I have no problem with legitimate National Banks that are truly part of the republic and its currency tied to some sort of fixed or floating standard. What I'm not in favor of is a foreign owned bank entity that does not have the republic's interest at heart (ie the Federal Reserve).
The Fed is no more foreign owned that you are or I am. Because I know that you are truly interested in these issues, I also know that you are aware that the stock in the Fed is owned by commercial banks that are members of the Federal Reserve system (as described in previous posts). But of course that stock does not convey any of the typical ownership rights. Indeed, it is such a lousy investment that member commercial banks are required to own it and, to the best of my knowledge, no commercial bank owns more than the minimum required amount. The only "ownership" right of the stock is that the commerical banks vote for the directors of the Federal Reserve regional banks. And the only power these boards of directors have is to nominate the President of the regional banks. But the nominees must be approved by the Board of Governors. And the members of the Board of Governors are appointed by the President of the United States and confirmed by the Senate. These people--the Board of Governors and especially the chair of the Board of Governors--are the true power center in the Federal Reserve. The 7 of them have a voting majority on the Federal Open Market Committee (the FOMC, the policy group within the Fed that is in charge of the Fed's monetary policy) since only 5 Presidents of the regional banks vote at any point in time. And, of course, each regional bank President must be approved by the Board of Governors. So the Board of Governors, who are appointed by the federal government, have by far the lion's share of the power.
Now you and I might agree (or possibly disagree but maybe not all that much ) about the extent to which the President and the Senate have the republic's interests at heart. But the suggestion that the Fed does not have the republic's interests at heart because it is foreign owned is simply wrong.
The dollar, Fed, Apple Pie or whatever that keeps this company, I mean country afloat is the military. A strong military throughout history has kept the leading "empire" strong and it's currency strong. Of course in the past there were some PM's and robbed crown jewels that back the "empires" currency. In the past 100 years with fiat money (America was one of the last to get out of silver/gold coinage and backing) the country with the perceived strongest and real military had the strongest currency. Of course you have to look at this in mega-trend history, because one would think that the current Euros strength now means they are going to gear up for war, no way. No collective balls. I have recently read "Day of Empire" and that military-currency connection is one of many ideas I gleamed. What concerns me, depending on the next couple of Presidents, is if the US military is handed off to the UN or equivalent and our military starts to wear powder-blue UN-style helmets, we're doomed, sold out. Of course, by then, the transition will have already occured...the Fed will be known has the World Federal Reserve.
Mark, we pretty much disagree on what is called "finance and economics" and that the govt, BLS, IMF, BIS, PPT, Treasury, GS, JPM, and FED are just part of that same manipulative equation. The system is rigged, no two ways about it.
The FED creation in 1913 was the means to funnel the money to the large European and American wealth interests. President Wilson penned a famous quote when he knew he had let the genie out of the bottle and gave currency control to private interests. He basically knew that he had ruined the country....and by 1929 that all came true. It is not a losing propostion to be in charge of the world's money creation. Whoever owns the purse strings, owns it all....and makes all the money from that.
Follow the money trail from the FED to all its intertwined entities:
FED=Treasury=PPT=SWAT=JPM=Goldman=etc., etc.
You won't find Mark, roadrunner, Goldsaint, "the republic", or even J6P in that equation. We're not included....and for good reason. Let the circus games continue right through to the PLOP "Alka-seltzer" end-game fizzle. If the FED really had the republic's interest at heart they would abolish themselves immediately. And if the republic had a lick of sense, they would have urged congress to get rid of them. Imagine that J6P thinks that inflation comes from rising prices and corporate greed rather than the FED/Treasury/Congressional monetary mechanism itself.
To think the FED and the other central bankers are non-profit organizations who donate their time to philanthropically manage the financial money flow of the USE is naive at best. My next question would be to physically audit the gold books of the USA and show us what we really have. If it's all there, then I'll retract everything I've said about the FED and Treasury for the past 5 years, and even donate $1 on my tax return to the GOP (lol)
A strong military throughout history has kept the leading "empire" strong
Bingo
As long as we continue to be on the cutting edge of technology we will always lead the way.
The dollar can bounce up and down as long as we have the hardware, because with said hardware countries like Saudi Arabia and the like will need us to defend them from the scum of the Earth.
Forget the paper and ink. They do most of their damage today with key strokes on a computer where they can create repos and other such things without affecting M1 or M2. In fact those 2 have been declining while M3 is increasing at >15% per year. Hence their need to eliminate M3 reporting 2 years ago. And even if the FED is not creating electronic money, the banks do a good job creating TRILLIONs on their own via off-balance sheet derivatives without any congressional approval or oversight.
What if the Fed cherrypicked the mint and got First Strikes at PCGS then sent them to Robert Chambers ?
Don't laugh. Last year a bill was introduced to Congress to give control of the BEP and US Mint to the FED. This would in essence give them complete 100% control of our monetary system. Not sure what happened to that bill. But if they get that control they can decide what commems or other products come out of the Mint. Big Brother can you spare a commem?
The Fed would become the government's "market stability regulator," given sweeping powers to gather information on a wide range of institutions so that Fed Chairman Ben Bernanke and his colleagues could better detect where threats to the system might be hiding.
