One oil company in particular recently moved it's headquarters to Saudi Arabia from the US. It's just as well, as this was the oil company that was/is developing the Iranian gas fields well after the embargo against US businesses working in that country - who is this "unpatriotic" company you might ask??? It's the company that the vice-president headed before being picked for his current position in the administration...lol.
Some may recall that in January this year, I mentioned moving some retirement fund assets into an inflation linked bond and draining the regular stock fund accounts to do this. Since this is part of a retirement program deduction from my second job that I have had for more than 10 years and since it is a manged fund (TIAA- CREF), I really don't have any control over it except that I can allocate distributions. In that post, I said that I would report in from time to time and since I did that reallocatioin in the first week of January, I guess this is a pre-quarterly assessment. Here's what they have done since the first week in Jan.
Stock Fund -10.41% Global Equities Fund -10.12% Growth Fund -11.95%
Inflation Linked Bond +6.51%
Looks like that is the way it'll play for at least another quarter. It's a lot better than the bank CD at 5.35% Just FYI, thought it might be of some interest.
in this present economy...choosing between two: recession or stagflation.....
which would suit the US economy best for long term recovery??? it's pretty obvious (to me) at least that the Central Banks have tossed the kitchen sink.
and would it be a different scenario if you took the emerging world economy (BRIC) and Western Europe, Japan, etc.
if there are other options.....send them to Bernanke
57loaded -- excellent question; my view may be simplistic, but I would always choose recession over stagflation, because I suspect that periods of stagflation will ultimately end in recession in any case. The period of stagflation creates instability and prolongs the pain.
<< <i>57loaded -- excellent question; my view may be simplistic, but I would always choose recession over stagflation, because I suspect that periods of stagflation will ultimately end in recession in any case. The period of stagflation creates instability and prolongs the pain. >>
I would tend to agree but would point out that a recession brought on by a currency collapse could not be contained to the financial sector in modern times. It would result in wide- spread and very deep pain to most of the population.
Factories run on money and even the seed crop comes from factories in modern times. It would have catastrophic results of rather remarkable proportions.
Ah, I think I finally cracked the code. When the financial advisors say "We need to inject more liquidity into the market place as soon as possible.", it actually means "I'm still paying for the ranch in San Palo and I'm goin' upside down here."
"When there isn't an honest report coming from any ratings agency, financial institution or regulatory body, or the mainstream media for that matter, then what chance has anyone got?"
Ripped from a reader's comment on the BBC web page.
The plot thickens!
Edited to add: Kitco gold spot at $1004.00 now...I love it when a plan comes together.
How many of you think prices were REALLY unchanged in February as the government claims? >>
well i personally did not notice anything going up in price. of course gas fluctuates the most but what did anyone else notice?
is one really supposed to be able to see month to month inflation? i tend to think of it as something that becomes visible to joe friendly, like me, on a yearly basis.
Actually the only thing that I noticed going up was gasoline & natural gas. TV's went down & so did PC's & Laptops ... also, most new Auto prices ... lots of bargains on big ticket items...
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
Let's see..........the propane contract that I signed last Fall was for $1.65/gal. and now that the contract has been fulfilled, I am paying $2.00/gal.
I figure that is a 21% increase...........in about 6 months.
Inflation, anyone?
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Let's see..........the propane contract that I signed last Fall was for $1.65/gal. and now that the contract has been fulfilled, I am paying $2.00/gal.
I figure that is a 21% increase...........in about 6 months.
Inflation, anyone? >>
Only if you use propane as a heating source
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
I tend to correlate propane costs with other hydrocarbon prices, although they may not move entirely in lock-step.
Added: Frankly, I think that mhammerman has it exactly right:
Ah, I think I finally cracked the code. When the financial advisors say "We need to inject more liquidity into the market place as soon as possible.", it actually means "I'm still paying for the ranch in San Palo and I'm goin' upside down here."
Q: Are You Printing Money? Bernanke: Not Literally
It makes no sense to sell at this time.... since there is nothing stable to put that money into.
The only reason I can see to sell any precious metals right now would be to get rid of high interest debt or if one absolutely needed the money to meet an obligation...
.... otherwise, I think it prudent to hold what you have, and continue to add to what you have.
well firmly over 1000 as i type this. where to next? when to sell? when will the economy recover enough to make other investments worthwhile?
All this crappy imaginary debt and imaginary money has to be pegged to something solid and brought under control by someone who is serious about it. When the financial foundations are screwed up, you can't properly value any kinds of assets.
After the financial system's damage becomes clearer - only then will P/E ratios, income statements and balance sheets have any good basis for comparison and valuation.
Right now, there's no good alternatives to hard assets. At least you know that they are real.
Q: Are You Printing Money? Bernanke: Not Literally
Does anyone have a lead on a story about Bear Sterns PM holdings for the silver fund...hummmm, this has got to be a story...I hope it doesn't take a year for us to find out. So, you're going upside down at Bear and you've been "holding" this PM for the fund participants, and you need to get liquid right now because of a huge margin call, what would you do? Bet this puppy doesn't pay out if they do indeed "hold" PM for clients. Bear Sterns fund (from Nov. '07)
Posted On: Thursday, March 13, 2008, 9:20:00 PM EST
Economic Forces Converge Like Never Before
Author: Jim Sinclair
Dear Extended Family,
Never in economic history has there been a night like tonight. I am writing later than usual because of the enormity of all the converging forces. The euro reaches for $1.60, the Middle East oil producers are in shock, and the IMF tells the world to “plan for the worst.”
