Anyone see Dollardude? had he employed the same methods he used to lose money in PM's years back, he'd have done quite well for himself the past 5 years.
It took a few months for attorneys to figure out the holes in the new Bankruptcy laws, but that period is over.
Bankruptcy filings soaring again/MSM MONEY May 11,2006 It looks as if last year's reform law did not really stem the enormous flood of bankruptcies after all. Here are the states with the highest bankruptcy rates.
Consumer bankruptcy cases plunged to a 20-year low in the first three months of 2006, reflecting the passage of a tough new bankruptcy law last year. But the pace of new filings is already on the rise.
Courts now see an average of 2,000 new filings a day -- four times the number that were filed in November 2005 after the bankruptcy law went into effect, according to Chris Lundquist, founder of Lundquist Consulting, which tracks bankruptcy trends.
If filings continue to rise at anything like this rate we could see close to 1 million filings by the end of the year.
"There are times during the afternoon -- around 1400 to 1500 -- when there is hardly any liquidity, and that's when it can be driven quite sharply," a senior floor trader said.
Base metals, precious metals gold, silver and platinum, oil and some agricultural products like sugar have all been swept higher in a two-year commodity bull market, fueled by asset-switching buying from hedge, macro and pension funds.
"It is dangerous for the exchange in the long-term, but there is not a lot that they can do. The funds are the flavor of the month at the moment.
The almost unbroken trend of rising prices has made selling, apart from profit-taking, risky. Many short-sellers have been burned, having to cover at loss-making higher prices.
Also, industry producers, who use futures to hedge-sell and lock in prices, are unwilling to trade.
What will the central banks do with gold at $700 or $800? Do you think that they are going to be holders, buyers or seller? It is a very different analysis at those prices than at $350 or $450.
The same can be said about consumers world wide. Some stricken with gold fever will rush to buy while others will be selling to cash in. Silver as well.
Central Banks will not be selling any gold imo. Why follow Britain's folly? If some CB's want to sell, I'm sure China, India, Russia, would be some of the eager buyers.
Here's an excerpt from a an article by Congressman Ron Paul of Texas. This about sums up the many problems we face today.
Meaning of the Gold Price-- Summation
A recent headline in the financial press announced that gold prices surged over concern that confrontation with Iran will further push oil prices higher. This may well reflect the current situation, but higher gold prices mainly reflect monetary expansion by the Federal Reserve. Dwelling on current events and their effect on gold prices reflects concern for symptoms rather than an understanding of the actual cause of these price increases. Without an enormous increase in the money supply over the past 35 years and a worldwide paper monetary system, this increase in the price of gold would not have occurred.
Certainly geo-political events in the Middle East under a gold standard would not alter its price, though they could affect the supply of oil and cause oil prices to rise. Only under conditions created by excessive paper money would one expect all or most prices to rise. This is a mere reflection of the devaluation of the dollar.
Particular things to remember:
If one endorses small government and maximum liberty, one must support commodity money.
One of the strongest restraints against unnecessary war is a gold standard.
Deficit financing by government is severely restricted by sound money.
The harmful effects of the business cycle are virtually eliminated with an honest gold standard.
Saving and thrift are encouraged by a gold standard; and discouraged by paper money.
Price inflation, with generally rising price levels, is characteristic of paper money. Reports that the consumer price index and the producer price index are rising are distractions: the real cause of inflation is the Fed’s creation of new money.
Interest rate manipulation by central bank helps the rich, the banks, the government, and the politicians.
Paper money permits the regressive inflation tax to be passed off on the poor and the middle class.
Speculative financial bubbles are characteristic of paper money-- not gold.
Paper money encourages economic and political chaos, which subsequently causes a search for scapegoats rather than blaming the central bank.
Dangerous protectionist measures frequently are implemented to compensate for the dislocations caused by fiat money.
Paper money, inflation, and the conditions they create contribute to the problems of illegal immigration.
The value of gold is remarkably stable.
The dollar price of gold reflects dollar depreciation.
Holding gold helps preserve and store wealth, but technically gold is not a true investment.
Since 2001 the dollar has been devalued by 60%.
In 1934 FDR devalued the dollar by 41%.
In 1971 Nixon devalued the dollar by 7.9%.
In 1973 Nixon devalued the dollar by 10%.
These were momentous monetary events, and every knowledgeable person worldwide paid close attention. Major changes were endured in 1979 and 1980 to save the dollar from disintegration. This involved a severe recession, interest rates over 21%, and general price inflation of 15%.
Today we face a 60% devaluation and counting, yet no one seems to care. It’s of greater significance than the three events mentioned above. And yet the one measurement that best reflects the degree of inflation, the Fed and our government deny us. Since March, M3 reporting has been discontinued. For starters, I’d like to see Congress demand that this report be resumed. I fully believe the American people and Congress are entitled to this information. Will we one day complain about false intelligence, as we have with the Iraq war? Will we complain about not having enough information to address monetary policy after it’s too late?
If ever there was a time to get a handle on what sound money is and what it means, that time is today.
Inflation, as exposed by high gold prices, transfers wealth from the middle class to the rich, as real wages decline while the salaries of CEOs, movie stars, and athletes skyrocket-- along with the profits of the military industrial complex, the oil industry, and other special interests.
A sharply rising gold price is a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.
Ultimately, the gold price is a measurement of trust in the currency and the politicians who run the country. It’s been that way for a long time, and is not about to change.
If we care about the financial system, the tax system, and the monumental debt we’re accumulating, we must start talking about the benefits and discipline that come only with a commodity standard of money-- money the government and central banks absolutely cannot create out of thin air.
Economic law dictates reform at some point. But should we wait until the dollar is 1/1,000 of an ounce of gold or 1/2,000 of an ounce of gold? The longer we wait, the more people suffer and the more difficult reforms become. Runaway inflation inevitably leads to political chaos, something numerous countries have suffered throughout the 20th century. The worst example of course was the German inflation of the 1920s that led to the rise of Hitler. Even the communist takeover of China was associated with runaway inflation brought on by Chinese Nationalists. The time for action is now, and it is up to the American people and the U.S. Congress to demand it.
