Clinton's tax hike had nothing to do with the boom of the 90s, that was due to Reagan's cuts which allowed for investment into R&R resulting in the tech boom. Clinton was fortunate to be president at the time, he inherited the economy that people mistakenly give him credit for. The economy succeded in spite of Clinton, not because of him. The current President inherited the Clinton recession which was caused by his tax programs. The chickens were finally coming home to roost and roosting chickens only result in a big pile of chickensh!t.
Here are the various assertions of Deadhorse. See if you can follow the logic...........
Jimmy Carter, president for exactly 4 years, keeps the top tax bracket at 70% effectively causing a recession DURING his term. Bill Clinton raises taxes in 1993, but a recession doesn't happen until 2001.......he claims a cause and effect delay of 8 years. Reagan lowers taxes in 1981, 1984, and 1986. We enter a recession in 1992........around 8 years later. BUT WAIT!!! Reagan is responsible for the economic boom of the late 1990s. A cause and effect delay of about 14 years give or take..
I'm not making this up, this is EXACTLY what Deadhorse is claiming on behalf of conservatives. I'm using HIS numbers and HIS examples.
Jimmy Carter can cause a recession by keeping taxes the same, and it takes 0 years. Bill Clinton can cause a recession by raising taxes, but it takes 8 years. Ronald Reagan is NOT responsible for a recession after 8 years but IS responsible for a boom economy 14 years later.
This is utter nonsense. This is blatant partisan stupidity. I cannot put into words how disgusted I am at the lengths someone would go to in defense of his party of choice. Deadhorse, you are beyond contempt.
"...reality has a well-known liberal bias." -- Stephen Colbert
Are you at least admitting that Carter's 70% tax rate did damage the economy?
No. And just to educate you, president Johnson signed the 70% top tax rate into law, not Carter.
I can't speak to the tax rates in the 20s, that was way before my time and frankly, I haven't studied that aspect of history in terms of the tax rate, only the trends that portend a similar fate in our near future.
You BETTER study it because Bush is making every single mistake that Wilson did in the mid 1920's.
He didn't balance any budgets because the books were clearly cooked.
George Bush uses the same Congressional budget office numbers that Bill Clinton did. You say the books were "clearly cooked" yet you can't provide evidence to save your life. You're simply making it up.
You know Iwog, I'm totally done with you.
Probably because you've posted a dozen times but have yet to provide a single fact, chart, link, or logical argument to support your assertions.
"...reality has a well-known liberal bias." -- Stephen Colbert
I never have a problem admitting an error, and actually retirees making $34,000 didn't get a tax increase. The tax increase only affected the amount of adjusted gross income OVER $34,000.
If I were you, I'd be mad as hell at George Bush. He lowered taxes for the highest tax bracket, gave corporations huge tax breaks, reduced taxes on dead people who left millions of dollars to heirs, but totally ignored the social security tax rollback proposed by REAL conservatives in the house and senate. Taking into account inflation, this particular tax under George Bush is higher and affects more people than it did under Bill Clinton.
"...reality has a well-known liberal bias." -- Stephen Colbert
Probably because you've posted a dozen times but have yet to provide a single fact, chart, link, or logical argument to support your assertions. >>
No, it's actually because I've been advised by posters far more respected than you that it is a fruitless endeavor. You are rude and obnoxious, a liar and a socialist scumbag, at least that's the concensus of a number of your peers. Some have been saying it's such a shame that this thread went along so well, 1000 posts and now it's been hijacked by the likes of your ilk.
No arguement, fact, chart or link that pokes a hole in your position is acceptable to you because you are an elitist prig.
"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>How much of Clinton's stock market bull was due to the rapt attention paid to TV commercials during the Lewinsky parade?
>>
A beter question might be; "How much of it was due to cooked books?"
"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
And thank you, Iwog, for admitting that in 1993 Democrats thought retirees making $34000 per year were Rich and not paying their fair share of taxes. >>
No arguement, fact, chart or link that pokes a hole in your position is acceptable to you because you are an elitist prig. you are rude and obnoxious, a liar and a socialist scumbag
What's a prig?
"...reality has a well-known liberal bias." -- Stephen Colbert
My parents lost over 27k just in Enron stock alone. and they were/are retired not to be confused with rich.
Here's the kicker.......Enron didn't pay any taxes (link) and actually took $278 million dollars FROM the government in 2001. (tax year 2000) George Bush's friend and close advisor Kenneth Lay stole millions of tax dollars and will probably be pardoned.
"...reality has a well-known liberal bias." -- Stephen Colbert
No arguement, fact, chart or link that pokes a hole in your position is acceptable to you because you are an elitist prig. you are rude and obnoxious, a liar and a socialist scumbag
What's a prig? >>
I thought you were so godamned intelligent, ever think of looking it up in the dictionary?
"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 always hear the "Rush" fans trashing Clinton and personally I never cared for him. Now after a few years of this guy I'm starting to think Clinton didn't do too bad. You think he "gutted" the military? What do you think is happening now?? They can't get recruits and we're down about 10,000 casualties. Nothing guts a military quite like a bad war. Clinton was in office 8 years and we had less casualties than 1 month of a Bush. Clinton had no great inflation or depression just a slow chug along.
In the end we overestimate the power of the president to fix all the problems when all the powers that be are feeding at the troth.
Now it seems that I underestimated the power of the president to screw things up. Bush is doing much more of that than I thought possible.
<<<<No arguement, fact, chart or link that pokes a hole in your position is acceptable to you because you are an elitist prig. you are rude and obnoxious, a liar and a socialist scumbag>>>>
<<What's a prig?>>
I thought you were so godamned intelligent, ever think of looking it up in the dictionary?
I'm sure glad we clarified who is rude and obnoxious........
"...reality has a well-known liberal bias." -- Stephen Colbert
Coynclecter, I agree with you. The deeper you examine the presidency of Bill Clinton, the better he looks. It's very hard to evaluate a man like Clinton when the press is hammering day and night about who he's having sex with.
The claims that he "gutted" the military are simply insane. See my graph on the previous page. You're also right about this immoral war making us much LESS prepared for our own defense than at any time under Clinton. I keep shaking my head and wondering when people will stop treating political parties like competing football teams.
