<< <i>Today I post the update to the chart I posted yesterday. This time I left the name of the security on the chart. It is the Proshares Ultrashort Financials ETF. It is designed to move double the inverse of the underlying stocks which make up the ETF. In other words, if financials are down 10%, this is designed to go up 20%. >>
Bearish or not, it takes some serious stones to play with this one... >>
Maybe, but this is one of my favorite chart patterns since the outsized returns more than justify the risk. The coal stocks had similiar patterns about 2 weeks ago. JRCC was also a tremendous short.
Truthfully, if I didnt think it would work I wouldnt have stuck my neck on the line and posted the chart in the first place.
Go back and check the charts I posted a few weeks ago regarding some foreign markets. They are breaking down nicely. There is one other overseas market that has had a bigger run than Brazil--up 32 fold in the last 9 years. WOW!!! Perhaps the 3 little pigs were wrong. You cant make a strong house out of BRIC's. This is going to be one hell of a fun ride.
Yesterday, Alex also called today a down day for gold with the FED continuing to have the PPT and banks short sell gold.
In the July 14th TOCOM Goldman Sachs covered 1475 short gold contracts to bring their net short position to 5,756 making this the LOWEST NET SHORT position they have EVER held in the past 30 months. This is GS typical move just before a run up in gold. So they covered on the slam down, now waiting for rebound. At some point GS could remove this entire short position as they watch gold perform its biggest run up.
THE FED Don't naked short stocks. BUT OK TO SHORT THE HELL OUT OF GOLD.
Mr. Sinclair sent this out last week when I was out of town. I for one cannot bring myself to just dump all my dollar savings. On the other hand it is a very good time to be very careful.
My wife found this great site where you can go and check the rating of your bank. This is a free private site. I do not know if they have any axes to grind but please take a look and see what all of you think.
The financial system is broken and all that can be done by the US Federal Reserve and the US Treasury is monetize all major financial entities.The reason that all this has happened is the $1.114 QUADRILLION dollar mountain of crap paper
You should hold no dollars except what is required to pay bills for six months. You know now that FDIC is grossly under-financed compared to potential claims. Get all your money out of financial entities now before you have to stand in line to get it. Screw interest rates. Keep six months of cash in your safety deposit box, invest the balance in short term treasuries of other currencies.
<< <i>Mr. Sinclair sent this out last week when I was out of town. I for one cannot bring myself to just dump all my dollar savings. On the other hand it is a very good time to be very careful.
My wife found this great site where you can go and check the rating of your bank. This is a free private site. I do not know if they have any axes to grind but please take a look and see what all of you think.
The financial system is broken and all that can be done by the US Federal Reserve and the US Treasury is monetize all major financial entities.The reason that all this has happened is the $1.114 QUADRILLION dollar mountain of crap paper
You should hold no dollars except what is required to pay bills for six months. You know now that FDIC is grossly under-financed compared to potential claims. Get all your money out of financial entities now before you have to stand in line to get it. Screw interest rates. Keep six months of cash in your safety deposit box, invest the balance in short term treasuries of other currencies. >>
I agree with this.
Most experts would recommend the Swiss Franc, and a 'basket' of Asian currencies.
But don't forget about the Canadian dollar too.
"Gold is money, and nothing else" (JP Morgan, 1912)
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
You could have shorted this or bought its counterpart--UYG, which I mentioned I trade yesterday.
I saw Washington Mutual (WM) at $3.21, but darn it I chickened out. I didn't want to be the genius who had his checking account AND stock go to $0 in one swoop.
<< <i>Yesterday, Alex also called today a down day for gold with the FED continuing to have the PPT and banks short sell gold.
In the July 14th TOCOM Goldman Sachs covered 1475 short gold contracts to bring their net short position to 5,756 making this the LOWEST NET SHORT position they have EVER held in the past 30 months. This is GS typical move just before a run up in gold. So they covered on the slam down, now waiting for rebound. At some point GS could remove this entire short position as they watch gold perform its biggest run up.
THE FED Don't naked short stocks. BUT OK TO SHORT THE HELL OUT OF GOLD. >>
The FED could flood the market with gold if they wanted.
I think Gold will continue it's secular upturn, after this correction in much of the commodities complex is over.....but it's not because of feelings fear and panic.
"You should hold no dollars except what is required to pay bills for six months. You know now that FDIC is grossly under-financed compared to potential claims. Get all your money out of financial entities now before you have to stand in line to get it. Screw interest rates. Keep six months of cash in your safety deposit box"
Fiirst anyone who stands in line and panics to get funds that are readily available, for monies insured, even after an FDIC siezure, of which there will certainly be more, is worthy of a" bless his heart".
Second, Sinclair appears to be very level headed...
The FED could flood the market with gold if they wanted.
Which Central Banks could they convince to give it up in this climate? Great Britain (lol)? And it would take thousands of tons of gold to harm the market. And last I checked only the US and a couple of others have that kind of gold.....assuming the books are correct, which they probably are not. If the FED arranged for some CB's to sell gold, it would be sold to other nations, and not dumped on the public. The CB's of Russia and China would love to buy it all.....dump away! The effects would last a few weeks or months and then the amount of ammo left for the FED would be miniscule. China would love to dump all $1.4 TRILLION of it's US dollars and turn it into gold...if they could. That beats seeing the dollar drop in price. Unfortunately there isn't 50,000 tons of gold available for the Chinese or anyone else to buy with those USDollars. They'll just have to be content to buy stakes in companies owning assets such as uranium, oil, coal, copper, land, etc.
Went to the B&M yesterday. Talked about metal a little and buying and sellling at the shop is at about normal levels and about even with each other. Of interest is that on the floor there were these box sized crates that were filled with 100 ozers, all askew like they were just thrown in there. They were not new, they had tarnish and had no shine and they all looked old. I asked about them and was told there were 153 of them and they all came from one guy. Didn't ask if it was from an estate but that would have been my first guess. Didn't ask how much either. I also asked the guy I was visiting with what he thought about metal right now and I got a pretty solid reply... "I just put a whole CD in, I believe, I believe."
I t was Joshua Rosner, writing in the Financial Times on Tuesday, who said it best. “In a capitalist economy, losers are expected to take losses and winners to gain.” But that’s not the way it works today, is it? More than three Decades ago, Richard Nixon famously said: “We’re all Keynesians now.” In 2008 we can go further. If George Bush had Nixon’s grasp of affairs, he would be forced to admit: “We’ve all become socialists, despite our lip service to the free market.”
Rosner says we have begun to nationalize bad assets. From there it is a small step to the nationalization of good assets. In fact, the two things logically entail one another. As Rosner asserts, we have officially lost faith in the market. We have lost faith in the source of our prosperity. We no longer abide the creative destruction of the market process. We do not want the suffering that naturally attends real growth. Good things and only good things are demanded. Losses are unacceptable, even though these always attend genuine achievement. Everybody has to be a winner. In today’s school system we find no child left behind, which exemplifies the ongoing catastrophe in American education.
The logic of late capitalism (the declining form of capitalism) calls for the elimination of all suffering (and therefore, the elimination of real growth). This program is the basis of latter-day social democracy, which opposes the market because pain and tragedy are normal to the market system. Social democracy wants a world without failing corporations or banks. It is no wonder, then, that step-by-step they have ringed the market with “protections.” Today’s social democrat (and compassionate conservative) wants the benefits of the market without the pain of market process. The Austrian economist Ludwig von Mises once wrote: “Men must choose between the market economy and socialism. They cannot evade deciding between these alternatives….” No pain, no gain.
So there you have it. A decision has been made (and nearly everyone agrees), that pain must be nationalized. Ergo, bad assets must be nationalized because bad assets involve pain. Someone somewhere figured out that nationalizing a thing makes it go away. Take, for example, health care. You nationalize health care and it’s gone. You nationalize any industry and it withers away. Apply this redistributionist principle to all human suffering and, well, you have socialism.
The process is logical, based on the human desire for a free pass. And so, we nationalize the losses from Bear Stearns. The FDIC kicks in over IndyMac. Taxpayers must pay for the mega-blunders of Fannie and Freddie. Where will it end? The redistribution of liabilities is the first step. Let everyone hurt a little, with responsibility shifted onto everybody (i.e., nobody in particular). Say goodbye to pain, but also say goodbye to the U.S. dollar. The collectivization of financial loss necessarily entails the collectivization of financial profit. As for freedom itself, the system of government brought in by the Founding Fathers cannot survive a general acceptance of Bolshevik financial practices. According to the Austrian economists, Ludwig von Mises, “Every step a government takes beyond … protecting the smooth operation of the market economy against aggression … is a step forward on a road that directly leads into the totalitarian system where there is no freedom at all.”
