<< <i>Guru input request: Can someone give us non-economics degreed layman the basic definition of short interest shares and what they portend for future stock movement? I've read the definition a few times but keep coming away with a huh. >>
Short interest measures the amount of market activity is "short" as opposed to long. A high short interest means that more market participants are bearish on the market and more money is on the short side.
Some consider this a bullish contrarian indicator because a high short interest means that there is more that will need to be "covered" with a buy. When the market rises and people who sold short rush out to close their short positions, it's a "short squeeze" that causes a quick upward spike in the market. >>
While a short squeeze can occur, it is just as likely that the shorts will be proven correct.
Dont get concerned about high short interests in sector ETFs as these have been used extensively as a means of portfolio insurance. Someone who is long physical gold or silver may short GLD or SLV to hedge their position. They could then trade their GLD/SLV position for minimal transaction cost---certainly much cheaper than trying to buy or sell physical--while maintaining their long position in physical. Most investors would hedge with futures, but since there is time premium involved with futures, it is cheaper with GLD/SLV. Same is probably true for USO, which Goldsaint posted about a few days ago.
What I am trying to say, is that short interest in ETFs is for all intents purpose, meaningless.
The problem that the stock market, or the economy in general, is experiencing is not going to magically go away if we cut taxes as some will have you believe. That kind of strange economics is why we're where we are in the first place. As I've said before, it's impossible to spend you way into affluence. Now that we have debt at all levels that's unmanageable, cutting taxes further (or sending us each a little check of our own money) is not going to do anything besides garner a few votes from the economic dummies for those who utter "cut taxes" during their elections. We need to pay down debt, and to do that we need to sacrifice, which unfortunately means paying extra taxes to service the debt until it's retired. You can't raise taxes on people who have no money, that's a revolving door of taking money from one pocket and putting it in another. There's only a certain group of people in this country who still have enough money to pay down the debt, and I'd imagine that they're the ones who are in the end going to do it. Without a reversal of our habit of going into debt, long term holding of things like precious metals is probably the only way to stay slightly ahead of the curve. Everyone talks sacrifice for country...few are willing to give anything but advice.
that will never happen, instead we will decrease the "value" of the debt.
If I owe you 100 cattle and there are only 2000 in the territory then I may have a problem. If I "create' another 10000 for the territory then it will be easier for me to get the 100 I owe you. Of course they won't be worth as much but I will have "paid" my debt.
Of course its not very easy to " create" 10000 cattle but it is real easy if they are just "digit" or Paper Cattle.
Any idea what the Govnm't plans to do to "pay down the debt" and what it will do to the "value" of each dollar of debt.
There's only a certain group of people in this country who still have enough money to pay down the debt
I disagree. I think the best thing for America is to have every person, and I mean every person, personally pay something towards the future. I think it would remarkably change the path of America.
Well, if we all continue to point at the next guy while continuing to ask the government to give us a personal break, we'll just keep circling the bowl. I have no problem with everyone paying, but I have not heard of any plan yet that does not in some way include tax shelters, etc., for those who need the money the least.
The bottom line is this...if you need money, do you ask aunt Mabel who's sitting on a couple million dollars in cash for a few thousand, or do you ask a thousand relatives who are now living in poverty for $1.00 each? It doesn't take too much intelligence to see where the money to pay down the debt has to come from. If we don't feel that this should be done, that's fine, but the vehicles that can make you wealthy in this country will continue to shrink as the debt continues to rise...eventually there will just be the uber wealthy with money hidden in other countries and the rest of us.
So, how does all this play out for the coin industry? Do the prices fall because increasing number of people can't purchase coins? Or do they rise because people from other countries continue to buy coins?
As far as the Debt issue goes, it won't change until the people demand their representatives act as if the money they spend is used responsibly and that's highly unlikely to happen. Which is why they spend the way they do, they know they can spin their spending on the people to believe they're doing good rather than bending them over.
I personally believe that coins and precious metals will only continue to appreciate as the dollar continues to fall and the debt continues to climb.
It's not our representatives who are at fault here - it's you and me and the guy down the block. It's all of us who continue to look at programs that benefit others as expendable while fighting tooth and nail to retain those that benefit us personally...even if we don't really need them (like the subsidies to oil companies). It's someone trying to justify a taxpayer funded surgery for on oldster who's got one foot in the grave and one on a banana peel...it's spending so much money on defense that we have no idea where it's even spent. We need to cut back across the board...that's why it's called sacrifice...it should effect all of us, maybe to the point where it hurts - a flat tax will not do this, neither will giving us back a small portion of our own money to "jump-start" the economy. For thirty years now we've milked the system of everything that was good...now we're just about dry. Hang on to your coins IMHO...your cash will be worth less with every passing day.
So, how does all this play out for the coin industry? Do the prices fall because increasing number of people can't purchase coins? Or do they rise because people from other countries continue to buy coins?
I think higher debt service and energy costs will inevitably slow the economy, and that has to hurt anything that's purchased with discretionary funds.
As far as the Debt issue goes, it won't change until the people demand their representatives act as if the money they spend is used responsibly and that's highly unlikely to happen. Which is why they spend the way they do, they know they can spin their spending on the people to believe they're doing good rather than bending them over.
I'm sure that my opinion will be in a very small minority, but I am not putting money into an IRA, a Roth, or even my 401K. In fact, I already liquidated my IRA and Roth, and ate the penalty and paid the taxes on the gains.
The reason? The money is better off in my possession than in someone else's at this point. My 401K is all in T-Bill funds but it is on the brink of being liquidated, too.
My lifelong observation is that the government is confiscatory and will only become more so. Obama, McCain - it makes little difference at this point. One might be worse than the other, but they both have pet projects and they both will not hesitate to spend big money that we don't have. Nothing has changed, and I am waiting for confirmation that indeed, nothing will change down the road, either.
The only reason that I'm holding back on cashing in the 401K is that I am averaging out of stock/bond/dollar assets instead of making a move all at one time. If the Red Sea parts sometime soon and Congress stops spending and the Fed stops printing, I will have something to plunge back into paper assets with - if I simultaneously lose my mind and decide to ignore my own advice and forget everything else that I've seen happening for the last 30 years or so.
But a more likely scenario is: when the politicians make their next move that I am sure will prove to be even more insulting and injurious to savers and investors, I will make another move away from the type of assets that they love to get their hands on, which is - anything that they can get.
Sorry for being so cynical, but I didn't start out this way. And by the way, I'm already ahead after paying the 10% penalty and the taxes on the liquidation of my IRA and the taxes on the gains from my Roth liquidation.
When I think of my having to go to these extremes, just to try and preserve what I've earned over my career, it makes me boiling mad. And then I think of the poor souls who aren't protecting themselves. It will truly be a disaster when folks run out of "money".
Have you noticed that the blame for everything is now due to the "evil speculators"? Congress plays no part in massive spending and allowing off-the-books shenanigans by the banks, along with uncontrolled money creation. Nah, Congress isn't culpable at all. They wouldn't trash our country by being so irresponsible. Would they?
The Fed won't be able to keep up the farce forever. China, Saudi and Europe are holding so many dollars overseas that they are the biggest losers when the Fed inflates the money supply. How long do you think that they will put up with being ripped off before they decide to come over here and start buying more US assets?
Congress is selling us out. The Fed is helping. And of course, the big international banking cartel isn't making out too badly, either. But just remember, if you happen to make any money in any commodity speculation, you will be the culprit that they come down on with both feet. Just ask Bunker Hunt.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>with regards to a Roth IRA vs traditional IRS, I prefer the traditional
Who knows how the tax rules will change in the future when it is time to cash out the Roth? There may be no income tax and all sales taxes. Your Social security benefits may be means tested and if you have a huge Roth, then you won't get your SS.
I would rather take the sure tax break now rather than risk getting no tax break at all. >>
There may be no income tax!?!?!?!? That's about as likely as me winning the lotto while crossing the finish line in the olympics winning the gold and breaking the world record. Twice in a row. Taxes will almost certainly be higher in the future, probably much higher than they are now. The Roth is a much better way to invest than a traditional IRA or 401K.
<< <i>with regards to a Roth IRA vs traditional IRS, I prefer the traditional
Who knows how the tax rules will change in the future when it is time to cash out the Roth? There may be no income tax and all sales taxes. Your Social security benefits may be means tested and if you have a huge Roth, then you won't get your SS.
I would rather take the sure tax break now rather than risk getting no tax break at all. >>
There may be no income tax!?!?!?!? That's about as likely as me winning the lotto while crossing the finish line in the olympics winning the gold and breaking the world record. Twice in a row. Taxes will almost certainly be higher in the future, probably much higher than they are now. The Roth is a much better way to invest than a traditional IRA or 401K. >>
I get what he's saying. He's referring to the national sales tax that's gaining popularity. It's possible, but a longshot as long as democrats have a say.