The complete article appears on the www.financialsense.com link below. Long but an excellent primer on why the tail is wagging the dog.
<< <i>Inflation, as exposed by high gold prices, transfers wealth from the middle class to the rich, as real wages decline while the salaries of CEOs, movie stars, and athletes skyrocket-- along with the profits of the military industrial complex, the oil industry, and other special interests.
A sharply rising gold price is a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.
Ultimately, the gold price is a measurement of trust in the currency and the politicians who run the country. It’s been that way for a long time, and is not about to change. >>
I would tend to agree with this part. But I do not agree that a strong dollar is necessarily attainable by going to gold backing without torpedoing domestic growth.
Fundamentally, I do not care whether the dollar is backed by gold. What I do care about is its purchasing power and its foreign exchange rate. I do not want a dollar that is so strong that we lose whatever export markets we have left (mostly agriculture, aerospace and defense, and other high tech I suppose) to EU and Asian competition. At the same time, we cannot break in to the EU market because it is run as an exclusionary mercantile system. Try to find California wine on a menu in Europe or an American car on the road (excluding cars manufactured in Europe by subsidiaries of Ford and GM). For that matter you see a lot more Renaults and Citroens than Hondas and Toyotas on the road in Europe, even though the French cars could not be sold in the US because of inferior quality to even the worst Detroit products. A gold backed currency is not going to change that.
If the dollar falls low enough, the EU countries will start to lose sales to the US and US tourist dollars. So any action by a central banks in the EU to strengthen the euro against the dollar will have a deleterious effect on their economies.
Perhaps the dollar was just exceptionally strong during the late 90's into 2001. The chart below tells me the dollar is just falling back into its normal range over the past 16 years.
In our modern socialistic American society I personally see no reason for children to go to school at all. If our kids cannot find a job the government should just send them checks in the mail for the rest of their lives.
If young people know that they can get welfare, food stamps, tax refunds on taxes they never paid, government housing, medical coverage etc. WHY FIND A JOB, and why even go to school if you don’t need a job?
Perhaps our kids could go to school just for fun, and we could have no tests, and no grades, and when they say they have gone long enough we can give them a diploma.
California Students Win Ruling Over High School Exam (Update1)
May 12 (Bloomberg) -- More than 47,000 California high school seniors will be able to graduate next month after a state judge blocked a law requiring students to pass an exit exam.
Judge Robert Freedman in Oakland today ruled the California High School Exit Examination, required for the first time this year, is unfair because some teachers aren't certified in the subjects tested, according to Arturo Gonzalez, a lawyer for the students.
Freedman's decision upholds an injunction blocking the state department of education from denying a diploma to any high school seniors who passed all required courses. State Superintendent of Public Instruction Jack O'Connell said lawyers for the schools have asked the court to stay the injunction as they prepare an appeal to Freedman's decision.
The ruling is ``bad news for employers who want meaning restored to our high school diplomas,'' O'Connell said in a conference call with reporters. ``We do no favors to unprepared students by handing them a diploma without the skills needed to back them up.''
California Governor Arnold Schwarzenegger said he supports O'Connell's decision to appeal the ruling, adding in a statement that the exit exam is the ``best resource'' for ensuring students are learning the ``skills they need to begin successful lives.''
do you have a graph of the US dollar index going back to say 1971. I'd like to see how it played out during the crazes of the 70's and 80's. That would be a more true comparison to what gold was doing at the same time.
At the very least, gold is a long-term insurance policy. I could care less what the moves are from this month to next. But, there is certainly enough rational opinion out there to suggest that the US Dollar may not be king forever, that worldwide fiat $ cannot be printed at current rates forever, that tangible goods (PM's, property) will be increasingly relatively scarce among a booming world population. Plus, you never know when a S- Hits The Fan situation will occur (and we all can see that America is not universally loved - many people would sacrifice their lives to sneak and light a nuke in a major US port). So, to those of you who had the cajones to buy many years ago, cheers. Coin dealers and financial managers don't make their major $ on bullion, so it is no surprise to see them poo-pooing this position. I'll bet the contents of their safe deposit boxes would speak differently than their words on this forum.
Who has charts showing the price of gold versus other currencies than the dollar? I'm convinced the fundamentals of gold will keep it rising for a long time, even vis-a-vis the euro and other currencies.
.....GOD
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
1jester, you made a good point. Gold finally went into a full-bull mode when all of the other majr foreign currencies finally got on board along with the US dollar. Seems like that was about 18-24 months ago. I think this was about the last major hurdle to convince the traders that gold was for real.
<<Hi. I'm new to this. Is gold a good investment?>>
First timer!! Oh, yes, gold is looking for "investors" such as yourself. Gold has such a high demand, and NO SPECULATORS!!!! Guaranteed to go to THE MOON.. BY NOW, BEFORE IT'S TOO LATE!!!
<< <i>cohodk, could you please explain your graph? Thank you. >>
The first graph is the dollar. The price of course is the middle window. The others are momentum indicators. The actual numbers are not that important but rather their relative values. As you can see the momentums were indicating that the dollar was oversold and a bounce was about to happen. A bounce in the dollar probably means a correction in gold and that is exactly what happened.
The second graph is the volatility index of the stock market. In this case a rising volatility usually means a falling stock market. The indicators were telling me that the VIX was about to break to the upside and hence a big drop in the market was on order. Hence my comment "Something wicked this way comes."
If you have more specific questions I would be happy to answer via PM.
Leonard Kaplan is one of the few rational gold bugs:
<< <i>``I've never seen anything quite like this in my entire life,'' said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois, who's been trading gold for more than 30 years. ``None of my traders are in the market.'' >>
The surge in the 1980s, when gold reached a record $873 an ounce, was ``news-related,'' said Kaplan, who has his money in short-term municipal bonds. ``Now you have extreme volatility for no apparent reason. The appetite for risk is greater than these markets can absorb.'
