<< <i>I doubt China would dump its US currency holdings and thereby incur enormous losses, unless there was some huge political benefit to them from doing so. The only one even I can think of would involve China seeking to leverage those US dollar holdings to keep us out of a conflict with Taiwan, but that doesn't seem to beon the horizon.
I just don't see the political advantage and the economic losses to them would be enormous. Anyway, given that the 2008 Olympics are in China next summer, I seriously doubt if China wants to invite those kinds of problems and that kind of scrutiny right now. >>
You can look at it that way I guess, but it's not like they're not already losing a lot of green right now and in the future as others sell. Not to mention the out of contol FED printing up more money by the second to make the problem worse.
<< <i> I doubt China would dump its US currency holdings and thereby incur enormous losses, unless there was some huge political benefit to them from doing so. The only one even I can think of would involve China seeking to leverage those US dollar holdings to keep us out of a conflict with Taiwan, but that doesn't seem to beon the horizon. >>
Do you expect they will be like a bank that continues to lend money to a bankrupt business so they don't have to admit the original loan is lost?? We left them holding the bag as we drop the value of the dollar and make thier dollars worth less each day.
I often wondered who was screwing who. Did they screw us with thier rigged system creating a huge trade imbalance or did we screw them giving them worthless paper for real goods?
China's coming out party is next year at the olympics and they will have their best face, good neighbor handshake, well groomed, and polite presentation to the world. Probably within the time between now and the conclusion of the olympics, their domestic situation will become critical. They just completed their National Congress plan for the next 5 years so there is no unfinished business at the national planning level and although they speak in platitudes and euphemisms, it didn't read like they were out to conquer the world. 5 yr plan
Taiwan is an issue but not an issue right now, they have the olympics to deal with until next summer is over. They do have some very serious and potentially crippling internal problems with both a very poorly developed infrastructure conflicting with a growing urban population. Toxic environmental management problems that include air, water, food and the realm of survival type issues will come to the news big time in the time between now and the olympics. These internal issues are serious enough to bring another huge protest on the order or larger than Tienamin Square. Their urban air is toxic, they have very little clean water in populated areas, their rivers and soils are toxic, and their public transportation is nearly nonexistent while there is wide spread corruption and a wild west mentality. There are some serious problems in the center earth. protest
The other thing to remember about China is that as soon as you have them figured, you will realize that you are wrong. Just for grins you can read Tsu's Art of War and follow that up with the 4 Books (kind of tedious) and if you can understand all of that, you may be able to guess what China will do next. All I can see is they have some serious internal problems to deal with. This capitalism transition is going to be extreemly difficult for them. Maybe mrearlygold will chime in here to offer guidance.
<< <i> I often wondered who was screwing who. Did they screw us with thier rigged system creating a huge trade imbalance or did we screw them giving them worthless paper for real goods? >>
You raise a really good point. The fact is that debtors sometimes have a tremendous amount of power and leverage. Especially when the debtor has issued the debt instrument and controls the supply of money to pay that debt. Unlike most other countries, our debt is denominated in our own currency, and WE decide how much of that currency exists. Maybe that's why lot of influential economists don't seem to care one whit about the trade deficit.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
<< I often wondered who was screwing who. Did they screw us with thier rigged system creating a huge trade imbalance or did we screw them giving them worthless paper for real goods? >>
Isn't it possible that the US and China both got what they wanted, so no one really screwed the other? E.g., China wanted rapid development and stability, and the US wanted cheap products and a way to transfer much of the grunt work offshore so that we could focus on higher level activities.
read down a wee bit where it says what the Jan 1980 price of gold was adjusted for inflation!...i know that is apples to maybe an apple of a different color?
<< <i>No different than his doomsday scenarios of the last few years running...
"second verse; same as the first!" >>
Hey, he is named "Bear", right?
Now, who is Wise Old "Bull?"
Don
Do your best to avoid circular arguments, as it will help you reason better, because better reasoning is often a result of avoiding circular arguments.
I understand being a "bear" but let's not get carried away here. You remind me of those people on airplanes who shriek and grab the armrests every time the plane hits a little turbulence. Folks, the US economy is experiencing some turbulence, but the plane isn't remotely going to crash.