"...reality has a well-known liberal bias." -- Stephen Colbert
The market made a late session run to new highs, pushing the yields lower across the curve, knocking the 10-yr yields off to 4.069%. The day's trade was afflicted with spotty volume even as there was decent price volatility. In the latter part of the day the strong-long-bond took the lead over from the 5-yr, each carving out a nearly 7 basis point range. The market is seeing some quarter-end activity which is feeding into the bid. Another input into the upside is refreshed concerns over the destiny of the hedge-fund world, as the quarter comes to a close there are expectations that customers will start asking for their money back. The dollar held its bid against the euro for the session, even as US rates fell and saw a surprisingly negative manufacturing report. The euro was off 4.5% from a month back, and 11% lower against the buck from the highs on the year. Treasury options saw limited action, although there were several sizable individual trades, generally on the side of selling implied volatility, but large-sized trade Treasuries grabbed a bid following the disappointing Philly Fed index and retained its bid throughout the afternoon on comments by KC Fed President Hoenig. Hoenig saying he has no answer to the yield curve's 'flattness' and believes the neutral fed funds rate may be 3.5% to 4.5% (pull your truck up over here). He also added that the rates should get there "sooner rather than later"...and the bond market rallied fairly hard (go figure)
Not suprising. The Philadelphia Federal Reserve survey wasn't just a disappointment, it was an economic contraction. (a contraction in two consecutive quarters is the definition of a recession)
For those keeping score.......
10 year yield: 4.07% 5 year yield: 3.86% 2 year yield: 3.69%
As most know, a yield curve inversion has a perfect record in predicting a recession.
"...reality has a well-known liberal bias." -- Stephen Colbert
“CNBC reported, on at least two days last week, that some mysterious buyer came roaring into the SP500 futures pits and gobbled up enough futures to control $300 billion in stock.”
And how about this??
“SILVER ETF MAY CAUSE SPIKE”
Is the accumulation of millions of ounces of Gold and Silver by EFT’S going to finally put enough of the metals in private hands so that worlds central banks can no longer move the prices at will?
My take is that Gold is moving on the Euro. I think the folks in the World are realizing that there is no other substitute for a World reserve currency, the USD is it for now. The EU seems to be arguing about everything under the sun. Months ago I predicted that the EU would eventually fall to pieces. It will take several years, but there is just no way all of these very different folks can act like we do in the U.S. My guess is that Europeans are now realizing this, and coming into the Gold market.
The USD will no doubt continue as the worlds reserve currency simple because there is no other choice, but safety minded investors don’t really like that they have no way to move, so they are perhaps buying some Gold!
On Sept. 8,1992, Bill Clinton said, "The only people who will pay more income taxes are the wealthiest 2 percent, those living in households making over $200,000 a year."
In response to a Bush-Quayle ad that people with incomes of as little as $36,000 would pay more taxes under the Clinton plan, Bill Clinton said on Oct. 1, 1992, "It's a disgrace to the American people that the president (Bush) of the United States would make a claim that is so baseless, that is so without foundation, so shameless in its attempt to get votes under false pretenses."
Yet the NY TIMES in the analysis of Clinton's budget wrote, "There are tax increases for every family making more than $20,000 a year!"
"While Clinton continued to defend his middle-class tax cut publicly, he privately expressed the view to his advisers that it was intellectually dishonest." (The Agenda, by Bob Woodward, p. 31)
We now know the truth, people making a little as $36K had their taxes raised. Somebody ranted about wanting numbers and facts, looks like they are right here, where they've always been.
This is an interesting bit of information that you don't hear much about in the media ---
a.. Enron's chairman did meet with the president and the vice president in the Oval Office.
b.. Enron gave $420,000 to the president's party over three years.
c.. It donated $100,000 to the president's inauguration festivities.
d.. The Enron chairman stayed at the White House 11 times.
e.. The corporation had access to the administration at its highest levels and even enlisted the Commerce and State Departments to grease deals for it.
f.. The taxpayer-supported Export-Import Bank subsidized Enron for more than $600 million in just one transaction. Scandalous!!
g.. BUT...the president under whom all this happened WASN'T George W. Bush.
h.. SURPRISE ......... It was Bill Clinton!
"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>The claims that he "gutted" the military are simply insane. See my graph on the previous page. You're also right about this immoral war making us much LESS prepared for our own defense than at any time under Clinton. >>
Pure lies!
Talk about gutting!
709,000 regular (active duty) service personnel 293,000 reserve troops Eight standing army divisions 20 air force and navy air wings with 2,000 combat aircraft 232 strategic bombers 13 strategic ballistic missile submarines with 3,114 nuclear warheads on 232 missiles 500 ICBMs with 1,950 warheads Four aircraft carriers 121 surface combat ships and submarines, plus all the support bases, shipyards and logistical assets needed to sustain such a naval force.
Those military assets have been eliminated by none other than Bill Clinton.
IMHO, if our military had not been destroyed as shown above and maintained at the levels they were before Clinton took out the scissors, we would be in much better shape today in manpower end-strength, weapons systems, armored combat vehicles, support logistics, etc.
Post all the pretty colored graphs you want, the above are facts.
Geoff Metcalf is the source, you can find his writings all over the internet.
"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
If anyone is paying attention to this debate between me and Deadhorse, you need to carefully consider what he just did.
The first half of his post was directly copied and plagiarized from a website entitled Bill Clinton's Known Lies
The second half of his post was directly copied and plagiarized from a website entitled Lying about Lay
He stole ALL of the text, word for word including spacing and punctuation, and gave no credit to the actual author. Instead of responding to my arguments and thinking for himself, he simply stole the thoughts of others and assumed they were correct because they agreed with his point of view. In my opinion, this is simply an evil act that has nothing to do with politics.
"...reality has a well-known liberal bias." -- Stephen Colbert
I checked one of Deadhorse's "Facts" with the US Government Information site just to see if they had any validity at all.
Whoever he stole the numbers from, they do not agree with the military's own published enlisted manpower report.
In 1993 we had 1,705,103 enlisted military In 2000 we had 1,384,338 enlisted military In April 30th, 2005 we had 1,427,331 enlisted military
The eight year reduction was 320,000 soliders or approximately 18% of our enlisted military force, not the fictcional 709,000 reported by Deadhorse. That 18% reduction represents a number of closed bases deemed obsolete by the military itself, and the general reduction in arms following the end of the cold war.
It really doesn't matter, because Republicans will continue to say Clinton "gutted" the military forever because this particular lie suits their purpose.
Editied: As I looked over the DoD website, I noticed that the current number of enlisted military personnel is almost EXACTLY what Bill Clinton left office with. Even if you think Clinton gutted the military, the ONLY valid comment you can make about George Bush is he kept it gutted.......
"...reality has a well-known liberal bias." -- Stephen Colbert
Was the graph on military spending in real dollars or nominal dollars? I suspect nominal dollars, which is somewhat misleading. I tried to find one in real dollars but had no luck.
<< <i>This debate needs to take place somewhere else. This thread is not a forum for political debate. "GOLD AND SILVER WORLD NEWS, ECONOMIC PREDICTIONS." >>
mhammerman, I agree with you totally except on one point. There is absolutely NO WAY you can call what Deadhorse has been posting "debate".........
