I see we are in disagreement about the strength of the Euro and Eurozone and will probably continue to differ on the value of the currency basket.
Here is what I see.
Barclays bank is/was leveraged 96x. Deutsche bank at 57x. By comparison BSC and LEH were leveraged at 35-40x. Royal Bank of Scotland and ING are in dire straights. Fortis took the combined efforts of 3 foreign govts to attempt to save them. CS and UBS are both bigger than the govt of Switzerland. Hungary is bankrupt. European citizens are already taxed at 50-60%. You are correct in that the USA will be able to "outprint" them, mostly because Europe will simply give up. They know they cant raise taxes so why even bother to increase their debt load. The Germans will blame the French and the French blame the Italians and the Italians blame the Spanish. I dont think that will inspire any confidence in the Euro.
We also are under no obligation to repay any derivative losses to our trading partners. What will they do? Say "we're not gonna make anymore toys for you"? Russia has already spent the vast majority of their currency surplus in trying to stabilize their banks. China will soon be doing the same. But since neither has a currency in the basket it will not affect the baskets value. So we really are only left with the Canadian dollar and Japanese Yen. Canada is one of my favorite countries, but still just a small economy in the grand scheme and the Loonie represents only about 9% of the basket. Japan has probably the worse demographics of any country in the world and is partly the reason for their economic stagnation. Combined with HUGE entitlement programs and high taxes makes Japan a great place to visit, but thats about all.
Again, the dollar is due for a pullback. The Euro should rally to about 1.40. No way in Hell will it go to 2. No way.
Some more tidbits about the health of the Eurozone.
National debt of Germany is about $5 Trillion with a GDP of about $3.2 Trillion. An unemployment rate of nearly 10% and 11% living under the poverty level. Public debt is 65% of GDP. National debt of England is about $10.5 Trillion with a GDP of about $2.8 Trillion. Unemployment is about 6% and 14% under poverty level. Public debt is about 44% of GDP. National debt of Switzerland is about $1.3 Trillion with a GDP of about $423 billion. Unemployment is about 3% and no record of poverty. Public debt is about 44% of GDP. National debt of France is about $4.4 Trillion and a GDP of about $2.6 Trillion. Unemployment is about 8% and 6% under poverty. Public debt is about 64% of GDP. National debt of Italy is about $1 Trillion and a GDP of about $2 Trillion. Unemployment of about 6% and no record of poverty. Public debt is about 104% of GDP.
National debt of Canada is about $800 billion with a GDP of $1.4 Trillion. Unemployment of about 6% and 10% below poverty. Public debt is about 64% of GDP.
National debt of USA is about $13 Trillion and a GDP of about $14 Trillion. Unemployment is about 6% and poverty level is about 12%. Public debt is about 60% of GDP.
All of a sudden the USA doesnt so bad compared to its European counterparts, does it? Or perhaps the Europeans dont look so good compared to the USA.
Another link to a list of external debt---the amount of debt owed to others--by country. The numbers are a little different but comparisons are the same. I should have just given this link first as it would have saved me alot of time and I think you can understand it much better.
We complain about the debt that each American is on the hook for--$42,000, but look at Switzerland at $510,000, England at $190,000, Spain at $176,000, Italy at $124,000, and Brazil at $51,000--and what is their income compared to ours?
We also are under no obligation to repay any derivative losses to our trading partners. What will they do? Say "we're not gonna make anymore toys for you"?
Pretty much something like that where they take their toys from the party. They can speed up the process of selling their $1-2 TRILLION in treasuries. They can all get together and consider a truly backed currency to compete against the dollar. It appears that the FED/Treasury are serious about bailing out China and others by accelerating a clause in the bailout bill by 3 years that allows them to pay interest to foreign banks. This was discussed in detail here a few weeks ago.
The EU seems to average about 50-60% debt compared to GDP. With what the US has done with Fannie and Freddie, AIG and other stalwarts of finance, we have effectively raised our debt to GDP to >100% regardless of what numbers are now published (and this is not even including unfunded entitlement and future bailouts). Seems to me that this ratio is a larger player in the scheme of things than just total debt dollars where of course the sum of the EU nations leads us by a factor of 2X.
Let's not forget the real wild card, JPM. They may hold more toxic otc derivatives than all those EU banks combined. Sure, Barclays may be leveraged 96X but they are small compared to the giants. I believe they are owned by Bank of NY. Who owns BONY is another research question. But a lot of roads lead back to JPM. JPM is the motherload and we have her all to ourselves....well, along with the FED and her secretive owners (lol). Your ultimately comparing real debt on the books compared to the unseen toxic debt off the books of which JPM is the unrivaled world leader. And I submit it's the total debt = published + yet to be seen debt, that will drive the final accounting of who's debt is bigger than who's. This whole crisis over the past year has been about toxic debt not observable on the balance sheets. Details on that information is not available to the investing public.
I have not seen an accounting of EU bank total otc derivatives. I'll see if I can find something on that.......
We complain about the debt that each American is on the hook for--$42,000, but look at Switzerland at $510,000, England at $190,000, Spain at $176,000, Italy at $124,000, and Brazil at $51,000--and what is their income compared to ours?
I guess we know why the dollar is "strong", eh?
I wonder who will blink first?
Q: Are You Printing Money? Bernanke: Not Literally
As markets around the world loss trillions of dollars, hedge funds continue to sell hundreds of billions of dollars in stocks and commodities. Who would have thought these funds owned so much gold? Gold opened at $702 this morning.
Hedge Funds’ Steep Fall Sends Investors Fleeing By LOUISE STORY Published: October 22, 2008
The gilded age of hedge funds is losing its luster. The funds, pools of fast money that defined the era of Wall Street hyper-wealth, are in the throes of an unprecedented shakeout.
No one knows how much more hedge funds might have to sell to meet a rush of redemptions. But as the industry’s woes deepen, money managers fear hundreds or even thousands of funds could be driven out of business. Funds are setting aside billions of dollars in cash to prepare for withdrawals.
Oct. 23 (Bloomberg) -- Gold fell to a 13-month low in London as the dollar strengthened and fund investors liquidated their holdings across most commodities. Platinum also declined.
"The phrase 'flight to quality' is a bit misleading. A more appropriate description would be 'flight to least bad' at the moment," said Jim Reid, a strategist at Deutsche Bank. "With most other asset classes around the world now under varying degrees of stress, U.S. equities are not a great relative value trade even after the recent declines."
Calpers suffers $40bn asset hit By Deborah Brewster
Published: October 22 2008 23:38 | Last updated: October 22 2008 23:38
Calpers, the largest state pension fund in the US, lost 20 per cent of its assets, or close to $40bn, between July 1 and October 20 this year as a result of failing financial markets.
The fund’s assets fell to $192bn, well below their height of more than $250bn three years ago.
The EU seems to average about 50-60% debt compared to GDP
Using the numbers you presented from CIAF, that's exactly where they fall in. Your source, not mine.
Cohodk, you presented 2 sets of EU data with totally different debt results (CIA factbook vs Wiki). So which is it? CIAF uses "public debt" and shows a 50-60% debt/GDP ratio. The Wiki numbers don't even make sense. Try as I might to flip those numbers back and forth and upside down, I can't come up with the stated ratio's as Wiki does. The USA debt vs GDP numbers at 99% should be identical except possibly for a decimal place....they aren't. At least the CIAF ratios work out mathematically and make sense. Let's be sure we are not comparing US apples to EU oranges. Unfunded liabilities, derivative payouts/bailouts, can alter those numbers far greater than plain old vanilla "public debt." We are not in a worldwide "public" debt crisis. The crisis is the unstated debt that is not included in public debt. We all could print our way out of this mess if not for the hundreds of TRILLIONs of Derivatives still left to unwind.
No doubt though that the European numbers are bad. I just don't believe they've slung anywhere near the derivatives around the world as the US banks have. And in the end, the US will pay $$ to buy back that debt. Since we own the world's reserve currency, we got the brunt of the good times (1980-2000) going up, and we'll bear the brunt of the bad times going down.