Direct quote from the above posted link: "uh oh, boo boo".
Practice makes perfect & nobody is perfect. So, practice being nobody and be perfect !
The Fed would become the government's "market stability regulator," given sweeping powers to gather information on a wide range of institutions so that Fed Chairman Ben Bernanke and his colleagues could better detect where threats to the system might be hiding.
Comical at best. The FED only has to look within itself to find where the threats are to the financial system. They are THE threat along with their banking and bureaucratic cohorts. It's not enough that they are the "market inflator" and "market destabilizer" and now we have to make them the "market regulator" as well? And they do all this for no profit to serve the republic? What swell guys!
The FED is the current "market instability" provider along with toothless SEC and congress regulators who won't correctly enforce the current laws and regulations on the books. Let's step back and make the regulators do the job they are already dodging before heaping more powers on the FED. FWIT the FED already has powers like this proposal states but they do it in secret and above the law. This would make their current shenanigans legal. When can we nominate the FED for President as well?
But there is a silver lining to this cloud. When you are shopping during Christmas and can't find that Tickle Me Elmo or Cabbage Patch doll (due to forced shortages by suppliers and chain stores) the FED will be ready to step in and stabilize that market and get you your doll at a controlled and stable market price. What swell guys! Now about that Monroe FDCC market..........
We both know the FED will never go under. They will continue to come up with schemes to keep this show on the road. I can't wait to hear congressional debate on their newest philanthropic proposal. Gee, if only I could find a way to get the FED involved in my local PTA and church groups! Do you think they would take a permanent chair in the Liberty Seated Collectors Club? One can never have too much regulation in our lives.
Hey, how about that Davidson continuing to slay those goliaths?
do you think the fed will let it all collapse in the end and we'll have deflation, or that they'll do whatever they can to inflate us out of it and destroy the dollar in the process? From what I've read all the federal reserve can do is issue loans, they can't actually print physical money from thin air... if nobody wants to take on debt, and we have a liquidity trap, there's not much that they can do about it except allow the liquidation and deflation phase.. though I could be wrong about that.
When you have deflation the ratio of cash & credit compared to the total goods and services is DECREASING. In a pithy saying - CASH IS KING.
When you have inflation the ratio of cash & credit compared to the total goods and services is INCREASING. in a pithy saying - CASH IS WORTHLESS.
Inflationary depressions are very rare and almost always localized. Weimar Germany, Argentina and Zimbabwe come to mind. They destroyed themselves, but that's about it.
Deflationary depressions are the rule - and usually infect the globe - the 1930's being the best known example.
In both situations, the depression parts are the same - people lose jobs, businesses close, credit dries up. The difference is that in an inflationary depression, THE CURRENCY BECOMES WORTHLESS - so foreigners get to buy all your assets for next to nothing and more importantly, the rich are hurt EVEN MORE than the common person.
In a deflationary depression, CASH IS KING, so if you are smart enough and fast enough to get to cash before it becomes scarce, YOU have the chance to become rich, and smart rich people get to stay rich. (Just don't expect the FDIC to save your ass when the banks go under, and they will, get the cash OUT of banks and into TREASURY NOTES)
Hyperinflation : depression + currency collapse + everyone becomes poor (except for gold owners who stay even) + foreign buyout of the country Hyperdeflation : depression + currency strength + smart people get/stay rich
An inflationary collapse is far worse.
I don't see how the dollar could strengthen relative to foreign currencies though.. my best guess is any "deflation" will be limited to real estate, cars, and other non essentials typically in high demand by joe 6 pack and typically purchased with credit. I do think a huge buying opportunity in houses is coming.. way beyond what anyone believes possible.
In truth, the Fed comes close to printing currency from thin air. Essentially the Fed buys U.S. government securities and pays for the securities with reserves, which banks can exchange for (newly printed) currency. The Fed could also pay for the securities by directly paying for them with (newly printed) currency, but that's simply not the way the Fed works. But it could if it chose to do so. Indeed, the Fed could buy anything you name--computers, cars, rare coins ()--and pay for the purchases with (newly printed) currency. But again, that's not the way the Fed works.
The Fed can't go "under". What's going under is the middle class in this country. The "equity" is being sucked right out of this country.
A return to traditional American values, the kind that Ron Paul WOULD bring to the white house. would reverse this course.
But the ignorance and self serving greed on one hand and the cronysism and corruption on the other hand has become so great, I don't see it as a possibility. Hence, as they say to have a good "plan" for your retirement?
It's absolutely essential to have a solid plan to take care of yourself and Family. Others including this government only wish to rip you off and if you don't recognize that, believe it, take measures to protect yourself and your Family, you have nobody else to blame but you.
When the Fed sells U.S. government bonds, the Fed decreases the quantity of money. When the Fed buys U.S. government bonds, the Fed increases the quantity of money. And it is the fact that the Fed can buy interest-bearing U.S. government bonds and pay for them with non-interest bearing money (currency) is why the Fed will never go under unless the government changes the laws and dissolves the Fed.
Mark, it's not the money or currency cycle that is the issue, it's the monetization of debt by the FED that is "off the balance sheet" per se and played as well by the major banks and investment brokerages.
