<< <i>So is it good to buy it after it has already doubled? >>
Fundamentals are still strong. Did people stop to think about cisco or lucent or nortel when they doubled every quarter and then split ? >>
I hear what you are saying but you are comparing apples to concrete. And after CSCO and LU doubled then split they got crushed, with LU down 92% and CSCO down 85%.
I do believe there are market forces that will keep metals strong, however you must always remember that the view is always best at the top of the mountain.
As far as a bubble goes, the bubble here has been the "Paper and Electronic Currency Bubble" not gold or silver bubble.
The amount of "electronic" wealth has totally outpaced the amount of true wealth to back it up. What if the Waltons or Gates or maybe a country like China, Russia decided to put a small amount, like 10 billion into silver or gold. Has there ever been a time in history when any one person could buy up all the available silver reserves in the world??? It's the paper metals game that has kept these items low, those days are ending.
If any bubble pops, it won't be the real assests, it will be "paper assets"
These numbers have been so big for so long that they no longer are a shock.
The only question is where can Americans find the money to have a Trillion dollar deficit in one year?
I guess some folks still will have a little equity to pull out of their homes if the real-estate markets do not drop to much, although the interest is going to cost them a little more.
Many Americans are now paying for T.V.’s and stereo’s for 30 years via their new 125% mortgages, but what we really need is the Gov. to pass some legislation so we could borrow all the money out of pension plans and 401’s to keep going, or we are never going to hit that one Trillion dollar mark.
U.S. Trade Deficit Widened to $65.7 Billion in December And tops $726 Billion for 2005.
Feb. 10 (Bloomberg) -- The U.S. trade deficit widened in December to $65.7 billion, ending a year of record energy prices and surging Chinese imports that made for the biggest annual shortfall ever.
The bigger gap in December followed a $64.7 billion deficit in November, the Commerce Department reported in Washington. American companies imported $726 billion more goods and services than they exported in 2005, the fourth straight year of record deficits.
Imports of consumer goods in December rose by $1.8 billion, led by televisions, stereo equipment and pharmaceuticals.
"The only question is where can Americans find the money to have a Trillion dollar deficit in one year?"
It is quite extraordinary -- this deficit translates to about $ 2500 per person per year, or $ 10,000 for a family of four.
It is also remarkable that the deficit is not just a function of an imbalance with a few countries -- we have huge deficits with China, Japan, the EU, and the Middle East. The deficit is so large and so pervasive that fine tuning will have no effect on it. It can't go on forever, but it is hard to see how and when it will end.
For those who care, this morning's dip (2/10/06) in both silver and gold color me short term bearish. There is support at $500 gold and $8 silver. I believe there is a high chance of these levels being hit. If nothing else to take out the stops, but it could get ugly given the sentiment. (Many traders place a stop-loss order to sell if the price goes below a certain level. Taking out the stops, touches these level to frustrate these traders.)
The sentiment numbers cited by Peter Grandich 1-31-06 warned of a correction, if not a top. http://www.kitco.com/ind/grandich/feb062006.html >> Market Vane’s latest Bullish Consensus on the metals. They are: Gold 91% Silver 91% Platinum 92% Copper 94% >>
Sentiment alone is not enough, but when combined that with the price movements and it looks like classic topping action.
We are headed for a king size ....DEE-pression! Believe it. No more to squeeze except equity and when equity stops heading .... UP.... the only avenue left is ...... LIQUIDATION.
Which has been the aim all along.
Bust em, buy em, then reflate em, AFTER they don't own it anymore. How much plainer can it get?
Layoffs are occurring every DAY! Job figures are skewed from dropping the old claims.
The new 30 yr bond sale yesterday confirms this opinion. 4.53% The bond market is the largest there is. Bond buyers are not stupid.
I don't believe so. There is going to be a period of super-galactic inflation. A period of humongous money supply and increased interest rate. You think interest rates are high now. Hardly.
During the 80s the short term fed funds rate was 19%. It is less than 5 % now.
We may see credit card interest rates rise to 30 % for the best customers and high inflation and believe it or not more wage inflation.
A sort of upward spiral. The US government can't afford to bring down the interest rates and cause a dollar crisis.
The estimated monthly budget is a very very conservative in the figure. I am pretty sure if people sit down and calculate every penny they spend in a month it will be more than the $ 5500.
Sorry, but "buying capacity" was not saturated in the old high interest days. Now there is NO source of income to purchase at higher levels. That's the key to a depression. No existing way out. If they loosen, it still won't bring purchases until the excess is already wrung out of the pricing. The US has negative savings now. Higher rates would only exacerbate that.
A new Taurus costs the same as the original did in 1986. I know. I bought one of the pigs.
"Cheaper" is winning the game. Gold will benefit just as a worldwide commodity, but even it needs a wring out.
But ..........rates............... will drop like rocks once our aging population stops spending which will also slug China in the guts. Rates go high when there is ..... opportunity........ to create wealth. Where is that opportunity at this point?
Based on your article, which gave some good insight, how can anyone consider retiring who isn't a millionaire by 65??
My 2cents
In a normal situation where the fed needs to control inflation, rates need to rise dramatically to stop the oncoming inflation. However, given how out of control the whole thing is, this is not practical. It would crash most every financial institution and destroy "the system". The only other course, is to let inflation go and "liquidate" the mountains of debt that have been accumulated by all levels of government. This seems to be the only way out. Hyperinflation will start and will slow after the dollar has depreciated by 3-600% over a 10 year period. Then they game will start again.
