OK, time for a continuing study in reality. A couple of weeks ago, I removed a fair percentage of my funds out of stocks and into an inflation linked bond. When previously discussing this topic here, caution was urged by a board member because while the idea had merit, what the bond uses to measure the rate of inflation is a variable that really may or may not be most equitible. Observation noted. Well, I thought to offer a report on the first two weeks of the year and since it is the start of a new year, maybe I'll post results as we proceed.
The stocks in my plan are like baskets of stocks or small funds as they are made up of selections of funds suited for that class of investment. Participants in the plan can move assets around once per month. Here are the results ytd., actually, the first two weeks of '08 for the funds.
Stock fund: -4.94 Global equities fund: -4.66 Growth fund: -5.46
Inflation Linked Bond: 1.67
Not much gain but certainly not the loss that was heading my way. 5% loss also coincides with the general stock market performance for this year.
Some thinking about gold: So, when you get to be old enough to really start looking at retirement and the necessary assets to carry you through retirement, you kind of get your game face on and start counting up the assets. So, my stash of the yellow metal is starting to look like a pretty good play and I was thinking of parting with some and let a portion go back into the great contiuum. My wife came up with clarity of thought to carry me through my confusion.
Our investment advisor told us (as all probably do) that we need to save an extra number of buks per month to meet our retirement objectives. So, I'm, thinking that in 30 years when I'll really need the money, it will kind of be like the previous 30 years in that gasoline in 1978 was about .30 and now it's 3.00, a 10 fold increase and maybe it's $30 in 2038...look at bread, milk, they are all the same. In 78, gold was...call it $200 but now it's $900 so a 4X increase give or take. That's what the investment advisors are seeing and thay's why they are telling everyone to save, save, save and it does make sense. Gold appears to be a very good store of value when put in this light. So, the play is to use gold as the great equalizer, to use the intrinsic value of the metal to offset the value of goods in the future.
I maintain that gold is not a speculative game for the common investor and is simply, as advertised, a store of value of goods and services now v.s. the value of goods and services in the future. So, the plan is to continue increasing the size of my stash through steady accumulation as opposed to holding USD in some CD account instead. If things change appreciably then the plan will certainly change.
So, that's the plan, continue accumulating metal and use the inflation linked bonds to keep the buks safe for the short term. Just though to offer this stuff in case anyone was dealing with a simular situation. Not saying I'm right or wrong but that's how I'm going to play for now. Good luck!
Quite a turnaround from Goldman Sachs considering only a month or two ago they were forecasting a poor year for gold (sub $750) and recommending everyone (except themselves) get out. Goldman Sachs!
Their record low gold short position on the Tokyo Exchange coupled with taking delivery of 5 tons of gold in December mirrored their actual sentiment. Now that they are bullish on gold, expect a major short play by them and PPT not far down the road.
Concur with Mish's analysis on deflation....but only after we go fully through the current stagflationary phase. The FED will make one last effort to inflate the economy.
I like your thoughts on Tips bonds. I think this is a great place to diversify in these volitle times. Doing a little search this morning there is also a Euro inflation fund, IBIC.
As far as seeing things continue for 30 years the way we have been, I guess one must have a plan, but I cannot see us going that way. I think there is a serious crash coming that will readjust everything. It may take a few more years to go down but it must be coming.
I just cannot see gas at $30 and milk at $50 and folks making an average salary of $410,000 per year. (the average income in the U.S. is $41,000 per year now).
Tips bonds, like everything else that is inflation "adjusted" by the Federal Govt, do not come close to covering the true level of inflation. If you believe in the CPI as a measurment of the inflation rate, then by all means, buy Tips. Gold and silver are much better barometers of real inflation....hence the need for the PPT to be actively managing those markets whenever feasible.
I just cannot see gas at $30 and milk at $50 and folks making an average salary of $410,000 per year. (the average income in the U.S. is $41,000 per year now).
Probably if you were asked 30 years ago if you thought gas would go from $0.30 to $3.00, you would have scoffed too. Having said that, I think you're right on these items. Petroleum will hopefully be displaced by other forms of energy by then (if not, we deserve to pay $30/gal.). Milk is a commodity that will always rise slower than inflation. And salaries will probably be held down by global competition. IMO.
I really feel uncomfortable with the tax treatment of inflation adjusted treasuries. Since you pay tax on the increase in principal, in an era of high inflation, it would be possible for taxes paid to exceed cash received from the coupon, so you would end up in a negative cash flow situation.
This approach to taxation is philosophically consistent with the treatment of interest on regular bonds, but vividly illustrates the fact that that our income tax is actually a combined income/wealth tax.
Man the US market must have just kicked in: Gold up $9.20 and silver up .12. I've been expecting a good correction, where will this all end nothing ever goes up in a stright line.
<< <i>Tips bonds, like everything else that is inflation "adjusted" by the Federal Govt, do not come close to covering the true level of inflation. If you believe in the CPI as a measurment of the inflation rate, then by all means, buy Tips. Gold and silver are much better barometers of real inflation....hence the need for the PPT to be actively managing those markets whenever feasible.
roadrunner >>
The push will come again to tie minimum wage to inflation. This has been proposed by Democrats like Kennedy and Kerry. If that happens you had better be in gold big time. This fiasco was played out in Argentina a decade back and totally destroyed their monies value and their economy.
<< <i>Tips bonds, like everything else that is inflation "adjusted" by the Federal Govt, do not come close to covering the true level of inflation. If you believe in the CPI as a measurment of the inflation rate, then by all means, buy Tips. Gold and silver are much better barometers of real inflation....hence the need for the PPT to be actively managing those markets whenever feasible.
roadrunner >>
The push will come again to tie minimum wage to inflation. This has been proposed by Democrats like Kennedy and Kerry. If that happens you had better be in gold big time. This fiasco was played out in Argentina a decade back and totally destroyed their monies value and their economy. >>
Paying fair wages isn't inflationary probably.
Printing money is inflationary. It doesn't matter why it's being printed just that the money supply is increasing faster than the total amount of wealth. This applies especially to that wealth that is "current" such as goods and services but inflation can appear in less current wealth such as gold or large infrastructure projects. When money supply increases too rapidly then whatever people are buying is likely to show inflation.
Here are some scary money supply growth numbers for you for 2007 courtesy of the Sinclair website. Nothing inflationary here, move along now.
