<< <i>Consequently many companies will divert cash needed for current job retention, job creation and needed business investments.'' >>
US business hasn't done any of this in decades. They try to gut the company and ship the jobs overseas. The last thing any of them want to do is protect jobs. They'll waste 40% of all their resources but consider this "fixed cost" while they go after union and non-union jobs alike with a hatchet. The only ones still in business are the ones the CEO's haven't figured out how to gut yet.
that 3.5 billion in gold bought by the Saudi's....have been trying to find some concrete evidence that it actually happened....even under the radar it would have made mainstream press, one would think.
yet if there is manipulation going on behind a curtain, i suppose anything is possible to hide and coerce silence >>
I found several different sources for this information.
"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
Haven't posted for a week to wean myself a little, was getting too negative. But then I realized...it's OK since I went out and got a bunch more metal.
It just seems desperate that the fed would consider the taxpayers as the primary funding source for the bail outs. It would seem to me that the taxpayers would be the source of last resort since it is we that should be the beneficiaries of our government. Hummm...maybe I wasn't listening in Civics class when they explained that part. So, if the tax payer is funding the acquisitions, bailouts, and all the people we have been put on the hook for, then are we all really working for each other ( I do remember that part of Civics class)? See, it is a wonderful world after all.
i had seen the original Cooper post but not the follow-up and i'm becoming more sceptical and jaded with blogs. i am still a believer that PM accumulation and cash (as debt free as possible) is the way to be at this time.
BTW didn't Erin look a wee bit chilly this morning? short clip
i had seen the original Cooper post but not the follow-up and i'm becoming more sceptical and jaded with blogs. i am still a believer that PM accumulation and cash (as debt free as possible) is the way to be at this time. >>
I've read about it so many times and at diffrent places, that I'm leaning towards believing it. Maybe not word for word, but it seems where there is enough smoke, there's probably some sort of fire.
Also, it does make perfect sense to me.
I'm increasing my gold holdings on a personal level for the first time in a couple years.
"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
WSJ calling for a recession only ensures that the people will make it happen by cutting back at all levels. Have to admit that there is much truth to that. More on the inflation vs. deflation scenario. Katz also mentions that the last true deflation occurred in 1955. Don't expect the FED to break a long standing record any time soon. Real interest rates are still strongly negative. The last GDP calculation used a "deflator" of 4%. Sounds inflationary to me.
Some people ask, "What comes first, the chicken or the egg?", I ask, "What comes first--inflation or deflation?"
The real issue is that deflation comes on when the FED/banks yank back on the money supply and cause a panic. When they pump it back up it leads to inflation. That's all that really follows. Whatever does comes, follows an increase or decrease in money supply.
Tracking the CPI since 1983 requires using the old methods to make legitimate comparisons. Using the skewed stats produced after 1983, and especially after the late 1990's where Rubin over-cooked them, can lead to potentially erroneous results.
I hear what you are saying Roadrunner, but I will disagree that there is currently an increase in the money supply. This is the way I see the current situation. The big banks all made loans (investments) based on their deposits (money supply). Deflation in real estate and default on corporate loans and derivatives have wiped out that money supply by a factor of at least 3x. The money that the FED is printing is just going to the banks to put back into their customers accounts so they dont realize they have lost anything. The only thing that is increasing is the Govt debt, not just US govt debt, but debt by all sovereign nations.
Some would argue that this increased debt will kill the US dollar, but I have been saying, kill it relative to what? Europe, China, India, Russia, Japan, South America and the Middle East are all in this boat together. The strongest currency will be the one that has the best chance of surviving, which is the USA and that has so far held true.
So I do not see inflation as any problem since there really is no increase in money supply and the increased debt load across the globe will curtail economic expansion and probably breed some sort of deflation for quite some time.
I will give comments on what I see in the graph at the top of this page shortly, but am interested in the thoughts of others also.
<< <i>I hear what you are saying Roadrunner, but I will disagree that there is currently an increase in the money supply. This is the way I see the current situation. The big banks all made loans (investments) based on their deposits (money supply). Deflation in real estate and default on corporate loans and derivatives have wiped out that money supply by a factor of at least 3x. The money that the FED is printing is just going to the banks to put back into their customers accounts so they dont realize they have lost anything. The only thing that is increasing is the Govt debt, not just US govt debt, but debt by all sovereign nations.
Some would argue that this increased debt will kill the US dollar, but I have been saying, kill it relative to what? Europe, China, India, Russia, Japan, South America and the Middle East are all in this boat together. The strongest currency will be the one that has the best chance of surviving, which is the USA and that has so far held true.
So I do not see inflation as any problem since there really is no increase in money supply and the increased debt load across the globe will curtail economic expansion and probably breed some sort of deflation for quite some time.
I will give comments on what I see in the graph at the top of this page shortly, but am interested in the thoughts of others also. >>
excellent post.
Not only was a ton of money destroyed we have commodities dropping. Oil, copper, cotton... you name it. Gas is now 2 dollars a gallon again. That to me does not represent inflation either.
I am also noticing that the swings in the graph are getting less violent over time and if i was a betting man, based on the graph, it appears we are due for deflation. In a booming economy everyone is fighting for resources... but now it goes unwanted due to a lack of heavy buying. Supplies are building up. It very well could be like this for an easy year or two. A chain reaction taking place compounding it with each failure of a company and less spending.
Amazing how well you stated it. I am just basically repeating it.
Interesting to note that when we had gold and silver backing our currency, that was the time of the biggest swings of inflation, except pf course the early days when even tobacco was money.
from the graph it seems when people wanted resources inflation ran rampant. soon after the gluttony ended deflation set in.
Well, you still have to consider servicing that increasingly huge level of debt. That's a constant. And if there is still a huge amount of toxic debt (which there still is), with alot of it in line to cause hedge funds to go out of business as redemption requests for December roll in, you are talking another round of hits to the stock market, because there's really nowhere to run now. All of the hedgies' truly liquid assets have already been sold (which included the metals).
All of that disappearing money is deflationary in the extreme. It's true. And the only way to re-liquify any of the affected markets is to create more money and inject it all over the place. That's inlationary in the extreme. So, you have two opposing extreme forces in play at the same time. Bernake's claim to fame is that he can overwhelm a deflation by printing money. I'd be real surprised if he actually struck a balance that ended up in equilibrium. He's not going to err on the side of deflation if he can help it. But that's not all.................
When is Treasury going to start paying people to buy their T-Bills? It almost came to that, until Paulson realized that he couldn't start taking in the bad paper in exchange for T-Bills without negatively affecting the whole commercial paper market. Even so, T-Bills are yielding a negative rate of return anyway.
And then, there's the credit card industry, coming up next - front and center. Don't forget the cities and states that are out of money. The mayor of Philly is already whinning about needing a bailout for all of the major cities. Don't forget Cali-for-nia for a $25 Billion "loan".
Note, watching our government mismanage our economy in total disbelief, and acting in your own self-preservation by buying pms doesn't make you a fanatic, although that's the implication. And with all the less-than-flattering definitions of "gold bug" floating around, I'd still much rather be considered a gold bug than any of the other alternatives at this point.
And this crap about gold investors "wanting financial armeggedon" is total BS. If someone doesn't have enough common sense to realize how serious this stuff is, then he's going to be very disappointed when reality finally does intrude. Mocking the debate is simply juvenile. There are hundreds of ways to express opposing opinions besides the way it's been done here by the trolls.
Q: Are You Printing Money? Bernanke: Not Literally
“I hear what you are saying Roadrunner, but I will disagree that there is currently an increase in the money supply. This is the way I see the current situation. The big banks all made loans (investments) based on their deposits (money supply). Deflation in real estate and default on corporate loans and derivatives have wiped out that money supply by a factor of at least 3x. The money that the FED is printing is just going to the banks to put back into their customers accounts so they dont realize they have lost anything. The only thing that is increasing is the Govt debt, not just US govt debt, but debt by all sovereign nations.
Some would argue that this increased debt will kill the US dollar, but I have been saying, kill it relative to what? Europe, China, India, Russia, Japan, South America and the Middle East are all in this boat together. The strongest currency will be the one that has the best chance of surviving, which is the USA and that has so far held true.
So I do not see inflation as any problem since there really is no increase in money supply and the increased debt load across the globe will curtail economic expansion and probably breed some sort of deflation for quite some time.”
My opinion is that Dave has made some very good points.
What I am seeing is purely deflationary. As I pointed out some weeks ago, in order to have real hyper-inflation money must be pumped into the general economy so that the folks can chase the goods and services driving up prices.