If only the Bolsheviks had understood the reach of their principles in 1917. Think how differently they would have handled the early Soviet period. Their tendency was to bring about socialism in the clumsiest, most violent way. They put the cart before the horse, got angry when the cart didn’t move and shot the horse. None of this was necessary. All they needed was to wait for bourgeoisie to self-tenderize.
The Bolsheviks didn’t need to storm the Winter Palace or starve the Kulaks. Purges and show trials were completely out of the way. All one needed to create a Union of Soviet Socialist Republics was patience. The capitalists themselves, weakened by their own promotion of hedonism, would inevitably seek refuge in the nationalization of investment risk. Thus, socialism would be installed at one stroke in the name of saving capitalism. There was never any need to arm the proletariat or hang businessmen on street lamps. The businessmen will hang themselves, in due course, by demanding a Soviet style of government. The proper ingenuity of the Communist is nothing more than the anticipation of his victim’s suicidal impulses.
One only has to wait for the FDIC to detonate beneath a floundering Republic. If anyone thought U.S. Treasury bonds are a riskless investment, think again. Am I suggesting the U.S. government will default on its obligations? In my opinion, no other outcome is imaginable. If you doubt this conclusion, try to imagine federal, state and local government paying off $10 trillion. It’s not going to happen, as the readiest method of default open to government is the debasement of the national currency. This means an end to American international power – financial and military. It means an end to the old international order, which has existed since 1945. It means global revolution. Wave hello to socialism.
Coinlieutenant; Very well said. It's not the way I'd say it but it's very well said.
I anticipate Americans will go to the polls in the fall and vote for most all of the same leaders who have gotten us to this point. We'll continue to buy food adult- erated with chemicals which make them hold more water so the seller can charge us more. We'll accept schools that can't teach. And banks and credit card companies which charge people onerous interest rates simply because their customers can't afford them while they pay depositors nearly nothing at all and inflation destroys all that and much more. We'll accept good companies being raided for their assets by predatory CEO's who then ship the jobs overseas.
The Bolshevics did win. They won far more than they ever expected.
I t was Joshua Rosner, writing in the Financial Times on Tuesday, who said it best. “In a capitalist economy, losers are expected to take losses and winners to gain.” But that’s not the way it works today, is it?
I heard a great interview on NPR Friday with former Treasury Secretary Larry Summers. He said the problem with Fannie and Freddie is that they were able to operate with extremely low capital and take greater than prudent risks because of the implicit backing of the government. So if they succeed, the shareholders and managers benefit, but if they fail, the government (taxpayers) lose. In other words, you have the "privatization of gain and the socialization of loss".
If the U.S. Treasury is going to be the lender of last resort for Freddie and Fannie, and JP Morgan and 16 other private investment banks, doesn't this pretty much destroy the market for T-Bills, since these other entities will be issuing their own instruments at a higher rate of interest, with essentially no difference in the risk premium?
Q: Are You Printing Money? Bernanke: Not Literally
Have you bought enough gold to buy your next piece of land, pay your mortgage payment, or your rent?
18 July 2008 By Jeff Clark
The long-awaited Mania stage in gold may be nigh. How can I make such a claim? After all, some have been screaming “It’s here! It’s here!”
I’ve got news for you... it’s already happening. The country of Vietnam is experiencing all of the inflation maladies... inflation is an incredible 27%, interest rates are over 8% (they rose 100 basis points in one swoop), the stock market was down every day in May, and unemployment has more than doubled (from 2% in ’07 to 5.1% in ’08).
And here’s the interesting part: how did the Vietnamese public react to all this? Did they dollar-cost average down on equities? How about real estate; that’s always a long-term winner, right? What about bonds? Maybe inflation-protected securities? Or did they just sit on cash? How about none of the above. The economic and monetary problems in their country have sent the Vietnamese fleeing to gold. And not gold stocks; gold bullion. Furthermore, they’re hoarding (and hiding) it from their government.
Hard figures on the size of the local gold trade aren’t available, but current estimates are that the public owns 16 million ounces, including 1.3 million ounces imported in the first quarter of 2008. Of this, only about 10% has been deposited into banks (which actually pay 2.5% interest on gold).
And the trend to gold is spilling into other financial areas. After a long period of quoting land prices in Vietnamese dong, landlords are now setting prices in gold in order to avoid the dong's devaluation. My question to you is, what happens when Americans flee their currency, as the Vietnamese have? What happens when inflation isn’t just an annoyance but becomes lifestyle-altering, as in Vietnam?
What happens when the dollar loses so much value that the average citizen scrambles for a safe harbor for their money? Over 50 countries are now experiencing double-digit price rises. Ukraine is now at 29%, and in the Gulf states inflation is out of control. Russia is at 15%, and India is close behind at 11%. China is on the cusp, at 7%. Interest rates are still below inflation rates in much of the emerging world.
The Gold Mania is nigh. In fact, our research shows this is the last summer you will be able to buy gold for 3 figures. Do you have enough?
Zimbabwe just came out with 50,000,000,000 dollar and 500,000,000,000 dollar sized bank notes because the previous denomination was too small (only in the hundreds of millions). Inflation there is now running at around 2,000,000 % per year.
Goldsaint, my mother in law did a real estate deal in Saigon a few months ago when gold hit $1,000/oz. The seller would not accept gold on the deal ( MIL was a buyer ) which is usually what is accepted for real estate deals in Vnam. He only wanted US Dollars. Weeks after the deal he apparently took the dollars and bought gold. I don't know what the exchange rates or any of that were but it sounded like the seller had a lot of balls to do that .
There's a gold shop on every other corner in the cities, and in what has become a truly cash society, gold is king.............most of the time
I t was Joshua Rosner, writing in the Financial Times on Tuesday, who said it best. “In a capitalist economy, losers are expected to take losses and winners to gain.” But that’s not the way it works today, is it? More than three Decades ago, Richard Nixon famously said: “We’re all Keynesians now.” In 2008 we can go further. If George Bush had Nixon’s grasp of affairs, he would be forced to admit: “We’ve all become socialists, despite our lip service to the free market.”
Rosner says we have begun to nationalize bad assets. From there it is a small step to the nationalization of good assets. In fact, the two things logically entail one another. As Rosner asserts, we have officially lost faith in the market. We have lost faith in the source of our prosperity. We no longer abide the creative destruction of the market process. We do not want the suffering that naturally attends real growth. Good things and only good things are demanded. Losses are unacceptable, even though these always attend genuine achievement. Everybody has to be a winner. In today’s school system we find no child left behind, which exemplifies the ongoing catastrophe in American education.
The logic of late capitalism (the declining form of capitalism) calls for the elimination of all suffering (and therefore, the elimination of real growth). This program is the basis of latter-day social democracy, which opposes the market because pain and tragedy are normal to the market system. Social democracy wants a world without failing corporations or banks. It is no wonder, then, that step-by-step they have ringed the market with “protections.” Today’s social democrat (and compassionate conservative) wants the benefits of the market without the pain of market process. The Austrian economist Ludwig von Mises once wrote: “Men must choose between the market economy and socialism. They cannot evade deciding between these alternatives….” No pain, no gain.
So there you have it. A decision has been made (and nearly everyone agrees), that pain must be nationalized. Ergo, bad assets must be nationalized because bad assets involve pain. Someone somewhere figured out that nationalizing a thing makes it go away. Take, for example, health care. You nationalize health care and it’s gone. You nationalize any industry and it withers away. Apply this redistributionist principle to all human suffering and, well, you have socialism.
The process is logical, based on the human desire for a free pass. And so, we nationalize the losses from Bear Stearns. The FDIC kicks in over IndyMac. Taxpayers must pay for the mega-blunders of Fannie and Freddie. Where will it end? The redistribution of liabilities is the first step. Let everyone hurt a little, with responsibility shifted onto everybody (i.e., nobody in particular). Say goodbye to pain, but also say goodbye to the U.S. dollar. The collectivization of financial loss necessarily entails the collectivization of financial profit. As for freedom itself, the system of government brought in by the Founding Fathers cannot survive a general acceptance of Bolshevik financial practices. According to the Austrian economists, Ludwig von Mises, “Every step a government takes beyond … protecting the smooth operation of the market economy against aggression … is a step forward on a road that directly leads into the totalitarian system where there is no freedom at all.”
If only the Bolsheviks had understood the reach of their principles in 1917. Think how differently they would have handled the early Soviet period. Their tendency was to bring about socialism in the clumsiest, most violent way. They put the cart before the horse, got angry when the cart didn’t move and shot the horse. None of this was necessary. All they needed was to wait for bourgeoisie to self-tenderize.
The Bolsheviks didn’t need to storm the Winter Palace or starve the Kulaks. Purges and show trials were completely out of the way. All one needed to create a Union of Soviet Socialist Republics was patience. The capitalists themselves, weakened by their own promotion of hedonism, would inevitably seek refuge in the nationalization of investment risk. Thus, socialism would be installed at one stroke in the name of saving capitalism. There was never any need to arm the proletariat or hang businessmen on street lamps. The businessmen will hang themselves, in due course, by demanding a Soviet style of government. The proper ingenuity of the Communist is nothing more than the anticipation of his victim’s suicidal impulses.
