"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government." "
Too bad we could not have a Thomas Jefferson show up in this day and age to get us back on course....
Well, on second thought.... he wouldn't have a chance. Our modern politicians would destroy him in a couple of days.....
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government." "
Too bad we could not have a Thomas Jefferson show up in this day and age to get us back on course....
Well, on second thought.... he wouldn't have a chance. Our modern politicians would destroy him in a couple of days..... >>
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government."
This can't be repeated too many times..........
Q: Are You Printing Money? Bernanke: Not Literally
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government." "
Too bad we could not have a Thomas Jefferson show up in this day and age to get us back on course....
Well, on second thought.... he wouldn't have a chance. Our modern politicians would destroy him in a couple of days..... >>
sad, but true. you ever notice you don't ever see a Presidential canidate from either party that ever touts Jeffersonian principles, or another founding father? I guess they assume the gravy train is already at the station and they need the money from these people for their campaigns. Going back to common sense principles to get the country back on track never enters their minds.
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government." "
Too bad we could not have a Thomas Jefferson show up in this day and age to get us back on course....
Well, on second thought.... he wouldn't have a chance. Our modern politicians would destroy him in a couple of days..... >>
sad, but true. you ever notice you don't ever see a Presidential canidate from either party that ever touts Jeffersonian principles, or another founding father? I guess they assume the gravy train is already at the station and they need the money from these people for their campaigns. Going back to common sense principles to get the country back on track never enters their minds. >>
since we are somewhat OT on Jefferson...when any of you guys get to the National Archives....be sure to go to the gift shop/book store and pick up the small books on quotes from Jefferson Washington Franklin and also the wee book on the signers of the Dec. of Independence.
we can't go back, nor should we IE gold is NOT what it meant a decade ago....wake up some of you.
we can't go back, nor should we IE gold is NOT what it meant a decade ago....wake up some of you.
....ahhh, spoken like a true central banker.
Very true, gold is not what it meant a decade ago. It is worth much more...and times are a changing. If what you said was honestly true, gold would not have tripled in price over the past 6 years. And the US dollar has certainly not fallen to 1/3 of its former value. So something else besides the dollar is driving gold. Frankly gold is 3X what it used to be in 2001, and is on its way to be 5X to 10X what it used to be. I'm glad I woke up in 2002 and got on the train.
From Richard Russell, a man who has seen a lot including the great depression:
The government will have to print the money to cover the coming tidal wave of unfunded liabilities. This process will have a brutal impact on the dollar. The purchasing power of the dollar will continue to head down. In my lifetime I've seen the purchasing power of the dollar lose 80 percent of its value. And I have to wonder what the dollar will buy ten years from now -- fifteen years, twenty years. It's very sad, indeed.
This is the reason to own gold. I hear a lot of talk about gold not keeping up with inflation, gold spending twenty years between 1980 and 2000 doing nothing or simply declining. Forget it, that was then, this is now. As I see it, the third phase of the great gold bull market lies ahead. Gold is fated to rise to "impossible" heights in terms of current US dollars. I know this sounds far-fetched to today's impatient holders of gold. But for a great move to materialize, it has to be considered to be "almost impossible" in advance.
Another way of putting it is that for a move to be huge, the public has to be clean of the item to start with. Ideally, nobody should be in the item. And today the US public is "clean as a whistle" when it comes to owning gold. "Oh yeah, I've got gold. I bought two American Eagles a year ago, and I still have 'em put away some where. Heck yeah, I got gold."
Yeah, what he said: Gold from 1980-2000 does not define it for eternity.
Today, one could never get our past heroes elected.
Washington had false teeth and liked the ladies.
Jefferson would not appeal to the big money boys.
Lincoln was not photogenic and would be considered a hick today.
Franklin D. Roosevelt was a cripple in a wheel chair
Teddy Roosevelt had a high pitched voice and would be made fun of.
John Adams was not a people person
The list could go on and on. The American public like its politicians as shallow as it likes its newscasters, TV programs and reading material. Simple to the point of ridiculousness.
The list could go on and on. The American public like its politicians as shallow as it likes its newscaster, TV programs and reading material. Simple to the point of ridiculousness. >>
<< <i>we can't go back, nor should we IE gold is NOT what it meant a decade ago....wake up some of you.
....ahhh, spoken like a true central banker.
Very true, gold is not what it meant a decade ago. It is worth much more...and times are a changing. If what you said was honestly true, gold would not have tripled in price over the past 6 years. And the US dollar has certainly not fallen to 1/3 of its former value. So something else besides the dollar is driving gold. Frankly gold is 3X what it used to be in 2001, and is on its way to be 5X to 10X what it used to be. I'm glad I woke up in 2002 and got on the train.
From Richard Russell, a man who has seen a lot including the great depression:
The government will have to print the money to cover the coming tidal wave of unfunded liabilities. This process will have a brutal impact on the dollar. The purchasing power of the dollar will continue to head down. In my lifetime I've seen the purchasing power of the dollar lose 80 percent of its value. And I have to wonder what the dollar will buy ten years from now -- fifteen years, twenty years. It's very sad, indeed.
This is the reason to own gold. I hear a lot of talk about gold not keeping up with inflation, gold spending twenty years between 1980 and 2000 doing nothing or simply declining. Forget it, that was then, this is now. As I see it, the third phase of the great gold bull market lies ahead. Gold is fated to rise to "impossible" heights in terms of current US dollars. I know this sounds far-fetched to today's impatient holders of gold. But for a great move to materialize, it has to be considered to be "almost impossible" in advance.
Another way of putting it is that for a move to be huge, the public has to be clean of the item to start with. Ideally, nobody should be in the item. And today the US public is "clean as a whistle" when it comes to owning gold. "Oh yeah, I've got gold. I bought two American Eagles a year ago, and I still have 'em put away some where. Heck yeah, I got gold."
Yeah, what he said: Gold from 1980-2000 does not define it for eternity.
roadrunner >>
i respect your statement and in some ways i hope you are right, but I also feel that 2000 to 2007 does not define gold either.
I wonder how many of these people have significant positions in gold:
George Bush John Kerry Alan Greenspan Bill Clinton John Edwards Ron Paul Newt Gingrich Harry Reed Nancy Pelosi Jesse Jackson Al Sharpton Ben Bernake Donald Trump Bill Gates Warren Buffett Bunker Hunt Al Gore
Is there any way to know if these folks are buying precious metals?
P.S. - throw in Prince Abdullah, Jimmy Carter and Vladimir Putin while you're at it.......
Q: Are You Printing Money? Bernanke: Not Literally
i respect your statement and in some ways i hope you are right, but I also feel that 2000 to 2007 does not define gold either.
Until 2000-2007 is completely reversed, and the long term uptrend is broken down hard, this 7 yr period will have to define gold's performance. That's how markets work, a long cycle up followed by a long cycle down. And when that downturn begins, that will define gold for the years that follow. Until then, we can take what it is given to us or ignore it.
Who has gold imo:
George Bush - not likely John Kerry - heck no Alan Greenspan - definitely yes. Bill Clinton - heck no John Edwards - no Ron Paul - without question, YES. Newt Gingrich - possibly Harry Reed - no Nancy Pelosi - are you kidding? Jesse Jackson - no Al Sharpton - no Ben Bernake - unlikely Donald Trump - probably Bill Gates - probably Warren Buffett - definitely Bunker Hunt - is he still alive? definitely has some if he is. Al Gore - are you kidding?
from 2005 shareholder meeting top 20 questions. Berkshire Hathaway
""A shareholder from Austin, Texas asked whether gold can be considered a viable investment alternative to paper currency. Buffett replied, “We’re not enthused about gold.” He said he’d prefer an asset that’s going to be useful, such as “oil, land, See’s Candies or Coca Cola.” He added that “we wouldn’t trade those real assets for a hunk of yellow metal,” noting that gold hasn’t provided a very high return over the decades. According to Munger, “When you have the opportunities of Berkshire, gold is a dumb investment.”