<< <i>Jewelry demand fell 22 percent to 535 tons in the first quarter while exchange-traded funds bought 109 tons of the metal, up 23 percent. Jewelers are the biggest buyers of gold, accounting for three-quarters of purchases. >>
<< <i>``These figures have served to highlight the dominance of speculators in driving gold prices,'' said Yingxi Yu, a precious metals analyst at Barclays Plc in London. >>
The jewelers who need physical gold have reduced purchases because of high prices, but those who have no interest in owning physical gold are demanding more. Meanwhile, gold mining companies continue to mine gold at a cost of $200-$250. Interesting.
Robert Scot: Engraving Liberty - biography of US Mint's first chief engraver
Sooooooooooo...what was that! A fools rush, promotion or world news related speculation, irrational exuberance, a masked man with a silver bullet? Metal has been such a scene lately, really screwing up auctions and coin prices. Anybody have a feel for what all that was?
Without any gold standard for the world’s currency markets, central bankers can — and will — print money like there’s no tomorrow to avoid or reverse economic downturns.
This is a very powerful monetary force, and it will drive inflation higher!
Fact: Money supply is exploding all around the world … in Canada, Russia, India, Israel, and Egypt … and in emerging countries like Pakistan, the Ukraine, Romania, and the Czech Republic.
But the worst inflation-pumping, currency-flooding central banks of the industrialized world happen to be some of the biggest economic powerhouses:
- U.S. broad money supply rose 4.9% over the past year … and it’s still surging!
- In the European Union, money stock growth is increasing at a sharp 6.3% annual pace.
- In Britain, money supply at the end of April showed an increase of 13.1% year over year!
-And in China, the broad money supply soared an amazing 18.9% over the 12 months through April.
The last time the world saw such a broad increase in money supply was 1977 to 1980. Over that period, the rate of inflation more than doubled … gold surged nearly eightfold … and interest rates in the United States zoomed 20%.
For those investors interested in hard assets, 2006 is the year to buy, before the real news on inflation hits the general public!
Intellectuals begin to shout their warnings, what do they know anyway?
Is the drop in Gold and Silver just a great buying opportunity ?
June 1st 2006
Laurence Kotlikoff, Professor and Chairman of the Department of Economics at Boston University, Research Associate at the National Bureau of Economic Research and President of Economic Security Planning, Inc., has served as a consultant to the IMF and the World Bank, major U.S. companies and the governments of Russia and Britain and has also authored or co-authored 11 books of which his latest, co-authored with Scott Burns, ‘The Coming Generational Storm,’ is particularly troubling in its conclusions.
According to Kotlikoff and Burns, “if our government continues on the course it has set, we’ll see skyrocketing tax rates, drastically lower retirement and health benefits, high inflation, a rapidly depreciating dollar, unemployment, and political instability. As they say, bad things happen to good countries, and we are heading into one God-awful fiscal storm, the full dimensions of which are hard to fathom.
To eliminate the fiscal gap between the government’s future receipts and future expenditures, assuming future generations faced the same net tax rates as current generations would require, in combination, a 17% increase in income taxes, a 24% increase in payroll taxes, a reduction in federal purchases by 26%, and a cut in Social Security and Medicare benefits by 11% by 2008. If such a combination was just not possible the same result could be achieved by immediately either raising federal income taxes by 69%, or raising payroll taxes by 95%, or permanently cutting federal discretionary spending by 106%, which, of course, is infeasible, or we could cut, immediately and permanently, Social Security and Medicare benefits by 45%. Talk about castor oil! Any delay would add significant cost as there would be interest on the accumulating debt.
Once the financial markets catch on to the depths of these problems, they will quickly dump their holdings of U.S. Treasury and other bonds. Precisely when the markets will wise up is hard to say, which is why long-term U.S. interest rates could start to soar at any time.”
Maya MacGuineas, President of the Committee for a Responsible Federal Budget, The United States is now heavily dependent on lenders from abroad to finance our massive levels of borrowing. Concern over America’s fiscal position would lead to a selling off of dollars, stocks and bonds, rising interest rates, the bursting of the housing bubble, and a slowdown in not just our economy, but the world’s economy. Another unsettling scenario is that private rating agencies downgrade the US debt based on our high levels of borrowing and unfunded liabilities. A downgrade of the U.S.’s debt would surely cause bondholders to dump their debt, leading to an abrupt jump in interest rates and potentially setting off an unwelcome economic spiral.
Mike Hoy, an economics professor at the University of Ontario, Canada, and a Ph.D graduate from the London School of Economics, “believes the public as a whole will be in for some very disappointing times. Over the last year there have been several events which have developed and continue to develop which, in my opinion, are the triggers that will bring an end to many of the commonly accepted practices of our government and financial system. The end result will change the future and the lives of everyone for as long as we live. I cannot emphasize enough the importance of understanding that the way of life the world has accepted as normal for the last two decades is nothing more than a time bomb whose fuse has now been lit. For those who do not understand or refuse to accept that the last two decades ushered in the end of the new economy rather than the beginning; then the fate of those caught in the path of this blast will not be pretty.
I believe we have now entered the hyper-inflationary cycle. I have no doubt that deficits and red ink will flow like water over a waterfall. It is after this hyper-inflationary stage that I expect to see very serious and tough economic times”.
Peter Bernstein, university professor in economics, author of numerous books including ‘Against the Gods, the Remarkable Story of Risk’, and president of Peter L. Bernstein, Inc., has said “Current trends are not sustainable. The imbalances are now enormous. The linkages of the parts are so tightly knit into the whole that reducing one imbalance to zero, or even compressing them all to a more manageable level, appears to be impossible without a major upheaval. The restoration of balance will be a compelling force roaring through the entire economy – globally in all likelihood. The breeze will not be gentle. Hurricane may be the more appropriate metaphor.
The United States has no choice but to either repudiate its staggering debts and unfunded liabilities of in excess of $86,000,000,000,000 or inflate its way through them because entitlement expenditure and interest payments are consuming ever increasing proportions of the government’s take. Pile on state, local and private debt, plus possible private sector pension bail-outs, and the actual hole is closer to $115,000,000,000,000. It doesn’t have to be that way, but there is a high probability that it will be. The coming inter-generational political battle over gap funds could well multiple hard asset prices like those of gold.”
