Well Economic news says inflation up , economy growing at a brisk 3.9 percent but gold and silver flying this morning . Looks like I will need a crying buddy
<< <i>Rate may get cut or not . PMs may go up or down. If you can play on this short term then you are better than I.
One thing I know is that inflation is a given. Forget the short term play, Ive called too many wrong. Think Ill just hold my PMs for 5-25 years. >>
Agree completely. Anyone who thinks the longer term economic picture is rosy needs to change their glasses. Inflation is unavoidable in our economy. That's fine if you don't stuff dollars in a mattress for decades as long as the overall growth paces it. I cannot imagine that happening with (1) aging boomer liabilities, (2) increased consumption from an advancing third world (aka emerging markets), (3) expensive solutions to climate transition issues, (4) dependence on offshore products and services, (5) the absorption of immigrants with an average skill set that would have been useful 50 years ago but not now in advancing our economy. We consume far more than we can justify. The remnant of products we make are increasingly vulnerable to international competitive encroachment.
When the life boats go down, the captain and crew might or might not abandon ship ahead of women and children. (How ethical are our congressmen anyway?) Gotta be smart and watchful. I am not thinking the doom and gloom is quite abyssmally deep. The life boat analogy just sounded good. However, it seems clear to me that America's best years are not ahead of now.
<< <i>Rate may get cut or not . PMs may go up or down. If you can play on this short term then you are better than I.
One thing I know is that inflation is a given. Forget the short term play, Ive called too many wrong. Think Ill just hold my PMs for 5-25 years. >>
Agree completely. Anyone who thinks the longer term economic picture is rosy needs to change their glasses. Inflation is unavoidable in our economy. That's fine if you don't stuff dollars in a mattress for decades as long as the overall growth paces it. I cannot imagine that happening with (1) aging boomer liabilities, (2) increased consumption from an advancing third world (aka emerging markets), (3) expensive solutions to climate transition issues, (4) dependence on offshore products and services, (5) the absorption of immigrants with an average skill set that would have been useful 50 years ago but not now in advancing our economy. We consume far more than we can justify. The remnant of products we make are increasingly vulnerable to international competitive encroachment.
When the life boats go down, the captain and crew might or might not abandon ship ahead of women and children. (How ethical are our congressmen anyway?) Gotta be smart and watchful. I am not thinking the doom and gloom is quite abyssmally deep. The life boat analogy just sounded good. However, it seems clear to me that America's best years are not ahead of now. >>
Completely agree with both of you , I think that most of us see the PMs as one of the plays that willl help protect our assets in the future, The only reason that the short term play has been prevalent in the last few days is that those of us that trade GLD and SLV have seen some profit in the last 2-3 weeks and today the FED will make one of 3 decisions, (hold, 1/4 point or 1/2 point) The market appears to have priced in the first 2 and the pms will probably correct ( eating our profits) .So we have elected to protect them by selling out and those with cojones going short . We can alway get back in this afternoon. Nobody ever got hurt taking a profit!
"...expensive solutions to climate transition issues"
Yeah, Baby...now we're talking! We're talking very pricey desalinization plants, heavy solar power technology purchases, major erosion contol and water management investments including revisiting the awkward and testy water rights issues (state, national and international) that are all based on 1800''s laws, very heavy petroleum use fees to pay for the new tech, major reforestation projects and air borne hydrocarbon reduction technologies, major local and nat. govt. legislative efforts...all will be mandatory in less than 20 years or less, methinks. But, it's not all bad because these will be huge employment sectors to be born from this and that means more specialty schools, more facilities...it's a whole new growth sector. Resources are going to become very precious and valuable and people/govt's are going to pay and pay big in buks and wars. Now, if the govt. has the huevos to realize this and starts training the people and setting up the schools, we can be there. If the govt. just focuses on more entitlement programs and patching the holes in the levee...it's going to be VERY expensive in quality of life sacrifices and technobuks. Somehow, I just don't think the feds are up to the task; they seem to be pulling an ostrich on us as far as this topic goes. This kind of forward thinking would go a long way to meeting the promise of new tech employment sectors to replace all the outsourcing of mac-jobs that we have sent to India.
mhammerman -- You got it right. The government and their lobbyists are myopic and self-centered. We waste so much on in-fighting over details on how big each guy's piece of pie should be and deceptive prestidigitation politics to get one's way. Everyone who goes so far as to suggest that the government doesn't genuinely represent its people end up looking like nutcases. But a spade is a spade. Very few can successfully make it in productive politics without selling their souls to one lobby or another. They are just mouthpieces (and Reagan was biggest of them) for others who would rather dodge the tomatoes. And nobody ever makes it to committee seats without that strong support. So no, I don't expect our government to do more than erect a minimal facade of taking the necessary actions.
<< <i>Watch out below(Dollar), Fed cut 25 basis points! >>
What was interesting was the whipsaw gold and silver took during the announcement. The market ain't buying the future outlook with respect to inflation and recession potential.
Cutting interest rates out of recession fears is counter productive when it further weakens the dollar and makes energy cost even higher. The rising cost of energy could strongly limit economic growth and further fuel inflation. But the stock market went up because when fixed income yields fall equitiies look more attractive to those folks whose future outlook does not extend much beyond the closing bell.
Back to where we were on Monday for gold and silver , all that excitement for nothing , dollar much lower though oil up big Follow thru tomorrow and gold at 800 or pullback because overextended???
I see a test of $800 and a only a small fall-back if any. More than likely we will run further from here. Even to $850-$875. Frankly, once $800 is cleared, there is no set resistance until $1000. While I don't see a run to $1000 any time in the next few months, it is possible to get there within weeks with the right circumstances....that was not possible a few weeks back. The only thing that could have derailed gold today was NO rate cut. It seemed that Bloomberg was leaked information from some hiher up (PPT?) that a rate cut was not gonna happen. Well so much for higher up sources. There are more bad sources of intelligence than good ones. Listen wisely. Oil at $94, USD index at a new low of 76.6, HUI with a new high, and even the Dow soaring. Looks like inflation to me.