Comment: Buffett and Munger were pretty blunt about their opinions on gold, and from the historical record it’s hard to disagree. At best, gold has kept pace with inflation over the long term—but that’s no great claim to fame. Nowadays, investors who want to keep pace with inflation can purchase Treasury Inflation-Protected Securities (TIPS), which rise in value along with inflation and provide a small additional yield. As Munger suggests, for intelligent investors who are tolerant of the volatility of stocks, the opportunity for meaningful real (above inflation) growth in equities is an attractive one.""
i doubt he has any on the side (his personal stash) nor can i afford one share of his stock. his only slip was during the dot com fiasco...if you could call it that a slip. he has some pretty solid investment strategy that long term can't be beat.
Certainly Mr. Buffett has his own investment items separate from those of BH. While PM's may not be a viable investment for BH shareholders at this time I'd be willing to bet that Warren himself has some stashed away for a rainy day. Consider that within the last 10 yrs he thought enough about PM's to purchase 100 MILL ounces of silver. That's not exactly a passing fancy of interest. Only problem was he ran the price up on himself as he was buying it. Would have made much more sense to buy over several years and quietly accumulate. Silver is now about 2X the price since he supposedly sold his stash a few years ago. According to Sinclair, he felt that Buffet made a deal with the (ie powers to be) to get out of silver while helping them out. I don't remember the particulars but it made for interesting reading. For someone worth dozens of billions, having a few % of their wealth in PM's makes perfect sense. If things ever got out of hand with FRN's....you'd have something to fall back on. What Munger and Buffet say out in the open is no doubt different than what they think inside. Their previous purchase of silver speaks volumes....much more so than a few sentences to the media. Look at Greenspan, the perfect example of doublespeak. Now that he is out of the FED, he can go back to stating that gold has merit, just as he said back in 1966. His spots just changed again.
It's the same old story about PM's being a poor long term investment. PM's will be a solid investment until that day comes when they are not. 6 yrs is more than a flash in the pan, just like 1971-1980 was more than a one time thing.
Gold is always a good long term store of value and during times of distress (like today) it is indeed a good short term investment. To those that think stock results from 1980-2005 are the norm.....please go back and check your history. It took until 1954 for the DOW to reach the 1929 high (w/o inflation adjustments). And it took a similar 20 year period to get far away from the 1966 market peak. Take true inflation out of the picture, and the performance of stocks, PM's, real estate and many other favorite items become very sedate.
As far as TIPs being a true inflation fighting investment look again. TIP's are based on the CPI, which if you haven't noticed is considerably lower than the real rate of inflation. That's obvious based on the dropping of the dollar and rise of gold. That's the market talking that inflation is higher than stated. The govt would love for you to come in and buy Tips. But then you wonder why major brokerages don't invest in TIPs themselves. I wonder if Buffet has TIPs in BH's portfolio? Not likely. The govt is not stupid and prefers to underpay pensions, social security, medicare, and TIPs too. Do you really think they want to pay a fair annual increase if they don't have to? How many studies can you find that show the CPI to be understated? (ie the govt is giving away money they don't have to). The dollar has fallen 35% in the past several years. Did TIPs really compensate fully for that drop, let alone true inflation?
RR...what if anything does the Central Banks ending their selling of ~475 tonnes (metric ton) (one tonne = ~ $24million dollars) of gold this being their third year (ended 09/26)?? it's a real question
this would seem to be partially responsible for the recent upswing in gold? sorry if i missed someone's post about this.
also companies will be reporting 3rd quarter soon and trade deficit is down obviously because of the weak dollar.
thanks for your input RR...
the CPI has a nominal weird calculation for cost of living as far as housing goes and is way out of touch with reality
RR...what if anything does the Central Banks ending their selling of ~475 tonnes (metric ton) (one tonne = ~ $24million dollars) of gold this being their third year (ended 09/26)?? it's a real question
Their sales are a small part of the equation. With 2500 tons or so of new gold made each year, a few hundred tons is not a deal breaker one way or the other. They seem to get more mileage out of just the words, than the physical sales. Considering they may have dumped 10,000-15,000 tons in prior years to keep gold supressed under $400, smaller amounts are of less concern. The recent upswing in gold is based on the liquidity crisis with derivatives and mortgaged back securities as well as Iran/Iraq more than anything else. The dollar index fell below key resistance of 80.0 so here we are.
also companies will be reporting 3rd quarter soon and trade deficit is down obviously because of the weak dollar.
It's sort of funny that killing the dollar to strengthen the trade deficit is considered a plus to many. One can't have it both ways. The main result is the dollar weakening, hence gold positive. But no doubt the trade deficit is spun in the headlines as strength, yet no mention of the dollar index at 78.2 as weakness. The spinners have no shortage of statistics that they can spin their way in any situation. End result....everything is good for the economy and for stocks...and everything is negative for gold (except a rising gold price!)
The CPI has a nominal weird calculation for cost of living as far as housing goes and is way out of touch with reality.
I've mentioned the concept of "imputed rent" in the past. This went into place in 1983 when the BLS and FED were tired of seeing huge leaps in the CPI due to housing costs. No more 18-20% CPI's said the FED. So they negated it by replacing it with the cost to rent your home out. This has worked wonderfully well in the following 23 years with housing prices mostly on the rise. In essence it kept 40% or more of the CPI fixed, making it much more resistant to change. Toss in the applicances, computers, clothing, cars, quality index changes, substitution effects, and voila, a CPI index of which 50% or more of the items don't change. But now that rents are finally moving up after 23 years of stagnation, and home prices are falling, the BLS's "imputed rent" theory will work against them. Maybe it will be time to change back to counting real housing prices for a while (lol).
Maybe we have missed the transition from our parents way of things to modern day finances and money management. Look at the issue of savings. Savings are low because of a new level of demand on the middle class (our primary saving group) to fund their endeavors. Childrens programs at school...they want money for this and that from the parents, be it atheletic team participation, band participation...all of the activities that used to be social and developmental now cost the parents plenty and we're not even talking about the impact college attendence has on the middle class providers, they get them signed up for credit cards as soon as they walk in, as a matter of adult right for being at college. At work, the middle class pays for all the federal programs (SS, FICA, Medicare...etc) by payroll deduction and then can pay for additional life insurance, disability, pretax healthcare plans, the list is long. Shoes for the kids, clothes for the kids: name brand will cost the middle class a fair amount, and the TV even tells the kids what to buy, what to eat, what to wear and the news services provide a chorus of the same hype. Media, peer pressure, internet is geared to sucking buks from those that need to be saving buks. The middle class used to be the homebuyers and nest egg builders of the previous generation but no more. It's like we market the middle class like fishermen catch mullet for bait, we have to haul them in by the netload to make the numbers work. We suck every buck we can get from them and then we push them into credit cards (@ 20% interest), refi's, paycheck loans, 8% car loans, ARM's, anything we can do to suck every last employer provided buk away from them and into some financial institution or cash flow enterprise. We never give them a chance to save, I'm suprised that they can even breathe and yet we chide them for not saving. And just to make it a little more challenging, our govt. puts up the AMT for any that might have a breath at getting free. And...since the middle class doesn't really have any real opportunity to itemize their return, they pay their full fair share of taxes.
The upper and upper middle class are good, they are in with the institutional programs, they have the where with all to manage a new car every few years, can step up to a nicer house every ten years or so, get vacations, check their interest rates, pay off any nasty little credit problems with either a check from savings or if things get really awkward, they can sell some stock or tap a CD. It's at least managable for the upper and upper middle class. They are players to faceless institutions like Chase bank, Citibank, Morgan Stanley, Ameritrade...they can call the bank and after a quick look at the account, the bank employee will help them as much as they can. Go to a doctor, do your copay, get your meds at the pharmacy, life is good and if it's not, they can afford a good attorney to make it right. And don't forget that paying taxes is not a good thing, you need deductions to make things work out so you'll need a good tax guy too.
The middle class can't save, they can't buy gold, they are not the middle class of yesteryear, things have changed. The middle class are no longer the share holders at the local savings and loan, they are no longer putting away significant savings for their retirement...heck, when is the last time you went to a savings and loan...it's just not done anymore. You know the S n L, you know the president, you know the loan guys that have been there for a long time, you know the teller, they don't ask for your ID when you want to cash a check. Now you either have a free go-go bank account with no minimum balance (minimum cash deposits of $1000 required), or you have a credit card balance that you struggle to pay off each month. We don't want the middle class to save...they must feed the great machine. We must have every dollar we can possibly get from them just to keep the wheel turning. So, things have changed from when our mom's and dad's were starting their careers, it's different now. We really don't want the middle class to save, we want them hooked up from the git-go and we want to keep them like that. As far as modern life styles, the current upper middle class is our mom and dad's middle class. Middle class now is a struggle, worse than our previous generation had experienced.