I also believe that this is what we have been experiencing over the last decade while the government lied about the numbers. During that period credit was expanded, wages tended upward and consumers spent like there was no tomorrow. This caused prices of all commodities/products to increase steadily.
This period for now appears to be over as wages are deteriorating, credit has tightened, spending has been cut, and price levels of commodities/products have begun to drop.
At least for the present time we are entering a deflationary period.
I also agree with Dave that in a case of having to choose the worst of the evils the dollar has no peers.
Schemes where by the world goes on a gold standard of some type are just untenable in a socialist world. Printing money to pay those on the government payroll, or to pay those on the dole, does not create hyper-inflation as long as those payments remain low. In fact this is also deflationary as wealth is redistributed from those true workers in the society, leaving them with less money to chase goods and services.
Who really knows how long this period will last? Or what our crazy government officials will do next? For now it is my belief that what we will see over the coming months is a deflationary cycle worldwide as all the crazy financial games, hedge funds, over bought stocks, and mutual funds unwind.
Throughout this thread we have recommended that the folks pay down debt, cut spending, and store wealth. Those bits of advice have not changed.
What we can expect to see in 2009 is more deterioration of the stock market, higher unemployment numbers, cash accounts and treasuries that pay little interest, a drop in commodity/product prices, Gold trading in a range of from $650 to $850, and higher taxes in many areas, as governments try to pay all those on their rolls.
With the trend being deflationary, homes prices will continue downward, small business will shut there doors, and more corporations will cut back or go bankrupt.
Went in to the local B&M on Friday after calling for some ASE's. Picked up 15 tubes no problem and they asked if I would rather have a whole sealed monster box but I had to decline because of my budget situation and I doubt I could carry it anyway. That would be a funny peculiar sight...some guy walking down the street hanging onto a green monster box...ha! The proprietor told me after my purchase that they had just sold 50 tubes to one guy that morning but he didn't say if they were sealed boxes or single tubes...I can guess. They had a cast 1000 ozer that someone had just brought in, it was sitting on the counter...pretty ugly. He was getting spot +$6 for the ase's and I thought that was a little stiff but they were fresh '08's and it was cash and carry and thinking that apmex is getting spot+5 for a mail order, nobody was getting hurt over the deal. I did notice that all the tapes were removed and didn't think to ask if they were all searched for rev. '07's but that's probably what happened. I was suprised with the ease of the whole thing, these guys were covered up with monster boxes of new ase's but at the rate they were moving out the door it's hard to say if they are still any left...life is good.
<< <i>Cohodk maybe i'm wrong but aren't you saying we should all be in pm's becase it's all a game the paper money thing no matter were you turn >>
Wayneme,
Thats not really what I am saying. I am not really concerned about paper (fiat) currency as it is and has been widely accepted across the globe for many generations now. Its roots are firmly planted. Surely we have an uphill battle, but I believe the US dollar will survive.
What I do see though is that ALL asset classes will suffer and that includes PMs. If not for the fact that gold is actively sought during times of panic I would not be bullish on gold at all. But since it historically has been viewed as a safe haven it will continue to receive demand. That demand however, may only provide stability to the price, which in itself may be strong relative outperformance when compared to other assets.
However, if deflation becomes more severe or prolonged, I would assume gold and other PMs to perform quite poorly.
Are falling prices the same as wealth distribution? Deflation causes the "haves" to have less, while the "have nots" may have an easier time acquiring things? Assuming the "have nots" still have jobs of course.
<< <i>“I hear what you are saying Roadrunner, but I will disagree that there is currently an increase in the money supply. This is the way I see the current situation. The big banks all made loans (investments) based on their deposits (money supply). Deflation in real estate and default on corporate loans and derivatives have wiped out that money supply by a factor of at least 3x. The money that the FED is printing is just going to the banks to put back into their customers accounts so they dont realize they have lost anything. The only thing that is increasing is the Govt debt, not just US govt debt, but debt by all sovereign nations.
Some would argue that this increased debt will kill the US dollar, but I have been saying, kill it relative to what? Europe, China, India, Russia, Japan, South America and the Middle East are all in this boat together. The strongest currency will be the one that has the best chance of surviving, which is the USA and that has so far held true.
So I do not see inflation as any problem since there really is no increase in money supply and the increased debt load across the globe will curtail economic expansion and probably breed some sort of deflation for quite some time.”
My opinion is that Dave has made some very good points.
What I am seeing is purely deflationary. As I pointed out some weeks ago, in order to have real hyper-inflation money must be pumped into the general economy so that the folks can chase the goods and services driving up prices.
I also believe that this is what we have been experiencing over the last decade while the government lied about the numbers. During that period credit was expanded, wages tended upward and consumers spent like there was no tomorrow. This caused prices of all commodities/products to increase steadily.
This period for now appears to be over as wages are deteriorating, credit has tightened, spending has been cut, and price levels of commodities/products have begun to drop.
At least for the present time we are entering a deflationary period.
I also agree with Dave that in a case of having to choose the worst of the evils the dollar has no peers.
Schemes where by the world goes on a gold standard of some type are just untenable in a socialist world. Printing money to pay those on the government payroll, or to pay those on the dole, does not create hyper-inflation as long as those payments remain low. In fact this is also deflationary as wealth is redistributed from those true workers in the society, leaving them with less money to chase goods and services.
Who really knows how long this period will last? Or what our crazy government officials will do next? For now it is my belief that what we will see over the coming months is a deflationary cycle worldwide as all the crazy financial games, hedge funds, over bought stocks, and mutual funds unwind.
Throughout this thread we have recommended that the folks pay down debt, cut spending, and store wealth. Those bits of advice have not changed.
What we can expect to see in 2009 is more deterioration of the stock market, higher unemployment numbers, cash accounts and treasuries that pay little interest, a drop in commodity/product prices, Gold trading in a range of from $650 to $850, and higher taxes in many areas, as governments try to pay all those on their rolls.
With the trend being deflationary, homes prices will continue downward, small business will shut there doors, and more corporations will cut back or go bankrupt. >>
2010 may not fair any better. RE issues take a lot of time to resolve unlike the dot-com bust.
Is this crisis a trickle down hyperinflation? In September alone, M3 was 2 trillion. Don't remember where that was calculated since it's no more reported. So, all of this money goes to institutions all over the world to save our dollar thereby devaluing it even more. Almost all tangible assets have been sold by the Hedgers depressing stocks, oil, PM's, commodities to raise cash with another bout of redemptions at hand. Deflation at one end and inflation at the other. Which -flation will overcome? We all know what Big Ben wants. This is like a rubber band stretched to a point where you can see it start to crack under stress. At some point without warning it snaps and gives pain to one hand or the other. Before it snaps you know it's under a lot a pressure, but what is the limit.
That would seem to be the common philosophy from what I'm reading but think of it another way, just as an exercise. Sure, the dollar is way inflated but in the current environment it doesn't really matter because it is very difficult to get a loan and there is very little liquidity in the commercial lending areas so even if the dollar is inflated, access to the dollars is very restricted at this time. It works well right now to inflate the dollars because the international monetary situation; the dollar seemingly has very good relative international value, in fact, it seems to be getting more valuable each day. It just makes things cheaper for the U.S..
Consider also that with the credit markets shut down there is less development, less buying, less being spent and people are using much less energy and as a result oil is much cheaper so it doesn't cost too many dollars to buy energy and this conserves cash dollars. So, actually, the cash dollars are more valuable but less plentiful...a strange twist of fate, particularly in an environment where they are printing them as fast as they can. So, I would contend that the dollars are more valuable, less plentiful, and people are not spending them as freely so the issue of devaluing the dollar has no real net effect on the regular guys or people that were in position before all this came to fruition.
People that have cash dollars are not spending them on non-necessary items nor on trips/travel, not on the credit card. People have responded very quickly to the shut down in liquidity at the banks and it didn't take more than a few months; everyone that was tuned in was acting on the situation. Many regular folk are treating those cash dollars like they are valuable and they are conserving and managing them; they know the banks are closed and that the credit card companies are trying to eat them alive. Everybody that wants to survive has responded as best as they can. Those dollars are staying home with daddy and he's keeping track of every one of them; they may be inflated and devalued but they are quite valuable to those that gots 'em.
