What's the price of a liter converted into gallons? Is it around 2 bucks, No, the rest of the world has the price of oil factored into their economies decades ago and this has keep down the consumption of oil and the price. An industrialized country like the US is going to take a much bigger hit than a third world country using manual labor instead of a mechanized society needing more and more energy. We were the hogs in the world and the prices have been keep artificially low. That's not going to continure for long, most modern foreign countries like Japan shows how a $4 to $5 a gallon price would hit the US IMO. Just the threat of such an action would take this economy into a major tail spin.
I know oil and if you think we haven't pissed it away your fooling yourself. We still vent and burning natural gas because most locations don't have a pipeline to deliver it to Joe Public, another major waste, but very costly if you don't have a way to transport it. We need to start building refineries near the remaining large field and covert petroleum assets into propane and CNG etc.
Have you ever been to Norway or most of the European countries? The cost of food and most everything else is very high too, you better thank your lucky stars your living in the US but its time has come too and it will hurt us more than those that haven't held their prices down.
Were still half the price of other modern countries when it comes to the price of a gallon of gas, you shouldn't be surprised that we've be impacted the most since we import the most, be shock.
The more I look at these numbers the more all of this “inflation” just looks like adjustments to a falling dollar. Prices do not seem to be moving up in other countries that don’t have the printing press running full tilt to print money or I.O.U.s.
In our defense of being oil hogs that is really just not true! It is true we use more per person than any other country but look at our country. In my state of Texas you can fit a good part of all of Europe. From the middle of the State, say Austin, it takes all day to just drive to Amarillo. The fact that Americans have been more affluent, and that we are taxed so heavily that our women must work, means we nearly have to have two cars in each family. As far as the prices of fuel being so much higher in other countries I would guess that they have a much higher tax on their gasoline, or they have no refineries. The price of oil is a World price so the Germans have not been paying more for oil than we.
I agree that high gas prices are going to be a shock to our budgets but then all of these price increases are a shock. A gallon of milk cost a lot more than a gallon of gas these days.
As far as gas venting goes, that will not change until the environmental groups allow more pipelines.
Back to my original question, is the drop in the dollar responsible for all these price increase? Are we in fact in a cycle that cannot be escaped because we must continue to print more paper to cover short falls, and this is devaluing the dollar and making the cost of worldwide materials and products more expensive?
Think about this example: A company in Oregon cuts lumber and makes boards. Several years ago they could sell the boards to an American for $100 per lot or they could sell it to a German for $100 Euros per lot .and the buyers paid the shipping. A few years later the dollar drops to .70 cents each but the Euro was still worth $1 each. The company in Oregon then has the choice of taking 100 dollars valued at .70 cents or $70 in the World market, or they can take $100 Euros, which will they take? My guess is that they will either take the Euros or tell their American client that they must increase the price by 30%.
In the case of certain numismatic coins there may be another factor here to consider, and that is the psychological factor of a limited supply pushing the prices even pass the point of dollar devaluation.
Goldsaint, I guess what you are saying is basically correct. In a nutshell we are in a cycle where commodities have become bullish while equities (stocks, bonds, other paper assets) have become weaker. The dollar has become weaker against a whole basket of commodities: soy, oj, silver, gold, steels, concrete, lumber, you name it. China's expansion has helped to fuel this demand too. But the basic cycle over the past few years has been towards tangible goods (and competing currencies) that hold value.
What's the price of a liter converted into gallons? Is it around 2 bucks, No, the rest of the world has the price of oil factored into their economies decades ago and this has keep down the consumption of oil and the price.
This is not true. The cost of gasoline is higher in the rest of the world because they tax the hell out of it. Just like in this country where gas is cheaper in Georgia than it is in California. Unleaded gasoline without all the taxes added on is about $1.50 per gallon. It is only different in different states because of taxes, as it is in other countries.
I agree with you however paper assets have actually performed in step with gold. The S&P 500 is up about 24% over the last 24 months while gold is up about 26%.
Other metals -silver, copper- have performed better than gold, but the Nasdaq has also outperformed the S&P.
Even the bond market is up about 20% not counting interest.
So it has in fact been very inflationary for all asset classes.
Gold May Rise as Alternative Asset to U.S. Stocks, Survey Shows
May 2 (Bloomberg) -- Gold may rise this week on speculation investors will buy the metal as an alternative to slumping U.S. equities, a Bloomberg survey showed.
Twenty-four of 50 traders, investors and analysts surveyed from Melbourne to New York April 28 and April 29 advised buying gold, which rose 50 cents last week to $436.10 an ounce on the Comex division of the New York Mercantile Exchange. Eighteen recommended selling the metal, and eight were neutral.
the whole article (via Kitco.com of course) is here: Bloomberg Linkage
A quote from the article : "``People can't figure out what to do in the stock market, and they can't figure out bonds,'' Martin said. ``People are very nervous, and that's a good environment for gold.''
I always find the psychology aspects interesting. Time will tell.
go back to when gold started it's move 4 years ago from $260 and you'll see a FAR better gain than any of the stock indices. Same for probably most of the leading commodities. Only counting the last 2 years is like looking at the peformance of gold over the past 24 years and saying it stinks. Let's only look at gold since Feb. and we can really say it has no long term prospects because the last QTR stunk.
The creation of the FED, coming out of the gold standard, and the creation of an immense number of socialistic programs is slowly bleeding us dry. We have been brainwashed to think that "only" 3% ave inflation per year since 1913 is a good thing, and a requirement for a sound, more stable and growing economy. The only outcome in the long term is the nearly complete destruction of our currency. Whether its in 10 years, or 20 years, or 50 years, it's pretty much on track...unless we link it back to something tangible and enforceable. Right now we are about 94% there. But still have 6% to go.
<< <i>Topstuff explain [just buy some fax ??? ] >>
Just like any investment, FAX comes with quite a bit of risk, especially for an "income" investment. The yield is only about 200 basis points above a 30yr treasury and only slightly more than investment grade bonds. The charts below show some severe volatility. Volatility that may negate any income aspect. IE. The fund lost 30% in just 3 months last winter and has had several 10-20% drops in the last 2 years.
The second chart shows the potential if commodity prices take a swan dive. IE-- the markets move back toward the psychology of the late 90's
What's weird is that where I work, we are suddenly getting more and more work that used to be handled by the European branches of our company. Since the U.S. Dollar is so weak compared to the Euro and various other European currencies, it's cheaper for us to do the work in the USA. So in a sense, we're the 'cheap labor' of the world. The other odd part of it is that we have a branch out in Mexico, and because we can't handle all the work we've been given, we're moving many projects down to Mexico as they are cheaper compared to us. I'm not sure if this is good for us, bad for us, or really indifferent. Thankfully, the company is turning over a nice profit margin and is passing it on to the employees. I just don't know how I should feel about this. (Breaks out Palladium, Platinum, Gold, Silver, Rhodium, Iridium, Osmium, Rhenium and Ruthenium metals and caresses them gently. )
I collect the elements on the periodic table, and some coins. I have a complete Roosevelt set, and am putting together a set of coins from 1880.
You may be as guilty as I as making the numbers prove what we want them to.
Time periods are very important. Here are examples.
1. The Nasdaq rallied 98% from its 2002 low and is up 200% from 10 years ago.
2. The S&P 500 rallied 60% from its low in 2003 and is up 150% over the last 10 years.
3. Gold has rallied 71% from its low in 2001 and is up about 10% over the last 10 years.
4. Silver has also rallied 71% from its 2001 lows and is up 32% over the last 10 years.
I could also say that if you bought the S&P at its high you will still be down 26% over the last 5 years and down 50% over the last 25 years if you bought gold.
One could make the arguement that you could have made more money in a money market over the last 10 years than if you held precious metals. All these fact just reinforce my views that all markets are cyclical and that all averages always revert to their mean. Long term holding periods are for the birds and if you really want to outperform then you must realize and take advantage of all opportunities. All dogs have their day, be they in the form of stocks, bonds, real estate, commodities or coins.
An excerpt: For the American government, the free ride may be coming to an end. It has run irresponsible fiscal policies, knowing that foreign governments and people would provide it with unlimited credit. But that credit comes at a price. When China holds huge reserves of dollars, it also holds the power to damage the American economy.
Keep on supporting these democrats and republicans and yes, the future sure looks bright for the Chinese whose direction is AWAY from socialism and ours......well if you don't know or agree then oh well.
“GOLDSAINT.....Whoa! Women ain't workin because of taxes. Women are working because our lying government jinks the CPI numbers to keep anyone from getting any raises in our labor hating country.”
Topstuf, Well Sir I will have to disagree on this one, although I do agree on the lying government CPI numbers. When is TAX freedom day this year? Some time in June? If you took our tax system back 100 years and eliminated the entitlement taxes paid by both employees and employers, it would not be necessary for the women in the family to work. In fact the income of the male in the family would double.