Hmm, let's see.... unemployment is at 4.7%, our economy grew at 3.9% last quarter, worker productivity gains are the highest in years, our per capita GDP is among the highest in the world, our budget deficit and trade deficits are shrinking.... not all the news out there is bad. I view this more as an opportunity rather than as the apocalypse.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
Who gave China the opportunity to go into business on a World Scale....I think if they don't buy our debt then one phone call will be all it takes to shut um down....Banks and derivatives, shucks , yeah a few banks go out of business and new one will emerge onto the great Banking Front....and all the bad paper will just disappear like always....remember it is just paper!
Have to throw my hat into the fray alongside Bear"s if the stock market follows thru on today's fall. Bernanke is speaking tomorrow and there is nothing he can say to placate the market , in fact he will probably say things that will make it fall out of bed. If the market crashes then all he can do is cut rates to prevent "the great depression" that he knows so much about. Cutting rates will put pressure on the dollar , China cannot bail on the dollar until after the Olympics , so we will see a slow agonising decrease in our spending power ( CPI and Inflation will still be at record lows because they dont measure anything that we spend money on ) GDP will be flying because they base it on a low inflation number. Gold and silver will fly Ultimately everything will be fine though, because Americans will become the cheap labor pool for the world. 3 years ago one euro bought you 2/3 of one american labor unit , now it buys you almost 1 and half americans and in the not so distant future it will buy 4 americans We will export lead filled toys to China and the rest of the world until the next Fed Chairman pulls out out of it and we become a consumer nation again
Unlike most other countries, our debt is denominated in our own currency, and WE decide how much of that currency exists.
We don't decide, and the FED doesn't really decide. It's the major banks that have created $450 TRILLION in debt via all their leveraging tactics that are divorced from realistic regulation. That's the real debt and credit problem.
Hmm, let's see.... unemployment is at 4.7%, our economy grew at 3.9% last quarter, worker productivity gains are the highest in years, our per capita GDP is among the highest in the world, our budget deficit and trade deficits are shrinking.... not all the news out there is bad. I view this more as an opportunity rather than as the apocalypse.
If you take those numbers literally, then yes, all is well. But the dollar/gold/credit default derivatives relationship says otherwise. Unemployment, GDP, and CPI stats are all cooked to order. The 3.9% GDP this last quarter was the recipient of an absurdly low GDP deflator (0.8%). This in essence said we have 0.8% inflation last quarter...while even the CPI stat said it was much higher. Such is the baloney inside of BLS stats. If you believe our economy grew last quarter rather than contracted, then the massaged stats are doing their job to keep the lid on things....for now. There may be no apocalypse, but we sure don't have 3.9% growth, 4.7% unemployment or 3% inflation.
<< <i> If you take those numbers literally, then yes, all is well. But the dollar/gold/credit default derivatives relationship says otherwise. Unemployment, GDP, and CPI stats are all cooked to order. >>
As I've said before, I'm not a huge fan of the government statistics (particularly as regards price inflation), but I don't think they're way off base. If the numbers were truly off, the major market participants - who collectively have trillions at stake - wouldn't rely on them to the extent they do. Surely Goldman Sachs and the huge hedge funds know enough about this to ensure that the information they're relying on is accurate. Moreover, if you're correct, it's a little surprising that the government admitted in 2001, as well as back in 1991, that we were in a recession. It seems hard to believe that they're lying now but wouldn't have done so back then.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
Interesting fact today for whatever it means GLD average volume 7.4 million shares....today 16.5 million more than double SLV average volume 450 000.. today just shy of 2million 4X average daily trade
> As I've said before, I'm not a huge fan of the government statistics (particularly as regards price inflation), but I don't think they're way off base. If the numbers were truly off, the major market participants - who collectively have trillions at stake - wouldn't rely on them to the extent they do.
First, I agree with MH, China will NOT dump its treasuries, and cause a world market crash before it’s coming out party next year.
That said it does not mean it will continue to add to the pile.
In addition they would be one of the most harmed by any dumping move. Here is exactly what they will do.
First they will roll over all debt, but slowly filter this into hard assets, buying up company’s etc. through their government trust.
Second, they will continue to add large percentages in other currencies, and gold.
Third, they will use their dollar denominated debt to pay for their growth and let others sell dollars, and notes, so they do not take the blame, and can “SAVE FACE”.
The simple fact here is that we have lost control of our financial system. Like a Chess game were any move you make leads to Checkmate, we are out of moves.
Most of the rest of the world is now experiencing inflation, and fessing up to that, and therefore raising rates to curb that inflation.
As the worlds largest debtor nation, and fiat creator, we cannot do that without crashing our financial institutions, which we have allowed to create trillions of dollars in additional fiat derivatives.
