Practically a whole generation has been trained to think that gold is outdated and that the stock market and bond market "put money to work". The old saw, "gold doesn't pay any interest" has been used for decades to attack gold ownership.
There must be underlying value for any investment to prove its worth. Gold doesn't have to prove anything - it is what it is. A stock certificate requires some research and it requires staying informed of company performance. T-Bills and the dollar require fiscal responsibility by politicians in Washington in order to maintain value.
'nuf said.
Q: Are You Printing Money? Bernanke: Not Literally
Citi is claiming foul over wells fargo getting wachovia...claims that they were supposed to get it and they are saying that what wells fargo did was illegal.
This is laughable. Citi hasn't turned a profit in 3 quarters and was going to use bail out money to get wachovia but wells fargo bought it with their own money and citi calls foul...pretty funny.
Citi is claiming foul over wells fargo getting wachovia...claims that they were supposed to get it and they are saying that what wells fargo did was illegal.
This is laughable. Citi hasn't turned a profit in 3 quarters and was going to use bail out money to get wachovia but wells fargo bought it with their own money and citi calls foul...pretty funny.
<< <i>Even with gold muddling along people are having trouble getting 1-oz gold coins without a substantial premium to spot (ie a paper vs. physical price disconnect). Many people want to be silver buyers but can't find 1-100 oz silver anywhere near melt. >>
During times of concern over the viability of financial institutions and business revenues (equity values) people will seek to shift their money to a secure asset. That is why T-Bill rates have plummeted and the dollars has soared. The little guy who pays a big premium for gold or silver is apt to lose that premium and more when the financial liquidity crisis subsides or if the economy continues on a deflationary course. Those who put their money into T-Bills at minimal yields are paying no premium, get at least some yield, and have their principal protected. But perhaps more significantly from a macro view point, investors and big institutions who were the ones parking dollars in T-Bills knew that there simply is not enough gold to go around to cover their needs. Had they bought gold they would have driven the price up so high that they would have lost their shirts getting out. In other words, as liquid as gold may be it is not sufficiently liquid to be a viable financial asset on a large scale today. That is why the world dropped the gold standard in the first place.
A timely article by Dr. Fekete and one of dozens he has put out over the past 4 years. He explains that capital destruction over the past 28 years while interest rates have lowered is the cause of the current credit crisis. An interesting view. Basically the banks screwed up and didn't see this coming. As interest rates have dropped streadily since 1980-1981 the cost of buying back debt has increased....now to the point where these derivative-laden schmucks cannot serivce the debt.
Fekete notes that gold does indeed pay interest just like any other earning asset via gold lease rates. He feels that the only way out for the banks at this point is to relink to gold.
Honolulu Dude's link above is a good read on the U.S.S. Bailout. The fact that the FED has already tossed 1.4$ TRILL down the rat hole in the past weeks and things have only worsened, should tell US taxpayers what they should expect to get for their $700 BILL bailout.
I would agree with the Smirking Chimp that this bill appears designed to buy off the toxic debt (at inflated prices) that the remaining banks have swallowed up in their recent "patriotic" buying binges of broken bank "assets" including that of foreign nations such as China, Japan, UK, Germany, etc.
Well, at least the bailout will get me $20 credits if I bicycle to work. Time to dust off the old Raleigh. Hats off to whichever Senator came up with that gem.
Does anybone know why government needed our permission to spend/print this 700Billion but they didnt need our permission to inject 630 billion into the economy last week?? A stupid mind would like to know
Does anybone know why government needed our permission to spend/print this 700Billion but they didnt need our permission to inject 630 billion into the economy last week??
It occurs to me that this $700 Billion is earmarked to relieve/purchase the bad debts for Freddie and Fannie so that they can continue to function.
The other $630 Billions weren't earmarked for anything other than a "liquidity injection" into the black hole, whoops - I mean the credit markets.
That's my best guess about the distinction. One's an earmarked budget item and the other isn't. I think that the Fed can create money up to the point at which the ceiling on the National Debt has to be legislated, which it was, last week.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i> He explains that capital destruction over the past 28 years while interest rates have lowered is the cause of the current credit crisis. An interesting view. Basically the banks screwed up and didn't see this coming. As interest rates have dropped streadily since 1980-1981 the cost of buying back debt has increased >>
Actually he did not explain anything. He just made this naked statement without foundation or explanation. In reality, to the extent a loan can be repaid without a prepayment premium, his statement is not even correct. And even if a prepayment premium is required, the payment comes from the borrower not the bank, and merely requires the borrower to borrow more from the new lender to pay back the old loan. Any borrower who cannot borrow enough to prepay a high interest loan is just stuck with that loan—it does not “cost” the banking system anything.