Brazil M3 +17.0% Canada M3 +12.9% China M2 +18.5% Euro zone M3 +12.3% Hong Kong M3 +31.5% India M3 +21.5% U.S. M3 +15.8%
Where's Russia? Mid last year they were over 50% YTD.
Raising minimum wages is inflationary. It distorts the economy and things warp from there. Wages should be set based on competition and not solely to get votes. Let them tie the min wage to stated BLS inflation - just as TIPS and GDP currently are. 2-3% per year in this environment is a drop in the bucket. Inflation is low, just ask the BLS or any economist who works for the government.
<< <i>Tips bonds, like everything else that is inflation "adjusted" by the Federal Govt, do not come close to covering the true level of inflation. If you believe in the CPI as a measurment of the inflation rate, then by all means, buy Tips. Gold and silver are much better barometers of real inflation....hence the need for the PPT to be actively managing those markets whenever feasible.
roadrunner >>
The push will come again to tie minimum wage to inflation. This has been proposed by Democrats like Kennedy and Kerry. If that happens you had better be in gold big time. This fiasco was played out in Argentina a decade back and totally destroyed their monies value and their economy. >>
Actually, what destroyed the Argentinian economy was the huge government debt (sound familiar?).
Gold is having its correction today, but this will not last long when the Fed drops the rate by at least a half a point, this may happen as early as Friday. Those that want to add to their positions should do so in the next few days.
This is next!
“Credit card delinquencies have jumped 26 percent from a year ago, a recent Associated Press poll shows. Experts say the sub-prime mortgage meltdown is partly to blame as consumers turn to credit cards to cover expenses. Alex Chadwick talks to Marketplace's Steve Tripoli about the rising credit card debt and what it could mean to the nation's economy.
Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.
The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP. That represented more than 4 percent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks such as Bank of America and Capital One and for retailers like Home Depot and Wal-Mart.
Serious delinquencies also are up sharply: Some of the nation's biggest lenders — including Advanta, GE Money Bank and HSBC — reported increases of 50 percent or more in the value of accounts that were at least 90 days delinquent when compared with the same period a year ago.”
One of the reason why investors typically make bad decisions is because they are too close to their investment. Home builders buy building related, doctors buy pharmarceutical, ect. You must look beyond your borders to see the whole picture.
I have stated many times that Europe, Asia, Australia, have had housing bubbles much bigger than our own. They may not have the substandard lending practices but homes across the world are UNAFFORDABLE to almost everyone. This will have a huge impact on global economies. Most of the reason why the dollar has been weaker has been due to the relative strength of the world. As the world slows, that relativity will shrink. What is more stable? A USA with fiscal problems or an Argentina?
The global inflation we have witnessed has been caused by a weak dollar, politics, and a runaway China. Food inflation will reverse when everyone wakes up and realizes that ethanol is a farce. Basic Material inflation will reverse when China implodes. Oil prices will collapse when global economies slow.
Edited to add....The ECB is saying they will take a serious look at their interest rates. This is exactly what I am talking about.
Gold is having its correction today, but this will not last long when the Fed drops the rate by at least a half a point, this may happen as early as Friday.
i totally agree. it is like people want to take a small profit not realizing the long term trend is good for PM.
the dow looks horrible over the last year and i do not think 4th quarter reports will be that great. a la intel. also predictions for 1st quarter earnings will probably disappoint many also.
i think we are in for quite a few more shocks in the year to come. seems people have very short memories or fail to think long term.
great thread. keep up the interesting posts you gurus! i know i still like PMs and picked up another couple gold pieces.
And...while we are at it, so what's this big deal to give everybody in the middle class and below a cash stimulus to get buks into the economy. Jezus, this stuff is beyond stupidity. Which would you rather have, a job that pays 2k/mo or get 1k now and no chance of the business sector expanding this year. Maybe they should call it the DUH bill. This way everybody can get their check, spend it and sit back and say...DUH?Duh?
So, which would you rather have, a K now or a job?
<< <i>And...while we are at it, so what's this big deal to give everybody in the middle class and below a cash stimulus to get buks into the economy. Jezus, this stuff is beyond stupidity. Which would you rather have, a job that pays 2k/mo or get 1k now and no chance of the business sector expanding this year. Maybe they should call it the DUH bill. This way everybody can get their check, spend it and sit back and say...DUH?Duh?
So, which would you rather have, a K now or a job? >>
it's scary a scary thought that a good percentage would take that 1k right now. (in my opinion)
<< <i>And...while we are at it, so what's this big deal to give everybody in the middle class and below a cash stimulus to get buks into the economy. Jezus, this stuff is beyond stupidity. Which would you rather have, a job that pays 2k/mo or get 1k now and no chance of the business sector expanding this year. Maybe they should call it the DUH bill. This way everybody can get their check, spend it and sit back and say...DUH?Duh?
So, which would you rather have, a K now or a job? >>
it's scary a scary thought that a good percentage would take that 1k right now. (in my opinion) >>
-Agreed, i have no idea what they are thinking with some of this stuff.
For those that can remember way back to 1972, George McGovern was the Dem candidate running for President against Richard Nixon.
One of his big campaign pledges at the time was to give every American citizen a $2,000 check annually. His way of evening out the unfair advatages of the rich Republicans. LOLOL!!
It was nothing more than redistribution of wealth and vote buying, but many people bought into it. I was just a college kid trying to get by and 2K back then was equal to a bit over $10,000 in spending power today. I could have lived on it through college with a room mate to split living costs. You could buy a good used car for a few hundred bucks and gas was around 30 cents a gallon, plus we still had gas wars back then. Sometimes it would be as low as 17 cents a gallon. Ground beef could be bought for 35 cents a pound in a large pack. A 10 pound bag of potatoes was 29 cents. Beer was cheap, less than $3 bucks a case in returnable bottles.
Those welfare folks spitting out kids due to stupidity or the welfare check, were looking at virtual retirement. 2 parents, 5 kids = over $75,000 in spending power today. A single mother with three kids could live off the state and never have to work.
The idea didn't fly with the majority though. That was the worst landslide in election history, I believe. McGovern didn't even carry his own state.
That was the first election I ever cared much about, we drank cheap beer that night watching the returns come in and cussed out Nixon.