Coinhusker, I think the graph is in nominal dollars. Inflation would change the left side of the graph greatly, but since there was very little inflation during the 1990's you can see that spending was MODERATELY reduced following the end of the cold war.
"...reality has a well-known liberal bias." -- Stephen Colbert
Look Iwog. The first part is common knowledge. Cut and paste yes, just like you do.
The second part you have no clue about. Read Metcalf's columns, that's where I got it from and gave him credit.
I did not visit either site you referenced. Sorry. I guess the truth is all over the net, isn't it.
The fact is, the truth hurts and you are wrong. You have been lying to everyone and now that I posted a few fact as you insisted upon, I really am done with the likes of you.
I was advised not to even bother, that it was fruitless and the posters who PM'd me were correct. You have taken this thread and done your best to poison it with your socialist lies.
KMA!
"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
Deadhorse, you copied and pasted your ENTIRE POST from other people!! 13 paragraphs copied directly from someone else's website, and you didn't even bother checking if the facts were correct!!!
And for the record, I haven't lied about anything and never will. Every single assertion I've made has facts behind it, and they ALL have links to those sources. I've NEVER copied and pasted a post in my entire life, and I've ALWAYS used quotes or italics when using someone else's work in my post. You've made a complete mockery out of your position, and proven yourself to be utterly beyond contempt. You've accused me of being a liar, a socialist, a scumbag, an elitist, and a prig, and UNBELIEVABLY you've called ME rude and obnoxious! This is how you view the world? A red film of blind hatred for Bill Clinton and Democrats? I feel sorry for you.
"...reality has a well-known liberal bias." -- Stephen Colbert
The govt makes it a habit of posting fudged numbers, why not US Military numbers as well. A "govt statistic" is an oxymoron. For what it's worth none of us believed that Deadhorse knew from personal memory that Ken Lay slept in the white house 11 times. My brother was a security guard there then and the real number is actually 12 times. Deadhorse, you are hearby "censured" for not using Ibid. I hope that hurt (lol). That's what a Senatorial censure feels like. Pretty bad huh?
I agree that if the dollar breaks 80 then all bets are off. The drop WILL BE fast and hard. I just dont see--on a relative basis--- that things are any different now than 20, 40, or 80 years ago. The discussions we are having are the same that our grandfathers bantered about.
Our current economy mirrors nothing we've seen in the past 200 years. The numbers in many cases exceed the outlandish ratios set just before 1929. Outlandish credit and spending set us up for the great depression, the same thing is happening now. We are well into the setup phase. Our grandfathers never saw what we have today. They never saw $500 TRILLION in derivatives, nor comex trading in paper that far exceeds the physical qty of metals available, nor an exponential rise in deficit spending, nor shipping our manufacturing base overseas, nor a savings rate so out of whack with spending, nor a current account deficit so far in the hole. Frankly, we are in a position that no one 20, 40, or 80 years ago could have imagined. The problems we discussed 20 years ago were solved by more "credit" and more "fiat." Unfortunately those are long term solutions to anything. We've only been on pure fiat now for 34 years. That's a drop in the bucket. Hardly enough history for this game to have played out. And let's not forget the 20 year "stay" that has been granted by credit and taxes. There's no previous history for how this plays out....at least not for the USA. But every previous regime in history that went towards fiat ended up destroying their economies. Not one succeeded. But somehow we will follow the same course and come out on top? Read an interesting article on jsmineset.com today concerning comments by a former Chairman of the NY FED Bank (2000-2004), they are striking, a bit moreso that Paul Volcker's current views (FED chair from 1979-1987).
Interesting how all the pundits who predicted that the Euro Union demise would foster an end to gold. It's only been a few weeks and those effects are long gone. And no sub-$400 gold either. Gold is here to stay. Until the current account deficit gets resolved (and it won't during this administration) gold & silver will be players.
And as far as comments on former presidents, all is fair for history to judge them. I still have a nagging feeling about how Pearl Harbor seemed to be set up for attack in 1941. Something was not right there and I don't buy the fact that the commanders at Pearl were at fault. Scapegoats is more like it. The real problem was back in Washington. I get the same bad feeling about GW and the Iraq War. This was preordained long before most of us care to admit.
For what it's worth none of us believed that Deadhorse knew from personal memory that Ken Lay slept in the white house 11 times.
You don't understand. He took the content of two websites and copied and pasted his entire post. He didn't just copy statistics, he even copied the spaces and tabs.
"...reality has a well-known liberal bias." -- Stephen Colbert
That $300 BILLION in rapid S&P buying almost smells like the ESF arm of the US Treasury doing their dirty work behind the scenes helping to prop up the market. They don't want it to fall and end the "game" so anything goes.
I also don't believe that gold is following the oil price. If you believe that then by implication, oil is following the US dollar index too. Then why wasn't oil taking off in 2002-2003 while the US dollar index fell from 120 down to 80? Gold responded but oil was quite late to the game.
I also think there is some US Gov intervention going on to prop up the game. Things do seem fishy lately.
As far as the Military, why is a huge military good? It drains so much money. Why must we threated anyone who won't play our game. Just because Bush spent billions on wars while Clinton avoided them and cut the military (if he did) doesn't make Bush a good President. We need a military big enough to defend the country, not big enough to protect the interests of all the multinational companies of the world. A big miliary will just hasten our financial demise.
The military spending in this country is pure insanity. The common conservative statment that we need to be prepared to fight two simultaneous full scale wars is like a bad episode of the twilight zone.
At least during the cold war we could pretend it was for defense.........
"...reality has a well-known liberal bias." -- Stephen Colbert
Hmmm, let's see what Bill Bonner has to say about the article in Time about the real estate market. I made 500% on land here in Port Charlotte AFTER the hurricane. Doubled my money in 15 months on the house we are in now and now have 2 offers for it that are on the table making it significantly more than double.
Paradise huh?
Now that the final tests on my lungs have been deemed NEGATIVE for anything, my wife and I are on our way back to Vietnam in Sept. Enough is enough of this.
Tom
And here's Bill:
Gaga Over Real Estate by Bill Bonner
"Why we’re going gaga over real estate," is the headline on this week’s Time magazine.
The only reason the Time’s reporter gives for the real estate mania is – because it is going up in price. The report is not unlike a love story written by a priest with no imagination; he has left out the exciting parts.
"I saw so many of my friends and colleagues getting rich," Time quotes one speculator, "I wanted to get rich too."
All over the country, houses are flipped, fixed-up, sold, torn down, rebuilt, refinanced, and flipped again. Lenders, builders, agents, speculators, and people who put in granite countertops are all getting rich. One day a house sells for $150,000... two years later, it has risen to $250,000.
"I bought a house in Gaithersburg, Maryland, just two years ago," said a young colleague yesterday. "I paid $400,000 for it. Now, they’re selling for $600,000. I made $100,000 per year. Actually, more than that, because I mortgaged most of the purchase price."