Now we could talk about his gold share capitalization of the banks, but why bother. It ignores the lid that would be placed on bank capital and the resulting contraction of credit and capital. Moreover, he talks about the banks paying a dividend of gold out of capital with no corresponding source of gold income, so they would be constantly depleting their capital.
I believe the uses for the $700B was expanded beyond "mortgage land" to include any bad debt the Treasury Secretary deemed unfit for the US taxpayer to own.....and there ideal for him/her. If Hank wants to buy distressed pork belly swaps he is free to do so. If he wants to buy distressed bicycle company stocks so all members of Congress can get a cheap bike to earn the $20 credit, he can do that too.
Actually he did not explain anything. He just made this naked statement without foundation or explanation. In reality, to the extent a loan can be repaid without a prepayment premium, his statement is not even correct. And even if a prepayment premium is required, the payment comes from the borrower not the bank, and merely requires the borrower to borrow more from the new lender to pay back the old loan. Any borrower who cannot borrow enough to prepay a high interest loan is just stuck with that loan—it does not “cost” the banking system anything.
Here, Rob links up Clinton, Rubin, and JPM in 1995-1996 as they initiated the first take down of gold while they manipulated interest rates downward. In other words they started off the housing boom by artificially messing with interest rates. Fascinating detective work on how interest rate derivatives helped to suck up market mechanisms such as bonds that would normally flag these symptoms. And there's old JPM increasing their interest rate derivatives at the same time by $2 TRILLION - or nearly a 20% increase of their total holdings at the time.
From Peter Schiff:
In fact, the Senate version of the bailout bill, which authorizes a suspension of mark- to-market, also increases the dollar limit on FDIC insured deposits from $100,000 to $250,000 (with no extra money budgeted to fund the increased taxpayer liability). Only in Washington would a bill pass which simultaneous makes banks more likely to fail while increasing taxpayer exposure when they do!
Joflax, I think that they have to raise the debt ceiling for both. The difference between the two money injections is that one is specifically earmarked for the mortgage bailout and the other is general liquidity for the all-purpose Fed window. That's my interpretation.
Q: Are You Printing Money? Bernanke: Not Literally
MARKET FORCE ANALYSIS OCTOBER 3, 2008 By Adrian Douglas
This is a mini-flash as the Market Force Analysis for gold is indicating a strong buy condition.
GOLD $830: The MFA for gold has reached the lower support line. A very strong upleg will be launched here which will be a continuation of the leg started from the $740 low (as previously identified in my Flash Alert of September 11). In 7 years the MFA reaching lower support has never failed to be a good buy point. I doubt it will be any different this time! .... Good to know.
<< <i>I believe the uses for the $700B was expanded beyond "mortgage land" to include any bad debt the Treasury Secretary deemed unfit for the US taxpayer to own.....and there ideal for him/her. If Hank wants to buy distressed pork belly swaps he is free to do so. If he wants to buy distressed bicycle company stocks so all members of Congress can get a cheap bike to earn the $20 credit, he can do that too.
Actually he did not explain anything. He just made this naked statement without foundation or explanation. In reality, to the extent a loan can be repaid without a prepayment premium, his statement is not even correct. And even if a prepayment premium is required, the payment comes from the borrower not the bank, and merely requires the borrower to borrow more from the new lender to pay back the old loan. Any borrower who cannot borrow enough to prepay a high interest loan is just stuck with that loan—it does not “cost” the banking system anything.
Thank you Dr. CalGold.
roadrunner >>
And now.... that $700 Billion may be used to bail out California. It was on the news tonight..... Arnold Schwartzenegger is planning to ask the Fed for $7 billion or they may have to ..... gasp..... cut services!
Katie bar the door. No telling what that money will be used for. And the ink isn't even dried on the bill after Bush signed it......
Does anyone know what cohodk's charts are supposed to mean? All I see are lots of pretty blue lines. Nearest I can tell it is a 6 month prediction of $850 Gold.