So, why don't communities get together and have a small savings and loan. Why doesn't a group of people get together and make a little thrift bank. Why don't people get out and help people understand the reality of the situation. Why don't they create some small, local institutions so the worker bees can put away $50 a paycheck or get a car loan at 4% and a savings interest rate of 7% or 8% for the first $10,000. Certainly that is part of the answer...how can you give a savings interest rate of $4% and charge the same guy 8% for a car loan...as they say in the industry, he's upside down in this deal.
The coin forum should give a medal to any member who has read this thread completely. If one had the inkling, one could do a great analysis of past predictions and the unfolded reality. Then, we can find out what members had the best predictive capabilities regarding gold and silver prices and their future. Seems like it might even be a worthwhile project for some YN with a lot of time....... a lot of time.
mhammerman -- For a couple generations, our public schools have been turning out graduates woefully unprepared for the world. There is little understanding of even the fundamentals of personal finance. They make sure they have double-digit budget percents allocated to maintaining the gymnasium but don;t teach personal finance and basic law, two things every adult in our society needs to know, with any level of serious commitment. Credit cards are free money and you are shortchanging yourself if you don't take full advantage of them is the way too many look at them. Of course, this mentality has crept into municipal governments and beyond, where those ho should know better are just shuffling fiscal responsibility along evasively appealing to the popular borrow and spend mentality.
In my opinion two large basic things changed in the boomer generation, first morality was sacrificed for , “a better life” and second the Lord has decided not to visit on the baby boomers total real world disasters i.e. a world war, world economic depression etc. at least not yet.
I just returned from a trip to Colorado to see an old friend. My friend is a typical upper middle class American who owns and runs a wheelchair business. He puts in about 10 hours per day six days a week, and gives most of his money to one government or another. His 40 year old children still drop by several times per week to get money from daddy, or fix their cars, etc..
When we discussed the current situation of politics, the economy, and taxes, his comment was that, “only a full blown depression will ever get things straight again”
All of these pollsters that say they cannot figure out why everyone says they are doing fine, but the country is on the wrong track, should realize that deep down inside most Americans know things are really screwed up, but feel powerless to make any changes.
I think my friend is right, only a full blown depression, or something of that magnitude is going to make our government, and its voters, come back to real moral values and a since of what makes senses.
The coin forum should give a medal to any member who has read this thread completely.
I know I've kept up on this thread since it was started. Same for Goldsaint I'm sure. And you can probably toss in Ttown, Deadhorse, Tincup, Mhammerman, Bear, Cladking, Oreville, Topstuff, Mrearlygold, Ellewood, Baley...and others who have been frequent responders as well. Apologies to any who I left out who have been here since day 1, read the whole thing, and have contributed.
Are there enough medals to go around?? I'd be happy with silver though gold is nicer.
The battle will rage today. Gold is on the verge of being cut loose to run free. Stock houses are turbulent and banks with the demand for another rate cut are stashing their cash in the big 'ol vault never to see the sun again until this stuff blows over, hoping that it will. Paper gold should be heavily pressured with the holders seeking to redeem their certificates for something a little more substantial. We should see if GATA has any huevos...sticks up, men.
<< <i>The battle will rage today. Gold is on the verge of being cut loose to run free. Stock houses are turbulent and banks with the demand for another rate cut are stashing their cash in the big 'ol vault never to see the sun again until this stuff blows over, hoping that it will. Paper gold should be heavily pressured with the holders seeking to redeem their certificates for something a little more substantial. We should see if GATA has any huevos...sticks up, men. >>
Agreed! I've long said that the last part of '07 would be a watershed moment. Still, the battle is far from over.
The big boys are still trying mightily to keep their house of cards in place. Maybe I should say, house of paper.
It promises to be interesting.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Thanks for the post, but the conclusions of some of these guys still bewilder me just a little.
Mr. Wiegand recommends the below at the end of his letter, but there does seem to come a time when elimination of debt is not a good thing if hyperinflation is just around the corner?
When we started this thread most of us agreed that elimination of debt should be a priority, and after that one should begin a process of building hard assets. Has that time past?
There will come a time in this worldwide paper play that one should just concentrate on buying hard assets, as the elimination of debt for most folks is a long term process.
If gold and silver are going to go through the roof to, $2,000 or $3,000 per ounce for gold, it seems that buying these assets now, then selling them at the higher prices and paying off debt might be a smarter move?
In addition I think it is time for all of those that want to own stocks to look at the assets behind the stocks they own. During the great inflations of the past many shares of hard asset companies went through the roof along with gold and silver. Any online broker will give you the full details about the companies one might want to hold, and its real assets.
As all of this comes to pass I think that we will find that those large dull old companies like Walmart, Burlington Northern (that Buffet is buying), steel companies, etc. will have large market share price increases. I would also think that many of the tech companies that are all fluff, smoke and mirrors, like many dot coms, Googles, etc. will have a very hard time justifying their shares prices.
“We wanted our readers to clearly understand what is happening to international currencies and their devaluation by over-printing. Russia prints at the rate of +50% annually. The United States is shoveling it out between 11% and 14%. Asian central banks produce new cash at rates between 12% and 20%. Where do we suppose this all ends? The ending is cast in bronze and it will not be a happy event. Review history and watch what our leaders do not what they say.
Your only conclusion is to eliminate debt, buy and trade gold and silver investments and most of all become an independent thinker and leader. Take care of yourself, your family and your friends. Most of them will not believe these ideas so move quietly to take charge and guarantee your future and theirs. Not only can you protect what you have, but you’ll move swiftly to increase your holdings and might even become wealthy in the process. Good luck and good trading! - Traderrog Roger Wiegand “
I agree with the wise old Bear, with one exception.
No need to raise taxes, either modestly or outrageously.
All the funds from income tax immediately go overseas to the Federal Reserve private bank. None of it goes to the infrastructure or welfare of our nation. Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around.
That's in spite of what nearly all Democrats will tell you. JFK was faced with a declining economy and he lowered taxes across the board and quickly brought the nation back into a growth period. Today he would be called a Republican, based on his policies.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
If gold and silver are going to go through the roof to, $2,000 or $3,000 per ounce for gold, it seems that buying these assets now, then selling them at the higher prices and paying off debt might be a smarter move? >>
This is extraordinarily risky of course.
Our comeuppance has been coming up since the 1960's. You have to be prepared to hang onto the incurred debt for a protracted period for this to be safe.
Will it become a good idea in the future? Possibly, but there should be am- ple warning of impending difficulty.
I still believe this struggle with commodity prices will continue and there's no end in sight. The powers that be will allow gold to run a little more and then put on the brakes hard again. Eventually when the dollar is at lower values and gold at higher this tactic will work and gold will drop sharply. I still think the dollar will be significantly lower and gold far higher before this balance is achieved. It will probably be played out over so much time that buying metals on credit is a losing proposition or will be profitable but not worth the enormous risk.
"The Laffer Curve only implies that there are conditions where a tax cut will result in increased revenues. The Curve also implies that there are conditions where a tax increase will result in additional revenues. For whatever reason, the former is almost always assumed despite our historically lower marginal rates in the upper brackets.
[Laffer relies upon] Say's Law to be true, e.g. supply creates its own demand. Keynes pretty much demolished it, but here are the assumptions involved: a) Business investment is solely determined by an ability to produce. b) If more money is available, more goods will be produced. c) Therefore, if you cut taxes, production will be increased resulting in an increase in taxable events and hence more revenue."
Next, a site attempting to create what the Laffer Curve looks like using real data:
The Laffer Curve is something that is still being debated. In my brief web search, it seemed generally that economics professors at Ivy League colleges think it questionable, while think tanks considered it gospel. The think tanks might have a pecuniary interest in espousing their belief.
