If you really believe hyperinflation is around the corner, you ought to load up on fixed-rate debt -- properties, etc. -- and just wait.
"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)
Don't really know what's around the corner. Having a sizeable stake in PM's covers multiple bases. I don't see taking on more debt as a solution to a problem where everyone already took on too much debt to begin with.
If you really believe hyperinflation is around the corner, you ought to load up on fixed-rate debt -- properties, etc. -- and just wait.
That would be great if you knew that you wouldn't be whipsawed and if you had enough cash to make payments no matter which way rates went. Hyperinflation or not - I trust having physical metals in-hand much, much more than I trust what the Fed might decide to do. They've proven that they are not to be trusted. Can you give me a reason to think otherwise?
Q: Are You Printing Money? Bernanke: Not Literally
There is one situation that is coming around the corner and will no doubt touch most of us that have socked away PM's and other wherewithall for the downturn we've been watching approach for the last couple of years. In-laws and siblings are and will be asking for assistance with money or even some help with a place to stay "just for a while". While I don't presume to offer advice, it may be a good time to put together a strategy for dealing with this issue. One thing I can say is that if you help with money, they will come back for more and if you don't then their situation somehow becomes your fault.
<< <i>That would be great if you knew that you wouldn't be whipsawed and if you had enough cash to make payments no matter which way rates went. Hyperinflation or not - I trust having physical metals in-hand much, much more than I trust what the Fed might decide to do. They've proven that they are not to be trusted. Can you give me a reason to think otherwise? >>
If you think hyperinflation is going to happen, you could easily sell your PMs at much higher prices and pay off the fixed-rate debt. Turn a small amount of gold into a big house or some such.
"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)
Where's Andrew Jackson when you need him.Jackson's Bank War Unfortunately the best we have is Ron Paul but at least he's trying.
Is there a way to separate the good from the bad debt and just let the bad debt implode?
Perhaps gov't protection of private pensions which probably would warrant the gov't take over of all 401Ks. The gov't as temporary custodian until the debt is reset. Protecting SS, gov't operating expenses, etc. Do what's necessary to keep the country and all its citizens intact while letting he bad debt implode. Or the the debt so interwined in the economy that this is impossible to do?
Is there a way to separate the good from the bad debt and just let the bad debt implode?
I think that's what Paulson was faced with in 2008 when he decided to let Leahman Bros. fail. In bailouts to follow, that was the overriding decision - who should be saved. Who should fail.
GM, directly or indirectly employed 1 Million people. Let them fail?
AIG insured the toxic Credit Default Swaps, which they thought they would never have to pay on. Let them fail? They didn't create the problem they just insured it wouldn't blow up. I guess it would be like letting Allstate Insurance fail next big hurricane that comes ashore.
I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it.
I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it.
Each month the revelations show just how much we underestimated these financial crooks. Now it's the fact that mortgage paperwork was never signed and foreclosures will be tied up for quite some time....technically an unsolvable issue if the original inked signed notes/deeds can't be located. If you look back at the start of this forum in early 2004, more often than not, most of the "dire predictions" have in fact come true. If this forum (and the ten thousand+ posts) has helped one additional person to prepare for what was coming back in the 2004-2007 time frame, it was worth the effort expended.
<< <i>GM, directly or indirectly employed 1 Million people. Let them fail? >>
Let them fail? If they can't compete? Sure. Why not?
For every GM, there are thousands of small businesses that, combined, employ just as many people. And some of those businesses fail every day. Nobody seems to be saying that we need to save those "too small to fail" businesses. If it's good enough for them, it's good enough for GM.
<< <i> I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it. >>
Well said.
We have some serious problems in this country. There will be some painful adjustments ahead. But I don't see a basis to conclude that "this time is different" from every other in our history and that we've somehow reached the end of the line as a country.
"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)
<< <i>I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it.
Each month the revelations show just how much we underestimated these financial crooks. Now it's the fact that mortgage paperwork was never signed and foreclosures will be tied up for quite some time....technically an unsolvable issue if the original inked signed notes/deeds can't be located. If you look back at the start of this forum in early 2004, more often than not, most of the "dire predictions" have in fact come true. If this forum (and the ten thousand+ posts) has helped one additional person to prepare for what was coming back in the 2004-2007 time frame, it was worth the effort expended.
roadrunner >>
RR, do you have any links for the "dire predictions" that have come to fruition? It would be interesting to review and study especially the ones prior to 2006.
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
Mistrust of the money starts with reckless creation of too much new money by the issuing authority.