Mark Piersall Random Collector www.marksmedals.com
Does anyone know what cohodk's charts are supposed to mean? All I see are lots of pretty blue lines. Nearest I can tell it is a 6 month prediction of $850 Gold.
Mark Piersall Random Collector www.marksmedals.com
I suppose we will now have to find someone else to blame for all the problems that face our economy. Wall Street is GONE, “Lehman Brothers and Bear Stearns have gone up in smoke. Merrill Lynch has been consumed. Morgan Stanley and Goldman Sachs have been turned into high street banks”
Perhaps it is time to place the blame where it always belonged, BIG GOVERNMENT! Can we now please have term limits for congress? Lets get this campaign started right here!
The news media is finally getting around to blaming individual congress folks, perhaps more of this is to come as we finally wind down this countries great financial experiment.
545 PEOPLE By Charlie Reese
“It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted - by present facts - of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red.
If the Army & Marines are in IRAQ , it's because they want them in IRAQ .
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.”
I think you have blame everyone whole has lived beyond their means. This includes individuals, corporations, and local, state and federal govt. There should also be no such thing as a "career" politician. Hopefully the recent uproar we have heard from the citizenry will result in record voter turnout and all incumbants will be voted out. If we want to send a message, then lets put politicians in the unemployment line.
I've been in favor of throwing the bums out for so long that at one time I supported the TBO party (yes Virginia, there was a real TBO party at one time...at least around here). But changing out one or two politicians doesn't do anything.
As far as Cohodk's charts go, they can mean literally anything. If there were just one interpretation then all the bets would be to one side and there would be no market. The fact that full time "experts" on both sides of the fence make handsome livings giving diff interpretations of said charts speaks volume of the accuracy of investing by charting only. What those charts mean to me will be different from anyone else here. I see a consolidation pennant continue to meander. And there are multiple pennants there as well (short term, long term, etc). Whose to say which one we are on. There are also multiple up channels as well, anyone of which could be the "right" one. The most conservative of those uptrends gives gold a bottom base of $550. But all bets are off when the FED/PPT decides to "intervene" for the good of the economy. That can change all those trends instantly and nullify the best chartist in the world. My take is we eventually break up out of one of the pennants. I'd be interested in cohodk's interpretation because I too do not see the point of telling us the chart is "saying quite a bit." It could be or it couldn't be.
A final option could be that gold has reached it's final multiple tops and will meander back to $260 to become a barbarous relic once again. While that may not be a highly probable option, it is not outside the realm of impossibility. All I know is that generic slabbed $20 gold (MS61-64) has experienced a massive demand increase all of a sudden to place these at levels higher than the $1033 peak. This while gold has fallen further to $830 as well. Has plastic gold mania replaced tulips?
Feels like it should be just short of 900 as a kind of base line. I'm liking the charts. It could spike higher or fall lower but methinks we're working with a mean of about 890 or so. There is a palpable downside risk just because when there is chaos in the market place then things happen that you can't account for at first glance, it requires time to understand why things happen in the chaotic environment. If the market for metal acts rational ie. responds to demand in real time with spot and supply in relative harmony then 890 with spikes into the 9's. That money is fickle, if the market takes root and a concensus of a bottom seems to be found than that money that was in metal will flee to the equities and we will be left right where we were, still high 8's but if people get really spooked then we could maybe assault that magical 1200 mark. People call the metals very volitile but looking at the 500-700 swings in the now falling 10300 dow, a good argument could be that gold is quite stable if you can accept that it acts within a range.
My argument is still for dumping extra cash into metal as an acumulation strategy, buying when the opportunity and situation presents itself but just accumulating relative to your available resources. Of course the obverse is also true that when there are up spikes, it is never a bad time to take a 20% profit. After a few years of accumulation, you will have a stockpile that you can add to or sell from, depending on your disposition.
Term limits are the ONLY way to go IMO. I know the argument has always been that... it takes several re-elections before the elected official can become 'experienced' enough to serve his people effectively. Actually, what this means, is that it takes several re-elections for the elected official to learn how to effectively use the system for his own benefit and profit. They then forget who they truly work for.
The only problem with term limits..... If the elected official knows that they will have to leave after X number of years, they may not care one bit about what the people they represent want. And thus will band together and pass legislation, accept payoffs, etc., to their hearts content. What would they care? They won't be back....
So there is no easy answer. Perhaps there needs to be an easier way to recall and get rid of an elected official...