We were still young and dumb back then, but at least we were right about Nixon.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
The concept of giving the poor checks is no more stupid than giving the wealthy and big business large tax refunds and incentives, paying for them by adding the cost to the national debt. The thinking is that people with less money will directly put it into the economy while the wealthy tend to put it in the bank. Expecting business to reinvest their tax savings doesn't work either...during the Reagan years only 19% of the money given to business by US taxpayers was reinvested in the United States. I can't see the sense in giving anyone any money that's funded by the taxpayer. either in refund checks or tax breaks...we're being asked to pay up-front to remedy the failed economic policies in the US for the last 30 years. Let those who benefitted the most from 30 years of hands off economic policy and debt building pay to get us out of the red.
<< <i>it's scary a scary thought that a good percentage would take that 1k right now. (in my opinion) >>
That's because those representing the wealthy in this country have taken the wealth redistribution too far the other way, creating an evergrowing group of poor and working poor who will take the $1000, much like the wealthy took the tax breaks given to them (an unsound economic disaster) when the country couldn't afford it. If your governmental policy is to create more poor, you shouldn't be suprised when they become the majority and exercise their right to grab a piece of the pie or vote you out in favor of someone more sympathetic to their needs. It's not rocket science guys.
<< <i>And...while we are at it, so what's this big deal to give everybody in the middle class and below a cash stimulus to get buks into the economy. Jezus, this stuff is beyond stupidity. Which would you rather have, a job that pays 2k/mo or get 1k now and no chance of the business sector expanding this year. Maybe they should call it the DUH bill. This way everybody can get their check, spend it and sit back and say...DUH?Duh?
So, which would you rather have, a K now or a job? >>
There is nothing to suggest it is a binary choice between the two extremes you have stated. The economy is a tad more complex than black and white.
They already tried to get the economy going by giving away money to wealthy people via tax breaks, and that didn't work. The wealthy CEO's and so on are busy using tax breaks to outsource jobs to other countries.
It is DUH to think that increased money velocity won't help out the economy. That concept is part of Econ 101. It has always worked in the past (as per Keynes), but maybe the economy has been so destroyed (by many things, notably lack of subprime lending regulation) that this time it won't.
In the past, the US had a strong manufacturing base. If people were given something like a $1000 check, it's true that most of them would spend it...this in turn would help keep those employed in manufacturing in their jobs. If given the same $1000 today, people would again probably spend it on manufactured goods, but unfortunately the folks keeping their jobs because of it live in other countries. I heard an interview with a financial talking head today reflecting on the worry by financial people that instead of using a check for $1000 to buy junk, those receiving it might use it to pay down their debt. The guy said that it might be true, but lower income people want to add to their possesions so would eventually just put the extra $1000 on their credit card, thus helping the economy. I don't know about you, but in my estimation we've reached a pretty sorry state of affairs in this country when business/government relies on citizens spending themselves into bankruptcy to save the economy. Giving people a $1000 check from the government to spend is equally sick - this check is nothing more than a loan plan, the people will have to pay it back eventually through additional taxation because it's coming from the US coffers as additional debt, probably funded by China. Pretty sad.
"There is nothing to suggest it is a binary choice between the two extremes you have stated. The economy is a tad more complex than black and white."
The choice does seem kind of binary to me because with about 130 million tax filers at 1000 ea that's 130000 million dollars or 130 bil in checks the govt is going to write? What would 130 bil do as a cash infusion to small businesses that the government taxes the bejezus out of do? It would greate more hiring or jobs at the scale of 130 billion dollars over 12 months.
The economy is much more complex than black or white and I so agree with you but putting the money in the hands of the same people that are broke now certainly won't do a darned thing for small business because all the "toys" they will either be paying for with their existing credit balances or buying new are made in China now. If the money was in US manufacturing, software development, or med. technology, well, then we might make some progress in getting people employed and back into homes again. Now if the money was put into community colleges and technical schools and universities...well, then we would have significant contact.
<< <i>They already tried to get the economy going by giving away money to wealthy people via tax breaks, and that didn't work. >>
Whether or not tax breaks are effective can be debated, but allowing people to keep more of what they've earned is not "giving away money" by the government unless one starts from the position that the government has first claim on everything you earn/own.
1. Increase savings, by allowing an amount of interest to be tax exempt. The same idea that allows folks to deduct home interest payments.
2.offer incentives to American companies who do not outsource manufacturing or services.
3. Establish guidelines to govern executive reimbursement to the detriment of the companies stock holders and employees. Why should a CEO screw up a company and then be awarded a gift of 100 million dollars or more.
4. Reestablish usuary laws to place a maximum limit on credit card interest. This could be tied to a relationship to the prime rate.
5. Limit unnecessary or excessive charges by banks, which have no relationship to actual cost to the bank.
6.Review the bankruptcy laws that were recently modified by and for the banks and credit card companies.
7. Re regulate the airline industry. The present mess is a factor of greed, avarice and insensitivity to the needs, safety and comfort of the consumer public.
8. Require aircraft maintenance of airlines, to be handled in the USA by certified technicians.
9. Increase the size of the FDA to actually test the drugs and food we ingest. Make the director and executive staff civil service and not subject to political whim or industry loyalties.
10. Establish agreed upon sound accounting methods and procedures, to accurately provide stock holders with an accurate, plain language explanation, of a public companies actual financial status in all of its transparent glory.
It is not the duty of the Government to regulate everything in sight, however, it is the duty and responsibility of the Government to protect the health and welfare of its citizens.
130 bil would really line the pocket's of goverment by us manufacturing, software companey's and hospital's or no let's give it to some universty to build a dorm room or library that my freind's kid's will never see?Hmmm eat today or have a job that at minimum wage no insurance and no way to pay rent let alone house payment?The grass isn't allways greener on the other side but hay what do i know
“Perhaps our elected officials can stop posturing”
Bear, Bear, Bear, this is all just to logical and the folks in Washington are NEVER going to do any of this!
As to the tax and give away money issue, I think it is important to remember that you can not give tax relief to the lower half of working Americans, they DO NOT PAY ANY FEDERAL TAXES!
Right now in our country if you are working and earning $37,000 per year you pay no Federal taxes and already get a rebate check in the mail for around $4,000.
True liberals think that anyone earning $50,000 plus per year falls in the wealthy category and must send in money to Washington to pay out the current rebates to the more than half of us that are already getting $4,000 in checks.
O.K. Just got this email warning in from Jim Sinclair, So what are your opinions on this???