So here are the moves we have left:
Lower rates and protect the banks, and no one will buy the NEW trillion dollars worth of debt we must sell each year, Checkmate!
Raise the rates to sell the debt and trillions of dollars in derivatives will go back to their real value of 20 cents on the dollar, the banks will crash, along with many brokerages, the housing market, peoples 401K’S, etc, Checkmate!
Lower the rates and print the money, and have the dollar drop in half, the Euro become the worlds currency, and create hyperinflation, Checkmate!
The one thing we could do, and will be forced to do in the end, we will not do until we have no choice. We could call it quits and start a new game. Cut the size of the government in half, stop being the world’s policeman, and become a self-serving protectionist, America First, country again. Eventually America will be forced into a new nationalistic movement and throw off these socialistic attitudes.
In the mean time it is up to each individual to protect their self-interests, because those in power still want to confiscate your money and spread it around.
This week in Texas we passed a 3 Billion dollar bond debt to finance cancer research, because a bicycle rider that once had cancer between his legs said we should.
<< <i>> As I've said before, I'm not a huge fan of the government statistics (particularly as regards price inflation), but I don't think they're way off base. If the numbers were truly off, the major market participants - who collectively have trillions at stake - wouldn't rely on them to the extent they do.
What evidence do you have that they do? >>
The markets move in response to these figures. Can you point to any other alternative measures of inflation or economic growth that, when released, similarly move the markets? I'm not aware of any.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
<< <i> The one thing we could do, and will be forced to do in the end, we will not do until we have no choice. We could call it quits and start a new game. Cut the size of the government in half, stop being the world’s policeman, and become a self-serving protectionist, America First, country again. Eventually America will be forced into a new nationalistic movement and throw off these socialistic attitudes.
In the mean time it is up to each individual to protect their self-interests, because those in power still want to confiscate your money and spread it around. >>
Amen to (most) of that.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
> The markets move in response to these figures. Can you point to any other alternative measures of inflation or economic growth that, when released, similarly move the markets? I'm not aware of any.
Any large brokerage house has its own economic unit that produces their own financial data. The main reason they even take the time to check the "official" figures is to get a handle on what laypeople will do; although that is now more a function of what the media tells people to think.
<< <i> Any large brokerage house has its own economic unit that produces their own financial data. The main reason they even take the time to check the "official" figures is to get a handle on what laypeople will do; although that is now more a function of what the media tells people to think. >>
Obviously large financial institutions generate their own proprietary data. The question, however, is whether that data (on jobs, GDP growth, inflation) is deviating in any substantial way from the recent government data. That I don't know the answer to. I would suspect that if the answer was "yes," those of us who follow the financial press carefully would have heard about it. It seems like an awful big secret for many dispersed market participants to be keeping.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
<< <i>Unlike most other countries, our debt is denominated in our own currency, and WE decide how much of that currency exists.
We don't decide, and the FED doesn't really decide. It's the major banks that have created $450 TRILLION in debt via all their leveraging tactics that are divorced from realistic regulation. That's the real debt and credit problem.
Hmm, let's see.... unemployment is at 4.7%, our economy grew at 3.9% last quarter, worker productivity gains are the highest in years, our per capita GDP is among the highest in the world, our budget deficit and trade deficits are shrinking.... not all the news out there is bad. I view this more as an opportunity rather than as the apocalypse.
If you take those numbers literally, then yes, all is well. But the dollar/gold/credit default derivatives relationship says otherwise. Unemployment, GDP, and CPI stats are all cooked to order. The 3.9% GDP this last quarter was the recipient of an absurdly low GDP deflator (0.8%). This in essence said we have 0.8% inflation last quarter...while even the CPI stat said it was much higher. Such is the baloney inside of BLS stats. If you believe our economy grew last quarter rather than contracted, then the massaged stats are doing their job to keep the lid on things....for now. There may be no apocalypse, but we sure don't have 3.9% growth, 4.7% unemployment or 3% inflation.
roadrunner >>
Are you counting in the naked shorting of stocks as well? Lets see I short more stock than exists for a company, sell it and never cover. Sounds good for me. How much money did I just create?
FWIW Just about every fall, we take a 3-4 week vacation to collect leaves & visit family/friends in Ind., Ohio, PA.
I have been doing this for about 20 years---since I was in my early 30's. We leave CA with the trailer hooked up to the motorhome and grab the dog. I usually go the the AACA meet at Hershey.