As markets around the world loss trillions of dollars, hedge funds continue to sell hundreds of billions of dollars in stocks and commodities. Who would have thought these funds owned so much gold? Gold opened at $702 this morning.
GS, good info. It's truly a meltdown. And this is the CLASSIC case for averaging-in.
The new money will be looking for a place to park. Will it be paper? Or gold?
Q: Are You Printing Money? Bernanke: Not Literally
In US the present Fed Governor Ben Bernanke took office from the hapless Alan Greenspan in February 2006 and has inherited the damage from Greenspan’s lax oversight and inadequate policy settings. Bernanke came to prominence as an academic with a particular interest in the economic and political causes of the Great Depression, on which he has written extensively. On Milton Friedman's ninetieth birthday, November 8, 2002, he stated:
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."
Ben, don't look now, but you're doing it again........
No matter which you use, it is easy to see that Europe has a much larger debt load than the USA. This will continue to keep pressure on the EURO and hence the basket. In the end, the USA will once again come to the aide of the world and stem this financial meltdown since no other country even has a chance. THAT is why the US dollar is the worlds reserve currency.
And I think the "public debt" component is a HUGE factor in the effectiveness of any govt intervention.
As an aside.....The USA is swapping a $Trillion with foreigh govts. We are getting their currency and they ours. If the dollar sucks wind, then we make money on the FOREX exchange. Hanky Panky has it all figured out.
<< <i>Found this gem in John Needham's article today:
In US the present Fed Governor Ben Bernanke took office from the hapless Alan Greenspan in February 2006 and has inherited the damage from Greenspan’s lax oversight and inadequate policy settings. Bernanke came to prominence as an academic with a particular interest in the economic and political causes of the Great Depression, on which he has written extensively. On Milton Friedman's ninetieth birthday, November 8, 2002, he stated:
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."
Ben, don't look now, but you're doing it again........
roadrunner >>
No kidding. Just because he's a student of the GD doesn't mean we need to repeat it so he can prove he knows what to do!
<< <i>We complain about the debt that each American is on the hook for--$42,000, but look at Switzerland at $510,000, England at $190,000, Spain at $176,000, Italy at $124,000, and Brazil at $51,000--and what is their income compared to ours? >>
Actually, the debt clock is but a small fraction each American owes. Corporate America isn't the only one who runs "off-book" accounting that got them in trouble. The amount is ACTUALLY ~$450,000 per American household owed thanks to our government. TRUE American debt is in the area of $55 trillion.
BTW, the man making the statement IS in a position to know as the former Controller General of the United States. And I was wrong....it's $480,000 per household.
What cohodk is saying about risks inherit to euro zone countries and their currencies as compared to the US and the dollar is very valid, but most people are so ethnocentric, they lack the objectivity to look at things on a relative basis. There is no denying that the US has serious financial problems, but to focus on just the US and not weigh that vis a vis other countries and their currencies, is surely deleterious to ones investment philosophy. I do not think this is a time to be dogmatic about what one thinks they know, when clearly many of us, even some that are obviously quite bright, have been so wrong about assumptions that they have held as fact.
You have got to be kidding me, I am shocked, market manipulation?
Jim Sinclair Oct. 23 2008
You think this is only in China? Illegality is now the hallmark of almost every market on the planet. The effort has between 13 and 88 days to go. Other major Western national leaders always cooperate with the sitting party of the Administration for re-election.
Central bank warns of risks in illegal gold futures speculation www.chinaview.cn 2008-10-23 17:30:59
BEIJING, Oct. 23 (Xinhua) -- The People's Bank of China said on Thursday that "underground gold futures speculation" was "typical illegal trading on gold futures" and was not protected by law.
The central bank warned Chinese investors of the extremely high risks in illegal futures trading.
Illegal gold futures trading is reported to have cost Chinese investors at least 100 billion yuan (14.6 billion U.S. dollars).
The central bank said Chinese investors could conduct real gold trading through domestic commercial banks, or invest in gold futures through the Shanghai Gold Futures Exchange.
<< <i>What cohodk is saying about risks inherit to euro zone countries and their currencies as compared to the US and the dollar is very valid, but most people are so ethnocentric, they lack the objectivity to look at things on a relative basis. >>
I wasn't commenting on that, just the fact that basing that comparison on the acknowledged debt, i.e. debt clock number, is an erroneous basis for such a comparison. The government, as I think most here would agree, is as good at "massaging" the numbers, off book accounting, and any accounting trick as any large corporation, and has just a valid reason (voters instead of stockholders) to do this as anyone else.
<< <i>What cohodk is saying about risks inherit to euro zone countries and their currencies as compared to the US and the dollar is very valid, but most people are so ethnocentric, they lack the objectivity to look at things on a relative basis. >>
I fully agree, but if we're going to look on a relative basis, let's use the REAL debt, which is over 5x higher than that the government would like acknowledged.
No kidding. Just because he's a student of the GD doesn't mean we need to repeat it so he can prove he knows what to do!
My comment was more in line with BB thinks we had the implements in place to prevent another GD and he has been pretty much wrong. The actions of Ben and Hank in trying to combat the financial crisis will only increase the chances of another GD. Ben has already proven that regardless of what his history taught him, he's following the same general policies that got us into hot water following October 1929.
This brief snippet from the JS site concerning Iceland which apparently is staring at a depressionary inflation. Yes, they aren't the UK, Germany, or the US...but the general concensus around here has been that such a thing is not possible with the on-going credit contraction and massive capital losses. And Iceland has had monumental capital losses. One would have thought that inflation would have been improbable.
I believe what happens to the economy in Iceland will be a test-case for the US. Iceland is going for an inflationary depression since the banking system crashed and foreign investors stopped investing in the country. The same is starting to happen in Eastern Europe. I suppose it is only a matter of time when foreign investors stop investing in the US. Then you will soon have the Iceland experience. Shouldn't we be looking for Weimar in Iceland, then Eastern Europe, then the US, and then the planet?
"Iceland's economy may contract as much as 10 percent, according to Lars Christensen, chief analyst at Danske Bank A/S in Copenhagen. The central bank on Oct. 15 cut the benchmark interest rate by an unprecedented 3.5 percentage points to 12 percent, indicating policy makers have given up trying to control inflation. Prices may surge as much as 75 percent in coming months, Christensen estimates. "
SprottMoney Ltd. sells Canadian gold and silver maples Submitted by cpowell on Thu, 2008-10-23 00:53. Section: Daily Dispatches
8:45p ET Wednesday, October 22, 2008
Dear Friend of GATA and Gold (and Silver):
Longtime GATA supporter Eric Sprott, founder of Sprott Asset Management in Toronto, has established SprottMoney Ltd. to buy and sell 1-ounce Canadian gold and silver maple coins. The firm accepts both Canadian and international orders and -- miracle of miracles -- actually has inventory ready for delivery. Here are the contact details:
SprottMoney Ltd. Royal Bank South Tower 200 Bay St. Suite 2750, P.O. Box 90 Toronto, Ontario M5J 2J2 Canada
Telephone: 416-861-0775 or toll-free 888-861-0775 E-mail: sales@sprottmoney.com Internet site: http://www.sprottmoney.com
Check it out, and remember that getting real metal cheap may be the best revenge against the bad guys.
CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.
Wall Street heads for big decline as recession fears stir panic, batter world markets
NEW YORK (AP) -- Wall Street headed for another precipitous drop Friday as fears of a punishing global recession stirred panic among investors and sent world financial markets into a tailspin. The Dow Jones industrial average futures fell 550 points, triggering a halt in selling of stock future contracts.
Oct. 24 (Bloomberg) -- Futures contracts on the Standard & Poor's 500 Index and Dow Jones Industrial Average plunged by their daily limits on growing concern the financial crisis has infected the broader economy.