The congress just turn over 700 Billion tax dollars to the very guy who started all this mess. Thanks congress for doing your homework once again!!
New York Times By STEPHEN LABATON Published: October 2, 2008
On that bright spring afternoon on April 28th 2004 , the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
There were five investment banks that led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told — those with assets greater than $5 billion.
“We’ve said these are the big guys,” Mr. Goldschmid said, provoking nervous laughter, “but that means if anything goes wrong, it’s going to be an awfully big mess.”
After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.
Things You’ll Never Read… AP. “Addendum to House Bill on the $700 billion Bail Out
Added to the house bill was a clause that amends IRS regulations to retroactively tax officers of the 700 financial companies as follows. Any income derived from salary and sale of company shares at inflated market prices that were based on falsely booked profits from dubious loan activity from 2003 onward, shall be retroactively taxed by the government at a rate of 90%. Those individuals unable to come up with the tax money due to the retroactive nature of the tax shall be given the opportunity of a government loan to cover the tax which shall be paid back at variable rates over 10 a year period.”
This should be interesting. Citi has lost money for 3 straight quarters and needs wachovias cash deposits to stay alive but to buy wachovia, citi has to borrow money from the fed. Now we have wells fargo that has the money and opts to buy wachovia. So we have a sick bank that will have to borrow money to do the deal and a well bank that can just buy it. FDIC will blink here because the deal to borrow money from the already stressed FDIC to do the deal will draw onsiderable interest. We could possibly see citi swallowed up and broken up by suitors if it can't do the deal AND get FDIC money in the process. Oh well, this should be entertaining. It's actually laughable that citi will sue wf so they can borrow money from the FDIC to buy deposits so they can stay alive while wf will be healthy regardless of the outcome. Citi might go the way of the others...whoda thunkit.
What it means to me is that if your a chart guy you might be screwed just like right after the Y2K crash of the market. We have leadership right now that doesn't know what will happen if they act or fail to act on a bill. Right now I'd bet PM's or keep my powder dry. This isn't the time to press for a major profit but protect. Will it be claim, a natural act, an attach, more off book new? Who knows be the odds are in your favor to bet the market or any fiat at this point. This is where all the black boxes in all the brokerages won't be able to stop what maybe ahead.
I'd say don't bet the farm on PM's but have enough that you have some insurance. It's best to have stocks, bonds, money market, and PM's at this point for anyone that telling you they know by any stable time measure is a fool IMO. Each one of us need to figure out their confort level but no one will hit a home run unless they are foolish and put most of their eggs in one basket.
I'd say don't bet the farm on PM's but have enough that you have some insurance. It's best to have stocks, bonds, money market, and PM's at this point for anyone that telling you they know by any stable time measure is a fool IMO. Each one of us need to figure out their confort level but no one will hit a home run unless they are foolish and put most of their eggs in one basket. >>
Agreed, make sure to have a good mix of silver and gold in addition to other investments, not in substitute of other investments. Easy way to get burned...
Shorting Citi, Wells Fargo, GS, JPM, BoA, UBS, HSBC, and any other major bank at this point is a good strategy. None of them have repaired their balance sheets and only more toxicity will drift to the surface as time goes on.
<< <i>Shorting Citi, Wells Fargo, GS, JPM, BoA, UBS, HBC, HSBC, and any other major bank at this point is a good strategy. None of them have repaired their balance sheets and only more toxicity will drift to the surface as time goes on.
roadrunner >>
that would seem the 'logical' play, but just wait for the opposite to happen
Fortis is similar to our Countrywide, which BoA now owns.
If the Euro weakens and the dollar strengthens on this news, paper gold will likely drop. What happens to physical remains to be seen. But in my mind physical gold should not be affected.
If they would have taken 20% of their savings from the nineties and diversified by purchasing Gold at 250.00 -280.00 range in 2000/2001, they would have been in the sweet spot . Speaking to the comment "nothing to invest in".
GOLD! GOLD!! GOLD!!! he yelled as he walked the streets of San Francisco...... and he made his big money off the shovels, picks and other dry goods. Diversification.
NumbersUsa, FairUs, Alipac, CapsWeb, and TeamAmericaPac
the dollar over 80 on the index will be "a relic" soon >>
In Japan, after their 1989 stock market crash from approx. 39,000, their Central Bank set interest rates near zero through most of the 1990's.