Jim Willie shows the 2 cycles rather well here. The currency engine is now a mere pittance to the FED debt engine. So yes, the FED can basically create liquidty by electronic key strokes out of thin air via this mechanism. No need to print currency and move it back and forth....that stuff is for Neanderthals. And they've been doing a masterful job of it as well. It's the reason they took M3 off the airwaves. They can now strut out M1 and M2 to show "fiscal restraint" while M3 tools around at +15%/yr increase. $516 TRILLION derivatives and counting. The bankers of today are all about hyper-collateralized debt monetization - not about maintaining currency flows. It's a far easier way to infuse liquidty and bypass the "silly" congressional appropriation's process. And this beast does have the potential to take down all its kings and horses with it.
I tried...I really tried to read the article you linked. But I simply cannot make sense of it. I think it is safe to say that sentences such as "Providing relief to lost leveraged money from carry trade reversals is top on the list for where new money went ... " and "If the Fed permits more benign neglect to the real economy, it will do so at the expense of bond market integrity, even in the face of price inflation pockets" are not crystal clear. And, frankly, I have no idea what the author means when he writes "The Federal Reserve has begun its hyper-liquidity endgame ..." when he doesn't bother to carefully spell out what the phrase "hyper-liquidity endgame" means. But I am 110% willing to allow others to read and understand him.
Your writing, however, I can understand. (I think that's a good thing; you may disagree...) And I think we might have a disagreement about what we mean by monetization. I use this term to mean the Fed increasing the monetary base (=currency outside of banks + reserves at banks). The monetary base is importanr because currency is clearly money and reserves can either be changed into currency or used to increase bank loans which simultaneously increases demand deposits and which are also money. The Fed increases the monetary base by purchasing some asset, eg, government securities. The Fed cannot hide this activity since the monetary base is reported weekly. Of course, I tend to believe the data that is published and I think you have some serious doubts. If there was a symbol for a "shrug," I'd use it here because I suspect you and I will perpetually disagree. But that's fine with me and I suspect (hope) it's fine with you since it means we can engage in more discussions/debates in the future.
<< <i>do think a huge buying opportunity in houses is coming.. way beyond what anyone believes possible. That is if you can get a mortgage. If you have cash then yes. That time is now. Problem is no one wants to commit. At least where I am anyway. Steve >>
I tend to agree with you; however, I'm not certain that the time is now.
Most headlines you read lately are very negative. ->150 million people facing a bleak retirement ->Treasury regulatory overhaul plan "timely" ->German watchdog eyes $600 bln global bank losses ->Inflation worries knock Europe shares lower ->Consumer Spending in U.S. Increases 0.1%, Slowest Pace in More Than a Year ->Vacation Home Sales, Prices Tumble as Buyers `Wait and See,' Realtors Say ->Japan's Inflation Rate Rises to Highest in Decade; Unemployment Increases ->Plosser Says Fed Is Too Aggressive, Risking Inflation-Fighting Reputation ->Rosengren of Boston Fed Says Reduced Bank Lending Is Crimping U.S. Economy ->J.C. Penney Plunges After Retailer Slashes Its Sales, Profit Forecasts
The FED intervened with Bear Stearns because they feared a run on the banks. I am wondering if things are a lot worse...are we in a depression instead of a recession?
Something interesting I read on the Internet was that a year into the Depression, in the autumn of 1930, the runs on the banks began. That's a little scary, especially considering the reason why the FED jumped into the Bear Stearns deal...to prevent a bank run. If other investment banks go down, whats going to happen then?
Which is the reason I started this thread. Basically, what is the best investment in this economic environment? COINS, REAL ESTATE, CASH, FOOD, etc. I appreciate all the answers. It is really quite interesting to read the various responses.
Always enjoy reading your posts Roadrunner. The question I'm grappling with is hyperinflation or deflation? Gold and silver will greatly benefit from the former but cash is king during deflation right? While there are a lot of digital dollars out there how about the actual amount of greenbacks( I've read as little as 4% of supply). Most people have very little actual cash. I just question whether the digital dollars could be lost (CDO's, credit default swaps,derivatives) thereby creating a shortage of greenbacks and thus deflation. Tough choice for me is how much in PM's and how much in cash.
<< <i>Always enjoy reading your posts Roadrunner. The question I'm grappling with is hyperinflation or deflation? Gold and silver will greatly benefit from the former but cash is king during deflation right? While there are a lot of digital dollars out there how about the actual amount of greenbacks( I've read as little as 4% of supply). Most people have very little actual cash. I just question whether the digital dollars could be lost (CDO's, credit default swaps,derivatives) thereby creating a shortage of greenbacks and thus deflation. Tough choice for me is how much in PM's and how much in cash. >>
I don't think that cash is king although it's better than stocks in the foreseeable future...but cash is worth less and less. MY 401k and B fund are 90% cash and bonds and TIPS, the rest is in a balanced fund. PM's are the way to go...still haven't come close to the top on these.
We've had a recent blip ($1,000) on the radar, consolidation and getting ready for another run. I recently read Kitco's Elliot wave on PM's, very interesting.