A major recession or depression will destroy the dollar as every major debtor will default and this will result in a major flight from the dollar.
"Bust em, buy em, then reflate em, AFTER they don't own it anymore. How much plainer can it get?"
This mirrors a thought I have been playing with lately. A number of seemingly unrelated items that seem to be creating a comprehensive US climate forecast, if you will allow that analogy...
Lay offs...Yes, the American worker must be better trained to compete for full benefits and a competitive wage. You can't expect full benefits and a competitive salary with only a high school education, at least not unless you have more than average ability because the competitive world economy we are in simply can't support it, that's reality. But the other side of the coin is that the CEO's, CFO's, and boards of directors have to stop wiggling the numbers so they can get their performance bonuses. The salaries these folks make are sinful and the way the make them are becoming more and more, a matter for the courts. The top 5% of the wealthy class has so much money and they get more and more every day for seemingly less and less creative thinking beyond how to get more money for themselves and their stockholders. Where does that money come from...look in the mirror.
It's about the money...It's ALL about the money. The middle class is heavily hunted by predatory credit companies, marketing ads, schemes, and ploys to separate them from their Bens. Oddly enough, the entitlements of the underclass are also being hunted by credit companies. The extra money the underclass receives for assisted living, education entitlements ($), welfare, unemployment, disadvantaged youth, the whole entitlements package is prone to marketing ads trying to get them on credit apps., new car loans, anything that will generate any income for the companies. If you multiply even a dollar a week by a million people, then that's 52 million dollars a year and that's real money. No credit, bad credit, forclosures, divorced, criminal record...no problem, you deserve a new car! Bust 'em, buy 'em...yeah!
The New Orleans perspective...The displaced people from Katrina marched on Washington DC yesterday to protest that they haven't been given new homes, money, capped rents, and a levee that will take a cat 5 hurricane, so they could go back home. Don't they realize that their home is gone, the entitlements and benefits are gone, and where they lived is gone...it's simply not there anymore. Surely they are unhappy about losing it all, anyone would be. But, I didn't see anybody protesting for more jobs, effective job training, or more/better schools, or some sort of responsible State and local government. They were just protesting for a new place to live and some money and better levees so they could go home. Have we really evolved to the point where people expect the government to provide these things for free, is it a right? Dont they realize that they are actually asking me and you for that money and can't they realize that it's not likely that it's going to happen?
Enron...did they, at the corporate leadership level, really do anything criminal? Probably not. Did they mislead the public...probably so, but that's not a crime in itself, people do it every day...it's called "spin". Did they go bankrupt...sure, but it happens every day too. A few of big people got left holding the bag and they are really pissed and want it to be someone's fault...sorry guys, you lost...unfortunately a lot of little people lost a lot too.
There was an interesting car commercial on TV recently about "Save the Greenbacks"...kind of a spoof on save the whales but actually about saving you money on your next car purchase. That's what made me realize that myself, and actually everybody with any money is under a continuous and unrelenting assault on our wallets to extract some greenbacks from us. This is a war, it's an economic war and it's about my money...MY money that someone wants to be their money and it is very much a war. It's funny, I would easily drop a K on a good coin but I drive an 8 year old car...hee hee.
So, to wrap this up...it's about the money. More importantly, it's about your and my money! Keep it close to home, carefully tended to and watched, and keep it growing without getting greedy, and don't waste it on senseless expenditures. Get out of debt as soon as possible so that it stays your money, do not use credit cards that can't be paid off at the next billing so that your money can stay home with you, make your money grow so that it can get bigger, drive your car for a couple of extra years. We must put some aside every day or every paycheck or we will become a casualty of war.
In closing, there is a story from my undergraduate days. I was dating a rich little tart who told me once..."My mother has a coctail ring that is worth more right now than you will ever make in your lifetime." Later in our history, I asked her..."What does money mean to you?" (I was somewhat existentialistic back then)...she answered: "It is a vechicle to go where you want to go, it is the freedom to do what you want to do."
<< <i>Based on your article, which gave some good insight, how can anyone consider retiring who isn't a millionaire by 65?? >>
By my calculations, ..... they can't. And as Social Security gets cut further and further, the bar will move even higher.
This has been in the works since 1913, the Federal Reserve AND the federal income tax.
Prior to 1913, a....lot.... of folks were becoming ..... RICH. And I mean....REALLY...rich. Which had to be stopped. Controlling rich people is tough duty.
My real concern is the ..... LACK OF CONCERN..... among younger Americans who are not paying attention.
Several things need doing and the contemporary attitude is that ..... "things will work out."
A very dangerous assumption. We are an easily manipulable people as a nation. And we are NOT looking realistically at demographics and trends in jobs. Nor are our kids being TAUGHT anything useful to the solution of the problem. Which is quite drastic and not at all politically correct.
So as part of my post this morning just think about this for one minute.
The news tonight announced that out of our trade deficit this past year 202 Billion went to China.
So I ran a few questions on Yahoo. There are about 1 billion 306 million people in China.
There average annual income of a Chinese working person is $600 per year.
202 billion dollars is about $155 dollars for every man, woman, and child in China.