One only has to wait for the FDIC to detonate beneath a floundering Republic. If anyone thought U.S. Treasury bonds are a riskless investment, think again. Am I suggesting the U.S. government will default on its obligations? In my opinion, no other outcome is imaginable. If you doubt this conclusion, try to imagine federal, state and local government paying off $10 trillion. It’s not going to happen, as the readiest method of default open to government is the debasement of the national currency. This means an end to American international power – financial and military. It means an end to the old international order, which has existed since 1945. It means global revolution. Wave hello to socialism. >>
Well, said coinlieutenant, So, in the end, the USA=France
A few years back I read Buchanan's Death of the West. He states we won the war on Marxism and communism militarily in the 1990's but have lost the war on social marxism that started over 100 years ago. New "people" have been created by the new elite occupying the institutions of TV, the arts, entertainment, and education. God is nearly dethroned and in my opinion Islamic extremism will accomplish this...when attacking Christianity and Judaism is free game to protect the state from the church. When the opposite is true. And don't dare to print satirical cartoons of Islam without an extremists wrath.
I've been talking of the currency bubble for sometime. Currencies trade relative to each other. It will be interesting to see how this plays out. What will be the "safe haven" currency?
<< <i>Have you bought enough gold to buy your next piece of land, pay your mortgage payment, or your rent?
18 July 2008 By Jeff Clark
The long-awaited Mania stage in gold may be nigh. How can I make such a claim? After all, some have been screaming “It’s here! It’s here!”
I’ve got news for you... it’s already happening. The country of Vietnam is experiencing all of the inflation maladies... inflation is an incredible 27%, interest rates are over 8% (they rose 100 basis points in one swoop), the stock market was down every day in May, and unemployment has more than doubled (from 2% in ’07 to 5.1% in ’08).
And here’s the interesting part: how did the Vietnamese public react to all this? Did they dollar-cost average down on equities? How about real estate; that’s always a long-term winner, right? What about bonds? Maybe inflation-protected securities? Or did they just sit on cash? How about none of the above. The economic and monetary problems in their country have sent the Vietnamese fleeing to gold. And not gold stocks; gold bullion. Furthermore, they’re hoarding (and hiding) it from their government.
Hard figures on the size of the local gold trade aren’t available, but current estimates are that the public owns 16 million ounces, including 1.3 million ounces imported in the first quarter of 2008. Of this, only about 10% has been deposited into banks (which actually pay 2.5% interest on gold).
And the trend to gold is spilling into other financial areas. After a long period of quoting land prices in Vietnamese dong, landlords are now setting prices in gold in order to avoid the dong's devaluation. My question to you is, what happens when Americans flee their currency, as the Vietnamese have? What happens when inflation isn’t just an annoyance but becomes lifestyle-altering, as in Vietnam?
What happens when the dollar loses so much value that the average citizen scrambles for a safe harbor for their money? Over 50 countries are now experiencing double-digit price rises. Ukraine is now at 29%, and in the Gulf states inflation is out of control. Russia is at 15%, and India is close behind at 11%. China is on the cusp, at 7%. Interest rates are still below inflation rates in much of the emerging world.
The Gold Mania is nigh. In fact, our research shows this is the last summer you will be able to buy gold for 3 figures. Do you have enough? >>
Actually, this is not unusual in the Vietnamese culture. A manufacturing company I worked for in the '90's employed a lot of Vietnamese and Laotians, and it was typical for them to convert their earnings into gold jewelry.
I believe it was a few months back when the World Back stated that they were going to dump gold into the market. The best part is that China said that they would buy it all...........Right now, countries like Russia, China, and India are buying up gold like crazy. If the US Fed were to dump gold into the market, the above mentioned countries would buy it all.
The article implies that the Fed has a limitless supply of money. That is the main problem.
Here's how it works. If an institution borrows, say, $50 billion from the Fed, the Fed can just post a $50 billion credit to the bank's account at the Fed, and the borrower can spend that balance on whatever it wants. It is indeed as if the Fed created cash out of nothing.
And if the Fed somehow needed more than $800 billion of Treasury securities, it could buy them in the open market, and deposit the payment for them in the seller's Fed account. That way, the Fed could lay its hands on however many Treasury securities it needed.
And now the foreign bailout for our faltering system is starting to dry up.... An article from Numismaster.com website.
Very bullish for gold.
"The current financial crisis over expected huge losses at Fannie Mae and Freddie Mac, two private companies that hold about half the real estate mortgages in the United States, may be the final event that persuades foreign investors and governments to stop lending to the U.S. government and private companies, and a resulting redirection of investments toward gold.
"Sovereign wealth funds that invested in U.S. banks have lost 30 to 50 percent of their investments in the space of six months, so they're becoming more cautious," said Nouriel Roubini, professor at the New York University Stern School of Business and head of Roubini Global Economics.
Sovereign wealth funds, established by Middle Eastern and Asian governments, control over $3 trillion in assets.
Last week, Kuwait authorities announced its sovereign wealth fund would no longer buy Fannie Mae or Freddie Mac debt. Instead, they will boost investments in stocks, bonds and real estate in China, India and Japan.
Also last week, Merrill Lynch warned that the Fannie Mae and Freddie Mac mortgage debacle could bring on a foreign financing crisis within months. The U.S. depends on Asian, Russian and Middle Eastern investors to fund much of the $700 billion trade deficit. With interest rates so low in the United States, Alex Patellis, the head of Merrill Lynch's international economics said, "Foreigners will not be willing to supply the capital."
Brian Bethune, chief financial economist at Global Insight warned that the U.S. Treasury had little time to put real money behind the rescue plan for Fannie Mae or Freddie Mac. He said, "This is not the time for policy-makers to underestimate, once again, the systemic risks to the financial system and the huge damage this would impose on the economy. Bold, aggressive action is needed, and needed now."
In total, about $1.5 trillion of Fannie Mae, Freddie Mac AAA-rated debt as well as other U.S. debt issued by government-sponsored enterprises is held in foreign hands. How long will these investors continue to absorb more losses before they bail out?
Last week, Hiroshi Watanabe, Japan's chief financial regulator, urged Japanese banks and life insurance companies to treat U.S. agency debt with caution, an extreme statement from a nation famous for comments being quite understated.
Rather than disgorge debt at what may be fire-sale prices, it would be more likely that foreign investors will stop buying new U.S. debt. Simply stopping the purchase of additional debt would be enough bring on a major financial crisis. Patellis said, "I don't see how the current situation can continue beyond six months."
Already, a rising percentage of the capital of sovereign wealth funds is being used to purchase gold. As these funds accumulate more assets, and less of it is used to invest in the United States, I expect the rate of gold purchases by these funds to accelerate, helping push up prices over the next year. "
<< <i>I've been talking of the currency bubble for sometime. Currencies trade relative to each other. It will be interesting to see how this plays out. What will be the "safe haven" currency?
Inflation in some of these currencies will lead directly to equivalent increases in commodities. This is starting to look like peak oil.
Price competition for resources will get intense if oil is a restraining factor. But reduced oil will simultaneously suppress demand. Watch for an explosion in new technology.
That's what T. Boone Pickins said today in front of a congressional panel regarding energy policy. He put it pretty plain and simple. He wants to get some ruling on oil tax (I think the windfall profits tax) so drillers can know what to expect; right now, this tax is changed every year so nobody is putting much money into renewable energy or exploration. He wants to drill ANWR also.
Here's his pitch...he wants a 10 year plan on US energy policy. He wants to use this ten years as a bridge to the next generation of energy, including wind, oil, nat gas, solar, etc. During that 10 years we would convert our cars to nat gas, use nat gas in our generating plants, and reduce our foreign oil consumption. He wants to use this 10 years to get the US to a point of being independent of foreign oil. He wants this 10 years to be a bridge to newer forms of energy from our current situation of importing foreign oil...I think he said $400 billion dollars a year that we are giving to people "...that don't particularly wish us well."
He's got a plan and he's working it. It's refreshing to finally see someone sensible explain it to congress in a way they can understand. I can't find the link to the congressional hearing, it seems to be disappeared or at least not in a place where I can find it. I listened to it live and it was pretty straight forward testimony and the panel was conspicuously impressed.
Very true Wayne. Pickens is selling this like he has nothing but altruistic intention, but he also started a huge windfarm I believe in TX. I do believe there are some "better for all" intentions, but let's not write him up as a hero.
I remember reading in "The Forgotten Man" that during FDR's reign everything was going social. And nothing could be done unless it was done by the gov't, e.g. the New Deal and all its tailings. Small businesses were eaten up by the Deal.