Wall Street thinks the price of gold is to high, but the Chinese that are holding lots of the marbles, think they should stop buying dollars and start buying Gold and oil. What do you think?
So what happens if the Chinese put only 5% of their foreign-exchange holdings in Gold? So they buy $44 billion in gold out of the $875 billion they have, I mean its not like they won’t get some more billions in paper this year.
Who has ever seen the old movie “Rollover” made in 1981 with Jane Fonda and Kris Kristofferson? A great pop-corn movie about the Arabs slowly buying up all the Gold without telling anyone, perhaps Blockbuster still carries this.
China Should Buy Gold, Central Bank Adviser Says (Update2) June 1 (Bloomberg)
-- China should use its foreign-currency reserves, the world's largest, to buy gold and oil as a hedge to guard against the risk of a sudden drop in the U.S. dollar, said an adviser on the central bank's 13-member policy board. The country has 1 percent of its reserves in gold, compared with more than 70 percent in the U.S., and rising demand may add to gains in the metal that pushed prices to a 26-year high in May. Booming exports and investment doubled Chinese reserves to $819 billion in the past two years, with economists estimating more than two-thirds of the cash went into U.S. Treasuries.
The country's foreign-exchange holdings as of March 31 surged to $875.1 billion, up more than $50 billion from end-2005 and overtaking those of Japan as the world's biggest.”
This must be a shocking welcome to foreigners entering the Global Economy. No real reason for the poor foreigners to ever learn, Americans never have!
TAIPEI (Reuters) - Kathy Chen is an accessories shopowner in Taiwan struggling to pay huge credit card debts on a modest income.
She is the new breed of "credit card slave."
Hundreds of thousands of Taiwan's credit card holders have racked up mountains of debt, undermining consumer sentiment and underlining the risks facing export-led Asian economies that are trying to crank up domestic consumption as an engine of growth.
Besides Taiwan, where American Express stopped issuing credit cards this year due to rising defaults, Thailand and China are among those that have tightened supervision to avoid the experience of
"I wanted to commit suicide because I was at a loss what to do to my credit card debts," said Chen, echoing the sentiments of a growing number of desperate borrowers.
She is trying to keep up payments on the T$5 million (US$157,233) she owes banks on a monthly income of only T$20,000 ($633).
"I have no money and I have so many debts. Nowadays, I only spend on three square meals a day and basic necessities," said Chen, 40, who tries to hide her face in public by wearing a hat, huge sunglasses and a mask covering her mouth. Chen is one of 520,000 so-called card slaves, or problem debtors, out of Taiwan.
Their overdue debts, averaging T$300,000 ($9,300) per person, are the dark side of a boom in Asia's credit card market, which is growing more than 10 percent a year as issuers such as Visa and MasterCard tap an exploding middle class.
Visa, which features actors Richard Gere and Catherine Zeta-Jones in its advertisements across Asia, said it had issued more than 202 million consumer credit cards in Asia by the end of 2005, up 11.5 percent from a year earlier.
Calling them "credit card slaves" is hugely misleading and dishonnest - those people are responsable for their pligh, which is exactly what slaves are not. This and the whinny tone of the article is a blatant attempt at putting the blame on the credit card companies.
With this said how credit cards could ever extend such a line of credit to those people is beyond me.
"The greatest productive force is human selfishness." Robert A. Heinlein
<< <i>With this said how credit cards could ever extend such a line of credit to those people is beyond me. >>
Why not, they lend money at 20% that they create from nothing. Then they compound interest to insure the debtors never get free. ITs a great deal for the international moneychangers, printing money from paper and lending it at mafia rates.
The entire system of Fiat money created by a private company called the Federal Reserve exists for the benefit of the financial elite. Too bad they got even too greedy and are about to kill their own golden goose.
That woman will take over 20 years to payoff her credit card debt if she pays every dollar she makes to the credit card company. That is assuming she pays no interest. I am not sure if this is a form of slavery, endentured servitude, or what... but it sure aint freedom.
Mark Piersall Random Collector www.marksmedals.com
This last Friday a very nice young married lady, with a new baby, came up to me and ask if I would help explain something to her about her credit card. I of course agreed to help if I could.
She told me that 3 years ago her and her husband bought their first household furniture and used a credit card. Not much as a house full of furniture goes, but $2,400.
She had left the bill paying on this card to her husband for the last three years, and he had been paying the minimum required. When she brought the statement to me their balance was still nearly $2,300, even after three years. At that point I read the fine print on the back. Their interest rate was 29.3% COMPOUNDED DAYILY!!
No it is not the credit card companies fault that they did not read the fine print, but there ought to be a law!!
<< <i>No it is not the credit card companies fault that they did not read the fine print, but there ought to be a law!! >>
There used to be and people went to prison if they charged too much. But then the corporate criminals paid off the govn't to allow these criminal rates to provide obscene profits for the moneychangers pointing out that they could always file Bankruptcy. Then they realized that they were letting these slaves out of indenturement so they changed the BK law too.
<< <i>Odd concept: To "buy" stuff you have to pay for it. I don't know why this is such a inconceivable concept for so many. >>
No one is disputing the need to pay what you borrowed. It when you borrow $1000, pay $2000 back and still owe $1000 that the vision of the creditor taking advantage of an inexperienced borrower to rape them for obscene profit takes form.
Particularly in light of the fact that our banking system allows them to lend money they don't even have to begin with.
That's my answer to all those that had to have NOW, and "say" they didn't know what the "pay later" meant. Not my problem. I really wish I knew how to start a banking business.
Newsflash: A person who borrows $157,000 is not a victim.
She has no intention of ever paying. The only thing left is to complain about how mistreated she is, and to hope that some kind sucker - oops I'm mean "activist" - gets her bill paid for her via the government.
I told myself I was too much of a wuss to post here again but alas, i am twice foolish
here is a chart i was looking at tonight. i am kinda happy i sold some of my common US half eagles during that peak we had. yet with all the talk of gold tanking.. this chart shows how silly it is to judge gold day by day. for the last few years everything has been uphill. 1000 an ounce within a seven years seems very reasonable.
i always enjoy reading the updates to this thread. good night.