Cash works in a deflation because there isn't enough of it. The price of goods drops, and the cash that is left buys more of those goods. I believe that gold, even though non-edible, can buy those goods as well either directly or indirectly through a medium exchange. Most people kept their gold during the last depression as protection. I don't ever recall reading that it became worthless even if FDR decreed a ban on private ownership of bullion.
The Fed cannot hide this activity since the monetary base is reported weekly. Of course, I tend to believe the data that is published and I think you have some serious doubts. If there was a symbol for a "shrug," I'd use it here because I suspect you and I will perpetually disagree. But that's fine with me and I suspect (hope) it's fine with you since it means we can engage in more discussions/debates in the future.
My understanding is that the FED, banks, and brokerages have been essentially monetizing debt instruments for years. This doesn't show up in the published M1 and M2 figures. I'm not even sure that it shows up in the estimated M3 numbers published by John Williams and others. +10-15% per year doesn't come close to explaining the tripling or quadrupling of debt instruments over the past 6 years. Obviously if estimated M3 is +16% per year, and M1,M2 are constants, then liquidity is entering the system through an "untracked" means. Something is rotten here if M3 continues to sharply rise yet the FED felt M3 served no purpose to continue to publish this barbaric and obsolete number. M3 is the place that odd things like repos exist. And flipping over 28 day repos every month for years doesn't show up on the M1, M2 radar screens. Where there is a will to inject "hidden" liquidity, the FED will find the way.
Derivatives are listed as real assets off the balance sheets of brokerages and banks. They made trillions skimming profits off those transactions and selling them off for FMV to pension plans, hedge funds, other banks, corporations, and municipalities..."assets" that many of them knew would not hold up under scrutiny over time (ie would become worthless). So even though the monetary base appears constant, total debt instruments, and other liquidity (or illiquidity?) instruments have been growing by leaps and bounds. I think the banks have hid this activity pretty well from J6P who still thinks all is well and housing prices and bank stocks are about to rebound.
The guy sitting in the Whitehouse and his friends would like to see a situation where the government has complete control of the stock market, thus guaranteeing that family and friends in big business will always have a good year, even if they have to add the profit for so-called "private" business directly on to the backs of the US taxpayer. Isn't this Communism? Since 1980, conservatives are not conservative but instead bent on gouging as much as possible from everyone to benefit big business - they're even worse than the so-called liberal democrats who they call "tax and spend"... modern republicans are only "spend" and have left the part about paying your debts out of the economic equation. The US economic system is quickly becoming a situation where if you can't win the game, change the rules until you can. Pretty weird for a country that supposedly touts "free markets".
Blackhawk, as you know, there are no longer any free markets, not even beanie babies, pez dispensers, or comic books. But the manipulation at all levels in the financial markets makes the collectibles market seem about as "free" and "pure" as you can get today. The financial markets might be 90% manipulation and 10% "free."
<< <i>The guy sitting in the Whitehouse and his friends would like to see a situation where the government has complete control of the stock market, thus guaranteeing that family and friends in big business will always have a good year, even if they have to add the profit for so-called "private" business directly on to the backs of the US taxpayer. Isn't this Communism? Since 1980, conservatives are not conservative but instead bent on gouging as much as possible from everyone to benefit big business - they're even worse than the so-called liberal democrats who they call "tax and spend"... modern republicans are only "spend" and have left the part about paying your debts out of the economic equation. >>
Complete control, period and as the equity is sucked out of the middle class which will eventually mean there is NO middle class, that total control is exactly what they'll have and yes that's how live is in communist countries.
<< <i>I don't think that cash is king although it's better than stocks in the foreseeable future...but cash is worth less and less. MY 401k and B fund are 90% cash and bonds and TIPS, the rest is in a balanced fund. PM's are the way to go...still haven't come close to the top on these. >>
I think he meant greenbacks in hand. Not an account statement that shows you have cash in it.
Instead of holding physical gold, you should hold physical cash in a deflationary cycle.
With the electronic economy physical cash is becoming more scarce each year.
Hey, how about that Davidson continuing to slay those goliaths?
My two favorites - Davidson & Texas, both lost . . . Bummer
With the Texas Longhorn loss, the Texas legend lives on. Texas Western College Flying Miners - Still the only team from Texas to win the NCAA Men's Basketball Championship.
<< <i>Core inflation to the vast majority of Americans means food, energy and rent, everything else can be excluded.
Just because the value of one asset you own is going down doesn't make this a deflationary cycle. >>
Good point, there are cross currents in asset pricing. Housing in the US is one of the few major asset classes to have deflationary price action..., but I think over time, secular inflationary forces of food, energy and industrial materials will be much stronger global forces than downward price movement in housing and I think you could make a case that with the cost of funds being relatively low(if you can get them) Housing may be a reasonably attractive asset in the next few months.
<< <i>Core inflation to the vast majority of Americans means food, energy and rent, everything else can be excluded.