Was nice to see $2-1/2 Libs in MS64 jump 10% today (they've been under-valued for months). Much of the generic gold has catching up to day. The longer gold hangs in this $770-$825 range the more than will creep up to match the May 2006 highs.
Logic would tell us that we should have a cooling off period now for PM’S and oil.
According to most REAL experts there is no oil shortage, and prices per barrel should be in the 70’s.
It appears now that some of the manipulations have been removed from PM’S, all those guys have moved to the oil pits?
My personal opinion here is that we see some dips in the PM ETF’S in the next few weeks that will allow us to get back in.
The tailwind of the FED meeting push is now gone, and from the announcement it does not sound like any more cuts this year. Sooner or later these guys have got to get back to the business of selling debt, and that means no more rate cuts, and perhaps increases.
In addition the 2008 political season is now officially underway, and folks attention will be drawn more and more to the holidays.
My guess here is that stock market players will take profits in the PM’S and petro shares and move to tech sales/ nat. gas/ heating oil, for the holidays and winter.
We all have our info. on how things will move in the next few years, but the PM’S and Oils cannot keep going up each week without a break.
This is very good,
"I sold SLV and GLD to protect my profits. I kept my physical holdings to protect my ass. "
Well, we cannot advance without continually pulling back to test support.
Oil isn't just about supply, but refining capacity and available reserves. The price of oil is all about the perception of all of that and a number of boogieman contingencies. Any fears that receive even partial validation these days will boost crude prices.
PMs can go up each week if inflation appears to be going up each week. Not saying it is or will though. Again, retracement to test and solidify support is an essential element for any commodity to soundly advance above established resistance levels. But that is all basic stuff you all know. I have less interest in the daily gyrations than the overall picture more long term. The cycles can be played to try to maximize equity in buys and returns in sells. Try to be consistent in that though. Nobody is.
Bear, considering that the crew is drunk and the captain is crazy, the broken steering wheel could work out in our favor. It's the leaking boat that bothers me most. How far is land? Are we off the shores of Iran, or Norway? That makes a big difference.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i> Frankly, once $800 is cleared, there is no set resistance until $1000. >>
What basis do you have for making any of these claims? This statement seems to be completely made up and has no grounding in any facts, other than a hope that gold will continue going up.
"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)
Any resistance remain resistance until it has been established as support. That is very basic. And I agree completely that there is no basis for presuming there is no further resistance between $800 and $1,000. Resistance will naturally present itself. There no unlimited bids and certainly not in the 25% gain range. Gold will get above $1K in time. When? Nobody knows. If the dollar declines sufficiently, it could go there due to natural inflation, buying power equilibrium, even with no exceptional interest in PMs.
---What basis do you have for making any of these claims? This statement seems to be completely made up and has no grounding in any facts, other than a hope that gold will continue going up.
my main reason for thinking it will reach 1000 soon is monetary inflation. lately i have been reminded of the 1970s. guns and butter.
you cannot spend spend, print print your way out of a mess. we should be making huge cuts in other programs not talking about even bigger programs.
it seems like common sense to me. in my short lifetime i have seen prices double on most everything i buy. some things even increased more.
i used to laugh when my mom told me when she was in college that 65 cents used to be enough for a big lunch at mcdonalds. now it does not buy a single item. you need 5-6 dollars for lunch.
if food keeps going up, why would not gold which takes a heck of a lot of resources to get out of the ground?
in 1970 a buick lesabre convertible cost, oh 3500? What is the cheapest car now? 12000 for a crappy KIA that has plastic fan belts and other cheap things to keep cost down?
kinda scary really. no wonder investors are so keen to get 10% yearly profits minimum of their investments. 4% is pathetic with costs going up so fast.
i used to laugh when my mom told me when she was in college that 65 cents used to be enough for a big lunch at mcdonalds. now it does not buy a single item. you need 5-6 dollars for lunch. >>
That sounds about right.
I can remember when the first one opened in my little town, I was 8 years old. I'd ride my bike 2 miles just to go there.
Regular hamburger, and it was quite a bit bigger than today, was 10 cents. Cheeseburger was 12 cents. Fillet of fish, my favorite, was twice the size and cost 12 cents also. Fries only came in one size, and there were plenty of them, cost 8 cents. Soft drinks were either 5 cents or a dime for a large and it really was large. 25 cents plus a penny for tax and I could eat a lunch fit for a King in my young mind. There was no such thing as a Big Mac back then.
I used to mow lawns for money(and coins) in the summer and I can remember filling my 1 gallon gas can for 15 cents too. Most of the lawns were 1/4 acre or more and I charged 50 cents on average. Got a lot of my first collectible coins from mowing lawns for the elderly.
Somehow, I really don't feel all that old, but I've seen a lot of prices go up by 1,000% or more since I began paying attention. I think my parents paid the incredible sum of $7,000 for the house I grew up in, and it had three bedrooms and two batrooms, we felt like Royalty.
That doesn't come close to just the property taxes I pay yearly.
"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 used to laugh when my mom told me when she was in college that 65 cents used to be enough for a big lunch at mcdonalds. now it does not buy a single item. you need 5-6 dollars for lunch. >>
That sounds about right.
I can remember when the first one opened in my little town, I was 8 years old. I'd ride my bike 2 miles just to go there.
Regular hamburger, and it was quite a bit bigger than today, was 10 cents. Cheeseburger was 12 cents. Fillet of fish, my favorite, was twice the size and cost 12 cents also. Fries only came in one size, and there were plenty of them, cost 8 cents. Soft drinks were either 5 cents or a dime for a large and it really was large. 25 cents plus a penny for tax and I could eat a lunch fit for a King in my young mind. There was no such thing as a Big Mac back then.
I used to mow lawns for money(and coins) in the summer and I can remember filling my 1 gallon gas can for 15 cents too. Most of the lawns were 1/4 acre or more and I charged 50 cents on average. Got a lot of my first collectible coins from mowing lawns for the elderly.