Comments
<< <i>Good one, TDN. Apparently you are unaware about The Curse of the 3000th post. >>
Why, no - I wasn't. Obviously, the Bard has failed in his creative teachings regarding this horror.
WE NEED A CLANKEYE FIX!
No fear, I can help, quick, you username and password and Ill check on it.
>>>My Collection
Coincidence...hummmmmmmm
"Do you feel lucky? Do ya?"
EOM
he'd have done quite well for himself the past 5 years.
roadrunner
Bankruptcy filings soaring again/MSM MONEY May 11,2006
It looks as if last year's reform law did not really stem the enormous flood of bankruptcies after all. Here are the states with the highest bankruptcy rates.
Consumer bankruptcy cases plunged to a 20-year low in the first three months of 2006, reflecting the passage of a tough new bankruptcy law last year. But the pace of new filings is already on the rise.
Courts now see an average of 2,000 new filings a day -- four times the number that were filed in November 2005 after the bankruptcy law went into effect, according to Chris Lundquist, founder of Lundquist Consulting, which tracks bankruptcy trends.
If filings continue to rise at anything like this rate we could see close to 1 million filings by the end of the year.
Record high metals prices crimp market liquidity
"There are times during the afternoon -- around 1400 to 1500 -- when there is hardly any liquidity, and that's when it can be driven quite sharply," a senior floor trader said.
Base metals, precious metals gold, silver and platinum, oil and some agricultural products like sugar have all been swept higher in a two-year commodity bull market, fueled by asset-switching buying from hedge, macro and pension funds.
"It is dangerous for the exchange in the long-term, but there is not a lot that they can do. The funds are the flavor of the month at the moment.
The almost unbroken trend of rising prices has made selling, apart from profit-taking, risky. Many short-sellers have been burned, having to cover at loss-making higher prices.
Also, industry producers, who use futures to hedge-sell and lock in prices, are unwilling to trade.
Also, something wicked this way comes.
Knowledge is the enemy of fear
The same can be said about consumers world wide. Some stricken with gold fever will rush to buy while others will be selling to cash in. Silver as well.
CG
be some of the eager buyers.
Here's an excerpt from a an article by Congressman Ron Paul of Texas. This about sums up the many problems we face today.
Meaning of the Gold Price-- Summation
A recent headline in the financial press announced that gold prices surged over concern that confrontation with Iran will further push oil prices higher. This may well reflect the current situation, but higher gold prices mainly reflect monetary expansion by the Federal Reserve. Dwelling on current events and their effect on gold prices reflects concern for symptoms rather than an understanding of the actual cause of these price increases. Without an enormous increase in the money supply over the past 35 years and a worldwide paper monetary system, this increase in the price of gold would not have occurred.
Certainly geo-political events in the Middle East under a gold standard would not alter its price, though they could affect the supply of oil and cause oil prices to rise. Only under conditions created by excessive paper money would one expect all or most prices to rise. This is a mere reflection of the devaluation of the dollar.
Particular things to remember:
If one endorses small government and maximum liberty, one must support commodity money.
One of the strongest restraints against unnecessary war is a gold standard.
Deficit financing by government is severely restricted by sound money.
The harmful effects of the business cycle are virtually eliminated with an honest gold standard.
Saving and thrift are encouraged by a gold standard; and discouraged by paper money.
Price inflation, with generally rising price levels, is characteristic of paper money. Reports that the consumer price index and the producer price index are rising are distractions: the real cause of inflation is the Fed’s creation of new money.
Interest rate manipulation by central bank helps the rich, the banks, the government, and the politicians.
Paper money permits the regressive inflation tax to be passed off on the poor and the middle class.
Speculative financial bubbles are characteristic of paper money-- not gold.
Paper money encourages economic and political chaos, which subsequently causes a search for scapegoats rather than blaming the central bank.
Dangerous protectionist measures frequently are implemented to compensate for the dislocations caused by fiat money.
Paper money, inflation, and the conditions they create contribute to the problems of illegal immigration.
The value of gold is remarkably stable.
The dollar price of gold reflects dollar depreciation.
Holding gold helps preserve and store wealth, but technically gold is not a true investment.
Since 2001 the dollar has been devalued by 60%.
In 1934 FDR devalued the dollar by 41%.
In 1971 Nixon devalued the dollar by 7.9%.
In 1973 Nixon devalued the dollar by 10%.
These were momentous monetary events, and every knowledgeable person worldwide paid close attention. Major changes were endured in 1979 and 1980 to save the dollar from disintegration. This involved a severe recession, interest rates over 21%, and general price inflation of 15%.
Today we face a 60% devaluation and counting, yet no one seems to care. It’s of greater significance than the three events mentioned above. And yet the one measurement that best reflects the degree of inflation, the Fed and our government deny us. Since March, M3 reporting has been discontinued. For starters, I’d like to see Congress demand that this report be resumed. I fully believe the American people and Congress are entitled to this information. Will we one day complain about false intelligence, as we have with the Iraq war? Will we complain about not having enough information to address monetary policy after it’s too late?
If ever there was a time to get a handle on what sound money is and what it means, that time is today.
Inflation, as exposed by high gold prices, transfers wealth from the middle class to the rich, as real wages decline while the salaries of CEOs, movie stars, and athletes skyrocket-- along with the profits of the military industrial complex, the oil industry, and other special interests.
A sharply rising gold price is a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.
Ultimately, the gold price is a measurement of trust in the currency and the politicians who run the country. It’s been that way for a long time, and is not about to change.
If we care about the financial system, the tax system, and the monumental debt we’re accumulating, we must start talking about the benefits and discipline that come only with a commodity standard of money-- money the government and central banks absolutely cannot create out of thin air.