I don't agree with raising taxes either, even though I am not a Republican. Whether we like it or not, managing monetary policy AND funding the budget can be accomplished entirely through the money supply and regular issuance of federal debt. All income tax is a system of taxation maintenance -- tax one man's dollar more than one other man's dollar. That is why the tax code is so complicated, to fit in all of the special interests. The attendant obfuscation is typically an unplanned benefit to the system. Printing more money taxes all of the dollars equally and is, by its nature, inflationary.
The country is iving beyond its means and the longer we put off lowering our standards of living the worse the pain we'll feel in having no remaining choice. Other nations are approaching our lifestyle and won't forever be our patsies, absorbing our debt, funding our lifestyle, and producing for us cheaply. Sharing the oil is only the beginning. No child left behind is a bandaid. We have to have no productive worker left behind....destroy layers of societal middle management that contribute little toward their own personal compensation.
<< <i> Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around. >>
Awesome, just lower them to 0% and watch the government rake in the revenue!!... >>
It wouldn't make any difference as the money goes overseas. People, wake up!
What it would do is increase business growth, investments and savings. That would be a great thing!
It was the Reagan tax cuts that allowed the increased R&D which resulted in the tech boom of the 90s.
Laffer curve or not, the history of the last 50 years, at the very least, shows that lowering taxes improves the economy and results in increased revenue to the collection agency for the Federal Reserve, most folks call them the IRS. Remember that they aren't a government agency, if they were, would they have to pay postage? That's the first thing people should notice. Name another real government agency that doesn't have franking privileges.
People have to let go of the brainwashing that says the Federal Government actually receives the income tax revenue. It doesn't and that's a fact. It's the biggest scam ever perpetrated on the American people.
How did the government survive before 1913? Answer: the same way they do now. Income tax doesn't add anything. Now FICA, OTOH, is a different story completely and that does go into the general revenue which is distributed to welfare and all sorts of things it was NEVER supposed to be used for.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>When we started this thread most of us agreed that elimination of debt should be a priority, and after that one should begin a process of building hard assets. Has that time past? >>
With the previous direction of the economy there was a strong belief that a recession/depression was on the way. Money would cease to be as plentiful as the past. It appears however that this direction is changing. It is obvious with the huge amount of debt at all levels that the 2 main choices of government policy are :
A) High rates, strong dollar..............Debts do not get paid, stocks crash, pensions/municipalities default, tax receipts plummet and the economy collapses ala 1930's. Then the holders of dollars, foreigners, buy up all US assets
Low rates, weak dollar............... Money is readily available to pay all debts. Stocks go up, tax income increases pensions survive and everything continues. However, everything soon cost 3 times as much and the middle class gets wiped out.
Judging from the recent FED action I'd have to say plan B is in play. The worlds largest debtor will be able to pay back loans with cheaper dollars.
Although it is never recommended to borrow money to spend on good times of material goods it would be smart to borrow (at fixed rate)anytime you can invest at a better rate . This means if you can borrow at 5% and you believe that inflation will run 10-20% for the next 5+ years then it would make sense to borrow to invest.
This method made a lot of people rich in the 70s and it will again.
as usual with a war that has run longer then our participation in WW2.
With a war that is costing more then WW2. >>
Is that in 1940s dollars versus 2007 dollars?
Adjusted for inflation, I may be wrong, but I doubt this current situation is costing more than WWII.
We aren't rationing gas and meat and turning in our pots and pans for the metal to be used in the war. Back then, people saved and turned in bacon grease to be used for machine gun belts. Even old clothing was turned in and used for the war effort. Sorry, I can't see this as being on the same level.
It's a sad fact that war is profitable and tends to help the economy. It's a dirty little secret.
Our problem now is we lack the will to win, to crush them till they have no more fight left. Many Iraqis have asked me what has changed with America. In the past, we crushed our enemies and collateral damage was just part of it. That also destroyed the enemy's will to fight. We did the same thing in Gulf War One, but we should never have stopped as the UN resolution called for. After 9-11, we should have crushed these Islamo-fascists immediately, hard and fast to start with and we wouldn't be here now.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
> Our problem now is we lack the will to win, to crush them till they have no more fight left. Many Iraqis have asked me what has changed with America. In the past, we crushed our enemies and collateral damage was just part of it. That also destroyed the enemy's will to fight. We did the same thing in Gulf War One, but we should never have stopped as the UN resolution called for. After 9-11, we should have crushed these Islamo-fascists immediately, hard and fast to start with and we wouldn't be here now.
What do you think we should do (rather than what we are doing now)?
<< <i> Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around. >>
Awesome, just lower them to 0% and watch the government rake in the revenue!!... >>
Although you are being sarcastic, you cannot deny that tax cuts have increased revenues and decreased the deficit to a 5 year low, which if you rely on the mainstream media for your economic news, is indeed news to you:
<< <i>to crush them till they have no more fight left >>
Crush who?? We haven't even defined the enemy. We are at war with "terror". That means an unending war with an undefined enemy. No capital to capture, no enemy to sign a surrender.
Continuous spending in a unwanted occupation that has no defined goal with money borrowed from China will destroy this country faster than any "terrorist". We played this same game iin Vietnam and 7 years later we had spent ourselves into inflation on an unwinnable war. Here we go again, borrow and spend and the military-industry gets rich and inflation will be back just like the 70's.
Interesting link but the "Heritage Foundation" is as biased as the mainstream media. Since when do we get prime economic indicators from the HF? No wonder they didn't make it to any newspaper. I don't see Jim Sinclair's or GATA's stuff in the papers either.
In any case those charts look as whacky as the supposed Clinton "surplus" that "smokin" Bill achieved by counting Soc Sec. revenues in his budget. In 2006 we achieved a record amount of debt to the order of $800 billion plus (borrowing $2 billion a day on average to run the country). Those charts show nothng of the kind. So something is amiss with those HF figures. I can't imagine we are borrowing any less money in 2007. But we are certainly not headed towards a balanced budget unless some smoke and mirrors accounting is being employed. And these bogus numbers don't even consider entitlement debt whatsoever. Guess you'd call those off the balance sheet numbers. If GAAP accounting was used on the US budget, we'd be bankrupt and in the hole for Trillions. Any Wall Street firm using govt acctg "standards" would see their CEO and CFO jailed for fraud.
We have made life infinitely more complicated than it once was, and the unwinding of what we have created will be just as complicated, and I can assure you no one on this earth has the ability to assert enough control to make it all better.
For Joe Average, the future is most certainly uncertain.
If there were someone who could fix it, why have they allowed the current situation to transpire?
<< <i> Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around. >>
Awesome, just lower them to 0% and watch the government rake in the revenue!!... >>
Although you are being sarcastic, you cannot deny that tax cuts have increased revenues and decreased the deficit to a 5 year low, which if you rely on the mainstream media for your economic news, is indeed news to you:
<< <i>We have made life infinitely more complicated than it once was, and the unwinding of what we have created will be just as complicated, and I can assure you no one on this earth has the ability to assert enough control to make it all better.
For Joe Average, the future is most certainly uncertain.
If there were someone who could fix it, why have they allowed the current situation to transpire?
Profit??
Sick profit?
What say you? >>
I say, I don't really get your point(s). Can you elaborate?
Quis custodiet ipsos custodes?
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
<< <i>I say, I don't really get your point(s). Can you elaborate? >>
How about this,
The bankers and the corporate war suppliers are getting rich from the Trillion dollars a year we spend to keep us safe from the few hundred "Militant Islam. Islamofascist terrorists" who don't even own a boat to get here. .
1. The complexity of financial instruments today coupled with their "probably sinister" associated profit motives is beyond the comprehension of most folk, and have become unmanageable even to their creators.
2. That being said, who can predict what the future holds, other than chaos?
3. It is my opinion that next to nothing is done for the common good by those in power these days, and I also believe those in power are those who control the money, which is just exactly the way they planned it to be. Not the only problem is that they have created a monster that they can no longer control.
4. Good thing there is plenty of delta nine tetrahydrocannabinol to help everyone enjoy the ride. ( That one is for you pharmer..... you fiendish dispenser of beta lactamase inhibitors you)
5. Sick profit is profit at the expense of unknowing and otherwise good folk in my opinion.
Comments
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government." "
Too bad we could not have a Thomas Jefferson show up in this day and age to get us back on course....
Well, on second thought.... he wouldn't have a chance. Our modern politicians would destroy him in a couple of days.....