<< <i>I'm sure that my opinion will be in a very small minority, but I am not putting money into an IRA, a Roth, or even my 401K. In fact, I already liquidated my IRA and Roth, and ate the penalty and paid the taxes on the gains.
The reason? The money is better off in my possession than in someone else's at this point. My 401K is all in T-Bill funds but it is on the brink of being liquidated, too.
My lifelong observation is that the government is confiscatory and will only become more so. Obama, McCain - it makes little difference at this point. One might be worse than the other, but they both have pet projects and they both will not hesitate to spend big money that we don't have. Nothing has changed, and I am waiting for confirmation that indeed, nothing will change down the road, either.
The only reason that I'm holding back on cashing in the 401K is that I am averaging out of stock/bond/dollar assets instead of making a move all at one time. If the Red Sea parts sometime soon and Congress stops spending and the Fed stops printing, I will have something to plunge back into paper assets with - if I simultaneously lose my mind and decide to ignore my own advice and forget everything else that I've seen happening for the last 30 years or so.
But a more likely scenario is: when the politicians make their next move that I am sure will prove to be even more insulting and injurious to savers and investors, I will make another move away from the type of assets that they love to get their hands on, which is - anything that they can get.
Sorry for being so cynical, but I didn't start out this way. And by the way, I'm already ahead after paying the 10% penalty and the taxes on the liquidation of my IRA and the taxes on the gains from my Roth liquidation.
When I think of my having to go to these extremes, just to try and preserve what I've earned over my career, it makes me boiling mad. And then I think of the poor souls who aren't protecting themselves. It will truly be a disaster when folks run out of "money".
Have you noticed that the blame for everything is now due to the "evil speculators"? Congress plays no part in massive spending and allowing off-the-books shenanigans by the banks, along with uncontrolled money creation. Nah, Congress isn't culpable at all. They wouldn't trash our country by being so irresponsible. Would they?
The Fed won't be able to keep up the farce forever. China, Saudi and Europe are holding so many dollars overseas that they are the biggest losers when the Fed inflates the money supply. How long do you think that they will put up with being ripped off before they decide to come over here and start buying more US assets?
Congress is selling us out. The Fed is helping. And of course, the big international banking cartel isn't making out too badly, either. But just remember, if you happen to make any money in any commodity speculation, you will be the culprit that they come down on with both feet. Just ask Bunker Hunt. >>
Good post and it's not cyntical it's just being smart .
Excellent post jmski52. You summed it all up very clearly. That should be posted every month as we procede.
Sinclair has become excited again. He's not expecting $1000 soon, but rather an assault on $1200 much sooner than he previously thought.
I sent you an email months ago saying, “This Is It.”
1. I am now telling you, “It Is Now.”
Gold is preparing for an assault not on $1000, but for a brief penetration of $1200. Violent chopping will occur, then off it goes to $1650.
This violent chop we have been living in here and now will resolve itself very soon and the take will be seen by history as having occurred in this last formation HERE AND NOW.
Wonder if this has anything to do with Bush signing an executive order to give himself emergency powers on the North Korea situation?
You mean another chance at $600-$800 gold is not in the cards this year?
<< <i>We need to pay down debt, and to do that we need to sacrifice, which unfortunately means paying extra taxes to service the debt until it's retired. You can't raise taxes on people who have no money, that's a revolving door of taking money from one pocket and putting it in another. There's only a certain group of people in this country who still have enough money to pay down the debt, and I'd imagine that they're the ones who are in the end going to do it. >>
So the people who went into debt buying bigger houses than they needed and then took out loans on them to buy SUVs and plasma TVs are let off the hook because their houses have lost value and they're now upside down in them (and their SUVs) and they can't pay their bills because they don't have any savings, while the people who worked hard and were industrious while living within (or maybe even below) their means and putting aside something for their future are left to pick up the tab? Nice.
<< <i>So the people who went into debt buying bigger houses than they needed and then took out loans on them to buy SUVs and plasma TVs are let off the hook because their houses have lost value and they're now upside down in them (and their SUVs) and they can't pay their bills because they don't have any savings, while the people who worked hard and were industrious while living within (or maybe even below) their means and putting aside something for their future are left to pick up the tab? Nice. >>
This is exactly why it could end really badly. Once enough people get wise and realize they can be a grasshopper and live a decent life off of the ant's hard work, we'll see lots of ants (savers and taxpayers) become grasshoppers (spenders and tax consumers) because working hard like the ant no longer provides enough incentive to justify doing the work or taking the financial risks.
And if enough of that wealth redistribution happens, we're staring "third world" in the face. We're not there yet and there's still time to reverse it, but we're still headed in the wrong direction so it's unlikely to be reversed any time soon. Tocqueville was right when he mentioned that the American republic could be doomed once politicians realized they could bribe us with our own money.
And if enough of that wealth redistribution happens, we're staring "third world" in the face. We're not there yet and there's still time to reverse it, but we're still headed in the wrong direction so it's unlikely to be reversed any time soon. Tocqueville was right when he mentioned that the American republic could be doomed once politicians realized they could bribe us with our own money. >>
The educational system has assured the next couple generations are going to be tough even if all these problems are addressed and we still haven't even begun to fix or gut the educational system. Each passing year compounds the problem.
Not sure what the stats are around the country but here in Houston, we have a 50% graduation rate from High School. In spite of all of the aid and gift programs state, federal, local and even the no child left behind federal act, we get no positive response for our money and our efforts. I still like the european system; the kids go to school, take placement exams and then either go to trade school or university before entering the workplace. Instead, we just let 50% of the people drop out...drop out of society, drop out of education, drop out of participating in the workplace, drop out of becoming a productive member of society. Here's a reality lesson...those that don't have a high school diploma really don't have much to offer society. That might not have been true in previous generations but it is so now.
When we even let one person drop out, we end up supporting them for the rest of their lives so they do become a burden PC or not. I would much rather deal with paying hospitalization and social services for illegal immigrants than I would want to deal with supporting half of the population for their entire lives for this generation and the generations that will surely follow; we're talking food stamps, med clinics, social services, housing assistance, court services, long list and "Each passing year compounds the problem." The numbers are not that hard to evidence High school drop out rates. I think an argument could be made that letting these slackers and their future families slide from their responsibilities cost city/state/federal tax payers much more than any group of illegal immigrants ever will. And the good thing about illegal immigrants is that they actually do things that benefit society as a whole. If you have one guy working and one guy not working then the net productivity is probably "0". We can't get anywhere like this.
As long as we tolerate our our current situation, there is no reason to anticipate that this phenomenon will do anything but escalate. The sad thing is that there is so little that one person can do and certainly it would be almost impossible to turn the tide...so many have dropped out already. The odd twist is that the uneducated do vote and anyone that runs for office proposing reforms that will result in more responsible citizenry is thouroughly crucified in the polls...just look at what France is going through trying people to reform their retirement system French retirement reforms. If someone did a cost benefit analysis of the cost of educating every member of the society vs. the cost of providing aid and services to the adult drop out (half the population?) we would probably find that it is much much cheaper to pay to educate people and we would get the added benefit of more people being able to take care of themselves and participate in producing something that has value to society as a whole.
It's my opinion that we have become so PC as to not call things what they are, afraid to voice any dissent lest we offend someone or some group regardless of the fact that we personally may be harmed or offended. Unfortunately it seems that being PC is more successful a strategy for getting elected than proposing measures that would result in having an educated, productive society. It is also my opinion that those that are paying for the dance (as in property/sales/fed taxes) should get some say about what the tune should be. So, for those that don't think their vote means anything...how would we know, if you don't vote.
If we don't get after our education strategy pretty soon, we are going to be paying for that lack of committment for many years to come; at least for those that can pay into the system. As a solution, I would offer that if each of those that have made it to a stable life style will take the time do the planning necessary to make sure that all of their family members find their way to a similar situation, then we would at the very least have a result of no net loss (50% drop out rate vs. 50% being productive). If each of us that can would take the time to teach in the community college system or volunteer in the schools or in church programs then we might be pushing that no net loss situation to a net gain system and that would be good. So the question becomes: "Do 50% of the population give enough of a hoot to do anything about it?" Should we be able to overcome this situation with education and productivity then we would reap the rewards for generations to come. I'm doing my part and I sure as heck do vote, every time.
Not a political statement, more an examination of public policy that has a fair amount of importance in our gross domestic product and hence our accumulation of wherewithall as in more money for all to buy PM...yeah! Education=more money across the board, for everyone.
This is the item to watch on Thursday. If the Europeans raise their rates this week regardless of the Feds pleadings not to do so this will be the beginning of the end of any effort to save the dollar. The dollar should crumble, gold, silver and oil should all have a big move up.