And for my part give me TERM LIMMITS.
“The US is so damn stupid that MOST people even believe in "term limits" in order to facilitate the buggers stealing very VERY quickly as they only got 4 years to do so. Gimme the smoke filled room fulla good ole boys pork barreling their "districts" anytime.”
Can you imagine working for a company that has a little more than 500 employees, and has the following statistics:
29 have been accused of spousal abuse
7 have been arrested for fraud
19 have been accused of writing bad checks
117 have directly or indirectly bankrupted at least 2 businesses
3 have done time for assault
71 cannot get a credit card due to bad credit
14 have been arrested on drug-related charges
8 have been arrested for shoplifting
21 are currently defendants in lawsuits
84 have been arrested for drunk driving in the last year
Can you guess which organization this is?
It's the 535 members of the United States Congress. The same group that crank out hundreds of new laws each year designed to keep the rest of us in line.
Hays Morning Market Comment Worried About Inflation? Bah!! Humbug!! May 02, 2005 A Bottom Made, but the Evolution Will Take a While
by Don R. Hays
Summary: As you know, we believe that a bottom has been made for this year in the S&P 500 as of April 20, 2005—8 trading days ago, but we do not expect a rocket-shoot from here. In fact, we suspect that this “rally” will last another 9-10 weeks, until the herd starts to worry about 2nd quarter earnings releases, and then another downdraft. Even with this said, you saw the small caps and the NASDAQ make new lows last week. This will remain the pattern in this tumultuous year until the herd discovers that this bull market has a long way to go.
I hear all kinds of inflation fears emerging, but wait a minute look at the evidence, total compensation—including a 6% increase in benefits—is up only 3.5% and easing, while productivity gains in manufacturing is up by 5.2% (2.7% in non-farm stats) and the evidence is clear that industrial commodity prices are trying to roll over. Greenspan should wait on any further increases, but he won’t. Remember, raising short-term rates actually makes inflation “look” worse, but the slowing economy is obvious.
Total put/call ratio is now over 100% for the last 15 days. The Rydex ratio is showing $1.20 bearish assets for every $1.00 bulllish assets. The “herd” is chasing defense, and is pushing indicators to levels that have told you historically that it is time to send your offense into the game. It will not be an immediate touch-down, but it will wear down the defense and they will be whimpering to the sidelines before year-end.
Last week ended with an upside flair that many observers believe was nothing more than institutional tape-painting, or window-dressing for the month-end. Maybe so, but I doubt that was the main driving force. I think it was more just a part of the evolving trend that will last throughout much of the next 3 months. When you see the total put/call ratio over 100% for the last three months, when you see the A.A.I.I. ratio of bears to bulls climb over 180% as it did two weeks ago, when you see the Rydex ratio in this phase of an evolving bull market move so decisively to the bearish side, when you see the ratio of the NYSE volume to that of the NASDAQ move over 90% for the last 10 days, and when you have emerged from a juncture in which the NYSE McClellan oscillator drops under -300 you are very foolish if you don’t take a bullish posture.
Oh yes you say, but the Federal Reserve is raising interest rates and inflation is starting to be on the increase. And don’t forget, we’re running out of oil, and the price of oil….what was that price that was floated by that Goldman Sachs guy…oh yes, the price of oil is going to $100 a barrel. And don’t forget all this terrorism, with the continuing success of the Democracy spreading in Iraq the insurgents almost certainly are going to be more vicious. And if that doesn’t work, look at the break-down in technology.
Yes, those were legitimate concerns in mid-December when our asset allocation matrix said it was time to raise a little defensive cash. But now they are in the headlines, and the optimism when we sent out that December 17, 2004 report has been replaced with Greenspan/Oil/Inflation fear this morning.
If you are not sweating when you make a decision change, the odds are high you will be wrong. It takes courage to do the right thing, and today the evidence makes it easy to sell and hard to buy.
But if you go back to that time in December of last year, the optimism was being fed by an expectation that 1st quarter 2005 earnings would grow by 7.6%. So now, we are just now seeing that growth was actually a robust 18.7%. Yes, I know a lot of that was due to energy and material price hikes, but don’t give that anomaly total credit as financial sector earnings were up 18.6%, healthcare up 11.8%, information technology up 18.4%, and industrials’ earnings were up by 25.1% It was a very good quarter. Did you base your bullishness or bearishness on those earnings forecast four months ago? They only missed it 146%. So what’s new? Oh yes, they are predicting that the second quarter earnings will be up by 7.2%, if you care. I do care, because that is the basis that many people use to propose their market decisions.
The evolution of corporate health is amazing in just the last three years. They certainly got religion in the last decade. I was very intrigued by this chart from my friends in the Wachovia economic department showing the huge improvement in what corporations are paying in net interest payments.
If you think back to the 1990 era, corporations were paying a huge amount of their cash flow in net interest payments on their debt. Thirty percent was going to satisfy that burden, while today half of that cash flow allocated to debt interest payment is available to do whatever—pay off debt, or finance future expansion, or to buy other companies. Remember that in 2006 when the clouds of today will all seem to disappear, and blue skies become obvious to all.
When you can allocate that extra money to capital expenditures, it dramatically increases the odds that productivity will continue to remain historically high.
Once again, here’s 1994’s chart of the S&P 500 and the NASDAQ.
When you look at the DRAM price chart on our website, you can quickly see the logic for the repeat of that 1994 continued lower-lows in the NASDAQ in these next 11 weeks.
But I do expect that by year-end the situation will be dramatically reversed from the above. I do not consider any bull market rally to be a healthy situation until technology gets back in the driver’s seat. Of course, it is certainly not all technology that is weak as evidenced by the above stated 18.4% increase in 1st quarter earnings. In fact, our sector studies that are based on the relative strength, earnings momentum, and relative valuation has been showing an increased weighting should be given to this important sector, but the above expectation tells you to be selective about which portions of information technology to buy.
Now, let’s go to this inflation bit, and the Federal Reserve’s tendency to always go too far in both directions—ease and restriction. It has pretty much been floated to the world that they will increase rates once again at tomorrow’s meeting. But I will be highly surprised if the minutes to that meeting that will be released in a few weeks do not show that this increase is not a unanimous decision. The economic evidence is piling up that the economy is slowing. For instance, Ed Hyman has shown in a recent report that every time for the last 50 years that the leading economic indicators—year over year—has been down as they are now, an economic slow-down or recession occurs in the ensuing year. He also shows that every time the growth of MZM has been this low over the preceding 12-months the same slowing economic tendencies have occurred. Ed Yardeni shows in his recent report the amazing discovery he has made that when the Foreign Official Dollar Reserves of central banks has declined as they have in the last 8 months, that it has generated an economic slowdown, a drop in the price of commodities, and in ……the price of oil. Oh no, could it be possible that Goldman Sachs energy analyst could have got caught up in the oil euphoria? Surely not!!
Don’t get me wrong. I definitely do not expect a recession. In fact, I’m not even all that worried about the economy since our highly dependable yield curve is holding my hand. As much faith as I have in Hyman and Yardeni—they are the best, I consider the simple old yield curve as the best predictor of economic activity in the WORLD. Let’s take another look. I consider the ratio of long-bond yield to t-bill yield to be perfect IF it remains between 1.25 and 1.50 as shown by the shaded area on the above chart. So as of now, we are closing in on that “perfect” scenario, just as the price of gold, bonds, currencies are also starting to show “perfection” is upon us.
Is Greenspan listening? I’m pretty sure he is, but the action that occurs tomorrow AFTER that well advertised next rise in the fed funds rate will be very important in all these parameters, but especially in the price of gold. Stay tuned!!
Now, very quickly, let’s take a peek at the option charts. The total put/call ratio has now penetrated the key 100% level.
You can see, the total put/call ratio has eclipsed that 100% juncture, but the other variables have not quite reached key zones. But you can also see that this perfect rhythm in all the option data is often skewed. So even though not perfect, and I do expect a better rhythm later this year, today’s posture is enough to justify a return to a fully invested posture, especially in view of the huge disparity being offered in favor of stocks over bonds.
That’s it. Gotta run. I’ll see you again on Wednesday morning.
If you are referring to the stats on the U.S. Congress you might very well be right I have no way to verify this statement.
Topstuf
“GOLDSAINT......That post is the most depressing (though probably accurate) assessment brought up so far.
What got me thinking about this is it seemed Gold only moved up and down according to the dollars rise and fall. It does not seem to react to any of the old causes i.e. War, Tidal waves, fear of nuclear missiles etc. In addition Wall Street, the Fed, and the Government keep putting out this ridiculous inflation number when anyone can just compare price changes on most all products each year and see a big difference.