Isn’t it amazing that an inert object – a consumer item – can become so much more valuable in the space of a few months, even though it has not really changed? The question never seems to occur to Time or anyone else. People may be going gaga over real estate, but what has happened to the real estate market to cause them to lose their minds?
Here is where the priest blushed and lowered his pen. He decided to end the story there. Too bad, because here is where the tale turns a little steamy... and even sordid. Here is where we find out the original sin that engendered the rise in real estate prices.
Today’s news reveals nothing very interesting. Day after day, stocks go nowhere. They have barely moved for the last few weeks. The Dow is neither higher nor lower than it was eight years ago.
The euro did not rally as we expected; at least, it has not rallied yet. Instead, it sinks. Your vacation in Europe will be less expensive than it might have been, but still probably more expensive than you expected. The euro has gone down, but only to $1.20.
Gold did rally, however. People with wealth are probably getting a little wary of both paper currencies – the euro and the dollar. Yesterday, gold went down, but was still $4 above our $425 buying target.
None of this is very exciting, so we step back... back... and back some more, until we practically fall off the stage... in order to get a view of the bigger picture. The world is flooded with two things: money and labor. There are 3 billion people in Asia who are entering the globalized labor pool. Politicians can rant and rave all they want; there is no escaping this downward, deflationary force in the cost of labor. That is a large part of the reason why real labor rates in America are going down.
We pause a moment to ponder two questions: How can people who earn less money afford more expensive houses? And how is it possible that the world’s most flexible, dynamic and successful economy actually makes its typical citizens poorer over a quarter of a century? We ask both questions out of mischief, not curiosity. We already know the answers: They can’t and it isn’t.
• Now we turn to the second thing with which the world is flooded: money. The "glut" of labor is cutting prices – directly, for labor itself, and indirectly for the things people make and do with labor. But the "glut" of money and credit – thanks largely to the Federal Reserve – pushes prices in the opposite direction. For the present, the two forces barely meet. Chinese-made goods fall in price, while house prices all over the planet rise. How long this will last is anyone’s guess, but that it won’t last forever is certain.
Since we are bending over backwards to get a good view, we squint to see where this might lead. Surely, real prices on things that can be made and shipped are bound to fall. But nominal prices on things that cannot be easily duplicated are likely to rise – perhaps sharply.
Reader Rolf Hackmann wrote a new book, Globalization, and reading it, you get the feeling that he must have better vision or a more distant perch. He sees "a prolonged decline... [including]... crushing competition... falling prices, profits... high levels of unemployment... business and consumer bankruptcies... deflation of asset values... trade wars... major reductions in white- and blue-collar workforces... rising long-term interest rates... perverse valuation bubbles coexisting with the generally weak economic conditions that seem poised to add more capital destruction and malaise coming from their inevitable implosion. Japan is setting an ominous example."
None of this occurs to Time editors... or to the real estate speculators... or to the lumpinvestoriat in general. As far as they know, the real estate boom came into the world by some sort of immaculate conception – untainted by the lust for easy money.
Bill Bonner is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.
I keep getting confused. We can all agree that there is a huge supply of paper currency and more always being printed. The governments of the world have not been shy to print as much as is needed. Maybe when the bubbles burst we will see unemployment and a major slowdown in trade but I don't see how this will create a major fall in values on such things as collectables, metals, and other inflation hedges. There is still a huge glut of paper.
Please explain the "deflationary" scenario considering all this fiat currency??
The vast majority will have no gold before it soars. After it soars they have no buying power to attain it. Does it seem realistic for businesses to only accept gold, when no one has it?
I see it as a simple lack of customers. Since the economy is basically a zero sum game, (with a few very minor exceptions that have been discussed) taking the money from the bottom and giving it to the top means that eventually there will be no one left to pay for your products. This is where Reaganomics utterly fails. You can have all the capital in the world and be capable of creating thousands of jobs.......but if there is no customer base, what's the point of hiring anyone?
In my opinion this is the primary cause of interest rates being so low. Thanks to the taxation policies of Bush(es) and Reagan, upper class millionaires have tons of capital available for investments. Since all those millions were transferred from the working class however, wealth at the bottom is considerably less and cannot fuel the demand required to create industry. As a result, everyone wants to loan money and few people want to borrow it..........with a single exception.
Real estate! By giving the money to the lower classes in the form of Real Estate loans, they have effectively transferred all that money BACK to the bottom. All of a sudden, anyone who owns a house can take out a second mortgage and buy that new car and plasma TV. The wheels of the economy are greased again and growth continues. I believe this is what saved us in 2001. The recession began, but Real Estate began to get hot at just the time money was cheap and interest rates were low. Speculation took over and the upper class handed out money like never before.
Here is the real reason why we're screwed. Taxation, union demands, bankruptcy, and military pay are ways in which money can be taken from the upper classes and PERMANENTLY transferred it to the consumer class which can then create demand which in turn creates jobs and we have a sustainable economy. Loaning money in the form of Real Estate loans does the exact same thing temporarily which is why we still have economic growth. But after the party is over, the people who lent all that money want it BACK. Not only will spendable cash dry up because you can no longer borrow on equity, but you will then have a huge mortgage which will take the little cash you do have and your spending will grind to a halt. The consumer class in America will no longer be able to afford to buy products, and the layoff/less demand/layoff/less demand snowball effect will take over and we'll be in another Depression.
One more thing......do you remember in High School how a lot of emphasis was put on bank failures as a primary cause of the collapse? A lot of people have argued with me that since the banks are now insured that we are protected from a simiar fate. Well this isn't 1929 and everything is different. WE THE PEOPLE are now the bank, and WE are not insured by the government. All the debt that was once carried by banks has now been transferred to the people in the form of mortgages, credit cards, and consumer loans. The U.S. population now carries the bulk of all loaned money in the United States, NOT the banks. We USED to loan money to banks in the form of savings, but the savings rate has dropped to practically nothing. There is nothing to stop the modern day bank from failing and as I said before, we are not insured.
It's all happened before. Everything I've stated can be found in economics texts of the 1930's. All of the actions taken by FDR reflected a belief in wealth disparity as the cause of the Great Depression and his attempts to reverse the trend. I consider a new Depression in the next 10 years to be absolutely inevitable unless politics drastically change.
Anyway to disagree with quite a few here, it's not the concept of paper currency that will destroy us. In fact I fully expect paper money to SAVE us. When you've got an established aristocracy holding all the dollar bills, the easiest way to transfer wealth back to the bottom is to devalue those dollar bills. Runaway inflation will correct the imbalance. Gold and silver will simply protect those who have wealth from losing it.