In a family of 4, if the man and woman both worked and made $600 each per year, they would earn $1,200.
In a family of 4 each would receive their portion of the American dollar transference of $155 each, therefore the family would receive $620 from the U.S., so over half of the income earned by an average family of Chinese people comes from U.S. citizens !!!!
I motion that we change our currency standards from dollars to Ben's, in honor of Benjamin's 300th birthday.
The minimum denomination would be $1 USD, previously known as the cent. $1 would be 1/100th Ben. There...presto, penny is gone and pocket change would be $1, $5, $10, and the $20 coin. There would be paper Quarter Ben's (Euro Blue), Half Ben's (pre'33 gold skin color), and of course the Ben, itself (U. S. Bureau of Printing and Engraving Green). That way, we could keep the dollar standard but we would call our money...Ben's.
Ethanol's a Big Scam, and Bush Has Fallen for It: Kevin Hassett Feb. 13 (Bloomberg) -- In his State of the Union address, George W. Bush called for an intense effort to develop more efficient alternative fuel sources.
``We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass,'' the president said. ``Our goal is to make this new kind of ethanol practical and competitive within six years.''
A recent careful study by Cornell University's David Pimentel and the University of California at Berkeley's Tad Patzek added up all the energy consumption that goes into ethanol production. They took account of the energy it takes to build and run tractors. They added in the energy embodied in the other inputs and irrigation. They parsed out how much is used at the ethanol plant.
Putting it all together, they found that it takes 29 percent more energy to make ethanol from corn than is contained in the ethanol itself.
It's not that corn is a bad source for ethanol. The other sources mentioned by the president look even worse. Wood biomass takes 57 percent more energy to produce than it contains. Switch grass takes about 50 percent more. Ethanol is just a highly uneconomical product. Some other authors have disputed these findings, but they invariably come up with more favorable calculations by excluding some of the costs.
Indeed, no matter how expensive fossil fuels become, ethanol will never be economical because it takes so much fossil fuel to produce. It might be possible that someday technological processes will emerge that make production of ethanol less reliant on fossil fuels, but the billions in subsidies to this point have left us with a process that is still a disgrace and an absurd waste of energy and taxpayers' money.
Ethanol's a Big Scam, and Bush Has Fallen for It: Kevin Hassett Feb. 13 (Bloomberg) -- In his State of the Union address, George W. Bush called for an intense effort to develop more efficient alternative fuel sources.
``We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass,'' the president said. ``Our goal is to make this new kind of ethanol practical and competitive within six years.''
A recent careful study by Cornell University's David Pimentel and the University of California at Berkeley's Tad Patzek added up all the energy consumption that goes into ethanol production. They took account of the energy it takes to build and run tractors. They added in the energy embodied in the other inputs and irrigation. They parsed out how much is used at the ethanol plant.
Putting it all together, they found that it takes 29 percent more energy to make ethanol from corn than is contained in the ethanol itself.
It's not that corn is a bad source for ethanol. The other sources mentioned by the president look even worse. Wood biomass takes 57 percent more energy to produce than it contains. Switch grass takes about 50 percent more. Ethanol is just a highly uneconomical product. Some other authors have disputed these findings, but they invariably come up with more favorable calculations by excluding some of the costs.
Indeed, no matter how expensive fossil fuels become, ethanol will never be economical because it takes so much fossil fuel to produce. It might be possible that someday technological processes will emerge that make production of ethanol less reliant on fossil fuels, but the billions in subsidies to this point have left us with a process that is still a disgrace and an absurd waste of energy and taxpayers' money. >>
It also costs more money than is produced and creates more polution than is saved. Any money spent on this is welfare for ADM. It is now virtually impossible to find gasoline which doesn't have alcohol added to it. Alcohol can be very hard on older engines.
<< <i>Look I really dont care how the CPI is computed. >>
Hell, I love inflation. I've got a mortgage at 5%, so I'd like nothing better than a run of 10-20% inflation, with commensurate wage increases of course. Meanwhile I'll be tucking as many silver coins as I can in the old safe! Keep your debts in dollars and you assets in anything else... .
Whoops...got to page seven and thought I was at the end. Responded to something posted months ago. Never mind...
<< <i>HARMONY Gold Mining more than trebled its cash operating profits in the December quarter compared with September as a result of the strong gold price and improvements in output, it said yesterday. >>
<< <i>The group also announced it would reopen its Orkney No6 and 7 shafts. They were closed in 2003-04 because the prevailing gold price made them uneconomical. >>
<< <i>With the current gold price holding above R100000/kg, a number of South African gold miners have announced projects to exploit previously unprofitable areas. >>
Robert Scot: Engraving Liberty - biography of US Mint's first chief engraver
People in this forum might be interested in this report, which deals with Greenspan's tenure and how it compares to the gold standard. Please take a close look at the table on p. 2.
Indeed, no matter how expensive fossil fuels become, ethanol will never be economical because it takes so much fossil fuel to produce. It might be possible that someday technological processes will emerge that make production of ethanol less reliant on fossil fuels, but the billions in subsidies to this point have left us with a process that is still a disgrace and an absurd waste of energy and taxpayers' money.
This is kind of similar to electric cars. Besides the thousands of pounds of ore mined to produce that extra vehicle while zillions of gas cars glut about, those handy-dandy electric cars will be recharged each evening via dirty coal power plants scattered across the country. Zero pollution? Hardly.