In 1936, Andrew Mellon, in his 80's wanted to establish a National Gallery. He had been spending millions on great works. He felt embarrassed in the 1920's when foreign dignitaries came to visit the US on official matters and wanted to be entertained and see the great art of America. But, there was no place like the Louvre, Britain's Gallery in America.
So, Mellon, quietly acquired great works and is accredited for the first to pay seven figures for a painting. He broke his intentions to FDR in late 1936. Mellon was dogged for bogus tax issues because "they" wanted to get at his art and was excited that the private sector would win a great victory for America. Mellon was so sincere about his "donation" to America that he did not want his name anywhere around the art or on the new marble building on the Washington Mall.
Also, the art would be displayed in a manner that was not snobbish...meaning in periods. They were originally displayed in alphabetical order. Most museums display their art in periods or by artists.
I would like to think that T. Boone Pickens may take note of Mellon. T. Boone Pickens may very well be out for himself but I would like to think when you're older than dirt it's time to pass on knowledge, wisdom and leadership to America.
It's one of the most comprehensive, riveting histories I have ever seen.
I consider myself a pretty good student of History, so after watching this, all I remeber from High School and College, really clicked.
For yourself and your Family, you need to watch and learn.
Just the explanation of the demonetization of silver with the Coinage Act of 1873 is stunning!
Also called the Crime of 1873, it is where Congress suspended further production of silver dollars until the Morgans began in 1878. Only Silver Trade Dollars where made as European interests bribed and actually drafted us back to the Gold Standard. Start at 1:34:00 to see how the Money Supply was contracted!
No wild conspiracies, no Trilateral Commission BS, just facts and the truth of how it is.
You give it 15 Minutes and you will watch it all, I swear.
<< <i>t boone is looking out for t boone but if it works for the country more power to him >>
T. Boone also said, "I'm 80 years old and have $4 billion. I dont need any more money."
He has given away hundreds of millions of dollars. I think he wants whats best for America. Probably moreso than the elected 500+ who work in Washington.
It's one of the most comprehensive, riveting histories I have ever seen.
I consider myself a pretty good student of History, so after watching this, all I remeber from High School and College, really clicked.
For yourself and your Family, you need to watch and learn.
Just the explanation of the demonetization of silver with the Coinage Act of 1873 is stunning!
Also called the Crime of 1873, it is where Congress suspended further production of silver dollars until the Morgans began in 1878. Only Silver Trade Dollars where made as European interests bribed and actually drafted us back to the Gold Standard. Start at 1:34:00 to see how the Money Supply was contracted!
No wild conspiracies, no Trilateral Commission BS, just facts and the truth of how it is.
You give it 15 Minutes and you will watch it all, I swear. >>
The video is dated. Does anyone know when this was created? Still, what a great piece of consolidated history on banking. Conspiracy theorists beware.
It's one of the most comprehensive, riveting histories I have ever seen.
I consider myself a pretty good student of History, so after watching this, all I remeber from High School and College, really clicked.
For yourself and your Family, you need to watch and learn.
Just the explanation of the demonetization of silver with the Coinage Act of 1873 is stunning!
Also called the Crime of 1873, it is where Congress suspended further production of silver dollars until the Morgans began in 1878. Only Silver Trade Dollars where made as European interests bribed and actually drafted us back to the Gold Standard. Start at 1:34:00 to see how the Money Supply was contracted!
No wild conspiracies, no Trilateral Commission BS, just facts and the truth of how it is.
You give it 15 Minutes and you will watch it all, I swear. >>
The video is dated. Does anyone know when this was created? Still, what a great piece of consolidated history on banking. Conspiracy theorists beware.
Ren >>
I listened to about half an hour before technical problems interfered.
but it might be too late...........to do any good, fellow slave.
It is very hard to accept that I've had the shackels on since birth and until now, despite an expensive education I was never taught anything but the "party line" ....I must educate my young ones...
Be careful Bear, or you'll invite all the naysays from the "FED thread" to come on over and start spouting how the FED and international banks are out to help us all...rather than themselves. I don't think I want to go through another thread like that one (lol). People won't get it until it lands on THEIR door step.
I don't pay much attention to what T. Boone says after his public call about oil going down right before it took off for new heights. I rate his calls on the order of say a Goldman Sachs. Just do the opposite of what they say in public. Hank Paulson was trained well.
The article implies that the Fed has a limitless supply of money. That is the main problem.
In fact they do have "limitless" money in the way they are continuing to roll over hundreds of billion dollars in repos. They also can create any amount of money electronically that they wish. For these types of give-aways they are not getting congressional authorization as they working "within new interpretations of existing guidelines." Following the BSC sale, the FED's bag of tricks is only getting bigger...all legal of course though!
A blind eye has been turned for to many years now...Question is...What other than trillions of American dollars that the world holds of ours, what is it that they need from us that no other country in the world can give...In other words , do we have anything left which we have not given away that the world is in need of and can only be gotten here? Have we spent our last dime with the needs of the world? My take on Pickens, he is right! We need to stop transferring the wealth of this nation and spend it on ourselves and be self supporting again...If he has the answer I will listen and and I hope others will too. We can turn our Country around and stop the spiraling before we hit bottom with no hopes of returning to the Healthy Nation which we once were...somewhere there is a point of no return and I hope we will not be to late before we repeat history! Those Oil producing Countries are not our friends, once we stop our use of oil that we buy from them, what do you think their reactions are going to be? As long as we need the World to grease our squeaky wheel, we will never be a strong country again, we have given to much away with nothing in return to gain our superiority in the world as we once knew it! We have a superior fighting force which no other country in the world has, but I do not wish it to come to that and only that...we need to bring our presence home and reformulate ourselves and strengthen our backbone...and I think if we can produce our own green energy we will be well on our way...I have always and still do believe this is the greatest land on earth...and with the help of every American, it shall always be!
You betcha High Tech is going to return and it will be in the green! I would imagine that with what is left of the automobile manufacturing , they are retooling as we speak! Bring on the propane!
When all this is said and done, it shows why we will remain the leader of the world, it is because we take a problem and we deal with it....we are inovators and make due with what we have...We are the YOUNGEST NATION on the Face of the Earth....and We are Americans and will take nothing and make something great, we have our Forefathers blood in our veins!
Some very ineresting stuff, as usual. Again I preface my remarks by saying IMHO, we are in a longer term secular upturn in commodity prices, that will resume, at least by the time the economy starts to expand again, which will happen sooner or later.
One thing I wonder about in reading this thread is, why Bernanke would WANT to create run away inflation? Is he a gold bug in disguise? Is he trying to kill the currency...No, I don't think so. Now the administrations policy is another thing entirely, IMHO. and have wanted and pursued a weaker dollar, at least , untill recently. For all the history buffs out there, what happend to Gold after the 1000 banks failed in 1990 and the RTC had to step in, to help with a MASSIVE bail out? Was that a horrible thing? Did the RTC Bail out ruin the economy in 1990 and for the next number of years? Wasn't the dollar stronger for the next 10 plus years AFTER the MASSIVE bailout?
As gold Bugs or PM bugs, it seems a few of you continue to think that more bank failures, resulting in rash behavior, by panicking and pulliing assets out of insured accounts and a further weakening(contracting) economy is good for gold, The reality is, as some of you realise, less bank failures are good for gold,(moral hazard) less panick is good for gold. Before the banks started their vicious rally, I have never seen such fear mongering by some, and I witnessed first hand, an RTC bailout. It is that kind of irrational fear and panic that creates the opposite effect almost everytime, as it certainly did this time. In looking at markets one of the most valuable things I have learned over time, is watch the fear indicators...put/call..Vix, short interest and my favorite, investors intelligence.(oxymoron) When put all together they provide great insight into the psychological underpinnings of many markets......and of course they are ALL contrary indicators....food for thought. So when you witness a few of the die hard PM bugs throw in the towel by choice or by neccessity, it most likely will be time for the next up leg, in the metals.
So maybe the real conspiracy is... fallable human emotion, that when conviced of something, it usuallly turns out to be wrong :
History never goes out of date, it only gets repeated by the ignorant.
If you do anything, pick it up at 1:34:00, like I said and give it 15 minutes of your time. you won't stop at 15 minutes, I guarantee it.
I've read "The Forgotten Man" twice and it is no where near this film in terms of explaining the Macro side of monetary policy. >>
COINBOY, have you read "Liberal Fascism"? I finished this book about six months ago and while I was reading it in public, the cover and title turned a few heads in the coffee shops.
"...why Bernanke would WANT to create run away inflation? Is he a gold bug in disguise?"
The horror, the horror.