"...reality has a well-known liberal bias." -- Stephen Colbert
Sorry I jumped on you guys yesterday iwog. I was just getting frustrated by the agressive demeanor and political tone of the thread as this has, for the most part, been a very courteous and polite discussion of all things money. Also, this is my favorite thread and I was the third person to post on it and have continued posting over time and it seemed to be going wrong so, once again, I apologize. Now is a good time to buy metal.
I have enjoyed lurking in this thread. Other than the last couple of days of partisan bickering between IWOG and Deadhorse, this has been a good read.
So what is the best way to buy silver and gold. I have done a little bit of shopping in my area, and it seems for gold the American Eagle bullion is a good buy (only about a $25 premium per ounce). But the silver eagles seem like a rip off (the best I could find when silver was $7.25/ounce was $9.75 per coin when buying 20 at a time). The silver eagles seemed to come at a 35% premium over the price of silver, while the gold eagles were only a 5.8% premium.
Do silver buyers simply buy the bars?
I would like to take possession of the metals, but in my state, that means sales tax. I buy my share of publicly traded stock, so its hard for me to stomach such large spreads.
So, any advice would be welcome. Silver and gold seem to be a good hedge against currencies.
Gold set some new records today in the Euro and Yen, and some other currencies as well. That's a bullish sign that could eventually lead to gold moving up against all currencies. Gold rallied and not just on a dropping dollar. Continued action like this will eventually signal a world wide bull market in gold. The fact that the Current Account deficit came in at $195 BILL for Jan-Mar (almost $800 BILL annualized) was another record. 190 had been predicted. The previous Qtr had been 188. This is also not a good omen. The dollar index broke under 88 while the unhedged gold index broke over 200. Oil closed over $58. This is an awful lot of pro-metals news all at once. Gold has now moved to nearly $439/oz from the low $420's in 2 weeks. The emperor (US dollar index) truly has no clothes.
Deadhorse did a long dissertation a while back showing that 100 oz bars are the way to go. I would concur. Buy them from out of state and pay some minor shipping. Whether you pay sales (use) tax is up to you.
Iwog's point is further supported by an article on the www.jsmineset sight today. It states that in 2005 only $80 Billion of the trillions in mortgages shift into the ARM (high risk mode). In 2006, $300 Billion in mortgages makes the shift into ratcheting ARM's. Then in 2007 $1 Trillion gets brought into play. Do you see the pyramid building here? And if rates rise a lot at some point, those mortgages go belly up.
Comments
Here are the various assertions of Deadhorse. See if you can follow the logic...........
Jimmy Carter, president for exactly 4 years, keeps the top tax bracket at 70% effectively causing a recession DURING his term.
Bill Clinton raises taxes in 1993, but a recession doesn't happen until 2001.......he claims a cause and effect delay of 8 years.
Reagan lowers taxes in 1981, 1984, and 1986. We enter a recession in 1992........around 8 years later. BUT WAIT!!! Reagan is responsible for the economic boom of the late 1990s. A cause and effect delay of about 14 years give or take..
I'm not making this up, this is EXACTLY what Deadhorse is claiming on behalf of conservatives. I'm using HIS numbers and HIS examples.
Jimmy Carter can cause a recession by keeping taxes the same, and it takes 0 years.
Bill Clinton can cause a recession by raising taxes, but it takes 8 years.
Ronald Reagan is NOT responsible for a recession after 8 years but IS responsible for a boom economy 14 years later.
This is utter nonsense. This is blatant partisan stupidity. I cannot put into words how disgusted I am at the lengths someone would go to in defense of his party of choice. Deadhorse, you are beyond contempt.
Are you at least admitting that Carter's 70% tax rate did damage the economy?
No. And just to educate you, president Johnson signed the 70% top tax rate into law, not Carter.
I can't speak to the tax rates in the 20s, that was way before my time and frankly, I haven't studied that aspect of history in terms of the tax rate, only the trends that portend a similar fate in our near future.
You BETTER study it because Bush is making every single mistake that Wilson did in the mid 1920's.
He didn't balance any budgets because the books were clearly cooked.
George Bush uses the same Congressional budget office numbers that Bill Clinton did. You say the books were "clearly cooked" yet you can't provide evidence to save your life. You're simply making it up.
You know Iwog, I'm totally done with you.
Probably because you've posted a dozen times but have yet to provide a single fact, chart, link, or logical argument to support your assertions.
Knowledge is the enemy of fear
And thank you, Iwog, for admitting that in 1993 Democrats thought retirees making $34000 per year were Rich and not paying their fair share of taxes.
If I were you, I'd be mad as hell at George Bush. He lowered taxes for the highest tax bracket, gave corporations huge tax breaks, reduced taxes on dead people who left millions of dollars to heirs, but totally ignored the social security tax rollback proposed by REAL conservatives in the house and senate. Taking into account inflation, this particular tax under George Bush is higher and affects more people than it did under Bill Clinton.
<< <i>You know Iwog, I'm totally done with you.
Probably because you've posted a dozen times but have yet to provide a single fact, chart, link, or logical argument to support your assertions. >>
No, it's actually because I've been advised by posters far more respected than you that it is a fruitless endeavor. You are rude and obnoxious, a liar and a socialist scumbag, at least that's the concensus of a number of your peers. Some have been saying it's such a shame that this thread went along so well, 1000 posts and now it's been hijacked by the likes of your ilk.
No arguement, fact, chart or link that pokes a hole in your position is acceptable to you because you are an elitist prig.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>How much of Clinton's stock market bull was due to the rapt attention paid to TV commercials during the Lewinsky parade?
A beter question might be; "How much of it was due to cooked books?"
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>cohodk, STOP IT!
And thank you, Iwog, for admitting that in 1993 Democrats thought retirees making $34000 per year were Rich and not paying their fair share of taxes. >>
Up over $6 now. I just cant help it
Knowledge is the enemy of fear
No arguement, fact, chart or link that pokes a hole in your position is acceptable to you because you are an elitist prig. you are rude and obnoxious, a liar and a socialist scumbag
What's a prig?
<< <i>
<< <i>How much of Clinton's stock market bull was due to the rapt attention paid to TV commercials during the Lewinsky parade?
A beter question might be; "How much of it was due to cooked books?" >>
My parents lost over 27k just in Enron stock alone. and they were/are retired not to be confused with rich.
Here's the kicker.......Enron didn't pay any taxes (link) and actually took $278 million dollars FROM the government in 2001. (tax year 2000) George Bush's friend and close advisor Kenneth Lay stole millions of tax dollars and will probably be pardoned.
<< <i>Deadhorse writes:
No arguement, fact, chart or link that pokes a hole in your position is acceptable to you because you are an elitist prig. you are rude and obnoxious, a liar and a socialist scumbag
What's a prig? >>
I thought you were so godamned intelligent, ever think of looking it up in the dictionary?