Gold recovered nicely back to $550. Appears to be back to a trading range. You can pat Grandich on the back along with the other gold top callers. If they call enough tops, they'll be right every once in a while. Most totally blew the run on gold from $450 to $540 and the recent HUI run from 250 to 350. They'll make bigger bloopers in the future as well. This race is a long term one. If you're day trading or week trading, eventually you will miss the best upward moves as volatility picks up. Slow and steady will win this race.
I take a look at GLD vs XLE (gold ETF vs. oil ETF) at my blog (sig link). Those who don't want to go, my conclusion is that there is some correlation between gold and oil, but it looks to be more of a confirming indicator than something to make buy or sell decisions from.
<< <i>I take a look at GLD vs XLE (gold ETF vs. oil ETF) at my blog (sig link). Those who don't want to go, my conclusion is that there is some correlation between gold and oil, but it looks to be more of a confirming indicator than something to make buy or sell decisions from. >>
I think the corrolation is mostly commodity based. However if the correlation remains intact then gold investors will have to remain patient, as oil looks to have double topped, or at least is in for a prolonged consolidation period.
What most people do not realize.... is that it always cost more energy to produce any other energy. Energy is always lost in the conversion. Crude oil, when it comes out of the ground, is worthless.... until converted into a more usable form. That requires energy to extract the oil, pump it, ship it, refine it, transport it..... and a huge amount is lost in doing this. But the end result is a much higher form of energy that is much more usable.
Ethanol is similar to this. The energy used to convert the corn to energy is a lower grade / less expensive type of energy..... most likely natural gas, electricity, etc.; and a more desirable or more usable product is the result. But yes... it can still be argued as to whether it is worthwhile or not. I personally think it is.... just for the fact that it is allowing us to do something to reduce dependence on crude oil, and does give us some employment while doing so.
One more interesting thought on energy..... Near the end of WW2, Germany was reduced to having to produce synthetic fuel, due to the fact that their oil souces and refiners were destroyed at that point. I do not know what process was used for this.... but evidently there is a method. It may be expensive, but it must exist.....
Yeah, we have the coastal oil and the technology, we have the Alaskan oil and the technology but somehow it is better to get other people to trash their environments instead of us doing it to our place. I guess that's good but it seems that we are paying a hefty price for keeping our house nice and tidy. Maybe the strategy is to save ours until after peak oil. Surely someone has a plan here...huh?
Is it just me, or does anyone else in the group see a pattern of ignorance here? If we continue to irritate all these folks around the planet then who in the hell is going to buy our debt. Don’t the news guys realize that Bush through the Arabs a bone here for buying the debt, and keeping the price of oil denominated in dollars?
I have no real comment here about the Dubai deal, and it seems like the administration could have given them something else, but exactly what happens when, the South Americans, the Iranians, the Dubia’s etc. all want to be paid in Euros?
Feb. 23 (Bloomberg) -- The scary, totally unfunny debt ceiling farce is playing once again in Washington. With the federal government debt about to hit the $8.18 trillion legal limit, the Treasury Department last week suspended sales of special securities bought by state and local governments so that regular auctions of Treasury bills and notes could continue.
U.S. Senators Urge Delay in Sale of Ports to Dubai Feb. 23 (Bloomberg)
HON. RON PAUL OF TEXAS U.S. House of Representatives
In the short run, the issuer of a fiat reserve currency can accrue great economic benefits. In the long run, it poses a threat to the country issuing the world currency. In this case that’s the United States. As long as foreign countries take our dollars in return for real goods, we come out ahead.
It sounds like a great deal for everyone, except the time will come when our dollars-- due to their depreciation-- will be received less enthusiastically or even be rejected by foreign countries.
The agreement with OPEC in the 1970s to price oil in dollars has provided tremendous artificial strength to the dollar as the preeminent reserve currency. This has created a universal demand for the dollar, and soaks up the huge number of new dollars generated each year. Last year alone M3 increased over $700 billion.
In November 2000 Saddam Hussein demanded Euros for his oil. His arrogance was a threat to the dollar; his lack of any military might was never a threat.
There was no public talk of removing Saddam Hussein because of his attack on the integrity of the dollar as a reserve currency by selling oil in Euros. Many believe this was the real reason for our obsession with Iraq.
Most Americans forget how our policies have systematically and needlessly antagonized the Iranians over the years.
Now Iran, especially since she’s made plans for pricing oil in Euros, has been on the receiving end of a propaganda war not unlike that waged against Iraq before our invasion.
For the most part the true victims aren’t aware of how they pay the bills. The license to create money out of thin air allows the bills to be paid through price inflation. American citizens, as well as average citizens of Japan, China, Arab nations, as well as other countries suffer from price inflation, which represents the “tax” that pays the bills for our military, and other adventures.
<< <i>... exactly what happens when, the South Americans, the Iranians, the Dubia’s etc. all want to be paid in Euros? >>
Huh? Why would they want to be paid in Euros? The Euro zone has more debt, more unemploymnet, and slower growth than the US - if there's pent-up inflation in the USD, there's much more in the Euro.
Unless and until someone decides to get back to a gold standard, the USD will keep on shining.