"Dear CIGAs,There is no doubt the Fed and the PPT are meeting right now. A drop of over 300 points on the Dow after the Chairman of the Federal Reserve speaks publicly presages a $1000 break in gold coming quite quickly, if not tomorrow.
Unless the equity markets can be calmed, a panic is about to happen, making the statement "This is it" a horrible reality. If the equity markets cannot be calmed then:·
Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Gold will rise to $1650 as an almost immediate effect of what will be done to attempt to fend off a total panic starting to take place in general equities, therein threatening to be followed by all credit markets of all kinds. ·
The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price about to occur. ·
The PPT and the Fed will step out of gold’s way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again now on the upside. ·
Gold is the only insurance there is against what all this means because a panic in equities will blow the financial system, already coming apart, to smithereens. · All country funds would shut down on any further investments in "at the wall" financial institutions. ·
The rollover in credit and default derivatives would exceed the entire foreign debt of the USA. ·
The rest of the $450 trillion dollar mountain of derivatives would start a disintegration like nothing you have every seen in your lifetime. ·
Consumer demand would slam shut. ·
The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush. The US dollar would burn a hole in the floor going directly to .5200 or lower. ·
As the dollar disintegrates gold would rocket to and through $1650 in days. ·
The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each. ·
All commercial call loans would be called. ·
All debtors one day late on any payment, lacking grace period, would be liquidated. All debtors over one day of the grace period would be liquidated. · It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets. ·
The commercial paper credit market which is almost dead will die totally. ·
Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety. ·
Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day. · Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Emergency action will be all splash and theatrics but truthfully the cat is out of the bag. It buys some time but corrects nothing. It makes the Formula 100% correct. ·
There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGECNY ACTION in days, not weeks."
It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets. ·
The equity market used to have 10-15% corrections every other year. We havent had a correction of this magnitude in 6 years. We are due. What is the big deal now?
Now, there is a possiblity that equities have broken support levels and we may only be halfway through this price adjustment, but it certainly doesnt call for the total collapse of the US economy. And be forwarned, if the US were to collapse, then it would not be alone. And chaos is usually a bit more extreme in foreign countries than it is here.
Silver seems to be breaking away from it's trend of following Gold IMHO. During this correction it appears to me that silver is holding it's own or increasing.
<< <i>O.K. Just got this email warning in from Jim Sinclair, So what are your opinions on this???
"Dear CIGAs,There is no doubt the Fed and the PPT are meeting right now. A drop of over 300 points on the Dow after the Chairman of the Federal Reserve speaks publicly presages a $1000 break in gold coming quite quickly, if not tomorrow.
Unless the equity markets can be calmed, a panic is about to happen, making the statement "This is it" a horrible reality. If the equity markets cannot be calmed then:·
Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Gold will rise to $1650 as an almost immediate effect of what will be done to attempt to fend off a total panic starting to take place in general equities, therein threatening to be followed by all credit markets of all kinds. ·
The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price about to occur. ·
The PPT and the Fed will step out of gold’s way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again now on the upside. ·
Gold is the only insurance there is against what all this means because a panic in equities will blow the financial system, already coming apart, to smithereens. · All country funds would shut down on any further investments in "at the wall" financial institutions. ·
The rollover in credit and default derivatives would exceed the entire foreign debt of the USA. ·
The rest of the $450 trillion dollar mountain of derivatives would start a disintegration like nothing you have every seen in your lifetime. ·
Consumer demand would slam shut. ·
The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush. The US dollar would burn a hole in the floor going directly to .5200 or lower. ·
As the dollar disintegrates gold would rocket to and through $1650 in days. ·
The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each. ·
All commercial call loans would be called. ·
All debtors one day late on any payment, lacking grace period, would be liquidated. All debtors over one day of the grace period would be liquidated. · It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets. ·
The commercial paper credit market which is almost dead will die totally. ·
Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety. ·
Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day. · Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Emergency action will be all splash and theatrics but truthfully the cat is out of the bag. It buys some time but corrects nothing. It makes the Formula 100% correct. ·
There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGECNY ACTION in days, not weeks." >>
This may be unfolding as we speak. It's in the news today that Bush and Co. is now working on $145 billion tax relief plan to give the economy "a shot in the arm"
I do believe there is a feeling of some panic on the upper levels. All this in an election year.
Hope that all that Sinclair has mentioned does not come to pass. Will not be pretty. But at this point..... I would not say that it will not happen. Fasten your seat belts.... the ride may be going from bumpy to rough.
<< <i>They already tried to get the economy going by giving away money to wealthy people via tax breaks, and that didn't work. >>
Whether or not tax breaks are effective can be debated, but allowing people to keep more of what they've earned is not "giving away money" by the government unless one starts from the position that the government has first claim on everything you earn/own. >>
Have you ever heard of the National Debt? In recent times, it was increased, sometimes by astronomical levels, under four presidents (who have the job of writing the budget): Ford, Reagan, Bush I, Bush II (especially the latter). Nixon actually lowered the national debt, but for at least part of his term we were still honoring the Bretton Woods agreements, so that skews things a bit. Carter was a wash - the debt was the same the year he left office as when he started. Clinton paid down the debt by over 500 billion dollars.
These numbers should help you understand the debt that YOU (and every other taxpayer) will be paying for many years. No, your money isn't your own. Somebody has already spent it.
<< <i>O.K. Just got this email warning in from Jim Sinclair, So what are your opinions on this???
"Dear CIGAs,There is no doubt the Fed and the PPT are meeting right now. A drop of over 300 points on the Dow after the Chairman of the Federal Reserve speaks publicly presages a $1000 break in gold coming quite quickly, if not tomorrow.