<< <i>" Thomas Jefferson was right...
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government." "
Too bad we could not have a Thomas Jefferson show up in this day and age to get us back on course....
Well, on second thought.... he wouldn't have a chance. Our modern politicians would destroy him in a couple of days..... >>
Aint that the truth!!
Knowledge is the enemy of fear
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government."
This can't be repeated too many times..........
I knew it would happen.
<< <i>" Thomas Jefferson was right...
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government." "
Too bad we could not have a Thomas Jefferson show up in this day and age to get us back on course....
Well, on second thought.... he wouldn't have a chance. Our modern politicians would destroy him in a couple of days..... >>
sad, but true. you ever notice you don't ever see a Presidential canidate from either party that ever touts Jeffersonian principles, or another founding father? I guess they assume the gravy train is already at the station and they need the money from these people for their campaigns. Going back to common sense principles to get the country back on track never enters their minds.
<< <i>
<< <i>" Thomas Jefferson was right...
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government." "
Too bad we could not have a Thomas Jefferson show up in this day and age to get us back on course....
Well, on second thought.... he wouldn't have a chance. Our modern politicians would destroy him in a couple of days..... >>
sad, but true. you ever notice you don't ever see a Presidential canidate from either party that ever touts Jeffersonian principles, or another founding father? I guess they assume the gravy train is already at the station and they need the money from these people for their campaigns. Going back to common sense principles to get the country back on track never enters their minds. >>
since we are somewhat OT on Jefferson...when any of you guys get to the National Archives....be sure to go to the gift shop/book store and pick up the small books on quotes from Jefferson Washington Franklin and also the wee book on the signers of the Dec. of Independence.
we can't go back, nor should we IE gold is NOT what it meant a decade ago....wake up some of you.
One of Jefferson's musings
Extreem violation of the homela nd sec urity provisions, certainly the media would eat this guy alive.
....ahhh, spoken like a true central banker.
Very true, gold is not what it meant a decade ago. It is worth much more...and times are a changing.
If what you said was honestly true, gold would not have tripled in price over the past 6 years. And the US
dollar has certainly not fallen to 1/3 of its former value. So something else besides the dollar is driving gold.
Frankly gold is 3X what it used to be in 2001, and is on its way to be 5X to 10X what it used to be. I'm glad
I woke up in 2002 and got on the train.
From Richard Russell, a man who has seen a lot including the great depression:
The government will have to print the money to cover the coming tidal wave of unfunded liabilities. This process will have a brutal impact on the dollar. The purchasing power of the dollar will continue to head down. In my lifetime I've seen the purchasing power of the dollar lose 80 percent of its value. And I have to wonder what the dollar will buy ten years from now -- fifteen years, twenty years. It's very sad, indeed.
This is the reason to own gold. I hear a lot of talk about gold not keeping up with inflation, gold spending twenty years between 1980 and 2000 doing nothing or simply declining. Forget it, that was then, this is now. As I see it, the third phase of the great gold bull market lies ahead. Gold is fated to rise to "impossible" heights in terms of current US dollars. I know this sounds far-fetched to today's impatient holders of gold. But for a great move to materialize, it has to be considered to be "almost impossible" in advance.
Another way of putting it is that for a move to be huge, the public has to be clean of the item to start with. Ideally, nobody should be in the item. And today the US public is "clean as a whistle" when it comes to owning gold. "Oh yeah, I've got gold. I bought two American Eagles a year ago, and I still have 'em put away some where. Heck yeah, I got gold."
Yeah, what he said: Gold from 1980-2000 does not define it for eternity.
roadrunner
Washington had false teeth and liked the ladies.
Jefferson would not appeal to the big money boys.
Lincoln was not photogenic and would be considered a hick today.
Franklin D. Roosevelt was a cripple in a wheel chair
Teddy Roosevelt had a high pitched voice and would be made fun of.
John Adams was not a people person
The list could go on and on. The American public like its politicians as shallow
as it likes its newscasters, TV programs and reading material. Simple to the point
of ridiculousness.
Camelot
<< <i>
The list could go on and on. The American public like its politicians as shallow
as it likes its newscaster, TV programs and reading material. Simple to the point
of ridiculousness. >>
Nothing is shallower than a newscaster.
At least politicians are three dimensional.
<< <i>we can't go back, nor should we IE gold is NOT what it meant a decade ago....wake up some of you.
....ahhh, spoken like a true central banker.
Very true, gold is not what it meant a decade ago. It is worth much more...and times are a changing.
If what you said was honestly true, gold would not have tripled in price over the past 6 years. And the US
dollar has certainly not fallen to 1/3 of its former value. So something else besides the dollar is driving gold.
Frankly gold is 3X what it used to be in 2001, and is on its way to be 5X to 10X what it used to be. I'm glad
I woke up in 2002 and got on the train.
From Richard Russell, a man who has seen a lot including the great depression:
The government will have to print the money to cover the coming tidal wave of unfunded liabilities. This process will have a brutal impact on the dollar. The purchasing power of the dollar will continue to head down. In my lifetime I've seen the purchasing power of the dollar lose 80 percent of its value. And I have to wonder what the dollar will buy ten years from now -- fifteen years, twenty years. It's very sad, indeed.
This is the reason to own gold. I hear a lot of talk about gold not keeping up with inflation, gold spending twenty years between 1980 and 2000 doing nothing or simply declining. Forget it, that was then, this is now. As I see it, the third phase of the great gold bull market lies ahead. Gold is fated to rise to "impossible" heights in terms of current US dollars. I know this sounds far-fetched to today's impatient holders of gold. But for a great move to materialize, it has to be considered to be "almost impossible" in advance.
Another way of putting it is that for a move to be huge, the public has to be clean of the item to start with. Ideally, nobody should be in the item. And today the US public is "clean as a whistle" when it comes to owning gold. "Oh yeah, I've got gold. I bought two American Eagles a year ago, and I still have 'em put away some where. Heck yeah, I got gold."
Yeah, what he said: Gold from 1980-2000 does not define it for eternity.
roadrunner >>
i respect your statement and in some ways i hope you are right, but I also feel that 2000 to 2007 does not define gold either.
George Bush
John Kerry
Alan Greenspan
Bill Clinton
John Edwards
Ron Paul
Newt Gingrich
Harry Reed
Nancy Pelosi
Jesse Jackson
Al Sharpton
Ben Bernake
Donald Trump
Bill Gates
Warren Buffett
Bunker Hunt
Al Gore
Is there any way to know if these folks are buying precious metals?
P.S. - throw in Prince Abdullah, Jimmy Carter and Vladimir Putin while you're at it.......
I knew it would happen.
Until 2000-2007 is completely reversed, and the long term uptrend is broken down hard, this 7 yr period will have to define gold's performance. That's how markets work, a long cycle up followed by a long cycle down. And when that downturn begins, that will define gold for the years that follow. Until then, we can take what it is given to us or ignore it.
Who has gold imo:
George Bush - not likely
John Kerry - heck no
Alan Greenspan - definitely yes.
Bill Clinton - heck no
John Edwards - no
Ron Paul - without question, YES.
Newt Gingrich - possibly
Harry Reed - no
Nancy Pelosi - are you kidding?
Jesse Jackson - no
Al Sharpton - no
Ben Bernake - unlikely
Donald Trump - probably
Bill Gates - probably
Warren Buffett - definitely
Bunker Hunt - is he still alive? definitely has some if he is.
Al Gore - are you kidding?
from 2005 shareholder meeting top 20 questions. Berkshire Hathaway
""A shareholder from Austin, Texas asked whether gold can be considered a viable investment alternative to paper currency. Buffett replied, “We’re not enthused about gold.” He said he’d prefer an asset that’s going to be useful, such as “oil, land, See’s Candies or Coca Cola.” He added that “we wouldn’t trade those real assets for a hunk of yellow metal,” noting that gold hasn’t provided a very high return over the decades. According to Munger, “When you have the opportunities of Berkshire, gold is a dumb investment.”