Having known a couple of Texas wildcatters done good (they're all about 80 or so now), they have some peculiar personality traits. One thing they do is they study their butts off, they are very well read, they are very astute; to them, knowledge is not only power, it is a minimum requirement and the better the information, the more they like it and they are tireless in their pursuit. Another trait is that they are absolutely fearless, they will put everything they have on the line if they think they are right and they will win or lose by their own wit and all of them have lost at one time or another. Some survive the loss, some don't. They will live in the west Texas desert, without their families, for months and months in a trailer surrounded by rattlesnakes and coyotes if need be, just to pour a few million dollars of their personal money into a hole in the ground and come up with nothing but rock and then go up a little more to the north and do it again. People like T. Boone are the last of a dying breed, most of them are gone so enjoy the last of them, there won't be another group like this ever.
So when T. Boone tells ya' that he's 80 years old and has 4 Billion dollars and doesn't need the money, believe it and listen to what he tells you because he is no fool and he has no game and that's not just an attitude, that's his life.
Edited to update: I find it just amazing that every bozo that can get press comes out and yells "Hey, he's going to make money" when they talk about T. Boone's plan. Then they say "hey, its expensive." Geezzz, and to think that we grow these bright fellas right here in the US. We have come to a pitiful place in time...just read this article. Our best and brightest
Comments
Don't have more than 100K in any bank that is fDIC insured.
Common Sense.
Don't put $ or other under the mattress as I am sure the burglary rate will increase.
Be creative.
Woah, I don't know...he's talkin' about fricasseed roadrunner. That may not be good; RR probably isn't going to enjoy that part.
http://www.liberty-watch.com/volume03/issue08/coverstory.php
<< <i>
<< <i>Today I post the update to the chart I posted yesterday. This time I left the name of the security on the chart. It is the Proshares Ultrashort Financials ETF. It is designed to move double the inverse of the underlying stocks which make up the ETF. In other words, if financials are down 10%, this is designed to go up 20%. >>
Bearish or not, it takes some serious stones to play with this one... >>
Maybe, but this is one of my favorite chart patterns since the outsized returns more than justify the risk. The coal stocks had similiar patterns about 2 weeks ago. JRCC was also a tremendous short.
Truthfully, if I didnt think it would work I wouldnt have stuck my neck on the line and posted the chart in the first place.
Go back and check the charts I posted a few weeks ago regarding some foreign markets. They are breaking down nicely.
Knowledge is the enemy of fear
In the July 14th TOCOM Goldman Sachs covered 1475 short gold contracts to bring their net short position to 5,756 making this the LOWEST NET SHORT position they have EVER held in the past 30 months. This is GS typical move just before a run up in gold. So they covered on the slam down, now waiting for rebound. At some point GS could remove this entire short position as they watch gold perform its biggest run up.
THE FED Don't naked short stocks. BUT OK TO SHORT THE HELL OUT OF GOLD.
I for one cannot bring myself to just dump all my dollar savings.
On the other hand it is a very good time to be very careful.
My wife found this great site where you can go and check the rating of your bank.
This is a free private site. I do not know if they have any axes to grind but please take a look and see what all of you think.
LINKY
http://www.bankrate.com/brm/safesound/select.asp?insttype=0
Jim Sinclair
July 15, 2008
The financial system is broken and all that can be done by the US Federal Reserve and the US Treasury is monetize all major financial entities.The reason that all this has happened is the $1.114 QUADRILLION dollar mountain of crap paper
You should hold no dollars except what is required to pay bills for six months. You know now that FDIC is grossly under-financed compared to potential claims. Get all your money out of financial entities now before you have to stand in line to get it. Screw interest rates. Keep six months of cash in your safety deposit box, invest the balance in short term treasuries of other currencies.
<< <i>Mr. Sinclair sent this out last week when I was out of town.
I for one cannot bring myself to just dump all my dollar savings.
On the other hand it is a very good time to be very careful.
My wife found this great site where you can go and check the rating of your bank.
This is a free private site. I do not know if they have any axes to grind but please take a look and see what all of you think.
LINKY
http://www.bankrate.com/brm/safesound/select.asp?insttype=0
Jim Sinclair
July 15, 2008
The financial system is broken and all that can be done by the US Federal Reserve and the US Treasury is monetize all major financial entities.The reason that all this has happened is the $1.114 QUADRILLION dollar mountain of crap paper
You should hold no dollars except what is required to pay bills for six months. You know now that FDIC is grossly under-financed compared to potential claims. Get all your money out of financial entities now before you have to stand in line to get it. Screw interest rates. Keep six months of cash in your safety deposit box, invest the balance in short term treasuries of other currencies. >>
I agree with this.
Most experts would recommend the Swiss Franc, and a 'basket' of Asian currencies.
But don't forget about the Canadian dollar too.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
I saw Washington Mutual (WM) at $3.21, but darn it I chickened out. I didn't want to be the genius who had his checking account AND stock go to $0 in one swoop.
<< <i>Yesterday, Alex also called today a down day for gold with the FED continuing to have the PPT and banks short sell gold.
In the July 14th TOCOM Goldman Sachs covered 1475 short gold contracts to bring their net short position to 5,756 making this the LOWEST NET SHORT position they have EVER held in the past 30 months. This is GS typical move just before a run up in gold. So they covered on the slam down, now waiting for rebound. At some point GS could remove this entire short position as they watch gold perform its biggest run up.
THE FED Don't naked short stocks. BUT OK TO SHORT THE HELL OUT OF GOLD. >>
The FED could flood the market with gold if they wanted.
No one could flood it with silver.
"You should hold no dollars except what is required to pay bills for six months. You know now that FDIC is grossly under-financed compared to potential claims. Get all your money out of financial entities now before you have to stand in line to get it. Screw interest rates. Keep six months of cash in your safety deposit box"
Fiirst anyone who stands in line and panics to get funds that are readily available, for monies insured, even after an FDIC siezure, of which there will certainly be more, is worthy of a" bless his heart".
Second, Sinclair appears to be very level headed...
Which Central Banks could they convince to give it up in this climate? Great Britain (lol)? And it would take thousands of tons of gold to harm the market. And last I checked only the US and a couple of others have that kind of gold.....assuming the books are correct, which they probably are not. If the FED arranged for some CB's to sell gold, it would be sold to other nations, and not dumped on the public. The CB's of Russia and China would love to buy it all.....dump away! The effects would last a few weeks or months and then the amount of ammo left for the FED would be miniscule.
China would love to dump all $1.4 TRILLION of it's US dollars and turn it into gold...if they could. That beats seeing the dollar drop in price. Unfortunately there isn't 50,000 tons of gold available for the Chinese or anyone else to buy with those USDollars. They'll just have to be content to buy stakes in companies owning assets such as uranium, oil, coal, copper, land, etc.
roadrunner
Went to the B&M yesterday. Talked about metal a little and buying and sellling at the shop is at about normal levels and about even with each other. Of interest is that on the floor there were these box sized crates that were filled with 100 ozers, all askew like they were just thrown in there. They were not new, they had tarnish and had no shine and they all looked old. I asked about them and was told there were 153 of them and they all came from one guy. Didn't ask if it was from an estate but that would have been my first guess. Didn't ask how much either. I also asked the guy I was visiting with what he thought about metal right now and I got a pretty solid reply... "I just put a whole CD in, I believe, I believe."
News from the front, indeed.
siliconvalleycoins.com
I t was Joshua Rosner, writing in the Financial Times on Tuesday, who said it best. “In a capitalist economy, losers are expected to take losses and winners to gain.” But that’s not the way it works today, is it? More than three Decades ago, Richard Nixon famously said: “We’re all Keynesians now.” In 2008 we can go further. If George Bush had Nixon’s grasp of affairs, he would be forced to admit: “We’ve all become socialists, despite our lip service to the free market.”
Rosner says we have begun to nationalize bad assets. From there it is a small step to the nationalization of good assets. In fact, the two things logically entail one another. As Rosner asserts, we have officially lost faith in the market. We have lost faith in the source of our prosperity. We no longer abide the creative destruction of the market process. We do not want the suffering that naturally attends real growth. Good things and only good things are demanded. Losses are unacceptable, even though these always attend genuine achievement. Everybody has to be a winner. In today’s school system we find no child left behind, which exemplifies the ongoing catastrophe in American education.
The logic of late capitalism (the declining form of capitalism) calls for the elimination of all suffering (and therefore, the elimination of real growth). This program is the basis of latter-day social democracy, which opposes the market because pain and tragedy are normal to the market system. Social democracy wants a world without failing corporations or banks. It is no wonder, then, that step-by-step they have ringed the market with “protections.” Today’s social democrat (and compassionate conservative) wants the benefits of the market without the pain of market process. The Austrian economist Ludwig von Mises once wrote: “Men must choose between the market economy and socialism. They cannot evade deciding between these alternatives….” No pain, no gain.