Just because the value of one asset you own is going down doesn't make this a deflationary cycle. >>
Good point, there are cross currents in asset pricing. Housing in the US is one of the few major asset classes to have deflationary price action..., but I think over time, secular inflationary forces of food, energy and industrial materials will be much stronger global forces than downward price movement in housing and I think you could make a case that with the cost of funds being relatively low(if you can get them) Housing may be a reasonably attractive asset in the next few months. >>
There will certainly be a lot to pic from. Are the current owners who are forced out practising some kind of scorched earth policy by trashing the place before they leave? Perhaps taking their anger out on the wrong person/s?
Frankly, if I'm in position to buy real estate, I don't think I would want the headaches of being a landlord to people who might have just lost their houses and are accustomed to having everything they want, on credit.
Question for the monetary theorists who prefer cash over gold as a contingency plan - if you have just gone through a massive deflation in real estate prices, but milk, eggs, bread and gasoline are going higher and your job is somewhat tenuous, while the Fed is pumping out more credit for banker bailouts and printing checks like crazy for consumers to spend, where does gold end up?
Q: Are You Printing Money? Bernanke: Not Literally
In the 1930's gold went up in price 75% due to FDR's shenanigans - and the inverse was a 40% devaluation of the dollar (ie "safe" CASH). Real estate did far worse than cash with many homes ending up as little as 10c to 20c on the dollar. It's way too early to think about buying homes in the former hot spots of the housing sector (Northeast, Calif, Florida, etc). The barber still needs to give these areas another 15-30% haircut. And the bigger % is probably the most likely.
Homestake gold mining stock went up 500% in the first half of the 1930's (and this is a paper gold play no less). I'd say gold held its own.
<< <i>If the Fed were to fail, I think the best investements would be guns and ammunition. >>
Decentralizing our monetary system would also have diversified the American people's risk. Only reason we can't afford to let Bear Stearns go down is because all our eggs are in a single FED basket. Of course, the crooks who run the show know this, but instead of doing what's right they used this as an opportunity to (seize more power/control and) make our markets less free.
Comments
when we need him.
Camelot
roadrunner
The Fed is no more foreign owned that you are or I am. Because I know that you are truly interested in these issues, I also know that you are aware that the stock in the Fed is owned by commercial banks that are members of the Federal Reserve system (as described in previous posts). But of course that stock does not convey any of the typical ownership rights. Indeed, it is such a lousy investment that member commercial banks are required to own it and, to the best of my knowledge, no commercial bank owns more than the minimum required amount. The only "ownership" right of the stock is that the commerical banks vote for the directors of the Federal Reserve regional banks. And the only power these boards of directors have is to nominate the President of the regional banks. But the nominees must be approved by the Board of Governors. And the members of the Board of Governors are appointed by the President of the United States and confirmed by the Senate. These people--the Board of Governors and especially the chair of the Board of Governors--are the true power center in the Federal Reserve. The 7 of them have a voting majority on the Federal Open Market Committee (the FOMC, the policy group within the Fed that is in charge of the Fed's monetary policy) since only 5 Presidents of the regional banks vote at any point in time. And, of course, each regional bank President must be approved by the Board of Governors. So the Board of Governors, who are appointed by the federal government, have by far the lion's share of the power.
Now you and I might agree (or possibly disagree but maybe not all that much
Ren
The country is currently trading US dollars for currency exchanges such as Euros etc.
They can convert the currency and take a gain off it with no interest.
Even though the Dollar might weaken the Fed REserve always makes money in treasury exchanges, PM, Foreign Stocks,Foreign TBills etc.
Can't happen.
The FED creation in 1913 was the means to funnel the money to the large European and American wealth interests. President Wilson penned a famous quote when he knew he had let the genie out of the bottle and gave currency control to private interests. He basically knew that he had ruined the country....and by 1929 that all came true. It is not a losing propostion to be in charge of the world's money creation. Whoever owns the purse strings, owns it all....and makes all the money from that.
Follow the money trail from the FED to all its intertwined entities:
FED=Treasury=PPT=SWAT=JPM=Goldman=etc., etc.
You won't find Mark, roadrunner, Goldsaint, "the republic", or even J6P in that equation. We're not included....and for good reason. Let the circus games continue right through to the PLOP "Alka-seltzer" end-game fizzle. If the FED really had the republic's interest at heart they would abolish themselves immediately. And if the republic had a lick of sense, they would have urged congress to get rid of them. Imagine that J6P thinks that inflation comes from rising prices and corporate greed rather than the FED/Treasury/Congressional monetary mechanism itself.
To think the FED and the other central bankers are non-profit organizations who donate their time to philanthropically manage the financial money flow of the USE is naive at best. My next question would be to physically audit the gold books of the USA and show us what we really have. If it's all there, then I'll retract everything I've said about the FED and Treasury for the past 5 years, and even donate $1 on my tax return to the GOP (lol)
roadrunner
Since we're on the military , I thought Target tied into the conversation and brought us full circle.
What if the Fed cherrypicked the mint and got First Strikes at PCGS then sent them to Robert Chambers ?
Practice makes perfect & nobody is perfect. So, practice being nobody and be perfect !
Bingo
As long as we continue to be on the cutting edge of technology we will always lead the way.
The dollar can bounce up and down as long as we have the hardware, because with said hardware countries like Saudi Arabia
and the like will need us to defend them from the scum of the Earth.
Steve
What if the Fed cherrypicked the mint and got First Strikes at PCGS then sent them to Robert Chambers ?