Zero rates failed to stop deflation
There was nothing for the average Japanese to invest in so they just saved with no returns on their money.
Their government also subsidize failing banks and businesses.
Their bubbles were stocks and real estate.
Nearly twenty years later the Nikkei is 11,000 up from 7,500 in 2003.
How many have twenty years or less until retirement? Exactly!
It's one big "crap-sandwich" as a Senator said last week about the US bailout.
I think the Japanese "depression" bears a little studying.
Ren >>
There are many things in the US like the Japanese situation in 1989. But the Japanese situation bubbled for almost 20 years prior to their economic demise, ours is less than half that. Not that our government hasn't done many similar things but Japan's gov't made it virtually impossible for their banking system to disclose their liquidity problems.
While the problem is dire, its still very different. Times are going to be hard but since things are much more global may make things a bit easier. As goes the US economy, so goes the global economy. This should force major countries into working to solve the problems.
Comments
There must be underlying value for any investment to prove its worth. Gold doesn't have to prove anything - it is what it is. A stock certificate requires some research and it requires staying informed of company performance. T-Bills and the dollar require fiscal responsibility by politicians in Washington in order to maintain value.
'nuf said.
I knew it would happen.
Citi is claiming foul over wells fargo getting wachovia...claims that they were supposed to get it and they are saying that what wells fargo did was illegal.
This is laughable. Citi hasn't turned a profit in 3 quarters and was going to use bail out money to get wachovia but wells fargo bought it with their own money and citi calls foul...pretty funny.
Citi is claiming foul over wells fargo getting wachovia...claims that they were supposed to get it and they are saying that what wells fargo did was illegal.
This is laughable. Citi hasn't turned a profit in 3 quarters and was going to use bail out money to get wachovia but wells fargo bought it with their own money and citi calls foul...pretty funny.
<< <i>Even with gold muddling along people are having trouble getting 1-oz gold coins without a substantial premium to spot (ie a paper vs. physical price disconnect). Many people want to be silver buyers but can't find 1-100 oz silver anywhere near melt. >>
During times of concern over the viability of financial institutions and business revenues (equity values) people will seek to shift their money to a secure asset. That is why T-Bill rates have plummeted and the dollars has soared. The little guy who pays a big premium for gold or silver is apt to lose that premium and more when the financial liquidity crisis subsides or if the economy continues on a deflationary course. Those who put their money into T-Bills at minimal yields are paying no premium, get at least some yield, and have their principal protected. But perhaps more significantly from a macro view point, investors and big institutions who were the ones parking dollars in T-Bills knew that there simply is not enough gold to go around to cover their needs. Had they bought gold they would have driven the price up so high that they would have lost their shirts getting out. In other words, as liquid as gold may be it is not sufficiently liquid to be a viable financial asset on a large scale today. That is why the world dropped the gold standard in the first place.
CG
A timely article by Dr. Fekete and one of dozens he has put out over the past 4 years. He explains that capital destruction over the past 28 years while interest rates have lowered is the cause of the current credit crisis. An interesting view. Basically the banks screwed up and didn't see this coming. As interest rates have dropped streadily since 1980-1981 the cost of buying back debt has increased....now to the point where these derivative-laden schmucks cannot serivce the debt.
Fekete notes that gold does indeed pay interest just like any other earning asset via gold lease rates. He feels that the only way out for the banks at this point is to relink to gold.
roadrunner
I would agree with the Smirking Chimp that this bill appears designed to buy off the toxic debt (at inflated prices) that the remaining banks have swallowed up in their recent "patriotic" buying binges of broken bank "assets" including that of foreign nations such as China, Japan, UK, Germany, etc.
Well, at least the bailout will get me $20 credits if I bicycle to work. Time to dust off the old Raleigh. Hats off to whichever Senator came up with that gem.
roadrunner
but where to buy physical????
what about those kitco pools?
A stupid mind would like to know
It occurs to me that this $700 Billion is earmarked to relieve/purchase the bad debts for Freddie and Fannie so that they can continue to function.
The other $630 Billions weren't earmarked for anything other than a "liquidity injection" into the black hole, whoops - I mean the credit markets.
That's my best guess about the distinction. One's an earmarked budget item and the other isn't. I think that the Fed can create money up to the point at which the ceiling on the National Debt has to be legislated, which it was, last week.