Somehow, I really don't feel all that old, but I've seen a lot of prices go up by 1,000% or more since I began paying attention. I think my parents paid the incredible sum of $7,000 for the house I grew up in, and it had three bedrooms and two batrooms, we felt like Royalty.
That doesn't come close to just the property taxes I pay yearly. >>
Yes, that does sound about right.
My Day used to make 65c per hour in the 60's. The stock market was priced in the hundreds in the 70s and gold was $35. Prices have increased but so has the means to pay them. 50 million jobs have been created in the last 30 years. And I predict in the next 30 years we will write the same stories.
Right now the dollar is cheap... very cheap, and commodities, most foreign currencies, and PMs are very expensive. Eventually, this cycle will reverse itself.
I remember back in 2000 / 2002 when a dollar was worth about about 1.15 euros and everyone was talking about how the European economies are so stagnant, they have bad demographics, too much red tape, etc. Fundamentally -- and I don't want to sound pollyanish here -- but not much has changes except the media hype. A major report came out yesterday confirming that our economy is the most competitive in the world. Our worker productivity level is the highest in the world. Our budget deficit and our trade deficit is shrinking, too. The stars have been aligned against us for a long time, but the situation will eventually turn. Bush is only in office for 1 more year, and after that, no matter who is in there, our reputation in the world is bound to improve.
However, the US dollar lags all those indicators. Good editorial in the Wall Street Journal a few days ago making these points and suggesting that we will see a rise in our currency in the medium term. Like Codohk, I am bullish about our future. I don't have a dog in the PM fight, but if I did, I would have cashed out my huge profits and waited for the next big opportunity.
"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)
We're probably just getting into the middle of the ARM resets, this will go on for a few years as many of them were 5 yr. ARM's (that's what the flippers/landlord types were using). The equities are obviously pressed for good news and little seems to be on the horizon. Gold is seemingly appreciating well and holding the gains with little effort so the cash is there. We seem to be going into a shake out, many of us have seen them before. These things are generally painful but good for a long-term healthy economy. Kind of like the dollar doctor telling us that this medicine is going to make you real sick but after that you'll feel much better.
<< <i>I believe that the US consumer is going to cut back on spending.
Not that they want to, they will just have to. Many credit cards are
maxed out, good jobs are drying up, credit and loans are tightening
and the loan fiasco is merely the tip of a very biiigggg iceberg. The issue
has not fully unraveled yet. >>
the tip of that iceberg is the sub-prime market, what's underwater are prime interest only 1st mortgage and credit....when it comes out that consumer spending has stalled and dropped...the ripple will go overseas.
5. Loss of quality manufacturing and mid management jobs
6.Open borders putting downward pressure on wages.
7. Excessive printing of money is causing a significant loss of value to Americans
8 Trade policies are unfair to Nation and American working people.
9. Federal statistics for Unemployment , Inflation and job creation have been manipulated by all political executive office holders.
10. Federal oversight of corporate and financial institution excesses, has been sorely lacking. When A CEO is fired for losing billions of dollars and yet leave with hundreds of millions of dollars as a going away present, something is terribly wrong with the system.
11. Over 2 million Americans are in danger of losing their homes and the number is growing with frightening rapidity.
12. Derivatives in excess of 400 TRILLION DOLLARS have an unknown base of actual valuation.
A storm of unimagined magnitude is coming and the damage will be extreme. The suffering with be severe, prolonged and wide spread.
PMs can go up each week if inflation appears to be going up each week. Not saying it is or will though. Again, retracement to test and solidify support is an essential element for any commodity to soundly advance above established resistance levels.
$100+ daily gyrations in gold are coming. Just a matter of when.
The dollar is cheap, and will continue to get cheaper over time, settling out somewhere in the .40 to .50 range eventually. It may make some rebounds to 0.80 (unsuccessfull so far though)
remember back in 2000 / 2002 when a dollar was worth about about 1.15 euros and everyone was talking about how the European economies are so stagnant, they have bad demographics, too much red tape, etc. Fundamentally -- and I don't want to sound pollyanish here -- but not much has changes except the media hype. A major report came out yesterday confirming that our economy is the most competitive in the world. Our worker productivity level is the highest in the world. Our budget deficit and our trade deficit is shrinking, too. The stars have been aligned against us for a long time, but the situation will eventually turn. Bush is only in office for 1 more year, and after that, no matter who is in there, our reputation in the world is bound to improve.
Budget and trade deficits shrinking? How is that possible when we just had the worse TIC report in years last month? This is one report you can't cook so easily. Fed budget reports are as accurate as BLS CPI data. That "report" you mention on competition......sounds like something from the PPT or GS. Yes the dollar has lost 36% since those days in 2001/2002. It's the primary reason for the phony gains in the stock markets. In that time frame gold has tripled (a bit higher than 36%). Nothing phony about those gains.
....In determining country rankings, the WEF weighed strengths in their "12 Pillars of Competitiveness", including: institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market sophistication, technological readiness, market size, business sophistication and innovation. Completely ignored however are the measurable results of competitiveness, notably a trade surplus and a strong currency.
It is as if the WEF decided to judge a weight loss contest without using a scale, by instead focusing only on mental attitude, dedication, perseverance, and nutritional education! As a result the prize is awarded to the fattest contestant. Based on the empirical evidence of a gargantuan trade deficit, staggering global indebtedness, and a declining currency, the United States is clearly not the most competitive economy in the world.
You can thank the FED, PPT, GS, JPM, Citi, ML, and the boys for the above "record" of noteworthy competition.
"remember back in 2000 / 2002 when a dollar was worth about about 1.15 euros and everyone was talking about how the European economies are so stagnant, they have bad demographics, too much red tape, etc. Fundamentally -- and I don't want to sound pollyanish here -- but not much has changes except the media hype. A major report came out yesterday confirming that our economy is the most competitive in the world. Our worker productivity level is the highest in the world. Our budget deficit and our trade deficit is shrinking, too. The stars have been aligned against us for a long time, but the situation will eventually turn. Bush is only in office for 1 more year, and after that, no matter who is in there, our reputation in the world is bound to improve."
