Cohodk my friend if we start pulling out little pieces of time to make comparisons of the past we can make all investments look good, Ha Ha.
If we can just get to one quadrillion in derivatives then the stock market can go to 26,000 and perhaps gold will go to $1,300. Which do we think is likely to happen first?
<< <i>The main criticism levelled against precious metals is that they just "sit there" and don't pay dividends. Yet looking at the stock market, it's also uncommon these days to find a stock that actually pays a dividend. >>
The problem isn't that it doesn't pay dividends but that it doesn't produce wealth. Stocks are pieces of companies that have a productive capacity and generate wealth. Whether they pay that wealth right away in dividends, reinvest it, or hoard it is a side issue.
"The greatest productive force is human selfishness." Robert A. Heinlein
"Stocks are pieces of companies that have a productive capacity and generate wealth."
That is suppose to be what they are for...but for the last 10-15 years there have been two sets of books kept by many...Just look at ENRON and may others...and there are more fudging of numbers out there...as BUSH calls it FUZZY math...I wonder how he new that before it all came down!! There is going to be HELL TO PAY! Corruption has never been more rampant thatn now!
<< <i> The problem isn't that it doesn't pay dividends but that it doesn't produce wealth. Stocks are pieces of companies that have a productive capacity and generate wealth. Whether they pay that wealth right away in dividends, reinvest it, or hoard it is a side issue. >>
Companies only produce wealth if they are profitable. Companies losing money are, in effect, destroying wealth.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
Derivatives accounting have left the real value of many companies up in the air. Look at just happened to Bear Sterns. It's quite obvious there is no accurate way to define the value of derivatives. This is a huge problem that will start taking down big companies one by one. A massive shell game if you ask me. First you see money, then you don't. Another form of corporate raiding, all legal-like.
I don't know what this means -"derivative accounting"? Care to give specifics? I value companies professionally, and I have no idea what you're referring to.
"The greatest productive force is human selfishness." Robert A. Heinlein
derivatives' accounting = how derivatives are valued
That is, how derivatives are figured into a company's bottom line. For some companies they are hidden off the books entirely. For others they may be grossly overstated in order to leverage a deal.
This is a very popular topic on the finanical websites. The problem is there is no approved method for calculating the majority of derivatives. I would imagine that each party to a derivatives agreement values the contract differently.
You don't value a company based on their books - you build a financial model of their cash flow and discount that to the present. The only case where that might be a problem is if you are valuing a purely financial company where some of the key assets are portfolio of derivatives.
In any case, the fact that there might not be an agreed upon methodology doesn't mean the value cannot be calculated. It means that different people with different opinion will reach different conclusions, but that's the case for all assets.
"The greatest productive force is human selfishness." Robert A. Heinlein
I'd say one can estimate the worth of a brick and mortar manufacturing company, capital equipment, cash, stock, etc to within a fairly tight range. Now how would one go about estimating the value of a company that has around $100 Trillion in derivatives (mostly interest rate sensitive) leveraged over $2 Trillion or less real value? That would be JPMorgan. Considering that the company might have only a few trillion in real assets, how does one account for say a "meager" $10 TRILLION derivatives bust?
Maybe a better way of putting this would be how does one estimate the risk:reward ratio of owning stock in such a company, esp considering that one botched derivatives deal can bankrupt the company (a la LTCM, Enron, Amaranth, Refco, and now a couple of Bear Stearns funds). The following link gives a nice summary of the growth of Derivatives and the companies found in their wake. LTCM had 2 PhD's (nobel prize winners to boot) that calculated the values of LTCM's derivatives and built the model. Look it where it got those Docs. Easy to value? Market acceptable?
It's not just the magnitude of the derivative investments but their unpredictability and how they might represent leverage where it's not recognized. These instru- ments are simply too complicated to understand and are trying to protect against moves in a market whose mechanisms have never been understood.
There is far more risk than necessary and far more than recognized. Remember it was just a little "fluke" that sank LTCM and larger flukes are hardly uncommon. Both bonds and interest rates were down a few days in a row recently. This kind of thing has me white-knuckled now days.
To date, the derivatives bust has only cost some companies a few billion to a dozen billion dollars. What happens when the nuclear derivatives bust occurs in the $500 Billion to multi-Trillion range? It's not if, but when...and how many. It the JPM doesn't go down, then it will be a daisy chain of LTCM's on the other end of those JPM contracts. And considering JPM, GS, Citi and the other big boys have a "direct line" to the FED, they will likely trade out in time. But not the pension and hedge funds and long term investors.
Here's a primer from Jim Sinclair (see website link below). It was by chance that he discussed them today along with a reference to Bear Stearns. This stuff is scary and one of the reasons I started to diversify into gold coins.
Remember this about Over the Counter Derivatives:
They have no regulation. They have no standards. Without standards there can be no viable market. They are unlisted They are traded by private treaty negotiation They are valued by "Mark to Model" which is a total cartoon. They have no financial guarantee such as a clearing house. They are unfunded special performance contracts floating in cyberspace. All funds in the OTC Derivatives are taken out as spreads and commissions. More than 50% of the earnings of major international investment banks come from granting in private treaty negotiations these instruments of mass financial destruction. The financial performance of the specific performance contract called OTC Derivatives depends on the financial capacity of the loser in the transaction. Control has been loose in the interest sensitive OTC Derivatives because of multiple dealings outside of the initiating two until no one knows who has what. The replacement value of these instruments is in the multi trillions of dollars......Jim Sinclair
Yes, gold has reacted poorly wrt to the dollar weakness and oil strength. A couple of closes above $660 will help. So far one in the bag.
Money stock YOY increases around the world....a reason why gold will still yet get the upper hand. This is what inflation really is (increasing money stocks) not the CPI drivel that is fed to us.
There was an interesting op-ed piece in last Thursday's Wall Street Journal. The theme was a global loss of confidence in paper currencies and the related tendency of governments (the US included of course) to use inflation as a means of gradual default on loans. Gold as a real measure of value was discussed.
Although there were no particularly new insights, it was interesting that this topic was presented in a very mainstream publication.
<< <i>There was an interest op-ed piece in last Thursday's Wall Street Journal. The theme was a global loss of confidence in paper currencies and the related tendency of governments (the US included of course) to use inflation as a means of gradual default on loans. Gold as a real measure of value was discussed. >>
Oh pish tosh. I'm buying Ford stock. As soon as I heard they were resurrecting the wunnerful Taurus, I put everything in it.
<< <i>There was an interest op-ed piece in last Thursday's Wall Street Journal. The theme was a global loss of confidence in paper currencies and the related tendency of governments (the US included of course) to use inflation as a means of gradual default on loans. Gold as a real measure of value was discussed. >>
. >>
Very large debts are rarely repaid but merely inflate away.
When the powers that be, decided that Globalization was the cure for the worlds wars, and ills, they did not take into account that once globalized the world would no longer react as localized, or national economies. What now happens in one large country affects all the rest.
The end result of inflation is that prices rise and the value of hard assets increases dramatically. This is supposed to be caused by to many dollars chasing to few goods, and therefore wage inflation. As we know our Fed decided to resolve wage inflation here by printing debt rather than increasing directly the money supply providing for wage inflation. As time has gone by over the last few decades, and we became globalized, the economies of many other nations also now affect the “World Economy”. Where we in the U.S. may have not had wage inflation to such a great extent, places like China, India, Russia, etc. have had wage increase of hundreds of percent over the last few decades.