Comment: Buffett and Munger were pretty blunt about their opinions on gold, and from the historical record it’s hard to disagree. At best, gold has kept pace with inflation over the long term—but that’s no great claim to fame. Nowadays, investors who want to keep pace with inflation can purchase Treasury Inflation-Protected Securities (TIPS), which rise in value along with inflation and provide a small additional yield. As Munger suggests, for intelligent investors who are tolerant of the volatility of stocks, the opportunity for meaningful real (above inflation) growth in equities is an attractive one.""
i doubt he has any on the side (his personal stash) nor can i afford one share of his stock.
his only slip was during the dot com fiasco...if you could call it that a slip. he has some pretty solid investment strategy that long term can't be beat.
Only problem was he ran the price up on himself as he was buying it.
Would have made much more sense to buy over several years and quietly accumulate. Silver is now about 2X the price since he supposedly sold his stash a few years ago. According to Sinclair, he felt that Buffet made a deal with the (ie powers to be) to get out of silver while helping them out. I don't remember the particulars but it made for interesting reading. For someone worth dozens of billions, having a few % of their wealth in PM's makes perfect sense.
If things ever got out of hand with FRN's....you'd have something to fall back on. What Munger and Buffet say out in the open is no doubt different than what they think inside. Their previous purchase of silver speaks volumes....much more so than a few sentences to the media. Look at Greenspan, the perfect example of doublespeak.
Now that he is out of the FED, he can go back to stating that gold has merit, just as he said back in 1966. His spots just changed again.
It's the same old story about PM's being a poor long term investment. PM's will be a solid investment until that day comes when they are not. 6 yrs is more than a flash in the pan, just like
1971-1980 was more than a one time thing.
Gold is always a good long term store of value and during times of distress (like today) it is indeed a good short term investment.
To those that think stock results from 1980-2005 are the norm.....please go back and check your history. It took until 1954 for the DOW to reach the 1929 high (w/o inflation adjustments).
And it took a similar 20 year period to get far away from the 1966 market peak. Take true inflation out of the picture, and the performance of stocks, PM's, real estate and many other favorite items become very sedate.
As far as TIPs being a true inflation fighting investment look again.
TIP's are based on the CPI, which if you haven't noticed is considerably lower than the real rate of inflation. That's obvious based on the dropping of the dollar and rise of gold. That's the market talking that inflation is higher than stated. The govt would love for you to come in and buy Tips. But then you wonder why major brokerages don't invest in TIPs themselves. I wonder if Buffet has TIPs in BH's portfolio? Not likely. The govt is not stupid and prefers to underpay pensions, social security, medicare, and TIPs too. Do you really think they want to pay a fair annual increase if they don't have to? How many studies can you find that show the CPI to be understated? (ie the govt is giving away money they don't have to). The dollar has fallen 35% in the past several years.
Did TIPs really compensate fully for that drop, let alone true inflation?
roadrunner
this would seem to be partially responsible for the recent upswing in gold? sorry if i missed someone's post about this.
also companies will be reporting 3rd quarter soon and trade deficit is down obviously because of the weak dollar.
thanks for your input RR...
the CPI has a nominal weird calculation for cost of living as far as housing goes and is way out of touch with reality
Their sales are a small part of the equation. With 2500 tons or so of new gold made each year, a few hundred tons is not a deal breaker one way or the other. They seem to get more mileage out of just the words, than the physical sales. Considering they may have dumped 10,000-15,000 tons in prior years to keep gold supressed under $400, smaller amounts are of less concern. The recent upswing in gold is based on the liquidity crisis with derivatives and mortgaged back securities as well as Iran/Iraq more than anything else. The dollar index fell below key resistance of 80.0 so here we are.
also companies will be reporting 3rd quarter soon and trade deficit is down obviously because of the weak dollar.
It's sort of funny that killing the dollar to strengthen the trade deficit is considered a plus to many. One can't have it both ways. The main result is the dollar weakening, hence gold positive. But no doubt the trade deficit is spun in the headlines as strength, yet no mention of the dollar index at 78.2 as weakness. The spinners have no shortage of statistics that they can spin their way in any situation. End result....everything is good for the economy and for stocks...and everything is negative for gold (except a rising gold price!)
The CPI has a nominal weird calculation for cost of living as far as housing goes and is way out of touch with reality.
I've mentioned the concept of "imputed rent" in the past. This went into place in 1983 when the BLS and FED were tired of seeing huge leaps in the CPI due to housing costs. No more 18-20% CPI's said the FED. So they negated it by replacing it with the cost to rent your home out. This has worked wonderfully well in the following 23 years with housing prices mostly on the rise. In essence it kept 40% or more of the CPI fixed, making it much more resistant to change. Toss in the applicances, computers, clothing, cars, quality index changes, substitution effects, and voila, a CPI index of which 50% or more of the items don't change. But now that rents are finally moving up after 23 years of stagnation, and home prices are falling, the BLS's "imputed rent" theory will work against them. Maybe it will be time to change back to counting real housing prices for a while (lol).
roadrunner
On the theory side of the equation...
Maybe we have missed the transition from our parents way of things to modern day finances and money management. Look at the issue of savings. Savings are low because of a new level of demand on the middle class (our primary saving group) to fund their endeavors. Childrens programs at school...they want money for this and that from the parents, be it atheletic team participation, band participation...all of the activities that used to be social and developmental now cost the parents plenty and we're not even talking about the impact college attendence has on the middle class providers, they get them signed up for credit cards as soon as they walk in, as a matter of adult right for being at college. At work, the middle class pays for all the federal programs (SS, FICA, Medicare...etc) by payroll deduction and then can pay for additional life insurance, disability, pretax healthcare plans, the list is long. Shoes for the kids, clothes for the kids: name brand will cost the middle class a fair amount, and the TV even tells the kids what to buy, what to eat, what to wear and the news services provide a chorus of the same hype. Media, peer pressure, internet is geared to sucking buks from those that need to be saving buks. The middle class used to be the homebuyers and nest egg builders of the previous generation but no more. It's like we market the middle class like fishermen catch mullet for bait, we have to haul them in by the netload to make the numbers work. We suck every buck we can get from them and then we push them into credit cards (@ 20% interest), refi's, paycheck loans, 8% car loans, ARM's, anything we can do to suck every last employer provided buk away from them and into some financial institution or cash flow enterprise. We never give them a chance to save, I'm suprised that they can even breathe and yet we chide them for not saving. And just to make it a little more challenging, our govt. puts up the AMT for any that might have a breath at getting free. And...since the middle class doesn't really have any real opportunity to itemize their return, they pay their full fair share of taxes.
The upper and upper middle class are good, they are in with the institutional programs, they have the where with all to manage a new car every few years, can step up to a nicer house every ten years or so, get vacations, check their interest rates, pay off any nasty little credit problems with either a check from savings or if things get really awkward, they can sell some stock or tap a CD. It's at least managable for the upper and upper middle class. They are players to faceless institutions like Chase bank, Citibank, Morgan Stanley, Ameritrade...they can call the bank and after a quick look at the account, the bank employee will help them as much as they can. Go to a doctor, do your copay, get your meds at the pharmacy, life is good and if it's not, they can afford a good attorney to make it right. And don't forget that paying taxes is not a good thing, you need deductions to make things work out so you'll need a good tax guy too.
The middle class can't save, they can't buy gold, they are not the middle class of yesteryear, things have changed. The middle class are no longer the share holders at the local savings and loan, they are no longer putting away significant savings for their retirement...heck, when is the last time you went to a savings and loan...it's just not done anymore. You know the S n L, you know the president, you know the loan guys that have been there for a long time, you know the teller, they don't ask for your ID when you want to cash a check. Now you either have a free go-go bank account with no minimum balance (minimum cash deposits of $1000 required), or you have a credit card balance that you struggle to pay off each month. We don't want the middle class to save...they must feed the great machine. We must have every dollar we can possibly get from them just to keep the wheel turning. So, things have changed from when our mom's and dad's were starting their careers, it's different now. We really don't want the middle class to save, we want them hooked up from the git-go and we want to keep them like that. As far as modern life styles, the current upper middle class is our mom and dad's middle class. Middle class now is a struggle, worse than our previous generation had experienced.
So, why don't communities get together and have a small savings and loan. Why doesn't a group of people get together and make a little thrift bank. Why don't people get out and help people understand the reality of the situation. Why don't they create some small, local institutions so the worker bees can put away $50 a paycheck or get a car loan at 4% and a savings interest rate of 7% or 8% for the first $10,000. Certainly that is part of the answer...how can you give a savings interest rate of $4% and charge the same guy 8% for a car loan...as they say in the industry, he's upside down in this deal.