I knew it would happen.
I thought they raised the debt ceiling to accomodate the 700B not the 630 B
<< <i> He explains that capital destruction over the past 28 years while interest rates have lowered is the cause of the current credit crisis. An interesting view. Basically the banks screwed up and didn't see this coming. As interest rates have dropped streadily since 1980-1981 the cost of buying back debt has increased >>
Actually he did not explain anything. He just made this naked statement without foundation or explanation. In reality, to the extent a loan can be repaid without a prepayment premium, his statement is not even correct. And even if a prepayment premium is required, the payment comes from the borrower not the bank, and merely requires the borrower to borrow more from the new lender to pay back the old loan. Any borrower who cannot borrow enough to prepay a high interest loan is just stuck with that loan—it does not “cost” the banking system anything.
Now we could talk about his gold share capitalization of the banks, but why bother. It ignores the lid that would be placed on bank capital and the resulting contraction of credit and capital. Moreover, he talks about the banks paying a dividend of gold out of capital with no corresponding source of gold income, so they would be constantly depleting their capital.
CG
Actually he did not explain anything. He just made this naked statement without foundation or explanation. In reality, to the extent a loan can be repaid without a prepayment premium, his statement is not even correct. And even if a prepayment premium is required, the payment comes from the borrower not the bank, and merely requires the borrower to borrow more from the new lender to pay back the old loan. Any borrower who cannot borrow enough to prepay a high interest loan is just stuck with that loan—it does not “cost” the banking system anything.
Thank you Dr. CalGold.
roadrunner
Here, Rob links up Clinton, Rubin, and JPM in 1995-1996 as they initiated the first take down of gold while they manipulated interest rates downward. In other words they started off the housing boom by artificially messing with interest rates. Fascinating detective work on how interest rate derivatives helped to suck up market mechanisms such as bonds that would normally flag these symptoms. And there's old JPM increasing their interest rate derivatives at the same time by $2 TRILLION - or nearly a 20% increase of their total holdings at the time.
From Peter Schiff:
In fact, the Senate version of the bailout bill, which authorizes a suspension of mark- to-market, also increases the dollar limit on FDIC insured deposits from $100,000 to $250,000 (with no extra money budgeted to fund the increased taxpayer liability). Only in Washington would a bill pass which simultaneous makes banks more likely to fail while increasing taxpayer exposure when they do!
roadrunner
I knew it would happen.
OCTOBER 3, 2008
By Adrian Douglas
This is a mini-flash as the Market Force Analysis for gold is indicating a strong buy condition.
GOLD $830: The MFA for gold has reached the lower support line. A very strong upleg will be launched here which will be a continuation of the leg started from the $740 low (as previously identified in my Flash Alert of September 11). In 7 years the MFA reaching lower support has never failed to be a good buy point. I doubt it will be
any different this time! .... Good to know.
roadrunner
<< <i>I believe the uses for the $700B was expanded beyond "mortgage land" to include any bad debt the Treasury Secretary deemed unfit for the US taxpayer to own.....and there ideal for him/her. If Hank wants to buy distressed pork belly swaps he is free to do so. If he wants to buy distressed bicycle company stocks so all members of Congress can get a cheap bike to earn the $20 credit, he can do that too.
Actually he did not explain anything. He just made this naked statement without foundation or explanation. In reality, to the extent a loan can be repaid without a prepayment premium, his statement is not even correct. And even if a prepayment premium is required, the payment comes from the borrower not the bank, and merely requires the borrower to borrow more from the new lender to pay back the old loan. Any borrower who cannot borrow enough to prepay a high interest loan is just stuck with that loan—it does not “cost” the banking system anything.
Thank you Dr. CalGold.
roadrunner >>
And now.... that $700 Billion may be used to bail out California. It was on the news tonight..... Arnold Schwartzenegger is planning to ask the Fed for $7 billion or they may have to ..... gasp..... cut services!
Katie bar the door. No telling what that money will be used for. And the ink isn't even dried on the bill after Bush signed it......
WTF....... it's only money.....
CalBAILOUT
Knowledge is the enemy of fear
Nearest I can tell it is a 6 month prediction of $850 Gold.
Random Collector
www.marksmedals.com
Knowledge is the enemy of fear
Nearest I can tell it is a 6 month prediction of $850 Gold.