A major report came out yesterday confirming that our economy is the most competitive in the world. Our worker productivity level is the highest in the world. Our budget deficit and our trade deficit is shrinking, too. The stars have been aligned against us for a long time, but the situation will eventually turn. Bush is only in office for 1 more year, and after that, no matter who is in there, our reputation in the world is bound to improve."
Who issued the report? I have news, too. If our worker productivity, budget deficit, and trade deficit are all improving, and we haven't been attacked at home since 911, why are you giving Bush such a bad rap?
Bush complies with what the bankers tell him, as did Clinton, and the others before him, except Reagan. Reagan did us all a favor by mainstreaming gold ownership. All politicians have their agendas, but the bankers are calling the shots in the economic arena, and that spills over into all other governmental policies. The main culprits here are the bankers and their Wall Street minions.
A rising stock market? Yeah, BFD - as long as the dealmakers, their attorneys and the financiers are raking in the money, who cares if we get our asses in a sling overseas, along with the rest of the perfect storm that Bear describes?
Q: Are You Printing Money? Bernanke: Not Literally
5. Loss of quality manufacturing and mid management jobs
6.Open borders putting downward pressure on wages.
7. Excessive printing of money is causing a significant loss of value to Americans
8 Trade policies are unfair to Nation and American working people.
9. Federal statistics for Unemployment , Inflation and job creation have been manipulated by all political executive office holders.
10. Federal oversight of corporate and financial institution excesses, has been sorely lacking. When A CEO is fired for losing billions of dollars and yet leave with hundreds of millions of dollars as a going away present, something is terribly wrong with the system.
11. Over 2 million Americans are in danger of losing their homes and the number is growing with frightening rapidity.
12. Derivatives in excess of 400 TRILLION DOLLARS have an unknown base of actual valuation.
A storm of unimagined magnitude is coming and the damage will be extreme. The suffering with be severe, prolonged and wide spread. >>
I bet you are a lot of fun at a party. I'm just gonna kill myself now.
The World Economic Forum issued the report on the competitiveness of the US economy - LINK.
Mhammerman, if you don't remember when the dollar was stronger than the euro, and the reasons for it, you need to go back and re-read some current events articles from around 2000 to 2002.
As for the broader issue, I don't hate Bush (in fact, I voted for him twice). But he has made some major economic mistakes. Massive deficit spending from 2003-2006 while our economy was growing and no longer in a recession was a big mistake. This guy has grown government more than even the Democrats did. That sends signals to the rest of the world that we are on an unsustainable course.
Apart from that, Bush has basically done nothing to reduce our dependence on foreign oil -- and all this does is send more and more money to our "friends" in the Middle East and Venezuela and other hell-holes (along with causing our trade deficit to rise tremendously). As one article explains, "the deficit widened from $125 billion in 1996, which was equal to 1.6% of U.S. GDP, to an all-time record of $857 billion [in 2006], which was equivalent to 6.5% of U.S. GDP, also a U.S. record." LINK. Only now is it slowly starting to shrink, though it's still above $700 billion, and only after our currency has fallen by 40% or more against most other countries. Have you ever heard Bush say anything about the trade deficit? The budget deficit? The loss of manufacturing jobs? Does he project any image about caring about these issues in the least?
Apart from that, his style toward the rest of the world - especially our allies - is unnecessarily antagonistic and naive. Say what you will about Clinton, but when I lived in London in 1997 and 1998 and studied mainly with left-wing European graduate students, I never encountered any hint of anti-Americanism. Could you say the same thing today?
I just don't think he has a good sense of the world. One of the dumbest things I ever heard a president say was his comment about "looking into the soul" of Vladimir Putin. One of the most pro-US places in the world is Poland, where people still remember the help the US provided during the Cold War in toppling communism and where there is still a lot of admiration for the US. Even there, when I last visited a year ago, many people don't like Bush and the direction he is leading the US. These aren't a bunch of knee-jerk European socialists; these are people who love Reagan and loved Bush's father.
Once he is gone, I expect our image in the rest of the world to improve, and that will matter for our bottom line well-being.
"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)
"Mhammerman, if you don't remember when the dollar was stronger than the euro, and the reasons for it, you need to go back and re-read some current events articles from around 2000 to 2002."
Nice argument and well stated but the euro wasn't even monetized until 2002 when it replaced the ECU so it is difficult to fathom what you are referring to. Euro monetized
<< <i>"Mhammerman, if you don't remember when the dollar was stronger than the euro, and the reasons for it, you need to go back and re-read some current events articles from around 2000 to 2002."
Nice argument and well stated but the euro wasn't even monetized until 2002 when it replaced the ECU so it is difficult to fathom what you are referring to. Euro monetized >>
"The euro was introduced in non-physical form (travellers' cheques, electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the Eurozone) ceased to exist independently in that their exchange rates were locked at fixed rates against each other, effectively making them mere non-decimal subdivisions of the euro. The euro thus became the successor to the European Currency Unit (ECU). The notes and coins for the old currencies, however, continued to be used as legal tender until new notes and coins were introduced on 1 January 2002." LINK
Still confused?
"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)
Well, since there were no ECU exchange rates for the USD in 1999 or 2000, it is still difficult to understand how the dollar was valued against the ECU. Exchange rates for ECU in dollars in 1999
Maybe I am confused...but can't find any support for your argument in the reference material.
Or the first paragraph of page 2 of this academic paper: LINK.
"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)
How do you make that statement and reference it to a paper based with the thesis:
"Simply put, the question that we want to answer is: can we generate the appreciation dynamics of the dollar with respect to the euro using the Mundell-Fleming-Dornbusch (MFD) model of exchange rates and a shock in long-run output expectations?"