It is always interesting to note the difference in the CASH(liquid) economy by setting things out on a table at the meet. I.E.----last show I did in CA.......$85. VS. Hershey, PA. $1800 at 4am the first day and 4k for 3 days.
Confirms my worst suspicions about LA right now....joe 6pack ain't spending money.
what hits me the most about this is if you talk to anyone about this [the loss in the dollar] they get mad or a dumb look no one even has a clue why things are going up unreal i even heard this to keep your wealth you have to own a junkyard meaning metals O'well who has the biggest junkyard wins i guess
<< <i>what hits me the most about this is if you talk to anyone about this [the loss in the dollar] they get mad or a dumb look no one even has a clue why things are going up unreal i even heard this to keep your wealth you have to own a junkyard meaning metals O'well who has the biggest junkyard wins i guess >>
The factories have been getting consumed for years now.
The big reason scrap steel is so high is that we're running out of factories to melt.
<< <i>The big reason scrap steel is so high is that we're running out of factories to melt. >>
That's okay. This Christmas all the evicted house defaulters will be shopping early at Goodwill to get there before the Melmac is all picked over so who'll need a factory?
I would suspect that if the answer was "yes," those of us who follow the financial press carefully would have heard about it. It seems like an awful big secret for many dispersed market participants to be keeping.
You'll not see the truth in the financial press as that is controlled by the powers to be as well. The same could be said for what our current gold inventory is (unverified for 50+ years) or the truth behind OTC derivatives. You won't see that stuff in the press.....yet. There's much more truth on the internet though.
You know, it's a little creepy to see anything you find not concurring with your reasoning as "tainted" and "not the real truth" because "the fix" is in, as dictated by a magical wizard ---
while remaining fully faithful that the "truth" is out there on the internet!
Well said LonerAnger. Most people on this and similar forums are well aware of the goings on. Gold/PM"s are "honest"money. Millions are heading for the exit where the "dollar" is concerned. People need to protect themselves/family, by holding different kinds of assets not just gold.....Different kind of eggs in the basket, in case of the unexpected.
mhammerman........you just not looking hard enough. Try Metal Management for one. That's a big metal recycler in Conn. Would not be surprised if BFI or Waste Management are big in that field as well.
Hey, his opinion is a good or better than most anyone here. Not a rosy picture he paints.
roadrunner >>
Now that's pessimism.
The only thing he didn't suggest was a race to the bottom by all the world currencies.
At one point in 1946 the Hungarian economy was worth about 5 quadrillion Pengos which equated to $26 US. Just something to keep in mind if gold ever approaches $10,000.
[WRONG...I can not find any equities for metal junk yard operators listed on any US exchange. ] his tone or meaning was about me owning gold and silver and him owning cash in the bank and drawing 5 % interest so the junkyard remark meaning metals in a junkyard or gold silver and platinum i'll never relate any more dollar losing buying power world wide to anyone else
A good healthy dose of 100% pessimism was needed after all the other replies on how good things are: great economic growth, a rebound in the dollar around the corner, no recession, a rebound in the housing market is at hand, low unemployment, a new S&P record in short order, etc.. etc. Only right to fight fantasy with fantasy. The truth is somewhere in between. What the govt puts out as information or stats is so tainted as to be total bs. The 38% loss in the dollar over the past 6 years is the proof. Factor that into the DOW and you are under 10,000 in real terms. But reality was never a BLS strong point when it came to numbers....that's certainly a lot more than 2-3% inflation per year. Actually, it's a lot more like 6%.
Not much talk about the Iranian oil bourse lately. If the dollar sinks deeply enough (some might say "when it does"), it will become a reality. If the bound economies of Europe and Japan drag the euro and yen down too, don't be surprised if they demand payment in gold as has been considered. In any event, the dollar will not be among the considerations. Think nukes are the worry of this administration and its supporters? Nope. This is much more alarming to them, so much so that it is not discussed.
Willie is completely hysterical: "[T]he problems in the Untied States are insurmountable, unfixable, without any remedy. The only real life solution will be a more visible totalitarian state complete with rationing.... Next come riots. In fact, job loss, home foreclosure, food prices, gasoline shortages, and bank runs will likely be the basis of social chaos in the next two years. One will not be capable of recognizing the US landscape in ten years, maybe five years."