For example, if I bought a house last year at 200K on a fixed note, or if I bought a car last year for 25K on a fixed note then those dollars are actually worth more than dollars today because it would be much harder to get that loan now. Maybe before I would put 10% down before, now I have to put 20% down so it would take more money now to do the same deal I could have had last year. Say, I bought a factory in '07 dollars or committed to a major construction project with '07 rates and dollars and all of the sudden there are a lot more dollars and the loan is in '07 dollars then it seems I would be much better off with more dollars, an inflated money supply, and an old note in an environment where nobody is lending and nobody is buying. So you get your house, you get your factory expansion and you're paying for them with an '07 fixed note. Point being that credit was much cheaper and easier to get then and if you are still stable and can make your obligations then actually you are much better off, inflated dollars and all.
It actually works for you to let the government print as much money as they can if you are paying for something you got before June this year or better yet, in '07 dollars. So, maybe the dollar is devalued but that isn't all bad. In fact, if I have that house, if I have that car, or factory, or office building then I'm actually in very good shape because my competition can't get a new note. Now, if you're trying to flip the house or develop a site for resale then you are in a poor environment to work your game. For those that are hunkered down and in position, they are in very good shape and they don't mind if you inflate the dollars till the presses break down For those that were in position, they have what they need and all's well.
For these people that have pre June dollars on a fixed note, the dollar may be devalued but it's working just fine. Those dollars are really quite valuable.
Went in to the local B&M on Friday after calling for some ASE's. Picked up 15 tubes no problem and they asked if I would rather have a whole sealed monster box but I had to decline because of my budget situation and I doubt I could carry it anyway. That would be a funny peculiar sight...some guy walking down the street hanging onto a green monster box...ha! The proprietor told me after my purchase that they had just sold 50 tubes to one guy that morning but he didn't say if they were sealed boxes or single tubes...I can guess. They had a cast 1000 ozer that someone had just brought in, it was sitting on the counter...pretty ugly. He was getting spot +$6 for the ase's and I thought that was a little stiff but they were fresh '08's and it was cash and carry and thinking that apmex is getting spot+5 for a mail order, nobody was getting hurt over the deal. I did notice that all the tapes were removed and didn't think to ask if they were all searched for rev. '07's but that's probably what happened. I was suprised with the ease of the whole thing, these guys were covered up with monster boxes of new ase's but at the rate they were moving out the door it's hard to say if they are still any left...life is good. >>
Spot plus $6 is a pretty good price on 08's.
Best down here is $9 over spot for them. Usually we have better pricing on silver than most of the country but lately, it's really hit or miss. I can sell to the shops for $6 over on common dates and they are selling them at $8 over. They won't last 30 minutes in the display case anywhere in town.
I am picking up a batch of 10 oz Engelhards for $111.00 each later this week and that's the best I've seen or heard in quite a while. I'll take that over the Eagles and their premium in a heartbeat.
"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 did notice that all the tapes were removed and didn't think to ask if they were all searched for rev. '07's but that's probably what happened. I was suprised with the ease of the whole thing, these guys were covered up with monster boxes of new ase's but at the rate they were moving out the door it's hard to say if they are still any left...life is good.
mhammerman, I still have an unopened green monster box of '08s that I bought from Tulving in March. Are you saying that the '07 reverse coins could be found in that box? I thought that all of the '07 reverses were on the "W" coins. I haven't really been paying attention to that. Should I open the green monster and get busy?
Q: Are You Printing Money? Bernanke: Not Literally
People need to have capital in order to purchase gold, silver, rare coins, vintage hot rods etc. There will always be people who have money. Because of the way government has expanded in this country to where it would make any marxist blush, the largest base of money in this country, A.K.A. the middle class is being wiped out.
This is not going to "change" ( where is that TM sign? ). Soon, there will be rich, poor, and ignorant .
"mhammerman, I still have an unopened green monster box of '08s that I bought from Tulving in March. Are you saying that the '07 reverse coins could be found in that box? I thought that all of the '07 reverses were on the "W" coins. I haven't really been paying attention to that. Should I open the green monster and get busy?"
Yeah, you're right but I couldn't think of any other reason that the tapes were removed. Heck, now I have no clue why those tapes were removed, just looking for a reason...hummmmmmmm.
I have no clue why those tapes were removed, just looking for a reason...hummmmmmmm.
I didn't know that the tubes had tape. But I would guess that if the tubes originally had tape, someone has looked for MS-70s and then resold the tubes, which I would think is par for the course.
I have an '03 box that I opened new back 5 years ago. I could check the tubes for tape and report back. But I suppose things could have changed since then as well.
Q: Are You Printing Money? Bernanke: Not Literally
Silver ETF for Dubai as they fly in bullion for the Hunts of Arabia
By: Peter J. Cooper
-- Posted 18 November, 2008
The Dubai Multi Commodities Center is understood to be putting the finishing touches to an exchange traded fund for silver with a launch likely next month as demand for silver has surged in the past six months.
Local bullion dealers are having to fly heavy silver bullion bars in from around the globe to meet demand as traditional sources closer to Dubai have been exhausted. The DMCC has successfully established itself as a regional hub for commodities trading over the past few years, and has its own swanky new business park with its gold, silver and diamond towers. City of Gold
Around 20 per cent of the world’s physical gold trade is conducted through Dubai which used to be the epicenter of gold smuggling to India thirty years ago when import taxes were sky high. Nowadays Dubai is a convenient logistics center for commodities traders and still tax free.
The details of the silver ETF are being kept under wraps for the launch but plans seem advanced. Local jewelers have long used silver in a 25:75 amalgam with gold to create white-gold which is popular with consumers.
But clearly the ETF is an strictly an investment product, and demand for the shiniest of metals has been rising strongly, as evidenced by the high premiums now being paid on coins and bullion locally.
ETF price advantage
The latter also gives the ETF a natural advantage. Its price will be closely linked to the lower spot price for physical silver, and not be inflated by the high premiums now paid on physical silver.
Investors will no doubt appreciate this keen pricing advantage, and hope to also profit from the leverage silver offers to the gold price. In previous gold price booms silver has outperformed the yellow metal, and the gold-to-silver price ratio has fallen sharply.
Will the new Dubai silver ETF have a big enough impact on the tiny global silver market to send prices higher like the Hunt Brothers did in the late 1970s when they cornered the market? Well, nothing succeeds like success and a silver ETF in Dubai looks like being the right product in the right place at the right time.
-dude, nice vid. And funny when everyone starts to back away from the table not wanting to acknowledge the "internet-chat PPT." Even the cutie couldn't resist in disclaiming. I have to give Gleason some credit for at least pushing the subject.
“There will always be people who have money. Because of the way government has expanded in this country to where it would make any marxist blush, the largest base of money in this country, A.K.A. the middle class is being wiped out.”
Mrearlygold
I think we can stop using that old saw about the middle class being wiped out.
The fact is the middle class cannot be destroyed until government is down sized by at least half simply because most of the middle class now work for GOVERNMENT.
When the new administration says they want to give a tax cut to the middle class what they are really saying is they want to give a tax cut to government workers which comprise most of those ranks.
There are 89,526 state and local governments in our country, plus the Federal governement, by most estimates these governments empoly a third of the work force, therefore unless governments are desinmated the middle class will always be alive and well.
CEOs want at least $300B stimulus from Obama Business executives press for $300 billion stimulus package shortly after Obama takes office.
In a speech to the conference Monday, Larry Summers cited a report by Goldman Sachs that suggested the stimulus should be in the range of $500 billion to $700 billion.
The federal government has made or proposed the following additional bailouts: · Economic stimulus (tax rebate). $146 billion.. · JP Morgan takeover of Bear Stearns. $29 billion financing by Federal Reserve. · US Treasury takeover of Fannie Mae and Freddie Mac: up to $200 billion. · Assistance package to American International Group. $150 billion (so far). · Bush-Paulson-Congressional bailout of financial institutions. $700 billion (some or all of AIG bailout may be included). · General Electric Co. Agreement to insure up to $139 billion in debt for GE Capital Corp. · Proposed assistance to auto industry. $25 billion or much more. · · Proposed restructuring of mortgages to prevent foreclosures. ???? · Proposed tax cut to families making less than $250,000 per year. · Bailouts for state and local governments .
<< <i>“There will always be people who have money. Because of the way government has expanded in this country to where it would make any marxist blush, the largest base of money in this country, A.K.A. the middle class is being wiped out.”
Mrearlygold
I think we can stop using that old saw about the middle class being wiped out.
The fact is the middle class cannot be destroyed until government is down sized by at least half simply because most of the middle class now work for GOVERNMENT.
When the new administration says they want to give a tax cut to the middle class what they are really saying is they want to give a tax cut to government workers which comprise most of those ranks.