Nice for economic theorists to chew on over dinner but still doesn't say what a Euro was worth against the USD in 1999-2000.
Read the CNN article, or look at the graph from the Fed report. According to CNN, 92 US cents got you 1 euro back in August 2000. In other words, 1 US dollar was worth about 1.086 euros. That's a real number that mattered for exchange rate purposes. But I think you're confused by the fact that the euro coins and paper money hadn't been rolled out yet until Jan. 1, 2002.
The key point is that when the euro was introduced in Jan. 1, 1999, the countries joining the euro froze their currencies into a single, permanent exchange ratio with the euro. I don't know each of those numbers offhand, but they are easy to look up. Once 2002 rolled around, all that changed was the banknotes and coins. The underlying currencies had ceased to separately exist in 1999, and for foreign exchange purposes that is what matters.
"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)
Comments
One thing I know is that inflation is a given. Forget the short term play, Ive called too many wrong. Think Ill just hold my PMs for 5-25 years.
<< <i>Rate may get cut or not . PMs may go up or down. If you can play on this short term then you are better than I.
One thing I know is that inflation is a given. Forget the short term play, Ive called too many wrong. Think Ill just hold my PMs for 5-25 years. >>
Agree completely. Anyone who thinks the longer term economic picture is rosy needs to change their glasses. Inflation is unavoidable in our economy. That's fine if you don't stuff dollars in a mattress for decades as long as the overall growth paces it. I cannot imagine that happening with (1) aging boomer liabilities, (2) increased consumption from an advancing third world (aka emerging markets), (3) expensive solutions to climate transition issues, (4) dependence on offshore products and services, (5) the absorption of immigrants with an average skill set that would have been useful 50 years ago but not now in advancing our economy. We consume far more than we can justify. The remnant of products we make are increasingly vulnerable to international competitive encroachment.
When the life boats go down, the captain and crew might or might not abandon ship ahead of women and children. (How ethical are our congressmen anyway?) Gotta be smart and watchful. I am not thinking the doom and gloom is quite abyssmally deep. The life boat analogy just sounded good. However, it seems clear to me that America's best years are not ahead of now.
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ANA - Pay As I Go Member
<< <i>
<< <i>Rate may get cut or not . PMs may go up or down. If you can play on this short term then you are better than I.
One thing I know is that inflation is a given. Forget the short term play, Ive called too many wrong. Think Ill just hold my PMs for 5-25 years. >>
Agree completely. Anyone who thinks the longer term economic picture is rosy needs to change their glasses. Inflation is unavoidable in our economy. That's fine if you don't stuff dollars in a mattress for decades as long as the overall growth paces it. I cannot imagine that happening with (1) aging boomer liabilities, (2) increased consumption from an advancing third world (aka emerging markets), (3) expensive solutions to climate transition issues, (4) dependence on offshore products and services, (5) the absorption of immigrants with an average skill set that would have been useful 50 years ago but not now in advancing our economy. We consume far more than we can justify. The remnant of products we make are increasingly vulnerable to international competitive encroachment.
When the life boats go down, the captain and crew might or might not abandon ship ahead of women and children. (How ethical are our congressmen anyway?) Gotta be smart and watchful. I am not thinking the doom and gloom is quite abyssmally deep. The life boat analogy just sounded good. However, it seems clear to me that America's best years are not ahead of now. >>
Completely agree with both of you ,
I think that most of us see the PMs as one of the plays that willl help protect our assets in the future,
The only reason that the short term play has been prevalent in the last few days is that those of us that trade GLD and SLV have seen some profit in the last 2-3 weeks and today the FED will make one of 3 decisions, (hold, 1/4 point or 1/2 point) The market appears to have priced in the first 2 and the pms will probably correct ( eating our profits) .So we have elected to protect them by selling out and those with cojones going short . We can alway get back in this afternoon. Nobody ever got hurt taking a profit!
I knew it would happen.
Yeah, Baby...now we're talking! We're talking very pricey desalinization plants, heavy solar power technology purchases, major erosion contol and water management investments including revisiting the awkward and testy water rights issues (state, national and international) that are all based on 1800''s laws, very heavy petroleum use fees to pay for the new tech, major reforestation projects and air borne hydrocarbon reduction technologies, major local and nat. govt. legislative efforts...all will be mandatory in less than 20 years or less, methinks. But, it's not all bad because these will be huge employment sectors to be born from this and that means more specialty schools, more facilities...it's a whole new growth sector. Resources are going to become very precious and valuable and people/govt's are going to pay and pay big in buks and wars. Now, if the govt. has the huevos to realize this and starts training the people and setting up the schools, we can be there. If the govt. just focuses on more entitlement programs and patching the holes in the levee...it's going to be VERY expensive in quality of life sacrifices and technobuks. Somehow, I just don't think the feds are up to the task; they seem to be pulling an ostrich on us as far as this topic goes. This kind of forward thinking would go a long way to meeting the promise of new tech employment sectors to replace all the outsourcing of mac-jobs that we have sent to India.
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I heard the elves were filing for unemployment.
Knowledge is the enemy of fear
<< <i>Watch out below(Dollar), Fed cut 25 basis points! >>
What was interesting was the whipsaw gold and silver took during the announcement. The market ain't buying the future outlook with respect to inflation and recession potential.
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The boat is leaking
The crew is drunk
The Captain is nuts
And the steering wheel is broke
Camelot
CG
Follow thru tomorrow and gold at 800 or pullback because overextended???
Frankly, once $800 is cleared, there is no set resistance until $1000. While I don't see a run to $1000 any time in the next
few months, it is possible to get there within weeks with the right circumstances....that was not possible a few weeks back.
The only thing that could have derailed gold today was NO rate cut. It seemed that Bloomberg was leaked information from
some hiher up (PPT?) that a rate cut was not gonna happen. Well so much for higher up sources. There are more bad sources
of intelligence than good ones. Listen wisely. Oil at $94, USD index at a new low of 76.6, HUI with a new high, and even the
Dow soaring. Looks like inflation to me.