Problem is while the govt had been quite loose with official M1/M2 monetary policy from 1996-2006 it pales in comparison to what corporations and GSE's did with their "unofficial" monetary systems to leverage up debt and credit. In this case the issuing authorities were the largest banks and corporations and they worked their magic outside our official money system. The govt gave these corporations all the levers needed to work around the system but they did not have a direct role in telling them to create $1 QUAD+ in leveraged debt/credit/bets. In this case it's the mistrust of the debt/credit system more than the official monetary system. For the past two decades debt and credit became their own monetary system without any reasonable controls. I would say that any damage to the economy from the increase in M1 and M2 during those 10 yrs could have been easily contained, and still could if it were the primary issue.
RR, do you have any links for the "dire predictions" that have come to fruition? It would be interesting to review and study especially the ones prior to 2006.
Everyone's definition of "dire" is probably different. Dire to me may be quite different than dire to EagleEye. In 2004 the main thread discussed the increasing probability of a complete bust in the housing and derivatives sectors along with big banks coming down...not to mention a return to $1000+ gold. I'd say those "dire" predictions did come true. Those are the easy ones. A number of mainstream analysts started putting that stuff out there in 2001-2002 of which Sinclair was just one of them. There are 10,000+ pages in the main PM's/Economic thread but those predictions were made within the first year. Too bad the site "search" function can't be applied to a single thread.
I think that's what Paulson was faced with in 2008 when he decided to let Leahman Bros. fail. In bailouts to follow, that was the overriding decision - who should be saved. Who should fail.
GM, directly or indirectly employed 1 Million people. Let them fail?
AIG insured the toxic Credit Default Swaps, which they thought they would never have to pay on. Let them fail? They didn't create the problem they just insured it wouldn't blow up. I guess it would be like letting Allstate Insurance fail next big hurricane that comes ashore.
All of those instances are no more than transfers of wealth from one section of the population to another. The recipients include the TBTF bankers, the Autoworkers, GM Management, Goldman Sachs and AIG Management - none of whom deserved a bailout. The donors are you and me, who had absolutely nothing to do with the corruption at those companies, the mismanagement at those companies, and the largess at those companies - all of which were contributing factors in their failures.
AIG was rescued so that they could pay off Goldman Sach's bum investments in AIG what was it, something like $25 Billion (with a "B")? Nice gig, if you can pull it off! If AIG was "insuring" bogus paper, why shouldn't they take the hit? They sure didn't have a problem pocketing the premiums for it. Paulson was the stickup man that Bush assigned to do the dirty work, and he was well-compensated to do it.
Anyone working for GM and its suppliers need to be thinking about re-training. It happens to people all the time, but they were given special status because they vote in a block. No mystery there. GM Management was simply doing what any greedy management does when allowed to get away with it. YES, let GM and the whole lot of them find jobs that matter at wages that aren't subsidized by Uncle Sam. Everyone else does it that way.
Lastly, if Allstate fails because their underwriters don't know how to allocate risks and figure out the actuarial ramifications, then why would you want them to survive? Who does incompetance help, anyway - and why shouldn't it fail? If a brain surgeon or a heart surgeon can go to Cuba or Venezuela for training, what's wrong with letting him practice with full priviledges in the US? Please help me out here, what is the payoff?
Rationalizing that everyone should be well-paid for minimal effort is absolutely the road to disaster, aside from being someone's impossible pipe dream. Creating money out of thin air to finance government give-aways and to prop up ineffective companies is exactly the reason that hyperinflation is a distinct possibility. "Magical thinking" is no substitute for seeing reality as it is. There is no defense for the indefensible.
Q: Are You Printing Money? Bernanke: Not Literally
"I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction."
That seems to be an interesting reflection on this and the mother thread but in my mind, a bit over stated. Many of the earlier predictions in that thread weren't so much predictions as they were observations. Observations such as people have wayyyyyy too much personal debt. And no one is saving any money. And the boomers are seriously stretched out and that is causing the X's and Y's to expand on that behaviour, we were becoming a nation of debtors and that was 6 years ago when that was being discussed. Other observations included the bankers and credit card usury and abuses of the public by the banksters like 29% interest rates on outstanding balances and the banksters doing that to produce income by soaking those that they could. There were observations on gold manipulation and inside games with the COMEX and bankers jimmying the reports just as there were observations about the M-1 report and even more esoteric subjects like how forward sellling by miners was skewing the real price of gold.
Most of the predictions in the earlier works were about where will gold and silver go and why, that was the thrust of the prediction part of the thread. As discussions became more evolved then things got to the offerings of predictions. Most of them were pretty right on ie. the housing discussions were well ahead of the actual blossoming of the event but our predictions on gold and silver being favored in response to economic weakness and the expansion of worthless fiat were even more brave.