Welcome to the new paradigm.
i still think Buffet has no gold though
Proud recipient of two "You Suck" awards
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just how insidious our perceived perspicacity actually is.
We are a monument to insularity and financial fulminations.
On the other hand.......Some folks are pretty darn smart.
Camelot
Mhammerman,
In my opinion two large basic things changed in the boomer generation, first morality was sacrificed for , “a better life” and second the Lord has decided not to visit on the baby boomers total real world disasters i.e. a world war, world economic depression etc. at least not yet.
I just returned from a trip to Colorado to see an old friend. My friend is a typical upper middle class American who owns and runs a wheelchair business. He puts in about 10 hours per day six days a week, and gives most of his money to one government or another. His 40 year old children still drop by several times per week to get money from daddy, or fix their cars, etc..
When we discussed the current situation of politics, the economy, and taxes, his comment was that, “only a full blown depression will ever get things straight again”
All of these pollsters that say they cannot figure out why everyone says they are doing fine, but the country is on the wrong track, should realize that deep down inside most Americans know things are really screwed up, but feel powerless to make any changes.
I think my friend is right, only a full blown depression, or something of that magnitude is going to make our government, and its voters, come back to real moral values and a since of what makes senses.
I know I've kept up on this thread since it was started. Same for Goldsaint I'm sure. And you can probably toss in Ttown, Deadhorse,
Tincup, Mhammerman, Bear, Cladking, Oreville, Topstuff, Mrearlygold,
Ellewood, Baley...and others who have been frequent responders as well. Apologies to any who I left out who have been here since day 1, read the whole thing, and have contributed.
Are there enough medals to go around?? I'd be happy with silver though gold is nicer.
roadrunner
<< <i>The battle will rage today. Gold is on the verge of being cut loose to run free. Stock houses are turbulent and banks with the demand for another rate cut are stashing their cash in the big 'ol vault never to see the sun again until this stuff blows over, hoping that it will. Paper gold should be heavily pressured with the holders seeking to redeem their certificates for something a little more substantial. We should see if GATA has any huevos...sticks up, men. >>
Agreed! I've long said that the last part of '07 would be a watershed moment. Still, the battle is far from over.
The big boys are still trying mightily to keep their house of cards in place. Maybe I should say, house of paper.
It promises to be interesting.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Hyperinflation Will Blow The Economic Doors Off
paper, backed by assets that may or may not exist.
Our money is backed by only the confidence in the Government
printing the money. As the dollar falls in value, that confidence
is becoming more of a vapor then a rock. Stocks are a confidence
game waiting for a whiff of reality to set values significantly lower.
Rising prices for metals are more a negative evaluation of the National
state of the economy and a rush to a storehouse of perceived value.
Exotic financial instruments are now in the realm of many hundreds of trillions
of dollars. Nobody knows what the underlying values are, if any. If confidence cracks
as it now appears is happening, the pain will be deep and broad. The 100 billion
emergency liquidity fund being put together by financial institutions,
may well be only a drop in a truly gigantic bucket. The day of financial reconing has been
a long time coming but it is, I fear coming.
The Government is faced with only several economic options. Inflate the money supply to
to reduce the effect of enormous debt and to delay recession , deflation and depression..At the
risk of hyperinflation.
reduce government spending, increase taxes, reduce the money supply and allow interest rates
to rise...this will correct the economic excesses at the cost of decades of suffering and decline
in GDP and standard of living.
The third course is a prudent long term, balanced budget, modest tax increases, reduction of all
non required spending and increased government regulation of investment vehicles. This would be
an austere and unpleasant dose of bitter medicine that would be politically difficult for
our politicians and population to endure. Medicine to treat a disease is often bitter and unpleasant.
It would mean closing of tax loopholes for the rich and mega corporations, more taxes for the working
stiff, inducements to increase the savings rate, taxing of offshore tax gimmicks, renewed enforcement
of Anti Monopoly Laws.
The course I believe our politicians will take is the initially easier way. Inflate, spend, borrow until
the credit card account is closed by the world.
Camelot
Ttown,
Thanks for the post, but the conclusions of some of these guys still bewilder me just a little.
Mr. Wiegand recommends the below at the end of his letter, but there does seem to come a time when elimination of debt is not a good thing if hyperinflation is just around the corner?
When we started this thread most of us agreed that elimination of debt should be a priority, and after that one should begin a process of building hard assets. Has that time past?
There will come a time in this worldwide paper play that one should just concentrate on buying hard assets, as the elimination of debt for most folks is a long term process.
If gold and silver are going to go through the roof to, $2,000 or $3,000 per ounce for gold, it seems that buying these assets now, then selling them at the higher prices and paying off debt might be a smarter move?
In addition I think it is time for all of those that want to own stocks to look at the assets behind the stocks they own. During the great inflations of the past many shares of hard asset companies went through the roof along with gold and silver. Any online broker will give you the full details about the companies one might want to hold, and its real assets.
As all of this comes to pass I think that we will find that those large dull old companies like Walmart, Burlington Northern (that Buffet is buying), steel companies, etc. will have large market share price increases. I would also think that many of the tech companies that are all fluff, smoke and mirrors, like many dot coms, Googles, etc. will have a very hard time justifying their shares prices.
“We wanted our readers to clearly understand what is happening to international currencies and their devaluation by over-printing. Russia prints at the rate of +50% annually. The United States is shoveling it out between 11% and 14%. Asian central banks produce new cash at rates between 12% and 20%. Where do we suppose this all ends? The ending is cast in bronze and it will not be a happy event. Review history and watch what our leaders do not what they say.
Your only conclusion is to eliminate debt, buy and trade gold and silver investments and most of all become an independent thinker and leader. Take care of yourself, your family and your friends. Most of them will not believe these ideas so move quietly to take charge and guarantee your future and theirs. Not only can you protect what you have, but you’ll move swiftly to increase your holdings and might even become wealthy in the process. Good luck and good trading! - Traderrog
Roger Wiegand “
No need to raise taxes, either modestly or outrageously.
All the funds from income tax immediately go overseas to the Federal Reserve private bank. None of it goes to the infrastructure or welfare of our nation. Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around.
That's in spite of what nearly all Democrats will tell you. JFK was faced with a declining economy and he lowered taxes across the board and quickly brought the nation back into a growth period. Today he would be called a Republican, based on his policies.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
If gold and silver are going to go through the roof to, $2,000 or $3,000 per ounce for gold, it seems that buying these assets now, then selling them at the higher prices and paying off debt might be a smarter move? >>
This is extraordinarily risky of course.
Our comeuppance has been coming up since the 1960's. You have to be
prepared to hang onto the incurred debt for a protracted period for this to
be safe.
Will it become a good idea in the future? Possibly, but there should be am-
ple warning of impending difficulty.
I still believe this struggle with commodity prices will continue and there's
no end in sight. The powers that be will allow gold to run a little more and
then put on the brakes hard again. Eventually when the dollar is at lower
values and gold at higher this tactic will work and gold will drop sharply. I
still think the dollar will be significantly lower and gold far higher before this
balance is achieved. It will probably be played out over so much time that
buying metals on credit is a losing proposition or will be profitable but not
worth the enormous risk.
I think there are way too many variables in the economy to boil them down to this conclusion. This article addresses the problems of the Laffer curve:
Link 1
From another website, I found these points:
"The Laffer Curve only implies that there are conditions where a tax cut will result in increased revenues. The Curve also implies that there are conditions where a tax increase will result in additional revenues. For whatever reason, the former is almost always assumed despite our historically lower marginal rates in the upper brackets.
[Laffer relies upon] Say's Law to be true, e.g. supply creates its own demand. Keynes pretty much demolished it, but here are the assumptions involved:
a) Business investment is solely determined by an ability to produce.
b) If more money is available, more goods will be produced.
c) Therefore, if you cut taxes, production will be increased resulting in an increase in taxable events and hence more revenue."