People in China and India for example now chase after the world’s goods with lots of new money printed by their countries, and therefore the prices of food, oil, and all commodities have increased dramatically. If one were to break down the real owners of worldwide assets on an individual basis, one would find that great amounts of American companies, American mortgages, financial instruments etc. are no longer owned just by Americans, but people from around the world. For example, my understanding is that the Chinese bought 3 billion dollars worth of the new Blackstone Company.
In looking at RR’s numbers it is easy to see there is in fact great monetary inflation worldwide, and when those currencies can flow across all borders, it really makes no difference if your local economy does not have too much money chasing to few goods, outsiders do the chasing for you!
In addition it is also necessary to dumb down the educational systems, and move the long established manufacturing companies of wealthier nations to foreign soil where cheap labor exists, if you are to have a truly global economy.
The globalists here, including Bush and his group as well as the Clinton group, feel that by building a lower class working group back into the U.S. we can then compete better with the Chinese and Indians, i.e. Mexicans.
<< <i>Ah, coming back to $670! Run on past 700 this time, baby! >>
Yup. And silver back over $13.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Wall Street soared Thursday, propelling the Standard & Poor's 500 index and Dow Jones industrials to record highs as bright spots among generally sluggish retail sales allowed investors to toss aside concerns about the health of the economy.
At the beginning of the year my institutional sales buddy told me that his clients' biggest fear was not owning stock. Apparently they are getting very scared.
Also Europeans with inflated currency find our stock market very cheap. I imagine this scene will repeat itself over the coming months-years. The baby boomers will be bailed out afterall.
Let me see if I have this correctly, Merrill Lynch takes back 800 million of defaulted mortgages from Bear Stearns and only gets offered 40 cents on the dollar.
The Chinese have bought 104.5 billion worth of these mortgages in the last 3 years worth now? Now we want them to buy billions of dollars more.
I guess the real question here is how many houses in the U.S. does China want to own?
July 13 (Bloomberg) -- The U.S. is urging China's central bank to buy more mortgage-backed securities after a surge in defaults by risky borrowers in the world's largest economy eroded demand for such instruments.
``It's not a matter whether they're going to do more business in mortgage-backed securities, it's who they're going to business with,'' U.S. Department of Housing and Urban Development Secretary Alphonso Jackson told reporters in Beijing. He met with central bank Governor Zhou Xiaochuan and Minister of Construction Wang Guangtao in the nation's capital this week. The U.S. housing regulator is seeking to tap China's $1.33 trillion of foreign-currency reserves after surging defaults on subprime mortgages caused the near-collapse last month of two hedge funds run by Bear Stearns Cos. Almost $12 billion of U.S. mortgage securities have been downgraded by ratings companies.
Jackson is in Beijing to persuade the Chinese central bank to buy more mortgage securities from Ginnie Mae, a mortgage association under the Housing Department. Its securities are guaranteed by the U.S. Government National Mortgage Association.
Ginnie Mae is ``in a better position than most'' to offer mortgage products since, unlike Fannie Mae and Freddie Mac, it has the full backing of the U.S. government, said Jackson. Mortgage securities offer China's central bank better returns than U.S. Treasury bonds at the same level of credit risk, he said.
Commercial Banks ``China's bought some mortgage-backed securities from us, but not in great numbers,'' Jackson said, without providing target numbers for future purchases.
China held $107.5 billion in U.S.government mortgage-backed securities as of June 2006, up from $3 billion three years earlier, according to HUD's Web site. The figures include securities offered by Ginnie Mae, Fannie Mae and Freddie Mac, without providing a more detailed breakdown of each agency's holdings.
HUD also plans to approach Chinese commercial banks such as China Construction Bank Corp. and ask them to buy mortgage securities, said Jackson.
The housing department wants to sign a memorandum of understanding with construction minister Wang when he visits the U.S. in August, Jackson said without elaborating. The two nations face similar challenges in providing affordable housing to average citizens, he said.
While we do have wage inflation it has been running well under the real inflation rate. This is no surprise since wage inflation is based on govt published CPI data. No one says its accurate.
I read an interesting article last week that showed a net 1-2 % positive inflation rate. The only problem was that half the items showed a large + increase, and the other half a large negative. The negative items (computers, cars, durable goods, etc.) are not things we buy every day. The other half (food, energy, consumer products and services, tuition, etc) was inflating drastically. This is the classic stagflation scenario. Those who diversify into real assets have a chance. Those who bank on cash, CD's, etc will have a rougher time.
Just returned from the annual Chryslers at Carlisle show after a 3yr hiatus and was stunned at the muscle car prices. A nice 1970 Challenger 440-6 RT that I sold in August 1996 for $19,500 is now over $90,000. Now that's impressive imo. And note that this car has had not anything significant done to it since I sold it. It has just been enjoyed by its next 3 owners. Most desireable Mopar muscle has done better than the coin market the past 10 years. I was told that a 1971 Hemi Cuda convertible (orig price around $5K) auctioned for over $4 MILL recently (there were 11 of those made). I call that an appreciating asset. Who would have thought you could have secured your retirement in 1971 by buying a car and parking it? These rare Cuda's were not always forgotten as by the late 1970's they were selling for multiples of orig purchase price. And by the early 1980's $25K-$35K may have been needed to secure one of them, if you even had the opportunity.
Watching the muscle car market gives me some clues as to how our coin market and the overall economy is doing. Big $$ are still being spent for the right cars and the right coins...but they must be seriously nice specimens, documented, original, etc. Clones, fakes, almost there, "close", is just not cutting it.
Bear -- I guess we are getting off topic, but I had to respond. My brother bought a 1965 Dodge Dart in the early 1970s -- the card had over 100,000 miles on it when he bought it for $250 -- he put another 100,000 miles on it, and never did more than change the oil and very minor repairs.
Getting back to Gold and Silver and economic news -- something positive for the US -- did anyone see the survey done in China of the top research universities in the world? The vast majority are in the US (eg - Harvard, Berkeley, Princeton, MIT, Cal Tech, Chicago, UCLA, UC San Diego, Wisconsin, Yale -- the list goes on and on). Intellectual capital at the very top of the food chain is the last, and most important strength of the United States.
Bear, don't bet the farm on your 64 Dart unless it has a big block in it or is a convertible. Most of the action has been in the 1966-1971 cars. And those cars have to have performance motors, documented, nice options or restored to the hilt. Not a lot of following for 64 Darts......unless it was a race car. Back then I think a 413 was the hot ticket.
“did anyone see the survey done in China of the top research universities in the world, Harvard, Berkeley, Princeton, MIT, Cal Tech, Chicago, UCLA, UC San Diego, Wisconsin, Yale”
Higashiyama,
This is good news I suppose, but the fact is doing research, and creating great ideas in think tanks, does not count for much when it comes to living a successful life in a practical world and producing wealth for your country. Having a PHD and coming up with new innovative ideas by the droves DOES NOT create hundreds of thousands of jobs, build homes, feed people, and make your country strong, if you do not have the gumption to go do the work. It also does not insure that your ideas will even remain in your own country to help your fellow countrymen.
Below is a list of today’s 10 wealthiest men, and their educations, most of these folks did not even make it out of high school.