A few short years ago, gold bugs were all but cussed because we were nay sayers, we were the guy standing at the craps table rail yelling for the 7 or 11...we were the "no" betters and everyone hated us except ourselves and we stuck it out. Swimming against the tide was an understatement, bugs were pariahs in the economics world, derided in their own forum. But we stuck with it, talking and discussing, observing and even predicting but we stuck with it. While everyone was scoffing at us, we were out there vacuuming up what ever $400-$600 metal we could afford. There were many folks, I suspect, that were swayed and started increasing their position in physical metal and their reward is now worth generally twice what their risk was so the predictions weren't all dire and they weren't all for shock either. Even now, "bubble" talk, "stock market rally" and all the other anti-gold hype is falling on deaf ears. We've watched financial soothsayers going from recommending 5% metal in portfolios to now confidently recommending 10%. We've watched the hoards of "smart" people that denigrated gold and any investment holding real assets in lieu of holding stocks, etf's, bonds , any paper, slowly recede into just a few small voices trying to sell their blogs to keep people in the paper mix and even the gov is in it, pumping stocks out of one side of their mouth to mulling over retirement vouchers out of the other.
Predictions that didn't happen: A run on the COMEX as in people demanding delivery and collapsing the exchange but it hasn't happened yet. Bankers owning the country, yep that happened but it hasn't played out yet. Contagation happened somewhat but we likely haven't seen nothing yet. There are more but the point is that predictions seem to come from observations...first you put your observations together and predictions/suppositions/prognostications (call 'em what you will) just naturally flow from that. Predictions here seem more like intelligent responses to a presentation of the arguments than just some wild assed guess; there are actually some very observant, astute posters on this thread or at the least, there are some posters here that do have their moments of vision and offer to share them.
There are plenty of predictions floating around and they can't all be right even as they likely aren't all wrong...theres a hard rain that's gonna fall and those that are interested in coming out of this in any shape at all are paying attention. This is an excellent forum to discuss these things...it's about the money. It's nice to be alerted to possibilities and watch how they play out so you can develop a response rather than read about it, after the fact, in the newspaper. For what it's worth.
<< In this case it's the mistrust of the debt/credit system more than the official monetary system. >>
No, it's mistrust of the official monetary system. Specifically the fact that a huge amount of new "money" is being created. The purpose for which it is being created - in this case to pay off the debts of several well-connected firms - is irrelevant. If the tons of new money were being created for some other purpose, the official monetary system would still come into disrepute. If the debt/credit system were to collapse of its own weight, it wouldn't create mistrust of the official monetary system. The mistrust is due fundamentally to money creation, not the rise or fall of credit and debt.
The fact is that we are essentially Team-USA (I know - corny) but if we had let GM fail we'd have lost one more reason that USA is falling behind the rest of the world. We don't care about our CORE industries. GM is a CORE industry. It takes decades to rebuild an integrated economy like the one that had been built around GM. There are whole industries who's sole customer is GM. They all employ Americans (and a few Canadiens).
You know what - I deleted my first post because I decided that the "numismatist of the year" wasn't worth my arguement. But then I decided that when someone accuses a person of being a traitor, that it is not to be taken lightly.
I never thought I'd be attacked and demonized on a hobby chatboard for having a legitimate opinion on a business and free enterprise issue. I think it's very inappropriate to be calling out "traitor" in an attempt to silence someone for advocating that bankruptcy law be followed instead of what actually happened with GM.
For the record, GM did fail and SHOULD FAIL, the bondholders should be paid off per contract law instead of being stiffed, the unions should retrain their people by utilizing reserves from the excesses that they've extorted from GM over the years, and the government should never be allowed to take over a private business - ever.
Anyone who has ever worked in a real job for a real company knows that the only way to revitalize an industry is to stop rewarding sloth and incompetance and to allow incentives to stimulate creative and competitive excellence. That's how the auto industry was built. It wasn't done by government committee.
I deserve an apology, but I'm pretty certain that one won't be forthcoming.
Q: Are You Printing Money? Bernanke: Not Literally
No it isn't. GM isn't even an industry - it's one of many automobile manufacturers. But that's beside the point.
During its history the U.S. has seen many so-called "core" industries bite the dust, and has emerged all the stronger for it. GM and other auto manufacturers helped make obsolete the "core" horse-and-buggy industry, along with all the smaller businesses that depended on it. Bailing out the horse-and-buggy industry wouldn't have made the American economy stronger, it would have made it weaker.
The government money currently being poured into bailing out "core" industries would be better spent in the private sector, creating jobs the old-fashioned way - producing goods and services that people actually want to buy.
No, it's mistrust of the official monetary system. Specifically the fact that a huge amount of new "money" is being created. The purpose for which it is being created - in this case to pay off the debts of several well-connected firms - is irrelevant. If the tons of new money were being created for some other purpose, the official monetary system would still come into disrepute. If the debt/credit system were to collapse of its own weight, it wouldn't create mistrust of the official monetary system. The mistrust is due fundamentally to money creation, not the rise or fall of credit and debt.