Next, a site attempting to create what the Laffer Curve looks like using real data:
Link 2
The Laffer Curve is something that is still being debated. In my brief web search, it seemed generally that economics professors at Ivy League colleges think it questionable, while think tanks considered it gospel. The think tanks might have a pecuniary interest in espousing their belief.
<< <i>
Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around. >>
Awesome, just lower them to 0% and watch the government rake in the revenue!!...
The country is iving beyond its means and the longer we put off lowering our standards of living the worse the pain we'll feel in having no remaining choice. Other nations are approaching our lifestyle and won't forever be our patsies, absorbing our debt, funding our lifestyle, and producing for us cheaply. Sharing the oil is only the beginning. No child left behind is a bandaid. We have to have no productive worker left behind....destroy layers of societal middle management that contribute little toward their own personal compensation.
NSDR - Life Member
SSDC - Life Member
ANA - Pay As I Go Member
<< <i>
<< <i>
Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around. >>
Awesome, just lower them to 0% and watch the government rake in the revenue!!... >>
It wouldn't make any difference as the money goes overseas. People, wake up!
What it would do is increase business growth, investments and savings. That would be a great thing!
It was the Reagan tax cuts that allowed the increased R&D which resulted in the tech boom of the 90s.
Laffer curve or not, the history of the last 50 years, at the very least, shows that lowering taxes improves the economy and results in increased revenue to the collection agency for the Federal Reserve, most folks call them the IRS. Remember that they aren't a government agency, if they were, would they have to pay postage? That's the first thing people should notice. Name another real government agency that doesn't have franking privileges.
People have to let go of the brainwashing that says the Federal Government actually receives the income tax revenue. It doesn't and that's a fact. It's the biggest scam ever perpetrated on the American people.
How did the government survive before 1913? Answer: the same way they do now. Income tax doesn't add anything. Now FICA, OTOH, is a different story completely and that does go into the general revenue which is distributed to welfare and all sorts of things it was NEVER supposed to be used for.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Viet Nam War. Guns and Butter. That ended with a disaster
and an inflation rate of near 20%. If war we are having,
then a way to pay for it must be found. We can not have business
as usual with a war that has run longer then our participation in WW2.
With a war that is costing more then WW2. ( Not adjusted for inflation)
Camelot
<< <i>When we started this thread most of us agreed that elimination of debt should be a priority, and after that one should begin a process of building hard assets. Has that time past?
>>
With the previous direction of the economy there was a strong belief that a recession/depression was on the way. Money would cease to be as plentiful as the past. It appears however that this direction is changing. It is obvious with the huge amount of debt at all levels that the 2 main choices of government policy are :
A) High rates, strong dollar..............Debts do not get paid, stocks crash, pensions/municipalities default, tax receipts plummet and the economy collapses ala 1930's. Then the holders of dollars, foreigners, buy up all US assets
Judging from the recent FED action I'd have to say plan B is in play. The worlds largest debtor will be able to pay back loans with cheaper dollars.
Although it is never recommended to borrow money to spend on good times of material goods it would be smart to borrow (at fixed rate)anytime you can invest at a better rate . This means if you can borrow at 5% and you believe that inflation will run 10-20% for the next 5+ years then it would make sense to borrow to invest.
This method made a lot of people rich in the 70s and it will again.
<< <i>We can not have business
as usual with a war that has run longer then our participation in WW2.
With a war that is costing more then WW2. >>
Is that in 1940s dollars versus 2007 dollars?
Adjusted for inflation, I may be wrong, but I doubt this current situation is costing more than WWII.
We aren't rationing gas and meat and turning in our pots and pans for the metal to be used in the war. Back then, people saved and turned in bacon grease to be used for machine gun belts. Even old clothing was turned in and used for the war effort. Sorry, I can't see this as being on the same level.
It's a sad fact that war is profitable and tends to help the economy. It's a dirty little secret.
Our problem now is we lack the will to win, to crush them till they have no more fight left. Many Iraqis have asked me what has changed with America. In the past, we crushed our enemies and collateral damage was just part of it. That also destroyed the enemy's will to fight. We did the same thing in Gulf War One, but we should never have stopped as the UN resolution called for. After 9-11, we should have crushed these Islamo-fascists immediately, hard and fast to start with and we wouldn't be here now.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
remember the war bond drives? mom and dad still do
What do you think we should do (rather than what we are doing now)?
<< <i>
<< <i>
Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around. >>
Awesome, just lower them to 0% and watch the government rake in the revenue!!... >>
Although you are being sarcastic, you cannot deny that tax cuts have increased revenues and decreased the deficit to a 5 year low, which if you rely on the mainstream media for your economic news, is indeed news to you:
Interesting link, read the whole thing.
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
if we were willing to lose 405,000 men in battle and fought this like WW2 this war would have been over years ago.
how much were those lives worth? are you figuring in that # in your "cost".
ridiculous argument.
hi, i'm tom.
i do not doctor coins like some who post in here.
<< <i>to crush them till they have no more fight left >>
Crush who?? We haven't even defined the enemy. We are at war with "terror". That means an unending war with an undefined enemy. No capital to capture, no enemy to sign a surrender.
Continuous spending in a unwanted occupation that has no defined goal with money borrowed from China will destroy this country faster than any "terrorist". We played this same game iin Vietnam and 7 years later we had spent ourselves into inflation on an unwinnable war. Here we go again, borrow and spend and the military-industry gets rich and inflation will be back just like the 70's.
Death to Eurasia!!!
Long Live Big Brother!!
Long Live Big Brother!!
In any case those charts look as whacky as the supposed Clinton "surplus" that "smokin" Bill achieved by counting Soc Sec. revenues in his budget. In 2006 we achieved a record amount of debt to the order of $800 billion plus (borrowing $2 billion a day on average to run the country). Those charts show nothng of the kind. So something is amiss with those HF figures. I can't imagine we are borrowing any less money in 2007. But we are certainly not headed towards a balanced budget unless some smoke and mirrors accounting is being employed. And these bogus numbers don't even consider entitlement debt whatsoever. Guess you'd call those off the balance sheet numbers. If GAAP accounting was used on the US budget, we'd be bankrupt and in the hole for Trillions. Any Wall Street firm using govt acctg "standards" would see their CEO and CFO jailed for fraud.
roadrunner
Next question?
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
We have made life infinitely more complicated than it once was, and the unwinding of what we have created will be just as complicated, and I can assure you no one on this earth has the ability to assert enough control to make it all better.
For Joe Average, the future is most certainly uncertain.
If there were someone who could fix it, why have they allowed the current situation to transpire?
Profit??
Sick profit?
What say you?
<< <i>
<< <i>
<< <i>
Besides, history has continually shown that lowering taxes increases the amount raked in by the IRS, not the other way around. >>
Awesome, just lower them to 0% and watch the government rake in the revenue!!... >>
Although you are being sarcastic, you cannot deny that tax cuts have increased revenues and decreased the deficit to a 5 year low, which if you rely on the mainstream media for your economic news, is indeed news to you:
Interesting link, read the whole thing. >>
Look more closely. And read the link. You make stuff up as you go, huh?
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
<< <i>We have made life infinitely more complicated than it once was, and the unwinding of what we have created will be just as complicated, and I can assure you no one on this earth has the ability to assert enough control to make it all better.
For Joe Average, the future is most certainly uncertain.
If there were someone who could fix it, why have they allowed the current situation to transpire?
Profit??
Sick profit?
What say you? >>
I say, I don't really get your point(s). Can you elaborate?
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
<< <i>I say, I don't really get your point(s). Can you elaborate? >>
How about this,
The bankers and the corporate war suppliers are getting rich from the Trillion dollars a year we spend to keep us safe from the few hundred "Militant Islam. Islamofascist terrorists" who don't even own a boat to get here. .
Keeping us scared is keeping them rich.
2. That being said, who can predict what the future holds, other than chaos?
3. It is my opinion that next to nothing is done for the common good by those in power these days, and I also believe those in power are those who control the money, which is just exactly the way they planned it to be. Not the only problem is that they have created a monster that they can no longer control.
4. Good thing there is plenty of delta nine tetrahydrocannabinol to help everyone enjoy the ride. ( That one is for you pharmer..... you fiendish dispenser of beta lactamase inhibitors you)
5. Sick profit is profit at the expense of unknowing and otherwise good folk in my opinion.