The reason this missive is late is because I am reverberating at the speed of the disintegration. These cursed OTC derivatives and their makers, who incidentally made the international banking community rich beyond your wildest dreams, are now unwinding at lightening speed.
Do you think any entity with any OTC derivative now has faith in the paper?
This paper is $550 trillion plus dollars in notional value. The horrible fact is that in bankruptcy notional value becomes real value with the capacity to destroy the world financial system.
The above is no wild assumption. It is hard, cold fact.
Expect currency intervention to slow down the rise of the euro. Intervention has never worked. It will not now. In fact, it will backfire so fast that the effort will be abandoned, making things even worse. Intervention in currency, the dollar, will only provide the capacity for other central banks, oil producers and holders of high risk long US treasury paper to diversify out in huge amounts of decaying dollars at singular prices. I could go through a tome on how intervention works, but accept that any rise in short rates will break the bank immediately. Intervention in the euro/dollar is another practical impossibility except as a bluff. There is no practical solution to today’s TERMINAL problems and that means you are up to your eyeballs in alligators. You must protect yourselves. Gold is going to $1650. In all probability my major error will be in forecasting a price that is much too low for gold. The ratio spread long the major gold producers, short the juniors, is going to kill the math whizzes that think they are in the captain’s seat. The reason is the only value still in precious metals shares lies in the best junior issues these geeks have been hammering. The prayer that a junior with quality assets has is that the illegal short position is enormous.
Sinclair is never subtle....yet his advice is worth more than salt.
The fact the FED intervention in the credit drivatives is now actually a lethal blow to the confidence in the monetary system other than a shot in the arm it was meant to be will speak volumes in epic proportions....
I've been trying to find a listing of the "sub custodians" that supposedly hold the silver for the SLV fund. But I have not been able to do so, so far. JPMorgan Chase is the main custodian, but probably is not storing the actual silver.
But some of what I HAVE found.... furthers my suspicions of the SLV fund. It may actually be a 'tool' of the big silver shorts, to be able to continue the game that they have been playing, and as frequently discussed by Ted Butler. It appears the prospectus, and papers filed with the SEC, etc... is filled with loopholes. Those of you who believe you are investing in actual silver..... For a good article about the loopholes, and how the fund may be used by the shorts to manipulate the market, the following is very interesting. It is about a year old.... but as far as I know, still applies....
well, they (JP Morgan Chase) are supposed to offer liquidity to Bear Sterns to keep them afloat for another 28 days...and see now what is happening to Bear Sterns?...
will it be an implosion or an explosion of silver?
<< <i>It makes no sense to sell at this time.... since there is nothing stable to put that money into.
The only reason I can see to sell any precious metals right now would be to get rid of high interest debt or if one absolutely needed the money to meet an obligation...
.... otherwise, I think it prudent to hold what you have, and continue to add to what you have. >>
I'm still bullish, as well. There's no reason to sell know!!
SEE the BULL!! BUY the BULL!! BE the BULL!! Do your homework first. And, you will learn alot!!
I heard an interesting analogy of our country's credit crisis (before this mornings fiasco aired) and that is: don't worry about fixing the cracks in your foundation while your house is on fire. I think I heard it on Kudlow and Kool Aid.
Do others here think like I do that when Kudlow gives into the Recession discussion that it's either about to end or that we've entered a depression?
Also, last night was the first time I've heard Ken Heebner speak out...and his outlook was pretty gloomy for the next year or two. That perked my ears.
And lastly, Kudlow was in a discussion with (name?) sitting next to him and asked where we are in terms of timeline. Then Kudlow asked...1934, 1935? His guest answered 1931. First of all, the fact that Kudlow started with the 1930's instead of his usual 1970's or 1990's was surprising.
" ...Governments might have to intervene with taxpayers’ money to shore up the financial system and prevent a “downward credit spiral” from taking hold, the International Monetary Fund said on Wednesday.
John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system....”
Please forgive my naivete`, but what would this look like, in concrete terms, in the USA? I'm serious, what is 'intevern[ing] with taxpayer's money' / 'private sector' options?
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.
RE: inflation at the big donut for 02/08.........what are they thinking? Most people I know would consider this statement as just plain bravo sierra. Furthermore, for those same people ----------it would just continue to undermine confidence in public statements. HOWEVER, tuna fish did remain unaffected by inflation in february.
RE: silver, a little shop I occaisionally deal with bought over $100,000 of all types of silver over the counter yesterday and resold about $50,000 back out to retail customers.
Bear Stearns.... I don't know if they store silver for the SLV fund.... but it was Bear Stearns that recently settled a lawsuit.... after they had sold silver to investors, they were charging the investors for storage fees.... but did not even have the physical silver on hand!!
Wonder if those investors are still having Bear Stearns 'store' their silver investments.... if so, I wonder if their silver is now at risk, if BS does not have it on hand, but just some paper receipts?
And, if BS stores silver for investors, I wonder if they in fact are one of the sub-custodians for the silver ETF SLV.... hmmmm......
Having the actual physical metal in ones possession is the only way to go right now, IMO.
" ...Governments might have to intervene with taxpayers’ money to shore up the financial system and prevent a “downward credit spiral” from taking hold, the International Monetary Fund said on Wednesday.
John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system....”
Any Assets you as Joe American my own, could be called to aid the saving of the United States Financial System!