SprottMoney Ltd. sells Canadian gold and silver maples Submitted by cpowell on Thu, 2008-10-23 00:53. Section: Daily Dispatches
8:45p ET Wednesday, October 22, 2008
Dear Friend of GATA and Gold (and Silver):
Longtime GATA supporter Eric Sprott, founder of Sprott Asset Management in Toronto, has established SprottMoney Ltd. to buy and sell 1-ounce Canadian gold and silver maple coins. The firm accepts both Canadian and international orders and -- miracle of miracles -- actually has inventory ready for delivery. Here are the contact details:
SprottMoney Ltd. Royal Bank South Tower 200 Bay St. Suite 2750, P.O. Box 90 Toronto, Ontario M5J 2J2 Canada
Telephone: 416-861-0775 or toll-free 888-861-0775 E-mail: sales@sprottmoney.com Internet site: http://www.sprottmoney.com
Check it out, and remember that getting real metal cheap may be the best revenge against the bad guys.
CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. >>
The Maple Leafs are over $1 per coin higher than teletrade direct which are right around $13.
Your in luck they are $12.49 each right now much less than the $14 and change.
You think this would shake up the market? If proved he won't be President, at least not for long.
Surely you jest. Anyone standing in the way of an election Win will be steamrollered.
Al Gore admitted on camera, in public, that he committed a Felony. As all 8th graders know, a Felon cannot be President. Yet he was on the ballot, no? The same ideology applies to the winner of the next election.
From K. Petrov, a former Precherite deflationist....another view:
5. The Deflation Scare
Everything on the monetary side points to more inflation in the future. Nevertheless, over the last half a year—especially since the “Credit Crunch” has gained strong momentum—deflationists have been emboldened to proclaim yet again that the economy will spin into a dreadful deflation, dragging everything in sight with it. I can understand the deflationist warnings, as I was once a deflationist, schooled by Robert Prechter, the Dean of the Deflationist School. His book Conquer the Crash is the ultimate reference book on deflations, The Deflationist Bible. Whether one believes in a coming deflationary depression or not, one must nevertheless read the book and understand its arguments.
The quintessence of Prechter’s book is that inflationary booms cannot last forever; here Austrians will eagerly agree. However, Prechter argues that inflation cannot last forever and that deflationary forces will overwhelm the financial system, so that the economy will tailspin into deflation; here Austrians will disagree, as they admit to the possibility of an inflationary bust, i.e., a stagflation.
Prechter provides (in Chapter 13, p. 130) three limits to credit expansion that we can actually observe. With these, we can determine whether monetary inflation can continue or not. His first limit on credit expansion is the rising price of gold; the second is the falling dollar, and the third is rising interest rates (due to rising inflationary expectations) and corresponding falling bond prices, which in itself is strongly deflationary. In Prechter’s terms, the three countervailing forces to inflation come from the gold market, the bond market, and the currency market.
Over the last six years, I have found these criteria to be extremely helpful, especially in determining whether the environment would turn deflationary any time soon. It is easy to analyze each and see if any currently represents a genuine limit to credit expansion.
Price of Gold: The price of gold has been steadily rising for the last seven years and it has not yet deterred the Fed from inflating. Clearly, whether gold rises to $1,000 or $2,000 or more, the Fed will remain unmoved by its rise. Also, just because the price of gold has been correcting for the last 3-4 months does not mean that deflation is here. An intermediate correction does not make a secular trend!
Dollar. Moving to the second limitation, apparently the Fed pays only lip service to the government’s Strong Dollar Policy. In reality, the Fed seems to like the idea of a falling dollar, as long as the fall is orderly. The Fed would most likely be pleased to see the dollar a lot weaker in the future, provided again that the devaluation is “orderly”. Interest Rates. This third limitation is no limitation at all to an Inflationist Fed hell-bent on preventing deflation. The Fed has devised a number of ingenious approaches to support the long bond and has even stated in public that, if necessary, it will monetize the long end of the curve to support high bond prices and respectively low bond yields. The deflationist arguments resting on gold, the dollar, and the long-bond yield apparently present no problems for the Fed at all. In reality, the Fed can inflate at will, and this is exactly what it’s doing! At this point, there appears one, and only one, limitation that will force the Fed to slow down its monetary inflation and compel it to raise interest rates – a Dollar Crisis associated with a flight out of dollars and a panic in the currency markets, triggering a colossal currency derivative crisis.
Nothing short of this will constrain monetary inflation. At this point, it is my opinion that so long as the dollar devalues in an orderly manner, or the dollar actually rises against other fiat currencies, the environment will remain strongly inflationary.
Other deflationists have raised a very powerful argument in their favor. Typically during an asset deflation, where the prices of stocks and real estate fall, there are no willing lenders and no willing borrowers, no matter how low the Fed lowers interest rates. This is dreaded condition is known as “pushing on a string”. The classic example is Japan since 1990.
The counterargument is straightforward: in modern fiat monetary systems: the Central Bank is always a willing lender of last resort and the Government is always a willing borrower of last resort. In order to prevent contraction of credit, the government can always borrow and the Fed can always monetize – credit contraction and deflation do not have to occur when the Fed and the government do not allow it to happen.
So far, it is more than obvious that the Credit Crisis has not prevented the Fed from its inflationary course, despite the rhetoric to the contrary. In reality, the Credit Crunch combined with a contrived deflation scare and a rising dollar has provided a cover for the U.S. government to increase its budget deficits and an excuse for the Fed to inflate further. All monetary indicators confirm that the Fed has been successful in this regard.
"Hard to bottom feed when you don't feel you're near the bottom."
I for one am out also. Every time I have tried to buy a few stocks the last 2 weeks the market goes down another 10%.
Some of the energy ETF’S are now trading at 50% below their opening offering price.
With trillions of dollars continuing to come out of the Hedge funds, and other funds, who knows when the bottom will be. We might see this go on for several months.
I don’t see anyway trillions of dollars trying to get out of these markets can happen in a short period of time.
In my case my trading experience for this year has ended up painful, but then again it was designed to be a plaything. I knew this was gambling when I started, but had no idea how rigged the game was, or that the house would be going all in with every passing week.
If this liquidation continues I do not see how we can stay out of the mid 6,000 on the DOW? I don’t think there has been any market correction in our history where all the big players just wanted to go to cash?
My small losses can be recouped in a few short months, but my heart goes out to those Americans that have their entire retirements in this card game.
<< <i> I don’t think there has been any market correction in our history where all the big players just wanted to go to cash? >>
I believe we saw a similar situation after the crash in 1929.
Other than that, I can't think of any other time in US history.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i> I don’t think there has been any market correction in our history where all the big players just wanted to go to cash? >>
I believe we saw a similar situation after the crash in 1929.
Other than that, I can't think of any other time in US history. >>
From urbansurvival.com: "A close in the next few weeks below 7,853 will make this decline worse than the October 1929 collapse." >>
I think that's a certainty, and it may not take a few weeks.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Edited to remove my honest opinion that there is something behind the birth certificate thingie. Turned too political, and want this thread to keep around!!
I'll accept this thingie as a last ditch effort by a desperate red party to tarnish the election. Thank you for editing your opinion, while I respect it concerning pms lets not start with politics. To stay on topic go long on gold.
This articule is from a man that helps run the Kitco gold sales operation. Where he thinks gold is going, and the stories about shortages!
Jon Nadler, an oft-quoted industry spokesman in financial media worldwide, is Senior Investment Products Analyst for Kitco Bullion Dealers. Jon has devoted some 30 years to the precious metals market and on its related investment products. A graduate of UCLA, he established and ran precious metals operations at major financial institutions (Deak-Perera, Republic National Bank, and Bank of America) and has consulted on marketing and product development issues to government mints, precious metals retailers, and trade and membership organizations such as the World Gold Council.
Edited to remove my honest opinion that there is something behind the birth certificate thingie. Turned too political, and want this thread to keep around!! >>
I, too, was tempted to write something...you know me.