According to the fellow that wrote the article on Gold being the same price in Europe for the last several years, in 2001 the Euro was at $.85 and today it is $1.28. This is a large percentage increase in 4 years and just about what oil, homes, milk, vegetables, lumber, gold, silver, copper, coins etc. have gone up in 4 years. It certainly looks like the dollar devaluation is creating price increases across the board.
What is interesting about all this is that general inflation seems to be caused by flooding an economy with too much currency, but in this case the foreigners are still buying the debt in the form of I.O.U.s and it does not appear these governments are cashing them in and buying STUFF. I mean how can you have to many I.O.U.s chasing the products?
Sure we have had increase demand from China, India, and other Asian countries around the World the last 4 years but not enough to drive the prices of nearly every product up by 40%. I mean most of these countries have been building their economies for 20 years.
One major reason that Milk or other produce like Soy may be doing better than gold is that it is not manipulated as much as gold. Gold is an economy bellweather and the last thing the politicians want is for gold to make the dollar look sick. Everything is being done to keep gold at bay (Central Bank sales for the past 10 year) including the hidden hand of the Exchange Stabilitzation Fund. Now you don't see the FED being worried about the price of Milk? Of course not. It's gold and possibly even oil they want to keep under wraps as much as possible. Milk is allowed to cycle with normal supply and demand. It is a question of how long can the lid be kept on gold while Nero fiddles.
The bull market in US coins (and other things) has been largely driven by the loss of value of the dollar. That has been caused by the wholesale printing of the FRN over the last 5 years.
<< Oh gee wow how impressive. So deep and such greatness to be so proud.
How pathetic and what a laugh. So since we can't compete, rely on the military.
Hey, be the first one to sign up! Ceeya! >>
You people are predicting doom-and-gloom-the-economy-has-collapsed-and-we're-all-starving-to-death, so I would assume that in a period of total collapse, war would be the response. Have not wars been waged over more minor things?
Economic power is not the only form of power. I suggest that the power to annhilate an offending country is greater than the power to merely impoverish it. HOPEFULLY neither country will have to use either form of power.
P.S. The poster was not saying that China SHOULD destroy our economy, merely that they have the power to. I was not suggesting that we should nuke China, but pointing to the fact that we have the power to. It seemed to me that the poster was referring to the capacity for harm, not the likelihood that said harm would be inflicted.
<< <i>And what other planet would you suggest we move to when our brilliant leaders decide to use them? >>
The same planet you intend on living on in the event that China destroys our economy. Read my response above. Again, the original poster was referring to China's capacity to do harm (not their likelihood of using it); my response was made in kind.
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
We could destroy china's economy if we stopped importing their products. They need us as much as we need them!
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>We could destroy china's economy if we stopped importing their products. They need us as much as we need them! >>
At this time. You need to include "at this time".
It's much the same with say the Japanese automobile/motorcycle business. The motorcycle companies can pretty much write the US off and do just fine. At least the smaller CC ones for sure. Have you ever been to Asia? If so you would notice that the Japanese by and large have a lock on almost every country there although of course there's some jeeps which get maufactured in Thailand that are around in small quantities, some German cars, many of which are manufactured in China........
The point I think is "direction" not necessarily ( although today is very important obviously with an 8 trillion and growing debt). What "direction is everyone going in? As China continues it's path AWAY from socialism, the US continues it's march deeper and deeper INTO socialism and the economic changes and directions speak for themselves.
More free, more prosperity. Less free, less prosperity. Add ignorance and an 8 trillion dollar and growing debt and it becomes pretty clear where we are and where we're going.
"So be sure to sit down when I tell you that revolving credit card debt in the United States has increased exactly 58,868% since 1968 (that's right, not 580%, not 5,800%, but 58,868%. Whoa, momma!)."
All of this deflation talk actually makes sense to me, but I am sure that Washington will try to inflate first, which appears to be happening NOW.
How long the G-men can continue the pump and dump scheme is what we need a crystal ball for.
Topstuf, I noticed this guy did not say any thing about what he likes for deflation he just says “be prepared” ?? “The result is a full-blown liquidity crisis, affecting all asset values - stocks, bonds, real estate, precious metals, collectibles - at least for a time.”
This deflationary scenario would not be good for rare coin values. I for one have a tough time too seeing where the continued hyperinflation (or stagflation) will come from if housing and/or stock prices burst.
<< <i>Topstuf, I noticed this guy did not say any thing about what he likes for deflation he just says “be prepared” ?? >>
From the bottom of the page...
<< <i>Those who prepared themselves by holding cash will be able to cherry-pick assets in many cases for literally pennies on the dollar. I sincerely hope you'll be one of them. >>
Sounds like the only asset class he likes right now is cash.
In the same vein, I was reading "The Oil Factor" (by Stephen Leeb), in which he recommends certain investement types in either inflationary or deflationary environments (which he predicts, using -suprise suprise- oil as his indicator). In his 'deflationary' portfolio allocations he still has a smattering of precious metals, energy, Berkshire Hathaway and more. But half of the model deflationary portfolio is allocated to cash and zero coupon bonds/bond funds. He is fond of metals when the indicator points to inflation (and interestingly Berkshire Hathaway maintains the same percentage allocation in both the inflationary and deflationary portfolios).
Two votes for cash in a deflationary environment.
edited because I am a slow typer, and I added a quote.
<< <i>"yeh, with 50% of ones incomes paid in taxes that's real representative of a free country"
Actually, there are few prosperous democracies where the wealthy pay significantly less than 50 % of their income in taxes.
(Hong Kong is a relatively free environment where taxes are well below this level -- however, I would not trade my US citizenship for HK residence) >>
The Chinese are a lot smarter when it comes to taxation and in HK as well as most of Asia very little income is reported regardless of the level of taxation so that's not a fair comparison.
Further, in "communist" countries such as China, Vietnam, the HIGHEST rate of taxation is less than 50% so I'd like to know your point.
You also don't need to abandon citizenship for "residence" anywhere.
Here's some more "good news" which has an impact on where the world invests it's money.
Tom
U.S. visa policy dampens investment climate Strict US visa policy scares away students, investors
Wed May 4, 3:30 AM ET
WASHINGTON (AFP) - A teenage Asian girl with a valid student visa was handcuffed and deported for entering the United States five days earlier than stipulated, highlighting strict American immigration policy. A 79-year-old British historian, who came to work at the US Library of Congress on the life of US former chief diplomat Henry Kissinger, was herded on arrival in a wheelchair at Washington's Dulles airport to a small room facing a superintendent with a revolver in his hip for no apparent mistake.
Although all his travel papers were in order, "I was stopped and treated rather disgracefully," lamented Sir Alistair Horne at a conference in Washington Tuesday.
Stringent enforcement of US visa policy and seemingly overzealous immigration officers following the September 11, 2001 terror attacks are not only scaring away foreign students and tourists but dampening the investment climate of the world's richest nation and taking a toll on its economy, experts told the conference organized by the Center for Strategic and International Studies.
Among the other cases cited to highlight the economic, security, scientific and diplomatic implications of changes in US visa policy were:
-- An international business conference in Hawaii had to be shifted to Hong Kong at the last minute because the organizers could not obtain travel papers for most of its participants, who were from China.
-- Some of US aviation giant Lockheed Martin Corporation's testing of its civil space activities have been delayed because visas could not be obtained on time for Russian scientists.
-- A company in northern Illinois waited in vain for seven months for its prospective buyers from China to get a visa to inspect its products and close a multi million dollar sale. Eventually the company became bankrupt and was auctioned off.
According to one private sector study, US businesses lost nearly 31 billion dollars in sales between 2002 and 2004 because foreign executives could not get into the United States to purchase American goods and services or attend trade shows.
From 2003 to 2004, there was a roughly 30 percent decline in the number of applicants for US graduate programs and correspondingly 20 percent decline in admissions, university figures showed.
The situation is critical and requires the personal intervention of President George W. Bush, former defense secretary Frank Carlucci told the conference.
He said Bush should act to stop further erosion of US popularity overseas.
"It is part and parcel of the anti-Americanism around the world and if the President is serious about addressing that, in that context, he has to address visa policy," Carlucci said.
" President Bush can demonstrate leadership and demonstrate that the country is not anti-foreigner and that we are not closing the gates and he can encourage the bureaucracy to make sense out of a patchwork quilt -- it is slowly coming together but needs to come together much faster."
Lockheed Martin's corporate international business development vice-president Richard Kirkland said "what is important is predictability and process" of getting approval for visas.
Nearly 100 percent of aerospace programs in the United States involve some form of foreign participation or content, he said.
"America's post-9/11 visa policy is threatening our country's economic security, and reforms are needed to boost US exports, maintain our technological leadership and create jobs," said Don Manzalo, head of the small business committee at the House of Representatives.
"Multinationals are setting up shop overseas to avoid our arbitrary visa process," said Monzalo, who is campaigning for a fast track visa program for companies.