<< <i>" ...Governments might have to intervene with taxpayers’ money to shore up the financial system and prevent a “downward credit spiral” from taking hold, the International Monetary Fund said on Wednesday.
John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system....”
Any Assets you as Joe American my own, could be called to aid the saving of the United States Financial System! >>
Sorry! Not happening in my neighborhood. The Fed has ripped us our entire lives.
We're all armed to the teeth thanks to the New Orleans gangs that our Mayor invited to come over and FEMA still pays them 2K a month each to stay. I guess that doesn't buy enough crack to last them a month. Several of us have already had encounters, myself included, and the cops only need around 8 hours to respond.
You'd be surprised at how fast they can run when they hear the click of a round being chambered at 2 AM.
The only additional assets the Fed is getting from me and my neighbors will be lead at several times the speed of sound.
The public isn't going to accept the notion that we somehow have to bail out the greedy financial houses. Bet on it!!
"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
I had already dealt with three of them over a year ago when my car alarm went off. That's why I know how fast they can run when confronted.
Late last summer they came through the neighborhood in the middle of the night and smashed nearly every car window and stole whatever was inside. They hit over 30 cars/SUVs/etc. I was one of the lucky ones, or they remembered my house if it was the same group.
The police showed up at 11 AM the next day.
We began a neighborhood patrol with cell phones and shotguns after this happened again three weeks later.
A month or so had passed, my cell phone went off at 2 AM, I was still up reading. I grabbed my P-89 and a couple of extra full clips and headed down the street. Three neighbors had 7 of them lined up against a garage door. Soon there were over a dozen of us, all armed.
Enough 911 calls got the Constables here in around 45 minutes. Must have been a slow night for them.
They were hauled off, the cops didn't even think twice about our own weapons, just asked that we holster them or crack the shotguns open.
We picked them out of a line up a few days later. They all had lifetime records, career criminals and all were from New Orleans.
They are still awaiting trial, bail was denied for all of them. My guess is that FEMA continues sending them checks.
That would never happen in California, or most states for that matter. Thank God for the Republic of Texas. We still have most of our rights.
"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
And lastly, Kudlow was in a discussion with (name?) sitting next to him and asked where we are in terms of timeline. Then Kudlow asked...1934, 1935? His guest answered 1931. First of all, the fact that Kudlow started with the 1930's instead of his usual 1970's or 1990's was surprising.
It seems Crudlowe and his guest completely left out 1929-1930. If Crudlowe is thinking 1934-1935, his recollection of history is poor. It would seem he wants to put the troubled times behind him as quickly as possible and start stumping for growth stocks once again.
I don't see any pro-GLD and pro-SLV pundits perking up now to defend holding paper PM's....nor the usual counterpoint about low inflation and economic recovery right around the corner. Jim Sinclair has been the watchman on this trail since 2001 and he has called each turn pretty much on target. For those that were listening he was quite outspoken about derivatives and gold back in 2001-2002. Few were listening or cared. And truthfully, it's still not much different today, but it is slowly changing.
Goldman now changing tune from their December 2007 forecast that commodities and gold in particular were going to tank in 2008. Now they claim just the opposite. More than likely, they are shorting oil heavily right now.
March 14 (Bloomberg) -- Commodities may have ``explosive rallies'' in the next couple of years, with crude oil rising to $175 a barrel, according to Goldman Sachs Group Inc.
<< <i>" ...Governments might have to intervene with taxpayers’ money to shore up the financial system and prevent a “downward credit spiral” from taking hold, the International Monetary Fund said on Wednesday.
John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system....”
Any Assets you as Joe American my own, could be called to aid the saving of the United States Financial System! >>
Unfortunately it wont be just the US financial system. The USA is just about 18 months ahead of the rest of the world.
cohodk your replys have changed over the years. I just pray this will blow over but man it's hard to see how this isn't going to be at least a "Great Depression" since everything is bad including our savings as a nation and the world. I've never been a "gloom and doomer" but I've tried to protect myself the best I could. I just wish I could figure out how to protect my 401k that it's options suck. Good Luck to all Americans is these tough times and esp. the average American To all you socialist out there bringing down America for so many years, you can go to H***! And BOTH PATRIES SUCK AND NEED TO BE REPLACED, IT'S NOT JUST GWB.
Both parties have sold out America for there own personal power and wealth.....................it's a sad day and many more to come but not the end of the world we just need to retake control. YOUR VOTES COUNT! Congress was more interested in playing the FBI than taking care of what they were sent to Washington to do and that's just wrong.
I hear you on 401K options stanking. Fortunately my fund manager allowed a 50% option into anything on the standard exchanges. And that I've taken advantage of the past few years with gold funds and mining shares. However the other 50% of my 401K is hanging out and it sure does stink. Right now I'm in treasuries looking for any direction in Dow/S&P, etc. But even treasuries have me scared as does the US dollar. At this point I see no way not to lose 30% on that 50% regardless of investment type. Gold producers are starting to do quite well. The junior producers and explorers exploding is not far down the road.
<< <i>And lastly, Kudlow was in a discussion with (name?) sitting next to him and asked where we are in terms of timeline. Then Kudlow asked...1934, 1935? His guest answered 1931. First of all, the fact that Kudlow started with the 1930's instead of his usual 1970's or 1990's was surprising.
It seems Crudlowe and his guest completely left out 1929-1930. If Crudlowe is thinking 1934-1935, his recollection of history is poor. It would seem he wants to put the troubled times behind him as quickly as possible and start stumping for growth stocks once again.
roadrunner >>
That's what I thought. I was discussing this with the misses and we wondered when we had passed through the crash of 1929 and the subsequent crashes in 1930 (metaphorically, of course.)