#1 William Gates III Education: Harvard University, Drop Out
#2 Warren Buffett Education: University of Nebraska Lincoln, Bachelor of Arts.
#3 Carlos Slim Helu Education: High school drop out.
#4 Ingvar Kamprad & family Education: High school drop out.
#5 Lakshmi Mittal Education: St Xavier's College Calcutta, Bachelor of Arts.
#6 Sheldon Adelson Education: City College of New York, Drop Out.
#7 Bernard Arnault Education: Ecole Polytechnique de Paris, Bachelor of Arts.
#8 Amancio Ortega Education: High School, Drop Out.
#9 Li Ka-shing Education: High School, Drop Out.
#10 David Thomson Education: High School, Drop Out.
Ah the Global economy! So as I wrote last week, just what do you do when foreigners rule your entire economy and you no longer have any internal controls?
If in fact you have to many foreigners chasing your goods causing inflation, those old tricks of tightening the money supply, raising interest rates, selling debt rather than printing hard currency, will just not work because the buying stimulus is outside of your system and you can not control that.
In the old days you could slap on tariffs, or pass laws prohibiting sales of products leaving your country, but no longer.
When the American bankers and the Fed changed policy in the 80’s to convince the American people, and our own government, to use debt rather than cash to buy consumables, that did seem like a good idea at the time. Unfortunately now everyone is hooked on credit, and the prices of everything are being driven up forces outside of our system.
Americans already paying 20% plus on their credit cards can also add that percentage to the cost of food, and gas as they swipe their cards each month to pay for the ever increasing prices of goods. Like sub-prime loans, how many will default on the credit cards over the next few years as Global inflation gets out of control?
I suppose the Fed can raises rates to keep the foreigners coming to the debt window, but that trick will no longer work on inflation when the demand is from outside of our American economic system, and of courses we have now lost our ability to control prices here by any other means.
What interesting times we live in!
Rising Food Prices May Give Bernanke, Central Bankers Heartburn:
July 16 (Bloomberg) The fastest increase in food-commodity prices in at least a decade has already led monetary authorities in England, Mexico, Chile and South Africa to lift borrowing costs. It is also sowing doubts about the U.S. Federal Reserve's focus on core inflation, which excludes food, energy, and housing.
An unprecedented surge in global demand is behind the 23 percent rise in food prices that the International Monetary Fund recorded during the last 18 months.
Economists, including some at the Bank of England, have criticized the Fed's focus on core prices, arguing that it ignores the inflationary impact of rapid global growth on commodities such as oil.
Rising prosperity in China and other emerging nations is spurring demand, particularly for value-added items such as meat and dairy products, the report said.
Goldsaint -- definitely many of the world's great entrepreneurs would feel constrained in a university setting. However, the vast majority of professionals at Microsoft and Berkshire Hathaway are college graduates, and these companies draw heavily from the talent produced by American universities; there are many examples of wealth being built in conjuncion with great universities; Silicon Valley certainly benefits enormously from Stanford and the California University system.
GOLDSAINT, I have to agree the food prices are really rising. There a many factors that have helped push the price of food up. One of the BIG ones here in the US of A is the recent gasahol craze that is going through our country.... the many ethanol plants that are being built are for the most part using corn for the product. Thus driving up the cost of corn.... and everything else since more cropland is now being used to raise the expensive corn and thus less of the other crops are being produced.
I'm somewhat mixed on using ethanol.... very expensive to produce, and you do not even get as good of gas mileage with it. And.... also takes a hugh amount of water to produce, thus helping deplete that resource also.
Sometimes the cure is worse than the original illness.
General Electric has the technology to turn coal into gasoline and some coal gasification plants are already being built. The main drawbacks are the tree huggers and cost. But here is the deal. I think it cost about $5 billion to build one of these plants and the USA needs about 300 such plants to meet our energy needs. So thats about $1.5 billion. Sounds like a big number but we have already spent $500 million in Iraq. I dont want to get into a debate about Iraq--unfortunately we dont fight wars like we used to 50-100 yrs ago, but we could have been 1/3 of our way to energy independence.
How would the rest of the world view an energy independent USA?
"How would the rest of the world view an energy independent USA?"
I'm not sure they would like it! They like having the energy card in the hole to help keep their hooks into us.....
I would like to see us proceed with the gasification projects and the oil shale developments. However.... I do think it is in our best interest..... to keep purchasing the imported oil also. (much better to keep our own pantry 'stocked' and ready to go when we need it in the energy starved future.... but meanwhile make use of the other sources so we can continue to conserve ours)!
As long as we have a Global economy, with no way to put in tariffs in place, or to stop the shipment of our natural resources to foreign lands, we are going to continue to see inflation.
How long before those empty ships returning to China after bringing us tennis shoes etc. will be carrying coal for their gas plants, or corn?
When will the American people get some leadership in Washington? NOT UNTIL WE HAVE TERM LIMMITS FOR SENATORS AND CONGRESSMEN!
How long will it take for the American citizens to march on Washington? Why is there not a big Internet move for term limits, gee it seems that all the petitions could be signed on line. With congresses approval around 20% plus shouldn’t we throw the bums out?
What in the world are we doing making ethanol? Every scientist with a real brain will tell you it costs more fuel to make this stuff than the ethanol it produces. Is there ever going to come a time again that the minority fringe group is just ignored the way they have always been for most of our history.
For six years the Democrats wanted control of congress, and now they have it, have they done anything about any of these serious issues? NO, quite simply they cannot. When the lower and middle economic class in this country can no long pay their grocery and fuel bills perhaps then we can throw the bums out!
Oh, and one more question, why are none of the right wing talk show hosts taking about getting rid of these guys and gals in Washington?
What in the world are we doing making ethanol? Every scientist with a real brain will tell you it costs more fuel to make this stuff than the ethanol it produces. Is there ever going to come a time again that the minority fringe group is just ignored the way they have always been for most of our history.
>>
Ethanol reduces mileage in some cars by more than the amount of ethanol in the fuel!!
The thinking is that eventually ethanol can be produced with less energy than it takes to produce. In the mean time it is driving up the cost of gas and the cost of food. It is very good for ADM and its supporters and stockholders.
Perhaps the government thinks the dangers of peak oil are over- blown so it's politically advantageous to waste money and fuel on ethanol production. It will eventually reduce dependence on out- side energy needs.
Research on coal-based technologies and transmission of energy would seem to be more effective even in this regard though.
<< <i>Bear -- I guess we are getting off topic, but I had to respond. My brother bought a 1965 Dodge Dart in the early 1970s -- the card had over 100,000 miles on it when he bought it for $250 -- he put another 100,000 miles on it, and never did more than change the oil and very minor repairs.
q]
Some of the things we used to create were incredible.
Now that's it's become a "Romelike Clone", we only create new words for higher taxes and go deeper and deeper into the crap pile of debt.