So there you have it. A decision has been made (and nearly everyone agrees), that pain must be nationalized. Ergo, bad assets must be nationalized because bad assets involve pain. Someone somewhere figured out that nationalizing a thing makes it go away. Take, for example, health care. You nationalize health care and it’s gone. You nationalize any industry and it withers away. Apply this redistributionist principle to all human suffering and, well, you have socialism.
The process is logical, based on the human desire for a free pass. And so, we nationalize the losses from Bear Stearns. The FDIC kicks in over IndyMac. Taxpayers must pay for the mega-blunders of Fannie and Freddie. Where will it end? The redistribution of liabilities is the first step. Let everyone hurt a little, with responsibility shifted onto everybody (i.e., nobody in particular). Say goodbye to pain, but also say goodbye to the U.S. dollar.
The collectivization of financial loss necessarily entails the collectivization of financial profit. As for freedom itself, the system of government brought in by the Founding Fathers cannot survive a general acceptance of Bolshevik financial practices. According to the Austrian economists, Ludwig von Mises, “Every step a government takes beyond … protecting the smooth operation of the market economy against aggression … is a step forward on a road that directly leads into the totalitarian system where there is no freedom at all.”
If only the Bolsheviks had understood the reach of their principles in 1917. Think how differently they would have handled the early Soviet period. Their tendency was to bring about socialism in the clumsiest, most violent way. They put the cart before the horse, got angry when the cart didn’t move and shot the horse. None of this was necessary. All they needed was to wait for bourgeoisie to self-tenderize.
The Bolsheviks didn’t need to storm the Winter Palace or starve the Kulaks. Purges and show trials were completely out of the way. All one needed to create a Union of Soviet Socialist Republics was patience. The capitalists themselves, weakened by their own promotion of hedonism, would inevitably seek refuge in the nationalization of investment risk. Thus, socialism would be installed at one stroke in the name of saving capitalism. There was never any need to arm the proletariat or hang businessmen on street lamps. The businessmen will hang themselves, in due course, by demanding a Soviet style of government. The proper ingenuity of the Communist is nothing more than the anticipation of his victim’s suicidal impulses.
One only has to wait for the FDIC to detonate beneath a floundering Republic. If anyone thought U.S. Treasury bonds are a riskless investment, think again. Am I suggesting the U.S. government will default on its obligations? In my opinion, no other outcome is imaginable. If you doubt this conclusion, try to imagine federal, state and local government paying off $10 trillion. It’s not going to happen, as the readiest method of default open to government is the debasement of the national currency. This means an end to American international power – financial and military. It means an end to the old international order, which has existed since 1945.
It means global revolution. Wave hello to socialism.
siliconvalleycoins.com
I anticipate Americans will go to the polls in the fall and vote for most all of the
same leaders who have gotten us to this point. We'll continue to buy food adult-
erated with chemicals which make them hold more water so the seller can charge
us more. We'll accept schools that can't teach. And banks and credit card companies
which charge people onerous interest rates simply because their customers can't afford
them while they pay depositors nearly nothing at all and inflation destroys all that and much
more. We'll accept good companies being raided for their assets by predatory CEO's who then
ship the jobs overseas.
The Bolshevics did win. They won far more than they ever expected.
on a Royal Flush....A-K-Q-J-10.
Camelot
Box of 20
I heard a great interview on NPR Friday with former Treasury Secretary Larry Summers. He said the problem with Fannie and Freddie is that they were able to operate with extremely low capital and take greater than prudent risks because of the implicit backing of the government. So if they succeed, the shareholders and managers benefit, but if they fail, the government (taxpayers) lose. In other words, you have the "privatization of gain and the socialization of loss".
I knew it would happen.
18 July 2008
By Jeff Clark
The long-awaited Mania stage in gold may be nigh. How can I make such a claim? After all, some have been screaming “It’s here! It’s here!”
I’ve got news for you... it’s already happening. The country of Vietnam is experiencing all of the inflation maladies... inflation is an incredible 27%, interest rates are over 8% (they rose 100 basis points in one swoop), the stock market was down every day in May, and unemployment has more than doubled (from 2% in ’07 to 5.1% in ’08).
And here’s the interesting part: how did the Vietnamese public react to all this? Did they dollar-cost average down on equities? How about real estate; that’s always a long-term winner, right? What about bonds? Maybe inflation-protected securities? Or did they just sit on cash? How about none of the above. The economic and monetary problems in their country have sent the Vietnamese fleeing to gold. And not gold stocks; gold bullion. Furthermore, they’re hoarding (and hiding) it from their government.
Hard figures on the size of the local gold trade aren’t available, but current estimates are that the public owns 16 million ounces, including 1.3 million ounces imported in the first quarter of 2008. Of this, only about 10% has been deposited into banks (which actually pay 2.5% interest on gold).
And the trend to gold is spilling into other financial areas. After a long period of quoting land prices in Vietnamese dong, landlords are now setting prices in gold in order to avoid the dong's devaluation.
My question to you is, what happens when Americans flee their currency, as the Vietnamese have? What happens when inflation isn’t just an annoyance but becomes lifestyle-altering, as in Vietnam?
What happens when the dollar loses so much value that the average citizen scrambles for a safe harbor for their money?
Over 50 countries are now experiencing double-digit price rises. Ukraine is now at 29%, and in the Gulf states inflation is out of control. Russia is at 15%, and India is close behind at 11%. China is on the cusp, at 7%. Interest rates are still below inflation rates in much of the emerging world.
The Gold Mania is nigh. In fact, our research shows this is the last summer you will be able to buy gold for 3 figures. Do you have enough?
That's beyond hyper-inflation.
roadrunner
There's a gold shop on every other corner in the cities, and in what has become a truly cash society, gold is king.............most of the time
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
What happens when the Vietnamese govt siezes this gold that has been so convieniently "registered"?
Knowledge is the enemy of fear
<< <i>Great article by Nyquist...
I t was Joshua Rosner, writing in the Financial Times on Tuesday, who said it best. “In a capitalist economy, losers are expected to take losses and winners to gain.” But that’s not the way it works today, is it? More than three Decades ago, Richard Nixon famously said: “We’re all Keynesians now.” In 2008 we can go further. If George Bush had Nixon’s grasp of affairs, he would be forced to admit: “We’ve all become socialists, despite our lip service to the free market.”
Rosner says we have begun to nationalize bad assets. From there it is a small step to the nationalization of good assets. In fact, the two things logically entail one another. As Rosner asserts, we have officially lost faith in the market. We have lost faith in the source of our prosperity. We no longer abide the creative destruction of the market process. We do not want the suffering that naturally attends real growth. Good things and only good things are demanded. Losses are unacceptable, even though these always attend genuine achievement. Everybody has to be a winner. In today’s school system we find no child left behind, which exemplifies the ongoing catastrophe in American education.
The logic of late capitalism (the declining form of capitalism) calls for the elimination of all suffering (and therefore, the elimination of real growth). This program is the basis of latter-day social democracy, which opposes the market because pain and tragedy are normal to the market system. Social democracy wants a world without failing corporations or banks. It is no wonder, then, that step-by-step they have ringed the market with “protections.” Today’s social democrat (and compassionate conservative) wants the benefits of the market without the pain of market process. The Austrian economist Ludwig von Mises once wrote: “Men must choose between the market economy and socialism. They cannot evade deciding between these alternatives….” No pain, no gain.
So there you have it. A decision has been made (and nearly everyone agrees), that pain must be nationalized. Ergo, bad assets must be nationalized because bad assets involve pain. Someone somewhere figured out that nationalizing a thing makes it go away. Take, for example, health care. You nationalize health care and it’s gone. You nationalize any industry and it withers away. Apply this redistributionist principle to all human suffering and, well, you have socialism.
The process is logical, based on the human desire for a free pass. And so, we nationalize the losses from Bear Stearns. The FDIC kicks in over IndyMac. Taxpayers must pay for the mega-blunders of Fannie and Freddie. Where will it end? The redistribution of liabilities is the first step. Let everyone hurt a little, with responsibility shifted onto everybody (i.e., nobody in particular). Say goodbye to pain, but also say goodbye to the U.S. dollar.
The collectivization of financial loss necessarily entails the collectivization of financial profit. As for freedom itself, the system of government brought in by the Founding Fathers cannot survive a general acceptance of Bolshevik financial practices. According to the Austrian economists, Ludwig von Mises, “Every step a government takes beyond … protecting the smooth operation of the market economy against aggression … is a step forward on a road that directly leads into the totalitarian system where there is no freedom at all.”
If only the Bolsheviks had understood the reach of their principles in 1917. Think how differently they would have handled the early Soviet period. Their tendency was to bring about socialism in the clumsiest, most violent way. They put the cart before the horse, got angry when the cart didn’t move and shot the horse. None of this was necessary. All they needed was to wait for bourgeoisie to self-tenderize.