"The greatest productive force is human selfishness." Robert A. Heinlein
<< <i>it always cost more energy to produce any other energy. >>
A popular fallacy. Expending only the energy to post a duplicate joke or thread here will yield far more energy in return posts excoriating your oversight. Perhaps a valuable source of future power with the correct dynamo keyboard.
Is the Honorable Ron Paul of Texas saying we removed Saddam Hussein because he wanted Euros for dollars? And our policies have antagonized the Iranians?
Comments
<< <i>
<< <i>So is it good to buy it after it has already doubled? >>
Fundamentals are still strong. Did people stop to think about cisco or lucent or nortel when they doubled every quarter and then split ? >>
I hear what you are saying but you are comparing apples to concrete.
I do believe there are market forces that will keep metals strong, however you must always remember that the view is always best at the top of the mountain.
Knowledge is the enemy of fear
<< <i>And after CSCO and LU doubled then split they got crushed >>
Eventually a bubble will burst. I feel there is no bubble in commodities yet. Even gold will come down crashing, but the time is not now.
As far as a bubble goes, the bubble here has been the "Paper and Electronic Currency Bubble" not gold or silver bubble.
The amount of "electronic" wealth has totally outpaced the amount of true wealth to back it up. What if the Waltons or Gates or maybe a country like China, Russia decided to put a small amount, like 10 billion into silver or gold. Has there ever been a time in history when any one person could buy up all the available silver reserves in the world??? It's the paper metals game that has kept these items low, those days are ending.
If any bubble pops, it won't be the real assests, it will be "paper assets"
Text
Just for fun...
Wonder if I can bet on an outbreak of pine park beetles in Louisiana?
OOPS...sorry, no betting going on here, move along...nothing to see.
Heck, do they have road construction futures?
I would like to bet agai..... whoops, I mean wish "for" the government projects ending on time.
These numbers have been so big for so long that they no longer are a shock.
The only question is where can Americans find the money to have a Trillion dollar deficit in one year?
I guess some folks still will have a little equity to pull out of their homes if the real-estate markets do not drop to much, although the interest is going to cost them a little more.
Many Americans are now paying for T.V.’s and stereo’s for 30 years via their new 125% mortgages, but what we really need is the Gov. to pass some legislation so we could borrow all the money out of pension plans and 401’s to keep going, or we are never going to hit that one Trillion dollar mark.
U.S. Trade Deficit Widened to $65.7 Billion in December
And tops $726 Billion for 2005.
Feb. 10 (Bloomberg) -- The U.S. trade deficit widened in December to $65.7 billion, ending a year of record energy prices and surging Chinese imports that made for the biggest annual shortfall ever.
The bigger gap in December followed a $64.7 billion deficit in November, the Commerce Department reported in Washington. American companies imported $726 billion more goods and services than they exported in 2005, the fourth straight year of record deficits.
Imports of consumer goods in December rose by $1.8 billion, led by televisions, stereo equipment and pharmaceuticals.
It is quite extraordinary -- this deficit translates to about $ 2500 per person per year, or $ 10,000 for a family of four.
It is also remarkable that the deficit is not just a function of an imbalance with a few countries -- we have huge deficits with China, Japan, the EU, and the Middle East. The deficit is so large and so pervasive that fine tuning will have no effect on it. It can't go on forever, but it is hard to see how and when it will end.
The sentiment numbers cited by Peter Grandich 1-31-06 warned of a correction, if not a top.
http://www.kitco.com/ind/grandich/feb062006.html
>>
Market Vane’s latest Bullish Consensus on the metals. They are:
Gold 91%
Silver 91%
Platinum 92%
Copper 94%
>>
Sentiment alone is not enough, but when combined that with the price movements and it looks like classic topping action.
We are headed for a king size ....DEE-pression! Believe it. No more to squeeze except equity and when equity stops heading .... UP.... the only avenue left is ...... LIQUIDATION.
Which has been the aim all along.
Bust em, buy em, then reflate em, AFTER they don't own it anymore. How much plainer can it get?
Layoffs are occurring every DAY! Job figures are skewed from dropping the old claims.
The new 30 yr bond sale yesterday confirms this opinion. 4.53% The bond market is the largest there is. Bond buyers are not stupid.
Retirement ratios
<< <i>Interest rates will be going DOWN !!!! >>
I don't believe so. There is going to be a period of super-galactic inflation. A period of humongous money supply and increased interest rate. You think interest rates are high now. Hardly.
During the 80s the short term fed funds rate was 19%. It is less than 5 % now.
We may see credit card interest rates rise to 30 % for the best customers and high inflation and believe it or not more wage inflation.
A sort of upward spiral. The US government can't afford to bring down the interest rates and cause a dollar crisis.
topstuff:
The estimated monthly budget is a very very conservative in the figure. I am pretty sure if people sit down and calculate every penny they spend in a month it will be more than the $ 5500.
The US has negative savings now. Higher rates would only exacerbate that.
A new Taurus costs the same as the original did in 1986. I know. I bought one of the pigs.
"Cheaper" is winning the game. Gold will benefit just as a worldwide commodity, but even it needs a wring out.
But ..........rates............... will drop like rocks once our aging population stops spending which will also slug China in the guts. Rates go high when there is ..... opportunity........ to create wealth. Where is that opportunity at this point?