If that's the case please show me with an M1, M2, M3, or MZM chart that shows this huge amount of "official" new money being created since 2006 that has caused so much distrust. The FED alone has piled over $1 TRILL in debt on to their balance sheet and porked up their Foreign Custodial Account by over 1/2 TRILLION in the past couple of years (now at $3 TRILL). The Treasury has sold $1-2 TRILLION in TBonds via 2x/month bond auctions for the past 18-24 months. What about the $780 BILL in TARP1 money? How about the $150 BILL or so dumped into Fannie & Freddie? What about the POMO operations that are dumping tens of billion each month into the financial markets? My point is that none of this shows up in the M's....therefore you "should" have no reason to distrust the monetary system based solely on official M1,2,3 changes. It's all good. My contention is that there is a growing distrust of the "unofficial" monetary system (ie the one that counts more). All this monetization is happening outside the official monetary system and it's not fooling too many people any more.
GM didn't fail because of it's auto manufacturing, it failed because it was primarily acting as a bank, lender, and credit facility (GMAC). It was/is loaded with toxic otc derivatives. Leveraged losing bets can really hurt when the tide turns against you. GMAC/GE did great when the times were booming even if that was smoke and mirrors. In free markets, the weak are allowed to fail. It's pretty clear we don't anything close to free markets. That "Team-USA" slogan is hoot. Next thing you'll be whipping out your Whip Inflation Now button from the 1970's. "Team-USA" are the banksters, govt, regulators, and corporatacracy. There's no room on that team for J6P. Joe remains as the taxpayer on the hook to pay for any of the Team's losses...present or future. But the credit and rewards for all the wins goes 100% to them. We are falling behind the rest of the world because we have allowed "Team-USA" over the past 40-50 years to take full reigns of the financial system w/o any responsibility or accountability. This is also one of those "dire" predictions in the main thread that has been slowly coming to the forefront...the depth of outright fraud throughout our entire system. It's getting to the point where no part of the financial system will be left unscatched. Look under rock and you'll probably find rampant fraud. We've only brushed the surface Team. If things are so squeaky clean why go to such great lengths to keep things covered up? The latest rush by both the Congress and Senate to pass the legality of interstate foreclosure robo-signings was a real piece of artistry by our Team.
<< <i>There are whole industries who's sole customer is GM. >>
Not just companies, but whole industries? And these industries supply nobody but GM? I had no idea. If you would, could you tell me which industries these are, and which companies comprise these industries?
There were many dire predictions made about the banking system collapsing prior to 2007. All one has to do is Goggle. The banking system did collapse. It was proped up immediately after it seized up. Without an AIG bailout it was game over globally.
There were many dire predictions made about the housing crisis pre 2006. The housing crisis happened. Many were correct. All one has to do is Google.
To be perfectly honest I understand why GM and AIG were saved and I'm at odds with it inside my thick head on the correct course of action. I could argue both sides against the middle. My libertarian core is not happy with me on this......I would have saved both and let the rest fail. It's not fair but it's what I would have done. Picking who lives and dies is never easy.
I've just spent the past week in Japan. I have some G20 smackdown from two hedgies I know. Will share later. Time to catch a flight to the "evil" China.
mhammerman.........I like your style.
MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
And for the 100th time hyperinflation is a currency event. Nothing more or nothing less. To think it couldn't happen is very ostritchesque IMHO................MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
If that's the case please show me with an M1, M2, M3, or MZM chart that shows this huge amount of "official" new money being created since 2006 that has caused so much distrust.
Well, here's M1. Not exactly confidence-inspiring. And here's M2. Seems to be headed in the same general direction. The government has conveniently quit reporting M3. Here's MZM, headed back up after a short blip.
Not that the "official" M's are any more trustworthy than other government statistics. (See this article, "US Dollar Money Supply Is Underreported", and the chart at the bottom of the webpage.) But the public generally ignores changes in the official M statistics. Most of the distrust is the public's reaction to uncontrolled spending. The most striking manifestation of distrust is the relentless rise in the gold price, as expressed in "official" U.S. dollars, not an "unofficial" money system.
GM didn't fail because of it's auto manufacturing, it failed because it was primarily acting as a bank, lender, and credit facility (GMAC).
A bit of both: check out Hummer and Saturn.
In free markets, the weak are allowed to fail. It's pretty clear we don't anything close to free markets.
The latest rush by both the Congress and Senate to pass the legality of interstate foreclosure robo-signings was a real piece of artistry by our Team.
Artistry is one way of looking at it. It's almost like watching a building-demolition team at work, setting the explosive charges in place. Waiting for the implosion that will take down the whole building. More bad policy that benefits the frauds, liars, cheats and the incompetant. The question is "why?" Papering-over the problem (instead of fixing it) will only make things worse.