By MARTIN CRUTSINGER, AP Economics Writer 2 hours, 32 minutes ago
WASHINGTON - The Federal Reserve invoked a rarely used Depression-era procedure Friday to bolster troubled Bear Stearns Cos. and said it will provide even more help to combat a serious credit crisis.
I hear you on 401K options stanking. Fortunately my fund manager allowed a 50% option into anything on the standard exchanges. And that I've taken advantage of the past few years with gold funds and mining shares. However the other 50% of my 401K is hanging out and it sure does stink. Right now I'm in treasuries looking for any direction in Dow/S&P, etc. But even treasuries have me scared as does the US dollar. At this point I see no way not to lose 30% on that 50% regardless of investment type. Gold producers are starting to do quite well. The junior producers and explorers exploding is not far down the road.
roadrunner >>
I hear you. I'm half in treasuries and the other half in the "so called" Stable Value Fund full of banks, corp loans, and insurance companies. I'm just hoping the DOW drops so I can buy real companies. My old 401k has BP as a option, TRP NEW ERA fund, and Utilties so at least I have a few options. BP is an ok company with good assest so I hope to new man in charge can strighten it out since they've suffered a lot of bad press and stupid decissions that has made them not follow the pack.
One of my small spin offs from BP a retirement account I had in DWS I put in the Scudder PM funds which has done well but certainly has lagged gold.
I hear you on 401K options stanking. Fortunately my fund manager allowed a 50% option into anything on the standard exchanges. And that I've taken advantage of the past few years with gold funds and mining shares. However the other 50% of my 401K is hanging out and it sure does stink. Right now I'm in treasuries looking for any direction in Dow/S&P, etc. But even treasuries have me scared as does the US dollar. At this point I see no way not to lose 30% on that 50% regardless of investment type. Gold producers are starting to do quite well. The junior producers and explorers exploding is not far down the road.
roadrunner >>
Our company uses Vanguard for our 401k and B-fund. Luckily we have VIPSX which is an inflation protected security and is up 5% since January. But, that's the only fund of choice that is up. Everything else is around 10% down. Since November I have paired everything out of equity and into bonds, cash and VIPSX. Unfortunately, it's all denominated in dollars.
Peter Schiff of EuroPacific calls bonds that last bubble left to pop.....and a big one at that. I'd be leery. If municipal bonds are starting to bust at the seams, how can corporate or govt bonds be any better?
...and the other half in the "so called" Stable Value Fund full of banks, corp loans, and insurance companies.
I was using the stable value fund for a while as well until I saw strange acronyms in there such as BIC (bank investment contracts), SIV's, etc. I figured they were synonymis with "derivatives." In my TRPrice prospectus they call many of these "illiquid" which to me was a red flag. I would be afraid of anything with banks, insurance companies and the like right now. I fear they are anything but "stable." If you are certain of their stability please post more about them.
We will see many more RARE events with the FED and others bailing out their buddies. They will become commonplace.
You are probably right. Several years ago I saw potential in equities and the markets had a very good ride. I was always concerned of the real estate bubble especially when I heard stories of garages converted into 1 BR 1 Bath homes selling for close to $300k in New Jersey. The bubble continued to expand, while signs of economic stagnation (not slowdown) were evident due to high oil.
About this time last year I posted a chart of the CCI index (private inflation index) as opposed to the CRB index (govt inflation index) and indicated how it was about to break out to the upside. Since that time the CCI index is up about 44%, while the CRB index is up about 31%. I also watch global economies very closely and warned of a collapse of the Yen carry trade about 6 months ago, when the YEN bottomed against the dollar. I have been in rather disbelief of the depreciation of the dollar, but finally threw in the towel when it broke 79.
I am also a student of foreign interest rate policy, as many countries are mere children compared to US, ie, Australia and New Zealand. In my opinion they have made some serious mistakes in their actions that have allowed real estates bubble to propagate longer and bigger than in the USA. The same can be said for most all Eastern European economies. Homes are now unaffordable to everyone across the globe, and will deflate much faster than in the USA as most countries have held interest steady or even increased them (Australia). This has created another carry trade bubble in second tier currencies and the flight to quality has been very evident in the appreciation of the Yen and Swiss Franc.
Currently I believe the currencies of Australia, New Zealand, Iceland to be very overvalued. And the US dollar is somewhat undervalued given the financial difficulties that Europe and Asia are going to experience. That doesnt mean the dollar will go up or the Euro down, as manias can be quite stubborn. And as I have stated numerous times, I do not believe the corrolation between gold and the dollar is as strong as commonly thought.
My greatest concern is that the rest of the world has their heads in the sand regarding their own real estate bubbles and they are not as equipped to handle them as well as the USA, even given our own problems. Europe had it own tremendous economic expansion after the fall of communism, but the integration of these economies is now mostly complete. It will be impossible to maintain the growth they have enjoyed. And China is another story in and of itself. Their stock market is down 35% since the summer, yet no one talks about that. What happens when the "newly created middle class", loses the financial security they found in the stock market? Will the govt be able to create enough social programs to keep everyone happy, or will they revolt like the Eastern Europeans did?
One last point, many companies have been buying back stock to boost earnings per share. These programs never made sense to me, but the latest is a huge buyback by IBM. They are now forcasting an increase in EPS of 5c, but given the size of the buyback, EPS should be up 70c. I think companies can no longer grow their income organically, in other words, we may have reached an economic peak.