Unless the equity markets can be calmed, a panic is about to happen, making the statement "This is it" a horrible reality. If the equity markets cannot be calmed then:·
Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Gold will rise to $1650 as an almost immediate effect of what will be done to attempt to fend off a total panic starting to take place in general equities, therein threatening to be followed by all credit markets of all kinds. ·
The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price about to occur. ·
The PPT and the Fed will step out of gold’s way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again now on the upside. ·
Gold is the only insurance there is against what all this means because a panic in equities will blow the financial system, already coming apart, to smithereens. · All country funds would shut down on any further investments in "at the wall" financial institutions. ·
The rollover in credit and default derivatives would exceed the entire foreign debt of the USA. ·
The rest of the $450 trillion dollar mountain of derivatives would start a disintegration like nothing you have every seen in your lifetime. ·
Consumer demand would slam shut. ·
The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush. The US dollar would burn a hole in the floor going directly to .5200 or lower. ·
As the dollar disintegrates gold would rocket to and through $1650 in days. ·
The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each. ·
All commercial call loans would be called. ·
All debtors one day late on any payment, lacking grace period, would be liquidated. All debtors over one day of the grace period would be liquidated. · It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets. ·
The commercial paper credit market which is almost dead will die totally. ·
Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety. ·
Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day. · Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Emergency action will be all splash and theatrics but truthfully the cat is out of the bag. It buys some time but corrects nothing. It makes the Formula 100% correct. ·
There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGECNY ACTION in days, not weeks." >>
This may be unfolding as we speak. It's in the news today that Bush and Co. is now working on $145 billion tax relief plan to give the economy "a shot in the arm"
I do believe there is a feeling of some panic on the upper levels. All this in an election year.
Hope that all that Sinclair has mentioned does not come to pass. Will not be pretty. But at this point..... I would not say that it will not happen. Fasten your seat belts.... the ride may be going from bumpy to rough. >>
i read it last night...something to filter...he might be "ahead of the tape" a few months and not all of it will come to being.
i have heard this AM from a few broker buddies that the "lice is off the linen" and the "bell never rings at the basement"..."came off faster than a prom dress"....and lack of corn tortillas in Mexico will start a war....now watch me get a PM from some of them...lol
Comments
The stocks in my plan are like baskets of stocks or small funds as they are made up of selections of funds suited for that class of investment. Participants in the plan can move assets around once per month. Here are the results ytd., actually, the first two weeks of '08 for the funds.
Stock fund: -4.94
Global equities fund: -4.66
Growth fund: -5.46
Inflation Linked Bond: 1.67
Not much gain but certainly not the loss that was heading my way. 5% loss also coincides with the general stock market performance for this year.
Some thinking about gold:
So, when you get to be old enough to really start looking at retirement and the necessary assets to carry you through retirement, you kind of get your game face on and start counting up the assets.
So, my stash of the yellow metal is starting to look like a pretty good play and I was thinking of parting with some and let a portion go back into the great contiuum. My wife came up with clarity of thought to carry me through my confusion.
Our investment advisor told us (as all probably do) that we need to save an extra number of buks per month to meet our retirement objectives. So, I'm, thinking that in 30 years when I'll really need the money, it will kind of be like the previous 30 years in that gasoline in 1978 was about .30 and now it's 3.00, a 10 fold increase and maybe it's $30 in 2038...look at bread, milk, they are all the same. In 78, gold was...call it $200 but now it's $900 so a 4X increase give or take. That's what the investment advisors are seeing and thay's why they are telling everyone to save, save, save and it does make sense. Gold appears to be a very good store of value when put in this light. So, the play is to use gold as the great equalizer, to use the intrinsic value of the metal to offset the value of goods in the future.
I maintain that gold is not a speculative game for the common investor and is simply, as advertised, a store of value of goods and services now v.s. the value of goods and services in the future. So, the plan is to continue increasing the size of my stash through steady accumulation as opposed to holding USD in some CD account instead. If things change appreciably then the plan will certainly change.
So, that's the plan, continue accumulating metal and use the inflation linked bonds to keep the buks safe for the short term. Just though to offer this stuff in case anyone was dealing with a simular situation. Not saying I'm right or wrong but that's how I'm going to play for now. Good luck!
Their record low gold short position on the Tokyo Exchange coupled with taking delivery of 5 tons of gold in December mirrored their actual sentiment. Now that they are bullish on gold, expect a major short play by them and PPT not far down the road.
Concur with Mish's analysis on deflation....but only after we go fully through the current stagflationary phase. The FED will make one last effort to inflate the economy.
roadrunner
WOW Gold is $913 this morning!!!
It went through $900 like grease on a pig.
MH
I like your thoughts on Tips bonds. I think this is a great place to diversify in these volitle times. Doing a little search this morning there is also a Euro inflation fund, IBIC.
As far as seeing things continue for 30 years the way we have been, I guess one must have a plan, but I cannot see us going that way. I think there is a serious crash coming that will readjust everything. It may take a few more years to go down but it must be coming.
I just cannot see gas at $30 and milk at $50 and folks making an average salary of $410,000 per year. (the average income in the U.S. is $41,000 per year now).
If you believe in the CPI as a measurment of the inflation rate, then by all means, buy Tips. Gold and silver are much better barometers of real inflation....hence the need for the PPT to be actively managing those markets whenever feasible.
roadrunner
Probably if you were asked 30 years ago if you thought gas would go from $0.30 to $3.00, you would have scoffed too. Having said that, I think you're right on these items. Petroleum will hopefully be displaced by other forms of energy by then (if not, we deserve to pay $30/gal.). Milk is a commodity that will always rise slower than inflation. And salaries will probably be held down by global competition. IMO.
Citigroup write-off and layoffs
$1000 gold
This approach to taxation is philosophically consistent with the treatment of interest on regular bonds, but vividly illustrates the fact that that our income tax is actually a combined income/wealth tax.
Knowledge is the enemy of fear
Worry is the interest you pay on a debt you may not owe.
Voltaire: Paper money eventually returns to its intrinsic value---zero.
Knowledge is the enemy of fear
<< <i>Tips bonds, like everything else that is inflation "adjusted" by the Federal Govt, do not come close to covering the true level of inflation.
If you believe in the CPI as a measurment of the inflation rate, then by all means, buy Tips. Gold and silver are much better barometers of real inflation....hence the need for the PPT to be actively managing those markets whenever feasible.
roadrunner >>
The push will come again to tie minimum wage to inflation. This has been proposed by Democrats like Kennedy and Kerry. If that happens you had better be in gold big time. This fiasco was played out in Argentina a decade back and totally destroyed their monies value and their economy.
FOR SALE Items
<< <i>
<< <i>Tips bonds, like everything else that is inflation "adjusted" by the Federal Govt, do not come close to covering the true level of inflation.