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
You think he "gutted" the military? What do you think is happening now?? They can't get recruits and we're down about 10,000 casualties. Nothing guts a military quite like a bad war. Clinton was in office 8 years and we had less casualties than 1 month of a Bush. Clinton had no great inflation or depression just a slow chug along.
In the end we overestimate the power of the president to fix all the problems when all the powers that be are feeding at the troth.
Now it seems that I underestimated the power of the president to screw things up. Bush is doing much more of that than I thought possible.
<<<<No arguement, fact, chart or link that pokes a hole in your position is acceptable to you because you are an elitist prig. you are rude and obnoxious, a liar and a socialist scumbag>>>>
<<What's a prig?>>
I thought you were so godamned intelligent, ever think of looking it up in the dictionary?
I'm sure glad we clarified who is rude and obnoxious........
The claims that he "gutted" the military are simply insane. See my graph on the previous page. You're also right about this immoral war making us much LESS prepared for our own defense than at any time under Clinton. I keep shaking my head and wondering when people will stop treating political parties like competing football teams.
The market made a late session run to new highs, pushing the yields lower across the curve, knocking the 10-yr yields off to 4.069%. The day's trade was afflicted with spotty volume even as there was decent price volatility. In the latter part of the day the strong-long-bond took the lead over from the 5-yr, each carving out a nearly 7 basis point range. The market is seeing some quarter-end activity which is feeding into the bid. Another input into the upside is refreshed concerns over the destiny of the hedge-fund world, as the quarter comes to a close there are expectations that customers will start asking for their money back. The dollar held its bid against the euro for the session, even as US rates fell and saw a surprisingly negative manufacturing report. The euro was off 4.5% from a month back, and 11% lower against the buck from the highs on the year. Treasury options saw limited action, although there were several sizable individual trades, generally on the side of selling implied volatility, but large-sized trade Treasuries grabbed a bid following the disappointing Philly Fed index and retained its bid throughout the afternoon on comments by KC Fed President Hoenig. Hoenig saying he has no answer to the yield curve's 'flattness' and believes the neutral fed funds rate may be 3.5% to 4.5% (pull your truck up over here). He also added that the rates should get there "sooner rather than later"...and the bond market rallied fairly hard (go figure)
Knowledge is the enemy of fear
For those keeping score.......
10 year yield: 4.07%
5 year yield: 3.86%
2 year yield: 3.69%
As most know, a yield curve inversion has a perfect record in predicting a recession.
“CNBC reported, on at least two days last week, that some mysterious buyer came roaring into the SP500 futures pits and gobbled up enough futures to control $300 billion in stock.”
And how about this??
“SILVER ETF MAY CAUSE SPIKE”
Is the accumulation of millions of ounces of Gold and Silver by EFT’S going to finally put enough of the metals in private hands so that worlds central banks can no longer move the prices at will?
CG
My take is that Gold is moving on the Euro. I think the folks in the World are realizing that there is no other substitute for a World reserve currency, the USD is it for now. The EU seems to be arguing about everything under the sun. Months ago I predicted that the EU would eventually fall to pieces. It will take several years, but there is just no way all of these very different folks can act like we do in the U.S. My guess is that Europeans are now realizing this, and coming into the Gold market.
The USD will no doubt continue as the worlds reserve currency simple because there is no other choice, but safety minded investors don’t really like that they have no way to move, so they are perhaps buying some Gold!
In response to a Bush-Quayle ad that people with incomes of as little as $36,000 would pay more taxes under the Clinton plan, Bill Clinton said on Oct. 1, 1992, "It's a disgrace to the American people that the president (Bush) of the United States would make a claim that is so baseless, that is so without foundation, so shameless in its attempt to get votes under false pretenses."
Yet the NY TIMES in the analysis of Clinton's budget wrote, "There are tax increases for every family making more than $20,000 a year!"
"While Clinton continued to defend his middle-class tax cut publicly, he privately expressed the view to his advisers that it was intellectually dishonest." (The Agenda, by Bob Woodward, p. 31)
We now know the truth, people making a little as $36K had their taxes raised. Somebody ranted about wanting numbers and facts, looks like they are right here, where they've always been.
This is an interesting bit of information that
you don't hear much about
in the media ---
a.. Enron's chairman did meet with the president
and the vice president
in the Oval Office.
b.. Enron gave $420,000 to the president's party
over three years.
c.. It donated $100,000 to the president's
inauguration festivities.
d.. The Enron chairman stayed at the White House
11 times.
e.. The corporation had access to the
administration at its highest
levels and even enlisted the Commerce and State
Departments to grease deals
for it.
f.. The taxpayer-supported Export-Import Bank
subsidized Enron for more
than $600 million in just one transaction.
Scandalous!!
g.. BUT...the president under whom all this
happened WASN'T George W.
Bush.
h.. SURPRISE ......... It was Bill Clinton!
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>The claims that he "gutted" the military are simply insane. See my graph on the previous page. You're also right about this immoral war making us much LESS prepared for our own defense than at any time under Clinton. >>
Pure lies!
Talk about gutting!
709,000 regular (active duty) service personnel
293,000 reserve troops
Eight standing army divisions
20 air force and navy air wings with
2,000 combat aircraft
232 strategic bombers
13 strategic ballistic missile submarines with
3,114 nuclear warheads on 232 missiles
500 ICBMs with 1,950 warheads
Four aircraft carriers
121 surface combat ships and submarines, plus all the support bases, shipyards and logistical assets needed to sustain such a naval force.
Those military assets have been eliminated by none other than Bill Clinton.
IMHO, if our military had not been destroyed as shown above and maintained at the levels they were before Clinton took out the scissors, we would be in much better shape today in manpower end-strength, weapons systems, armored combat vehicles, support logistics, etc.
Post all the pretty colored graphs you want, the above are facts.
Geoff Metcalf is the source, you can find his writings all over the internet.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
The first half of his post was directly copied and plagiarized from a website entitled Bill Clinton's Known Lies
The second half of his post was directly copied and plagiarized from a website entitled Lying about Lay
He stole ALL of the text, word for word including spacing and punctuation, and gave no credit to the actual author. Instead of responding to my arguments and thinking for himself, he simply stole the thoughts of others and assumed they were correct because they agreed with his point of view. In my opinion, this is simply an evil act that has nothing to do with politics.
Whoever he stole the numbers from, they do not agree with the military's own published enlisted manpower report.
In 1993 we had 1,705,103 enlisted military
In 2000 we had 1,384,338 enlisted military
In April 30th, 2005 we had 1,427,331 enlisted military
The eight year reduction was 320,000 soliders or approximately 18% of our enlisted military force, not the fictcional 709,000 reported by Deadhorse. That 18% reduction represents a number of closed bases deemed obsolete by the military itself, and the general reduction in arms following the end of the cold war.