Musical chairs to sell out of the dollar is going to move to a whole new level!
Stagflation grips Eurozone as interest rates look set to rise
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 1:20am BST 01/07/2008
Eurozone inflation surged to an all-time high of 4pc in June despite worrying signs of a slump in manufacturing, confronting the European Central Bank with the toughest challenge since its creation a decade ago. Soaring oil and food prices guarantee a quarter-point rise in interest rates to 4.25pc on Thursday, further widening the gulf in rates between Europe and America."
So the people who went into debt buying bigger houses than they needed and then took out loans on them to buy SUVs and plasma TVs are let off the hook because their houses have lost value and they're now upside down in them (and their SUVs) and they can't pay their bills because they don't have any savings, while the people who worked hard and were industrious while living within (or maybe even below) their means and putting aside something for their future are left to pick up the tab? Nice.
Yes, that's pretty much what it means. Well, except for the welfare society who never had to pay for anything in the first place, and lived off the teat of the welfare state their whole lives. Don't forget them. And people wonder why guys like Jim Sinclair have a cataclysmic attitude about the gold market. Sheesh. It seems pretty clear to me.
What it means is that you will not only be supporting the state and their minions, but also various members of your family who have not or could not make it on their own. How can you refuse? All of a sudden, everybody is hurting and needs help. Where is the government now?
Edited, out of paranoia over political correctness.
Q: Are You Printing Money? Bernanke: Not Literally
I originally said << with regards to a Roth IRA vs traditional IRS, I prefer the traditional
Who knows how the tax rules will change in the future when it is time to cash out the Roth? There may be no income tax and all sales taxes. Your Social security benefits may be means tested and if you have a huge Roth, then you won't get your SS.
I would rather take the sure tax break now rather than risk getting no tax break at all. >>
you replied:
<<<There may be no income tax!?!?!?!? That's about as likely as me winning the lotto while crossing the finish line in the olympics winning the gold and breaking the world record. Twice in a row. Taxes will almost certainly be higher in the future, probably much higher than they are now. The Roth is a much better way to invest than a traditional IRA or 401K. >>>
First, not everyone qualifies for a Roth. I don't. More to the point, the government has so much debt that they only way to pay it off is to debase the currency and/or add new taxes. Most likely, Social Security will be means tested in the future. If you have a huge pot of cash in a Roth and expect to collect SS, forget about it. Plus, so many people will have Roth's that the best way to tax them is to have a national sales tax. I fully expect it.
There have been numerous articles written on these points re Roth vs Traditional IRA, future taxes and SS. I would not bank on things staying the same.
For me, the most practical and tax efficient means to save is to buy precious metals and use them tax free in the future. Selling a coin is a private transaction. Yes, I know the consequenses. For now, I would rather put into a tax deferred IRA which lowers my AMT base and in effect, saves me 40% or more on every dollar I stick in it when you figure in all the deductions the AMT disallows. If taxes are higher than 40% in the future on nominal income, then I move to the Cayman Islands.
Money in 401k, IRA, Roth, Social Security, whatever you want to call it... it's all under government supervision and subject to confiscation. That may occur in the form of means testing, sales taxes, elimination of scholarships, or just plain "you a rich guy" tax. Some die hards can say what you want, but the pols never met a tax they didn't like.
<< <i>This is the item to watch on Thursday. If the Europeans raise their rates this week regardless of the Feds pleadings not to do so this will be the beginning of the end of any effort to save the dollar. The dollar should crumble, gold, silver and oil should all have a big move up.
Musical chairs to sell out of the dollar is going to move to a whole new level!
Stagflation grips Eurozone as interest rates look set to rise
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 1:20am BST 01/07/2008
Eurozone inflation surged to an all-time high of 4pc in June despite worrying signs of a slump in manufacturing, confronting the European Central Bank with the toughest challenge since its creation a decade ago. Soaring oil and food prices guarantee a quarter-point rise in interest rates to 4.25pc on Thursday, further widening the gulf in rates between Europe and America." >>
Or the ECB could leave rates unchanged. That could be perceived that they are more concerned about a slowing economy rather than inflation. That concern would spook commodities. Strengthening the Euro would only cause inflation to retrench. ECB will leave rates unchanged.
Or the ECB could leave rates unchanged. That could be perceived that they are more concerned about a slowing economy rather than inflation. That concern would spook commodities. Strengthening the Euro would only cause inflation to retrench. ECB will leave rates unchanged.
The major bank in the ECB is the German Bank and they have a long memory of the Wiemar Inflation period. The ECB's mandate is one thing and one thing only; control inflation. They have to raise.
<< <i>Or the ECB could leave rates unchanged. That could be perceived that they are more concerned about a slowing economy rather than inflation. That concern would spook commodities. Strengthening the Euro would only cause inflation to retrench. ECB will leave rates unchanged.
The major bank in the ECB is the German Bank and they have a long memory of the Wiemar Inflation period. The ECB's mandate is one thing and one thing only; control inflation. They have to raise. >>
We are not talking 1000% inflation here. German banks are in crisis as much, or perhaps even more, than our banks. Inflation is being caused by a weak dollar, strengthening the Euro only throws fuel on the fire.
Personally I dont care what they do, but adding to inflationary pressures, increasing borrowing costs, and further decimating the housing crisis in Spain and France doesnt make much sense to me. And Great Britain is already probably in worse shape than we are. It is possible that we could witness the fastest birth and death of a currency in the history of the world.
They jaw-boned enough to make the same effect without raising. They'll stay in bed with us for a while longer. More than likely no rate hikes in US or Europe in 2008. But we start in earnest in 2009 on our way to double digit rates 3-5 years down the road. I doubt if the Weimar Bankers got hurt as much as the Weimar people during the 1920's inflation.
Jim Willie has the same basic view as Sinclair at this point: a possible shoot through $1100 right to $1200 in short order. The next group of bankers are getting ready to go poof. Note the huge cup and handle formation nearly completed in gold over the past 3 months. This will only resolve one way. This next major wave in gold and silver will dwarf what has already come. And there will still be 2 major waves to follow after that one in the years to come. Alf Field's EWT shows an ending price of $1500 on this next major move up. His calls have been quite good in the past.
Meanwhile, the calls of Kitco Senior Anal-ist, John Nadler have been annoying at best. Kitco continues to be somewhat anti-gold;
After hitting resistance just above the $945 pivot point both yesterday as well as today, gold prices managed to head into slightly calmer waters but retained their small gains trading near $943 amid still rising crude oil prices and a small loss in the greenback. Rising apprehensions about (once again) dwindling jewelry demand (the largest offtake sector in the market) and the increasing amount of short positions being added in the oil markets and related ETFs also contributed to the metal's stall. Core jewelry buyers are apparently holding out for eventual inventory acquisitions at levels in the upper $800's.
Seems like everything affects gold except gold itself. And those core jewelry buyers didn't think to load up at $850 but rather waited to get gold closer to $900.....smart! With the gold to oil ratio at a very low 6.6, there is nowhere for this ratio to go except back towards historic averages. If oil does fall back, I don't think gold will respond in unison. Act contrary to Nadler's advice and you'll do well.
Overall U.S. credit card debt grew by 435% from $211 billion in 2002 to approximately $915 billion year-end 2007.
By October of 2007, according to a survey of only the leading credit card banks by the Associated Press, the value of credit card accounts at least 30 days late was up 26% from the previous year, to $17.3 billion.
Just as with mortgage debt, credit card debt is put into pools that are then resold to investment houses, other banks and institutional investors. About 45 percent of the nation’s $900-plus billion in credit card debt has been packaged into these pools, and so many companies, not just a few, are at risk of being forced out of business by credit card debt write-offs.
We are actually face to face with the results of the most massive failure of our political and economic system since the Depression.
Financial analysts say that in the U.S. alone more than $850 billion in unpaid credit card balances is at stake and fast approaching $1 trillion, roughly the same amount as in the subprime market.
CNN reports that worldwide, consumers have racked up more than $2.2 trillion in purchases and cash advances on major credit cards in just the last year.
<< <i>I keep scratching my head why I always do so well in my coins and pm's compared to my investments in stocks and bank accounts.
This is getting old as this has been happening to me for the past 30 years.
Sure, I did fantastically well in the stock market in the mid to late 1990's. But was an exception in all these years. >>
Funny you should say that. I had a client who was a designer for GM back in the mid 1980's and was one of the guys who I believe built the Buick Reatta. He purchased from me a wild Morgan Half Dollar pattern for I think $3500 bucks. I think GM was in the mid $30's then? Not sure but I think that's what it was. I'm sure the pattern half would have ultimately graded prf 6 or 7. I have to go back and refresh my memory as to which one it was. But certainly the coin is worth much more than $3500.00 these days and GM? Well, it's starting to look like GM will be swirling around the drainpipe pretty soon.