Random Collector
www.marksmedals.com
I suppose we will now have to find someone else to blame for all the problems that face our economy. Wall Street is GONE, “Lehman Brothers and Bear Stearns have gone up in smoke. Merrill Lynch has been consumed. Morgan Stanley and Goldman Sachs have been turned into high street banks”
Perhaps it is time to place the blame where it always belonged, BIG GOVERNMENT!
Can we now please have term limits for congress?
Lets get this campaign started right here!
The news media is finally getting around to blaming individual congress folks, perhaps more of this is to come as we finally wind down this countries great financial experiment.
545 PEOPLE
By Charlie Reese
“It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted - by present facts - of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red.
If the Army & Marines are in IRAQ , it's because they want them in IRAQ .
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.”
I think you have blame everyone whole has lived beyond their means. This includes individuals, corporations, and local, state and federal govt. There should also be no such thing as a "career" politician. Hopefully the recent uproar we have heard from the citizenry will result in record voter turnout and all incumbants will be voted out. If we want to send a message, then lets put politicians in the unemployment line.
Knowledge is the enemy of fear
As far as Cohodk's charts go, they can mean literally anything. If there were just one interpretation then all the bets would be to one side and there would be no market. The fact that full time "experts" on both sides of the fence make handsome livings giving diff interpretations of said charts speaks volume of the accuracy of investing by charting only. What those charts mean to me will be different from anyone else here. I see a consolidation pennant continue to meander. And there are multiple pennants there as well (short term, long term, etc). Whose to say which one we are on. There are also multiple up channels as well, anyone of which could be the "right" one. The most conservative of those uptrends gives gold a bottom base of $550. But all bets are off when the FED/PPT decides to "intervene" for the good of the economy. That can change all those trends instantly and nullify the best chartist in the world. My take is we eventually break up out of one of the pennants. I'd be interested in cohodk's interpretation because I too do not see the point of telling us the chart is "saying quite a bit."
It could be or it couldn't be.
A final option could be that gold has reached it's final multiple tops and will meander back to $260 to become a barbarous relic once again. While that may not be a highly probable option, it is not outside the realm of impossibility. All I know is that generic slabbed $20 gold (MS61-64) has experienced a massive demand increase all of a sudden to place these at levels higher than the $1033 peak. This while gold has fallen further to $830 as well. Has plastic gold mania replaced tulips?
roadrunner
My argument is still for dumping extra cash into metal as an acumulation strategy, buying when the opportunity and situation presents itself but just accumulating relative to your available resources. Of course the obverse is also true that when there are up spikes, it is never a bad time to take a 20% profit. After a few years of accumulation, you will have a stockpile that you can add to or sell from, depending on your disposition.
JMHO
The only problem with term limits..... If the elected official knows that they will have to leave after X number of years, they may not care one bit about what the people they represent want. And thus will band together and pass legislation, accept payoffs, etc., to their hearts content. What would they care? They won't be back....
So there is no easy answer. Perhaps there needs to be an easier way to recall and get rid of an elected official...
The congress just turn over 700 Billion tax dollars to the very guy who started all this mess. Thanks congress for doing your homework once again!!
New York Times
By STEPHEN LABATON
Published: October 2, 2008
On that bright spring afternoon on April 28th 2004 , the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
There were five investment banks that led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told — those with assets greater than $5 billion.
“We’ve said these are the big guys,” Mr. Goldschmid said, provoking nervous laughter, “but that means if anything goes wrong, it’s going to be an awfully big mess.”
After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.
Things You’ll Never Read…
AP. “Addendum to House Bill on the $700 billion Bail Out
Added to the house bill was a clause that amends IRS regulations to
retroactively tax officers of the 700 financial companies as follows. Any
income derived from salary and sale of company shares at inflated market
prices that were based on falsely booked profits from dubious loan activity
from 2003 onward, shall be retroactively taxed by the government at a rate
of 90%. Those individuals unable to come up with the tax money due to the
retroactive nature of the tax shall be given the opportunity of a government
loan to cover the tax which shall be paid back at variable rates over 10 a
year period.”
JMHO
Next weeks entertainment between citi and wells fargo
I'd say don't bet the farm on PM's but have enough that you have some insurance. It's best to have stocks, bonds, money market, and PM's at this point for anyone that telling you they know by any stable time measure is a fool IMO. Each one of us need to figure out their confort level but no one will hit a home run unless they are foolish and put most of their eggs in one basket.