There are 89,526 state and local governments in our country, plus the Federal governement, by most estimates these governments empoly a third of the work force, therefore unless governments are desinmated the middle class will always be alive and well. >>
I didn't know a third was employed by the government. That still leaves 2/3 to be wiped out. Maybe under Obama and his Universal Voluntary Public Service (aka, green shirts), government jobs will increase to 1/2 of the middle class.
"What this crisis reveals is a broken financial system like no other in my lifetime," he told a conference at Lombard Street Research in London.”
As a student of history I see no real reason that Mr. Volkers actions some decades ago should be applauded as saveing the American economy more than it should be condemed for starting this entire debt fiasco.
Mr. Volkers plan was to save the U.S. economy was to issue massive amounts of debt rather than than print massive amounts of money.
Yes this stopped the inflation sprial of the eighty’s but look at what it has given us instead, a world so in debt that we can not find our way clear.
Wasn’t it Mr. Volker who said just print all the money you want as long as it is in the form of debt, and can be sold to others?
I know that Mr. Obama is in high regards of this gentleman, but in the end our massive amounts of debt will be our undoing, just as surely as the inflation.
What is needed at the Federal reserve is a Fed chairman that goes to congress and tells them the well is dry!! Cut the spending because we can no longer print the money nor print the DEBT!
"Jon Nadler, senior analyst at Kitco Bullion Dealers, said demand for gold bars and coins was robust at his firm. But he also pointed out that some investors, frustrated by gold's lack of price performance, were recently selling their gold coins and bars back to dealers.
Gold holdings in ETFs have also been declining recently. The SPDR Gold Trust held 748.94 tons of gold as of Monday, down nearly 22 tons from the October record. Prices of the ETF, which tracks gold prices, have dropped more than 25% from the March record above $100 a share. "
That 22 ton depletion in GLD is a pittance really. Considering gold paper prices have dropped up to 30% over the past several months, yet GLD inventory levels have generally been rising and still near all time highs (less than a 5% dip). That's an incredible statement.
This brief article sums of the usual anti-gold bug claims that gold is a bad investment, earns no interest, is a barbarous relic, is not a currency. etc. And in reality, these arguments hold no water whatsoever. But the myths provide good fodder for the anti-bugs to spread their hatred for hard currencies. What's the current line? If you can't eat it or burn it for warmth, then it's not an investment.......lol. 29,000 tons under central banks control says otherwise.
Another interesting point made by Steve Saville today was that too many anti-bugs focus on the jewelry demand side of gold. So when the Indians stop buying, the demand for gold world-wide falls apart....hence price drops. What they forget is that new gold mining adds about 2% per year to the world's gold supplies. That amount covers current yearly jewelry demand. So it's the other 98% of the existing world gold (CB currency backing, investor and speculator's holdings and demand, etc.) that determines the true price of gold...not the 2%.
And as far as deflating assets "wiping" out monetary increases, it's just not the case. Whether your house is worth $200K yesterday and then $100K, it doesn't offset a $100K increase in the monetary supply that same day. First of all that $100K in the money stock will be multiplied up to $1MILL. Your $100K paper loss on the house may cut your spending back a tad but not to the tune of $900K. While banks may have to increase their stated reserves because of bad debts, they are so close to a zero % reserve requirement (plus getting free money via the FED/Treasury windows) to be irrelevant. The huge monetary increases of the past few months will eventually make it into the economy and be increased by 10X via the Fed fractional reserve ratio. Huge inflation is coming in the period of 2010-2015....maybe sooner. It will play out similar to 2001-2008, 1971-1980, and to some extent 1930-1945, but only much, much larger.
<< <i>What is needed at the Federal reserve is a Fed chairman that goes to congress and tells them the well is dry!! Cut the spending because we can no longer print the money nor print the DEBT! >>
Interesting to note that when we had gold and silver backing our currency, that was the time of the biggest swings of inflation, except pf course the early days when even tobacco was money.
Not true. The biggest swings have occured since 1971 and they form a wave of increasing amplitude (ie each successive bout of inflation and recession was worse than the previous). It still all comes to monetary policy by banks. This is the FED opening the spigot wider during each bout of "growth" followed by them shutting off the spigot more quickly. Each cycle is more severe than the previous. This next cycle will be a Deusie. In the panics of the 1800's it was the regional and local banks that either contracted or increased their money stocks that gave us inflation or panics. Even when their was gold backing the currency, it was the bankers again reducing the amount of gold backing the local currencies that created the panics. If one compares the panics of the 1800's with the panics we've had over the past 95 years, they are all very similar in that it was not gold nor paper money that caused the problems....but the bankers themselves. Don't blame gold or even tobacco when it really comes down to greedy bankers who just always have to have more than the last time.
<< <i>Interesting to note that when we had gold and silver backing our currency, that was the time of the biggest swings of inflation, except pf course the early days when even tobacco was money.
Not true. The biggest swings have occured since 1971 and they form a wave of increasing amplitude (ie each successive bout of inflation and recession was worse than the previous). It still all comes to monetary policy by banks. This is the FED opening the spigot wider during each bout of "growth" followed by them shutting off the spigot more quickly. Each cycle is more severe than the previous. This next cycle will be a Deusie. In the panics of the 1800's it was the regional and local banks that either contracted or increased their money stocks that gave us inflation or panics. Even when their was gold backing the currency, it was the bankers again reducing the amount of gold backing the local currencies that created the panics. If one compares the panics of the 1800's with the panics we've had over the past 95 years, they are all very similar in that it was not gold nor paper money that caused the problems....but the bankers themselves. Don't blame gold or even tobacco when it really comes down to greedy bankers who just always have to have more than the last time.
roadrunner >>
Looking at the chart, which we shall assume is accurate for conversation's sake, we can all probably agree that War caused the largest spikes of inflation except for the 1970s? This makes sense to me personally because resources were being gobbled up at a alarming rate and in many cases destroyed needing to be replaced over and over again until the war was over.
I think we can also agree that most bank panics happened during a time when there was deflation taking place at the same time? Yet oddly enough even with inflation going wild several times after WWI we have had no bank panics marked on the chart.
It is curious to note and I think we can all agree that inflation has taken place non stop since the US dollar became the world's reserve currency after WWII? Yet during this time the US blossomed into a power house with a high standard of living that still seems to be taking place to this day. Riding the hog until the well runs dry I suppose and people no longer want to buy our govt debt or hold our dollars as a reserve.
I also think most people here would agree deflation has probably finally set in after 50+ years? There are many signs of this taking place be it in real estate, commodities, or what have you.
So if I were to lay blame it would be:
1. Early US history it would be the discovery stage of what would work for us. Tobacco was not very wise when the average family could grow money in their backyard. Our govt was so immature no one would trust paper money. We kept sending our hard currency overseas for things we could not make here. We had no choice but to experiment.
2. Middle history of the US would be banker greed. If they tried to be more stable in how they operated maybe they would have survived. No guarantee of their accounts by anyone. Either grab it or lose it when the stampede started by the people.
3. WWI and WWII which set the stage for every other major country becoming a shattered wreck and our currency becoming the reserve. Our govt abused that privilege and here we are. The Federal govt has spent like pigs not just on war.. but on everything else under the sun. It grew like a fat pig with an endless supply of feed.
So to blame bankers might not be a good enough blanket statement to cover the cause as a whole. It seems to me we are in this current mess because we the people elected boobs to office and allowed them to spend like mad at the federal level. (War is one thing.. that is what the Federal govt is supposed to handle.. but everything else grew also). "Ask what your country can do for you, instead of what you can do for your country" is our new slogan that has to stop.
Sad but true... we need a recession that will make the feds realize they have to stop spending and cut cut cut once we have the slightest long term chance for a rebound.
I just think that rampant inflation is a ways away yet. I am hoping that GM going bankrupt will be the wake up call for the feds. It is not too late to change our ways. I am still optimistic.
That is why I feel gold and silver have a while to go yet before we see huge increases if our govt does not change it ways. I guess that is why we disagree so much. I am still an optimist. Young and naive ;-)
so fc if gm goes under tell us your thoughts what will happen we lose 10 percent of the jobs in the country i as a bug hope you are right let the fur fly
Comments
Thank God, two years ago, Casino Royale set the Standard for which all Bond films should be judged.
This one absolutely sucked!!
The worst movie I have ever seen. I feel sorry for my son Danny as it was his first James Bond Movie.
The Director & Editor should be drawn and quartered.........no, even better they should be forced to watch the film at least twice.
Daniel Craig was great, it was all the Film making that ruined it
All MTV type B.S, cuts every 2 seconds, sometimes not even a second.