Don't laugh. Last year a bill was introduced to Congress to give control of the BEP and US Mint to the FED. This would in essence give them complete 100% control of our monetary system. Not sure what happened to that bill. But if they get that control they can decide what commems or other products come out of the Mint. Big Brother can you spare a commem?
roadrunner
Practice makes perfect & nobody is perfect. So, practice being nobody and be perfect !
Direct quote from the above posted link: "uh oh, boo boo".
Practice makes perfect & nobody is perfect. So, practice being nobody and be perfect !
Comical at best. The FED only has to look within itself to find where the threats are to the financial system. They are THE threat along with their banking and bureaucratic cohorts. It's not enough that they are the "market inflator" and "market destabilizer" and now we have to make them the "market regulator" as well? And they do all this for no profit to serve the republic? What swell guys!
The FED is the current "market instability" provider along with toothless SEC and congress regulators who won't correctly enforce the current laws and regulations on the books. Let's step back and make the regulators do the job they are already dodging before heaping more powers on the FED. FWIT the FED already has powers like this proposal states but they do it in secret and above the law. This would make their current shenanigans legal. When can we nominate the FED for President as well?
But there is a silver lining to this cloud. When you are shopping during Christmas and can't find that Tickle Me Elmo or Cabbage Patch doll (due to forced shortages by suppliers and chain stores) the FED will be ready to step in and stabilize that market and get you your doll at a controlled and stable market price. What swell guys! Now about that Monroe FDCC market..........
roadrunner
Practice makes perfect & nobody is perfect. So, practice being nobody and be perfect !
Someone post a coin. This is getting so off topic that it makes my orbs itch.
Practice makes perfect & nobody is perfect. So, practice being nobody and be perfect !
@
Your &%$@#! welcome!
We both know the FED will never go under. They will continue to come up with schemes to keep this show on the road. I can't wait to hear congressional debate on their newest philanthropic proposal. Gee, if only I could find a way to get the FED involved in my local PTA and church groups! Do you think they would take a permanent chair in the Liberty Seated Collectors Club? One can never have too much regulation in our lives.
Hey, how about that Davidson continuing to slay those goliaths?
roadrunner
When you have deflation the ratio of cash & credit compared to the total goods and services is DECREASING. In a pithy saying - CASH IS KING.
When you have inflation the ratio of cash & credit compared to the total goods and services is INCREASING. in a pithy saying - CASH IS WORTHLESS.
Inflationary depressions are very rare and almost always localized. Weimar Germany, Argentina and Zimbabwe come to mind. They destroyed themselves, but that's about it.
Deflationary depressions are the rule - and usually infect the globe - the 1930's being the best known example.
In both situations, the depression parts are the same - people lose jobs, businesses close, credit dries up. The difference is that in an inflationary depression, THE CURRENCY BECOMES WORTHLESS - so foreigners get to buy all your assets for next to nothing and more importantly, the rich are hurt EVEN MORE than the common person.
In a deflationary depression, CASH IS KING, so if you are smart enough and fast enough to get to cash before it becomes scarce, YOU have the chance to become rich, and smart rich people get to stay rich. (Just don't expect the FDIC to save your ass when the banks go under, and they will, get the cash OUT of banks and into TREASURY NOTES)
Hyperinflation : depression + currency collapse + everyone becomes poor (except for gold owners who stay even) + foreign buyout of the country
Hyperdeflation : depression + currency strength + smart people get/stay rich
An inflationary collapse is far worse.
I don't see how the dollar could strengthen relative to foreign currencies though.. my best guess is any "deflation" will be limited to real estate, cars, and other non essentials typically in high demand by joe 6 pack and typically purchased with credit. I do think a huge buying opportunity in houses is coming.. way beyond what anyone believes possible.
In truth, the Fed comes close to printing currency from thin air. Essentially the Fed buys U.S. government securities and pays for the securities with reserves, which banks can exchange for (newly printed) currency. The Fed could also pay for the securities by directly paying for them with (newly printed) currency, but that's simply not the way the Fed works. But it could if it chose to do so. Indeed, the Fed could buy anything you name--computers, cars, rare coins (
No but they do it one better by selling tons of UST bonds via key strokes. The Japanese bought a boat-load of these in the 2002-2004 time frame.
I do think a huge buying opportunity in houses is coming.. way beyond what anyone believes possible.
I agree. Another 3-5 years of dropping prices and another haircut of 30-50% from today...and it will be a true buyer's market.
roadrunner
A return to traditional American values, the kind that Ron Paul WOULD bring to the white house. would reverse this course.
But the ignorance and self serving greed on one hand and the cronysism and corruption on the other hand has become so great, I don't see it as a possibility. Hence, as they say to have a good "plan" for your retirement?
It's absolutely essential to have a solid plan to take care of yourself and Family. Others including this government only wish to rip you off and if you don't recognize that, believe it, take measures to protect yourself and your Family, you have nobody else to blame but you.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
When the Fed sells U.S. government bonds, the Fed decreases the quantity of money. When the Fed buys U.S. government bonds, the Fed increases the quantity of money. And it is the fact that the Fed can buy interest-bearing U.S. government bonds and pay for them with non-interest bearing money (currency) is why the Fed will never go under unless the government changes the laws and dissolves the Fed.