The Bolsheviks didn’t need to storm the Winter Palace or starve the Kulaks. Purges and show trials were completely out of the way. All one needed to create a Union of Soviet Socialist Republics was patience. The capitalists themselves, weakened by their own promotion of hedonism, would inevitably seek refuge in the nationalization of investment risk. Thus, socialism would be installed at one stroke in the name of saving capitalism. There was never any need to arm the proletariat or hang businessmen on street lamps. The businessmen will hang themselves, in due course, by demanding a Soviet style of government. The proper ingenuity of the Communist is nothing more than the anticipation of his victim’s suicidal impulses.
One only has to wait for the FDIC to detonate beneath a floundering Republic. If anyone thought U.S. Treasury bonds are a riskless investment, think again. Am I suggesting the U.S. government will default on its obligations? In my opinion, no other outcome is imaginable. If you doubt this conclusion, try to imagine federal, state and local government paying off $10 trillion. It’s not going to happen, as the readiest method of default open to government is the debasement of the national currency. This means an end to American international power – financial and military. It means an end to the old international order, which has existed since 1945.
It means global revolution. Wave hello to socialism. >>
Well, said coinlieutenant,
So, in the end, the USA=France
A few years back I read Buchanan's Death of the West. He states we won the war on Marxism and communism militarily in the 1990's but have lost the war on social marxism that started over 100 years ago. New "people" have been created by the new elite occupying the institutions of TV, the arts, entertainment, and education. God is nearly dethroned and in my opinion Islamic extremism will accomplish this...when attacking Christianity and Judaism is free game to protect the state from the church. When the opposite is true. And don't dare to print satirical cartoons of Islam without an extremists wrath.
Political correctness is cultural marxism.
Vote for gold and vote often.
Ren
The five-year rally in emerging- market currencies is coming to an end
Knowledge is the enemy of fear
<< <i>Have you bought enough gold to buy your next piece of land, pay your mortgage payment, or your rent?
18 July 2008
By Jeff Clark
The long-awaited Mania stage in gold may be nigh. How can I make such a claim? After all, some have been screaming “It’s here! It’s here!”
I’ve got news for you... it’s already happening. The country of Vietnam is experiencing all of the inflation maladies... inflation is an incredible 27%, interest rates are over 8% (they rose 100 basis points in one swoop), the stock market was down every day in May, and unemployment has more than doubled (from 2% in ’07 to 5.1% in ’08).
And here’s the interesting part: how did the Vietnamese public react to all this? Did they dollar-cost average down on equities? How about real estate; that’s always a long-term winner, right? What about bonds? Maybe inflation-protected securities? Or did they just sit on cash? How about none of the above. The economic and monetary problems in their country have sent the Vietnamese fleeing to gold. And not gold stocks; gold bullion. Furthermore, they’re hoarding (and hiding) it from their government.
Hard figures on the size of the local gold trade aren’t available, but current estimates are that the public owns 16 million ounces, including 1.3 million ounces imported in the first quarter of 2008. Of this, only about 10% has been deposited into banks (which actually pay 2.5% interest on gold).
And the trend to gold is spilling into other financial areas. After a long period of quoting land prices in Vietnamese dong, landlords are now setting prices in gold in order to avoid the dong's devaluation.
My question to you is, what happens when Americans flee their currency, as the Vietnamese have? What happens when inflation isn’t just an annoyance but becomes lifestyle-altering, as in Vietnam?
What happens when the dollar loses so much value that the average citizen scrambles for a safe harbor for their money?
Over 50 countries are now experiencing double-digit price rises. Ukraine is now at 29%, and in the Gulf states inflation is out of control. Russia is at 15%, and India is close behind at 11%. China is on the cusp, at 7%. Interest rates are still below inflation rates in much of the emerging world.
The Gold Mania is nigh. In fact, our research shows this is the last summer you will be able to buy gold for 3 figures. Do you have enough? >>
Actually, this is not unusual in the Vietnamese culture. A manufacturing company I worked for in the '90's employed a lot of Vietnamese and Laotians, and it was typical for them to convert their earnings into gold jewelry.
The article implies that the Fed has a limitless supply of money. That is the main problem.
Here's how it works. If an institution borrows, say, $50 billion from the Fed, the Fed can just post a $50 billion credit to the bank's account at the Fed, and the borrower can spend that balance on whatever it wants. It is indeed as if the Fed created cash out of nothing.
And if the Fed somehow needed more than $800 billion of Treasury securities, it could buy them in the open market, and deposit the payment for them in the seller's Fed account. That way, the Fed could lay its hands on however many Treasury securities it needed.
Box of 20
Very bullish for gold.
"The current financial crisis over expected huge losses at Fannie Mae and Freddie Mac, two private companies that hold about half the real estate mortgages in the United States, may be the final event that persuades foreign investors and governments to stop lending to the U.S. government and private companies, and a resulting redirection of investments toward gold.
"Sovereign wealth funds that invested in U.S. banks have lost 30 to 50 percent of their investments in the space of six months, so they're becoming more cautious," said Nouriel Roubini, professor at the New York University Stern School of Business and head of Roubini Global Economics.
Sovereign wealth funds, established by Middle Eastern and Asian governments, control over $3 trillion in assets.
Last week, Kuwait authorities announced its sovereign wealth fund would no longer buy Fannie Mae or Freddie Mac debt. Instead, they will boost investments in stocks, bonds and real estate in China, India and Japan.
Also last week, Merrill Lynch warned that the Fannie Mae and Freddie Mac mortgage debacle could bring on a foreign financing crisis within months. The U.S. depends on Asian, Russian and Middle Eastern investors to fund much of the $700 billion trade deficit. With interest rates so low in the United States, Alex Patellis, the head of Merrill Lynch's international economics said, "Foreigners will not be willing to supply the capital."
Brian Bethune, chief financial economist at Global Insight warned that the U.S. Treasury had little time to put real money behind the rescue plan for Fannie Mae or Freddie Mac. He said, "This is not the time for policy-makers to underestimate, once again, the systemic risks to the financial system and the huge damage this would impose on the economy. Bold, aggressive action is needed, and needed now."
In total, about $1.5 trillion of Fannie Mae, Freddie Mac AAA-rated debt as well as other U.S. debt issued by government-sponsored enterprises is held in foreign hands. How long will these investors continue to absorb more losses before they bail out?
Last week, Hiroshi Watanabe, Japan's chief financial regulator, urged Japanese banks and life insurance companies to treat U.S. agency debt with caution, an extreme statement from a nation famous for comments being quite understated.
Rather than disgorge debt at what may be fire-sale prices, it would be more likely that foreign investors will stop buying new U.S. debt. Simply stopping the purchase of additional debt would be enough bring on a major financial crisis. Patellis said, "I don't see how the current situation can continue beyond six months."
Already, a rising percentage of the capital of sovereign wealth funds is being used to purchase gold. As these funds accumulate more assets, and less of it is used to invest in the United States, I expect the rate of gold purchases by these funds to accelerate, helping push up prices over the next year. "
to read
<< <i>I've been talking of the currency bubble for sometime. Currencies trade relative to each other. It will be interesting to see how this plays out. What will be the "safe haven" currency?
The five-year rally in emerging- market currencies is coming to an end >>
Inflation in some of these currencies will lead directly to equivalent
increases in commodities. This is starting to look like peak oil.
Price competition for resources will get intense if oil is a restraining
factor. But reduced oil will simultaneously suppress demand. Watch
for an explosion in new technology.
That's what T. Boone Pickins said today in front of a congressional panel regarding energy policy. He put it pretty plain and simple. He wants to get some ruling on oil tax (I think the windfall profits tax) so drillers can know what to expect; right now, this tax is changed every year so nobody is putting much money into renewable energy or exploration. He wants to drill ANWR also.
Here's his pitch...he wants a 10 year plan on US energy policy. He wants to use this ten years as a bridge to the next generation of energy, including wind, oil, nat gas, solar, etc. During that 10 years we would convert our cars to nat gas, use nat gas in our generating plants, and reduce our foreign oil consumption. He wants to use this 10 years to get the US to a point of being independent of foreign oil. He wants this 10 years to be a bridge to newer forms of energy from our current situation of importing foreign oil...I think he said $400 billion dollars a year that we are giving to people "...that don't particularly wish us well."
He's got a plan and he's working it. It's refreshing to finally see someone sensible explain it to congress in a way they can understand. I can't find the link to the congressional hearing, it seems to be disappeared or at least not in a place where I can find it. I listened to it live and it was pretty straight forward testimony and the panel was conspicuously impressed.
Here's one link I found.Pickins plan
but if it works for the country more power to him
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In 1936, Andrew Mellon, in his 80's wanted to establish a National Gallery. He had been spending millions on great works. He felt embarrassed in the 1920's when foreign dignitaries came to visit the US on official matters and wanted to be entertained and see the great art of America. But, there was no place like the Louvre, Britain's Gallery in America.