Horrible, Horrible ...what a waste of a great story line and all of that acting talent .....pure torture to watch.
<< <i>U.S. Companies Ask Congress to Suspend Rule on Pension Payments
Whither the US dollar?
Insurers pull cover from GM and Ford suppliers >>
<< <i>Consequently many companies will divert cash needed for current job retention, job creation and needed business investments.'' >>
US business hasn't done any of this in decades. They try to gut the company
and ship the jobs overseas. The last thing any of them want to do is protect
jobs. They'll waste 40% of all their resources but consider this "fixed cost"
while they go after union and non-union jobs alike with a hatchet. The only
ones still in business are the ones the CEO's haven't figured out how to gut
yet.
<< <i>RR
that 3.5 billion in gold bought by the Saudi's....have been trying to find some concrete evidence that it actually happened....even under the radar it would have made mainstream press, one would think.
yet if there is manipulation going on behind a curtain, i suppose anything is possible to hide and coerce silence >>
I found several different sources for this information.
Here is one to start with:
Saudi buys 3.5 bill in gold
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
"I can not verify the source but all I can say is that this has the hallmarks of a genuine story, based on my 25 years in financial journalism."
Yeah, and did he read about the Cow that learned to fly?
follow up link
It just seems desperate that the fed would consider the taxpayers as the primary funding source for the bail outs. It would seem to me that the taxpayers would be the source of last resort since it is we that should be the beneficiaries of our government. Hummm...maybe I wasn't listening in Civics class when they explained that part. So, if the tax payer is funding the acquisitions, bailouts, and all the people we have been put on the hook for, then are we all really working for each other ( I do remember that part of Civics class)? See, it is a wonderful world after all.
Gold May Spike to $2000 in Medium Term
Let the lawsuites begain:
Goldman Targeted by Investor Complaints of Naked Short-Selling
'Gold production in South Africa will never recover'
Ken Clarke warns Britain is on the brink of 'meltdown'
<< <i>Coopers follow up on his original story about the 3.5bl Gold purchase:
"I can not verify the source but all I can say is that this has the hallmarks of a genuine story, based on my 25 years in financial journalism."
Yeah, and did he read about the Cow that learned to fly?
follow up link >>
Thanks OPA and DH, too.....
i had seen the original Cooper post but not the follow-up and i'm becoming more sceptical and jaded with blogs. i am still a believer that PM accumulation and cash (as debt free as possible) is the way to be at this time.
BTW didn't Erin look a wee bit chilly this morning? short clip
Poppy clip
<< <i>On the other hand, Poppy isn't cold at all; plenty of ventilation.
Poppy clip >>
<< <i>
<< <i>Coopers follow up on his original story about the 3.5bl Gold purchase:
"I can not verify the source but all I can say is that this has the hallmarks of a genuine story, based on my 25 years in financial journalism."
Yeah, and did he read about the Cow that learned to fly?
follow up link >>
Thanks OPA and DH, too.....
i had seen the original Cooper post but not the follow-up and i'm becoming more sceptical and jaded with blogs. i am still a believer that PM accumulation and cash (as debt free as possible) is the way to be at this time. >>
I've read about it so many times and at diffrent places, that I'm leaning towards believing it. Maybe not word for word, but it seems where there is enough smoke, there's probably some sort of fire.
Also, it does make perfect sense to me.
I'm increasing my gold holdings on a personal level for the first time in a couple years.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
WSJ calling for a recession only ensures that the people will make it happen by cutting back at all levels. Have to admit that there is much truth to that. More on the inflation vs. deflation scenario. Katz also mentions that the last true deflation occurred in 1955. Don't expect the FED to break a long standing record any time soon. Real interest rates are still strongly negative. The last GDP calculation used a "deflator" of 4%. Sounds inflationary to me.
Some people ask, "What comes first, the chicken or the egg?", I ask, "What comes first--inflation or deflation?"
The real issue is that deflation comes on when the FED/banks yank back on the money supply and cause a panic. When they pump it back up it leads to inflation. That's all that really follows. Whatever does comes, follows an increase or decrease in money supply.
Tracking the CPI since 1983 requires using the old methods to make legitimate comparisons. Using the skewed stats produced after 1983, and especially after the late 1990's where Rubin over-cooked them, can lead to potentially erroneous results.
Play book for how to achieve a 50% reduction in the price of silver while demand is increasing...
roadrunner
Some would argue that this increased debt will kill the US dollar, but I have been saying, kill it relative to what? Europe, China, India, Russia, Japan, South America and the Middle East are all in this boat together. The strongest currency will be the one that has the best chance of surviving, which is the USA and that has so far held true.
So I do not see inflation as any problem since there really is no increase in money supply and the increased debt load across the globe will curtail economic expansion and probably breed some sort of deflation for quite some time.
I will give comments on what I see in the graph at the top of this page shortly, but am interested in the thoughts of others also.
Knowledge is the enemy of fear
maybe i'm wrong but aren't you saying we should all be in pm's becase it's all a game
the paper money thing
no matter were you turn
<< <i>I hear what you are saying Roadrunner, but I will disagree that there is currently an increase in the money supply. This is the way I see the current situation. The big banks all made loans (investments) based on their deposits (money supply). Deflation in real estate and default on corporate loans and derivatives have wiped out that money supply by a factor of at least 3x. The money that the FED is printing is just going to the banks to put back into their customers accounts so they dont realize they have lost anything. The only thing that is increasing is the Govt debt, not just US govt debt, but debt by all sovereign nations.
Some would argue that this increased debt will kill the US dollar, but I have been saying, kill it relative to what? Europe, China, India, Russia, Japan, South America and the Middle East are all in this boat together. The strongest currency will be the one that has the best chance of surviving, which is the USA and that has so far held true.
So I do not see inflation as any problem since there really is no increase in money supply and the increased debt load across the globe will curtail economic expansion and probably breed some sort of deflation for quite some time.
I will give comments on what I see in the graph at the top of this page shortly, but am interested in the thoughts of others also. >>
excellent post.
Not only was a ton of money destroyed we have commodities dropping.
Oil, copper, cotton... you name it. Gas is now 2 dollars a gallon again.
That to me does not represent inflation either.
I am also noticing that the swings in the graph are getting less violent
over time and if i was a betting man, based on the graph, it appears
we are due for deflation. In a booming economy everyone is fighting
for resources... but now it goes unwanted due to a lack of heavy buying.
Supplies are building up. It very well could be like this for an
easy year or two. A chain reaction taking place compounding it with
each failure of a company and less spending.
Amazing how well you stated it. I am just basically repeating it.
Interesting to note that when we had gold and silver backing our
currency, that was the time of the biggest swings of inflation, except
pf course the early days when even tobacco was money.
from the graph it seems when people wanted resources inflation
ran rampant. soon after the gluttony ended deflation set in.
to cohodk
my be not a excellent post but i would like a reply
All of that disappearing money is deflationary in the extreme. It's true. And the only way to re-liquify any of the affected markets is to create more money and inject it all over the place. That's inlationary in the extreme. So, you have two opposing extreme forces in play at the same time. Bernake's claim to fame is that he can overwhelm a deflation by printing money. I'd be real surprised if he actually struck a balance that ended up in equilibrium. He's not going to err on the side of deflation if he can help it. But that's not all.................
When is Treasury going to start paying people to buy their T-Bills? It almost came to that, until Paulson realized that he couldn't start taking in the bad paper in exchange for T-Bills without negatively affecting the whole commercial paper market. Even so, T-Bills are yielding a negative rate of return anyway.
And then, there's the credit card industry, coming up next - front and center. Don't forget the cities and states that are out of money. The mayor of Philly is already whinning about needing a bailout for all of the major cities. Don't forget Cali-for-nia for a $25 Billion "loan".
Note, watching our government mismanage our economy in total disbelief, and acting in your own self-preservation by buying pms doesn't make you a fanatic, although that's the implication. And with all the less-than-flattering definitions of "gold bug" floating around, I'd still much rather be considered a gold bug than any of the other alternatives at this point.
And this crap about gold investors "wanting financial armeggedon" is total BS. If someone doesn't have enough common sense to realize how serious this stuff is, then he's going to be very disappointed when reality finally does intrude. Mocking the debate is simply juvenile. There are hundreds of ways to express opposing opinions besides the way it's been done here by the trolls.
I knew it would happen.