The Nadler article is a good example of how he peddles his "gold has no upside" philosophy that must have taken him 20 years to ingrain during the 1980-2000 bear cycle. I don't know how often he was wrong as gold went from $250 to $650 (probably frequently), but I know he was completely wrong from $650 to $1000. As a bear market analyst he probably has no equal. How many here would hire on a personal investment analyst in any medium who could never see an upside to their product, even during bull markets? Surprisingly though, Kitco, the World Gold Council, and other organizations all share that same philosophy.
My perception is that we have a contingent of pundits who are extremely panicked that this is a very poor reaction by gold to the crisis, and it will make them look bad. It already has. Now they’re trying to manufacture this global stampede into gold by panicking investors and by scaring them with stories of supplies running out. No one will argue that there are higher levels of individual investor interest, but it’s nothing “unprecedented.” They’re trying to make it out as unprecedented, and that’s simply not the case. Perhaps it says more about how short a time such pundits have spent in these markets.
Is this a simplistic approach or what? The newsletter writers and account managers for gold funds are the source of the contrived panic in physical gold. Sure, John. It's one big conspiracy, just like the other so-called "gold cartel conspiracy" that doesn't exist at all by your own account. Demand does appear unprecedented as I have many dealer sources who have been in the coin markets for 30 years (including the 1970's), and they have never seen anything like this. So for whatever reason, the demand for gold and silver coins does appear unprecedented. Many of the pundits that John refers to have been around the bullion and currency markets 10-30 years longer than he has.
In his article he states that the current asset bubbles are being regulated away. And by who else other than our "trusted" regulators who created them. In other words, we've finally been cured of FED/govt-induced asset bubbles. Yes, the same guys who have given us a series of asset bubbles starting with stocks in the later-1990's. The only real question is what will be the next asset bubble in this enduring string? The FED's monetary policies ensure that such a string of hits will not soon be broken. At least not until there is no more FED.
Nadler's interpretation of the dollar turnaround beginning in July is pretty simplistic in that even a 5th grader might question it. He states that suddenly, people looked at how low the dollar was and just decided it was time to start sitting on dollars. Yup, just like that. Let's all start sitting on dollars because supermodel Gisele won't. Seems a bit too cute to me. Now, why didn't the hedge funds see this parking into dollars coming? A lot of smart people there, smarter than 5th graders and supermodels. How about that maybe the FED and major banks saw armageddon coming within weeks or months in the shape of Fannie/Freddie, AIG, WaMu, Merrill, Lehman, Wachovia, etc and decided to strengthen the dollar, kill commodities via the hedge and investment funds to give them a glimmer of hope in getting through it? It was a quick take down with no prisoners being taken. The FED and Treasury work proactively. They don't wait for markets to try and fix things before they get their chance to meddle and tinker.
At the end of Nadler's interview he mentions how even keeled he must be to be "credible" to his audience. After all, if he were proclaiming $2000 gold he would lose all "credibility." Lightweight words coming from the same guy who never saw gold exceeding $650 and secretly hopes that it gets back there so he can claim he did good by keeping his clients out of gold for the last couple of years. Deflationist Robert Prechter is now stating a similar line of reasoning in that fiat (ie FRN) has out performed stocks for the past 10 years or longer. The only thing he left out was that gold (ie real money) has tripled in that time while the FRN is still down 30%. Sorry Robert, the FRN isn't gold. Those holding FRN's since 2001 still lost 30% or more to inflation.
Nadler is no friend of gold so understand where his opinons derive.
“The Nadler article is a good example of how he peddles his "gold has no upside" Surprisingly though, Kitco, the World Gold Council, and other organizations all share that same philosophy.”
RR, I see this as good and bad, we do want people to think for themselves, and protect their families, on the other hand we don’t want to become the new stockbroker crowd.
Speaking of the stockbroker crowd, I nearly fell out of my chair laughing when Maria Bartiromo of MSNBC said on Friday, “ I don’t understand what is going on here? For over the last ten years I have done just what almost all of our guests here have recommended, I have invested for the long term. However looking at my portfolio I have not made any money in those ten years, so I am beginning to think that investing for the long term is not the smart thing to do”.
Ya Think?
Speaking of long-term stock investing, I did hear one talking head on MSNBC that made some sense on Friday. Forgot his name, but basically he said this.
If you break the stock market down over the last several decades you will find the following. The market moves in approximately 7-year cycles. After a bottom is reached in a bear market one should load the boat with very good quality, dividend paying, companies with very little debt. The first four years of the cycle great profits are there to be made. At the end of about 4 years the market begins to get stagnant and moves sideways or down. At that point investors should sell and get out waiting for the market to correct. Sometimes within approximately 3 years of downward movement the market will bottom and it will be time to get back in. The reason that the average investor never makes any money is they ride the cycle all the way up and all the way down, being told to hang in and invest for the long term.
All of these folks that contribute each month to their retirement funds are basically riding the up and down waves of a market that MUST in fact correct at some point as no markets go up forever.
His advise was that everyone possible should be out of the market now and should have gotten out last year. Some time in the next 12 months we will hit a bottom and everyone should be back in.
This does make perfect sense, but unfortunately his voice is just one of a thousand in the wilderness shouting different advice.
I'm concerned about democrats considering retirement plan changes that involve taking individuals' 401k money and putting it in government accounts in which the government adds $600 annually along with a guaranteed 3% return.
Isn't Argentina doing this now or will in the future?
I remember the Clinton's had the same idea but first they would have redistributed money to help those who couldn't save(?)
Speaking of the stockbroker crowd, I nearly fell out of my chair laughing when Maria Bartiromo of MSNBC said on Friday, “ I don’t understand what is going on here? For over the last ten years I have done just what almost all of our guests here have recommended, I have invested for the long term. However looking at my portfolio I have not made any money in those ten years, so I am beginning to think that investing for the long term is not the smart thing to do”.
Oh Maria, Maria, Maria, Maria! One would have thought that someone so close to the action would have seen things correctly. Maybe if Jim Sinclair had been one of her guests a few years back she'd have seen another point of view. Not only did she not make money in those 10 years, she lost 30% or more to inflation.
If everyone is "out" of the market, then we'd have no market. Same thing if Storm888 and everyone else were short at the same time...no market. I'm so confident in my 401K that I stopped contributing even with the free 3% company matching. I'd rather have 40% now in my hands, then a wish or further losses down the road.
But Storm888 is probably right. Only traders and shorters make money these days. The rest is for fools.
"...taking individuals' 401k money and putting it in government accounts..."
Oh, kinda like the social security retirement account. Yeah, that oughta work. Campers, if you have any money in any account that the government can get to then you deserve to get the hickey you so richly earned; stock accounts/transactions ummmhuhhhhhh, 401K's ummmmmmhuhhhh, ss account ummmmhuhhhh, cd's just a little redemption tax, roth's well maybe just a little tax on this and the list goes on. Prepare to have your wealth/income "spread around a little", particularly if it's in the public sector where our elected representatives can get a give you a little nick everytime you move it or touch it. Lots of recent news about home safes. Enjoy
I'm so confident in my 401K that I stopped contributing even with the free 3% company matching. I'd rather have 40% now in my hands, then a wish or further losses down the road.
roadrunner
You'd do better to put in your contributions, put in a totally safe low-yield, and get the company match. Then take it out (immediately) and pay the 10% penalty, and you're probably still ahead.
Example: you contribute $5000 to get the $2500 match. You withdraw all of it now; the 10% penalty adds $750 to your tax bill on top of what you would have otherwise paid. You're still ahead.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
Comments
Here is what I see.
Barclays bank is/was leveraged 96x. Deutsche bank at 57x. By comparison BSC and LEH were leveraged at 35-40x. Royal Bank of Scotland and ING are in dire straights. Fortis took the combined efforts of 3 foreign govts to attempt to save them. CS and UBS are both bigger than the govt of Switzerland. Hungary is bankrupt. European citizens are already taxed at 50-60%. You are correct in that the USA will be able to "outprint" them, mostly because Europe will simply give up. They know they cant raise taxes so why even bother to increase their debt load. The Germans will blame the French and the French blame the Italians and the Italians blame the Spanish. I dont think that will inspire any confidence in the Euro.