It really doesn't matter, because Republicans will continue to say Clinton "gutted" the military forever because this particular lie suits their purpose.
Editied: As I looked over the DoD website, I noticed that the current number of enlisted military personnel is almost EXACTLY what Bill Clinton left office with. Even if you think Clinton gutted the military, the ONLY valid comment you can make about George Bush is he kept it gutted.......
<< <i>This debate needs to take place somewhere else. This thread is not a forum for political debate. "GOLD AND SILVER WORLD NEWS, ECONOMIC PREDICTIONS." >>
Were you elected to replace Cameron as forum cop?
Coinhusker, I think the graph is in nominal dollars. Inflation would change the left side of the graph greatly, but since there was very little inflation during the 1990's you can see that spending was MODERATELY reduced following the end of the cold war.
The second part you have no clue about. Read Metcalf's columns, that's where I got it from and gave him credit.
I did not visit either site you referenced. Sorry. I guess the truth is all over the net, isn't it.
The fact is, the truth hurts and you are wrong. You have been lying to everyone and now that I posted a few fact as you insisted upon, I really am done with the likes of you.
I was advised not to even bother, that it was fruitless and the posters who PM'd me were correct. You have taken this thread and done your best to poison it with your socialist lies.
KMA!
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
And for the record, I haven't lied about anything and never will. Every single assertion I've made has facts behind it, and they ALL have links to those sources. I've NEVER copied and pasted a post in my entire life, and I've ALWAYS used quotes or italics when using someone else's work in my post. You've made a complete mockery out of your position, and proven yourself to be utterly beyond contempt. You've accused me of being a liar, a socialist, a scumbag, an elitist, and a prig, and UNBELIEVABLY you've called ME rude and obnoxious! This is how you view the world? A red film of blind hatred for Bill Clinton and Democrats? I feel sorry for you.
My brother was a security guard there then and the real number is actually 12 times. Deadhorse, you are hearby "censured" for not using Ibid. I hope that hurt (lol). That's what a Senatorial censure
feels like. Pretty bad huh?
I agree that if the dollar breaks 80 then all bets are off. The drop WILL BE fast and hard. I just dont see--on a relative basis--- that things are any different now than 20, 40, or 80 years ago. The discussions we are having are the same that our grandfathers bantered about.
Our current economy mirrors nothing we've seen in the past 200 years. The numbers in many cases exceed the outlandish ratios set just before 1929. Outlandish credit and spending set us up for the great depression, the same thing is happening now. We are well into the setup phase. Our grandfathers never saw what we have today. They never saw $500 TRILLION in derivatives, nor comex trading in paper that far exceeds the physical qty of metals available,
nor an exponential rise in deficit spending, nor shipping our manufacturing base overseas, nor a savings rate so out of whack with spending, nor a current account deficit so far in the hole.
Frankly, we are in a position that no one 20, 40, or 80 years ago could have imagined. The problems we discussed 20 years ago were solved by more "credit" and more "fiat." Unfortunately those are long term solutions to anything. We've only been on pure fiat now for 34 years. That's a drop in the bucket. Hardly enough history for this game to have played out. And let's not forget the 20 year "stay" that has been granted by credit and taxes. There's no previous history for how this plays out....at least not for the USA. But every previous regime in history that went towards fiat ended up destroying their economies. Not one succeeded. But somehow we will follow the same course and come out on top? Read an interesting article on jsmineset.com today concerning comments by a former Chairman of the NY FED Bank (2000-2004), they are striking, a bit moreso that Paul Volcker's current views (FED chair from 1979-1987).
Interesting how all the pundits who predicted that the Euro Union demise would foster an end to gold. It's only been a few weeks and those effects are long gone. And no sub-$400 gold either. Gold is here to stay. Until the current account deficit gets resolved (and it won't during this administration) gold & silver will be players.
And as far as comments on former presidents, all is fair for history to judge them. I still have a nagging feeling about how Pearl Harbor seemed to be set up for attack in 1941. Something was not right there and I don't buy the fact that the commanders at Pearl were at fault. Scapegoats is more like it. The real problem was back in Washington. I get the same bad feeling about GW and the Iraq War. This was preordained long before most of us care to admit.
roadrunner
You don't understand. He took the content of two websites and copied and pasted his entire post. He didn't just copy statistics, he even copied the spaces and tabs.
I also don't believe that gold is following the oil price. If you believe that then by implication, oil is following the US dollar index too. Then why wasn't oil taking off in 2002-2003 while the US dollar index fell from 120 down to 80? Gold responded but oil was quite late to the game.
roadrunner
I also think there is some US Gov intervention going on to prop up the game. Things do seem fishy lately.
As far as the Military, why is a huge military good? It drains so much money. Why must we threated anyone who won't play our game. Just because Bush spent billions on wars while Clinton avoided them and cut the military (if he did) doesn't make Bush a good President. We need a military big enough to defend the country, not big enough to protect the interests of all the multinational companies of the world. A big miliary will just hasten our financial demise.
At least during the cold war we could pretend it was for defense.........
Paradise huh?
Now that the final tests on my lungs have been deemed NEGATIVE for anything, my wife and I are on our way back to Vietnam in Sept. Enough is enough of this.
Tom
And here's Bill:
Gaga Over Real Estate
by Bill Bonner
"Why we’re going gaga over real estate," is the headline on this week’s Time magazine.
The only reason the Time’s reporter gives for the real estate mania is – because it is going up in price. The report is not unlike a love story written by a priest with no imagination; he has left out the exciting parts.
"I saw so many of my friends and colleagues getting rich," Time quotes one speculator, "I wanted to get rich too."
All over the country, houses are flipped, fixed-up, sold, torn down, rebuilt, refinanced, and flipped again. Lenders, builders, agents, speculators, and people who put in granite countertops are all getting rich. One day a house sells for $150,000... two years later, it has risen to $250,000.
"I bought a house in Gaithersburg, Maryland, just two years ago," said a young colleague yesterday. "I paid $400,000 for it. Now, they’re selling for $600,000. I made $100,000 per year. Actually, more than that, because I mortgaged most of the purchase price."
Isn’t it amazing that an inert object – a consumer item – can become so much more valuable in the space of a few months, even though it has not really changed? The question never seems to occur to Time or anyone else. People may be going gaga over real estate, but what has happened to the real estate market to cause them to lose their minds?
Here is where the priest blushed and lowered his pen. He decided to end the story there. Too bad, because here is where the tale turns a little steamy... and even sordid. Here is where we find out the original sin that engendered the rise in real estate prices.
Today’s news reveals nothing very interesting. Day after day, stocks go nowhere. They have barely moved for the last few weeks. The Dow is neither higher nor lower than it was eight years ago.