Economic law dictates reform at some point. But should we wait until the dollar is 1/1,000 of an ounce of gold or 1/2,000 of an ounce of gold? The longer we wait, the more people suffer and the more difficult reforms become. Runaway inflation inevitably leads to political chaos, something numerous countries have suffered throughout the 20th century. The worst example of course was the German inflation of the 1920s that led to the rise of Hitler. Even the communist takeover of China was associated with runaway inflation brought on by Chinese Nationalists. The time for action is now, and it is up to the American people and the U.S. Congress to demand it.
The complete article appears on the www.financialsense.com link below. Long but an excellent primer on why the tail is wagging the dog.
roadrunner
<< <i>Inflation, as exposed by high gold prices, transfers wealth from the middle class to the rich, as real wages decline while the salaries of CEOs, movie stars, and athletes skyrocket-- along with the profits of the military industrial complex, the oil industry, and other special interests.
A sharply rising gold price is a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.
Ultimately, the gold price is a measurement of trust in the currency and the politicians who run the country. It’s been that way for a long time, and is not about to change. >>
I would tend to agree with this part. But I do not agree that a strong dollar is necessarily attainable by going to gold backing without torpedoing domestic growth.
Fundamentally, I do not care whether the dollar is backed by gold. What I do care about is its purchasing power and its foreign exchange rate. I do not want a dollar that is so strong that we lose whatever export markets we have left (mostly agriculture, aerospace and defense, and other high tech I suppose) to EU and Asian competition. At the same time, we cannot break in to the EU market because it is run as an exclusionary mercantile system. Try to find California wine on a menu in Europe or an American car on the road (excluding cars manufactured in Europe by subsidiaries of Ford and GM). For that matter you see a lot more Renaults and Citroens than Hondas and Toyotas on the road in Europe, even though the French cars could not be sold in the US because of inferior quality to even the worst Detroit products. A gold backed currency is not going to change that.
If the dollar falls low enough, the EU countries will start to lose sales to the US and US tourist dollars. So any action by a central banks in the EU to strengthen the euro against the dollar will have a deleterious effect on their economies.
CG
Unfortunately, options don't trade of the gold ETF (Tick: GLD). So I guess I'm stuck buying options on gold sticks to get the leverage I want.
Anybody having any suggestions on gold stocks that closely parallel movents in gold?
Perhaps the dollar was just exceptionally strong during the late 90's into 2001. The chart below tells me the dollar is just falling back into its normal range over the past 16 years.
Knowledge is the enemy of fear
In our modern socialistic American society I personally see no reason for children to go to school at all. If our kids cannot find a job the government should just send them checks in the mail for the rest of their lives.
If young people know that they can get welfare, food stamps, tax refunds on taxes they never paid, government housing, medical coverage etc. WHY FIND A JOB, and why even go to school if you don’t need a job?
Perhaps our kids could go to school just for fun, and we could have no tests, and no grades, and when they say they have gone long enough we can give them a diploma.
California Students Win Ruling Over High School Exam (Update1)
May 12 (Bloomberg) -- More than 47,000 California high school seniors will be able to graduate next month after a state judge blocked a law requiring students to pass an exit exam.
Judge Robert Freedman in Oakland today ruled the California High School Exit Examination, required for the first time this year, is unfair because some teachers aren't certified in the subjects tested, according to Arturo Gonzalez, a lawyer for the students.
Freedman's decision upholds an injunction blocking the state department of education from denying a diploma to any high school seniors who passed all required courses. State Superintendent of Public Instruction Jack O'Connell said lawyers for the schools have asked the court to stay the injunction as they prepare an appeal to Freedman's decision.
The ruling is ``bad news for employers who want meaning restored to our high school diplomas,'' O'Connell said in a conference call with reporters. ``We do no favors to unprepared students by handing them a diploma without the skills needed to back them up.''
California Governor Arnold Schwarzenegger said he supports O'Connell's decision to appeal the ruling, adding in a statement that the exit exam is the ``best resource'' for ensuring students are learning the ``skills they need to begin successful lives.''
do you have a graph of the US dollar index going back to say 1971. I'd like to see how it played out during the crazes of the 70's
and 80's. That would be a more true comparison to what gold was doing at the same time.
roadrunner
I did find some charts of the dollar VS other currencies that do go back to the late 70's
Knowledge is the enemy of fear
I was right !
...and you guys, don't forget
And for all you Mom's... thanks
we'd be bigger dorks without ya.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
roadrunner
<< <i>The dollar is a bit oversold.
Also, something wicked this way comes.
I sure hope some used these charts. Gold has dropped $65 and the stock indices are down about 4%.
Knowledge is the enemy of fear
Thank you.
First timer!! Oh, yes, gold is looking for "investors" such as yourself. Gold has such a high demand, and NO SPECULATORS!!!! Guaranteed to go to THE MOON.. BY NOW, BEFORE IT'S TOO LATE!!!
<< <i>cohodk, could you please explain your graph?
Thank you. >>
The first graph is the dollar. The price of course is the middle window. The others are momentum indicators. The actual numbers are not that important but rather their relative values. As you can see the momentums were indicating that the dollar was oversold and a bounce was about to happen. A bounce in the dollar probably means a correction in gold and that is exactly what happened.
The second graph is the volatility index of the stock market. In this case a rising volatility usually means a falling stock market. The indicators were telling me that the VIX was about to break to the upside and hence a big drop in the market was on order. Hence my comment "Something wicked this way comes."
If you have more specific questions I would be happy to answer via PM.
Knowledge is the enemy of fear
<< <i>``I've never seen anything quite like this in my entire life,'' said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois, who's been trading gold for more than 30 years. ``None of my traders are in the market.'' >>
The surge in the 1980s, when gold reached a record $873 an ounce, was ``news-related,'' said Kaplan, who has his money in short-term municipal bonds. ``Now you have extreme volatility for no apparent reason. The appetite for risk is greater than these markets can absorb.'
<< <i>Jewelry demand fell 22 percent to 535 tons in the first quarter while exchange-traded funds bought 109 tons of the metal, up 23 percent. Jewelers are the biggest buyers of gold, accounting for three-quarters of purchases. >>
<< <i>``These figures have served to highlight the dominance of speculators in driving gold prices,'' said Yingxi Yu, a precious metals analyst at Barclays Plc in London. >>
The jewelers who need physical gold have reduced purchases because of high prices, but those who have no interest in owning physical gold are demanding more. Meanwhile, gold mining companies continue to mine gold at a cost of $200-$250. Interesting.