If the legal system wasn't complicated enough before, it is now becoming a snarl of insolvable claims and counterclaims that promises to bring commerce to a dead standstill. The implications for the economy and for the dollar are profound.
If the economy isn't producing, then it doesn't matter how many dollars are printed, how many dollars are dropped from helicopters, how much liquidity is injected, or how much quantitative easing takes place. If real shortages develop, then you can bet that the government will be called upon to "solve the problem" with rationing, quotas of all sorts, and price controls.
It should be the government's job to keep this from happening by enforcing the laws, not by changing them when their buddies get caught red-handed jerking the system.
Q: Are You Printing Money? Bernanke: Not Literally
Traitor is not too strong, but it wasn't directed at you Jminski, but if you feel you deserve the moniker, so be it. If you are against the US's success, then that's the label you deserve.
If I were to soften "traitor" maybe I could have said you (not you personally Jminski) want the country to become Somalia. None of that horrible government intervention there.
Well on Nov 2 at 8pm PST we may have a clearer picture of America's chances of success or at least its path. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Overdate, that was a good article on how deposit currency created by banks has skewed the M's. That was even a larger figure than I had thought. That article estimates true M1 at $2.9 TRILL yet current reporting has it down around $1.8 TRILL. A nice slight of hand maneuver. A large part of that error was when the FED gave its banks $900B in reserves during the 4th quarter of 2008 to cover fallout from the crash. While M0 (BASE) saw that all of that change (+117%), M1 did not because of accounting gimmicks allowed in reclassifying demand deposts into time deposits. But that huge change in M0 and M1 was basically a one time event back in late 2008. In the past 12 months the FED/Treasury have been apparently easing/monetizing big time yet we only see relatively small gains in the M's:
M1 +94 BILL (+5.6%) M2 +240 BILL (+2.8%) MZM +100 BILL (+1.0 %)
An extra $240 BILL didn't cause gold to rise 32% from Feb. did it? And even using peak to peak from Dec 2009 to Oct 2010 gold was up 13%. Using the adjusted M1 chart you posted it doesn't appear to have changed more than $240 BILL. in the past year. That would be about a 9% change. Possibly that can account for the 13% change in the gold price? Of course such an adjusted M1 curve is not posted at the FED.
I don't think Hummer or Saturn was the true death blow to GM. Much of the carnage was in behind the scenes otc derivatives just like at the big banks. And a lot of the mess has not been brought to the surface for public scrutiny. Same thing that took down Lehman and Bear Stearns. Wasn't GMAC heavily into mortgage backed securities as well?
If you are against the US's success, then that's the label you deserve
Is that another way of saying that the big banks, mortgage companies, AIG, FED, Treasury, Fannie & Freddie, politicians, lobbyists, and others have all been doing God's work for the success of their country? In other words, they just made some slight error in judgements along the way but their intentions were all honorable?
<< <i>Traitor is not too strong, but it wasn't directed at you Jminski, but if you feel you deserve the moniker, so be it. If you are against the US's success, then that's the label you deserve.
If I were to soften "traitor" maybe I could have said you (not you personally Jminski) want the country to become Somalia. None of that horrible government intervention there. >>
The name calling has no place here. Even sleeping on it, you stick to this language? Are the Swedes that opposed the bailout of their auto makers Saab and Volvo traitors to their country? Just because they oppose policy? Did they wish Sweden would become Somalia? What? I would say an apology, now two apologies are warranted. If a person wants to resort to name calling to make their arguments, there are plenty of vile names that I have heard for those that favored the GM bailout as structured.
Treason is an offense where the maximum penalty is death. The minimum if convicted is like 20 years in prison. Literally millions of honorable Americans, many of them veterans that served in combat opposed the GM bailout as it was structured. Is there any calm person advocating prison camps for them? Or worse, mass gas chambers? That is what traitor means, and the weight that word carries. Think before you throw around such strong emotion laced language. Many people opposed the bailout. Many wish it was structured very differently. Perhaps a tiny minority wanted the millions involved with the company thrown out on the street with no recourse, no hope, but differences on policy are often wide.
What is ironic is that one president ago, there were bumper stickers saying "dissent is patriotic." Now that there is a new president, much of the same crowd now views opposition to POLICY as sedition (= treason). Which is it? Can't honest people disagree without the name calling? Why is it patriotism when one side of the aisle disagrees with the president's policy, but sedition when the other side disagrees?
Again, I'd say an apology, now two apologies are warranted.
I don't get where the traitor comment was warranted in anyway, shape or form. Over the top. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Roadrunner, I don't think the price of gold does or should move in lockstep with reported official changes in the money supply. A lot of other factors are at work, such as a general rise in prices (which lags the money creation itself), possible gold price manipulation, and expected future government policy regarding money creation and spending. I think this last factor has contributed the most to gold's price rise over the last few years.