The euro did not rally as we expected; at least, it has not rallied yet. Instead, it sinks. Your vacation in Europe will be less expensive than it might have been, but still probably more expensive than you expected. The euro has gone down, but only to $1.20.
Gold did rally, however. People with wealth are probably getting a little wary of both paper currencies – the euro and the dollar. Yesterday, gold went down, but was still $4 above our $425 buying target.
None of this is very exciting, so we step back... back... and back some more, until we practically fall off the stage... in order to get a view of the bigger picture. The world is flooded with two things: money and labor. There are 3 billion people in Asia who are entering the globalized labor pool. Politicians can rant and rave all they want; there is no escaping this downward, deflationary force in the cost of labor. That is a large part of the reason why real labor rates in America are going down.
We pause a moment to ponder two questions: How can people who earn less money afford more expensive houses? And how is it possible that the world’s most flexible, dynamic and successful economy actually makes its typical citizens poorer over a quarter of a century? We ask both questions out of mischief, not curiosity. We already know the answers: They can’t and it isn’t.
• Now we turn to the second thing with which the world is flooded: money. The "glut" of labor is cutting prices – directly, for labor itself, and indirectly for the things people make and do with labor. But the "glut" of money and credit – thanks largely to the Federal Reserve – pushes prices in the opposite direction. For the present, the two forces barely meet. Chinese-made goods fall in price, while house prices all over the planet rise. How long this will last is anyone’s guess, but that it won’t last forever is certain.
Since we are bending over backwards to get a good view, we squint to see where this might lead. Surely, real prices on things that can be made and shipped are bound to fall. But nominal prices on things that cannot be easily duplicated are likely to rise – perhaps sharply.
Reader Rolf Hackmann wrote a new book, Globalization, and reading it, you get the feeling that he must have better vision or a more distant perch. He sees "a prolonged decline... [including]... crushing competition... falling prices, profits... high levels of unemployment... business and consumer bankruptcies... deflation of asset values... trade wars... major reductions in white- and blue-collar workforces... rising long-term interest rates... perverse valuation bubbles coexisting with the generally weak economic conditions that seem poised to add more capital destruction and malaise coming from their inevitable implosion. Japan is setting an ominous example."
None of this occurs to Time editors... or to the real estate speculators... or to the lumpinvestoriat in general. As far as they know, the real estate boom came into the world by some sort of immaculate conception – untainted by the lust for easy money.
Bill Bonner is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.
Where this story was reprinted
LEW ROCKWELL
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Please explain the "deflationary" scenario considering all this fiat currency??
The vast majority will have no gold before it soars. After it soars they have no buying power to attain it. Does it seem realistic for businesses to only accept gold, when no one has it?
Money is.
In my opinion this is the primary cause of interest rates being so low. Thanks to the taxation policies of Bush(es) and Reagan, upper class millionaires have tons of capital available for investments. Since all those millions were transferred from the working class however, wealth at the bottom is considerably less and cannot fuel the demand required to create industry. As a result, everyone wants to loan money and few people want to borrow it..........with a single exception.
Real estate! By giving the money to the lower classes in the form of Real Estate loans, they have effectively transferred all that money BACK to the bottom. All of a sudden, anyone who owns a house can take out a second mortgage and buy that new car and plasma TV. The wheels of the economy are greased again and growth continues. I believe this is what saved us in 2001. The recession began, but Real Estate began to get hot at just the time money was cheap and interest rates were low. Speculation took over and the upper class handed out money like never before.
Here is the real reason why we're screwed. Taxation, union demands, bankruptcy, and military pay are ways in which money can be taken from the upper classes and PERMANENTLY transferred it to the consumer class which can then create demand which in turn creates jobs and we have a sustainable economy. Loaning money in the form of Real Estate loans does the exact same thing temporarily which is why we still have economic growth. But after the party is over, the people who lent all that money want it BACK. Not only will spendable cash dry up because you can no longer borrow on equity, but you will then have a huge mortgage which will take the little cash you do have and your spending will grind to a halt. The consumer class in America will no longer be able to afford to buy products, and the layoff/less demand/layoff/less demand snowball effect will take over and we'll be in another Depression.
One more thing......do you remember in High School how a lot of emphasis was put on bank failures as a primary cause of the collapse? A lot of people have argued with me that since the banks are now insured that we are protected from a simiar fate. Well this isn't 1929 and everything is different. WE THE PEOPLE are now the bank, and WE are not insured by the government. All the debt that was once carried by banks has now been transferred to the people in the form of mortgages, credit cards, and consumer loans. The U.S. population now carries the bulk of all loaned money in the United States, NOT the banks. We USED to loan money to banks in the form of savings, but the savings rate has dropped to practically nothing. There is nothing to stop the modern day bank from failing and as I said before, we are not insured.
It's all happened before. Everything I've stated can be found in economics texts of the 1930's. All of the actions taken by FDR reflected a belief in wealth disparity as the cause of the Great Depression and his attempts to reverse the trend. I consider a new Depression in the next 10 years to be absolutely inevitable unless politics drastically change.
Anyway to disagree with quite a few here, it's not the concept of paper currency that will destroy us. In fact I fully expect paper money to SAVE us. When you've got an established aristocracy holding all the dollar bills, the easiest way to transfer wealth back to the bottom is to devalue those dollar bills. Runaway inflation will correct the imbalance. Gold and silver will simply protect those who have wealth from losing it.
Mike
So what is the best way to buy silver and gold. I have done a little bit of shopping in my area, and it seems for gold the American Eagle bullion is a good buy (only about a $25 premium per ounce). But the silver eagles seem like a rip off (the best I could find when silver was $7.25/ounce was $9.75 per coin when buying 20 at a time). The silver eagles seemed to come at a 35% premium over the price of silver, while the gold eagles were only a 5.8% premium.
Do silver buyers simply buy the bars?
I would like to take possession of the metals, but in my state, that means sales tax. I buy my share of publicly traded stock, so its hard for me to stomach such large spreads.
So, any advice would be welcome. Silver and gold seem to be a good hedge against currencies.
Thanks.
Deadhorse did a long dissertation a while back showing that 100 oz bars are the way to go. I would concur. Buy them from out of state and pay some minor shipping. Whether you pay sales (use) tax is up to you.
Iwog's point is further supported by an article on the www.jsmineset sight today. It states that in 2005 only $80 Billion of the trillions in mortgages shift into the ARM (high risk mode). In 2006, $300 Billion in mortgages makes the shift into ratcheting ARM's. Then in 2007 $1 Trillion gets brought into play. Do you see the pyramid building here? And if rates rise a lot at some point, those mortgages go belly up.
roadrunner
<< <i>Amen. Buy gold and silver and try to reduce your cost of living as much as possible. >>
I have been lurking here and I guess I just don't get it
which is the better hedge if you play with metals?
Thank you all
Ron