>>> As we know our Fed decided to resolve wage inflation here by printing debt rather than increasing directly the money supply providing for wage inflation>>>>
let me first say i have way too many degrees in economics to let this slide ...while i wont bore you with naming them or the people ( yes a few presidents are in the mix...unfortunately not george ) i have advised but here is the real deal
some facts
1) wage inflation happens when the unemployment number gets too low where as employers raise their hourly wage that they pay to employees so they can do business....this then forces the present employer to match or better the hourly rate and a " bidding" war begins ....these are never a few % point jumps but rather very large ones....this in turn is passed on to you the consumer ....some of these raises are in the 20% or higher area....and i can assure you they are felt with excruciating pain by the consumer.....on the commodity side when there is a shortage and the price goes up...the private sector steps in and creates more capacity as long as its good business to do so and the price then comes back down....the difference is....labor costs almost never come down like commodities do....in fact it takes a depression ...and the last one we had was over 75 years ago thus its safe to say...NOTHING IS MORE INFLATIONARY THAN WAGES
2) the fed did not decide to resolve wage inflation by printing more money.....the fact is washington decided 35 years ago to deal with it by importing labor from mexico thus sharply curbing the aforementioned " bidding war " from ever happening.....by keeping the market flooded with employees the economy has been allowed to produce like never before....please notice the fruits of this practice...you and your wife drive new cars....4 color tvs...all family members have a cell phone ( in 1985 they were 1500 each ) and cars for 16 year olds is common place now...i-pods...dvds...tivo....cable...the list goes on and on...but the fact is life in america has never been better
how do they import labor????they just call down to the border say ...let 100,000 in....ok not really like that but you get the picture.....and the result is the same....20 million to be exact....who btw have had 60 million descendants over the last 35 years...so the total result is 80 million as of today
3) the fact is you and i have burned the candle at both ends living the via loca where as we decided not to have the 5 or 6 kids as the cost would take away our spare cash ...so we decided to have 2 kids and spend the rest of the money on our standard of living....in fact everyone has done just that....the problem is our economy kept growing and needed more labor and we werent birthing them....so washington imported them...its as simple as that!!
4) fact is ....all g-7 countries have done the same.....so what mexicans did france ...germany and spain import????fact is...muslims...so now you know why those countries are not supporting the war in iraq....if they did their labor force would riot....imagine if russia invaded mexico and we backed russia....our hispanics would go ballistic
5) by the numbers
1 million seconds on your watch takes 12 days 1 billion seconds on your watch takes 32 years 1 trillion seconds on your watch takes 32,000
and to date ..we the workers have sent washington 45 trillion dollars for our social security trust fund and they have spent every single penny of it
so why is george trying to force the illegal imm amnesty ????no money and no people to pay for it...so they are staying...believe that...in fact they have to....and here is how it will work
1st gen....menial jobs 2nd gen...apprentice plumbers and electricians 3rd gen....bis owners 4th gen...doctors and lawyers
****a gen can be taken out if they are fast tracked in education
6) inflation is known to economists in 2 forms.....core and headline....core is a gov bs stat as many already know and had nothing to do with people.....but headline is what you feel in your pocket..in 2006 it was 10.3%...2007 will be in that neighborhood...thus a 100k a year in jan 2006 will have the purchasing power of 70 something christmas this year
7) most all people think the fed controls the money supply...NOT....why go to them when you can create your own....now you know what a credit derivative is
8) yen carry trade....as i mentioned the g-7 above i was talking of only 6....the 7th...japan...has had their economy shrinking for 15 years as their culture simple does not allow them to import labor to make their economy grow thus they are shrinking like a prune thus their discount rate is .05% and ours is 5.25% ...they have been trying to loan money to expand but no takers...in japan that is....but lots of takers around the world.....and you will see a lot of unwinding the yen carry trade this year as japan doubles their lending rate...this wont be a good thing for our economy
9) the stock market while most think we just hit a all time high....not in terms of the euro....the pound....the cannook dollar ...or gold just to name a few...in fact its been going down for 5 straight years
10) while your dollar is getting worth less everyday and you feel pain....our goods are getting cheaper overseas so our trade def will begin to subside....good news is....the most important thing in washington is do we have jobs...and we will....albeit washington is inflating it`s butt off
11) sub prime blow up is coming soon and will rock the house and the fed will lower rates..aka more inflation...but at least your working
*****how do we deal with all of this sheet...............one way and one way only
VOTE FOR ONLY THOSE WHO WILL BALANCE THE BUDGET as that's why we are now entering the toilet
ok buddy there you go....some food for thought
monsterman
my goal is to find the monsters and i go where they are but i sometimes miss some.... so if you have any and want to sell IM THE BUYER FOR THEM!!!
out of rockets ...out of bullets...switching to harsh language
I concur in principle with most of what was said by Monsterman. I would add that war is VERY expensive and we cannot afford to continue this charade that makes W feel like a man. Time to quit allowing our youth to be killed while simultaneously bankrupting us for no good reason.
Retired United States Mint guy, now working on an Everyman Type Set.
If you use the standard setting of twenty posts per page then you can't see posts that are numbered, divisable by twenty (plus one). It's a little software glitch that happens to some threads and becomes more likely as they lenghten. If you highlight the address on your browser and add one to the last num- ber, it will take you to the new page so you can see the "stealth post".
I generally agree with your synopsis though would phrase it differently. I don't think that they intentionally created a situation with so many illegals but they did allow the porous borders knowing full well any employment void would be filled with traffic through here. It seems unlikely they intend to do anything ser- ious to stem this tide.
I'm also a little dubious that wage inflation will behave the same in the future as in the past. There are some fundamental changes in the way the economy works.
deepcoin >>>Time to quit allowing our youth to be killed while simultaneously bankrupting us for no good reason.>>>
i can think of a good reason
these terrorists are doing their thing in every country in the world....and nobody is uneffected....and it will continue until they are defeated....and i do have a plan for that but way to long for here
that being said if you think its time to quit then you have to ask yourself 1 question and 1 question only
WILL YOU BE SAFER IF WE LEFT AND LET THEM GET STRONGER AND STRONGER OVER THERE EVENTUALLY COMING HERE....OR WILL YOU BE SAFER IF WE STAYED AND BEAT THEM OVER THERE
thats it!!!! plain and simple
the fact is....these people want you, your wife, your parents,grand parents and your children dead....you are an infidel and you must die
that being said this smarter to beat them there than here....and these flip floppers like hilary et al are not the sharpest knives in the drawer
cladking
>>>I don't think that they intentionally created a situation with so many illegals but they did allow the porous borders knowing full well any employment void would be filled with traffic through here
sounds like the same thing to me :-)....sounds like machiavelli to me!!
>>>I'm also a little dubious that wage inflation will behave the same in the future as in the past.>>>> economic theory will always be the same thus will always apply ....raise the min wage and we inflate....no big deal just a little less for about 80% of the people as the top 20% will always get theirs...as they should...they are smarter than the other 80%
There are some fundamental changes in the way the economy works. >>>>im not sure what this means
monsterman
ps...clad...thanks for the tip on the page number
my goal is to find the monsters and i go where they are but i sometimes miss some.... so if you have any and want to sell IM THE BUYER FOR THEM!!!
out of rockets ...out of bullets...switching to harsh language
There are some fundamental changes in the way the economy works. >>>>im not sure what this means
monsterman
>>
I'm not sure either.
For one thing the economy is more "planned" than it was in the old days. It used to be strictly supply and demand but now goverment does a lot of tweeking on both sides of this equation and advertising drives demand. Supply can be dramatically affected by small changes in law and regulations. It was at one time possible to start a manufacturing company on a shoestring but now even the simplest such con- cern will take millions and heavy manufacturing will require billions for start-up. This limits employees' ability to quit their job and go into competition with their employer. They are more at the mercy of what the CEO wants. Unions are less strong and there are far fewer unionized workers.