Was nice to see $2-1/2 Libs in MS64 jump 10% today (they've been under-valued for months). Much of the generic gold has
catching up to day. The longer gold hangs in this $770-$825 range the more than will creep up to match the May 2006 highs.
roadrunner
According to most REAL experts there is no oil shortage, and prices per barrel should be in the 70’s.
It appears now that some of the manipulations have been removed from PM’S, all those guys have moved to the oil pits?
My personal opinion here is that we see some dips in the PM ETF’S in the next few weeks that will allow us to get back in.
The tailwind of the FED meeting push is now gone, and from the announcement it does not sound like any more cuts this year. Sooner or later these guys have got to get back to the business of selling debt, and that means no more rate cuts, and perhaps increases.
In addition the 2008 political season is now officially underway, and folks attention will be drawn more and more to the holidays.
My guess here is that stock market players will take profits in the PM’S and petro shares and move to tech sales/ nat. gas/ heating oil, for the holidays and winter.
We all have our info. on how things will move in the next few years, but the PM’S and Oils cannot keep going up each week without a break.
This is very good,
"I sold SLV and GLD to protect my profits. I kept my physical holdings to protect my ass. "
Me to!
Oil isn't just about supply, but refining capacity and available reserves. The price of oil is all about the perception of all of that and a number of boogieman contingencies. Any fears that receive even partial validation these days will boost crude prices.
PMs can go up each week if inflation appears to be going up each week. Not saying it is or will though. Again, retracement to test and solidify support is an essential element for any commodity to soundly advance above established resistance levels. But that is all basic stuff you all know. I have less interest in the daily gyrations than the overall picture more long term. The cycles can be played to try to maximize equity in buys and returns in sells. Try to be consistent in that though. Nobody is.
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The boat is leaking
The crew is drunk
The Captain is nuts
And the steering wheel is broke
Bear, considering that the crew is drunk and the captain is crazy, the broken steering wheel could work out in our favor. It's the leaking boat that bothers me most. How far is land? Are we off the shores of Iran, or Norway? That makes a big difference.
I knew it would happen.
<< <i> Frankly, once $800 is cleared, there is no set resistance until $1000. >>
What basis do you have for making any of these claims? This statement seems to be completely made up and has no grounding in any facts, other than a hope that gold will continue going up.
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my main reason for thinking it will reach 1000 soon is monetary
inflation. lately i have been reminded of the 1970s. guns and butter.
you cannot spend spend, print print your way out of a mess.
we should be making huge cuts in other programs not talking about
even bigger programs.
it seems like common sense to me. in my short lifetime i have seen
prices double on most everything i buy. some things even increased
more.
i used to laugh when my mom told me when she was in college
that 65 cents used to be enough for a big lunch at mcdonalds. now it
does not buy a single item. you need 5-6 dollars for lunch.
if food keeps going up, why would not gold which takes a heck
of a lot of resources to get out of the ground?
in 1970 a buick lesabre convertible cost, oh 3500? What is the
cheapest car now? 12000 for a crappy KIA that has plastic fan
belts and other cheap things to keep cost down?
kinda scary really. no wonder investors are so keen to get 10%
yearly profits minimum of their investments. 4% is pathetic with
costs going up so fast.
<< <i>
i used to laugh when my mom told me when she was in college
that 65 cents used to be enough for a big lunch at mcdonalds. now it
does not buy a single item. you need 5-6 dollars for lunch. >>
That sounds about right.
I can remember when the first one opened in my little town, I was 8 years old. I'd ride my bike 2 miles just to go there.
Regular hamburger, and it was quite a bit bigger than today, was 10 cents. Cheeseburger was 12 cents. Fillet of fish, my favorite, was twice the size and cost 12 cents also. Fries only came in one size, and there were plenty of them, cost 8 cents. Soft drinks were either 5 cents or a dime for a large and it really was large. 25 cents plus a penny for tax and I could eat a lunch fit for a King in my young mind. There was no such thing as a Big Mac back then.
I used to mow lawns for money(and coins) in the summer and I can remember filling my 1 gallon gas can for 15 cents too. Most of the lawns were 1/4 acre or more and I charged 50 cents on average. Got a lot of my first collectible coins from mowing lawns for the elderly.
Somehow, I really don't feel all that old, but I've seen a lot of prices go up by 1,000% or more since I began paying attention. I think my parents paid the incredible sum of $7,000 for the house I grew up in, and it had three bedrooms and two batrooms, we felt like Royalty.
That doesn't come close to just the property taxes I pay yearly.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
<< <i>
i used to laugh when my mom told me when she was in college
that 65 cents used to be enough for a big lunch at mcdonalds. now it
does not buy a single item. you need 5-6 dollars for lunch. >>
That sounds about right.
I can remember when the first one opened in my little town, I was 8 years old. I'd ride my bike 2 miles just to go there.
Regular hamburger, and it was quite a bit bigger than today, was 10 cents. Cheeseburger was 12 cents. Fillet of fish, my favorite, was twice the size and cost 12 cents also. Fries only came in one size, and there were plenty of them, cost 8 cents. Soft drinks were either 5 cents or a dime for a large and it really was large. 25 cents plus a penny for tax and I could eat a lunch fit for a King in my young mind. There was no such thing as a Big Mac back then.
I used to mow lawns for money(and coins) in the summer and I can remember filling my 1 gallon gas can for 15 cents too. Most of the lawns were 1/4 acre or more and I charged 50 cents on average. Got a lot of my first collectible coins from mowing lawns for the elderly.
Somehow, I really don't feel all that old, but I've seen a lot of prices go up by 1,000% or more since I began paying attention. I think my parents paid the incredible sum of $7,000 for the house I grew up in, and it had three bedrooms and two batrooms, we felt like Royalty.
That doesn't come close to just the property taxes I pay yearly. >>
Yes, that does sound about right.