May 25, 2006
Larry Edelson
Worldwide Monetary
Inflation Set to Soar
Without any gold standard for the world’s currency markets, central bankers can — and will — print money like there’s no tomorrow to avoid or reverse economic downturns.
This is a very powerful monetary force, and it will drive inflation higher!
Fact: Money supply is exploding all around the world … in Canada, Russia, India, Israel, and Egypt … and in emerging countries like Pakistan, the Ukraine, Romania, and the Czech Republic.
But the worst inflation-pumping, currency-flooding central banks of the industrialized world happen to be some of the biggest economic powerhouses:
- U.S. broad money supply rose 4.9% over the past year … and it’s still surging!
- In the European Union, money stock growth is increasing at a sharp 6.3% annual pace.
- In Britain, money supply at the end of April showed an increase of 13.1% year over year!
-And in China, the broad money supply soared an amazing 18.9% over the 12 months through April.
The last time the world saw such a broad increase in money supply was 1977 to 1980. Over that period, the rate of inflation more than doubled … gold surged nearly eightfold … and interest rates in the United States zoomed 20%.
For those investors interested in hard assets, 2006 is the year to buy, before the real news on inflation hits the general public!
Robert A. Heinlein
Intellectuals begin to shout their warnings, what do they know anyway?
Is the drop in Gold and Silver just a great buying opportunity ?
June 1st 2006
Laurence Kotlikoff, Professor and Chairman of the Department of Economics at Boston University, Research Associate at the National Bureau of Economic Research and President of Economic Security Planning, Inc., has served as a consultant to the IMF and the World Bank, major U.S. companies and the governments of Russia and Britain and has also authored or co-authored 11 books of which his latest, co-authored with Scott Burns, ‘The Coming Generational Storm,’ is particularly troubling in its conclusions.
According to Kotlikoff and Burns, “if our government continues on the course it has set, we’ll see skyrocketing tax rates, drastically lower retirement and health benefits, high inflation, a rapidly depreciating dollar, unemployment, and political instability. As they say, bad things happen to good countries, and we are heading into one God-awful fiscal storm, the full dimensions of which are hard to fathom.
To eliminate the fiscal gap between the government’s future receipts and future expenditures, assuming future generations faced the same net tax rates as current generations would require, in combination, a 17% increase in income taxes, a 24% increase in payroll taxes, a reduction in federal purchases by 26%, and a cut in Social Security and Medicare benefits by 11% by 2008. If such a combination was just not possible the same result could be achieved by immediately either raising federal income taxes by 69%, or raising payroll taxes by 95%, or permanently cutting federal discretionary spending by 106%, which, of course, is infeasible, or we could cut, immediately and permanently, Social Security and Medicare benefits by 45%. Talk about castor oil! Any delay would add significant cost as there would be interest on the accumulating debt.
Once the financial markets catch on to the depths of these problems, they will quickly dump their holdings of U.S. Treasury and other bonds. Precisely when the markets will wise up is hard to say, which is why long-term U.S. interest rates could start to soar at any time.”
Maya MacGuineas, President of the Committee for a Responsible Federal Budget,
The United States is now heavily dependent on lenders from abroad to finance our massive levels of borrowing. Concern over America’s fiscal position would lead to a selling off of dollars, stocks and bonds, rising interest rates, the bursting of the housing bubble, and a slowdown in not just our economy, but the world’s economy. Another unsettling scenario is that private rating agencies downgrade the US debt based on our high levels of borrowing and unfunded liabilities. A downgrade of the U.S.’s debt would surely cause bondholders to dump their debt, leading to an abrupt jump in interest rates and potentially setting off an unwelcome economic spiral.
Mike Hoy, an economics professor at the University of Ontario, Canada, and a Ph.D graduate from the London School of Economics, “believes the public as a whole will be in for some very disappointing times. Over the last year there have been several events which have developed and continue to develop which, in my opinion, are the triggers that will bring an end to many of the commonly accepted practices of our government and financial system. The end result will change the future and the lives of everyone for as long as we live. I cannot emphasize enough the importance of understanding that the way of life the world has accepted as normal for the last two decades is nothing more than a time bomb whose fuse has now been lit. For those who do not understand or refuse to accept that the last two decades ushered in the end of the new economy rather than the beginning; then the fate of those caught in the path of this blast will not be pretty.
I believe we have now entered the hyper-inflationary cycle. I have no doubt that deficits and red ink will flow like water over a waterfall. It is after this hyper-inflationary stage that I expect to see very serious and tough economic times”.
Peter Bernstein, university professor in economics, author of numerous books including ‘Against the Gods, the Remarkable Story of Risk’, and president of Peter L. Bernstein, Inc., has said “Current trends are not sustainable. The imbalances are now enormous. The linkages of the parts are so tightly knit into the whole that reducing one imbalance to zero, or even compressing them all to a more manageable level, appears to be impossible without a major upheaval. The restoration of balance will be a compelling force roaring through the entire economy – globally in all likelihood. The breeze will not be gentle. Hurricane may be the more appropriate metaphor.
The United States has no choice but to either repudiate its staggering debts and unfunded liabilities of in excess of $86,000,000,000,000 or inflate its way through them because entitlement expenditure and interest payments are consuming ever increasing proportions of the government’s take. Pile on state, local and private debt, plus possible private sector pension bail-outs, and the actual hole is closer to $115,000,000,000,000. It doesn’t have to be that way, but there is a high probability that it will be. The coming inter-generational political battle over gap funds could well multiple hard asset prices like those of gold.”
So what happens if the Chinese put only 5% of their foreign-exchange holdings in Gold?
So they buy $44 billion in gold out of the $875 billion they have, I mean its not like they won’t get some more billions in paper this year.
Who has ever seen the old movie “Rollover” made in 1981 with Jane Fonda and Kris Kristofferson? A great pop-corn movie about the Arabs slowly buying up all the Gold without telling anyone, perhaps Blockbuster still carries this.