He had brokered a deal between the United States and China earlier this year allowing executives to travel between the two countries under a single visa for 12 months instead of seeking new visas for each trip.
The Migration Policy Institute, an independent think tank which studies movement of people worldwide, said Tuesday it was convening a bipartisan panel of US lawmakers, business leaders and public policy and immigration experts to consider immigration reforms.
"Neither national security nor individual liberties can be properly safeguarded in the United States without sensible and effective immigration laws," said Lee Hamilton, among those who led a special commission that investigated the 2001 terror attacks.
William Webster, former CIA and FBI head, said by scaring away foreign students, "we are losing an opportunity for public diplomacy because the best ambassadors we can possibly have are these students."
Jordan's ambassador to Washington Karim Tawfiq Kawar said there had been a drop of more than 30 percent of students from the Arab world coming to the United States to study.
A survey showed 65 percent of students from six Middle East countries still wanted to study in the United States but "only one quarter of those who came here had a positive experience."
Tom Interesting article on visa’s. For my part I am an isolationist. I never believed in the One World Order plan put forth by the elites. I think it is a bad idea to educate your competitors, and it will not work to try to bring hundreds of millions of people living around the world up to the high standard of living we have in the U.S. For my part I think we need a ten-year moratorium on all foreign visa’s, kick all the illegals out, and put the convicts in our prisons to doing the manual labor jobs at minimum wage. This would solve a multitude of problems.
Back to the inflation or deflation argument. What I have not seen explained is just how we are going to have deflation as long as the government must keep printing hundreds of billions of dollars to meet the obligations of the entitlement programs? In less than 3 years the first big wave of baby boomers retire, and millions of tax payers stop paying in and begin getting new mail box money. Many of this group that would have waited for a few years for higher payments will opt to get checks at 62 fearing that the S.C. system and the Medicare system are going down the tubes. In addition the interest on the National Debt must be paid, and the rates are going up, so billions each month will have to be printed and much of this money will not be in long term I.O.U.’s but in currency chasing products.
If the Fed can raise rates to a reasonable point and keep things moving for 3 more years, slowing down the housing bubble, how can you have huge unemployment with 77 million people headed to retirement? How can you have deflation with millions of folks getting checks in the mail, and these folks will already be cutting back their lifestyles?
The deflation comes if the FED is not able to unwind the currrent bubbles while "slowly" advancing rates. Just what if the housing market comes apart rather quickly? Or the same for the stock market (picture an Oct '87 again)? Or how about the $300 TRILLION in derivatives that have NEVER been part of the problem until today? Trillions of losses could easily occur. The money supply could never keep up. And if the Fed/Treasury were stupid enough to keep up with that, they would be devaluing the currency at the rate of 20-100% (or more) per year. How long could that game go on for without repurcussions?
If any of these unwind quickly, the relatively quick contraction of credit cannot be overcome by printing money into oblivion.
The US was a creditor nation enjoying huge surpluses in both the 1830's and the late 1920's when the implosion of credit ocurred with the resulting depression. In those days, cash was very valuable and so was gold (but not silver in the early 1930's).
This time we are a debtor nation with huge deficits. We are more like Germany facing huge balance of trade payments to everyone else. Their currency had been in shambles. Ours has been shaky at best. What was the performance of the various European currencies with deficits and debtor status as the depression took hold? Is cash in US denominated currency the way to go or is foreign currency better at this juncture, and specifically which one and why?
If a great depression takes hold, how will the US government avoid default on their debt? Will we go the way of Germany in the 1930's and other countries in South America in the 1980's and 1990's and declare our debt null and void?
I am concerned that gold has already recently re-appreciated to levels that will not change much as deflation takes hold. The last time we had a depression, gold prices were fixed by governments for many years prior so a 50% rise in gold was necessary since prices had been fixed for so long. Gold already had its 50% price increase recently.
By the way, real rare collectibles suffered for a very short period of time but the better stuff went into strong hands, locked away until things improved. But prices on collectibles did much better overall than holding cash between 1930 and 1942.
RR I agree that there are some real disastrous things out there that could act as a trigger but then again we cannot make plans for truly doom and gloom.
I for one am interested in hearing scenarios like Orville. Most folks cannot plan for both sides of this issue. So what say the rest of you will it be inflation or deflation?
In order to plan for both you would need to be pretty much debt free, have plenty of cash, have some Gold, and some type of paid for income producing property.
In a deflation the debt is what is the killer since everything drops but the debt. Most lenders are unlikely to forgive a great deal of your mortgage, car loan, or credit card debt. At least they won’t do this right off, and of course later is to late for most folks. I see all debt as the biggest disaster one can have. Even in short periods of inflation most folks cannot pay off there longer term debt. They either don’t get the extra income or the inflation clock runs out.
As for holding foreign currencies I would not be one to do that. I just can’t move fast enough, and I think that America is still the main economic engine of the planet so in the end what happens here will affect everywhere else.
I also agree with Orville in that I think Gold is more than fully funded for current inflation at this time. It does not mean that it won’t go up if the dollar goes down or we start having serious inflation, but that is for later. Personal it looks like gold is moving along with foreign currencies and I would prefer to have some gold in my hand.
In short I think we are in for one of these two scenarios, and not business as usual, so for now I think the stock market is in a trading range and basically a game for day traders or gamblers, probably the same for bonds until things shake out.
<< <i>Tom Interesting article on visa’s. For my part I am an isolationist. I never believed in the One World Order plan put forth by the elites. I think it is a bad idea to educate your competitors, and it will not work to try to bring hundreds of millions of people living around the world up to the high standard of living we have in the U.S. For my part I think we need a ten-year moratorium on all foreign visa’s, kick all the illegals out, and put the convicts in our prisons to doing the manual labor jobs at minimum wage. This would solve a multitude of problems.
We're all human and I believe there's a certain forgotten document that starts with "All men are created equal and are endowed by their creator etc etc etc" so apparently your as much against the Constitution and the very idea of what once upon a time made this place unique in world history as the politicians who run this place eh?
Further, if this were put on an individual level, and if YOU ( The USA) owed ME ( take your pick) started playing games with where I could go, I would call in the note and if you didn't pay me, then I would take whatever actions I could to destroy you, or certainly cause you pain.
Speaking so tough about the illegals is wonderful and while I would agree with you on getting "illegals" out, I would like to know how you would propose to do that. Send the police door to door? And assuming you could even get away with that, what then? Tax me to pay for plane tickets? Line then up and shoot em? What?
I would dissect the rest and expound more but have to drive over to Ft Lauderdale for a long neglected dentist appt.
I don't think you have your thinking cap on with that response Mr Goldsaint. The enemies to this country have not been foreigners. It's been and is the politicans and ignorance.
I think it's funny when citizens complain about taxes.
Perhaps they would like to not pay any taxes, and then build their own roads and highways with their own hands? maybe they'd like to put out their own fires, or police their own neighborhoods? they should operate their own schools, and approve and regulate their own medicines? how about national defense? who needs it? we have a pistol in our house, right?
<< <i>I think it's funny when citizens complain about taxes.
Perhaps they would like to not pay any taxes, and then build their own roads and highways with their own hands? maybe they'd like to put out their own fires, or police their own neighborhoods? they should operate their own schools, and approve and regulate their own medicines? how about national defense? who needs it? we have a pistol in our house, right? >>
Baley, actually I think it's pathetic that Americans think that a level of taxes which nearly equals at this point the levels in communist countries is pathetic.
Far as roads and bridges and the like, frankly I don't see why I have to pay for YOUR roads in YOUR neighborhood or you have to pay for mine. Now let me ask you a question, if we were not "subjected" to as much as half our earings to be taken from us and sent to washington to be spent in all the ways these politicans have devised to spend it, do ya think we could have better schools, better roads, better healthcare or do you really believe that this giant sucking of our earnings and liveleyhoods are creating a more free and better living environment?
how can you have huge unemployment with 77 million people headed to retirement?
I don't think Greenspan, and the likes of people who own the Federal Reserve, will allow 77 million people to retire.
"They" have to kill people's financials - stocks, bonds, land, whatever - so that people cannot afford to retire. Gotta keep 'em working and paying into the system forever.
<< <i>I think it's funny when citizens complain about taxes.
Perhaps they would like to not pay any taxes, and then build their own roads and highways with their own hands? maybe they'd like to put out their own fires, or police their own neighborhoods? they should operate their own schools, and approve and regulate their own medicines? how about national defense? who needs it? we have a pistol in our house, right? >>
I pay 4% of the value of my home in property and school taxes. Anybody else pay that much? The school district has gone from 1300 students 15 years ago to 1100. And they just approved a $15 million addition. Its crazy here. And the value of my home has not increased in value. It is 2700 sq ft with a huge oversized 3 car garage with a pole barn on 3.7 acres. If I sold it I would be able to get a townhouse in New Jersey. Taxes where I live are rediculous. Did I mention the 8.25% sales tax?