If you believe in the CPI as a measurment of the inflation rate, then by all means, buy Tips. Gold and silver are much better barometers of real inflation....hence the need for the PPT to be actively managing those markets whenever feasible.
roadrunner >>
The push will come again to tie minimum wage to inflation. This has been proposed by Democrats like Kennedy and Kerry. If that happens you had better be in gold big time. This fiasco was played out in Argentina a decade back and totally destroyed their monies value and their economy. >>
Paying fair wages isn't inflationary probably.
Printing money is inflationary. It doesn't matter why it's being printed just that the money supply is increasing faster than the total amount of wealth. This applies especially to that wealth that is "current" such as goods and services but inflation can appear in less current wealth such as gold or large infrastructure projects. When money supply increases too rapidly then whatever people are buying is likely to show inflation.
Brazil M3 +17.0%
Canada M3 +12.9%
China M2 +18.5%
Euro zone M3 +12.3%
Hong Kong M3 +31.5%
India M3 +21.5%
U.S. M3 +15.8%
Where's Russia? Mid last year they were over 50% YTD.
Raising minimum wages is inflationary. It distorts the economy and things warp from there. Wages should be set based on competition and not solely to get votes. Let them tie the min wage to stated BLS inflation - just as TIPS and GDP currently are. 2-3% per year in this environment is a drop in the bucket. Inflation is low, just ask the BLS or any economist who works for the government.
roadrunner
<< <i>
<< <i>Tips bonds, like everything else that is inflation "adjusted" by the Federal Govt, do not come close to covering the true level of inflation.
If you believe in the CPI as a measurment of the inflation rate, then by all means, buy Tips. Gold and silver are much better barometers of real inflation....hence the need for the PPT to be actively managing those markets whenever feasible.
roadrunner >>
The push will come again to tie minimum wage to inflation. This has been proposed by Democrats like Kennedy and Kerry. If that happens you had better be in gold big time. This fiasco was played out in Argentina a decade back and totally destroyed their monies value and their economy. >>
Actually, what destroyed the Argentinian economy was the huge government debt (sound familiar?).
Gold is having its correction today, but this will not last long when the Fed drops the rate by at least a half a point, this may happen as early as Friday. Those that want to add to their positions should do so in the next few days.
This is next!
“Credit card delinquencies have jumped 26 percent from a year ago, a recent Associated Press poll shows. Experts say the sub-prime mortgage meltdown is partly to blame as consumers turn to credit cards to cover expenses. Alex Chadwick talks to Marketplace's Steve Tripoli about the rising credit card debt and what it could mean to the nation's economy.
Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.
The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP. That represented more than 4 percent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks such as Bank of America and Capital One and for retailers like Home Depot and Wal-Mart.
Serious delinquencies also are up sharply: Some of the nation's biggest lenders — including Advanta, GE Money Bank and HSBC — reported increases of 50 percent or more in the value of accounts that were at least 90 days delinquent when compared with the same period a year ago.”
I have stated many times that Europe, Asia, Australia, have had housing bubbles much bigger than our own. They may not have the substandard lending practices but homes across the world are UNAFFORDABLE to almost everyone. This will have a huge impact on global economies. Most of the reason why the dollar has been weaker has been due to the relative strength of the world. As the world slows, that relativity will shrink. What is more stable? A USA with fiscal problems or an Argentina?
The global inflation we have witnessed has been caused by a weak dollar, politics, and a runaway China. Food inflation will reverse when everyone wakes up and realizes that ethanol is a farce. Basic Material inflation will reverse when China implodes. Oil prices will collapse when global economies slow.
Edited to add....The ECB is saying they will take a serious look at their interest rates. This is exactly what I am talking about.
UK housing market worst in 15 years.
Australia consumer confidence falls
New Zealand home sales fall 32%
Knowledge is the enemy of fear
i totally agree. it is like people want to take a small profit not realizing the long term trend is good for PM.
the dow looks horrible over the last year and i do not think 4th quarter reports will be that great. a la intel.
also predictions for 1st quarter earnings will probably disappoint many also.
i think we are in for quite a few more shocks in the year to come. seems people have very short memories
or fail to think long term.
great thread. keep up the interesting posts you gurus!
i know i still like PMs and picked up another couple gold pieces.
So, which would you rather have, a K now or a job?
Random Collector
www.marksmedals.com
<< <i>And...while we are at it, so what's this big deal to give everybody in the middle class and below a cash stimulus to get buks into the economy. Jezus, this stuff is beyond stupidity. Which would you rather have, a job that pays 2k/mo or get 1k now and no chance of the business sector expanding this year. Maybe they should call it the DUH bill. This way everybody can get their check, spend it and sit back and say...DUH?Duh?
So, which would you rather have, a K now or a job? >>
it's scary a scary thought that a good percentage would take that 1k right now. (in my opinion)
<< <i>
<< <i>And...while we are at it, so what's this big deal to give everybody in the middle class and below a cash stimulus to get buks into the economy. Jezus, this stuff is beyond stupidity. Which would you rather have, a job that pays 2k/mo or get 1k now and no chance of the business sector expanding this year. Maybe they should call it the DUH bill. This way everybody can get their check, spend it and sit back and say...DUH?Duh?
So, which would you rather have, a K now or a job? >>
it's scary a scary thought that a good percentage would take that 1k right now. (in my opinion) >>
-Agreed, i have no idea what they are thinking with some of this stuff.
One of his big campaign pledges at the time was to give every American citizen a $2,000 check annually. His way of evening out the unfair advatages of the rich Republicans. LOLOL!!
It was nothing more than redistribution of wealth and vote buying, but many people bought into it. I was just a college kid trying to get by and 2K back then was equal to a bit over $10,000 in spending power today. I could have lived on it through college with a room mate to split living costs. You could buy a good used car for a few hundred bucks and gas was around 30 cents a gallon, plus we still had gas wars back then. Sometimes it would be as low as 17 cents a gallon. Ground beef could be bought for 35 cents a pound in a large pack. A 10 pound bag of potatoes was 29 cents. Beer was cheap, less than $3 bucks a case in returnable bottles.
Those welfare folks spitting out kids due to stupidity or the welfare check, were looking at virtual retirement. 2 parents, 5 kids = over $75,000 in spending power today. A single mother with three kids could live off the state and never have to work.
The idea didn't fly with the majority though. That was the worst landslide in election history, I believe. McGovern didn't even carry his own state.
That was the first election I ever cared much about, we drank cheap beer that night watching the returns come in and cussed out Nixon.