We also are under no obligation to repay any derivative losses to our trading partners. What will they do? Say "we're not gonna make anymore toys for you"? Russia has already spent the vast majority of their currency surplus in trying to stabilize their banks. China will soon be doing the same. But since neither has a currency in the basket it will not affect the baskets value. So we really are only left with the Canadian dollar and Japanese Yen. Canada is one of my favorite countries, but still just a small economy in the grand scheme and the Loonie represents only about 9% of the basket. Japan has probably the worse demographics of any country in the world and is partly the reason for their economic stagnation. Combined with HUGE entitlement programs and high taxes makes Japan a great place to visit, but thats about all.
Again, the dollar is due for a pullback. The Euro should rally to about 1.40. No way in Hell will it go to 2. No way.
Some more tidbits about the health of the Eurozone.
National debt of Germany is about $5 Trillion with a GDP of about $3.2 Trillion. An unemployment rate of nearly 10% and 11% living under the poverty level. Public debt is 65% of GDP.
National debt of England is about $10.5 Trillion with a GDP of about $2.8 Trillion. Unemployment is about 6% and 14% under poverty level. Public debt is about 44% of GDP.
National debt of Switzerland is about $1.3 Trillion with a GDP of about $423 billion. Unemployment is about 3% and no record of poverty. Public debt is about 44% of GDP.
National debt of France is about $4.4 Trillion and a GDP of about $2.6 Trillion. Unemployment is about 8% and 6% under poverty. Public debt is about 64% of GDP.
National debt of Italy is about $1 Trillion and a GDP of about $2 Trillion. Unemployment of about 6% and no record of poverty. Public debt is about 104% of GDP.
National debt of Canada is about $800 billion with a GDP of $1.4 Trillion. Unemployment of about 6% and 10% below poverty. Public debt is about 64% of GDP.
National debt of USA is about $13 Trillion and a GDP of about $14 Trillion. Unemployment is about 6% and poverty level is about 12%. Public debt is about 60% of GDP.
All of a sudden the USA doesnt so bad compared to its European counterparts, does it? Or perhaps the Europeans dont look so good compared to the USA.
Info taken from the CIA World Factbook.
Knowledge is the enemy of fear
We complain about the debt that each American is on the hook for--$42,000, but look at Switzerland at $510,000, England at $190,000, Spain at $176,000, Italy at $124,000, and Brazil at $51,000--and what is their income compared to ours?
External debt by country
Knowledge is the enemy of fear
Pretty much something like that where they take their toys from the party. They can speed up the process of selling their $1-2 TRILLION in treasuries. They can all get together and consider a truly backed currency to compete against the dollar. It appears that the FED/Treasury are serious about bailing out China and others by accelerating a clause in the bailout bill by 3 years that allows them to pay interest to foreign banks. This was discussed in detail here a few weeks ago.
The EU seems to average about 50-60% debt compared to GDP. With what the US has done with Fannie and Freddie, AIG and other stalwarts of finance, we have effectively raised our debt to GDP to >100% regardless of what numbers are now published (and this is not even including unfunded entitlement and future bailouts). Seems to me that this ratio is a larger player in the scheme of things than just total debt dollars where of course the sum of the EU nations leads us by a factor of 2X.
Let's not forget the real wild card, JPM. They may hold more toxic otc derivatives than all those EU banks combined. Sure, Barclays may be leveraged 96X but they are small compared to the giants. I believe they are owned by Bank of NY. Who owns BONY is another research question. But a lot of roads lead back to JPM. JPM is the motherload and we have her all to ourselves....well, along with the FED and her secretive owners (lol). Your ultimately comparing real debt on the books compared to the unseen toxic debt off the books of which JPM is the unrivaled world leader. And I submit it's the total debt = published + yet to be seen debt, that will drive the final accounting of who's debt is bigger than who's. This whole crisis over the past year has been about toxic debt not observable on the balance sheets. Details on that information is not available to the investing public.
I have not seen an accounting of EU bank total otc derivatives. I'll see if I can find something on that.......
roadrunner
I guess we know why the dollar is "strong", eh?
I wonder who will blink first?
I knew it would happen.
I think you meant 200-500% of gdp. From the Wiki link....
Ireland $1,841,000 6/30/2007 $138,619 30-Jun-08................... 960.86%
United Kingdom $10,450,000 6/30/2007 $189,855 Q4 2007...... 490.61%
Switzerland $1,340,000 6/30/2007 $509,529 30-Jun-07.............. 441.95%
Netherlands $2,277,000 6/30/2007 $39,446 30-Jun-07 ..............352.75%
Belgium $1,313,000 6/30/2007 $11,682 30-Jun-07..................... 348.74%
Denmark $492,600 6/30/2007 $89,853 30-Jun-07...................... 242.30%
Austria $752,500 6/30/2007 $90,289 30-Jun-07 ........................233.70%
Zimbabwe $5,155 12/31/2007 $454 31 December 2007 est........ 220.11%
France $4,396,000 6/30/2007 $68,183 30-Jun-07....................... 211.86%
Liberia $3,200 2005 $9,717 2005 est. ......................................209.84%
Hong Kong $588,000 2007 $84,445 2007 est. ..........................200.48%
Portugal $461,200 12/31/2007 $39,113 30-Jun-07................. 198.54%
Norway $469,100 6/30/2007 $98,530 30-Jun-07 ......................190.23%
Sweden $598,200 6/30/2006 $65,048 30-Jun-06..................... 176.72%
Germany $4,489,000 6/30/2007 $54,604 30-Jun-07 ................159.92%
Finland $271,200 6/30/2007 $274 30-Jun-07.......................... 143.95%
Cyprus $26,970 12/31/2007 $30,550 31 December 2007 est. ..126.03%
Sao Tome and Principe $318 2002 $10,258 2002 .....................124.22%
Guinea-Bissau $942 2000 $555 2000 est. ...............................113.93%
Australia $826,400 12/31/2007 $22,801 30-Jun-07 ...................106.91%
United States[1] $13,773,135 6/30/2007 $42,343 31-March-08 ..99.95%
The USA is quite aways down the list and well below our European brethren.
Barclays is its own entity and not owned by anyone other than its debt and stockholders.
Barclays
Knowledge is the enemy of fear
The USA is quite aways down the list and well below our European brethren.
Barclays is its own entity and not owned by anyone other than its debt and stockholders.
Barclays >>
So does the EU collapse before the USA?
Ren
order we all fall into the toilet. Perhaps we
should just flush and have it over already.
Camelot
Hedge Funds’ Steep Fall Sends Investors Fleeing
By LOUISE STORY
Published: October 22, 2008
The gilded age of hedge funds is losing its luster. The funds, pools of fast money that defined the era of Wall Street hyper-wealth, are in the throes of an unprecedented shakeout.
No one knows how much more hedge funds might have to sell to meet a rush of redemptions. But as the industry’s woes deepen, money managers fear hundreds or even thousands of funds could be driven out of business.
Funds are setting aside billions of dollars in cash to prepare for withdrawals.
Oct. 23 (Bloomberg) -- Gold fell to a 13-month low in London as the dollar strengthened and fund investors liquidated their holdings across most commodities. Platinum also declined.
"The phrase 'flight to quality' is a bit misleading. A more appropriate description would be 'flight to least bad' at the moment," said Jim Reid, a strategist at Deutsche Bank. "With most other asset classes around the world now under varying degrees of stress, U.S. equities are not a great relative value trade even after the recent declines."
Calpers suffers $40bn asset hit
By Deborah Brewster
Published: October 22 2008 23:38 | Last updated: October 22 2008 23:38
Calpers, the largest state pension fund in the US, lost 20 per cent of its assets, or close to $40bn, between July 1 and October 20 this year as a result of failing financial markets.