Comments
I know oil and if you think we haven't pissed it away your fooling yourself. We still vent and burning natural gas because most locations don't have a pipeline to deliver it to Joe Public, another major waste, but very costly if you don't have a way to transport it. We need to start building refineries near the remaining large field and covert petroleum assets into propane and CNG etc.
Have you ever been to Norway or most of the European countries? The cost of food and most everything else is very high too, you better thank your lucky stars your living in the US but its time has come too and it will hurt us more than those that haven't held their prices down.
Were still half the price of other modern countries when it comes to the price of a gallon of gas, you shouldn't be surprised that we've be impacted the most since we import the most, be shock.
The more I look at these numbers the more all of this “inflation” just looks like adjustments to a falling dollar. Prices do not seem to be moving up in other countries that don’t have the printing press running full tilt to print money or I.O.U.s.
In our defense of being oil hogs that is really just not true! It is true we use more per person than any other country but look at our country. In my state of Texas you can fit a good part of all of Europe. From the middle of the State, say Austin, it takes all day to just drive to Amarillo. The fact that Americans have been more affluent, and that we are taxed so heavily that our women must work, means we nearly have to have two cars in each family. As far as the prices of fuel being so much higher in other countries I would guess that they have a much higher tax on their gasoline, or they have no refineries. The price of oil is a World price so the Germans have not been paying more for oil than we.
I agree that high gas prices are going to be a shock to our budgets but then all of these price increases are a shock. A gallon of milk cost a lot more than a gallon of gas these days.
As far as gas venting goes, that will not change until the environmental groups allow more pipelines.
Back to my original question, is the drop in the dollar responsible for all these price increase? Are we in fact in a cycle that cannot be escaped because we must continue to print more paper to cover short falls, and this is devaluing the dollar and making the cost of worldwide materials and products more expensive?
Think about this example: A company in Oregon cuts lumber and makes boards. Several years ago they could sell the boards to an American for $100 per lot or they could sell it to a German for $100 Euros per lot .and the buyers paid the shipping. A few years later the dollar drops to .70 cents each but the Euro was still worth $1 each. The company in Oregon then has the choice of taking 100 dollars valued at .70 cents or $70 in the World market, or they can take $100 Euros, which will they take? My guess is that they will either take the Euros or tell their American client that they must increase the price by 30%.
In the case of certain numismatic coins there may be another factor here to consider, and that is the psychological factor of a limited supply pushing the prices even pass the point of dollar devaluation.
But the basic cycle over the past few years has been towards tangible goods (and competing currencies) that hold value.
roadrunner
This is not true. The cost of gasoline is higher in the rest of the world because they tax the hell out of it. Just like in this country where gas is cheaper in Georgia than it is in California. Unleaded gasoline without all the taxes added on is about $1.50 per gallon. It is only different in different states because of taxes, as it is in other countries.
Knowledge is the enemy of fear
I agree with you however paper assets have actually performed in step with gold. The S&P 500 is up about 24% over the last 24 months while gold is up about 26%.
Other metals -silver, copper- have performed better than gold, but the Nasdaq has also outperformed the S&P.
Even the bond market is up about 20% not counting interest.
So it has in fact been very inflationary for all asset classes.
Knowledge is the enemy of fear
Gold May Rise as Alternative Asset to U.S. Stocks, Survey Shows
May 2 (Bloomberg) -- Gold may rise this week on speculation investors will buy the metal as an alternative to slumping U.S. equities, a Bloomberg survey showed.
Twenty-four of 50 traders, investors and analysts surveyed from Melbourne to New York April 28 and April 29 advised buying gold, which rose 50 cents last week to $436.10 an ounce on the Comex division of the New York Mercantile Exchange. Eighteen recommended selling the metal, and eight were neutral.
the whole article (via Kitco.com of course) is here:
Bloomberg Linkage
A quote from the article : "``People can't figure out what to do in the stock market, and they can't figure out bonds,'' Martin said. ``People are very nervous, and that's a good environment for gold.''
I always find the psychology aspects interesting. Time will tell.
go back to when gold started it's move 4 years ago from
$260 and you'll see a FAR better gain than any of the stock indices.
Same for probably most of the leading commodities. Only counting the last 2 years is like looking at the peformance of gold over the past 24 years and saying it stinks. Let's only look at gold since Feb. and we can really say it has no long term prospects because the last QTR stunk.
The creation of the FED, coming out of the gold standard, and the creation of an immense number of socialistic programs is slowly bleeding us dry. We have been brainwashed to think that "only" 3% ave inflation per year since 1913 is a good thing, and a requirement for a sound, more stable and growing economy.
The only outcome in the long term is the nearly complete destruction of our currency. Whether its in 10 years, or 20 years, or 50 years, it's pretty much on track...unless we link it back to something tangible and enforceable. Right now we are about 94% there.
But still have 6% to go.
roadrunner
<< <i>....we had a country that would have ridden WalMart outta town on a "Union Label" rail...... >>
What the heck, we had Sears Roebuck then.
<< <i>Topstuff explain [just buy some fax ??? ] >>
Just like any investment, FAX comes with quite a bit of risk, especially for an "income" investment. The yield is only about 200 basis points above a 30yr treasury and only slightly more than investment grade bonds. The charts below show some severe volatility. Volatility that may negate any income aspect. IE. The fund lost 30% in just 3 months last winter and has had several 10-20% drops in the last 2 years.
The second chart shows the potential if commodity prices take a swan dive. IE-- the markets move back toward the psychology of the late 90's
Knowledge is the enemy of fear
Well certainly king of the hill in terms of Freedom.......once upon a time.
It's all about the same now in a matter of degrees, but from a standpoint of cost of living as well as "direction", , oh jeesh never mind.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
You may be as guilty as I as making the numbers prove what we want them to.
Time periods are very important. Here are examples.
1. The Nasdaq rallied 98% from its 2002 low and is up 200% from 10 years ago.
2. The S&P 500 rallied 60% from its low in 2003 and is up 150% over the last 10 years.
3. Gold has rallied 71% from its low in 2001 and is up about 10% over the last 10 years.
4. Silver has also rallied 71% from its 2001 lows and is up 32% over the last 10 years.
I could also say that if you bought the S&P at its high you will still be down 26% over the last 5 years and down 50% over the last 25 years if you bought gold.
One could make the arguement that you could have made more money in a money market over the last 10 years than if you held precious metals. All these fact just reinforce my views that all markets are cyclical and that all averages always revert to their mean. Long term holding periods are for the birds and if you really want to outperform then you must realize and take advantage of all opportunities. All dogs have their day, be they in the form of stocks, bonds, real estate, commodities or coins.
Knowledge is the enemy of fear
An excerpt:
For the American government, the free ride may be coming to an end. It has run irresponsible fiscal policies, knowing that foreign governments and people would provide it with unlimited credit. But that credit comes at a price. When China holds huge reserves of dollars, it also holds the power to damage the American economy.
Does the future belong to China?
Keep on supporting these democrats and republicans and yes, the future sure looks bright for the Chinese whose direction is AWAY from socialism and ours......well if you don't know or agree then oh well.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
“GOLDSAINT.....Whoa! Women ain't workin because of taxes. Women are working because our lying government jinks the CPI numbers to keep anyone from getting any raises in our labor hating country.”
Topstuf,
Well Sir I will have to disagree on this one, although I do agree on the lying government CPI numbers.
When is TAX freedom day this year? Some time in June? If you took our tax system back 100 years and eliminated the entitlement taxes paid by both employees and employers, it would not be necessary for the women in the family to work. In fact the income of the male in the family would double.
And for my part give me TERM LIMMITS.
“The US is so damn stupid that MOST people even believe in "term limits" in order to facilitate the buggers stealing very VERY quickly as they only got 4 years to do so.
Gimme the smoke filled room fulla good ole boys pork barreling their "districts" anytime.”
Can you imagine working for a company that has a little more than 500
employees, and has the following statistics:
29 have been accused of spousal abuse
7 have been arrested for fraud
19 have been accused of writing bad checks
117 have directly or indirectly bankrupted at least 2 businesses
3 have done time for assault
71 cannot get a credit card due to bad credit
14 have been arrested on drug-related charges
8 have been arrested for shoplifting
21 are currently defendants in lawsuits
84 have been arrested for drunk driving in the last year
Can you guess which organization this is?
It's the 535 members of the United States Congress. The same group
that crank out hundreds of new laws each year designed to keep the rest
of us in line.
Worried About Inflation? Bah!! Humbug!!