Jim Willie shows the 2 cycles rather well here. The currency engine is now a mere pittance to the FED debt engine. So yes, the FED can basically create liquidty by electronic key strokes out of thin air via this mechanism. No need to print currency and move it back and forth....that stuff is for Neanderthals. And they've been doing a masterful job of it as well. It's the reason they took M3 off the airwaves. They can now strut out M1 and M2 to show "fiscal restraint" while M3 tools around at +15%/yr increase. $516 TRILLION derivatives and counting. The bankers of today are all about hyper-collateralized debt monetization - not about maintaining currency flows. It's a far easier way to infuse liquidty and bypass the "silly" congressional appropriation's process. And this beast does have the potential to take down all its kings and horses with it.
FED debt monetization engine - Jim Willie
roadrunner
That is if you can get a mortgage. If you have cash then yes. That time is now.
Problem is no one wants to commit.
At least where I am anyway.
Steve
I tried...I really tried to read the article you linked. But I simply cannot make sense of it. I think it is safe to say that sentences such as "Providing relief to lost leveraged money from carry trade reversals is top on the list for where new money went ... " and "If the Fed permits more benign neglect to the real economy, it will do so at the expense of bond market integrity, even in the face of price inflation pockets" are not crystal clear. And, frankly, I have no idea what the author means when he writes "The Federal Reserve has begun its hyper-liquidity endgame ..." when he doesn't bother to carefully spell out what the phrase "hyper-liquidity endgame" means. But I am 110% willing to allow others to read and understand him.
Your writing, however, I can understand. (I think that's a good thing; you may disagree...
<< <i>do think a huge buying opportunity in houses is coming.. way beyond what anyone believes possible.
That is if you can get a mortgage. If you have cash then yes. That time is now.
Problem is no one wants to commit.
At least where I am anyway.
Steve >>
I tend to agree with you; however, I'm not certain that the time is now.
Most headlines you read lately are very negative.
->150 million people facing a bleak retirement
->Treasury regulatory overhaul plan "timely"
->German watchdog eyes $600 bln global bank losses
->Inflation worries knock Europe shares lower
->Consumer Spending in U.S. Increases 0.1%, Slowest Pace in More Than a Year
->Vacation Home Sales, Prices Tumble as Buyers `Wait and See,' Realtors Say
->Japan's Inflation Rate Rises to Highest in Decade; Unemployment Increases
->Plosser Says Fed Is Too Aggressive, Risking Inflation-Fighting Reputation
->Rosengren of Boston Fed Says Reduced Bank Lending Is Crimping U.S. Economy
->J.C. Penney Plunges After Retailer Slashes Its Sales, Profit Forecasts
The FED intervened with Bear Stearns because they feared a run on the banks.
I am wondering if things are a lot worse...are we in a depression instead of a recession?
Something interesting I read on the Internet was that a year into the Depression,
in the autumn of 1930, the runs on the banks began. That's a little scary, especially
considering the reason why the FED jumped into the Bear Stearns deal...to prevent
a bank run. If other investment banks go down, whats going to happen then?
Which is the reason I started this thread. Basically, what is the best investment in
this economic environment? COINS, REAL ESTATE, CASH, FOOD, etc. I appreciate
all the answers. It is really quite interesting to read the various responses.
Thanks!
SoundPoint
Got Gold?
Governments can print currency. Only the people can print faith in it — and they’re running low on ink.
<< <i>Always enjoy reading your posts Roadrunner. The question I'm grappling with is hyperinflation or deflation? Gold and silver will greatly benefit from the former but cash is king during deflation right? While there are a lot of digital dollars out there how about the actual amount of greenbacks( I've read as little as 4% of supply). Most people have very little actual cash. I just question whether the digital dollars could be lost (CDO's, credit default swaps,derivatives) thereby creating a shortage of greenbacks and thus deflation. Tough choice for me is how much in PM's and how much in cash. >>
I don't think that cash is king although it's better than stocks in the foreseeable future...but cash is worth less and less. MY 401k and B fund are 90% cash and bonds and TIPS, the rest is in a balanced fund. PM's are the way to go...still haven't come close to the top on these.
We've had a recent blip ($1,000) on the radar, consolidation and getting ready for another run. I recently read Kitco's Elliot wave on PM's, very interesting.
Ren
The Fed cannot hide this activity since the monetary base is reported weekly. Of course, I tend to believe the data that is published and I think you have some serious doubts. If there was a symbol for a "shrug," I'd use it here because I suspect you and I will perpetually disagree. But that's fine with me and I suspect (hope) it's fine with you since it means we can engage in more discussions/debates in the future.
My understanding is that the FED, banks, and brokerages have been essentially monetizing debt instruments for years. This doesn't show up in the published M1 and M2 figures. I'm not even sure that it shows up in the estimated M3 numbers published by John Williams and others. +10-15% per year doesn't come close to explaining the tripling or quadrupling of debt instruments over the past 6 years. Obviously if estimated M3 is +16% per year, and M1,M2 are constants, then liquidity is entering the system through an "untracked" means. Something is rotten here if M3 continues to sharply rise yet the FED felt M3 served no purpose to continue to publish this barbaric and obsolete number. M3 is the place that odd things like repos exist. And flipping over 28 day repos every month for years doesn't show up on the M1, M2 radar screens. Where there is a will to inject "hidden" liquidity, the FED will find the way.