The fund’s assets fell to $192bn, well below their height of more than $250bn three years ago.
Using the numbers you presented from CIAF, that's exactly where they fall in. Your source, not mine.
Cohodk, you presented 2 sets of EU data with totally different debt results (CIA factbook vs Wiki). So which is it? CIAF uses "public debt" and shows a 50-60% debt/GDP ratio. The Wiki numbers don't even make sense. Try as I might to flip those numbers back and forth and upside down, I can't come up with the stated ratio's as Wiki does. The USA debt vs GDP numbers at 99% should be identical except possibly for a decimal place....they aren't. At least the CIAF ratios work out mathematically and make sense. Let's be sure we are not comparing US apples to EU oranges. Unfunded liabilities, derivative payouts/bailouts, can alter those numbers far greater than plain old vanilla "public debt." We are not in a worldwide "public" debt crisis. The crisis is the unstated debt that is not included in public debt. We all could print our way out of this mess if not for the hundreds of TRILLIONs of Derivatives still left to unwind.
No doubt though that the European numbers are bad. I just don't believe they've slung anywhere near the derivatives around the world as the US banks have. And in the end, the US will pay $$ to buy back that debt. Since we own the world's reserve currency, we got the brunt of the good times (1980-2000) going up, and we'll bear the brunt of the bad times going down.
roadrunner
GS, good info. It's truly a meltdown. And this is the CLASSIC case for averaging-in.
The new money will be looking for a place to park. Will it be paper? Or gold?
I knew it would happen.
In US the present Fed Governor Ben Bernanke took office from the hapless Alan Greenspan in February 2006 and has inherited the damage from Greenspan’s lax oversight and inadequate policy settings. Bernanke came to prominence as an academic with a particular interest in the economic and political causes of the Great Depression, on which he has written extensively. On Milton Friedman's ninetieth birthday, November 8, 2002, he stated:
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."
Ben, don't look now, but you're doing it again........
roadrunner
I am showing 2 different numbers. Public debt and External debt. Both can be found on the CIAWF website.
CIAWF Public debt list
CIAWF External debt. Yes, of course we have more but is a much small percentage of GDP than other countries.
No matter which you use, it is easy to see that Europe has a much larger debt load than the USA. This will continue to keep pressure on the EURO and hence the basket. In the end, the USA will once again come to the aide of the world and stem this financial meltdown since no other country even has a chance. THAT is why the US dollar is the worlds reserve currency.
And I think the "public debt" component is a HUGE factor in the effectiveness of any govt intervention.
As an aside.....The USA is swapping a $Trillion with foreigh govts. We are getting their currency and they ours. If the dollar sucks wind, then we make money on the FOREX exchange. Hanky Panky has it all figured out.
Knowledge is the enemy of fear
<< <i>Found this gem in John Needham's article today:
In US the present Fed Governor Ben Bernanke took office from the hapless Alan Greenspan in February 2006 and has inherited the damage from Greenspan’s lax oversight and inadequate policy settings. Bernanke came to prominence as an academic with a particular interest in the economic and political causes of the Great Depression, on which he has written extensively. On Milton Friedman's ninetieth birthday, November 8, 2002, he stated:
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."
Ben, don't look now, but you're doing it again........
roadrunner >>
No kidding. Just because he's a student of the GD doesn't mean we need to repeat it so he can prove he knows what to do!
<< <i>We complain about the debt that each American is on the hook for--$42,000, but look at Switzerland at $510,000, England at $190,000, Spain at $176,000, Italy at $124,000, and Brazil at $51,000--and what is their income compared to ours? >>
Actually, the debt clock is but a small fraction each American owes. Corporate America isn't the only one who runs "off-book" accounting that got them in trouble. The amount is ACTUALLY ~$450,000 per American household owed thanks to our government. TRUE American debt is in the area of $55 trillion.
<< <i> TRUE American debt is in the area of $55 trillion. >>
Based on what exactly?
Random Collector
www.marksmedals.com
BTW, the man making the statement IS in a position to know as the former Controller General of the United States. And I was wrong....it's $480,000 per household.
Jim Sinclair Oct. 23 2008
You think this is only in China? Illegality is now the hallmark of almost every market on the planet. The effort has between 13 and 88 days to go. Other major Western national leaders always cooperate with the sitting party of the Administration for re-election.
Central bank warns of risks in illegal gold futures speculation
www.chinaview.cn
2008-10-23 17:30:59
BEIJING, Oct. 23 (Xinhua) -- The People's Bank of China said on Thursday that "underground gold futures speculation" was "typical illegal trading on gold futures" and was not protected by law.
The central bank warned Chinese investors of the extremely high risks in illegal futures trading.
Illegal gold futures trading is reported to have cost Chinese investors at least 100 billion yuan (14.6 billion U.S. dollars).
The central bank said Chinese investors could conduct real gold trading through domestic commercial banks, or invest in gold futures through the Shanghai Gold Futures Exchange.
<< <i>What cohodk is saying about risks inherit to euro zone countries and their currencies as compared to the US and the dollar is very valid, but most people are so ethnocentric, they lack the objectivity to look at things on a relative basis. >>
I wasn't commenting on that, just the fact that basing that comparison on the acknowledged debt, i.e. debt clock number, is an erroneous basis for such a comparison. The government, as I think most here would agree, is as good at "massaging" the numbers, off book accounting, and any accounting trick as any large corporation, and has just a valid reason (voters instead of stockholders) to do this as anyone else.
<< <i>What cohodk is saying about risks inherit to euro zone countries and their currencies as compared to the US and the dollar is very valid, but most people are so ethnocentric, they lack the objectivity to look at things on a relative basis. >>
I fully agree, but if we're going to look on a relative basis, let's use the REAL debt, which is over 5x higher than that the government would like acknowledged.
My comment was more in line with BB thinks we had the implements in place to prevent another GD and he has been pretty much wrong. The actions of Ben and Hank in trying to combat the financial crisis will only increase the chances of another GD. Ben has already proven that regardless of what his history taught him, he's following the same general policies that got us into hot water following October 1929.
This brief snippet from the JS site concerning Iceland which apparently is staring at a depressionary inflation. Yes, they aren't the UK, Germany, or the US...but the general concensus around here has been that such a thing is not possible with the on-going credit contraction and massive capital losses. And Iceland has had monumental capital losses. One would have thought that inflation would have been improbable.
I believe what happens to the economy in Iceland will be a test-case for the US. Iceland is going for an inflationary depression since the banking system crashed and foreign investors stopped investing in the country. The same is starting to happen in Eastern Europe. I suppose it is only a matter of time when foreign investors stop investing in the US. Then you will soon have the Iceland experience. Shouldn't we be looking for Weimar in Iceland, then Eastern Europe, then the US, and then the planet?
"Iceland's economy may contract as much as 10 percent, according to Lars Christensen, chief analyst at Danske Bank A/S in Copenhagen. The central bank on Oct. 15 cut the benchmark interest rate by an unprecedented 3.5 percentage points to 12 percent, indicating policy makers have given up trying to control inflation. Prices may surge as much as 75 percent in coming months, Christensen estimates. "
roadrunner
http://gata.org/node/6804
SprottMoney Ltd. sells Canadian gold and silver maples
Submitted by cpowell on Thu, 2008-10-23 00:53. Section: Daily Dispatches
8:45p ET Wednesday, October 22, 2008
Dear Friend of GATA and Gold (and Silver):
Longtime GATA supporter Eric Sprott, founder of Sprott Asset Management in Toronto, has established SprottMoney Ltd. to buy and sell 1-ounce Canadian gold and silver maple coins. The firm accepts both Canadian and international orders and -- miracle of miracles -- actually has inventory ready for delivery. Here are the contact details:
SprottMoney Ltd.