Also human life appears to be worth far less than it was relative to capital only a few generations ago. The requirements of the individual to keep body and soul together relative to the total size of the economy is shrinking even with rising food costs.
Increases in wages are not only less likely under these conditions but also less sus- tainable. This isn't to say such increases won't occur, they probably will, just that it won't be as significant to the overall picture as in the past and can be unwound rat- her quickly by inflating these increases away.
Monsterman, you have a minor error in your minimum wage analysis. Raising the minimum wage increases the price floor. Depending upon the number of individuals below that floor it will have an effect. Given the minimum wage had not been raised in many years, effectively there was no minimum wage price floor the past few years.
Also, lets not forget the shadow economy where all wages are cash. There is no minimum wage effect there.
To your other comments regarding the terrorists, lets not confuse a civil war with terrorism. We are occupying a country right now, not fighting terrorism. I served 8 years and know far too many names on that wall. The Republicans are now figuring this out, finally.
Retired United States Mint guy, now working on an Everyman Type Set.
>>> you have a minor error in your minimum wage analysis. Raising the minimum wage increases the price floor>>>>
no error...absolutely it does...while only kids with their first jobs get min wage ...many get paid x dollars over min wage....so raise min wage and you do raise cost...which will be passed on to you
as far as this
>>>To your other comments regarding the terrorists, lets not confuse a civil war with terrorism>>
the " civil war" going on is all about control where as both sects want the power....thus its all about power
never forget there are 2 ways to get what one wants
1) convincing with logic 2) a gun
when a robber wants your money there is no way he can do #1 so he uses #2.......all differences are as above.....and thats way the democratic way of life works as its all logical and the "gun" can never be used to convice someone....
my goal is to find the monsters and i go where they are but i sometimes miss some.... so if you have any and want to sell IM THE BUYER FOR THEM!!!
out of rockets ...out of bullets...switching to harsh language
Comments
If we can just get to one quadrillion in derivatives then the stock market can go to 26,000 and perhaps gold will go to $1,300. Which do we think is likely to happen first?
sorry posted twice?
<< <i>The main criticism levelled against precious metals is that they just "sit there" and don't pay dividends. Yet looking at the stock market, it's also uncommon these days to find a stock that actually pays a dividend. >>
The problem isn't that it doesn't pay dividends but that it doesn't produce wealth. Stocks are pieces of companies that have a productive capacity and generate wealth. Whether they pay that wealth right away in dividends, reinvest it, or hoard it is a side issue.
Robert A. Heinlein
You haven't worked at some of the places I have!
That is suppose to be what they are for...but for the last 10-15 years there have been two sets of books kept by many...Just look at ENRON and may others...and there are more fudging of numbers out there...as BUSH calls it FUZZY math...I wonder how he new that before it all came down!! There is going to be HELL TO PAY! Corruption has never been more rampant thatn now!
Just think how many lives ENRON alone destroyed!
<< <i>
The problem isn't that it doesn't pay dividends but that it doesn't produce wealth. Stocks are pieces of companies that have a productive capacity and generate wealth. Whether they pay that wealth right away in dividends, reinvest it, or hoard it is a side issue. >>
Companies only produce wealth if they are profitable. Companies losing money are, in effect, destroying wealth.
A massive shell game if you ask me. First you see money, then you don't. Another form of corporate raiding, all legal-like.
roadrunner
Robert A. Heinlein
That is, how derivatives are figured into a company's bottom line.
For some companies they are hidden off the books entirely. For others they may be grossly overstated in order to leverage a deal.
This is a very popular topic on the finanical websites.
The problem is there is no approved method for calculating the majority of derivatives. I would imagine that each party to a derivatives agreement values the contract differently.
roadrunner
In any case, the fact that there might not be an agreed upon methodology doesn't mean the value cannot be calculated. It means that different people with different opinion will reach different conclusions, but that's the case for all assets.
Robert A. Heinlein
Maybe a better way of putting this would be how does one estimate the risk:reward ratio of owning stock in such a company, esp considering that one botched derivatives deal can bankrupt the company (a la LTCM, Enron, Amaranth, Refco, and now a couple of Bear Stearns funds). The following link gives a nice summary of the growth of Derivatives and the companies found in their wake.
LTCM had 2 PhD's (nobel prize winners to boot) that calculated the values of LTCM's derivatives and built the model. Look it where it got those Docs. Easy to value? Market acceptable?
From derivatives birth to busted companies
roadrunner
and how they might represent leverage where it's not recognized. These instru-
ments are simply too complicated to understand and are trying to protect against
moves in a market whose mechanisms have never been understood.
There is far more risk than necessary and far more than recognized. Remember it
was just a little "fluke" that sank LTCM and larger flukes are hardly uncommon. Both
bonds and interest rates were down a few days in a row recently. This kind of thing
has me white-knuckled now days.
It's not if, but when...and how many. It the JPM doesn't go down, then it will be a daisy chain of LTCM's on the other end of those JPM contracts. And considering JPM, GS, Citi and the other big boys have a "direct line" to the FED, they will likely trade out in time. But not the pension and hedge funds and long term investors.
Jim Willie on Bear Stearns and the Bond contagian
A not so rosy look on bonds by Jim Willie. This is the daisy chain in derivatives that will hurt most of us.
roadrunner
I knew it would happen.
Remember this about Over the Counter Derivatives:
They have no regulation.
They have no standards.
Without standards there can be no viable market.
They are unlisted
They are traded by private treaty negotiation
They are valued by "Mark to Model" which is a total cartoon.
They have no financial guarantee such as a clearing house.
They are unfunded special performance contracts floating in cyberspace. All funds in the OTC Derivatives are taken out as spreads and commissions.
More than 50% of the earnings of major international investment banks come from granting in private treaty negotiations these instruments of mass financial destruction.
The financial performance of the specific performance contract called OTC Derivatives depends on the financial capacity of the loser in the transaction.
Control has been loose in the interest sensitive OTC Derivatives because of multiple dealings outside of the initiating two until no one knows who has what.
The replacement value of these instruments is in the multi trillions of dollars......Jim Sinclair
roadrunner
The moment of truth is soon upon the dollar.
Knowledge is the enemy of fear
Money stock YOY increases around the world....a reason why gold will still yet get the upper hand. This is what inflation really is (increasing money stocks) not the CPI drivel that is fed to us.
Russian Fed. M2
50.94
India M3
19.70
China M2
16.74
Australia M3
14.05
United Kingdom M4
13.84
Mexico M4
12.21
Brazil M2
11.92
Denmark M3
10.62
Korea M3
10.07
Canada M3
8.08
OECD Total M3/ EUROZONE
7.86/10.9
United States M3 reconstructed
13.7
Germany M3
6.16
roadrunner
So, are we buying Euros to stuff under the matress yet?
Although there were no particularly new insights, it was interesting that this topic was presented in a very mainstream publication.
<< <i>There was an interest op-ed piece in last Thursday's Wall Street Journal. The theme was a global loss of confidence in paper currencies and the related tendency of governments (the US included of course) to use inflation as a means of gradual default on loans. Gold as a real measure of value was discussed. >>
Oh pish tosh. I'm buying Ford stock. As soon as I heard they were resurrecting the wunnerful Taurus, I put everything in it.