Traitor is not too strong, but it wasn't directed at you Jminski, but if you feel you deserve the moniker, so be it. If you are against the US's success, then that's the label you deserve.
If I were to soften "traitor" maybe I could have said you (not you personally Jminski) want the country to become Somalia. None of that horrible government intervention there.
I'm truly glad that I don't belong to the same organization. Not directed specifically at you Eqelsaeyhe, but if you feel you deserve the moniker of class fool, so be it.
If I were to pretend that I were talking about someone else in order to make it seem that I were something that I weren't, I doubt that it would fool a single person reading this thread.
Numismatist of the year? I wonder what that group thinks about this type of behavior. I'm done with this thread. Sorry Renski.
Q: Are You Printing Money? Bernanke: Not Literally
Sorry, It's Jmski52, not jminski. You sure are touchy. No, you don't deserve any apology. For assuming I was directing anything at you, for assuming I messed up your name on purpose, for just being. You seem to take offense easily and spout garbage in the next breath, So, no.
I edited out the statement, but I still am a patriotic flag waver and reserve the right to speak my mind in upholding the values of this country, whether you agree or not.
Note that when EE starts flailing in discussions/debates he resorts to name calling. This is certainly not the first time he's used this tactic, and it probably won't be the last. So when he says someone only spouts "garbage" he is tossing in the towel as he has nothing further to offer. He then covers up his mess by stating it's not personal nor even directed at a specific individual, when clearly it is. The entire CU forum deserves a lot better, especially from the NOTY. And as a patriot and flag waver he does have the unconditional right to label other people's work as "garbage." Guess there are just too many "touchy" people in this forum.
None of the above was personally directed at EE...even if it the shoe fits.
Hey, If say it wasn't directed at anyone, that is what I mean, not what you think it means, and not anything else. I am not on the weaker end of the discussion, and you are worng in thinking that I am running away from any argument. I will always and continue to correct you when you are wrong. You can correct me if I'm wrong. That part of what these boards are for, but when you start changing my posts around, to mean something else, then I have to correct you.
I'm still interested in learning which whole industries might exist that are suppliers to GM exclusively. I'm willing to be convinced, but I'd like to see some sort of evidence before taking that claim at face value.
EagleEye you do realize that GM failed, right? Just because they were bailed out with the reorganization does not mean they are a success.
Also Ford did not need any bailout or reorganization and was harmed by the government giving GM a bailout, I don't hear anyone mentioning that much.
What you are saying is sort of like what is happening to Blockbuster right now, they are going into bankruptcy and should be bailed out to save the people that make DVD's for Blockbuster. Does that make sense? No.
In this Country if you run a business and run it badly then you should fail and others will take over your market share and run it better. That is not being a traitor to expect that, it is what this Country was founded on. many small businesses have gone under without a whimper to help save them. If we help one, then we should help all or do nothing.
<< <i>Already, this demand is strong in China, which last year became the world’s largest auto market, Chang said. Sales of Chinese passenger cars to dealerships rose 19.3% in September from the year-ago period, and sales for January through September were up 36.7% to 9.9 million units, according to a report earlier this month from the Chinese Association of Automobile Manufacturers. >>
Suppliers Big players like parts maker Tower Automotive Inc. and American Axle & Manufacturing (AXL ) rely on GM for a large chunk of their business. If its market share slid more quickly, they would suffer declines in revenue. The carmaker would try to keep the disruption to key business partners to a minimum, but many smaller parts makers could topple into bankruptcy, predicts Stallkamp. He says Ripplewood considered buying one thriving parts maker recently, a company with about $500 million in revenue. But it was too dependent on GM. If the auto maker stopped paying suppliers even just for a few weeks after filing, that company and a handful of others could end up in bankruptcy, he says.
Unsurprisingly, there are suppliers who would be impacted by a GM failure. I did not see where any companies (let alone whole industries) were described as being suppliers to GM exclusively.
Back to hyperinflation for a moment... and I apologize if this question(s) has already been answered.
The vast majority in the USA have never experienced a currency-devaluation event (or "hyperinflation"). So it is not even in the back of most peoples' minds. Simply have never had to fear it. Maybe correspondingly, it seems that only a small minority of the US actually own substantial PM's.
Therefore, I cannot imagine a point where the majority of regular people decide "I've got to go spend this money now, it's going to be worth less tomorrow".
But without hyperinflation being initiated by the masses, how do we get from point A to B? How would a hyperinflationary event actually logistically happen? Or is it more likely to be a slow decline of all fiat, relative to PM's, resources, oil, etc? Or, how would a quick series of events trigger HI? Or how could the US gov't just say - here's new fiat, turn in your old fiat (and trim 30% off the top).