We were still young and dumb back then, but at least we were right about Nixon.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>it's scary a scary thought that a good percentage would take that 1k right now. (in my opinion) >>
That's because those representing the wealthy in this country have taken the wealth redistribution too far the other way, creating an evergrowing group of poor and working poor who will take the $1000, much like the wealthy took the tax breaks given to them (an unsound economic disaster) when the country couldn't afford it. If your governmental policy is to create more poor, you shouldn't be suprised when they become the majority and exercise their right to grab a piece of the pie or vote you out in favor of someone more sympathetic to their needs. It's not rocket science guys.
<< <i>And...while we are at it, so what's this big deal to give everybody in the middle class and below a cash stimulus to get buks into the economy. Jezus, this stuff is beyond stupidity. Which would you rather have, a job that pays 2k/mo or get 1k now and no chance of the business sector expanding this year. Maybe they should call it the DUH bill. This way everybody can get their check, spend it and sit back and say...DUH?Duh?
So, which would you rather have, a K now or a job? >>
There is nothing to suggest it is a binary choice between the two extremes you have stated. The economy is a tad more complex than black and white.
They already tried to get the economy going by giving away money to wealthy people via tax breaks, and that didn't work. The wealthy CEO's and so on are busy using tax breaks to outsource jobs to other countries.
It is DUH to think that increased money velocity won't help out the economy. That concept is part of Econ 101. It has always worked in the past (as per Keynes), but maybe the economy has been so destroyed (by many things, notably lack of subprime lending regulation) that this time it won't.
The choice does seem kind of binary to me because with about 130 million tax filers at 1000 ea that's 130000 million dollars or 130 bil in checks the govt is going to write? What would 130 bil do as a cash infusion to small businesses that the government taxes the bejezus out of do? It would greate more hiring or jobs at the scale of 130 billion dollars over 12 months.
The economy is much more complex than black or white and I so agree with you but putting the money in the hands of the same people that are broke now certainly won't do a darned thing for small business because all the "toys" they will either be paying for with their existing credit balances or buying new are made in China now. If the money was in US manufacturing, software development, or med. technology, well, then we might make some progress in getting people employed and back into homes again. Now if the money was put into community colleges and technical schools and universities...well, then we would have significant contact.
JMHO; not a challenge, just my view.
<< <i>They already tried to get the economy going by giving away money to wealthy people via tax breaks, and that didn't work. >>
Whether or not tax breaks are effective can be debated, but allowing people to keep more of what they've earned is not "giving away money" by the government unless one starts from the position that the government has first claim on everything you earn/own.
long enough to do the following.
1. Increase savings, by allowing an amount of interest
to be tax exempt. The same idea that allows folks
to deduct home interest payments.
2.offer incentives to American companies who do not
outsource manufacturing or services.
3. Establish guidelines to govern executive reimbursement
to the detriment of the companies stock holders and employees.
Why should a CEO screw up a company and then be awarded a
gift of 100 million dollars or more.
4. Reestablish usuary laws to place a maximum limit on credit card interest.
This could be tied to a relationship to the prime rate.
5. Limit unnecessary or excessive charges by banks, which have no relationship to
actual cost to the bank.
6.Review the bankruptcy laws that were recently modified by and for the banks and credit
card companies.
7. Re regulate the airline industry. The present mess is a factor of greed, avarice
and insensitivity to the needs, safety and comfort of the consumer public.
8. Require aircraft maintenance of airlines, to be handled in the USA by certified technicians.
9. Increase the size of the FDA to actually test the drugs and food we ingest. Make the director
and executive staff civil service and not subject to political whim or industry loyalties.
10. Establish agreed upon sound accounting methods and procedures, to accurately provide
stock holders with an accurate, plain language explanation, of a public companies actual financial
status in all of its transparent glory.
It is not the duty of the Government to regulate everything in sight, however, it is the duty and
responsibility of the Government to protect the health and welfare of its citizens.
Camelot
Bear, Bear, Bear, this is all just to logical and the folks in Washington are NEVER going to do any of this!
As to the tax and give away money issue, I think it is important to remember that you can not give tax relief to the lower half of working Americans, they DO NOT PAY ANY FEDERAL TAXES!
Right now in our country if you are working and earning $37,000 per year you pay no Federal taxes and already get a rebate check in the mail for around $4,000.
True liberals think that anyone earning $50,000 plus per year falls in the wealthy category and must send in money to Washington to pay out the current rebates to the more than half of us that are already getting $4,000 in checks.
O.K. Just got this email warning in from Jim Sinclair,
So what are your opinions on this???
"Dear CIGAs,There is no doubt the Fed and the PPT are meeting right now. A drop of over 300 points on the Dow after the Chairman of the Federal Reserve speaks publicly presages a $1000 break in gold coming quite quickly, if not tomorrow.
Unless the equity markets can be calmed, a panic is about to happen, making the statement "This is it" a horrible reality. If the equity markets cannot be calmed then:·
Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Gold will rise to $1650 as an almost immediate effect of what will be done to attempt to fend off a total panic starting to take place in general equities, therein threatening to be followed by all credit markets of all kinds. ·
The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price about to occur. ·
The PPT and the Fed will step out of gold’s way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again now on the upside. ·
Gold is the only insurance there is against what all this means because a panic in equities will blow the financial system, already coming apart, to smithereens. · All country funds would shut down on any further investments in "at the wall" financial institutions. ·
The rollover in credit and default derivatives would exceed the entire foreign debt of the USA. ·
The rest of the $450 trillion dollar mountain of derivatives would start a disintegration like nothing you have every seen in your lifetime. ·
Consumer demand would slam shut. ·
The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush. The US dollar would burn a hole in the floor going directly to .5200 or lower. ·
As the dollar disintegrates gold would rocket to and through $1650 in days. ·
The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each. ·
All commercial call loans would be called. ·
All debtors one day late on any payment, lacking grace period, would be liquidated. All debtors over one day of the grace period would be liquidated. · It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets. ·
The commercial paper credit market which is almost dead will die totally. ·
Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety. ·
Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day. · Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Emergency action will be all splash and theatrics but truthfully the cat is out of the bag. It buys some time but corrects nothing. It makes the Formula 100% correct. ·
There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGECNY ACTION in days, not weeks."
Who are you and what have you done with Blackhawk??????
I knew it would happen.
Sounds a little edgy today.
I knew it would happen.