My Day used to make 65c per hour in the 60's. The stock market was priced in the hundreds in the 70s and gold was $35. Prices have increased but so has the means to pay them. 50 million jobs have been created in the last 30 years. And I predict in the next 30 years we will write the same stories.
Knowledge is the enemy of fear
I remember when Quarter Pounders went from 79 to 89 to 99 cents, and I thought "Who can afford that?"
Imho this .25 cut was a MISTAKE and was a 'political' move. We are awash in liquidity and .25 will make no diff. to this economy.
If gold runs to a grand, oil would nearing $120/barrel ---the euro at 162/$..............etc. I do not believe this to be probable.
Not that they want to, they will just have to. Many credit cards are
maxed out, good jobs are drying up, credit and loans are tightening
and the loan fiasco is merely the tip of a very biiigggg iceberg. The issue
has not fully unraveled yet.
Camelot
<< <i>My little birdie in my stomach says that it is about time to go long on the dollar.
Imho this .25 cut was a MISTAKE and was a 'political' move. We are awash in liquidity and .25 will make no diff. to this economy.
If gold runs to a grand, oil would nearing $120/barrel ---the euro at 162/$..............etc. I do not believe this to be probable. >>
Why do they have to move proportionally? One cannot move independent from the others?
I remember back in 2000 / 2002 when a dollar was worth about about 1.15 euros and everyone was talking about how the European economies are so stagnant, they have bad demographics, too much red tape, etc. Fundamentally -- and I don't want to sound pollyanish here -- but not much has changes except the media hype. A major report came out yesterday confirming that our economy is the most competitive in the world. Our worker productivity level is the highest in the world. Our budget deficit and our trade deficit is shrinking, too. The stars have been aligned against us for a long time, but the situation will eventually turn. Bush is only in office for 1 more year, and after that, no matter who is in there, our reputation in the world is bound to improve.
However, the US dollar lags all those indicators. Good editorial in the Wall Street Journal a few days ago making these points and suggesting that we will see a rise in our currency in the medium term. Like Codohk, I am bullish about our future. I don't have a dog in the PM fight, but if I did, I would have cashed out my huge profits and waited for the next big opportunity.
<< <i>I believe that the US consumer is going to cut back on spending.
Not that they want to, they will just have to. Many credit cards are
maxed out, good jobs are drying up, credit and loans are tightening
and the loan fiasco is merely the tip of a very biiigggg iceberg. The issue
has not fully unraveled yet. >>
the tip of that iceberg is the sub-prime market, what's underwater are prime interest only 1st mortgage and credit....when it comes out that consumer spending has stalled and dropped...the ripple will go overseas.
1. Declining home values
2. Declining % of home equity
3. Zero savings rate
4. Increasing variable interest rates
5. Loss of quality manufacturing and
mid management jobs
6.Open borders putting downward pressure
on wages.
7. Excessive printing of money is causing a significant
loss of value to Americans
8 Trade policies are unfair to Nation and American working people.
9. Federal statistics for Unemployment , Inflation and job creation have
been manipulated by all political executive office holders.
10. Federal oversight of corporate and financial institution excesses,
has been sorely lacking. When A CEO is fired for losing billions of dollars
and yet leave with hundreds of millions of dollars as a going away present, something
is terribly wrong with the system.
11. Over 2 million Americans are in danger of losing their homes
and the number is growing with frightening rapidity.
12. Derivatives in excess of 400 TRILLION DOLLARS have an unknown
base of actual valuation.
A storm of unimagined magnitude is coming and the damage will be extreme.
The suffering with be severe, prolonged and wide spread.
Camelot
$100+ daily gyrations in gold are coming. Just a matter of when.
The dollar is cheap, and will continue to get cheaper over time, settling out somewhere in the .40 to .50 range eventually. It may make some rebounds to 0.80 (unsuccessfull so far though)
remember back in 2000 / 2002 when a dollar was worth about about 1.15 euros and everyone was talking about how the European economies are so stagnant, they have bad demographics, too much red tape, etc. Fundamentally -- and I don't want to sound pollyanish here -- but not much has changes except the media hype. A major report came out yesterday confirming that our economy is the most competitive in the world. Our worker productivity level is the highest in the world. Our budget deficit and our trade deficit is shrinking, too. The stars have been aligned against us for a long time, but the situation will eventually turn. Bush is only in office for 1 more year, and after that, no matter who is in there, our reputation in the world is bound to improve.
Budget and trade deficits shrinking? How is that possible when we just had the worse TIC report in years last month? This is one report you can't cook so easily. Fed budget reports are as accurate as BLS CPI data. That "report" you mention on competition......sounds like something from the PPT or GS.
Yes the dollar has lost 36% since those days in 2001/2002. It's the primary reason for the phony gains in the stock markets. In that time frame gold has tripled (a bit higher than 36%). Nothing phony about those gains.
You've got to be kidding me......
A quote from the above article by Schiff:
....In determining country rankings, the WEF weighed strengths in their "12 Pillars of Competitiveness", including: institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market sophistication, technological readiness, market size, business sophistication and innovation. Completely ignored however are the measurable results of competitiveness, notably a trade surplus and a strong currency.
It is as if the WEF decided to judge a weight loss contest without using a scale, by instead focusing only on mental attitude, dedication, perseverance, and nutritional education! As a result the prize is awarded to the fattest contestant. Based on the empirical evidence of a gargantuan trade deficit, staggering global indebtedness, and a declining currency, the United States is clearly not the most competitive economy in the world.
You can thank the FED, PPT, GS, JPM, Citi, ML, and the boys for the above "record" of noteworthy competition.
roadrunner
Huh...?
Who issued the report? I have news, too. If our worker productivity, budget deficit, and trade deficit are all improving, and we haven't been attacked at home since 911, why are you giving Bush such a bad rap?
Bush complies with what the bankers tell him, as did Clinton, and the others before him, except Reagan. Reagan did us all a favor by mainstreaming gold ownership. All politicians have their agendas, but the bankers are calling the shots in the economic arena, and that spills over into all other governmental policies. The main culprits here are the bankers and their Wall Street minions.