<< <i>We need to pay down debt, and to do that we need to sacrifice, which unfortunately means paying extra taxes to service the debt until it's retired. q]
Well no, that's not what that means and if anyone read Ron Paul's economic plan, one would know that not only are more taxes out of the question but significantly less taxes are what would happen if a true American patriot and expert of freedom and the economics that freedom propells such as Dr Paul were to be in the highest office in the land.
We won't need more socialism to combat socialism. We need more freedom.
Because of the way that the cost of living was computed since 1980 (no president since 1979 has wanted to be honest about inflation), your actuaLwages have actually shrunk dramatically since that year. It's no mystery why people are living on credit...with actual inflation (using 1978 computation) now running at 12% (it's been at 10% for years now), it's not hard to see that a 3% wage or Social Security increase is not going to cut it. Add to the misery by realizing that the value of your stock portfolio or 401K, after the dollar devalutaion and real inflation have been factored in, has been going south for years unless you've been extremely lucky, and it's easy to see why people are turning to hard assets like coins, etc., to ride out the storm.
<< <i>Well no, that's not what that means and if anyone read Ron Paul's economic plan, one would know that not only are more taxes out of the question but significantly less taxes are what would happen if a true American patriot and expert of freedom and the economics that freedom propells such as Dr Paul were to be in the highest office in the land. >>
I disagree...you're idea sounds like a helluva plan on paper, but is there any example of it working in an economic environment as that now facing the United States. It would probably work in a third world country right now...one that is not fully developed, but I have serious doubts about it working in the US now...especially since actual wages have been shrinking, the average person is just about tapped out with credit, and the ability to buy more and help our 'service" economy is permanently hindered until an eventual crash resets the system. I think that we are well past the point of thinking that the little that most people pay in taxes would make a difference in their lives if they were allowed to keep it. The exception of course, is the wealthy class in America, who's tax burden amounts to a lot when compared to that of the average American. The money saved by them with a tax reduction would really not make a difference to the economy as a whole, as they would just put it in the bank...if they were going to spur the economy on with extravagant spending, they would have did it by now as they've been increasing their % of the total American wealth through their ties with elected officials for near 30 years. I'll stand by my assertion that the current trickle-down economic system is broken and no voodoo economics that will have you believe that you can keep your tax money and still enjoy benefits from the government at the same time will help the way a good old "pay down the debt" and sacrifice common sense economics plan will.
you're idea sounds like a helluva plan on paper, but is there any example of it working in an economic environment as that now facing the United States. It would probably work in a third world country right now...one that is not fully developed, but I have serious doubts about it working in the US now.
What it means is that gold and silver are extremely undervalued.
especially since actual wages have been shrinking, the average person is just about tapped out with credit, and the ability to buy more and help our 'service" economy is permanently hindered until an eventual crash resets the system...
The result of shipping our manufacturing and heavy industries overseas is lower wages. They are the foundation. So, you say that metals won't work as a basis for trade & commerce, and yet the system is going to crash? We currently use a fiat money system that isn't working for anyone but a few bankers. Cause and effect.
I think that we are well past the point of thinking that the little that most people pay in taxes would make a difference in their lives if they were allowed to keep it.
Huh? Maybe if the money weren't being devalued, it would be worth keeping more of.
The exception of course, is the wealthy class in America, who's tax burden amounts to a lot when compared to that of the average American. The money saved by them with a tax reduction would really not make a difference to the economy as a whole, as they would just put it in the bank...if they were going to spur the economy on with extravagant spending, they would have did it by now
Blackhawk, you tax somebody too much and they simply leave. You tax them fairly and they stay around to invest in businesses. It's not much more complicated than that. They only put it in the bank if that's where they can make the most money, and usually it's more productive to put it on the line in a profitable enterprise that actually DOES something. But too much tax kills that deal, in a hurry.
they've been increasing their % of the total American wealth through their ties with elected officials for near 30 years.
Bankers and politicians have been scratching each other's backs for alot longer than 30 years. Even our institutionalized system of graft and corruption has been in existance for 95 years, in the form of the Fed.
I'll stand by my assertion that the current trickle-down economic system is broken and no voodoo economics that will have you believe that you can keep your tax money and still enjoy benefits from the government at the same time will help the way a good old "pay down the debt" and sacrifice common sense economics plan will.
No argument there. Well, maybe a small one. Our current system isn't even trickle-down. It's sell-out. Sell off everything that isn't nailed down, at bargain prices. You haven't seen anything yet.
Q: Are You Printing Money? Bernanke: Not Literally
Interesting. The ECB raises rates a quarter point and the dollar *rallies* and gold *falls*? Sell on the rumor and buy on the news, perhaps? Seems odd.
Just a short term blip in a long term trend, but sometimes I just don't understand the financial markets...
<< <i>Interesting. The ECB raises rates a quarter point and the dollar *rallies* and gold *falls*? Sell on the rumor and buy on the news, perhaps? Seems odd. >>
People may be looking at this as a shot across the FED's bow to raise interest rates here.
“When the people find that they can vote themselves money, that will herald the end of the republic.” — Benjamin Franklin
My icon IS my coin. It is a gem 1949 FBL Franklin.
<< <i>Interesting. The ECB raises rates a quarter point and the dollar *rallies* and gold *falls*? Sell on the rumor and buy on the news, perhaps? Seems odd.
Just a short term blip in a long term trend, but sometimes I just don't understand the financial markets... >>
Thats part of it. The hike was widely forcast so there is nothing to get excited about. The ECB did say that downside risks to the economy remain. This rate hike will not help that economy. We now need to look at relativity. Will Europe weaken faster than the USA? Will the banking and real estate sectors fall faster than in the USA?
Although I am not expecting it just yet, I would not be suprised if oil makes a top today. DTO.
I'm sure this has been discussed somewhere in this thread, but would be interested to see if my views are consistent with fellow financial mavens on here on the analysis of that precipitous drop this year. Anyone got some views to discuss?
<< <i>I'm sure this has been discussed somewhere in this thread, but would be interested to see if my views are consistent with fellow financial mavens on here on the analysis of that precipitous drop this year. Anyone got some views to discuss? >>
Well the stage is set, now lets see where the longer term funds go, into Euro Bonds or Treasuries?
Jim Sinclair’s Commentary
The big “news” in today’s session was from Euroland where the ECB raised short term rates by 25 basis points. ECB President Trichet forgot to include the magic words, “strong vigilance” or “heightened alertness”, a faux pas which he immediately corrected by stating that because he did not use the words it did not mean anything! Glad he cleared that up. That sent the Forex lemmings into a real tizzy who responded by dumping the Euro on the assumption that the ECB is now finished its rate hikes forever and will never, ever, mention the subject again for as long as the heavens and the earth remains! Central Banks the world over are attempting to deal with the inflation genie but not to worry - the ECB left out two itty bitty phrases!
Ah yes – the efficient markets and their wondrous price discovery mechanism! Personally I am ready to go back to trading wampum or tobacco leaves for goods and services – at least we would not have to put up with the Central Bankers or the dipsticks who now infest the Forex world.
Gold of course was dutifully clocked as a result of the collapsing Euro as once again the bulls managed to snatch defeat from the jaws of victory by surrendering the technical advantage that they had worked so hard to gain. For now it appears that the effort to thwart its rise at $950 has been successful. Only for now however as it still looks technically strong.
Silver is actually faring pretty well. It will needs to clear 1850 (basis September) to set up a run at 1900. For the week, Silver tacked on around 65 cents turning its weekly chart friendly. A strong showing early next week will generate some excitement in the Silver pit. Gold gained a bit more than $2.00 for the week after all of the early week excitement as it fizzled out its fireworks show for the July 4th holiday.
<< Interesting. The ECB raises rates a quarter point and the dollar *rallies* and gold *falls*? Sell on the rumor and buy on the news, perhaps? Seems odd. >>
No... the move was totally expected. They couldn't let gold rally and the dollar fall on the ECB news so the usual manipulation took place. It was all so easy on a preholiday short day when many traders weren't working. The up move will be next week,
In the financial markets, black is white and white is black as the manipulators spin and manipulate everything.
Remember the FED has stated clearly they intend to control "inflationary expectations".................. not inflation itself. Gold had to go down today.
"Nancy Pelosi wants a Windfall Tax on Retirement Income.. In other words tax what you have made investing in your retirement.
“ We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest.”
“ 'We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long way to guarantee these people the standard of living they would like to have as 'Americans”.
<< <i>"Nancy Pelosi wants a Windfall Tax on Retirement Income.. In other words tax what you have made investing in your retirement.
“ We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest.”