<< <i>
<< <i>There was an interest op-ed piece in last Thursday's Wall Street Journal. The theme was a global loss of confidence in paper currencies and the related tendency of governments (the US included of course) to use inflation as a means of gradual default on loans. Gold as a real measure of value was discussed. >>
. >>
Very large debts are rarely repaid but merely inflate away.
RR interesting numbers on inflation.
Perhaps this is what’s going on.
When the powers that be, decided that Globalization was the cure for the worlds wars, and ills, they did not take into account that once globalized the world would no longer react as localized, or national economies. What now happens in one large country affects all the rest.
The end result of inflation is that prices rise and the value of hard assets increases dramatically. This is supposed to be caused by to many dollars chasing to few goods, and therefore wage inflation. As we know our Fed decided to resolve wage inflation here by printing debt rather than increasing directly the money supply providing for wage inflation. As time has gone by over the last few decades, and we became globalized, the economies of many other nations also now affect the “World Economy”. Where we in the U.S. may have not had wage inflation to such a great extent, places like China, India, Russia, etc. have had wage increase of hundreds of percent over the last few decades.
People in China and India for example now chase after the world’s goods with lots of new money printed by their countries, and therefore the prices of food, oil, and all commodities have increased dramatically. If one were to break down the real owners of worldwide assets on an individual basis, one would find that great amounts of American companies, American mortgages, financial instruments etc. are no longer owned just by Americans, but people from around the world. For example, my understanding is that the Chinese bought 3 billion dollars worth of the new Blackstone Company.
In looking at RR’s numbers it is easy to see there is in fact great monetary inflation worldwide, and when those currencies can flow across all borders, it really makes no difference if your local economy does not have too much money chasing to few goods, outsiders do the chasing for you!
In addition it is also necessary to dumb down the educational systems, and move the long established manufacturing companies of wealthier nations to foreign soil where cheap labor exists, if you are to have a truly global economy.
The globalists here, including Bush and his group as well as the Clinton group, feel that by building a lower class working group back into the U.S. we can then compete better with the Chinese and Indians, i.e. Mexicans.
<< <i>Ah, coming back to $670! Run on past 700 this time, baby! >>
Yup. And silver back over $13.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
AP -
Wall Street soared Thursday, propelling the Standard & Poor's 500 index and Dow Jones industrials to record highs as bright spots among generally sluggish retail sales allowed investors to toss aside concerns about the health of the economy.
Also Europeans with inflated currency find our stock market very cheap. I imagine this scene will repeat itself over the coming months-years. The baby boomers will be bailed out afterall.
Knowledge is the enemy of fear
The Chinese have bought 104.5 billion worth of these mortgages in the last 3 years worth now? Now we want them to buy billions of dollars more.
I guess the real question here is how many houses in the U.S. does China want to own?
July 13 (Bloomberg) -- The U.S. is urging China's central bank to buy more mortgage-backed securities after a surge in defaults by risky borrowers in the world's largest economy eroded demand for such instruments.
``It's not a matter whether they're going to do more business in mortgage-backed securities, it's who they're going to business with,'' U.S. Department of Housing and Urban Development Secretary Alphonso Jackson told reporters in Beijing. He met with central bank Governor Zhou Xiaochuan and Minister of Construction Wang Guangtao in the nation's capital this week.
The U.S. housing regulator is seeking to tap China's $1.33 trillion of foreign-currency reserves after surging defaults on subprime mortgages caused the near-collapse last month of two hedge funds run by Bear Stearns Cos. Almost $12 billion of U.S. mortgage securities have been downgraded by ratings companies.
Jackson is in Beijing to persuade the Chinese central bank to buy more mortgage securities from Ginnie Mae, a mortgage association under the Housing Department. Its securities are guaranteed by the U.S. Government National Mortgage Association.
Ginnie Mae is ``in a better position than most'' to offer mortgage products since, unlike Fannie Mae and Freddie Mac, it has the full backing of the U.S. government, said Jackson. Mortgage securities offer China's central bank better returns than U.S. Treasury bonds at the same level of credit risk, he said.
Commercial Banks
``China's bought some mortgage-backed securities from us, but not in great numbers,'' Jackson said, without providing target numbers for future purchases.
China held $107.5 billion in U.S.government mortgage-backed securities as of June 2006, up from $3 billion three years earlier, according to HUD's Web site. The figures include securities offered by Ginnie Mae, Fannie Mae and Freddie Mac, without providing a more detailed breakdown of each agency's holdings.
HUD also plans to approach Chinese commercial banks such as China Construction Bank Corp. and ask them to buy mortgage securities, said Jackson.
The housing department wants to sign a memorandum of understanding with construction minister Wang when he visits the U.S. in August, Jackson said without elaborating. The two nations face similar challenges in providing affordable housing to average citizens, he said.
I read an interesting article last week that showed a net 1-2 % positive inflation rate. The only problem was that half the items showed a large + increase, and the other half a large negative.
The negative items (computers, cars, durable goods, etc.) are not things we buy every day. The other half (food, energy, consumer products and services, tuition, etc) was inflating drastically. This is the classic stagflation scenario. Those who diversify into real assets have a chance. Those who bank on cash, CD's, etc will have a rougher time.
Just returned from the annual Chryslers at Carlisle show after a 3yr hiatus and was stunned at the muscle car prices. A nice 1970 Challenger 440-6 RT that I sold in August 1996 for $19,500 is now over $90,000. Now that's impressive imo. And note that this car has had not anything significant done to it since I sold it. It has just been enjoyed by its next 3 owners. Most desireable Mopar muscle has done better than the coin market the past 10 years.
I was told that a 1971 Hemi Cuda convertible (orig price around $5K)
auctioned for over $4 MILL recently (there were 11 of those made).
I call that an appreciating asset. Who would have thought you could have secured your retirement in 1971 by buying a car and parking it? These rare Cuda's were not always forgotten as by
the late 1970's they were selling for multiples of orig purchase price.
And by the early 1980's $25K-$35K may have been needed to secure one of them, if you even had the opportunity.
Watching the muscle car market gives me some clues as to how our coin market and the overall economy is doing. Big $$ are still being spent for the right cars and the right coins...but they must be seriously nice specimens, documented, original, etc. Clones, fakes, almost there, "close", is just not cutting it.
roadrunner
Camelot
Getting back to Gold and Silver and economic news -- something positive for the US -- did anyone see the survey done in China of the top research universities in the world? The vast majority are in the US (eg - Harvard, Berkeley, Princeton, MIT, Cal Tech, Chicago, UCLA, UC San Diego, Wisconsin, Yale -- the list goes on and on). Intellectual capital at the very top of the food chain is the last, and most important strength of the United States.
Stick with coins. They got potential too.
roadrunner
Higashiyama,
This is good news I suppose, but the fact is doing research, and creating great ideas in think tanks, does not count for much when it comes to living a successful life in a practical world and producing wealth for your country. Having a PHD and coming up with new innovative ideas by the droves DOES NOT create hundreds of thousands of jobs, build homes, feed people, and make your country strong, if you do not have the gumption to go do the work. It also does not insure that your ideas will even remain in your own country to help your fellow countrymen.
Below is a list of today’s 10 wealthiest men, and their educations, most of these folks did not even make it out of high school.