A rising stock market? Yeah, BFD - as long as the dealmakers, their attorneys and the financiers are raking in the money, who cares if we get our asses in a sling overseas, along with the rest of the perfect storm that Bear describes?
I knew it would happen.
<< <i>We are facing a perfect storm.
1. Declining home values
2. Declining % of home equity
3. Zero savings rate
4. Increasing variable interest rates
5. Loss of quality manufacturing and
mid management jobs
6.Open borders putting downward pressure
on wages.
7. Excessive printing of money is causing a significant
loss of value to Americans
8 Trade policies are unfair to Nation and American working people.
9. Federal statistics for Unemployment , Inflation and job creation have
been manipulated by all political executive office holders.
10. Federal oversight of corporate and financial institution excesses,
has been sorely lacking. When A CEO is fired for losing billions of dollars
and yet leave with hundreds of millions of dollars as a going away present, something
is terribly wrong with the system.
11. Over 2 million Americans are in danger of losing their homes
and the number is growing with frightening rapidity.
12. Derivatives in excess of 400 TRILLION DOLLARS have an unknown
base of actual valuation.
A storm of unimagined magnitude is coming and the damage will be extreme.
The suffering with be severe, prolonged and wide spread. >>
I bet you are a lot of fun at a party. I'm just gonna kill myself now.
Knowledge is the enemy of fear
Mhammerman, if you don't remember when the dollar was stronger than the euro, and the reasons for it, you need to go back and re-read some current events articles from around 2000 to 2002.
As for the broader issue, I don't hate Bush (in fact, I voted for him twice). But he has made some major economic mistakes. Massive deficit spending from 2003-2006 while our economy was growing and no longer in a recession was a big mistake. This guy has grown government more than even the Democrats did. That sends signals to the rest of the world that we are on an unsustainable course.
Apart from that, Bush has basically done nothing to reduce our dependence on foreign oil -- and all this does is send more and more money to our "friends" in the Middle East and Venezuela and other hell-holes (along with causing our trade deficit to rise tremendously). As one article explains, "the deficit widened from $125 billion in 1996, which was equal to 1.6% of U.S. GDP, to an all-time record of $857 billion [in 2006], which was equivalent to 6.5% of U.S. GDP, also a U.S. record." LINK. Only now is it slowly starting to shrink, though it's still above $700 billion, and only after our currency has fallen by 40% or more against most other countries. Have you ever heard Bush say anything about the trade deficit? The budget deficit? The loss of manufacturing jobs? Does he project any image about caring about these issues in the least?
Apart from that, his style toward the rest of the world - especially our allies - is unnecessarily antagonistic and naive. Say what you will about Clinton, but when I lived in London in 1997 and 1998 and studied mainly with left-wing European graduate students, I never encountered any hint of anti-Americanism. Could you say the same thing today?
I just don't think he has a good sense of the world. One of the dumbest things I ever heard a president say was his comment about "looking into the soul" of Vladimir Putin. One of the most pro-US places in the world is Poland, where people still remember the help the US provided during the Cold War in toppling communism and where there is still a lot of admiration for the US. Even there, when I last visited a year ago, many people don't like Bush and the direction he is leading the US. These aren't a bunch of knee-jerk European socialists; these are people who love Reagan and loved Bush's father.
Once he is gone, I expect our image in the rest of the world to improve, and that will matter for our bottom line well-being.
Nice argument and well stated but the euro wasn't even monetized until 2002 when it replaced the ECU so it is difficult to fathom what you are referring to.
Euro monetized
<< <i>"Mhammerman, if you don't remember when the dollar was stronger than the euro, and the reasons for it, you need to go back and re-read some current events articles from around 2000 to 2002."
Nice argument and well stated but the euro wasn't even monetized until 2002 when it replaced the ECU so it is difficult to fathom what you are referring to.
Euro monetized >>
"The euro was introduced in non-physical form (travellers' cheques, electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the Eurozone) ceased to exist independently in that their exchange rates were locked at fixed rates against each other, effectively making them mere non-decimal subdivisions of the euro. The euro thus became the successor to the European Currency Unit (ECU). The notes and coins for the old currencies, however, continued to be used as legal tender until new notes and coins were introduced on 1 January 2002." LINK
Still confused?
Exchange rates for ECU in dollars in 1999
Maybe I am confused...but can't find any support for your argument in the reference material.
Or read this article from CNN: LINK.
Or the first paragraph of page 2 of this academic paper: LINK.
How do you make that statement and reference it to a paper based with the thesis:
"Simply put, the question that we want to answer is: can we generate the appreciation dynamics of the dollar with respect to the euro using the Mundell-Fleming-Dornbusch (MFD) model of exchange rates and a shock in long-run output expectations?"
Nice for economic theorists to chew on over dinner but still doesn't say what a Euro was worth against the USD in 1999-2000.
The key point is that when the euro was introduced in Jan. 1, 1999, the countries joining the euro froze their currencies into a single, permanent exchange ratio with the euro. I don't know each of those numbers offhand, but they are easy to look up. Once 2002 rolled around, all that changed was the banknotes and coins. The underlying currencies had ceased to separately exist in 1999, and for foreign exchange purposes that is what matters.
Those prepared for it will get through it in better
shape then those who are not prepared. A period
of purging excesses is necessary if painful. My only hope
is that the American people will nominate and elect a person
with the courage to lead this Nation safely thru the storm to
a safe harbor.
Camelot
It could be worse, for instance - you could be in with both feet and the market could be declining. Being out and whole is ok.
I knew it would happen.
<< <i>The perfect storm is not the end of the world.
Those prepared for it will get through it in better
shape then those who are not prepared. A period
of purging excesses is necessary if painful. My only hope
is that the American people will nominate and elect a person
with the courage to lead this Nation safely thru the storm to
a safe harbor. >>
I get it now. If it wasnt the end of the world then it was Hillary's platform.
Knowledge is the enemy of fear