<< <i>
I'd say don't bet the farm on PM's but have enough that you have some insurance. It's best to have stocks, bonds, money market, and PM's at this point for anyone that telling you they know by any stable time measure is a fool IMO. Each one of us need to figure out their confort level but no one will hit a home run unless they are foolish and put most of their eggs in one basket. >>
Agreed, make sure to have a good mix of silver and gold in addition to other investments, not in substitute of other investments. Easy way to get burned...
Michael Kittle Rare Coins --- 1908-S Indian Head Cent Grading Set --- No. 1 1909 Mint Set --- Kittlecoins on Facebook --- Long Beach Table 448
roadrunner
<< <i>Shorting Citi, Wells Fargo, GS, JPM, BoA, UBS, HBC, HSBC, and any other major bank at this point is a good strategy. None of them have repaired their balance sheets and only more toxicity will drift to the surface as time goes on.
roadrunner >>
that would seem the 'logical' play, but just wait for the opposite to happen
Hypo Real Estate Rescue at Risk as Banks Withdraw Their Support
and this
Belgium Is Exploring `All Methods' for Fortis
And my own thoughts that the ECB will cut rates by 100 basis points this week
leads me to think that the Euro will probably hit 130 and possibly even 125 by the end of next week with probably puts the dollar index at 85.
So now I will have to rethink my "chart reading" and get back to you tomorrow.
Knowledge is the enemy of fear
If the Euro weakens and the dollar strengthens on this news, paper gold will likely drop. What happens to physical remains to be seen. But in my mind physical gold should not be affected.
roadrunner
I like home runs.... but I usually only hit single baggers, sometimes I strike out , and sometimes I get thrown out of the game altogether.
the dollar over 80 on the index will be "a relic" soon
some elementary look at the credit crisis.
FTLOM (for the life of me) i don't undertand the PM market any more....
WSJ link to credit crisis in personal section this W/E
<< <i>the FED will be cutting to 1% very shortly.
the dollar over 80 on the index will be "a relic" soon >>
In Japan, after their 1989 stock market crash from approx. 39,000, their Central Bank set interest rates near zero through most of the 1990's.
Zero rates failed to stop deflation
There was nothing for the average Japanese to invest in so they just saved with no returns on their money.
Their government also subsidize failing banks and businesses.
Their bubbles were stocks and real estate.
Nearly twenty years later the Nikkei is 11,000 up from 7,500 in 2003.
How many have twenty years or less until retirement? Exactly!
It's one big "crap-sandwich" as a Senator said last week about the US bailout.
I think the Japanese "depression" bears a little studying.
Ren
they would have been in the sweet spot . Speaking to the comment "nothing to invest in".
GOLD! GOLD!! GOLD!!! he yelled as he walked the streets of San Francisco...... and he made his big money off the shovels, picks and other dry goods. Diversification.
Banks want to halt bailout’s accounting rule
<< <i>
<< <i>the FED will be cutting to 1% very shortly.
the dollar over 80 on the index will be "a relic" soon >>
In Japan, after their 1989 stock market crash from approx. 39,000, their Central Bank set interest rates near zero through most of the 1990's.
Zero rates failed to stop deflation
There was nothing for the average Japanese to invest in so they just saved with no returns on their money.
Their government also subsidize failing banks and businesses.
Their bubbles were stocks and real estate.
Nearly twenty years later the Nikkei is 11,000 up from 7,500 in 2003.
How many have twenty years or less until retirement? Exactly!
It's one big "crap-sandwich" as a Senator said last week about the US bailout.
I think the Japanese "depression" bears a little studying.
Ren >>
There are many things in the US like the Japanese situation in 1989. But the Japanese situation bubbled for almost 20 years prior to their economic demise, ours is less than half that. Not that our government hasn't done many similar things but Japan's gov't made it virtually impossible for their banking system to disclose their liquidity problems.
While the problem is dire, its still very different. Times are going to be hard but since things are much more global may make things a bit easier. As goes the US economy, so goes the global economy. This should force major countries into working to solve the problems.
<< <i>Good article the puts the global crisis into perspective >>
This is the daily telegraph and it looks like you get about 20 cookies with it.
123 minutes long. First 4 1/2 minutes is tedious (just try to get past it).
Citi V.S. Wells Fargo
Result: DRAW