“ 'We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long way to guarantee these people the standard of living they would like to have as 'Americans”. >>
<< <i>"For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. ” >>
I know she's Nancy Pelosi and all, but there's no way I believe she (or any other politician) would be stupid enough to actually say that out loud.
“When the people find that they can vote themselves money, that will herald the end of the republic.” — Benjamin Franklin
My icon IS my coin. It is a gem 1949 FBL Franklin.
"What it means is that gold and silver are extremely undervalued."
It would certainly seem that way, just looking around and seeing what we are seeing. If those vids are as valid as they seem then you would think that who ever is issuing the money and lending on the money are quite threatened by people actually having debt free, non FRN, assets. The easiest way for the regular guy to get his pocket around some good assets is to pick up some PM. Maybe it goes up, maybe it goes down but it is always going to have value above and beyond any piece of paper, be it paper currency or certificate and it is always going to be able to be exchanged for goods. So, if banks and by proxy, governments are threatened by individual privately owned assets that are not debt related, then seems like it would prudent for them to reject private ownership of such a valuable asset and get the govt. to make it very difficult for the private individual to make any transactions involving PM. All transactions should be done in FRN's or the game is hurt.
Man, if you aren't free of high interest debt by now, you just have to get that way as quickly as possible; get an extra job, convert assets, throw cash at it, just get out of high interest debt right now. Make it a high priority; you have been warned. A house at 6% and a car at 4% is not really high interest debt. Have no debt, take no debt, no debt, bring the game down!
"Nancy Pelosi wants a Windfall Tax on Retirement Income.. In other words tax what you have made investing in your retirement.
“ We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest.”
“ 'We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long way to guarantee these people the standard of living they would like to have as 'Americans”. >>
Yikes. Well, I guess someone has to take care of the illegals.........
Comments
<< <i>
<< <i>Guru input request: Can someone give us non-economics degreed layman the basic definition of short interest shares and what they portend for future stock movement? I've read the definition a few times but keep coming away with a huh. >>
Short interest measures the amount of market activity is "short" as opposed to long. A high short interest means that more market participants are bearish on the market and more money is on the short side.
Some consider this a bullish contrarian indicator because a high short interest means that there is more that will need to be "covered" with a buy. When the market rises and people who sold short rush out to close their short positions, it's a "short squeeze" that causes a quick upward spike in the market. >>
While a short squeeze can occur, it is just as likely that the shorts will be proven correct.
Dont get concerned about high short interests in sector ETFs as these have been used extensively as a means of portfolio insurance. Someone who is long physical gold or silver may short GLD or SLV to hedge their position. They could then trade their GLD/SLV position for minimal transaction cost---certainly much cheaper than trying to buy or sell physical--while maintaining their long position in physical. Most investors would hedge with futures, but since there is time premium involved with futures, it is cheaper with GLD/SLV. Same is probably true for USO, which Goldsaint posted about a few days ago.
What I am trying to say, is that short interest in ETFs is for all intents purpose, meaningless.
Knowledge is the enemy of fear
<< <i> We need to pay down debt >>
that will never happen, instead we will decrease the "value" of the debt.
If I owe you 100 cattle and there are only 2000 in the territory then I may have a problem. If I "create' another 10000 for the territory then it will be easier for me to get the 100 I owe you. Of course they won't be worth as much but I will have "paid" my debt.
Of course its not very easy to " create" 10000 cattle but it is real easy if they are just "digit" or Paper Cattle.
Any idea what the Govnm't plans to do to "pay down the debt" and what it will do to the "value" of each dollar of debt.
I disagree. I think the best thing for America is to have every person, and I mean every person, personally pay something towards the future. I think it would remarkably change the path of America.
The bottom line is this...if you need money, do you ask aunt Mabel who's sitting on a couple million dollars in cash for a few thousand, or do you ask a thousand relatives who are now living in poverty for $1.00 each? It doesn't take too much intelligence to see where the money to pay down the debt has to come from. If we don't feel that this should be done, that's fine, but the vehicles that can make you wealthy in this country will continue to shrink as the debt continues to rise...eventually there will just be the uber wealthy with money hidden in other countries and the rest of us.
As far as the Debt issue goes, it won't change until the people demand their representatives act as if the money they spend is used responsibly and that's highly unlikely to happen. Which is why they spend the way they do, they know they can spin their spending on the people to believe they're doing good rather than bending them over.
It's not our representatives who are at fault here - it's you and me and the guy down the block. It's all of us who continue to look at programs that benefit others as expendable while fighting tooth and nail to retain those that benefit us personally...even if we don't really need them (like the subsidies to oil companies). It's someone trying to justify a taxpayer funded surgery for on oldster who's got one foot in the grave and one on a banana peel...it's spending so much money on defense that we have no idea where it's even spent. We need to cut back across the board...that's why it's called sacrifice...it should effect all of us, maybe to the point where it hurts - a flat tax will not do this, neither will giving us back a small portion of our own money to "jump-start" the economy. For thirty years now we've milked the system of everything that was good...now we're just about dry. Hang on to your coins IMHO...your cash will be worth less with every passing day.
I think higher debt service and energy costs will inevitably slow the economy, and that has to hurt anything that's purchased with discretionary funds.
As far as the Debt issue goes, it won't change until the people demand their representatives act as if the money they spend is used responsibly and that's highly unlikely to happen. Which is why they spend the way they do, they know they can spin their spending on the people to believe they're doing good rather than bending them over.
Amen!
The reason? The money is better off in my possession than in someone else's at this point. My 401K is all in T-Bill funds but it is on the brink of being liquidated, too.
My lifelong observation is that the government is confiscatory and will only become more so. Obama, McCain - it makes little difference at this point. One might be worse than the other, but they both have pet projects and they both will not hesitate to spend big money that we don't have. Nothing has changed, and I am waiting for confirmation that indeed, nothing will change down the road, either.
The only reason that I'm holding back on cashing in the 401K is that I am averaging out of stock/bond/dollar assets instead of making a move all at one time. If the Red Sea parts sometime soon and Congress stops spending and the Fed stops printing, I will have something to plunge back into paper assets with - if I simultaneously lose my mind and decide to ignore my own advice and forget everything else that I've seen happening for the last 30 years or so.
But a more likely scenario is: when the politicians make their next move that I am sure will prove to be even more insulting and injurious to savers and investors, I will make another move away from the type of assets that they love to get their hands on, which is - anything that they can get.
Sorry for being so cynical, but I didn't start out this way. And by the way, I'm already ahead after paying the 10% penalty and the taxes on the liquidation of my IRA and the taxes on the gains from my Roth liquidation.
When I think of my having to go to these extremes, just to try and preserve what I've earned over my career, it makes me boiling mad. And then I think of the poor souls who aren't protecting themselves. It will truly be a disaster when folks run out of "money".
Have you noticed that the blame for everything is now due to the "evil speculators"? Congress plays no part in massive spending and allowing off-the-books shenanigans by the banks, along with uncontrolled money creation. Nah, Congress isn't culpable at all. They wouldn't trash our country by being so irresponsible. Would they?
The Fed won't be able to keep up the farce forever. China, Saudi and Europe are holding so many dollars overseas that they are the biggest losers when the Fed inflates the money supply. How long do you think that they will put up with being ripped off before they decide to come over here and start buying more US assets?
Congress is selling us out. The Fed is helping. And of course, the big international banking cartel isn't making out too badly, either. But just remember, if you happen to make any money in any commodity speculation, you will be the culprit that they come down on with both feet. Just ask Bunker Hunt.
I knew it would happen.
<< <i>with regards to a Roth IRA vs traditional IRS, I prefer the traditional
Who knows how the tax rules will change in the future when it is time to cash out the Roth? There may be no income tax and all sales taxes. Your Social security benefits may be means tested and if you have a huge Roth, then you won't get your SS.
I would rather take the sure tax break now rather than risk getting no tax break at all. >>
There may be no income tax!?!?!?!? That's about as likely as me winning the lotto while crossing the finish line in the olympics winning the gold and breaking the world record. Twice in a row. Taxes will almost certainly be higher in the future, probably much higher than they are now. The Roth is a much better way to invest than a traditional IRA or 401K.
<< <i>
<< <i>with regards to a Roth IRA vs traditional IRS, I prefer the traditional
Who knows how the tax rules will change in the future when it is time to cash out the Roth? There may be no income tax and all sales taxes. Your Social security benefits may be means tested and if you have a huge Roth, then you won't get your SS.
I would rather take the sure tax break now rather than risk getting no tax break at all. >>
There may be no income tax!?!?!?!? That's about as likely as me winning the lotto while crossing the finish line in the olympics winning the gold and breaking the world record. Twice in a row. Taxes will almost certainly be higher in the future, probably much higher than they are now. The Roth is a much better way to invest than a traditional IRA or 401K. >>
I get what he's saying. He's referring to the national sales tax that's gaining popularity. It's possible, but a longshot as long as democrats have a say.