Royal Bank South Tower
200 Bay St.
Suite 2750, P.O. Box 90
Toronto, Ontario M5J 2J2
Canada
Telephone: 416-861-0775 or toll-free 888-861-0775
E-mail: sales@sprottmoney.com
Internet site: http://www.sprottmoney.com
Check it out, and remember that getting real metal cheap may be the best revenge against the bad guys.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Wall Street heads for big decline as recession fears stir panic, batter world markets
NEW YORK (AP) -- Wall Street headed for another precipitous drop Friday as fears of a punishing global recession stirred panic among investors and sent world financial markets into a tailspin. The Dow Jones industrial average futures fell 550 points, triggering a halt in selling of stock future contracts.
Oct. 24 (Bloomberg) -- Futures contracts on the Standard & Poor's 500 Index and Dow Jones Industrial Average plunged by their daily limits on growing concern the financial crisis has infected the broader economy.
<< <i>http://gata.org/node/6804
SprottMoney Ltd. sells Canadian gold and silver maples
Submitted by cpowell on Thu, 2008-10-23 00:53. Section: Daily Dispatches
8:45p ET Wednesday, October 22, 2008
Dear Friend of GATA and Gold (and Silver):
Longtime GATA supporter Eric Sprott, founder of Sprott Asset Management in Toronto, has established SprottMoney Ltd. to buy and sell 1-ounce Canadian gold and silver maple coins. The firm accepts both Canadian and international orders and -- miracle of miracles -- actually has inventory ready for delivery. Here are the contact details:
SprottMoney Ltd.
Royal Bank South Tower
200 Bay St.
Suite 2750, P.O. Box 90
Toronto, Ontario M5J 2J2
Canada
Telephone: 416-861-0775 or toll-free 888-861-0775
E-mail: sales@sprottmoney.com
Internet site: http://www.sprottmoney.com
Check it out, and remember that getting real metal cheap may be the best revenge against the bad guys.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc. >>
The Maple Leafs are over $1 per coin higher than teletrade direct which are right around $13.
Your in luck they are $12.49 each right now much less than the $14 and change.
Teletrade Direct
Hard to bottom feed when you don't feel you're near the bottom.
I know dat's rite! Let's see how things go.
Democrat: Obama's grandma confirms Kenyan birth
roadrunner
Surely you jest. Anyone standing in the way of an election Win will be steamrollered.
Al Gore admitted on camera, in public, that he committed a Felony. As all 8th graders know, a Felon cannot be President. Yet he was on the ballot, no? The same ideology applies to the winner of the next election.
5. The Deflation Scare
Everything on the monetary side points to more inflation in the future. Nevertheless, over the last half a year—especially since the “Credit Crunch” has gained strong momentum—deflationists have been emboldened to proclaim yet again that the economy will spin into a dreadful deflation, dragging everything in sight with it. I can understand the deflationist warnings, as I was once a deflationist, schooled by Robert Prechter, the Dean of the Deflationist School. His book Conquer the Crash is the ultimate reference book on deflations, The Deflationist Bible. Whether one believes in a coming deflationary depression or not, one must nevertheless read the book and understand its arguments.
The quintessence of Prechter’s book is that inflationary booms cannot last forever; here Austrians will eagerly agree. However, Prechter argues that inflation cannot last forever and that deflationary forces will overwhelm the financial system, so that the economy will tailspin into deflation; here Austrians will disagree, as they admit to the possibility of an inflationary bust, i.e., a stagflation.
Prechter provides (in Chapter 13, p. 130) three limits to credit expansion that we can actually observe. With these, we can determine whether monetary inflation can continue or not. His first limit on credit expansion is the rising price of gold; the second is the falling dollar, and the third is rising interest rates (due to rising inflationary expectations) and corresponding falling bond prices, which in itself is strongly deflationary. In Prechter’s terms, the three countervailing forces to inflation come from the gold market, the bond market, and the currency market.
Over the last six years, I have found these criteria to be extremely helpful, especially in determining whether the environment would turn deflationary any time soon. It is easy to analyze each and see if any currently represents a genuine limit to credit expansion.
Price of Gold: The price of gold has been steadily rising for the last seven years and it has not yet deterred the Fed from inflating. Clearly, whether gold rises to $1,000 or $2,000 or more, the Fed will remain unmoved by its rise. Also, just because the price of gold has been correcting for the last 3-4 months does not mean that deflation is here. An intermediate correction does not make a secular trend!
Dollar. Moving to the second limitation, apparently the Fed pays only lip service to the government’s Strong Dollar Policy. In reality, the Fed seems to like the idea of a falling dollar, as long as the fall is orderly. The Fed would most likely be pleased to see the dollar a lot weaker in the future, provided again that the devaluation is “orderly”.
Interest Rates. This third limitation is no limitation at all to an Inflationist Fed hell-bent on preventing deflation. The Fed has devised a number of ingenious approaches to support the long bond and has even stated in public that, if necessary, it will monetize the long end of the curve to support high bond prices and respectively low bond yields.
The deflationist arguments resting on gold, the dollar, and the long-bond yield apparently present no problems for the Fed at all. In reality, the Fed can inflate at will, and this is exactly what it’s doing!
At this point, there appears one, and only one, limitation that will force the Fed to slow down its monetary inflation and compel it to raise interest rates – a Dollar Crisis associated with a flight out of dollars and a panic in the currency markets, triggering a colossal currency derivative crisis.
Nothing short of this will constrain monetary inflation. At this point, it is my opinion that so long as the dollar devalues in an orderly manner, or the dollar actually rises against other fiat currencies, the environment will remain strongly inflationary.
Other deflationists have raised a very powerful argument in their favor. Typically during an asset deflation, where the prices of stocks and real estate fall, there are no willing lenders and no willing borrowers, no matter how low the Fed lowers interest rates. This is dreaded condition is known as “pushing on a string”. The classic example is Japan since 1990.
The counterargument is straightforward: in modern fiat monetary systems: the Central Bank is always a willing lender of last resort and the Government is always a willing borrower of last resort. In order to prevent contraction of credit, the government can always borrow and the Fed can always monetize – credit contraction and deflation do not have to occur when the Fed and the government do not allow it to happen.
So far, it is more than obvious that the Credit Crisis has not prevented the Fed from its inflationary course, despite the rhetoric to the contrary. In reality, the Credit Crunch combined with a contrived deflation scare and a rising dollar has provided a cover for the U.S. government to increase its budget deficits and an excuse for the Fed to inflate further. All monetary indicators confirm that the Fed has been successful in this regard.
link to full article
roadrunner
"Hard to bottom feed when you don't feel you're near the bottom."
I for one am out also. Every time I have tried to buy a few stocks the last 2 weeks the market goes down another 10%.
Some of the energy ETF’S are now trading at 50% below their opening offering price.
With trillions of dollars continuing to come out of the Hedge funds, and other funds, who knows when the bottom will be. We might see this go on for several months.
I don’t see anyway trillions of dollars trying to get out of these markets can happen in a short period of time.
In my case my trading experience for this year has ended up painful, but then again it was designed to be a plaything. I knew this was gambling when I started, but had no idea how rigged the game was, or that the house would be going all in with every passing week.
If this liquidation continues I do not see how we can stay out of the mid 6,000 on the DOW? I don’t think there has been any market correction in our history where all the big players just wanted to go to cash?
My small losses can be recouped in a few short months, but my heart goes out to those Americans that have their entire retirements in this card game.
<< <i> I don’t think there has been any market correction in our history where all the big players just wanted to go to cash? >>
I believe we saw a similar situation after the crash in 1929.
Other than that, I can't think of any other time in US history.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
<< <i> I don’t think there has been any market correction in our history where all the big players just wanted to go to cash? >>
I believe we saw a similar situation after the crash in 1929. Other than that, I can't think of any other time in US history. >>
From urbansurvival.com: "A close in the next few weeks below 7,853 will make this decline worse than the October 1929 collapse."