“I hear what you are saying Roadrunner, but I will disagree that there is currently an increase in the money supply. This is the way I see the current situation. The big banks all made loans (investments) based on their deposits (money supply). Deflation in real estate and default on corporate loans and derivatives have wiped out that money supply by a factor of at least 3x. The money that the FED is printing is just going to the banks to put back into their customers accounts so they dont realize they have lost anything. The only thing that is increasing is the Govt debt, not just US govt debt, but debt by all sovereign nations.
Some would argue that this increased debt will kill the US dollar, but I have been saying, kill it relative to what? Europe, China, India, Russia, Japan, South America and the Middle East are all in this boat together. The strongest currency will be the one that has the best chance of surviving, which is the USA and that has so far held true.
So I do not see inflation as any problem since there really is no increase in money supply and the increased debt load across the globe will curtail economic expansion and probably breed some sort of deflation for quite some time.”
My opinion is that Dave has made some very good points.
What I am seeing is purely deflationary. As I pointed out some weeks ago, in order to have real hyper-inflation money must be pumped into the general economy so that the folks can chase the goods and services driving up prices.
I also believe that this is what we have been experiencing over the last decade while the government lied about the numbers. During that period credit was expanded, wages tended upward and consumers spent like there was no tomorrow. This caused prices of all commodities/products to increase steadily.
This period for now appears to be over as wages are deteriorating, credit has tightened, spending has been cut, and price levels of commodities/products have begun to drop.
At least for the present time we are entering a deflationary period.
I also agree with Dave that in a case of having to choose the worst of the evils the dollar has no peers.
Schemes where by the world goes on a gold standard of some type are just untenable in a socialist world.
Printing money to pay those on the government payroll, or to pay those on the dole, does not create hyper-inflation as long as those payments remain low. In fact this is also deflationary as wealth is redistributed from those true workers in the society, leaving them with less money to chase goods and services.
Who really knows how long this period will last? Or what our crazy government officials will do next?
For now it is my belief that what we will see over the coming months is a deflationary cycle worldwide as all the crazy financial games, hedge funds, over bought stocks, and mutual funds unwind.
Throughout this thread we have recommended that the folks pay down debt, cut spending, and store wealth. Those bits of advice have not changed.
What we can expect to see in 2009 is more deterioration of the stock market, higher unemployment numbers, cash accounts and treasuries that pay little interest, a drop in commodity/product prices, Gold trading in a range of from $650 to $850, and higher taxes in many areas, as governments try to pay all those on their rolls.
With the trend being deflationary, homes prices will continue downward, small business will shut there doors, and more corporations will cut back or go bankrupt.
Agreed, simply stated and sufficient.
TTOWN,
This is interesting but I am not sure how this theory explains first having inflation then, deflation, and then inflation again.
It is a crazy world, with not much in the way of stability!
Went in to the local B&M on Friday after calling for some ASE's. Picked up 15 tubes no problem and they asked if I would rather have a whole sealed monster box but I had to decline because of my budget situation and I doubt I could carry it anyway. That would be a funny peculiar sight...some guy walking down the street hanging onto a green monster box...ha! The proprietor told me after my purchase that they had just sold 50 tubes to one guy that morning but he didn't say if they were sealed boxes or single tubes...I can guess. They had a cast 1000 ozer that someone had just brought in, it was sitting on the counter...pretty ugly. He was getting spot +$6 for the ase's and I thought that was a little stiff but they were fresh '08's and it was cash and carry and thinking that apmex is getting spot+5 for a mail order, nobody was getting hurt over the deal. I did notice that all the tapes were removed and didn't think to ask if they were all searched for rev. '07's but that's probably what happened. I was suprised with the ease of the whole thing, these guys were covered up with monster boxes of new ase's but at the rate they were moving out the door it's hard to say if they are still any left...life is good.
<< <i>Cohodk
maybe i'm wrong but aren't you saying we should all be in pm's becase it's all a game
the paper money thing
no matter were you turn >>
Wayneme,
Thats not really what I am saying. I am not really concerned about paper (fiat) currency as it is and has been widely accepted across the globe for many generations now. Its roots are firmly planted. Surely we have an uphill battle, but I believe the US dollar will survive.
What I do see though is that ALL asset classes will suffer and that includes PMs. If not for the fact that gold is actively sought during times of panic I would not be bullish on gold at all. But since it historically has been viewed as a safe haven it will continue to receive demand. That demand however, may only provide stability to the price, which in itself may be strong relative outperformance when compared to other assets.
However, if deflation becomes more severe or prolonged, I would assume gold and other PMs to perform quite poorly.
Knowledge is the enemy of fear
Are falling prices the same as wealth distribution? Deflation causes the "haves" to have less, while the "have nots" may have an easier time acquiring things? Assuming the "have nots" still have jobs of course.
Knowledge is the enemy of fear
<< <i>“I hear what you are saying Roadrunner, but I will disagree that there is currently an increase in the money supply. This is the way I see the current situation. The big banks all made loans (investments) based on their deposits (money supply). Deflation in real estate and default on corporate loans and derivatives have wiped out that money supply by a factor of at least 3x. The money that the FED is printing is just going to the banks to put back into their customers accounts so they dont realize they have lost anything. The only thing that is increasing is the Govt debt, not just US govt debt, but debt by all sovereign nations.
Some would argue that this increased debt will kill the US dollar, but I have been saying, kill it relative to what? Europe, China, India, Russia, Japan, South America and the Middle East are all in this boat together. The strongest currency will be the one that has the best chance of surviving, which is the USA and that has so far held true.
So I do not see inflation as any problem since there really is no increase in money supply and the increased debt load across the globe will curtail economic expansion and probably breed some sort of deflation for quite some time.”
My opinion is that Dave has made some very good points.
What I am seeing is purely deflationary. As I pointed out some weeks ago, in order to have real hyper-inflation money must be pumped into the general economy so that the folks can chase the goods and services driving up prices.
I also believe that this is what we have been experiencing over the last decade while the government lied about the numbers. During that period credit was expanded, wages tended upward and consumers spent like there was no tomorrow. This caused prices of all commodities/products to increase steadily.
This period for now appears to be over as wages are deteriorating, credit has tightened, spending has been cut, and price levels of commodities/products have begun to drop.
At least for the present time we are entering a deflationary period.
I also agree with Dave that in a case of having to choose the worst of the evils the dollar has no peers.
Schemes where by the world goes on a gold standard of some type are just untenable in a socialist world.
Printing money to pay those on the government payroll, or to pay those on the dole, does not create hyper-inflation as long as those payments remain low. In fact this is also deflationary as wealth is redistributed from those true workers in the society, leaving them with less money to chase goods and services.
Who really knows how long this period will last? Or what our crazy government officials will do next?
For now it is my belief that what we will see over the coming months is a deflationary cycle worldwide as all the crazy financial games, hedge funds, over bought stocks, and mutual funds unwind.
Throughout this thread we have recommended that the folks pay down debt, cut spending, and store wealth. Those bits of advice have not changed.
What we can expect to see in 2009 is more deterioration of the stock market, higher unemployment numbers, cash accounts and treasuries that pay little interest, a drop in commodity/product prices, Gold trading in a range of from $650 to $850, and higher taxes in many areas, as governments try to pay all those on their rolls.
With the trend being deflationary, homes prices will continue downward, small business will shut there doors, and more corporations will cut back or go bankrupt. >>
2010 may not fair any better. RE issues take a lot of time to resolve unlike the dot-com bust.
Is this crisis a trickle down hyperinflation? In September alone, M3 was 2 trillion. Don't remember where that was calculated since it's no more reported. So, all of this money goes to institutions all over the world to save our dollar thereby devaluing it even more. Almost all tangible assets have been sold by the Hedgers depressing stocks, oil, PM's, commodities to raise cash with another bout of redemptions at hand. Deflation at one end and inflation at the other. Which -flation will overcome? We all know what Big Ben wants. This is like a rubber band stretched to a point where you can see it start to crack under stress. At some point without warning it snaps and gives pain to one hand or the other. Before it snaps you know it's under a lot a pressure, but what is the limit.
Ren
That would seem to be the common philosophy from what I'm reading but think of it another way, just as an exercise. Sure, the dollar is way inflated but in the current environment it doesn't really matter because it is very difficult to get a loan and there is very little liquidity in the commercial lending areas so even if the dollar is inflated, access to the dollars is very restricted at this time. It works well right now to inflate the dollars because the international monetary situation; the dollar seemingly has very good relative international value, in fact, it seems to be getting more valuable each day. It just makes things cheaper for the U.S..