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<< <i>I'm sure that my opinion will be in a very small minority, but I am not putting money into an IRA, a Roth, or even my 401K. In fact, I already liquidated my IRA and Roth, and ate the penalty and paid the taxes on the gains.
The reason? The money is better off in my possession than in someone else's at this point. My 401K is all in T-Bill funds but it is on the brink of being liquidated, too.
My lifelong observation is that the government is confiscatory and will only become more so. Obama, McCain - it makes little difference at this point. One might be worse than the other, but they both have pet projects and they both will not hesitate to spend big money that we don't have. Nothing has changed, and I am waiting for confirmation that indeed, nothing will change down the road, either.
The only reason that I'm holding back on cashing in the 401K is that I am averaging out of stock/bond/dollar assets instead of making a move all at one time. If the Red Sea parts sometime soon and Congress stops spending and the Fed stops printing, I will have something to plunge back into paper assets with - if I simultaneously lose my mind and decide to ignore my own advice and forget everything else that I've seen happening for the last 30 years or so.
But a more likely scenario is: when the politicians make their next move that I am sure will prove to be even more insulting and injurious to savers and investors, I will make another move away from the type of assets that they love to get their hands on, which is - anything that they can get.
Sorry for being so cynical, but I didn't start out this way. And by the way, I'm already ahead after paying the 10% penalty and the taxes on the liquidation of my IRA and the taxes on the gains from my Roth liquidation.
When I think of my having to go to these extremes, just to try and preserve what I've earned over my career, it makes me boiling mad. And then I think of the poor souls who aren't protecting themselves. It will truly be a disaster when folks run out of "money".
Have you noticed that the blame for everything is now due to the "evil speculators"? Congress plays no part in massive spending and allowing off-the-books shenanigans by the banks, along with uncontrolled money creation. Nah, Congress isn't culpable at all. They wouldn't trash our country by being so irresponsible. Would they?
The Fed won't be able to keep up the farce forever. China, Saudi and Europe are holding so many dollars overseas that they are the biggest losers when the Fed inflates the money supply. How long do you think that they will put up with being ripped off before they decide to come over here and start buying more US assets?
Congress is selling us out. The Fed is helping. And of course, the big international banking cartel isn't making out too badly, either. But just remember, if you happen to make any money in any commodity speculation, you will be the culprit that they come down on with both feet. Just ask Bunker Hunt. >>
Good post and it's not cyntical it's just being smart .
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Sinclair has become excited again. He's not expecting $1000 soon, but rather an assault on $1200 much sooner than he previously thought.
I sent you an email months ago saying, “This Is It.”
1. I am now telling you, “It Is Now.”
Gold is preparing for an assault not on $1000, but for a brief penetration of $1200.
Violent chopping will occur, then off it goes to $1650.
This violent chop we have been living in here and now will resolve itself very soon and the take will be seen by history as having occurred in this last formation HERE AND NOW.
Wonder if this has anything to do with Bush signing an executive order to give himself emergency powers on the North Korea situation?
You mean another chance at $600-$800 gold is not in the cards this year?
roadrunner
<< <i>We need to pay down debt, and to do that we need to sacrifice, which unfortunately means paying extra taxes to service the debt until it's retired. You can't raise taxes on people who have no money, that's a revolving door of taking money from one pocket and putting it in another. There's only a certain group of people in this country who still have enough money to pay down the debt, and I'd imagine that they're the ones who are in the end going to do it. >>
So the people who went into debt buying bigger houses than they needed and then took out loans on them to buy SUVs and plasma TVs are let off the hook because their houses have lost value and they're now upside down in them (and their SUVs) and they can't pay their bills because they don't have any savings, while the people who worked hard and were industrious while living within (or maybe even below) their means and putting aside something for their future are left to pick up the tab? Nice.
<< <i>So the people who went into debt buying bigger houses than they needed and then took out loans on them to buy SUVs and plasma TVs are let off the hook because their houses have lost value and they're now upside down in them (and their SUVs) and they can't pay their bills because they don't have any savings, while the people who worked hard and were industrious while living within (or maybe even below) their means and putting aside something for their future are left to pick up the tab? Nice. >>
This is exactly why it could end really badly. Once enough people get wise and realize they can be a grasshopper and live a decent life off of the ant's hard work, we'll see lots of ants (savers and taxpayers) become grasshoppers (spenders and tax consumers) because working hard like the ant no longer provides enough incentive to justify doing the work or taking the financial risks.
And if enough of that wealth redistribution happens, we're staring "third world" in the face. We're not there yet and there's still time to reverse it, but we're still headed in the wrong direction so it's unlikely to be reversed any time soon. Tocqueville was right when he mentioned that the American republic could be doomed once politicians realized they could bribe us with our own money.
<< <i>
And if enough of that wealth redistribution happens, we're staring "third world" in the face. We're not there yet and there's still time to reverse it, but we're still headed in the wrong direction so it's unlikely to be reversed any time soon. Tocqueville was right when he mentioned that the American republic could be doomed once politicians realized they could bribe us with our own money. >>
The educational system has assured the next couple generations are going to be tough
even if all these problems are addressed and we still haven't even begun to fix or gut the
educational system. Each passing year compounds the problem.
So true!
Not sure what the stats are around the country but here in Houston, we have a 50% graduation rate from High School. In spite of all of the aid and gift programs state, federal, local and even the no child left behind federal act, we get no positive response for our money and our efforts. I still like the european system; the kids go to school, take placement exams and then either go to trade school or university before entering the workplace. Instead, we just let 50% of the people drop out...drop out of society, drop out of education, drop out of participating in the workplace, drop out of becoming a productive member of society. Here's a reality lesson...those that don't have a high school diploma really don't have much to offer society. That might not have been true in previous generations but it is so now.
When we even let one person drop out, we end up supporting them for the rest of their lives so they do become a burden PC or not. I would much rather deal with paying hospitalization and social services for illegal immigrants than I would want to deal with supporting half of the population for their entire lives for this generation and the generations that will surely follow; we're talking food stamps, med clinics, social services, housing assistance, court services, long list and "Each passing year compounds the problem." The numbers are not that hard to evidence High school drop out rates. I think an argument could be made that letting these slackers and their future families slide from their responsibilities cost city/state/federal tax payers much more than any group of illegal immigrants ever will. And the good thing about illegal immigrants is that they actually do things that benefit society as a whole. If you have one guy working and one guy not working then the net productivity is probably "0". We can't get anywhere like this.
As long as we tolerate our our current situation, there is no reason to anticipate that this phenomenon will do anything but escalate. The sad thing is that there is so little that one person can do and certainly it would be almost impossible to turn the tide...so many have dropped out already. The odd twist is that the uneducated do vote and anyone that runs for office proposing reforms that will result in more responsible citizenry is thouroughly crucified in the polls...just look at what France is going through trying people to reform their retirement system French retirement reforms. If someone did a cost benefit analysis of the cost of educating every member of the society vs. the cost of providing aid and services to the adult drop out (half the population?) we would probably find that it is much much cheaper to pay to educate people and we would get the added benefit of more people being able to take care of themselves and participate in producing something that has value to society as a whole.
It's my opinion that we have become so PC as to not call things what they are, afraid to voice any dissent lest we offend someone or some group regardless of the fact that we personally may be harmed or offended. Unfortunately it seems that being PC is more successful a strategy for getting elected than proposing measures that would result in having an educated, productive society. It is also my opinion that those that are paying for the dance
(as in property/sales/fed taxes) should get some say about what the tune should be. So, for those that don't think their vote means anything...how would we know, if you don't vote.
If we don't get after our education strategy pretty soon, we are going to be paying for that lack of committment for many years to come; at least for those that can pay into the system. As a solution, I would offer that if each of those that have made it to a stable life style will take the time do the planning necessary to make sure that all of their family members find their way to a similar situation, then we would at the very least have a result of no net loss (50% drop out rate vs. 50% being productive). If each of us that can would take the time to teach in the community college system or volunteer in the schools or in church programs then we might be pushing that no net loss situation to a net gain system and that would be good. So the question becomes: "Do 50% of the population give enough of a hoot to do anything about it?" Should we be able to overcome this situation with education and productivity then we would reap the rewards for generations to come. I'm doing my part and I sure as heck do vote, every time.
Not a political statement, more an examination of public policy that has a fair amount of importance in our gross domestic product and hence our accumulation of wherewithall as in more money for all to buy PM...yeah! Education=more money across the board, for everyone.
Edited for content
This is the item to watch on Thursday. If the Europeans raise their rates this week regardless of the Feds pleadings not to do so this will be the beginning of the end of any effort to save the dollar. The dollar should crumble, gold, silver and oil should all have a big move up.
Musical chairs to sell out of the dollar is going to move to a whole new level!