#1 William Gates III Education: Harvard University, Drop Out
#2 Warren Buffett Education: University of Nebraska Lincoln, Bachelor of Arts.
#3 Carlos Slim Helu Education: High school drop out.
#4 Ingvar Kamprad & family Education: High school drop out.
#5 Lakshmi Mittal Education: St Xavier's College Calcutta, Bachelor of Arts.
#6 Sheldon Adelson Education: City College of New York, Drop Out.
#7 Bernard Arnault Education: Ecole Polytechnique de Paris, Bachelor of Arts.
#8 Amancio Ortega Education: High School, Drop Out.
#9 Li Ka-shing Education: High School, Drop Out.
#10 David Thomson Education: High School, Drop Out.
Ah the Global economy! So as I wrote last week, just what do you do when foreigners rule your entire economy and you no longer have any internal controls?
If in fact you have to many foreigners chasing your goods causing inflation, those old tricks of tightening the money supply, raising interest rates, selling debt rather than printing hard currency, will just not work because the buying stimulus is outside of your system and you can not control that.
In the old days you could slap on tariffs, or pass laws prohibiting sales of products leaving your country, but no longer.
When the American bankers and the Fed changed policy in the 80’s to convince the American people, and our own government, to use debt rather than cash to buy consumables, that did seem like a good idea at the time. Unfortunately now everyone is hooked on credit, and the prices of everything are being driven up forces outside of our system.
Americans already paying 20% plus on their credit cards can also add that percentage to the cost of food, and gas as they swipe their cards each month to pay for the ever increasing prices of goods. Like sub-prime loans, how many will default on the credit cards over the next few years as Global inflation gets out of control?
I suppose the Fed can raises rates to keep the foreigners coming to the debt window, but that trick will no longer work on inflation when the demand is from outside of our American economic system, and of courses we have now lost our ability to control prices here by any other means.
What interesting times we live in!
Rising Food Prices May Give Bernanke, Central Bankers Heartburn:
July 16 (Bloomberg) The fastest increase in food-commodity prices in at least a decade has already led monetary authorities in England, Mexico, Chile and South Africa to lift borrowing costs. It is also sowing doubts about the U.S. Federal Reserve's focus on core inflation, which excludes food, energy, and housing.
An unprecedented surge in global demand is behind the 23 percent rise in food prices that the International Monetary Fund recorded during the last 18 months.
Economists, including some at the Bank of England, have criticized the Fed's focus on core prices, arguing that it ignores the inflationary impact of rapid global growth on commodities such as oil.
Rising prosperity in China and other emerging nations is spurring demand, particularly for value-added items such as meat and dairy products, the report said.
I'm somewhat mixed on using ethanol.... very expensive to produce, and you do not even get as good of gas mileage with it. And.... also takes a hugh amount of water to produce, thus helping deplete that resource also.
Sometimes the cure is worse than the original illness.
How would the rest of the world view an energy independent USA?
Knowledge is the enemy of fear
I'm not sure they would like it! They like having the energy card in the hole to help keep their hooks into us.....
I would like to see us proceed with the gasification projects and the oil shale developments. However.... I do think it is in our best interest..... to keep purchasing the imported oil also. (much better to keep our own pantry 'stocked' and ready to go when we need it in the energy starved future.... but meanwhile make use of the other sources so we can continue to conserve ours)!
As long as we have a Global economy, with no way to put in tariffs in place, or to stop the shipment of our natural resources to foreign lands, we are going to continue to see inflation.
How long before those empty ships returning to China after bringing us tennis shoes etc. will be carrying coal for their gas plants, or corn?
When will the American people get some leadership in Washington? NOT UNTIL WE HAVE TERM LIMMITS FOR SENATORS AND CONGRESSMEN!
How long will it take for the American citizens to march on Washington? Why is there not a big Internet move for term limits, gee it seems that all the petitions could be signed on line. With congresses approval around 20% plus shouldn’t we throw the bums out?
What in the world are we doing making ethanol? Every scientist with a real brain will tell you it costs more fuel to make this stuff than the ethanol it produces. Is there ever going to come a time again that the minority fringe group is just ignored the way they have always been for most of our history.
For six years the Democrats wanted control of congress, and now they have it, have they done anything about any of these serious issues? NO, quite simply they cannot. When the lower and middle economic class in this country can no long pay their grocery and fuel bills perhaps then we can throw the bums out!
Oh, and one more question, why are none of the right wing talk show hosts taking about getting rid of these guys and gals in Washington?
<< <i>
What in the world are we doing making ethanol? Every scientist with a real brain will tell you it costs more fuel to make this stuff than the ethanol it produces. Is there ever going to come a time again that the minority fringe group is just ignored the way they have always been for most of our history.
>>
Ethanol reduces mileage in some cars by more than the amount
of ethanol in the fuel!!
The thinking is that eventually ethanol can be produced with less
energy than it takes to produce. In the mean time it is driving up
the cost of gas and the cost of food. It is very good for ADM and
its supporters and stockholders.
Perhaps the government thinks the dangers of peak oil are over-
blown so it's politically advantageous to waste money and fuel on
ethanol production. It will eventually reduce dependence on out-
side energy needs.
Research on coal-based technologies and transmission of energy
would seem to be more effective even in this regard though.
<< <i>Bear -- I guess we are getting off topic, but I had to respond. My brother bought a 1965 Dodge Dart in the early 1970s -- the card had over 100,000 miles on it when he bought it for $250 -- he put another 100,000 miles on it, and never did more than change the oil and very minor repairs.
q]
Some of the things we used to create were incredible.
Now that's it's become a "Romelike Clone", we only create new words for higher taxes and go deeper and deeper into the crap pile of debt.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
out of rockets ...out of bullets...switching to harsh language
<< <i>test >>
1,2,3
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
>>> As we know our Fed decided to resolve wage inflation here by printing debt rather than increasing directly the money supply providing for wage inflation>>>>
let me first say i have way too many degrees in economics to let this slide ...while i wont bore you with naming them or the people ( yes a few presidents are in the mix...unfortunately not george ) i have advised but here is the real deal
some facts
1) wage inflation happens when the unemployment number gets too low where as employers raise their hourly wage that they pay to employees so they can do business....this then forces the present employer to match or better the hourly rate and a " bidding" war begins ....these are never a few % point jumps but rather very large ones....this in turn is passed on to you the consumer ....some of these raises are in the 20% or higher area....and i can assure you they are felt with excruciating pain by the consumer.....on the commodity side when there is a shortage and the price goes up...the private sector steps in and creates more capacity as long as its good business to do so and the price then comes back down....the difference is....labor costs almost never come down like commodities do....in fact it takes a depression ...and the last one we had was over 75 years ago thus its safe to say...NOTHING IS MORE INFLATIONARY THAN WAGES
2) the fed did not decide to resolve wage inflation by printing more money.....the fact is washington decided 35 years ago to deal with it by importing labor from mexico thus sharply curbing the aforementioned " bidding war " from ever happening.....by keeping the market flooded with employees the economy has been allowed to produce like never before....please notice the fruits of this practice...you and your wife drive new cars....4 color tvs...all family members have a cell phone ( in 1985 they were 1500 each ) and cars for 16 year olds is common place now...i-pods...dvds...tivo....cable...the list goes on and on...but the fact is life in america has never been better
how do they import labor????they just call down to the border say ...let 100,000 in....ok not really like that but you get the picture.....and the result is the same....20 million to be exact....who btw have had 60 million descendants over the last 35 years...so the total result is 80 million as of today
3) the fact is you and i have burned the candle at both ends living the via loca where as we decided not to have the 5 or 6 kids as the cost would take away our spare cash ...so we decided to have 2 kids and spend the rest of the money on our standard of living....in fact everyone has done just that....the problem is our economy kept growing and needed more labor and we werent birthing them....so washington imported them...its as simple as that!!