I had thought that Australia was already in a deep housing funk that began a year or more before ours started. There were other countries on that list as well. As a matter of fact when I read articles concerning Australia a few years back it seemed to predict a hard landing for our Real Estate market as well.
<< <i>cohodk your replys have changed over the years. I just pray this will blow over but man it's hard to see how this isn't going to be at least a "Great Depression" since everything is bad including our savings as a nation and the world. I've never been a "gloom and doomer" but I've tried to protect myself the best I could. I just wish I could figure out how to protect my 401k that it's options suck. Good Luck to all Americans is these tough times and esp. the average American To all you socialist out there bringing down America for so many years, you can go to H***! And BOTH PATRIES SUCK AND NEED TO BE REPLACED, IT'S NOT JUST GWB.
Both parties have sold out America for there own personal power and wealth.....................it's a sad day and many more to come but not the end of the world we just need to retake control. YOUR VOTES COUNT! Congress was more interested in playing the FBI than taking care of what they were sent to Washington to do and that's just wrong. >>
Much of the reason for the dollars decline is that its role as reserve currency is ending all over the world. This is money coming home to roost which lowers the value of the dollar and raises the level of chicken parts made by decades of Congressional fiscal mismanagement.
There is no need to panic because we maintain our tremendous infrastructure and our ability to rise to challenges. We have tremendous human resources.
I've been trying to tell people for years now that the major problem isn't peak oil or debt. It's not overpopulation and it's sure as hell not global warming.
The biggest threat to our way of life is the encumbered and broken education- al system. We are fast running out of time to repair it. If we fail we will be a very dangerous and very poor third world country within two generations.
The educational system is so easy to fix that we'll probably fail. Why fix it while everyone profits from the status quo?
Comments
Stock Fund -10.41%
Global Equities Fund -10.12%
Growth Fund -11.95%
Inflation Linked Bond +6.51%
Looks like that is the way it'll play for at least another quarter. It's a lot better than the bank CD at 5.35% Just FYI, thought it might be of some interest.
which would suit the US economy best for long term recovery??? it's pretty obvious (to me) at least that the Central Banks have tossed the kitchen sink.
and would it be a different scenario if you took the emerging world economy (BRIC) and Western Europe, Japan, etc.
if there are other options.....send them to Bernanke
<< <i>57loaded -- excellent question; my view may be simplistic, but I would always choose recession over stagflation, because I suspect that periods of stagflation will ultimately end in recession in any case. The period of stagflation creates instability and prolongs the pain. >>
I would tend to agree but would point out that a recession
brought on by a currency collapse could not be contained to
the financial sector in modern times. It would result in wide-
spread and very deep pain to most of the population.
Factories run on money and even the seed crop comes from
factories in modern times. It would have catastrophic results
of rather remarkable proportions.
Random Collector
www.marksmedals.com
<< <i>This would be good news for those opposed to genetically engineered food crops. >>
There's always a bright side, eh.
...No more pesticides on produce and a lot less obesity as well.
<< <i>Despite the Federal Reserve's efforts Wall Street fears a big US bank is in trouble
Interesting. Isn't Bear Stearns one of the chosen few who 'store' the silver for the silver ETF? May have to do a little research on that....
Ah, I think I finally cracked the code. When the financial advisors say "We need to inject more liquidity into the market place as soon as possible.", it actually means "I'm still paying for the ranch in San Palo and I'm goin' upside down here."
Ripped from a reader's comment on the BBC web page.
The plot thickens!
Edited to add: Kitco gold spot at $1004.00 now...I love it when a plan comes together.
How many of you think prices were REALLY unchanged in February as the government claims?
<< <i>Show of hands.
How many of you think prices were REALLY unchanged in February as the government claims? >>
well i personally did not notice anything going up in price. of course gas fluctuates the most
but what did anyone else notice?
is one really supposed to be able to see month to month inflation? i tend to think of it as something
that becomes visible to joe friendly, like me, on a yearly basis.
I figure that is a 21% increase...........in about 6 months.
Inflation, anyone?
I knew it would happen.
<< <i>Let's see..........the propane contract that I signed last Fall was for $1.65/gal. and now that the contract has been fulfilled, I am paying $2.00/gal.
I figure that is a 21% increase...........in about 6 months.
Inflation, anyone? >>
Only if you use propane as a heating source
I tend to correlate propane costs with other hydrocarbon prices, although they may not move entirely in lock-step.
Added: Frankly, I think that mhammerman has it exactly right:
Ah, I think I finally cracked the code. When the financial advisors say "We need to inject more liquidity into the market place as soon as possible.", it actually means "I'm still paying for the ranch in San Palo and I'm goin' upside down here."
I knew it would happen.
economy recover enough to make other investments worthwhile?
The only reason I can see to sell any precious metals right now would be to get rid of high interest debt or if one absolutely needed the money to meet an obligation...
.... otherwise, I think it prudent to hold what you have, and continue to add to what you have.
All this crappy imaginary debt and imaginary money has to be pegged to something solid and brought under control by someone who is serious about it. When the financial foundations are screwed up, you can't properly value any kinds of assets.
After the financial system's damage becomes clearer - only then will P/E ratios, income statements and balance sheets have any good basis for comparison and valuation.
Right now, there's no good alternatives to hard assets. At least you know that they are real.
I knew it would happen.