Based on your article, which gave some good insight, how can anyone consider retiring who isn't a millionaire by 65??
My 2cents
In a normal situation where the fed needs to control inflation, rates need to rise dramatically to stop the oncoming inflation. However, given how out of control the whole thing is, this is not practical. It would crash most every financial institution and destroy "the system". The only other course, is to let inflation go and "liquidate" the mountains of debt that have been accumulated by all levels of government. This seems to be the only way out. Hyperinflation will start and will slow after the dollar has depreciated by 3-600% over a 10 year period. Then they game will start again.
A major recession or depression will destroy the dollar as every major debtor will default and this will result in a major flight from the dollar.
This mirrors a thought I have been playing with lately. A number of seemingly unrelated items that seem to be creating a comprehensive US climate forecast, if you will allow that analogy...
Lay offs...Yes, the American worker must be better trained to compete for full benefits and a competitive wage. You can't expect full benefits and a competitive salary with only a high school education, at least not unless you have more than average ability because the competitive world economy we are in simply can't support it, that's reality. But the other side of the coin is that the CEO's, CFO's, and boards of directors have to stop wiggling the numbers so they can get their performance bonuses. The salaries these folks make are sinful and the way the make them are becoming more and more, a matter for the courts. The top 5% of the wealthy class has so much money and they get more and more every day for seemingly less and less creative thinking beyond how to get more money for themselves and their stockholders. Where does that money come from...look in the mirror.
It's about the money...It's ALL about the money. The middle class is heavily hunted by predatory credit companies, marketing ads, schemes, and ploys to separate them from their Bens. Oddly enough, the entitlements of the underclass are also being hunted by credit companies. The extra money the underclass receives for assisted living, education entitlements ($), welfare, unemployment, disadvantaged youth, the whole entitlements package is prone to marketing ads trying to get them on credit apps., new car loans, anything that will generate any income for the companies. If you multiply even a dollar a week by a million people, then that's 52 million dollars a year and that's real money. No credit, bad credit, forclosures, divorced, criminal record...no problem, you deserve a new car! Bust 'em, buy 'em...yeah!
The New Orleans perspective...The displaced people from Katrina marched on Washington DC yesterday to protest that they haven't been given new homes, money, capped rents, and a levee that will take a cat 5 hurricane, so they could go back home. Don't they realize that their home is gone, the entitlements and benefits are gone, and where they lived is gone...it's simply not there anymore. Surely they are unhappy about losing it all, anyone would be. But, I didn't see anybody protesting for more jobs, effective job training, or more/better schools, or some sort of responsible State and local government. They were just protesting for a new place to live and some money and better levees so they could go home. Have we really evolved to the point where people expect the government to provide these things for free, is it a right? Dont they realize that they are actually asking me and you for that money and can't they realize that it's not likely that it's going to happen?
Enron...did they, at the corporate leadership level, really do anything criminal? Probably not. Did they mislead the public...probably so, but that's not a crime in itself, people do it every day...it's called "spin". Did they go bankrupt...sure, but it happens every day too. A few of big people got left holding the bag and they are really pissed and want it to be someone's fault...sorry guys, you lost...unfortunately a lot of little people lost a lot too.
There was an interesting car commercial on TV recently about "Save the Greenbacks"...kind of a spoof on save the whales but actually about saving you money on your next car purchase. That's what made me realize that myself, and actually everybody with any money is under a continuous and unrelenting assault on our wallets to extract some greenbacks from us. This is a war, it's an economic war and it's about my money...MY money that someone wants to be their money and it is very much a war. It's funny, I would easily drop a K on a good coin but I drive an 8 year old car...hee hee.
So, to wrap this up...it's about the money. More importantly, it's about your and my money! Keep it close to home, carefully tended to and watched, and keep it growing without getting greedy, and don't waste it on senseless expenditures. Get out of debt as soon as possible so that it stays your money, do not use credit cards that can't be paid off at the next billing so that your money can stay home with you, make your money grow so that it can get bigger, drive your car for a couple of extra years. We must put some aside every day or every paycheck or we will become a casualty of war.
In closing, there is a story from my undergraduate days. I was dating a rich little tart who told me once..."My mother has a coctail ring that is worth more right now than you will ever make in your lifetime." Later in our history, I asked her..."What does money mean to you?" (I was somewhat existentialistic back then)...she answered: "It is a vechicle to go where you want to go, it is the freedom to do what you want to do."
Nuff said.
<< <i>Based on your article, which gave some good insight, how can anyone consider retiring who isn't a millionaire by 65?? >>
By my calculations, ..... they can't. And as Social Security gets cut further and further, the bar will move even higher.
This has been in the works since 1913, the Federal Reserve AND the federal income tax.
Prior to 1913, a....lot.... of folks were becoming ..... RICH. And I mean....REALLY...rich. Which had to be stopped. Controlling rich people is tough duty.
My real concern is the ..... LACK OF CONCERN..... among younger Americans who are not paying attention.
Several things need doing and the contemporary attitude is that ..... "things will work out."
A very dangerous assumption. We are an easily manipulable people as a nation. And we are NOT looking realistically at demographics and trends in jobs. Nor are our kids being TAUGHT anything useful to the solution of the problem. Which is quite drastic and not at all politically correct.
Hate to see it.