The decline of the dollar, and the corresponding rise in precious metals and foreign currencies is most proximately being caused by falling US interest rates. The problem with Willis's prediction is that he totally underestimates our capacity to adapt and change course. Before we get remotely close to the kind of scenario he is envisioning, there are a lot of remedies available. Here's a simple one that would cause the dollar to rise and gold to fall: raise interest rates. Why aren't we doing that? Obviously, because economic growth is weak and the Fed. wants to skirt a recession. But if we got into a situation remotely approaching what he is describing, the Fed. would do exactly that. Volcker did the same thing in the early 80s.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
Not sure if this has been posted earlier, but here is an interesting website measuring the "true" rate of inflation: LINK.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
Comments
<< <i>I doubt China would dump its US currency holdings and thereby incur enormous losses, unless there was some huge political benefit to them from doing so. The only one even I can think of would involve China seeking to leverage those US dollar holdings to keep us out of a conflict with Taiwan, but that doesn't seem to beon the horizon.
I just don't see the political advantage and the economic losses to them would be enormous. Anyway, given that the 2008 Olympics are in China next summer, I seriously doubt if China wants to invite those kinds of problems and that kind of scrutiny right now. >>
You can look at it that way I guess, but it's not like they're not already losing a lot of green right now and in the future as others sell. Not to mention the out of contol FED printing up more money by the second to make the problem worse.
<< <i> I doubt China would dump its US currency holdings and thereby incur enormous losses, unless there was some huge political benefit to them from doing so. The only one even I can think of would involve China seeking to leverage those US dollar holdings to keep us out of a conflict with Taiwan, but that doesn't seem to beon the horizon. >>
Do you expect they will be like a bank that continues to lend money to a bankrupt business so they don't have to admit the original loan is lost?? We left them holding the bag as we drop the value of the dollar and make thier dollars worth less each day.
I often wondered who was screwing who. Did they screw us with thier rigged system creating a huge trade imbalance or did we screw them giving them worthless paper for real goods?
I think the latter is starting to play out.
China's coming out party is next year at the olympics and they will have their best face, good neighbor handshake, well groomed, and polite presentation to the world. Probably within the time between now and the conclusion of the olympics, their domestic situation will become critical. They just completed their National Congress plan for the next 5 years so there is no unfinished business at the national planning level and although they speak in platitudes and euphemisms, it didn't read like they were out to conquer the world.
5 yr plan
Taiwan is an issue but not an issue right now, they have the olympics to deal with until next summer is over. They do have some very serious and potentially crippling internal problems with both a very poorly developed infrastructure conflicting with a growing urban population. Toxic environmental management problems that include air, water, food and the realm of survival type issues will come to the news big time in the time between now and the olympics. These internal issues are serious enough to bring another huge protest on the order or larger than Tienamin Square. Their urban air is toxic, they have very little clean water in populated areas, their rivers and soils are toxic, and their public transportation is nearly nonexistent while there is wide spread corruption and a wild west mentality. There are some serious problems in the center earth.
protest
The other thing to remember about China is that as soon as you have them figured, you will realize that you are wrong. Just for grins you can read Tsu's Art of War and follow that up with the 4 Books (kind of tedious) and if you can understand all of that, you may be able to guess what China will do next. All I can see is they have some serious internal problems to deal with. This capitalism transition is going to be extreemly difficult for them. Maybe mrearlygold will chime in here to offer guidance.
Edited to add some thoughts from teacher
Lao Tzu
<< <i> I often wondered who was screwing who. Did they screw us with thier rigged system creating a huge trade imbalance or did we screw them giving them worthless paper for real goods? >>
You raise a really good point. The fact is that debtors sometimes have a tremendous amount of power and leverage. Especially when the debtor has issued the debt instrument and controls the supply of money to pay that debt. Unlike most other countries, our debt is denominated in our own currency, and WE decide how much of that currency exists. Maybe that's why lot of influential economists don't seem to care one whit about the trade deficit.
With regard to:
<< I often wondered who was screwing who. Did they screw us with thier rigged system creating a huge trade imbalance or did we screw them giving them worthless paper for real goods? >>
Isn't it possible that the US and China both got what they wanted, so no one really screwed the other? E.g., China wanted rapid development and stability, and the US wanted cheap products and a way to transfer much of the grunt work offshore so that we could focus on higher level activities.
The FED will be forced to again lower the discount rate significantly in the next week.
I would not be amazed to see another 1/2 point reduction if not two.
The dollar will really fall out of bed and Oil and gold will hit new highs. I
really don't know how far this nightmare will go, but I believe we are nearer
the beginning rather then the end. What ever those "in the know", know, is not
being shared with us tax payers. Kudlow keeps prattling about the favorable
Government statistics on productivity ect., ect. Will someone tell the supposed
expert that those numbers have been cooked. Soon we will be hearing more about
the 600 trillion is derivatives. It looks like were in for a really fun winter season.