Economic Forces Converge Like Never Before
Author: Jim Sinclair
Dear Extended Family,
Never in economic history has there been a night like tonight. I am writing later than usual because of the enormity of all the converging forces. The euro reaches for $1.60, the Middle East oil producers are in shock, and the IMF tells the world to “plan for the worst.”
The reason this missive is late is because I am reverberating at the speed of the disintegration. These cursed OTC derivatives and their makers, who incidentally made the international banking community rich beyond your wildest dreams, are now unwinding at lightening speed.
Do you think any entity with any OTC derivative now has faith in the paper?
This paper is $550 trillion plus dollars in notional value. The horrible fact is that in bankruptcy notional value becomes real value with the capacity to destroy the world financial system.
The above is no wild assumption. It is hard, cold fact.
Expect currency intervention to slow down the rise of the euro.
Intervention has never worked. It will not now. In fact, it will backfire so fast that the effort will be abandoned, making things even worse.
Intervention in currency, the dollar, will only provide the capacity for other central banks, oil producers and holders of high risk long US treasury paper to diversify out in huge amounts of decaying dollars at singular prices.
I could go through a tome on how intervention works, but accept that any rise in short rates will break the bank immediately. Intervention in the euro/dollar is another practical impossibility except as a bluff.
There is no practical solution to today’s TERMINAL problems and that means you are up to your eyeballs in alligators.
You must protect yourselves.
Gold is going to $1650. In all probability my major error will be in forecasting a price that is much too low for gold.
The ratio spread long the major gold producers, short the juniors, is going to kill the math whizzes that think they are in the captain’s seat. The reason is the only value still in precious metals shares lies in the best junior issues these geeks have been hammering.
The prayer that a junior with quality assets has is that the illegal short position is enormous.
This is it!
Your concerned friend,
Jim
The fact the FED intervention in the credit drivatives is now actually a lethal blow to the confidence in the monetary system other than a shot in the arm it was meant to be will speak volumes in epic proportions....
But some of what I HAVE found.... furthers my suspicions of the SLV fund. It may actually be a 'tool' of the big silver shorts, to be able to continue the game that they have been playing, and as frequently discussed by Ted Butler. It appears the prospectus, and papers filed with the SEC, etc... is filled with loopholes. Those of you who believe you are investing in actual silver..... For a good article about the loopholes, and how the fund may be used by the shorts to manipulate the market, the following is very interesting. It is about a year old.... but as far as I know, still applies....
SLV_loopholes
will it be an implosion or an explosion of silver?
<< <i>It makes no sense to sell at this time.... since there is nothing stable to put that money into.
The only reason I can see to sell any precious metals right now would be to get rid of high interest debt or if one absolutely needed the money to meet an obligation...
.... otherwise, I think it prudent to hold what you have, and continue to add to what you have. >>
I'm still bullish, as well. There's no reason to sell know!!
Do others here think like I do that when Kudlow gives into the Recession discussion that it's either about to end or that we've entered a depression?
Also, last night was the first time I've heard Ken Heebner speak out...and his outlook was pretty gloomy for the next year or two. That perked my ears.
And lastly, Kudlow was in a discussion with (name?) sitting next to him and asked where we are in terms of timeline. Then Kudlow asked...1934, 1935? His guest answered 1931. First of all, the fact that Kudlow started with the 1930's instead of his usual 1970's or 1990's was surprising.
Ren
<< <i>IMF tells states to plan for the worst >>
" ...Governments might have to intervene with taxpayers’ money to shore up the financial system and prevent a “downward credit spiral” from taking hold, the International Monetary Fund said on Wednesday.
John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system....”
Please forgive my naivete`, but what would this look like, in concrete terms, in the USA? I'm serious, what is 'intevern[ing] with taxpayer's money' / 'private sector' options?
RE: silver, a little shop I occaisionally deal with bought over $100,000 of all types of silver over the counter yesterday and resold about $50,000 back out to retail customers.
that is all.
Wonder if those investors are still having Bear Stearns 'store' their silver investments.... if so, I wonder if their silver is now at risk, if BS does not have it on hand, but just some paper receipts?
And, if BS stores silver for investors, I wonder if they in fact are one of the sub-custodians for the silver ETF SLV.... hmmmm......
Having the actual physical metal in ones possession is the only way to go right now, IMO.
John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system....”
Any Assets you as Joe American my own, could be called to aid the saving of the United States Financial System!
<< <i>" ...Governments might have to intervene with taxpayers’ money to shore up the financial system and prevent a “downward credit spiral” from taking hold, the International Monetary Fund said on Wednesday.
John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system....”
Any Assets you as Joe American my own, could be called to aid the saving of the United States Financial System! >>
Sorry! Not happening in my neighborhood. The Fed has ripped us our entire lives.
We're all armed to the teeth thanks to the New Orleans gangs that our Mayor invited to come over and FEMA still pays them 2K a month each to stay. I guess that doesn't buy enough crack to last them a month. Several of us have already had encounters, myself included, and the cops only need around 8 hours to respond.
You'd be surprised at how fast they can run when they hear the click of a round being chambered at 2 AM.
The only additional assets the Fed is getting from me and my neighbors will be lead at several times the speed of sound.
The public isn't going to accept the notion that we somehow have to bail out the greedy financial houses. Bet on it!!
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
go Deadhorse go??
be careful?
<< <i>
go Deadhorse go??
be careful? >>
That's what body armor is for.