<< <i>
<< <i>
<< <i> I don’t think there has been any market correction in our history where all the big players just wanted to go to cash? >>
I believe we saw a similar situation after the crash in 1929.
Other than that, I can't think of any other time in US history. >>
From urbansurvival.com: "A close in the next few weeks below 7,853 will make this decline worse than the October 1929 collapse." >>
I think that's a certainty, and it may not take a few weeks.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>You think this would shake up the market? If proved he won't be President, at least not for long.
Democrat: Obama's grandma confirms Kenyan birth >>
Edited to remove my honest opinion that there is something behind the birth certificate thingie. Turned too political, and want this thread to keep around!!
This articule is from a man that helps run the Kitco gold sales operation.
Where he thinks gold is going, and the stories about shortages!
Jon Nadler, an oft-quoted industry spokesman in financial media worldwide, is Senior Investment Products Analyst for Kitco Bullion Dealers. Jon has devoted some 30 years to the precious metals market and on its related investment products. A graduate of UCLA, he established and ran precious metals operations at major financial institutions (Deak-Perera, Republic National Bank, and Bank of America) and has consulted on marketing and product development issues to government mints, precious metals retailers, and trade and membership organizations such as the World Gold Council.
LINK
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<< <i>You think this would shake up the market? If proved he won't be President, at least not for long.
Democrat: Obama's grandma confirms Kenyan birth >>
Edited to remove my honest opinion that there is something behind the birth certificate thingie. Turned too political, and want this thread to keep around!! >>
I, too, was tempted to write something...you know me.
Now I vent of YouTube.
It's fun and less filling.
Ren
My perception is that we have a contingent of pundits who are extremely panicked that this is a very poor reaction by gold to the crisis, and it will make them look bad. It already has. Now they’re trying to manufacture this global stampede into gold by panicking investors and by scaring them with stories of supplies running out. No one will argue that there are higher levels of individual investor interest, but it’s nothing “unprecedented.” They’re trying to make it out as unprecedented, and that’s simply not the case. Perhaps it says more about how short a time such pundits have spent in these markets.
Is this a simplistic approach or what? The newsletter writers and account managers for gold funds are the source of the contrived panic in physical gold. Sure, John. It's one big conspiracy, just like the other so-called "gold cartel conspiracy" that doesn't exist at all by your own account. Demand does appear unprecedented as I have many dealer sources who have been in the coin markets for 30 years (including the 1970's), and they have never seen anything like this. So for whatever reason, the demand for gold and silver coins does appear unprecedented. Many of the pundits that John refers to have been around the bullion and currency markets 10-30 years longer than he has.
In his article he states that the current asset bubbles are being regulated away. And by who else other than our "trusted" regulators who created them. In other words, we've finally been cured of FED/govt-induced asset bubbles. Yes, the same guys who have given us a series of asset bubbles starting with stocks in the later-1990's. The only real question is what will be the next asset bubble in this enduring string? The FED's monetary policies ensure that such a string of hits will not soon be broken. At least not until there is no more FED.
Nadler's interpretation of the dollar turnaround beginning in July is pretty simplistic in that even a 5th grader might question it. He states that suddenly, people looked at how low the dollar was and just decided it was time to start sitting on dollars. Yup, just like that. Let's all start sitting on dollars because supermodel Gisele won't. Seems a bit too cute to me. Now, why didn't the hedge funds see this parking into dollars coming? A lot of smart people there, smarter than 5th graders and supermodels. How about that maybe the FED and major banks saw armageddon coming within weeks or months in the shape of Fannie/Freddie, AIG, WaMu, Merrill, Lehman, Wachovia, etc and decided to strengthen the dollar, kill commodities via the hedge and investment funds to give them a glimmer of hope in getting through it? It was a quick take down with no prisoners being taken. The FED and Treasury work proactively. They don't wait for markets to try and fix things before they get their chance to meddle and tinker.
At the end of Nadler's interview he mentions how even keeled he must be to be "credible" to his audience. After all, if he were proclaiming $2000 gold he would lose all "credibility." Lightweight words coming from the same guy who never saw gold exceeding $650 and secretly hopes that it gets back there so he can claim he did good by keeping his clients out of gold for the last couple of years. Deflationist Robert Prechter is now stating a similar line of reasoning in that fiat (ie FRN) has out performed stocks for the past 10 years or longer. The only thing he left out was that gold (ie real money) has tripled in that time while the FRN is still down 30%. Sorry Robert, the FRN isn't gold. Those holding FRN's since 2001 still lost 30% or more to inflation.
Nadler is no friend of gold so understand where his opinons derive.
roadrunner
“The Nadler article is a good example of how he peddles his "gold has no upside"
Surprisingly though, Kitco, the World Gold Council, and other organizations all share that same philosophy.”
RR,
I see this as good and bad, we do want people to think for themselves, and protect their families, on the other hand we don’t want to become the new stockbroker crowd.
Speaking of the stockbroker crowd, I nearly fell out of my chair laughing when Maria Bartiromo of MSNBC said on Friday, “ I don’t understand what is going on here? For over the last ten years I have done just what almost all of our guests here have recommended, I have invested for the long term. However looking at my portfolio I have not made any money in those ten years, so I am beginning to think that investing for the long term is not the smart thing to do”.
Ya Think?
Speaking of long-term stock investing, I did hear one talking head on MSNBC that made some sense on Friday. Forgot his name, but basically he said this.
If you break the stock market down over the last several decades you will find the following. The market moves in approximately 7-year cycles. After a bottom is reached in a bear market one should load the boat with very good quality, dividend paying, companies with very little debt. The first four years of the cycle great profits are there to be made. At the end of about 4 years the market begins to get stagnant and moves sideways or down. At that point investors should sell and get out waiting for the market to correct. Sometimes within approximately 3 years of downward movement the market will bottom and it will be time to get back in.
The reason that the average investor never makes any money is they ride the cycle all the way up and all the way down, being told to hang in and invest for the long term.
All of these folks that contribute each month to their retirement funds are basically riding the up and down waves of a market that MUST in fact correct at some point as no markets go up forever.
His advise was that everyone possible should be out of the market now and should have gotten out last year.
Some time in the next 12 months we will hit a bottom and everyone should be back in.
This does make perfect sense, but unfortunately his voice is just one of a thousand in the wilderness shouting different advice.
Isn't Argentina doing this now or will in the future?
I remember the Clinton's had the same idea but first they would have redistributed money to help those who couldn't save(?)
401killer
Oh Maria, Maria, Maria, Maria! One would have thought that someone so close to the action would have seen things correctly. Maybe if Jim Sinclair had been one of her guests a few years back she'd have seen another point of view. Not only did she not make money in those 10 years, she lost 30% or more to inflation.
If everyone is "out" of the market, then we'd have no market. Same thing if Storm888 and everyone else were short at the same time...no market. I'm so confident in my 401K that I stopped contributing even with the free 3% company matching. I'd rather have 40% now in my hands, then a wish or further losses down the road.
But Storm888 is probably right. Only traders and shorters make money these days. The rest is for fools.
roadrunner
Oh, kinda like the social security retirement account. Yeah, that oughta work. Campers, if you have any money in any account that the government can get to then you deserve to get the hickey you so richly earned; stock accounts/transactions ummmhuhhhhhh, 401K's ummmmmmhuhhhh, ss account ummmmhuhhhh, cd's just a little redemption tax, roth's well maybe just a little tax on this and the list goes on. Prepare to have your wealth/income "spread around a little", particularly if it's in the public sector where our elected representatives can get a give you a little nick everytime you move it or touch it. Lots of recent news about home safes. Enjoy
roadrunner
You'd do better to put in your contributions, put in a totally safe low-yield, and get the company match. Then take it out (immediately) and pay the 10% penalty, and you're probably still ahead.
Example: you contribute $5000 to get the $2500 match. You withdraw all of it now; the 10% penalty adds $750 to your tax bill on top of what you would have otherwise paid. You're still ahead.