Consider also that with the credit markets shut down there is less development, less buying, less being spent and people are using much less energy and as a result oil is much cheaper so it doesn't cost too many dollars to buy energy and this conserves cash dollars. So, actually, the cash dollars are more valuable but less plentiful...a strange twist of fate, particularly in an environment where they are printing them as fast as they can. So, I would contend that the dollars are more valuable, less plentiful, and people are not spending them as freely so the issue of devaluing the dollar has no real net effect on the regular guys or people that were in position before all this came to fruition.
People that have cash dollars are not spending them on non-necessary items nor on trips/travel, not on the credit card. People have responded very quickly to the shut down in liquidity at the banks and it didn't take more than a few months; everyone that was tuned in was acting on the situation. Many regular folk are treating those cash dollars like they are valuable and they are conserving and managing them; they know the banks are closed and that the credit card companies are trying to eat them alive. Everybody that wants to survive has responded as best as they can. Those dollars are staying home with daddy and he's keeping track of every one of them; they may be inflated and devalued but they are quite valuable to those that gots 'em.
For example, if I bought a house last year at 200K on a fixed note, or if I bought a car last year for 25K on a fixed note then those dollars are actually worth more than dollars today because it would be much harder to get that loan now. Maybe before I would put 10% down before, now I have to put 20% down so it would take more money now to do the same deal I could have had last year. Say, I bought a factory in '07 dollars or committed to a major construction project with '07 rates and dollars and all of the sudden there are a lot more dollars and the loan is in '07 dollars then it seems I would be much better off with more dollars, an inflated money supply, and an old note in an environment where nobody is lending and nobody is buying. So you get your house, you get your factory expansion and you're paying for them with an '07 fixed note. Point being that credit was much cheaper and easier to get then and if you are still stable and can make your obligations then actually you are much better off, inflated dollars and all.
It actually works for you to let the government print as much money as they can if you are paying for something you got before June this year or better yet, in '07 dollars. So, maybe the dollar is devalued but that isn't all bad. In fact, if I have that house, if I have that car, or factory, or office building then I'm actually in very good shape because my competition can't get a new note. Now, if you're trying to flip the house or develop a site for resale then you are in a poor environment to work your game. For those that are hunkered down and in position, they are in very good shape and they don't mind if you inflate the dollars till the presses break down For those that were in position, they have what they need and all's well.
For these people that have pre June dollars on a fixed note, the dollar may be devalued but it's working just fine. Those dollars are really quite valuable.
<< <i>News from the front:
Went in to the local B&M on Friday after calling for some ASE's. Picked up 15 tubes no problem and they asked if I would rather have a whole sealed monster box but I had to decline because of my budget situation and I doubt I could carry it anyway. That would be a funny peculiar sight...some guy walking down the street hanging onto a green monster box...ha! The proprietor told me after my purchase that they had just sold 50 tubes to one guy that morning but he didn't say if they were sealed boxes or single tubes...I can guess. They had a cast 1000 ozer that someone had just brought in, it was sitting on the counter...pretty ugly. He was getting spot +$6 for the ase's and I thought that was a little stiff but they were fresh '08's and it was cash and carry and thinking that apmex is getting spot+5 for a mail order, nobody was getting hurt over the deal. I did notice that all the tapes were removed and didn't think to ask if they were all searched for rev. '07's but that's probably what happened. I was suprised with the ease of the whole thing, these guys were covered up with monster boxes of new ase's but at the rate they were moving out the door it's hard to say if they are still any left...life is good. >>
Spot plus $6 is a pretty good price on 08's.
Best down here is $9 over spot for them. Usually we have better pricing on silver than most of the country but lately, it's really hit or miss. I can sell to the shops for $6 over on common dates and they are selling them at $8 over. They won't last 30 minutes in the display case anywhere in town.
I am picking up a batch of 10 oz Engelhards for $111.00 each later this week and that's the best I've seen or heard in quite a while. I'll take that over the Eagles and their premium in a heartbeat.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
mhammerman, I still have an unopened green monster box of '08s that I bought from Tulving in March. Are you saying that the '07 reverse coins could be found in that box? I thought that all of the '07 reverses were on the "W" coins. I haven't really been paying attention to that. Should I open the green monster and get busy?
I knew it would happen.
This is not going to "change" ( where is that TM sign? ). Soon, there will be rich, poor, and ignorant .
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Yeah, you're right but I couldn't think of any other reason that the tapes were removed. Heck, now I have no clue why those tapes were removed, just looking for a reason...hummmmmmmm.
I didn't know that the tubes had tape. But I would guess that if the tubes originally had tape, someone has looked for MS-70s and then resold the tubes, which I would think is par for the course.
I have an '03 box that I opened new back 5 years ago. I could check the tubes for tape and report back. But I suppose things could have changed since then as well.
I knew it would happen.
Linky
Silver ETF for Dubai as they fly in bullion for the Hunts of Arabia
By: Peter J. Cooper
-- Posted 18 November, 2008
The Dubai Multi Commodities Center is understood to be putting the finishing touches to an exchange traded fund for silver with a launch likely next month as demand for silver has surged in the past six months.
Local bullion dealers are having to fly heavy silver bullion bars in from around the globe to meet demand as traditional sources closer to Dubai have been exhausted. The DMCC has successfully established itself as a regional hub for commodities trading over the past few years, and has its own swanky new business park with its gold, silver and diamond towers.
City of Gold
Around 20 per cent of the world’s physical gold trade is conducted through Dubai which used to be the epicenter of gold smuggling to India thirty years ago when import taxes were sky high. Nowadays Dubai is a convenient logistics center for commodities traders and still tax free.
The details of the silver ETF are being kept under wraps for the launch but plans seem advanced. Local jewelers have long used silver in a 25:75 amalgam with gold to create white-gold which is popular with consumers.
But clearly the ETF is an strictly an investment product, and demand for the shiniest of metals has been rising strongly, as evidenced by the high premiums now being paid on coins and bullion locally.
ETF price advantage
The latter also gives the ETF a natural advantage. Its price will be closely linked to the lower spot price for physical silver, and not be inflated by the high premiums now paid on physical silver.
Investors will no doubt appreciate this keen pricing advantage, and hope to also profit from the leverage silver offers to the gold price. In previous gold price booms silver has outperformed the yellow metal, and the gold-to-silver price ratio has fallen sharply.
Will the new Dubai silver ETF have a big enough impact on the tiny global silver market to send prices higher like the Hunt Brothers did in the late 1970s when they cornered the market? Well, nothing succeeds like success and a silver ETF in Dubai looks like being the right product in the right place at the right time.
<< <i>CNBC talking heads discussion of the PPT >>
-dude, nice vid. And funny when everyone starts to back away from the table not wanting to acknowledge the "internet-chat PPT." Even the cutie couldn't resist in disclaiming. I have to give Gleason some credit for at least pushing the subject.
Ren
Mrearlygold
I think we can stop using that old saw about the middle class being wiped out.
The fact is the middle class cannot be destroyed until government is down sized by at least half simply because most of the middle class now work for GOVERNMENT.
When the new administration says they want to give a tax cut to the middle class what they are really saying is they want to give a tax cut to government workers which comprise most of those ranks.
There are 89,526 state and local governments in our country, plus the Federal governement, by most estimates these governments empoly a third of the work force, therefore unless governments are desinmated the middle class will always be alive and well.
Will all these bails be inflationary ?
CEOs want at least $300B stimulus from Obama
Business executives press for $300 billion stimulus package shortly after Obama takes office.
In a speech to the conference Monday, Larry Summers cited a report by Goldman Sachs that suggested the stimulus should be in the range of $500 billion to $700 billion.
The federal government has made or proposed the following additional bailouts:
· Economic stimulus (tax rebate). $146 billion..
· JP Morgan takeover of Bear Stearns. $29 billion financing by Federal Reserve.
· US Treasury takeover of Fannie Mae and Freddie Mac: up to $200 billion.
· Assistance package to American International Group. $150 billion (so far).
· Bush-Paulson-Congressional bailout of financial institutions. $700 billion (some or all of AIG bailout may be included).
· General Electric Co. Agreement to insure up to $139 billion in debt for GE Capital Corp.
· Proposed assistance to auto industry. $25 billion or much more.
·
· Proposed restructuring of mortgages to prevent foreclosures. ????
· Proposed tax cut to families making less than $250,000 per year.
· Bailouts for state and local governments .
Should The Government Stop Dumping Money Into A Giant Hole?
<< <i>“There will always be people who have money. Because of the way government has expanded in this country to where it would make any marxist blush, the largest base of money in this country, A.K.A. the middle class is being wiped out.”
Mrearlygold
I think we can stop using that old saw about the middle class being wiped out.