May 02, 2005
A Bottom Made, but the Evolution Will Take a While
by Don R. Hays
Summary: As you know, we believe that a bottom has been made for this year in the S&P 500 as of April 20, 2005—8 trading days ago, but we do not expect a rocket-shoot from here. In fact, we suspect that this “rally” will last another 9-10 weeks, until the herd starts to worry about 2nd quarter earnings releases, and then another downdraft. Even with this said, you saw the small caps and the NASDAQ make new lows last week. This will remain the pattern in this tumultuous year until the herd discovers that this bull market has a long way to go.
I hear all kinds of inflation fears emerging, but wait a minute look at the evidence, total compensation—including a 6% increase in benefits—is up only 3.5% and easing, while productivity gains in manufacturing is up by 5.2% (2.7% in non-farm stats) and the evidence is clear that industrial commodity prices are trying to roll over. Greenspan should wait on any further increases, but he won’t. Remember, raising short-term rates actually makes inflation “look” worse, but the slowing economy is obvious.
Total put/call ratio is now over 100% for the last 15 days. The Rydex ratio is showing $1.20 bearish assets for every $1.00 bulllish assets. The “herd” is chasing defense, and is pushing indicators to levels that have told you historically that it is time to send your offense into the game. It will not be an immediate touch-down, but it will wear down the defense and they will be whimpering to the sidelines before year-end.
Last week ended with an upside flair that many observers believe was nothing more than institutional tape-painting, or window-dressing for the month-end. Maybe so, but I doubt that was the main driving force. I think it was more just a part of the evolving trend that will last throughout much of the next 3 months. When you see the total put/call ratio over 100% for the last three months, when you see the A.A.I.I. ratio of bears to bulls climb over 180% as it did two weeks ago, when you see the Rydex ratio in this phase of an evolving bull market move so decisively to the bearish side, when you see the ratio of the NYSE volume to that of the NASDAQ move over 90% for the last 10 days, and when you have emerged from a juncture in which the NYSE McClellan oscillator drops under -300 you are very foolish if you don’t take a bullish posture.
Oh yes you say, but the Federal Reserve is raising interest rates and inflation is starting to be on the increase. And don’t forget, we’re running out of oil, and the price of oil….what was that price that was floated by that Goldman Sachs guy…oh yes, the price of oil is going to $100 a barrel. And don’t forget all this terrorism, with the continuing success of the Democracy spreading in Iraq the insurgents almost certainly are going to be more vicious. And if that doesn’t work, look at the break-down in technology.
Yes, those were legitimate concerns in mid-December when our asset allocation matrix said it was time to raise a little defensive cash. But now they are in the headlines, and the optimism when we sent out that December 17, 2004 report has been replaced with Greenspan/Oil/Inflation fear this morning.
If you are not sweating when you make a decision change, the odds are high you will be wrong. It takes courage to do the right thing, and today the evidence makes it easy to sell and hard to buy.
But if you go back to that time in December of last year, the optimism was being fed by an expectation that 1st quarter 2005 earnings would grow by 7.6%. So now, we are just now seeing that growth was actually a robust 18.7%. Yes, I know a lot of that was due to energy and material price hikes, but don’t give that anomaly total credit as financial sector earnings were up 18.6%, healthcare up 11.8%, information technology up 18.4%, and industrials’ earnings were up by 25.1% It was a very good quarter. Did you base your bullishness or bearishness on those earnings forecast four months ago? They only missed it 146%. So what’s new? Oh yes, they are predicting that the second quarter earnings will be up by 7.2%, if you care. I do care, because that is the basis that many people use to propose their market decisions.
The evolution of corporate health is amazing in just the last three years. They certainly got religion in the last decade. I was very intrigued by this chart from my friends in the Wachovia economic department showing the huge improvement in what corporations are paying in net interest payments.
If you think back to the 1990 era, corporations were paying a huge amount of their cash flow in net interest payments on their debt. Thirty percent was going to satisfy that burden, while today half of that cash flow allocated to debt interest payment is available to do whatever—pay off debt, or finance future expansion, or to buy other companies. Remember that in 2006 when the clouds of today will all seem to disappear, and blue skies become obvious to all.
When you can allocate that extra money to capital expenditures, it dramatically increases the odds that productivity will continue to remain historically high.
Once again, here’s 1994’s chart of the S&P 500 and the NASDAQ.
When you look at the DRAM price chart on our website, you can quickly see the logic for the repeat of that 1994 continued lower-lows in the NASDAQ in these next 11 weeks.
But I do expect that by year-end the situation will be dramatically reversed from the above. I do not consider any bull market rally to be a healthy situation until technology gets back in the driver’s seat. Of course, it is certainly not all technology that is weak as evidenced by the above stated 18.4% increase in 1st quarter earnings. In fact, our sector studies that are based on the relative strength, earnings momentum, and relative valuation has been showing an increased weighting should be given to this important sector, but the above expectation tells you to be selective about which portions of information technology to buy.
Now, let’s go to this inflation bit, and the Federal Reserve’s tendency to always go too far in both directions—ease and restriction. It has pretty much been floated to the world that they will increase rates once again at tomorrow’s meeting. But I will be highly surprised if the minutes to that meeting that will be released in a few weeks do not show that this increase is not a unanimous decision. The economic evidence is piling up that the economy is slowing. For instance, Ed Hyman has shown in a recent report that every time for the last 50 years that the leading economic indicators—year over year—has been down as they are now, an economic slow-down or recession occurs in the ensuing year. He also shows that every time the growth of MZM has been this low over the preceding 12-months the same slowing economic tendencies have occurred. Ed Yardeni shows in his recent report the amazing discovery he has made that when the Foreign Official Dollar Reserves of central banks has declined as they have in the last 8 months, that it has generated an economic slowdown, a drop in the price of commodities, and in ……the price of oil. Oh no, could it be possible that Goldman Sachs energy analyst could have got caught up in the oil euphoria? Surely not!!
Don’t get me wrong. I definitely do not expect a recession. In fact, I’m not even all that worried about the economy since our highly dependable yield curve is holding my hand. As much faith as I have in Hyman and Yardeni—they are the best, I consider the simple old yield curve as the best predictor of economic activity in the WORLD. Let’s take another look.
I consider the ratio of long-bond yield to t-bill yield to be perfect IF it remains between 1.25 and 1.50 as shown by the shaded area on the above chart. So as of now, we are closing in on that “perfect” scenario, just as the price of gold, bonds, currencies are also starting to show “perfection” is upon us.
Is Greenspan listening? I’m pretty sure he is, but the action that occurs tomorrow AFTER that well advertised next rise in the fed funds rate will be very important in all these parameters, but especially in the price of gold. Stay tuned!!
Now, very quickly, let’s take a peek at the option charts. The total put/call ratio has now penetrated the key 100% level.
You can see, the total put/call ratio has eclipsed that 100% juncture, but the other variables have not quite reached key zones. But you can also see that this perfect rhythm in all the option data is often skewed. So even though not perfect, and I do expect a better rhythm later this year, today’s posture is enough to justify a return to a fully invested posture, especially in view of the huge disparity being offered in favor of stocks over bonds.
That’s it. Gotta run. I’ll see you again on Wednesday morning.
Goldsaint -- you have posted an "urban legend" -- these "statistics" are fabricated nonesense.
Higashiyama
Goldsaint -- you have posted an "urban legend"
If you are referring to the stats on the U.S. Congress you might very well be right I have no way to verify this statement.
Topstuf
“GOLDSAINT......That post is the most depressing (though probably accurate) assessment brought up so far.
What got me thinking about this is it seemed Gold only moved up and down according to the dollars rise and fall. It does not seem to react to any of the old causes i.e. War, Tidal waves, fear of nuclear missiles etc. In addition Wall Street, the Fed, and the Government keep putting out this ridiculous inflation number when anyone can just compare price changes on most all products each year and see a big difference.
According to the fellow that wrote the article on Gold being the same price in Europe for the last several years, in 2001 the Euro was at $.85 and today it is $1.28. This is a large percentage increase in 4 years and just about what oil, homes, milk, vegetables, lumber, gold, silver, copper, coins etc. have gone up in 4 years. It certainly looks like the dollar devaluation is creating price increases across the board.
What is interesting about all this is that general inflation seems to be caused by flooding an economy with too much currency, but in this case the foreigners are still buying the debt in the form of I.O.U.s and it does not appear these governments are cashing them in and buying STUFF. I mean how can you have to many I.O.U.s chasing the products?
Sure we have had increase demand from China, India, and other Asian countries around the World the last 4 years but not enough to drive the prices of nearly every product up by 40%. I mean most of these countries have been building their economies for 20 years.
roadrunner
<< <i>When China holds huge reserves of dollars, it also holds the power to damage the American economy. >>
When America holds huge reserves of nuclear weapons, it also holds the power to damage the Chinese population.
RR
<< <i> When America holds huge reserves of nuclear weapons, it also holds the power to damage the Chinese population. >>
And what other planet would you suggest we move to when our brilliant leaders decide to use them?
--------
Howdy from Houston...