Free trade is slavery without having to import and feed the slaves. "Follow the money" has never been so obvious nor so cleverly concealed.
Serfdom is just around the corner and nobody seems to care.
Have we really evolved to the point where people expect the government to provide these things for free, is it a right?
Yes.
great read
thanks
monsterman
out of rockets ...out of bullets...switching to harsh language
The news tonight announced that out of our trade deficit this past year 202 Billion went to China.
So I ran a few questions on Yahoo. There are about 1 billion 306 million people in China.
There average annual income of a Chinese working person is $600 per year.
202 billion dollars is about $155 dollars for every man, woman, and child in China.
In a family of 4, if the man and woman both worked and made $600 each per year, they would earn $1,200.
In a family of 4 each would receive their portion of the American dollar transference of $155 each, therefore the family would receive $620 from the U.S., so over half of the income earned by an average family of Chinese people comes from U.S. citizens !!!!
The minimum denomination would be $1 USD, previously known as the cent. $1 would be 1/100th Ben. There...presto, penny is gone and pocket change would be $1, $5, $10, and the $20 coin. There would be paper Quarter Ben's (Euro Blue), Half Ben's (pre'33 gold skin color), and of course the Ben, itself (U. S. Bureau of Printing and Engraving Green). That way, we could keep the dollar standard but we would call our money...Ben's.
Do I have a second?
Motion Fails...
Any other new business?
What we need is more Farm subsides?
Ethanol's a Big Scam, and Bush Has Fallen for It: Kevin Hassett
Feb. 13 (Bloomberg) -- In his State of the Union address, George W. Bush called for an intense effort to develop more efficient alternative fuel sources.
``We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass,'' the president said. ``Our goal is to make this new kind of ethanol practical and competitive within six years.''
A recent careful study by Cornell University's David Pimentel and the University of California at Berkeley's Tad Patzek added up all the energy consumption that goes into ethanol production. They took account of the energy it takes to build and run tractors. They added in the energy embodied in the other inputs and irrigation. They parsed out how much is used at the ethanol plant.
Putting it all together, they found that it takes 29 percent more energy to make ethanol from corn than is contained in the ethanol itself.
It's not that corn is a bad source for ethanol. The other sources mentioned by the president look even worse. Wood biomass takes 57 percent more energy to produce than it contains. Switch grass takes about 50 percent more.
Ethanol is just a highly uneconomical product. Some other authors have disputed these findings, but they invariably come up with more favorable calculations by excluding some of the costs.
Indeed, no matter how expensive fossil fuels become, ethanol will never be economical because it takes so much fossil fuel to produce. It might be possible that someday technological processes will emerge that make production of ethanol less reliant on fossil fuels, but the billions in subsidies to this point have left us with a process that is still a disgrace and an absurd waste of energy and taxpayers' money.
and the sky IS really falling.
Camelot
<< <i>What we need is more Farm subsides?
Ethanol's a Big Scam, and Bush Has Fallen for It: Kevin Hassett
Feb. 13 (Bloomberg) -- In his State of the Union address, George W. Bush called for an intense effort to develop more efficient alternative fuel sources.
``We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass,'' the president said. ``Our goal is to make this new kind of ethanol practical and competitive within six years.''
A recent careful study by Cornell University's David Pimentel and the University of California at Berkeley's Tad Patzek added up all the energy consumption that goes into ethanol production. They took account of the energy it takes to build and run tractors. They added in the energy embodied in the other inputs and irrigation. They parsed out how much is used at the ethanol plant.
Putting it all together, they found that it takes 29 percent more energy to make ethanol from corn than is contained in the ethanol itself.
It's not that corn is a bad source for ethanol. The other sources mentioned by the president look even worse. Wood biomass takes 57 percent more energy to produce than it contains. Switch grass takes about 50 percent more.
Ethanol is just a highly uneconomical product. Some other authors have disputed these findings, but they invariably come up with more favorable calculations by excluding some of the costs.
Indeed, no matter how expensive fossil fuels become, ethanol will never be economical because it takes so much fossil fuel to produce. It might be possible that someday technological processes will emerge that make production of ethanol less reliant on fossil fuels, but the billions in subsidies to this point have left us with a process that is still a disgrace and an absurd waste of energy and taxpayers' money. >>
It also costs more money than is produced and creates more polution than is saved. Any money
spent on this is welfare for ADM. It is now virtually impossible to find gasoline which doesn't have
alcohol added to it. Alcohol can be very hard on older engines.
<< <i>Look I really dont care how the CPI is computed.
>>
Hell, I love inflation. I've got a mortgage at 5%, so I'd like nothing better than a run of 10-20% inflation, with commensurate wage increases of course. Meanwhile I'll be tucking as many silver coins as I can in the old safe! Keep your debts in dollars and you assets in anything else... .
Whoops...got to page seven and thought I was at the end. Responded to something posted months ago. Never mind...
<< <i>HARMONY Gold Mining more than trebled its cash operating profits in the December quarter compared with September as a result of the strong gold price and improvements in output, it said yesterday. >>
<< <i>The group also announced it would reopen its Orkney No6 and 7 shafts. They were closed in 2003-04 because the prevailing gold price made them uneconomical. >>
<< <i>With the current gold price holding above R100000/kg, a number of South African gold miners have announced projects to exploit previously unprofitable areas. >>
Have any societies ever advanced their standard of living whilst inflating prices at 15%?