The fact is the middle class cannot be destroyed until government is down sized by at least half simply because most of the middle class now work for GOVERNMENT.
When the new administration says they want to give a tax cut to the middle class what they are really saying is they want to give a tax cut to government workers which comprise most of those ranks.
There are 89,526 state and local governments in our country, plus the Federal governement, by most estimates these governments empoly a third of the work force, therefore unless governments are desinmated the middle class will always be alive and well. >>
I didn't know a third was employed by the government. That still leaves 2/3 to be wiped out. Maybe under Obama and his Universal Voluntary Public Service (aka, green shirts), government jobs will increase to 1/2 of the middle class.
Ren
Volcker issues dire warning on slump
"What this crisis reveals is a broken financial system like no other in my lifetime," he told a conference at Lombard Street Research in London.”
As a student of history I see no real reason that Mr. Volkers actions some decades ago should be applauded as saveing the American economy more than it should be condemed for starting this entire debt fiasco.
Mr. Volkers plan was to save the U.S. economy was to issue massive amounts of debt rather than than print massive amounts of money.
Yes this stopped the inflation sprial of the eighty’s but look at what it has given us instead, a world so in debt that we can not find our way clear.
Wasn’t it Mr. Volker who said just print all the money you want as long as it is in the form of debt, and can be sold to others?
I know that Mr. Obama is in high regards of this gentleman, but in the end our massive amounts of debt will be our undoing, just as surely as the inflation.
What is needed at the Federal reserve is a Fed chairman that goes to congress and tells them the well is dry!! Cut the spending because we can no longer print the money nor print the DEBT!
"Jon Nadler, senior analyst at Kitco Bullion Dealers, said demand for gold bars and coins was robust at his firm. But he also pointed out that some investors, frustrated by gold's lack of price performance, were recently selling their gold coins and bars back to dealers.
Gold holdings in ETFs have also been declining recently. The SPDR Gold Trust held 748.94 tons of gold as of Monday, down nearly 22 tons from the October record. Prices of the ETF, which tracks gold prices, have dropped more than 25% from the March record above $100 a share. "
CG
6 myths about gold - the usual things you see trotted out here for show and tell
This brief article sums of the usual anti-gold bug claims that gold is a bad investment, earns no interest, is a barbarous relic, is not a currency. etc. And in reality, these arguments hold no water whatsoever. But the myths provide good fodder for the anti-bugs to spread their hatred for hard currencies. What's the current line? If you can't eat it or burn it for warmth, then it's not an investment.......lol. 29,000 tons under central banks control says otherwise.
Another interesting point made by Steve Saville today was that too many anti-bugs focus on the jewelry demand side of gold. So when the Indians stop buying, the demand for gold world-wide falls apart....hence price drops. What they forget is that new gold mining adds about 2% per year to the world's gold supplies. That amount covers current yearly jewelry demand. So it's the other 98% of the existing world gold (CB currency backing, investor and speculator's holdings and demand, etc.) that determines the true price of gold...not the 2%.
And as far as deflating assets "wiping" out monetary increases, it's just not the case. Whether your house is worth $200K yesterday and then $100K, it doesn't offset a $100K increase in the monetary supply that same day. First of all that $100K in the money stock will be multiplied up to $1MILL. Your $100K paper loss on the house may cut your spending back a tad but not to the tune of $900K. While banks may have to increase their stated reserves because of bad debts, they are so close to a zero % reserve requirement (plus getting free money via the FED/Treasury windows) to be irrelevant. The huge monetary increases of the past few months will eventually make it into the economy and be increased by 10X via the Fed fractional reserve ratio. Huge inflation is coming in the period of 2010-2015....maybe sooner. It will play out similar to 2001-2008, 1971-1980, and to some extent 1930-1945, but only much, much larger.
roadrunner
<< <i>What is needed at the Federal reserve is a Fed chairman that goes to congress and tells them the well is dry!! Cut the spending because we can no longer print the money nor print the DEBT! >>
i'd get in line for that!
currency, that was the time of the biggest swings of inflation, except
pf course the early days when even tobacco was money.
Not true. The biggest swings have occured since 1971 and they form a wave of increasing amplitude (ie each successive bout of inflation and recession was worse than the previous). It still all comes to monetary policy by banks. This is the FED opening the spigot wider during each bout of "growth" followed by them shutting off the spigot more quickly. Each cycle is more severe than the previous. This next cycle will be a Deusie. In the panics of the 1800's it was the regional and local banks that either contracted or increased their money stocks that gave us inflation or panics. Even when their was gold backing the currency, it was the bankers again reducing the amount of gold backing the local currencies that created the panics. If one compares the panics of the 1800's with the panics we've had over the past 95 years, they are all very similar in that it was not gold nor paper money that caused the problems....but the bankers themselves. Don't blame gold or even tobacco when it really comes down to greedy bankers who just always have to have more than the last time.
roadrunner
When I snap out of this, I just know that it's going to be bad.
I knew it would happen.
<< <i>Interesting to note that when we had gold and silver backing our
currency, that was the time of the biggest swings of inflation, except
pf course the early days when even tobacco was money.
Not true. The biggest swings have occured since 1971 and they form a wave of increasing amplitude (ie each successive bout of inflation and recession was worse than the previous). It still all comes to monetary policy by banks. This is the FED opening the spigot wider during each bout of "growth" followed by them shutting off the spigot more quickly. Each cycle is more severe than the previous. This next cycle will be a Deusie. In the panics of the 1800's it was the regional and local banks that either contracted or increased their money stocks that gave us inflation or panics. Even when their was gold backing the currency, it was the bankers again reducing the amount of gold backing the local currencies that created the panics. If one compares the panics of the 1800's with the panics we've had over the past 95 years, they are all very similar in that it was not gold nor paper money that caused the problems....but the bankers themselves. Don't blame gold or even tobacco when it really comes down to greedy bankers who just always have to have more than the last time.
roadrunner >>
Looking at the chart, which we shall assume is accurate for conversation's sake, we can all probably agree that War caused
the largest spikes of inflation except for the 1970s? This makes sense
to me personally because resources were being gobbled up at a
alarming rate and in many cases destroyed needing to be replaced
over and over again until the war was over.
I think we can also agree that most bank panics happened during
a time when there was deflation taking place at the same time? Yet
oddly enough even with inflation going wild several times after WWI
we have had no bank panics marked on the chart.
It is curious to note and I think we can all agree that inflation has taken
place non stop since the US dollar became the world's reserve currency
after WWII? Yet during this time the US blossomed into a power house
with a high standard of living that still seems to be taking place to this
day. Riding the hog until the well runs dry I suppose and people no
longer want to buy our govt debt or hold our dollars as a reserve.
I also think most people here would agree deflation has probably finally
set in after 50+ years? There are many signs of this taking place be
it in real estate, commodities, or what have you.
So if I were to lay blame it would be:
1. Early US history it would be the discovery stage of what would work for us. Tobacco was not very wise when the average family
could grow money in their backyard. Our govt was so immature no
one would trust paper money. We kept sending our hard currency
overseas for things we could not make here. We had no choice but
to experiment.
2. Middle history of the US would be banker greed. If they tried to be
more stable in how they operated maybe they would have survived.
No guarantee of their accounts by anyone. Either grab it or lose it
when the stampede started by the people.
3. WWI and WWII which set the stage for every other major country
becoming a shattered wreck and our currency becoming the reserve.
Our govt abused that privilege and here we are. The Federal govt
has spent like pigs not just on war.. but on everything else under
the sun. It grew like a fat pig with an endless supply of feed.
So to blame bankers might not be a good enough blanket statement
to cover the cause as a whole. It seems to me we are in this current
mess because we the people elected boobs to office and allowed
them to spend like mad at the federal level. (War is one thing.. that
is what the Federal govt is supposed to handle.. but everything else
grew also). "Ask what your country can do for you, instead of what
you can do for your country" is our new slogan that has to stop.
Sad but true... we need a recession that will make the feds realize
they have to stop spending and cut cut cut once we have the slightest
long term chance for a rebound.
I just think that rampant inflation is a ways away yet. I am hoping
that GM going bankrupt will be the wake up call for the feds. It is not
too late to change our ways. I am still optimistic.
That is why I feel gold and silver have a while to go yet before we see
huge increases if our govt does not change it ways. I guess that is
why we disagree so much. I am still an optimist. Young and naive ;-)
if gm goes under tell us your thoughts what will happen
we lose 10 percent of the jobs in the country
i as a bug hope you are right let the fur fly
you seem to like history look a little farther back see how things work out