I had already dealt with three of them over a year ago when my car alarm went off. That's why I know how fast they can run when confronted.
Late last summer they came through the neighborhood in the middle of the night and smashed nearly every car window and stole whatever was inside. They hit over 30 cars/SUVs/etc. I was one of the lucky ones, or they remembered my house if it was the same group.
The police showed up at 11 AM the next day.
We began a neighborhood patrol with cell phones and shotguns after this happened again three weeks later.
A month or so had passed, my cell phone went off at 2 AM, I was still up reading. I grabbed my P-89 and a couple of extra full clips and headed down the street. Three neighbors had 7 of them lined up against a garage door. Soon there were over a dozen of us, all armed.
Enough 911 calls got the Constables here in around 45 minutes. Must have been a slow night for them.
They were hauled off, the cops didn't even think twice about our own weapons, just asked that we holster them or crack the shotguns open.
We picked them out of a line up a few days later. They all had lifetime records, career criminals and all were from New Orleans.
They are still awaiting trial, bail was denied for all of them. My guess is that FEMA continues sending them checks.
That would never happen in California, or most states for that matter. Thank God for the Republic of Texas. We still have most of our rights.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
It seems Crudlowe and his guest completely left out 1929-1930.
If Crudlowe is thinking 1934-1935, his recollection of history is poor.
It would seem he wants to put the troubled times behind him as quickly as possible and start stumping for growth stocks once again.
I don't see any pro-GLD and pro-SLV pundits perking up now to defend holding paper PM's....nor the usual counterpoint about low inflation and economic recovery right around the corner. Jim Sinclair has been the watchman on this trail since 2001 and he has called each turn pretty much on target. For those that were listening he was quite outspoken about derivatives and gold back in 2001-2002. Few were listening or cared. And truthfully, it's still not much different today, but it is slowly changing.
Goldman now changing tune from their December 2007 forecast that commodities and gold in particular were going to tank in 2008. Now they claim just the opposite. More than likely, they are shorting oil heavily right now.
March 14 (Bloomberg) -- Commodities may have ``explosive rallies'' in the next couple of years, with crude oil rising to $175 a barrel, according to Goldman Sachs Group Inc.
roadrunner
<< <i>" ...Governments might have to intervene with taxpayers’ money to shore up the financial system and prevent a “downward credit spiral” from taking hold, the International Monetary Fund said on Wednesday.
John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system....”
Any Assets you as Joe American my own, could be called to aid the saving of the United States Financial System! >>
Unfortunately it wont be just the US financial system. The USA is just about 18 months ahead of the rest of the world.
Knowledge is the enemy of fear
Both parties have sold out America for there own personal power and wealth.....................it's a sad day and many more to come but not the end of the world we just need to retake control. YOUR VOTES COUNT!
I hear you on 401K options stanking. Fortunately my fund manager allowed a 50% option into anything on the standard exchanges. And that I've taken advantage of the past few years with gold funds and mining shares. However the other 50% of my 401K is hanging out and it sure does stink. Right now I'm in treasuries looking for any direction in Dow/S&P, etc. But even treasuries have me scared as does the US dollar. At this point I see no way not to lose 30% on that 50% regardless of investment type. Gold producers are starting to do quite well. The junior producers and explorers exploding is not far down the road.
roadrunner
<< <i>And lastly, Kudlow was in a discussion with (name?) sitting next to him and asked where we are in terms of timeline. Then Kudlow asked...1934, 1935? His guest answered 1931. First of all, the fact that Kudlow started with the 1930's instead of his usual 1970's or 1990's was surprising.
It seems Crudlowe and his guest completely left out 1929-1930.
If Crudlowe is thinking 1934-1935, his recollection of history is poor.
It would seem he wants to put the troubled times behind him as quickly as possible and start stumping for growth stocks once again.
roadrunner >>
That's what I thought. I was discussing this with the misses and we wondered when we had passed through the crash of 1929 and the subsequent crashes in 1930 (metaphorically, of course.)
Ren
By MARTIN CRUTSINGER, AP Economics Writer
2 hours, 32 minutes ago
WASHINGTON - The Federal Reserve invoked a rarely used Depression-era procedure Friday to bolster troubled Bear Stearns Cos. and said it will provide even more help to combat a serious credit crisis.
Fed takes rare path to aid Bear Stearns
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>ttown,
I hear you on 401K options stanking. Fortunately my fund manager allowed a 50% option into anything on the standard exchanges. And that I've taken advantage of the past few years with gold funds and mining shares. However the other 50% of my 401K is hanging out and it sure does stink. Right now I'm in treasuries looking for any direction in Dow/S&P, etc. But even treasuries have me scared as does the US dollar. At this point I see no way not to lose 30% on that 50% regardless of investment type. Gold producers are starting to do quite well. The junior producers and explorers exploding is not far down the road.
roadrunner >>
I hear you. I'm half in treasuries and the other half in the "so called" Stable Value Fund full of banks, corp loans, and insurance companies. I'm just hoping the DOW drops so I can buy real companies. My old 401k has BP as a option, TRP NEW ERA fund, and Utilties so at least I have a few options. BP is an ok company with good assest so I hope to new man in charge can strighten it out since they've suffered a lot of bad press and stupid decissions that has made them not follow the pack.
One of my small spin offs from BP a retirement account I had in DWS I put in the Scudder PM funds which has done well but certainly has lagged gold.