What is most likely to happen, and HOW will it happen?
<< <i>Back to hyperinflation for a moment... and I apologize if this question(s) has already been answered.
The vast majority in the USA have never experienced a currency-devaluation event (or "hyperinflation"). So it is not even in the back of most peoples' minds. Simply have never had to fear it. Maybe correspondingly, it seems that only a small minority of the US actually own substantial PM's.
Therefore, I cannot imagine a point where the majority of regular people decide "I've got to go spend this money now, it's going to be worth less tomorrow".
But without hyperinflation being initiated by the masses, how do we get from point A to B? How would a hyperinflationary event actually logistically happen? Or is it more likely to be a slow decline of all fiat, relative to PM's, resources, oil, etc? Or, how would a quick series of events trigger HI? Or how could the US gov't just say - here's new fiat, turn in your old fiat (and trim 30% off the top).
What is most likely to happen, and HOW will it happen? >>
Yes.
This is why I've always expected things are likely to manifest in a bond market panic.
People will get out of the most dangerous assets first and this will be bonds. The FED must tread very lightly to avoid this. An implosion could occur very rapidly because the damned bankers have messed around with derivitives tied to these bonds that will move at multiples the rates that the bonds move. A lightning fast move could easily ensue within the entire financial system.
If thisis avoided then people will just start noticing higher prices. There are already anecdotal reports of much higher prices wafting through the system. The closer you are to the raw materials the more this is visible. Some industry has already experienced triple digit gains in most of the commodities they use and these prices will work through the system.
<< <i> I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it. >>
Well said.
We have some serious problems in this country. There will be some painful adjustments ahead. But I don't see a basis to conclude that "this time is different" from every other in our history and that we've somehow reached the end of the line as a country. >>
secondrepublic, for arguments sake, how would you conclude a "this time is different" scenario? Is it more debt? Change of gov't fundamentals? Serious question.
Comments
Agreed. But the actions currently being taken are turning the boat around 180 degrees and heading back towards the waterfall for a second attempt.
roadrunner
<< <i>I think we AVOIDED a complete collapse in 2008. The future, well, is a bit more dimly lit.
Agreed. But the actions currently being taken are turning the boat around 180 degrees and heading back towards the waterfall for a second attempt.
Same but different. I think "2008" will look like a pop quiz compared to what's coming.
roadrunner
That would be great if you knew that you wouldn't be whipsawed and if you had enough cash to make payments no matter which way rates went. Hyperinflation or not - I trust having physical metals in-hand much, much more than I trust what the Fed might decide to do. They've proven that they are not to be trusted. Can you give me a reason to think otherwise?
I knew it would happen.
Camelot
<< <i>Don't really know what's around the corner. >>
The borrower always becomes a slave to the lender.
There is one situation that is coming around the corner and will no doubt touch most of us that have socked away PM's and other wherewithall for the downturn we've been watching approach for the last couple of years. In-laws and siblings are and will be asking for assistance with money or even some help with a place to stay "just for a while". While I don't presume to offer advice, it may be a good time to put together a strategy for dealing with this issue. One thing I can say is that if you help with money, they will come back for more and if you don't then their situation somehow becomes your fault.
File under: Food For Thought
<< <i>That would be great if you knew that you wouldn't be whipsawed and if you had enough cash to make payments no matter which way rates went. Hyperinflation or not - I trust having physical metals in-hand much, much more than I trust what the Fed might decide to do. They've proven that they are not to be trusted. Can you give me a reason to think otherwise? >>
If you think hyperinflation is going to happen, you could easily sell your PMs at much higher prices and pay off the fixed-rate debt. Turn a small amount of gold into a big house or some such.
Is there a way to separate the good from the bad debt and just let the bad debt implode?
Perhaps gov't protection of private pensions which probably would warrant the gov't take over of all 401Ks. The gov't as temporary custodian until the debt is reset. Protecting SS, gov't operating expenses, etc. Do what's necessary to keep the country and all its citizens intact while letting he bad debt implode. Or the the debt so interwined in the economy that this is impossible to do?
Box of 20
I think that's what Paulson was faced with in 2008 when he decided to let Leahman Bros. fail. In bailouts to follow, that was the overriding decision - who should be saved. Who should fail.
GM, directly or indirectly employed 1 Million people. Let them fail?
AIG insured the toxic Credit Default Swaps, which they thought they would never have to pay on. Let them fail? They didn't create the problem they just insured it wouldn't blow up. I guess it would be like letting Allstate Insurance fail next big hurricane that comes ashore.
I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it.