4) fact is ....all g-7 countries have done the same.....so what mexicans did france ...germany and spain import????fact is...muslims...so now you know why those countries are not supporting the war in iraq....if they did their labor force would riot....imagine if russia invaded mexico and we backed russia....our hispanics would go ballistic
5) by the numbers
1 million seconds on your watch takes 12 days
1 billion seconds on your watch takes 32 years
1 trillion seconds on your watch takes 32,000
and to date ..we the workers have sent washington 45 trillion dollars for our social security trust fund and they have spent every single penny of it
so why is george trying to force the illegal imm amnesty ????no money and no people to pay for it...so they are staying...believe that...in fact they have to....and here is how it will work
1st gen....menial jobs
2nd gen...apprentice plumbers and electricians
3rd gen....bis owners
4th gen...doctors and lawyers
****a gen can be taken out if they are fast tracked in education
6) inflation is known to economists in 2 forms.....core and headline....core is a gov bs stat as many already know and had nothing to do with people.....but headline is what you feel in your pocket..in 2006 it was 10.3%...2007 will be in that neighborhood...thus a 100k a year in jan 2006 will have the purchasing power of 70 something christmas this year
7) most all people think the fed controls the money supply...NOT....why go to them when you can create your own....now you know what a credit derivative is
8) yen carry trade....as i mentioned the g-7 above i was talking of only 6....the 7th...japan...has had their economy shrinking for 15 years as their culture simple does not allow them to import labor to make their economy grow thus they are shrinking like a prune thus their discount rate is .05% and ours is 5.25% ...they have been trying to loan money to expand but no takers...in japan that is....but lots of takers around the world.....and you will see a lot of unwinding the yen carry trade this year as japan doubles their lending rate...this wont be a good thing for our economy
9) the stock market while most think we just hit a all time high....not in terms of the euro....the pound....the cannook dollar ...or gold just to name a few...in fact its been going down for 5 straight years
10) while your dollar is getting worth less everyday and you feel pain....our goods are getting cheaper overseas so our trade def will begin to subside....good news is....the most important thing in washington is do we have jobs...and we will....albeit washington is inflating it`s butt off
11) sub prime blow up is coming soon and will rock the house and the fed will lower rates..aka more inflation...but at least your working
*****how do we deal with all of this sheet...............one way and one way only
VOTE FOR ONLY THOSE WHO WILL BALANCE THE BUDGET as that's why we are now entering the toilet
ok buddy there you go....some food for thought
monsterman
out of rockets ...out of bullets...switching to harsh language
<< <i>test >>
If you use the standard setting of twenty posts per page then you can't see
posts that are numbered, divisable by twenty (plus one). It's a little software
glitch that happens to some threads and becomes more likely as they lenghten.
If you highlight the address on your browser and add one to the last num-
ber, it will take you to the new page so you can see the "stealth post".
I generally agree with your synopsis though would phrase it differently. I don't
think that they intentionally created a situation with so many illegals but they
did allow the porous borders knowing full well any employment void would be
filled with traffic through here. It seems unlikely they intend to do anything ser-
ious to stem this tide.
I'm also a little dubious that wage inflation will behave the same in the future
as in the past. There are some fundamental changes in the way the economy
works.
>>>Time to quit allowing our youth to be killed while simultaneously bankrupting us for no good reason.>>>
i can think of a good reason
these terrorists are doing their thing in every country in the world....and nobody is uneffected....and it will continue until they are defeated....and i do have a plan for that but way to long for here
that being said if you think its time to quit then you have to ask yourself 1 question and 1 question only
WILL YOU BE SAFER IF WE LEFT AND LET THEM GET STRONGER AND STRONGER OVER THERE EVENTUALLY COMING HERE....OR WILL YOU BE SAFER IF WE STAYED AND BEAT THEM OVER THERE
thats it!!!! plain and simple
the fact is....these people want you, your wife, your parents,grand parents and your children dead....you are an infidel and you must die
that being said this smarter to beat them there than here....and these flip floppers like hilary et al are not the sharpest knives in the drawer
cladking
>>>I don't
think that they intentionally created a situation with so many illegals but they
did allow the porous borders knowing full well any employment void would be
filled with traffic through here
sounds like the same thing to me :-)....sounds like machiavelli to me!!
>>>I'm also a little dubious that wage inflation will behave the same in the future
as in the past.>>>> economic theory will always be the same thus will always apply ....raise the min wage and we inflate....no big deal just a little less for about 80% of the people as the top 20% will always get theirs...as they should...they are smarter than the other 80%
There are some fundamental changes in the way the economy
works. >>>>im not sure what this means
monsterman
ps...clad...thanks for the tip on the page number
out of rockets ...out of bullets...switching to harsh language
<< <i>
There are some fundamental changes in the way the economy
works. >>>>im not sure what this means
monsterman
>>
I'm not sure either.
For one thing the economy is more "planned" than it was in the old days. It used
to be strictly supply and demand but now goverment does a lot of tweeking on both
sides of this equation and advertising drives demand. Supply can be dramatically
affected by small changes in law and regulations. It was at one time possible to
start a manufacturing company on a shoestring but now even the simplest such con-
cern will take millions and heavy manufacturing will require billions for start-up. This
limits employees' ability to quit their job and go into competition with their employer.
They are more at the mercy of what the CEO wants. Unions are less strong and
there are far fewer unionized workers.
Also human life appears to be worth far less than it was relative to capital only a few
generations ago. The requirements of the individual to keep body and soul together
relative to the total size of the economy is shrinking even with rising food costs.
Increases in wages are not only less likely under these conditions but also less sus-
tainable. This isn't to say such increases won't occur, they probably will, just that it
won't be as significant to the overall picture as in the past and can be unwound rat-
her quickly by inflating these increases away.
out of rockets ...out of bullets...switching to harsh language
Also, lets not forget the shadow economy where all wages are cash. There is no minimum wage effect there.
To your other comments regarding the terrorists, lets not confuse a civil war with terrorism. We are occupying a country right now, not fighting terrorism. I served 8 years and know far too many names on that wall. The Republicans are now figuring this out, finally.
>>> you have a minor error in your minimum wage analysis. Raising the minimum wage increases the price floor>>>>
no error...absolutely it does...while only kids with their first jobs get min wage ...many get paid x dollars over min wage....so raise min wage and you do raise cost...which will be passed on to you
as far as this
>>>To your other comments regarding the terrorists, lets not confuse a civil war with terrorism>>
the " civil war" going on is all about control where as both sects want the power....thus its all about power
never forget there are 2 ways to get what one wants
1) convincing with logic
2) a gun
when a robber wants your money there is no way he can do #1 so he uses #2.......all differences are as above.....and thats way the democratic way of life works as its all logical and the "gun" can never be used to convice someone....
out of rockets ...out of bullets...switching to harsh language