<< <i>ttown,
I hear you on 401K options stanking. Fortunately my fund manager allowed a 50% option into anything on the standard exchanges. And that I've taken advantage of the past few years with gold funds and mining shares. However the other 50% of my 401K is hanging out and it sure does stink. Right now I'm in treasuries looking for any direction in Dow/S&P, etc. But even treasuries have me scared as does the US dollar. At this point I see no way not to lose 30% on that 50% regardless of investment type. Gold producers are starting to do quite well. The junior producers and explorers exploding is not far down the road.
roadrunner >>
Our company uses Vanguard for our 401k and B-fund. Luckily we have VIPSX which is an inflation protected security and is up 5% since January. But, that's the only fund of choice that is up. Everything else is around 10% down. Since November I have paired everything out of equity and into bonds, cash and VIPSX. Unfortunately, it's all denominated in dollars.
Ren
...and the other half in the "so called" Stable Value Fund full of banks, corp loans, and insurance companies.
I was using the stable value fund for a while as well until I saw strange acronyms in there such as BIC (bank investment contracts), SIV's, etc. I figured they were synonymis with "derivatives." In my TRPrice prospectus they call many of these "illiquid" which to me was a red flag. I would be afraid of anything with banks, insurance companies and the like right now. I fear they are anything but "stable." If you are certain of their stability please post more about them.
We will see many more RARE events with the FED and others bailing out their buddies. They will become commonplace.
roadrunner
OOOhhhhh that hurt........you never want to go to the FED WINDOW for capital.....
Guys, this is getting ugly. And it will get much worse.
You are probably right. Several years ago I saw potential in equities and the markets had a very good ride. I was always concerned of the real estate bubble especially when I heard stories of garages converted into 1 BR 1 Bath homes selling for close to $300k in New Jersey. The bubble continued to expand, while signs of economic stagnation (not slowdown) were evident due to high oil.
About this time last year I posted a chart of the CCI index (private inflation index) as opposed to the CRB index (govt inflation index) and indicated how it was about to break out to the upside. Since that time the CCI index is up about 44%, while the CRB index is up about 31%. I also watch global economies very closely and warned of a collapse of the Yen carry trade about 6 months ago, when the YEN bottomed against the dollar. I have been in rather disbelief of the depreciation of the dollar, but finally threw in the towel when it broke 79.
I am also a student of foreign interest rate policy, as many countries are mere children compared to US, ie, Australia and New Zealand. In my opinion they have made some serious mistakes in their actions that have allowed real estates bubble to propagate longer and bigger than in the USA. The same can be said for most all Eastern European economies. Homes are now unaffordable to everyone across the globe, and will deflate much faster than in the USA as most countries have held interest steady or even increased them (Australia). This has created another carry trade bubble in second tier currencies and the flight to quality has been very evident in the appreciation of the Yen and Swiss Franc.
Currently I believe the currencies of Australia, New Zealand, Iceland to be very overvalued. And the US dollar is somewhat undervalued given the financial difficulties that Europe and Asia are going to experience. That doesnt mean the dollar will go up or the Euro down, as manias can be quite stubborn. And as I have stated numerous times, I do not believe the corrolation between gold and the dollar is as strong as commonly thought.
My greatest concern is that the rest of the world has their heads in the sand regarding their own real estate bubbles and they are not as equipped to handle them as well as the USA, even given our own problems. Europe had it own tremendous economic expansion after the fall of communism, but the integration of these economies is now mostly complete. It will be impossible to maintain the growth they have enjoyed. And China is another story in and of itself. Their stock market is down 35% since the summer, yet no one talks about that. What happens when the "newly created middle class", loses the financial security they found in the stock market? Will the govt be able to create enough social programs to keep everyone happy, or will they revolt like the Eastern Europeans did?
One last point, many companies have been buying back stock to boost earnings per share. These programs never made sense to me, but the latest is a huge buyback by IBM. They are now forcasting an increase in EPS of 5c, but given the size of the buyback, EPS should be up 70c. I think companies can no longer grow their income organically, in other words, we may have reached an economic peak.
Knowledge is the enemy of fear
I had thought that Australia was already in a deep housing funk that began a year or more before ours started. There were other countries on that list as well. As a matter of fact when I read articles concerning Australia a few years back it seemed to predict a hard landing for our Real Estate market as well.
roadrunner
<< <i>cohodk your replys have changed over the years. I just pray this will blow over but man it's hard to see how this isn't going to be at least a "Great Depression" since everything is bad including our savings as a nation and the world. I've never been a "gloom and doomer" but I've tried to protect myself the best I could. I just wish I could figure out how to protect my 401k that it's options suck. Good Luck to all Americans is these tough times and esp. the average American
Both parties have sold out America for there own personal power and wealth.....................it's a sad day and many more to come but not the end of the world we just need to retake control. YOUR VOTES COUNT!
Much of the reason for the dollars decline is that its role as reserve currency
is ending all over the world. This is money coming home to roost which lowers
the value of the dollar and raises the level of chicken parts made by decades
of Congressional fiscal mismanagement.
There is no need to panic because we maintain our tremendous infrastructure
and our ability to rise to challenges. We have tremendous human resources.
I've been trying to tell people for years now that the major problem isn't peak
oil or debt. It's not overpopulation and it's sure as hell not global warming.
The biggest threat to our way of life is the encumbered and broken education-
al system. We are fast running out of time to repair it. If we fail we will be a
very dangerous and very poor third world country within two generations.
The educational system is so easy to fix that we'll probably fail. Why fix it while
everyone profits from the status quo?