The great American consumer market, is about to contract with worldwide implications.
Camelot
read down a wee bit where it says what the Jan 1980 price of gold was adjusted for inflation!...i know that is apples to maybe an apple of a different color?
Bear -- it sounds like you are predicting global depression?
"second verse; same as the first!"
<< <i>No different than his doomsday scenarios of the last few years running...
"second verse; same as the first!" >>
Hey, he is named "Bear", right?
Now, who is Wise Old "Bull?"
Don
Hmm, let's see.... unemployment is at 4.7%, our economy grew at 3.9% last quarter, worker productivity gains are the highest in years, our per capita GDP is among the highest in the world, our budget deficit and trade deficits are shrinking.... not all the news out there is bad. I view this more as an opportunity rather than as the apocalypse.
Bernanke is speaking tomorrow and there is nothing he can say to placate the market , in fact he will probably say things that will make it fall out of bed.
If the market crashes then all he can do is cut rates to prevent "the great depression" that he knows so much about.
Cutting rates will put pressure on the dollar , China cannot bail on the dollar until after the Olympics , so we will see a slow agonising decrease in our spending power ( CPI and Inflation will still be at record lows because they dont measure anything that we spend money on ) GDP will be flying because they base it on a low inflation number.
Gold and silver will fly
Ultimately everything will be fine though, because Americans will become the cheap labor pool for the world. 3 years ago one euro bought you 2/3 of one american labor unit , now it buys you almost 1 and half americans and in the not so distant future it will buy 4 americans
We will export lead filled toys to China and the rest of the world until the next Fed Chairman pulls out out of it and we become a consumer nation again
We don't decide, and the FED doesn't really decide. It's the major banks that have created $450 TRILLION in debt via all their leveraging tactics that are divorced from realistic regulation. That's the real debt and credit problem.
Hmm, let's see.... unemployment is at 4.7%, our economy grew at 3.9% last quarter, worker productivity gains are the highest in years, our per capita GDP is among the highest in the world, our budget deficit and trade deficits are shrinking.... not all the news out there is bad. I view this more as an opportunity rather than as the apocalypse.
If you take those numbers literally, then yes, all is well. But the dollar/gold/credit default derivatives relationship says otherwise. Unemployment, GDP, and CPI stats are all cooked to order. The 3.9% GDP this last quarter was the recipient of an absurdly low GDP deflator (0.8%). This in essence said we have 0.8% inflation last quarter...while even the CPI stat said it was much higher. Such is the baloney inside of BLS stats. If you believe our economy grew last quarter rather than contracted, then the massaged stats are doing their job to keep the lid on things....for now. There may be no apocalypse, but we sure don't have 3.9% growth, 4.7% unemployment or 3% inflation.
roadrunner
<< <i> If you take those numbers literally, then yes, all is well. But the dollar/gold/credit default derivatives relationship says otherwise. Unemployment, GDP, and CPI stats are all cooked to order. >>
As I've said before, I'm not a huge fan of the government statistics (particularly as regards price inflation), but I don't think they're way off base. If the numbers were truly off, the major market participants - who collectively have trillions at stake - wouldn't rely on them to the extent they do. Surely Goldman Sachs and the huge hedge funds know enough about this to ensure that the information they're relying on is accurate. Moreover, if you're correct, it's a little surprising that the government admitted in 2001, as well as back in 1991, that we were in a recession. It seems hard to believe that they're lying now but wouldn't have done so back then.
GLD average volume 7.4 million shares....today 16.5 million more than double
SLV average volume 450 000.. today just shy of 2million 4X average daily trade
What evidence do you have that they do?
First, I agree with MH, China will NOT dump its treasuries, and cause a world market crash before it’s coming out party next year.
That said it does not mean it will continue to add to the pile.
In addition they would be one of the most harmed by any dumping move.
Here is exactly what they will do.
First they will roll over all debt, but slowly filter this into hard assets, buying up company’s etc. through their government trust.
Second, they will continue to add large percentages in other currencies, and gold.
Third, they will use their dollar denominated debt to pay for their growth and let others sell dollars, and notes, so they do not take the blame, and can “SAVE FACE”.
The simple fact here is that we have lost control of our financial system.
Like a Chess game were any move you make leads to Checkmate, we are out of moves.