Derivatives are listed as real assets off the balance sheets of brokerages and banks. They made trillions skimming profits off those transactions and selling them off for FMV to pension plans, hedge funds, other banks, corporations, and municipalities..."assets" that many of them knew would not hold up under scrutiny over time (ie would become worthless). So even though the monetary base appears constant, total debt instruments, and other liquidity (or illiquidity?) instruments have been growing by leaps and bounds. I think the banks have hid this activity pretty well from J6P who still thinks all is well and housing prices and bank stocks are about to rebound.
roadrunner
roadrunner
<< <i>The guy sitting in the Whitehouse and his friends would like to see a situation where the government has complete control of the stock market, thus guaranteeing that family and friends in big business will always have a good year, even if they have to add the profit for so-called "private" business directly on to the backs of the US taxpayer. Isn't this Communism? Since 1980, conservatives are not conservative but instead bent on gouging as much as possible from everyone to benefit big business - they're even worse than the so-called liberal democrats who they call "tax and spend"... modern republicans are only "spend" and have left the part about paying your debts out of the economic equation. >>
Complete control, period and as the equity is sucked out of the middle class which will eventually mean there is NO middle class, that total control is exactly what they'll have and yes that's how live is in communist countries.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>I don't think that cash is king although it's better than stocks in the foreseeable future...but cash is worth less and less. MY 401k and B fund are 90% cash and bonds and TIPS, the rest is in a balanced fund. PM's are the way to go...still haven't come close to the top on these. >>
I think he meant greenbacks in hand. Not an account statement that shows you have cash in it.
Instead of holding physical gold, you should hold physical cash in a deflationary cycle.
With the electronic economy physical cash is becoming more scarce each year.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
and pervasive that no one knows what to do, where
to run or what basket to place our cash in. We will all do
what we think is best and wait for the tidal waves to hit.
Camelot
<< <i>Aint gonna happen! >>
Not Likely . . . BUT . . .
In addition to lowering interest rates at the fastest pace in two decades, Bernanke has committed as much as 60 percent of the $700 billion in Treasury securities on his balance sheet to expand lending. The Fed has also offered a $29 billion loan against illiquid securities to assist the buyout of failing securities firm Bear Stearns Cos.
I think precious metals look good at this point in time!
SoundPoint
Hey, how about that Davidson continuing to slay those goliaths?
With the Texas Longhorn loss, the Texas legend lives on.
Texas Western College Flying Miners - Still the only team from Texas to win the NCAA Men's Basketball Championship.
SoundPoint
Just because the value of one asset you own is going down doesn't make this a deflationary cycle.
<< <i>Core inflation to the vast majority of Americans means food, energy and rent, everything else can be excluded.
Just because the value of one asset you own is going down doesn't make this a deflationary cycle. >>
Good point, there are cross currents in asset pricing. Housing in the US is one of the few major asset classes to have deflationary price action..., but I think over time, secular inflationary forces of food, energy and industrial materials will be much stronger global forces than downward price movement in housing and I think you could make a case that with the cost of funds being relatively low(if you can get them) Housing may be a reasonably attractive asset in the next few months.
<< <i>
<< <i>Core inflation to the vast majority of Americans means food, energy and rent, everything else can be excluded.
Just because the value of one asset you own is going down doesn't make this a deflationary cycle. >>
Good point, there are cross currents in asset pricing. Housing in the US is one of the few major asset classes to have deflationary price action..., but I think over time, secular inflationary forces of food, energy and industrial materials will be much stronger global forces than downward price movement in housing and I think you could make a case that with the cost of funds being relatively low(if you can get them) Housing may be a reasonably attractive asset in the next few months. >>
There will certainly be a lot to pic from. Are the current owners who are forced out practising some kind of scorched earth policy by trashing the place before they leave? Perhaps taking their anger out on the wrong person/s?
Question for the monetary theorists who prefer cash over gold as a contingency plan - if you have just gone through a massive deflation in real estate prices, but milk, eggs, bread and gasoline are going higher and your job is somewhat tenuous, while the Fed is pumping out more credit for banker bailouts and printing checks like crazy for consumers to spend, where does gold end up?
I knew it would happen.
Usually the more demand for an asset the higher the price. If perceptions create demand then I suppose gold would go higher.
Knowledge is the enemy of fear
Homestake gold mining stock went up 500% in the first half of the 1930's (and this is a paper gold play no less). I'd say gold held its own.
roadrunner
<< <i>If the Fed were to fail, I think the best investements would be guns and ammunition. >>
Decentralizing our monetary system would also have diversified the American people's risk. Only reason we can't afford to let Bear Stearns go down is because all our eggs are in a single FED basket. Of course, the crooks who run the show know this, but instead of doing what's right they used this as an opportunity to (seize more power/control and) make our markets less free.
History of the US Constitution Coin Set