China Should Buy Gold, Central Bank Adviser Says (Update2)
June 1 (Bloomberg)
-- China should use its foreign-currency reserves, the world's largest, to buy gold and oil as a hedge to guard against the risk of a sudden drop in the U.S. dollar, said an adviser on the central bank's 13-member policy board.
The country has 1 percent of its reserves in gold, compared with more than 70 percent in the U.S., and rising demand may add to gains in the metal that pushed prices to a 26-year high in May. Booming exports and investment doubled Chinese reserves to $819 billion in the past two years, with economists estimating more than two-thirds of the cash went into U.S. Treasuries.
The country's foreign-exchange holdings as of March 31 surged to $875.1 billion, up more than $50 billion from end-2005 and overtaking those of Japan as the world's biggest.”
<< <i>Four exclamation marks in 10 sentences - that's marketing, not news. >>
Ain't that the truth!!
TAIPEI (Reuters) - Kathy Chen is an accessories shopowner in Taiwan struggling to pay huge credit card debts on a modest income.
She is the new breed of "credit card slave."
Hundreds of thousands of Taiwan's credit card holders have racked up mountains of debt, undermining consumer sentiment and underlining the risks facing export-led Asian economies that are trying to crank up domestic consumption as an engine of growth.
Besides Taiwan, where American Express stopped issuing credit cards this year due to rising defaults, Thailand and China are among those that have tightened supervision to avoid the experience of
"I wanted to commit suicide because I was at a loss what to do to my credit card debts," said Chen, echoing the sentiments of a growing number of desperate borrowers.
She is trying to keep up payments on the T$5 million (US$157,233) she owes banks on a monthly income of only
T$20,000 ($633).
"I have no money and I have so many debts. Nowadays, I only spend on three square meals a day and basic necessities," said Chen, 40, who tries to hide her face in public by wearing a hat, huge sunglasses and a mask covering her mouth.
Chen is one of 520,000 so-called card slaves, or problem debtors, out of Taiwan.
Their overdue debts, averaging T$300,000 ($9,300) per person, are the dark side of a boom in Asia's credit card market, which is growing more than 10 percent a year as issuers such as Visa and MasterCard tap an exploding middle class.
Visa, which features actors Richard Gere and Catherine Zeta-Jones in its advertisements across Asia, said it had issued more than 202 million consumer credit cards in Asia by the end of 2005, up 11.5 percent from a year earlier.
With this said how credit cards could ever extend such a line of credit to those people is beyond me.
Robert A. Heinlein
<< <i>With this said how credit cards could ever extend such a line of credit to those people is beyond me. >>
Why not, they lend money at 20% that they create from nothing. Then they compound interest to insure the debtors never get free. ITs a great deal for the international moneychangers, printing money from paper and lending it at mafia rates.
The entire system of Fiat money created by a private company called the Federal Reserve exists for the benefit of the financial elite. Too bad they got even too greedy and are about to kill their own golden goose.
I am not sure if this is a form of slavery, endentured servitude, or what... but it sure aint freedom.
Random Collector
www.marksmedals.com
This last Friday a very nice young married lady, with a new baby, came up to me and ask if I would help explain something to her about her credit card. I of course agreed to help if I could.
She told me that 3 years ago her and her husband bought their first household furniture and used a credit card. Not much as a house full of furniture goes, but $2,400.
She had left the bill paying on this card to her husband for the last three years, and he had been paying the minimum required. When she brought the statement to me their balance was still nearly $2,300, even after three years. At that point I read the fine print on the back. Their interest rate was 29.3% COMPOUNDED DAYILY!!
No it is not the credit card companies fault that they did not read the fine print, but there ought to be a law!!
<< <i>No it is not the credit card companies fault that they did not read the fine print, but there ought to be a law!! >>
There used to be and people went to prison if they charged too much. But then the corporate criminals paid off the govn't to allow these criminal rates to provide obscene profits for the moneychangers pointing out that they could always file Bankruptcy. Then they realized that they were letting these slaves out of indenturement so they changed the BK law too.
Odd concept: To "buy" stuff you have to pay for it. I don't know why this is such a inconceivable concept for so many.
<< <i>Odd concept: To "buy" stuff you have to pay for it. I don't know why this is such a inconceivable concept for so many. >>
No one is disputing the need to pay what you borrowed. It when you borrow $1000, pay $2000 back and still owe $1000 that the vision of the creditor taking advantage of an inexperienced borrower to rape them for obscene profit takes form.
Particularly in light of the fact that our banking system allows them to lend money they don't even have to begin with.
interest on credit cards. That law was removed and now
the sky is the limit. Even if you are offered a car at the Prim
Rate, just be late with one payment and usually the rate doubles
if not triples. The Credit Card Companies say that they need high rates
because of the amount of folks that dont pay their bills. Well that is a great lie
they used to change the bankruptcy laws. It is the Credit Card Companies themselves
that offer cards to everyone including dead people, dogs, cats, horses and babies.
Even the Mafia would be embarrassed to charge what some of these
well known companies charge. In a play on words...SOME DAY THE HOUSE OF CARDS WILL FALL.
tHIS WILL BRING THE THE ECONOMY CRASHING DOWN LIKE THE TREE , THE CRADLE, BABY AND ALL!
Camelot
That's my answer to all those that had to have NOW, and "say" they didn't know what the "pay later" meant. Not my problem. I really wish I knew how to start a banking business.
Newsflash: A person who borrows $157,000 is not a victim.
She has no intention of ever paying. The only thing left is to complain about how mistreated she is, and to hope that some kind sucker - oops I'm mean "activist" - gets her bill paid for her via the government.
but alas, i am twice foolish
here is a chart i was looking at tonight. i am kinda happy i sold
some of my common US half eagles during that peak we had.
yet with all the talk of gold tanking.. this chart shows how silly
it is to judge gold day by day. for the last few years everything
has been uphill. 1000 an ounce within a seven years seems
very reasonable.
i always enjoy reading the updates to this thread. good night.