Most of the rest of the world is now experiencing inflation, and fessing up to that, and therefore raising rates to curb that inflation.
As the worlds largest debtor nation, and fiat creator, we cannot do that without crashing our financial institutions, which we have allowed to create trillions of dollars in additional fiat derivatives.
So here are the moves we have left:
Lower rates and protect the banks, and no one will buy the NEW trillion dollars worth of debt we must sell each year, Checkmate!
Raise the rates to sell the debt and trillions of dollars in derivatives will go back to their real value of 20 cents on the dollar, the banks will crash, along with many brokerages, the housing market, peoples 401K’S, etc, Checkmate!
Lower the rates and print the money, and have the dollar drop in half, the Euro become the worlds currency, and create hyperinflation, Checkmate!
The one thing we could do, and will be forced to do in the end, we will not do until we have no choice. We could call it quits and start a new game. Cut the size of the government in half, stop being the world’s policeman, and become a self-serving protectionist, America First, country again. Eventually America will be forced into a new nationalistic movement and throw off these socialistic attitudes.
In the mean time it is up to each individual to protect their self-interests, because those in power still want to confiscate your money and spread it around.
This week in Texas we passed a 3 Billion dollar bond debt to finance cancer research, because a bicycle rider that once had cancer between his legs said we should.
<< <i>> As I've said before, I'm not a huge fan of the government statistics (particularly as regards price inflation), but I don't think they're way off base. If the numbers were truly off, the major market participants - who collectively have trillions at stake - wouldn't rely on them to the extent they do.
What evidence do you have that they do? >>
The markets move in response to these figures. Can you point to any other alternative measures of inflation or economic growth that, when released, similarly move the markets? I'm not aware of any.
<< <i> The one thing we could do, and will be forced to do in the end, we will not do until we have no choice. We could call it quits and start a new game. Cut the size of the government in half, stop being the world’s policeman, and become a self-serving protectionist, America First, country again. Eventually America will be forced into a new nationalistic movement and throw off these socialistic attitudes.
In the mean time it is up to each individual to protect their self-interests, because those in power still want to confiscate your money and spread it around. >>
Amen to (most) of that.
Any large brokerage house has its own economic unit that produces their own financial data. The main reason they even take the time to check the "official" figures is to get a handle on what laypeople will do; although that is now more a function of what the media tells people to think.
<< <i> Any large brokerage house has its own economic unit that produces their own financial data. The main reason they even take the time to check the "official" figures is to get a handle on what laypeople will do; although that is now more a function of what the media tells people to think. >>
Obviously large financial institutions generate their own proprietary data. The question, however, is whether that data (on jobs, GDP growth, inflation) is deviating in any substantial way from the recent government data. That I don't know the answer to. I would suspect that if the answer was "yes," those of us who follow the financial press carefully would have heard about it. It seems like an awful big secret for many dispersed market participants to be keeping.
<< <i>Unlike most other countries, our debt is denominated in our own currency, and WE decide how much of that currency exists.
We don't decide, and the FED doesn't really decide. It's the major banks that have created $450 TRILLION in debt via all their leveraging tactics that are divorced from realistic regulation. That's the real debt and credit problem.
Hmm, let's see.... unemployment is at 4.7%, our economy grew at 3.9% last quarter, worker productivity gains are the highest in years, our per capita GDP is among the highest in the world, our budget deficit and trade deficits are shrinking.... not all the news out there is bad. I view this more as an opportunity rather than as the apocalypse.
If you take those numbers literally, then yes, all is well. But the dollar/gold/credit default derivatives relationship says otherwise. Unemployment, GDP, and CPI stats are all cooked to order. The 3.9% GDP this last quarter was the recipient of an absurdly low GDP deflator (0.8%). This in essence said we have 0.8% inflation last quarter...while even the CPI stat said it was much higher. Such is the baloney inside of BLS stats. If you believe our economy grew last quarter rather than contracted, then the massaged stats are doing their job to keep the lid on things....for now. There may be no apocalypse, but we sure don't have 3.9% growth, 4.7% unemployment or 3% inflation.
roadrunner >>
Are you counting in the naked shorting of stocks as well? Lets see I short more stock than exists for a company, sell it and never cover. Sounds good for me. How much money did I just create?
Credit cards create money out of thin air
Derivatives create money out of thin air
Selling junk bonds to allow overpaying for a company
is creating money out of thin air.
Massaging the numbers of quarterly reports is creating
money out of thin air.
Gee...that is gonna take a lot of thin air.