Stagflation grips Eurozone as interest rates look set to rise
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 1:20am BST 01/07/2008
Eurozone inflation surged to an all-time high of 4pc in June despite worrying signs of a slump in manufacturing, confronting the European Central Bank with the toughest challenge since its creation a decade ago.
Soaring oil and food prices guarantee a quarter-point rise in interest rates to 4.25pc on Thursday, further widening the gulf in rates between Europe and America."
Yes, that's pretty much what it means. Well, except for the welfare society who never had to pay for anything in the first place, and lived off the teat of the welfare state their whole lives. Don't forget them. And people wonder why guys like Jim Sinclair have a cataclysmic attitude about the gold market. Sheesh. It seems pretty clear to me.
What it means is that you will not only be supporting the state and their minions, but also various members of your family who have not or could not make it on their own. How can you refuse? All of a sudden, everybody is hurting and needs help. Where is the
government now?
Edited, out of paranoia over political correctness.
I knew it would happen.
<< with regards to a Roth IRA vs traditional IRS, I prefer the traditional
Who knows how the tax rules will change in the future when it is time to cash out the Roth? There may be no income tax and all sales taxes. Your Social security benefits may be means tested and if you have a huge Roth, then you won't get your SS.
I would rather take the sure tax break now rather than risk getting no tax break at all. >>
you replied:
<<<There may be no income tax!?!?!?!? That's about as likely as me winning the lotto while crossing the finish line in the olympics winning the gold and breaking the world record. Twice in a row. Taxes will almost certainly be higher in the future, probably much higher than they are now. The Roth is a much better way to invest than a traditional IRA or 401K. >>>
First, not everyone qualifies for a Roth. I don't. More to the point, the government has so much debt that they only way to pay it off is to debase the currency and/or add new taxes. Most likely, Social Security will be means tested in the future. If you have a huge pot of cash in a Roth and expect to collect SS, forget about it. Plus, so many people will have Roth's that the best way to tax them is to have a national sales tax. I fully expect it.
There have been numerous articles written on these points re Roth vs Traditional IRA, future taxes and SS. I would not bank on things staying the same.
For me, the most practical and tax efficient means to save is to buy precious metals and use them tax free in the future. Selling a coin is a private transaction. Yes, I know the consequenses. For now, I would rather put into a tax deferred IRA which lowers my AMT base and in effect, saves me 40% or more on every dollar I stick in it when you figure in all the deductions the AMT disallows. If taxes are higher than 40% in the future on nominal income, then I move to the Cayman Islands.
No-brainer
Ren
<< <i>This is the item to watch on Thursday. If the Europeans raise their rates this week regardless of the Feds pleadings not to do so this will be the beginning of the end of any effort to save the dollar. The dollar should crumble, gold, silver and oil should all have a big move up.
Musical chairs to sell out of the dollar is going to move to a whole new level!
Stagflation grips Eurozone as interest rates look set to rise
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 1:20am BST 01/07/2008
Eurozone inflation surged to an all-time high of 4pc in June despite worrying signs of a slump in manufacturing, confronting the European Central Bank with the toughest challenge since its creation a decade ago.
Soaring oil and food prices guarantee a quarter-point rise in interest rates to 4.25pc on Thursday, further widening the gulf in rates between Europe and America." >>
Or the ECB could leave rates unchanged. That could be perceived that they are more concerned about a slowing economy rather than inflation. That concern would spook commodities. Strengthening the Euro would only cause inflation to retrench. ECB will leave rates unchanged.
Knowledge is the enemy of fear
The major bank in the ECB is the German Bank and they have a long memory of the Wiemar Inflation period. The ECB's mandate is one thing and one thing only; control inflation. They have to raise.
<< <i>Or the ECB could leave rates unchanged. That could be perceived that they are more concerned about a slowing economy rather than inflation. That concern would spook commodities. Strengthening the Euro would only cause inflation to retrench. ECB will leave rates unchanged.
The major bank in the ECB is the German Bank and they have a long memory of the Wiemar Inflation period. The ECB's mandate is one thing and one thing only; control inflation. They have to raise. >>
We are not talking 1000% inflation here. German banks are in crisis as much, or perhaps even more, than our banks. Inflation is being caused by a weak dollar, strengthening the Euro only throws fuel on the fire.
Personally I dont care what they do, but adding to inflationary pressures, increasing borrowing costs, and further decimating the housing crisis in Spain and France doesnt make much sense to me. And Great Britain is already probably in worse shape than we are. It is possible that we could witness the fastest birth and death of a currency in the history of the world.
Knowledge is the enemy of fear
Gold forming cup and handle - tea anyone? - Jim Willie
Jim Willie has the same basic view as Sinclair at this point: a possible shoot through $1100 right to $1200 in short order. The next group of bankers are getting ready to go poof. Note the huge cup and handle formation nearly completed in gold over the past 3 months. This will only resolve one way. This next major wave in gold and silver will dwarf what has already come. And there will still be 2 major waves to follow after that one in the years to come. Alf Field's EWT shows an ending price of $1500 on this next major move up. His calls have been quite good in the past.
Meanwhile, the calls of Kitco Senior Anal-ist, John Nadler have been annoying at best. Kitco continues to be somewhat anti-gold;
After hitting resistance just above the $945 pivot point both yesterday as well as today, gold prices managed to head into slightly calmer waters but retained their small gains trading near $943 amid still rising crude oil prices and a small loss in the greenback. Rising apprehensions about (once again) dwindling jewelry demand (the largest offtake sector in the market) and the increasing amount of short positions being added in the oil markets and related ETFs also contributed to the metal's stall. Core jewelry buyers are apparently holding out for eventual inventory acquisitions at levels in the upper $800's.
Seems like everything affects gold except gold itself. And those core jewelry buyers didn't think to load up at $850 but rather waited to get gold closer to $900.....smart! With the gold to oil ratio at a very low 6.6, there is nowhere for this ratio to go except back towards historic averages. If oil does fall back, I don't think gold will respond in unison. Act contrary to Nadler's advice and you'll do well.
roadrunner
HUGE CREDIT CARD CRISIS NEXT FOR AMERICA
Monday, June 30, 2008
Overall U.S. credit card debt grew by 435% from $211 billion in 2002 to approximately $915 billion year-end 2007.
By October of 2007, according to a survey of only the leading credit card banks by the Associated Press, the value of credit card accounts at least 30 days late was up 26% from the previous year, to $17.3 billion.
Just as with mortgage debt, credit card debt is put into pools that are then resold to investment houses, other banks and institutional investors. About 45 percent of the nation’s $900-plus billion in credit card debt has been packaged into these pools, and so many companies, not just a few, are at risk of being forced out of business by credit card debt write-offs.
We are actually face to face with the results of the most massive failure of our political and economic system since the Depression.
Financial analysts say that in the U.S. alone more than $850 billion in unpaid credit card balances is at stake and fast approaching $1 trillion, roughly the same amount as in the subprime market.
CNN reports that worldwide, consumers have racked up more than $2.2 trillion in purchases and cash advances on major credit cards in just the last year.
<< <i>I keep scratching my head why I always do so well in my coins and pm's compared to my investments in stocks and bank accounts.
This is getting old as this has been happening to me for the past 30 years.
Sure, I did fantastically well in the stock market in the mid to late 1990's. But was an exception in all these years. >>
Funny you should say that. I had a client who was a designer for GM back in the mid 1980's and was one of the guys who I believe built the Buick Reatta. He purchased from me a wild Morgan Half Dollar pattern for I think $3500 bucks. I think GM was in the mid $30's then? Not sure but I think that's what it was. I'm sure the pattern half would have ultimately graded prf 6 or 7. I have to go back and refresh my memory as to which one it was. But certainly the coin is worth much more than $3500.00 these days and GM? Well, it's starting to look like GM will be swirling around the drainpipe pretty soon.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>
<< <i>We need to pay down debt, and to do that we need to sacrifice, which unfortunately means paying extra taxes to service the debt until it's retired. q]
Well no, that's not what that means and if anyone read Ron Paul's economic plan, one would know that not only are more taxes out of the question but significantly less taxes are what would happen if a true American patriot and expert of freedom and the economics that freedom propells such as Dr Paul were to be in the highest office in the land.