It would devastate the retirees and union pensioners.
Who cares about them? Its all about me me me!!!
Knowledge is the enemy of fear
More will be revealed by price action.
Greenspan's Record: Better Than Predecessors, Not As Good as Gold
Robert A. Heinlein
This is kind of similar to electric cars. Besides the thousands of pounds of ore mined to produce that extra vehicle while zillions of gas cars glut about, those handy-dandy electric cars will be recharged each evening via dirty coal power plants scattered across the country. Zero pollution? Hardly.
Gold recovered nicely back to $550. Appears to be back to a trading range. You can pat Grandich on the back along with the other gold top callers. If they call enough tops, they'll be right every once in a while. Most totally blew the run on gold from $450 to $540 and the recent HUI run from 250 to 350. They'll make bigger bloopers in the future as well. This race is a long term one. If you're day trading or week trading, eventually you will miss the best upward moves as volatility picks up. Slow and steady will win this race.
roadrunner
<< <i>Would Bio-diesel be a better alternative? >>
Yes
<< <i>I take a look at GLD vs XLE (gold ETF vs. oil ETF) at my blog (sig link). Those who don't want to go, my conclusion is that there is some correlation between gold and oil, but it looks to be more of a confirming indicator than something to make buy or sell decisions from. >>
I think the corrolation is mostly commodity based. However if the correlation remains intact then gold investors will have to remain patient, as oil looks to have double topped, or at least is in for a prolonged consolidation period.
Knowledge is the enemy of fear
Ethanol is similar to this. The energy used to convert the corn to energy is a lower grade / less expensive type of energy..... most likely natural gas, electricity, etc.; and a more desirable or more usable product is the result. But yes... it can still be argued as to whether it is worthwhile or not. I personally think it is.... just for the fact that it is allowing us to do something to reduce dependence on crude oil, and does give us some employment while doing so.
One more interesting thought on energy..... Near the end of WW2, Germany was reduced to having to produce synthetic fuel, due to the fact that their oil souces and refiners were destroyed at that point. I do not know what process was used for this.... but evidently there is a method. It may be expensive, but it must exist.....
Text
If we were really interested in those issues, we would immediately expand drilling access in the offshore waters of the USA.
If we continue to irritate all these folks around the planet then who in the hell is going to buy our debt. Don’t the news guys realize that Bush through the Arabs a bone here for buying the debt, and keeping the price of oil denominated in dollars?
I have no real comment here about the Dubai deal, and it seems like the administration could have given them something else, but exactly what happens when, the South Americans, the Iranians, the Dubia’s etc. all want to be paid in Euros?
Feb. 23 (Bloomberg) -- The scary, totally unfunny debt ceiling farce is playing once again in Washington.
With the federal government debt about to hit the $8.18 trillion legal limit, the Treasury Department last week suspended sales of special securities bought by state and local governments so that regular auctions of Treasury bills and notes could continue.
U.S. Senators Urge Delay in Sale of Ports to Dubai
Feb. 23 (Bloomberg)
HON. RON PAUL OF TEXAS
U.S. House of Representatives
In the short run, the issuer of a fiat reserve currency can accrue great economic benefits. In the long run, it poses a threat to the country issuing the world currency. In this case that’s the United States. As long as foreign countries take our dollars in return for real goods, we come out ahead.
It sounds like a great deal for everyone, except the time will come when our dollars-- due to their depreciation-- will be received less enthusiastically or even be rejected by foreign countries.
The agreement with OPEC in the 1970s to price oil in dollars has provided tremendous artificial strength to the dollar as the preeminent reserve currency. This has created a universal demand for the dollar, and soaks up the huge number of new dollars generated each year. Last year alone M3 increased over $700 billion.
In November 2000 Saddam Hussein demanded Euros for his oil. His arrogance was a threat to the dollar; his lack of any military might was never a threat.
There was no public talk of removing Saddam Hussein because of his attack on the integrity of the dollar as a reserve currency by selling oil in Euros. Many believe this was the real reason for our obsession with Iraq.
Most Americans forget how our policies have systematically and needlessly antagonized the Iranians over the years.
Now Iran, especially since she’s made plans for pricing oil in Euros, has been on the receiving end of a propaganda war not unlike that waged against Iraq before our invasion.
For the most part the true victims aren’t aware of how they pay the bills. The license to create money out of thin air allows the bills to be paid through price inflation. American citizens, as well as average citizens of Japan, China, Arab nations, as well as other countries suffer from price inflation, which represents the “tax” that pays the bills for our military, and other adventures.
<< <i>... exactly what happens when, the South Americans, the Iranians, the Dubia’s etc. all want to be paid in Euros? >>
Huh? Why would they want to be paid in Euros? The Euro zone has more debt, more unemploymnet, and slower growth than the US - if there's pent-up inflation in the USD, there's much more in the Euro.
Unless and until someone decides to get back to a gold standard, the USD will keep on shining.
Robert A. Heinlein
<< <i>it always cost more energy to produce any other energy. >>
A popular fallacy. Expending only the energy to post a duplicate joke or thread here will yield far more energy in return posts excoriating your oversight. Perhaps a valuable source of future power with the correct dynamo keyboard.
How do people like this get elected anyway?
Knowledge is the enemy of fear