Camelot
Just about every fall, we take a 3-4 week vacation to collect leaves & visit family/friends in Ind., Ohio, PA.
I have been doing this for about 20 years---since I was in my early 30's. We leave CA with the trailer hooked up to the motorhome and grab the dog. I usually go the the AACA meet at Hershey.
It is always interesting to note the difference in the CASH(liquid) economy by setting things out on a table at the meet. I.E.----last show I did in CA.......$85. VS. Hershey, PA. $1800 at 4am the first day and 4k for 3 days.
Confirms my worst suspicions about LA right now....joe 6pack ain't spending money.
they get mad or a dumb look
no one even has a clue why things are going up unreal
i even heard this to keep your wealth you have to own a junkyard meaning metals
O'well who has the biggest junkyard wins i guess
<< <i>what hits me the most about this is if you talk to anyone about this [the loss in the dollar]
they get mad or a dumb look
no one even has a clue why things are going up unreal
i even heard this to keep your wealth you have to own a junkyard meaning metals
O'well who has the biggest junkyard wins i guess >>
The factories have been getting consumed for years now.
The big reason scrap steel is so high is that we're running out of factories to melt.
Proud recipient of two "You Suck" awards
<< <i>The big reason scrap steel is so high is that we're running out of factories to melt. >>
That's okay. This Christmas all the evicted house defaulters will be shopping early at Goodwill to get there before the Melmac is all picked over so who'll need a factory?
Camelot
HE>I
You'll not see the truth in the financial press as that is controlled by the powers to be as well. The same could be said for what our current gold inventory is (unverified for 50+ years) or the truth behind OTC derivatives. You won't see that stuff in the press.....yet.
There's much more truth on the internet though.
roadrunner
<< <i>I think someone needs a hug
Or a drink
Antique Fishing Lures
<< <i>LonerAnger....Great rant! Well done!
Indeed!
It would have been a classic on the OF.
while remaining fully faithful that the "truth" is out there on the internet!
economic reality - true inflation rates - not for the faint of heart - by Jim Willie
Hey, his opinion is a good or better than most anyone here.
Not a rosy picture he paints.
roadrunner
WRONG...I can not find any equities for metal junk yard operators listed on any US exchange.
Would not be surprised if BFI or Waste Management are big in that field as well.
roadrunner
<< <i> Deadly dollar confluence....by Jim Willie.
economic reality - true inflation rates - not for the faint of heart - by Jim Willie
Hey, his opinion is a good or better than most anyone here.
Not a rosy picture he paints.
roadrunner >>
Now that's pessimism.
The only thing he didn't suggest was a race to the bottom by all the world currencies.
At one point in 1946 the Hungarian economy was worth about 5 quadrillion Pengos which equated to $26 US. Just something to keep in mind if gold ever approaches $10,000.
his tone or meaning was about me owning gold and silver and him owning cash in the bank and drawing 5 % interest
so the junkyard remark meaning metals in a junkyard or gold silver and platinum
i'll never relate any more dollar losing buying power world wide to anyone else
roadrunner
NSDR - Life Member
SSDC - Life Member
ANA - Pay As I Go Member
<< <i> economic reality - true inflation rates - not for the faint of heart - by Jim Willie
Hey, his opinion is a good or better than most anyone here. >>
Willie is completely hysterical: "[T]he problems in the Untied States are insurmountable, unfixable, without any remedy. The only real life solution will be a more visible totalitarian state complete with rationing.... Next come riots. In fact, job loss, home foreclosure, food prices, gasoline shortages, and bank runs will likely be the basis of social chaos in the next two years. One will not be capable of recognizing the US landscape in ten years, maybe five years."
The decline of the dollar, and the corresponding rise in precious metals and foreign currencies is most proximately being caused by falling US interest rates. The problem with Willis's prediction is that he totally underestimates our capacity to adapt and change course. Before we get remotely close to the kind of scenario he is envisioning, there are a lot of remedies available. Here's a simple one that would cause the dollar to rise and gold to fall: raise interest rates. Why aren't we doing that? Obviously, because economic growth is weak and the Fed. wants to skirt a recession. But if we got into a situation remotely approaching what he is describing, the Fed. would do exactly that. Volcker did the same thing in the early 80s.
Today was so blatant it was a joke. I'm sure it will all be paid for with freshly minted greenbacks.
Inflation will come just as sure as Winter.
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(We're all thinking it...)
>>>My Collection
<< <i>5,000!
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Doesn't work that way, dear.