We won't need more socialism to combat socialism. We need more freedom.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
http://youtube.com/watch?v=LgkYjFYr2QI
http://youtube.com/watch?v=qTu4kGkQOvE
http://youtube.com/watch?v=CPmZBfBx53Q
http://youtube.com/watch?v=-IdpkvLdKLQ
<< <i>Well no, that's not what that means and if anyone read Ron Paul's economic plan, one would know that not only are more taxes out of the question but significantly less taxes are what would happen if a true American patriot and expert of freedom and the economics that freedom propells such as Dr Paul were to be in the highest office in the land. >>
I disagree...you're idea sounds like a helluva plan on paper, but is there any example of it working in an economic environment as that now facing the United States. It would probably work in a third world country right now...one that is not fully developed, but I have serious doubts about it working in the US now...especially since actual wages have been shrinking, the average person is just about tapped out with credit, and the ability to buy more and help our 'service" economy is permanently hindered until an eventual crash resets the system. I think that we are well past the point of thinking that the little that most people pay in taxes would make a difference in their lives if they were allowed to keep it. The exception of course, is the wealthy class in America, who's tax burden amounts to a lot when compared to that of the average American. The money saved by them with a tax reduction would really not make a difference to the economy as a whole, as they would just put it in the bank...if they were going to spur the economy on with extravagant spending, they would have did it by now as they've been increasing their % of the total American wealth through their ties with elected officials for near 30 years. I'll stand by my assertion that the current trickle-down economic system is broken and no voodoo economics that will have you believe that you can keep your tax money and still enjoy benefits from the government at the same time will help the way a good old "pay down the debt" and sacrifice common sense economics plan will.
What it means is that gold and silver are extremely undervalued.
especially since actual wages have been shrinking, the average person is just about tapped out with credit, and the ability to buy more and help our 'service" economy is permanently hindered until an eventual crash resets the system...
The result of shipping our manufacturing and heavy industries overseas is lower wages. They are the foundation. So, you say that metals won't work as a basis for trade & commerce, and yet the system is going to crash? We currently use a fiat money system that isn't working for anyone but a few bankers. Cause and effect.
I think that we are well past the point of thinking that the little that most people pay in taxes would make a difference in their lives if they were allowed to keep it.
Huh? Maybe if the money weren't being devalued, it would be worth keeping more of.
The exception of course, is the wealthy class in America, who's tax burden amounts to a lot when compared to that of the average American. The money saved by them with a tax reduction would really not make a difference to the economy as a whole, as they would just put it in the bank...if they were going to spur the economy on with extravagant spending, they would have did it by now
Blackhawk, you tax somebody too much and they simply leave. You tax them fairly and they stay around to invest in businesses. It's not much more complicated than that. They only put it in the bank if that's where they can make the most money, and usually it's more productive to put it on the line in a profitable enterprise that actually DOES something. But too much tax kills that deal, in a hurry.
they've been increasing their % of the total American wealth through their ties with elected officials for near 30 years.
Bankers and politicians have been scratching each other's backs for alot longer than 30 years. Even our institutionalized system of graft and corruption has been in existance for 95 years, in the form of the Fed.
I'll stand by my assertion that the current trickle-down economic system is broken and no voodoo economics that will have you believe that you can keep your tax money and still enjoy benefits from the government at the same time will help the way a good old "pay down the debt" and sacrifice common sense economics plan will.
No argument there. Well, maybe a small one. Our current system isn't even trickle-down. It's sell-out. Sell off everything that isn't nailed down, at bargain prices. You haven't seen anything yet.
I knew it would happen.
Just a short term blip in a long term trend, but sometimes I just don't understand the financial markets...
<< <i>Interesting. The ECB raises rates a quarter point and the dollar *rallies* and gold *falls*? Sell on the rumor and buy on the news, perhaps? Seems odd.
>>
People may be looking at this as a shot across the FED's bow to raise interest rates here.
My icon IS my coin. It is a gem 1949 FBL Franklin.
<< <i>Interesting. The ECB raises rates a quarter point and the dollar *rallies* and gold *falls*? Sell on the rumor and buy on the news, perhaps? Seems odd.
Just a short term blip in a long term trend, but sometimes I just don't understand the financial markets... >>
Thats part of it. The hike was widely forcast so there is nothing to get excited about. The ECB did say that downside risks to the economy remain. This rate hike will not help that economy. We now need to look at relativity. Will Europe weaken faster than the USA? Will the banking and real estate sectors fall faster than in the USA?
Although I am not expecting it just yet, I would not be suprised if oil makes a top today. DTO.
Knowledge is the enemy of fear
NSDR - Life Member
SSDC - Life Member
ANA - Pay As I Go Member
<< <i>Although I am not expecting it just yet, I would not be suprised if oil makes a top today. >>
Well... if so, my recent purchase of USO in my IRA will have served its intended purpose.
<< <i>I'm sure this has been discussed somewhere in this thread, but would be interested to see if my views are consistent with fellow financial mavens on here on the analysis of that precipitous drop this year. Anyone got some views to discuss? >>
i googled the title and the first hit was
article in ?
Well the stage is set, now lets see where the longer term funds go, into Euro Bonds or Treasuries?
Jim Sinclair’s Commentary
The big “news” in today’s session was from Euroland where the ECB raised short term rates by 25 basis points.
ECB President Trichet forgot to include the magic words, “strong vigilance” or “heightened alertness”, a faux pas which he immediately corrected by stating that because he did not use the words it did not mean anything! Glad he cleared that up. That sent the Forex lemmings into a real tizzy who responded by dumping the Euro on the assumption that the ECB is now finished its rate hikes forever and will never, ever, mention the subject again for as long as the heavens and the earth remains! Central Banks the world over are attempting to deal with the inflation genie but not to worry - the ECB left out two itty bitty phrases!
Ah yes – the efficient markets and their wondrous price discovery mechanism! Personally I am ready to go back to trading wampum or tobacco leaves for goods and services – at least we would not have to put up with the Central Bankers or the dipsticks who now infest the Forex world.
Gold of course was dutifully clocked as a result of the collapsing Euro as once again the bulls managed to snatch defeat from the jaws of victory by surrendering the technical advantage that they had worked so hard to gain. For now it appears that the effort to thwart its rise at $950 has been successful. Only for now however as it still looks technically strong.
Silver is actually faring pretty well. It will needs to clear 1850 (basis September) to set up a run at 1900. For the week, Silver tacked on around 65 cents turning its weekly chart friendly. A strong showing early next week will generate some excitement in the Silver pit. Gold gained a bit more than $2.00 for the week after all of the early week excitement as it fizzled out its fireworks show for the July 4th holiday.
>>
No... the move was totally expected. They couldn't let gold rally and the dollar fall on the ECB news so the usual manipulation took place. It was all so easy on a preholiday short day when many traders weren't working. The up move will be next week,
In the financial markets, black is white and white is black as the manipulators spin and manipulate everything.
Remember the FED has stated clearly they intend to control "inflationary expectations".................. not inflation itself. Gold had to go down today.
GATA
"Nancy Pelosi wants a Windfall Tax on Retirement Income.. In other words tax what you have made investing in your retirement.
“ We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest.”
“ 'We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long way to guarantee these people the standard of living they would like to have as 'Americans”.
<< <i>"Nancy Pelosi wants a Windfall Tax on Retirement Income.. In other words tax what you have made investing in your retirement.
“ We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest.”
“ 'We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long way to guarantee these people the standard of living they would like to have as 'Americans”. >>
Do you have a link for this?
I got this as an email from a freind but doing a yahoo search the news is full of this issue, here is one link.
LINK
http://www.snopes.com/politics/soapbox/pelosi.asp
<< <i>"For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. ” >>
I know she's Nancy Pelosi and all, but there's no way I believe she (or any other politician) would be stupid enough to actually say that out loud.
My icon IS my coin. It is a gem 1949 FBL Franklin.
"What it means is that gold and silver are extremely undervalued."
It would certainly seem that way, just looking around and seeing what we are seeing. If those vids are as valid as they seem then you would think that who ever is issuing the money and lending on the money are quite threatened by people actually having debt free, non FRN, assets. The easiest way for the regular guy to get his pocket around some good assets is to pick up some PM. Maybe it goes up, maybe it goes down but it is always going to have value above and beyond any piece of paper, be it paper currency or certificate and it is always going to be able to be exchanged for goods. So, if banks and by proxy, governments are threatened by individual privately owned assets that are not debt related, then seems like it would prudent for them to reject private ownership of such a valuable asset and get the govt. to make it very difficult for the private individual to make any transactions involving PM. All transactions should be done in FRN's or the game is hurt.
Man, if you aren't free of high interest debt by now, you just have to get that way as quickly as possible; get an extra job, convert assets, throw cash at it, just get out of high interest debt right now. Make it a high priority; you have been warned. A house at 6% and a car at 4% is not really high interest debt. Have no debt, take no debt, no debt, bring the game down!
Carry on.
<< <i>Well this is pretty interesting!!
"Nancy Pelosi wants a Windfall Tax on Retirement Income.. In other words tax what you have made investing in your retirement.
“ We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest.”
“ 'We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long way to guarantee these people the standard of living they would like to have as 'Americans”. >>
Yikes. Well, I guess someone has to take care of the illegals.........