So, Mellon, quietly acquired great works and is accredited for the first to pay seven figures for a painting. He broke his intentions to FDR in late 1936. Mellon was dogged for bogus tax issues because "they" wanted to get at his art and was excited that the private sector would win a great victory for America. Mellon was so sincere about his "donation" to America that he did not want his name anywhere around the art or on the new marble building on the Washington Mall.
Also, the art would be displayed in a manner that was not snobbish...meaning in periods. They were originally displayed in alphabetical order. Most museums display their art in periods or by artists.
I would like to think that T. Boone Pickens may take note of Mellon. T. Boone Pickens may very well be out for himself but I would like to think when you're older than dirt it's time to pass on knowledge, wisdom and leadership to America.
Ren
How We have been Fooled into Believing
It's one of the most comprehensive, riveting histories I have ever seen.
I consider myself a pretty good student of History, so after watching this, all I remeber from High School and College, really clicked.
For yourself and your Family, you need to watch and learn.
Just the explanation of the demonetization of silver with the Coinage Act of 1873 is stunning!
Also called the Crime of 1873, it is where Congress suspended further production of silver dollars until the Morgans began in 1878. Only Silver Trade Dollars where made as European interests bribed and actually drafted us back to the Gold Standard. Start at 1:34:00 to see how the Money Supply was contracted!
No wild conspiracies, no Trilateral Commission BS, just facts and the truth of how it is.
You give it 15 Minutes and you will watch it all, I swear.
<< <i>t boone is looking out for t boone
but if it works for the country more power to him >>
T. Boone also said, "I'm 80 years old and have $4 billion. I dont need any more money."
He has given away hundreds of millions of dollars. I think he wants whats best for America. Probably moreso than the elected 500+ who work in Washington.
Knowledge is the enemy of fear
<< <i>I was enlightened by a link posted last week from this Board:
How We have been Fooled into Believing
It's one of the most comprehensive, riveting histories I have ever seen.
I consider myself a pretty good student of History, so after watching this, all I remeber from High School and College, really clicked.
For yourself and your Family, you need to watch and learn.
Just the explanation of the demonetization of silver with the Coinage Act of 1873 is stunning!
Also called the Crime of 1873, it is where Congress suspended further production of silver dollars until the Morgans began in 1878. Only Silver Trade Dollars where made as European interests bribed and actually drafted us back to the Gold Standard. Start at 1:34:00 to see how the Money Supply was contracted!
No wild conspiracies, no Trilateral Commission BS, just facts and the truth of how it is.
You give it 15 Minutes and you will watch it all, I swear. >>
The video is dated. Does anyone know when this was created? Still, what a great piece of consolidated history on banking. Conspiracy theorists beware.
Ren
<< <i>
<< <i>I was enlightened by a link posted last week from this Board:
How We have been Fooled into Believing
It's one of the most comprehensive, riveting histories I have ever seen.
I consider myself a pretty good student of History, so after watching this, all I remeber from High School and College, really clicked.
For yourself and your Family, you need to watch and learn.
Just the explanation of the demonetization of silver with the Coinage Act of 1873 is stunning!
Also called the Crime of 1873, it is where Congress suspended further production of silver dollars until the Morgans began in 1878. Only Silver Trade Dollars where made as European interests bribed and actually drafted us back to the Gold Standard. Start at 1:34:00 to see how the Money Supply was contracted!
No wild conspiracies, no Trilateral Commission BS, just facts and the truth of how it is.
You give it 15 Minutes and you will watch it all, I swear. >>
The video is dated. Does anyone know when this was created? Still, what a great piece of consolidated history on banking. Conspiracy theorists beware.
Ren >>
I listened to about half an hour before technical problems interfered.
It was apparently 1995.
History never goes out of date, it only gets repeated by the ignorant.
If you do anything, pick it up at 1:34:00, like I said and give it 15 minutes of your time. you won't stop at 15 minutes, I guarantee it.
I've read "The Forgotten Man" twice and it is no where near this film in terms of explaining the Macro side of monetary policy.
stage that has been ongoing since 1913. Inflation
is the hidden tax that governments are afraid to impose.
This hidden tax steals the wealth of the working folks and
transfers it to the uber rich. We are doomed to repeat history,
because we have failed to learn from history.
Camelot
but it might be too late...........to do any good, fellow slave.
It is very hard to accept that I've had the shackels on since birth and until now, despite an expensive education I was never taught anything but the "party line" ....I must educate my young ones...
I don't pay much attention to what T. Boone says after his public call about oil going down right before it took off for new heights. I rate his calls on the order of say a Goldman Sachs. Just do the opposite of what they say in public. Hank Paulson was trained well.
The article implies that the Fed has a limitless supply of money. That is the main problem.
In fact they do have "limitless" money in the way they are continuing to roll over hundreds of billion dollars in repos. They also can create any amount of money electronically that they wish. For these types of give-aways they are not getting congressional authorization as they working "within new interpretations of existing guidelines." Following the BSC sale, the FED's bag of tricks is only getting bigger...all legal of course though!
roadrunner
You betcha High Tech is going to return and it will be in the green! I would imagine that with what is left of the automobile manufacturing , they are retooling as we speak! Bring on the propane!
When all this is said and done, it shows why we will remain the leader of the world, it is because we take a problem and we deal with it....we are inovators and make due with what we have...We are the YOUNGEST NATION on the Face of the Earth....and We are Americans and will take nothing and make something great, we have our Forefathers blood in our veins!
I Vote PICKENS FOR PRESIDENT!
One thing I wonder about in reading this thread is, why Bernanke would WANT to create run away inflation? Is he a gold bug in disguise? Is he trying to kill the currency...No, I don't think so. Now the administrations policy is another thing entirely, IMHO. and have wanted and pursued a weaker dollar, at least , untill recently. For all the history buffs out there, what happend to Gold after the 1000 banks failed in 1990 and the RTC had to step in, to help with a MASSIVE bail out? Was that a horrible thing? Did the RTC Bail out ruin the economy in 1990 and for the next number of years? Wasn't the dollar stronger for the next 10 plus years AFTER the MASSIVE bailout?
As gold Bugs or PM bugs, it seems a few of you continue to think that more bank failures, resulting in rash behavior, by panicking and pulliing assets out of insured accounts and a further weakening(contracting) economy is good for gold, The reality is, as some of you realise, less bank failures are good for gold,(moral hazard) less panick is good for gold. Before the banks started their vicious rally, I have never seen such fear mongering by some, and I witnessed first hand, an RTC bailout. It is that kind of irrational fear and panic that creates the opposite effect almost everytime, as it certainly did this time. In looking at markets one of the most valuable things I have learned over time, is watch the fear indicators...put/call..Vix, short interest and my favorite, investors intelligence.(oxymoron) When put all together they provide great insight into the psychological underpinnings of many markets......and of course they are ALL contrary indicators....food for thought. So when you witness a few of the die hard PM bugs throw in the towel by choice or by neccessity, it most likely will be time for the next up leg, in the metals.
So maybe the real conspiracy is... fallable human emotion, that when conviced of something, it usuallly turns out to be wrong
<< <i>It's 1996, but don't let that fool you.
History never goes out of date, it only gets repeated by the ignorant.
If you do anything, pick it up at 1:34:00, like I said and give it 15 minutes of your time. you won't stop at 15 minutes, I guarantee it.
I've read "The Forgotten Man" twice and it is no where near this film in terms of explaining the Macro side of monetary policy. >>
COINBOY, have you read "Liberal Fascism"? I finished this book about six months ago and while I was reading it in public, the cover and title turned a few heads in the coffee shops.
Ren
The horror, the horror.
Having known a couple of Texas wildcatters done good (they're all about 80 or so now), they have some peculiar personality traits. One thing they do is they study their butts off, they are very well read, they are very astute; to them, knowledge is not only power, it is a minimum requirement and the better the information, the more they like it and they are tireless in their pursuit. Another trait is that they are absolutely fearless, they will put everything they have on the line if they think they are right and they will win or lose by their own wit and all of them have lost at one time or another. Some survive the loss, some don't. They will live in the west Texas desert, without their families, for months and months in a trailer surrounded by rattlesnakes and coyotes if need be, just to pour a few million dollars of their personal money into a hole in the ground and come up with nothing but rock and then go up a little more to the north and do it again. People like T. Boone are the last of a dying breed, most of them are gone so enjoy the last of them, there won't be another group like this ever.
So when T. Boone tells ya' that he's 80 years old and has 4 Billion dollars and doesn't need the money, believe it and listen to what he tells you because he is no fool and he has no game and that's not just an attitude, that's his life.
Edited to update: I find it just amazing that every bozo that can get press comes out and yells "Hey, he's going to make money" when they talk about T. Boone's plan. Then they say "hey, its expensive." Geezzz, and to think that we grow these bright fellas right here in the US. We have come to a pitiful place in time...just read this article. Our best and brightest