The equity market used to have 10-15% corrections every other year. We havent had a correction of this magnitude in 6 years. We are due. What is the big deal now?
Now, there is a possiblity that equities have broken support levels and we may only be halfway through this price adjustment, but it certainly doesnt call for the total collapse of the US economy. And be forwarned, if the US were to collapse, then it would not be alone. And chaos is usually a bit more extreme in foreign countries than it is here.
Knowledge is the enemy of fear
FOR SALE Items
<< <i>O.K. Just got this email warning in from Jim Sinclair,
So what are your opinions on this???
"Dear CIGAs,There is no doubt the Fed and the PPT are meeting right now. A drop of over 300 points on the Dow after the Chairman of the Federal Reserve speaks publicly presages a $1000 break in gold coming quite quickly, if not tomorrow.
Unless the equity markets can be calmed, a panic is about to happen, making the statement "This is it" a horrible reality. If the equity markets cannot be calmed then:·
Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Gold will rise to $1650 as an almost immediate effect of what will be done to attempt to fend off a total panic starting to take place in general equities, therein threatening to be followed by all credit markets of all kinds. ·
The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price about to occur. ·
The PPT and the Fed will step out of gold’s way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again now on the upside. ·
Gold is the only insurance there is against what all this means because a panic in equities will blow the financial system, already coming apart, to smithereens. · All country funds would shut down on any further investments in "at the wall" financial institutions. ·
The rollover in credit and default derivatives would exceed the entire foreign debt of the USA. ·
The rest of the $450 trillion dollar mountain of derivatives would start a disintegration like nothing you have every seen in your lifetime. ·
Consumer demand would slam shut. ·
The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush. The US dollar would burn a hole in the floor going directly to .5200 or lower. ·
As the dollar disintegrates gold would rocket to and through $1650 in days. ·
The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each. ·
All commercial call loans would be called. ·
All debtors one day late on any payment, lacking grace period, would be liquidated. All debtors over one day of the grace period would be liquidated. · It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets. ·
The commercial paper credit market which is almost dead will die totally. ·
Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety. ·
Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day. · Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Emergency action will be all splash and theatrics but truthfully the cat is out of the bag. It buys some time but corrects nothing. It makes the Formula 100% correct. ·
There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGECNY ACTION in days, not weeks." >>
This may be unfolding as we speak. It's in the news today that Bush and Co. is now working on $145 billion tax relief plan to give the economy "a shot in the arm"
I do believe there is a feeling of some panic on the upper levels. All this in an election year.
Hope that all that Sinclair has mentioned does not come to pass. Will not be pretty. But at this point..... I would not say that it will not happen. Fasten your seat belts.... the ride may be going from bumpy to rough.
<< <i>
<< <i>They already tried to get the economy going by giving away money to wealthy people via tax breaks, and that didn't work. >>
Whether or not tax breaks are effective can be debated, but allowing people to keep more of what they've earned is not "giving away money" by the government unless one starts from the position that the government has first claim on everything you earn/own. >>
Have you ever heard of the National Debt? In recent times, it was increased, sometimes by astronomical levels, under four presidents (who have the job of writing the budget): Ford, Reagan, Bush I, Bush II (especially the latter). Nixon actually lowered the national debt, but for at least part of his term we were still honoring the Bretton Woods agreements, so that skews things a bit. Carter was a wash - the debt was the same the year he left office as when he started. Clinton paid down the debt by over 500 billion dollars.
These numbers should help you understand the debt that YOU (and every other taxpayer) will be paying for many years. No, your money isn't your own. Somebody has already spent it.
Link
<< <i>
<< <i>O.K. Just got this email warning in from Jim Sinclair,
So what are your opinions on this???
"Dear CIGAs,There is no doubt the Fed and the PPT are meeting right now. A drop of over 300 points on the Dow after the Chairman of the Federal Reserve speaks publicly presages a $1000 break in gold coming quite quickly, if not tomorrow.
Unless the equity markets can be calmed, a panic is about to happen, making the statement "This is it" a horrible reality. If the equity markets cannot be calmed then:·
Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Gold will rise to $1650 as an almost immediate effect of what will be done to attempt to fend off a total panic starting to take place in general equities, therein threatening to be followed by all credit markets of all kinds. ·
The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price about to occur. ·
The PPT and the Fed will step out of gold’s way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again now on the upside. ·
Gold is the only insurance there is against what all this means because a panic in equities will blow the financial system, already coming apart, to smithereens. · All country funds would shut down on any further investments in "at the wall" financial institutions. ·
The rollover in credit and default derivatives would exceed the entire foreign debt of the USA. ·
The rest of the $450 trillion dollar mountain of derivatives would start a disintegration like nothing you have every seen in your lifetime. ·
Consumer demand would slam shut. ·
The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush. The US dollar would burn a hole in the floor going directly to .5200 or lower. ·
As the dollar disintegrates gold would rocket to and through $1650 in days. ·
The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each. ·
All commercial call loans would be called. ·
All debtors one day late on any payment, lacking grace period, would be liquidated. All debtors over one day of the grace period would be liquidated. · It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets. ·
The commercial paper credit market which is almost dead will die totally. ·
Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety. ·
Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day. · Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated. ·
Emergency action will be all splash and theatrics but truthfully the cat is out of the bag. It buys some time but corrects nothing. It makes the Formula 100% correct. ·
There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGECNY ACTION in days, not weeks." >>
This may be unfolding as we speak. It's in the news today that Bush and Co. is now working on $145 billion tax relief plan to give the economy "a shot in the arm"
I do believe there is a feeling of some panic on the upper levels. All this in an election year.
Hope that all that Sinclair has mentioned does not come to pass. Will not be pretty. But at this point..... I would not say that it will not happen. Fasten your seat belts.... the ride may be going from bumpy to rough. >>
i read it last night...something to filter...he might be "ahead of the tape" a few months and not all of it will come to being.
i have heard this AM from a few broker buddies that the "lice is off the linen" and the "bell never rings at the basement"..."came off faster than a prom dress"....and lack of corn tortillas in Mexico will start a war....now watch me get a PM from some of them...lol
The Treasury Secretary says we are not in a recession
and the President is on top of the problem.
I feel so much better now!
Camelot
roadrunner
<< <i>EVERYBODY NOT TO WORRY
The Treasury Secretary says we are not in a recession
and the President is the problem.
I feel so much better now! >>