Can't keep my eyes
from the circling skies
Tongue tied and twisted
Just an earthbound misfit,
I
">my registry set
<< <i>
<< <i>When China holds huge reserves of dollars, it also holds the power to damage the American economy. >>
When America holds huge reserves of nuclear weapons, it also holds the power to damage the Chinese population. >>
Oh gee wow how impressive. So deep and such greatness to be so proud.
How pathetic and what a laugh. So since we can't compete, rely on the military.
Hey, be the first one to sign up! Ceeya!
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Oh gee wow how impressive. So deep and such greatness to be so proud.
How pathetic and what a laugh. So since we can't compete, rely on the military.
Hey, be the first one to sign up! Ceeya!
>>
You people are predicting doom-and-gloom-the-economy-has-collapsed-and-we're-all-starving-to-death, so I would assume that in a period of total collapse, war would be the response. Have not wars been waged over more minor things?
Economic power is not the only form of power. I suggest that the power to annhilate an offending country is greater than the power to merely impoverish it. HOPEFULLY neither country will have to use either form of power.
P.S. The poster was not saying that China SHOULD destroy our economy, merely that they have the power to. I was not suggesting that we should nuke China, but pointing to the fact that we have the power to. It seemed to me that the poster was referring to the capacity for harm, not the likelihood that said harm would be inflicted.
<< <i>And what other planet would you suggest we move to when our brilliant leaders decide to use them? >>
The same planet you intend on living on in the event that China destroys our economy. Read my response above. Again, the original poster was referring to China's capacity to do harm (not their likelihood of using it); my response was made in kind.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>We could destroy china's economy if we stopped importing their products. They need us as much as we need them! >>
At this time. You need to include "at this time".
It's much the same with say the Japanese automobile/motorcycle business. The motorcycle companies can pretty much write the US off and do just fine. At least the smaller CC ones for sure. Have you ever been to Asia? If so you would notice that the Japanese by and large have a lock on almost every country there although of course there's some jeeps which get maufactured in Thailand that are around in small quantities, some German cars, many of which are manufactured in China........
The point I think is "direction" not necessarily ( although today is very important obviously with an 8 trillion and growing debt). What "direction is everyone going in? As China continues it's path AWAY from socialism, the US continues it's march deeper and deeper INTO socialism and the economic changes and directions speak for themselves.
More free, more prosperity. Less free, less prosperity. Add ignorance and an 8 trillion dollar and growing debt and it becomes pretty clear where we are and where we're going.
Tom
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Tom Pilitowski
US Rare Coin Investments
800-624-1870
WOW !!!!!
"So be sure to sit down when I tell you that revolving credit card debt in the United States has increased exactly 58,868% since 1968 (that's right, not 580%, not 5,800%, but 58,868%. Whoa, momma!)."
All of this deflation talk actually makes sense to me, but I am sure that Washington will try to inflate first, which appears to be happening NOW.
How long the G-men can continue the pump and dump scheme is what we need a crystal ball for.
Topstuf, I noticed this guy did not say any thing about what he likes for deflation he just says “be prepared” ??
“The result is a full-blown liquidity crisis, affecting all asset values - stocks, bonds, real estate, precious metals, collectibles - at least for a time.”
I for one have a tough time too seeing where the continued hyperinflation (or stagflation) will come from if housing and/or stock prices burst.
Deflation is coming - article
Another deflation disciple
roadrunner
<< <i>Topstuf, I noticed this guy did not say any thing about what he likes for deflation he just says “be prepared” ?? >>
From the bottom of the page...
<< <i>Those who prepared themselves by holding cash will be able to cherry-pick assets in many cases for literally pennies on the dollar. I sincerely hope you'll be one of them. >>
Sounds like the only asset class he likes right now is cash.
In the same vein, I was reading "The Oil Factor" (by Stephen Leeb), in which he recommends certain investement types in either inflationary or deflationary environments (which he predicts, using -suprise suprise- oil as his indicator). In his 'deflationary' portfolio allocations he still has a smattering of precious metals, energy, Berkshire Hathaway and more. But half of the model deflationary portfolio is allocated to cash and zero coupon bonds/bond funds. He is fond of metals when the indicator points to inflation (and interestingly Berkshire Hathaway maintains the same percentage allocation in both the inflationary and deflationary portfolios).
Two votes for cash in a deflationary environment.
edited because I am a slow typer, and I added a quote.
<< <i>We BEAT da Commies! We tore down their wall an left em wid nuttin but .......capitalism.
yeh, with 50% of ones incomes paid in taxes that's real representative of a free country.
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Tom Pilitowski
US Rare Coin Investments
800-624-1870
Actually, there are few prosperous democracies where the wealthy pay significantly less than 50 % of their income in taxes.
(Hong Kong is a relatively free environment where taxes are well below this level -- however, I would not trade my US citizenship for HK residence)
<< <i>"yeh, with 50% of ones incomes paid in taxes that's real representative of a free country"
Actually, there are few prosperous democracies where the wealthy pay significantly less than 50 % of their income in taxes.
(Hong Kong is a relatively free environment where taxes are well below this level -- however, I would not trade my US citizenship for HK residence) >>
The Chinese are a lot smarter when it comes to taxation and in HK as well as most of Asia very little income is reported regardless of the level of taxation so that's not a fair comparison.
Further, in "communist" countries such as China, Vietnam, the HIGHEST rate of taxation is less than 50% so I'd like to know your point.
You also don't need to abandon citizenship for "residence" anywhere.
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Tom Pilitowski
US Rare Coin Investments
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Tom
U.S. visa policy dampens investment climate
Strict US visa policy scares away students, investors
Wed May 4, 3:30 AM ET
WASHINGTON (AFP) - A teenage Asian girl with a valid student visa was handcuffed and deported for entering the United States five days earlier than stipulated, highlighting strict American immigration policy.
A 79-year-old British historian, who came to work at the US Library of Congress on the life of US former chief diplomat Henry Kissinger, was herded on arrival in a wheelchair at Washington's Dulles airport to a small room facing a superintendent with a revolver in his hip for no apparent mistake.
Although all his travel papers were in order, "I was stopped and treated rather disgracefully," lamented Sir Alistair Horne at a conference in Washington Tuesday.
Stringent enforcement of US visa policy and seemingly overzealous immigration officers following the September 11, 2001 terror attacks are not only scaring away foreign students and tourists but dampening the investment climate of the world's richest nation and taking a toll on its economy, experts told the conference organized by the Center for Strategic and International Studies.
Among the other cases cited to highlight the economic, security, scientific and diplomatic implications of changes in US visa policy were:
-- An international business conference in Hawaii had to be shifted to Hong Kong at the last minute because the organizers could not obtain travel papers for most of its participants, who were from China.
-- Some of US aviation giant Lockheed Martin Corporation's testing of its civil space activities have been delayed because visas could not be obtained on time for Russian scientists.
-- A company in northern Illinois waited in vain for seven months for its prospective buyers from China to get a visa to inspect its products and close a multi million dollar sale. Eventually the company became bankrupt and was auctioned off.
According to one private sector study, US businesses lost nearly 31 billion dollars in sales between 2002 and 2004 because foreign executives could not get into the United States to purchase American goods and services or attend trade shows.
From 2003 to 2004, there was a roughly 30 percent decline in the number of applicants for US graduate programs and correspondingly 20 percent decline in admissions, university figures showed.
The situation is critical and requires the personal intervention of President George W. Bush, former defense secretary Frank Carlucci told the conference.
He said Bush should act to stop further erosion of US popularity overseas.
"It is part and parcel of the anti-Americanism around the world and if the President is serious about addressing that, in that context, he has to address visa policy," Carlucci said.
" President Bush can demonstrate leadership and demonstrate that the country is not anti-foreigner and that we are not closing the gates and he can encourage the bureaucracy to make sense out of a patchwork quilt -- it is slowly coming together but needs to come together much faster."
Lockheed Martin's corporate international business development vice-president Richard Kirkland said "what is important is predictability and process" of getting approval for visas.
Nearly 100 percent of aerospace programs in the United States involve some form of foreign participation or content, he said.
"America's post-9/11 visa policy is threatening our country's economic security, and reforms are needed to boost US exports, maintain our technological leadership and create jobs," said Don Manzalo, head of the small business committee at the House of Representatives.
"Multinationals are setting up shop overseas to avoid our arbitrary visa process," said Monzalo, who is campaigning for a fast track visa program for companies.
He had brokered a deal between the United States and China earlier this year allowing executives to travel between the two countries under a single visa for 12 months instead of seeking new visas for each trip.
The Migration Policy Institute, an independent think tank which studies movement of people worldwide, said Tuesday it was convening a bipartisan panel of US lawmakers, business leaders and public policy and immigration experts to consider immigration reforms.
"Neither national security nor individual liberties can be properly safeguarded in the United States without sensible and effective immigration laws," said Lee Hamilton, among those who led a special commission that investigated the 2001 terror attacks.
William Webster, former CIA and FBI head, said by scaring away foreign students, "we are losing an opportunity for public diplomacy because the best ambassadors we can possibly have are these students."
Jordan's ambassador to Washington Karim Tawfiq Kawar said there had been a drop of more than 30 percent of students from the Arab world coming to the United States to study.
A survey showed 65 percent of students from six Middle East countries still wanted to study in the United States but "only one quarter of those who came here had a positive experience."
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Tom Pilitowski
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800-624-1870
Hey I grew up down the road from University of Texas - Iran. I wouldn't lose a single wink of sleep if those cats stayed home.
Interesting article on visa’s. For my part I am an isolationist. I never believed in the One World Order plan put forth by the elites. I think it is a bad idea to educate your competitors, and it will not work to try to bring hundreds of millions of people living around the world up to the high standard of living we have in the U.S. For my part I think we need a ten-year moratorium on all foreign visa’s, kick all the illegals out, and put the convicts in our prisons to doing the manual labor jobs at minimum wage. This would solve a multitude of problems.
Back to the inflation or deflation argument. What I have not seen explained is just how we are going to have deflation as long as the government must keep printing hundreds of billions of dollars to meet the obligations of the entitlement programs? In less than 3 years the first big wave of baby boomers retire, and millions of tax payers stop paying in and begin getting new mail box money. Many of this group that would have waited for a few years for higher payments will opt to get checks at 62 fearing that the S.C. system and the Medicare system are going down the tubes.
In addition the interest on the National Debt must be paid, and the rates are going up, so billions each month will have to be printed and much of this money will not be in long term I.O.U.’s but in currency chasing products.
If the Fed can raise rates to a reasonable point and keep things moving for 3 more years, slowing down the housing bubble, how can you have huge unemployment with 77 million people headed to retirement? How can you have deflation with millions of folks getting checks in the mail, and these folks will already be cutting back their lifestyles?
Trillions of losses could easily occur. The money supply could never keep up. And if the Fed/Treasury were stupid enough to keep up with that, they would be devaluing the currency at the rate of 20-100% (or more) per year. How long could that game go on for without repurcussions?
If any of these unwind quickly, the relatively quick contraction of credit cannot be overcome by printing money into oblivion.
roadrunner
The US was a creditor nation enjoying huge surpluses in both the 1830's and the late 1920's when the implosion of credit ocurred with the resulting depression. In those days, cash was very valuable and so was gold (but not silver in the early 1930's).
This time we are a debtor nation with huge deficits. We are more like Germany facing huge balance of trade payments to everyone else. Their currency had been in shambles. Ours has been shaky at best. What was the performance of the various European currencies with deficits and debtor status as the depression took hold? Is cash in US denominated currency the way to go or is foreign currency better at this juncture, and specifically which one and why?
If a great depression takes hold, how will the US government avoid default on their debt? Will we go the way of Germany in the 1930's and other countries in South America in the 1980's and 1990's and declare our debt null and void?
I am concerned that gold has already recently re-appreciated to levels that will not change much as deflation takes hold. The last time we had a depression, gold prices were fixed by governments for many years prior so a 50% rise in gold was necessary since prices had been fixed for so long. Gold already had its 50% price increase recently.
So where to go?
I agree that there are some real disastrous things out there that could act as a trigger but then again we cannot make plans for truly doom and gloom.
I for one am interested in hearing scenarios like Orville. Most folks cannot plan for both sides of this issue. So what say the rest of you will it be inflation or deflation?
In order to plan for both you would need to be pretty much debt free, have plenty of cash, have some Gold, and some type of paid for income producing property.
In a deflation the debt is what is the killer since everything drops but the debt. Most lenders are unlikely to forgive a great deal of your mortgage, car loan, or credit card debt. At least they won’t do this right off, and of course later is to late for most folks. I see all debt as the biggest disaster one can have. Even in short periods of inflation most folks cannot pay off there longer term debt. They either don’t get the extra income or the inflation clock runs out.
As for holding foreign currencies I would not be one to do that. I just can’t move fast enough, and I think that America is still the main economic engine of the planet so in the end what happens here will affect everywhere else.
I also agree with Orville in that I think Gold is more than fully funded for current inflation at this time. It does not mean that it won’t go up if the dollar goes down or we start having serious inflation, but that is for later. Personal it looks like gold is moving along with foreign currencies and I would prefer to have some gold in my hand.
In short I think we are in for one of these two scenarios, and not business as usual, so for now I think the stock market is in a trading range and basically a game for day traders or gamblers, probably the same for bonds until things shake out.
<< <i>Tom
Interesting article on visa’s. For my part I am an isolationist. I never believed in the One World Order plan put forth by the elites. I think it is a bad idea to educate your competitors, and it will not work to try to bring hundreds of millions of people living around the world up to the high standard of living we have in the U.S. For my part I think we need a ten-year moratorium on all foreign visa’s, kick all the illegals out, and put the convicts in our prisons to doing the manual labor jobs at minimum wage. This would solve a multitude of problems.
We're all human and I believe there's a certain forgotten document that starts with "All men are created equal and are endowed by their creator etc etc etc" so apparently your as much against the Constitution and the very idea of what once upon a time made this place unique in world history as the politicians who run this place eh?
Further, if this were put on an individual level, and if YOU ( The USA) owed ME ( take your pick) started playing games with where I could go, I would call in the note and if you didn't pay me, then I would take whatever actions I could to destroy you, or certainly cause you pain.
Speaking so tough about the illegals is wonderful and while I would agree with you on getting "illegals" out, I would like to know how you would propose to do that. Send the police door to door? And assuming you could even get away with that, what then? Tax me to pay for plane tickets? Line then up and shoot em? What?
I would dissect the rest and expound more but have to drive over to Ft Lauderdale for a long neglected dentist appt.
I don't think you have your thinking cap on with that response Mr Goldsaint. The enemies to this country have not been foreigners. It's been and is the politicans and ignorance.
Tom
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Tom Pilitowski
US Rare Coin Investments
800-624-1870
Perhaps they would like to not pay any taxes, and then build their own roads and highways with their own hands? maybe they'd like to put out their own fires, or police their own neighborhoods? they should operate their own schools, and approve and regulate their own medicines? how about national defense? who needs it? we have a pistol in our house, right?
Liberty: Parent of Science & Industry
<< <i>I think it's funny when citizens complain about taxes.
Perhaps they would like to not pay any taxes, and then build their own roads and highways with their own hands? maybe they'd like to put out their own fires, or police their own neighborhoods? they should operate their own schools, and approve and regulate their own medicines? how about national defense? who needs it? we have a pistol in our house, right?
Baley, actually I think it's pathetic that Americans think that a level of taxes which nearly equals at this point the levels in communist countries is pathetic.
Far as roads and bridges and the like, frankly I don't see why I have to pay for YOUR roads in YOUR neighborhood or you have to pay for mine. Now let me ask you a question, if we were not "subjected" to as much as half our earings to be taken from us and sent to washington to be spent in all the ways these politicans have devised to spend it, do ya think we could have better schools, better roads, better healthcare or do you really believe that this giant sucking of our earnings and liveleyhoods are creating a more free and better living environment?
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
I don't think Greenspan, and the likes of people who own the Federal Reserve, will allow 77 million people to retire.
"They" have to kill people's financials - stocks, bonds, land, whatever - so that people cannot afford to retire. Gotta keep 'em working and paying into the system forever.
We're paying tolls to drive on roads built by our tax money.
maybe they'd like to put out their own fires
We have a VFD, so yes we do.
or police their own neighborhoods?
Actually we pay to hire the police, in addition to our taxes, so that a police will be there.
they should operate their own schools,
Public schools are so low quality we do private school.
and approve and regulate their own medicines?
Poor argument since identical medicines are 75% cheaper from overseas.
how about national defense? who needs it? we have a pistol in our house, right?
You are right. The poor need my taxes for college money, and the military at least gets work from 'em in exchange for the money.
<< <i>I think it's funny when citizens complain about taxes.
Perhaps they would like to not pay any taxes, and then build their own roads and highways with their own hands? maybe they'd like to put out their own fires, or police their own neighborhoods? they should operate their own schools, and approve and regulate their own medicines? how about national defense? who needs it? we have a pistol in our house, right?
I pay 4% of the value of my home in property and school taxes. Anybody else pay that much? The school district has gone from 1300 students 15 years ago to 1100. And they just approved a $15 million addition. Its crazy here. And the value of my home has not increased in value. It is 2700 sq ft with a huge oversized 3 car garage with a pole barn on 3.7 acres. If I sold it I would be able to get a townhouse in New Jersey. Taxes where I live are rediculous. Did I mention the 8.25% sales tax?
Knowledge is the enemy of fear