Each month the revelations show just how much we underestimated these financial crooks. Now it's the fact that mortgage paperwork was never signed and foreclosures will be tied up for quite some time....technically an unsolvable issue if the original inked signed notes/deeds can't be located. If you look back at the start of this forum in early 2004, more often than not, most of the "dire predictions" have in fact come true. If this forum (and the ten thousand+ posts) has helped one additional person to prepare for what was coming back in the 2004-2007 time frame, it was worth the effort expended.
roadrunner
<< <i>GM, directly or indirectly employed 1 Million people. Let them fail? >>
Let them fail? If they can't compete? Sure. Why not?
For every GM, there are thousands of small businesses that, combined, employ just as many people. And some of those businesses fail every day. Nobody seems to be saying that we need to save those "too small to fail" businesses. If it's good enough for them, it's good enough for GM.
Mistrust of the money starts with reckless creation of too much new money by the issuing authority.
My Adolph A. Weinman signature
<< <i> I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it. >>
Well said.
We have some serious problems in this country. There will be some painful adjustments ahead. But I don't see a basis to conclude that "this time is different" from every other in our history and that we've somehow reached the end of the line as a country.
<< <i>I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it.
Each month the revelations show just how much we underestimated these financial crooks. Now it's the fact that mortgage paperwork was never signed and foreclosures will be tied up for quite some time....technically an unsolvable issue if the original inked signed notes/deeds can't be located. If you look back at the start of this forum in early 2004, more often than not, most of the "dire predictions" have in fact come true. If this forum (and the ten thousand+ posts) has helped one additional person to prepare for what was coming back in the 2004-2007 time frame, it was worth the effort expended.
roadrunner >>
RR, do you have any links for the "dire predictions" that have come to fruition? It would be interesting to review and study especially the ones prior to 2006.
Problem is while the govt had been quite loose with official M1/M2 monetary policy from 1996-2006 it pales in comparison to what corporations and GSE's did with their "unofficial" monetary systems to leverage up debt and credit. In this case the issuing authorities were the largest banks and corporations and they worked their magic outside our official money system. The govt gave these corporations all the levers needed to work around the system but they did not have a direct role in telling them to create $1 QUAD+ in leveraged debt/credit/bets. In this case it's the mistrust of the debt/credit system more than the official monetary system. For the past two decades debt and credit became their own monetary system without any reasonable controls. I would say that any damage to the economy from the increase in M1 and M2 during those 10 yrs could have been easily contained, and still could if it were the primary issue.
RR, do you have any links for the "dire predictions" that have come to fruition? It would be interesting to review and study especially the ones prior to 2006.
Everyone's definition of "dire" is probably different. Dire to me may be quite different than dire to EagleEye. In 2004 the main thread discussed the increasing probability of a complete bust in the housing and derivatives sectors along with big banks coming down...not to mention a return to $1000+ gold. I'd say those "dire" predictions did come true. Those are the easy ones. A number of mainstream analysts started putting that stuff out there in 2001-2002 of which Sinclair was just one of them. There are 10,000+ pages in the main PM's/Economic thread but those predictions were made within the first year. Too bad the site "search" function can't be applied to a single thread.
roadrunner
GM, directly or indirectly employed 1 Million people. Let them fail?
AIG insured the toxic Credit Default Swaps, which they thought they would never have to pay on. Let them fail? They didn't create the problem they just insured it wouldn't blow up. I guess it would be like letting Allstate Insurance fail next big hurricane that comes ashore.
All of those instances are no more than transfers of wealth from one section of the population to another. The recipients include the TBTF bankers, the Autoworkers, GM Management, Goldman Sachs and AIG Management - none of whom deserved a bailout. The donors are you and me, who had absolutely nothing to do with the corruption at those companies, the mismanagement at those companies, and the largess at those companies - all of which were contributing factors in their failures.
AIG was rescued so that they could pay off Goldman Sach's bum investments in AIG what was it, something like $25 Billion (with a "B")? Nice gig, if you can pull it off! If AIG was "insuring" bogus paper, why shouldn't they take the hit? They sure didn't have a problem pocketing the premiums for it. Paulson was the stickup man that Bush assigned to do the dirty work, and he was well-compensated to do it.
Anyone working for GM and its suppliers need to be thinking about re-training. It happens to people all the time, but they were given special status because they vote in a block. No mystery there. GM Management was simply doing what any greedy management does when allowed to get away with it. YES, let GM and the whole lot of them find jobs that matter at wages that aren't subsidized by Uncle Sam. Everyone else does it that way.
Lastly, if Allstate fails because their underwriters don't know how to allocate risks and figure out the actuarial ramifications, then why would you want them to survive? Who does incompetance help, anyway - and why shouldn't it fail? If a brain surgeon or a heart surgeon can go to Cuba or Venezuela for training, what's wrong with letting him practice with full priviledges in the US? Please help me out here, what is the payoff?
Rationalizing that everyone should be well-paid for minimal effort is absolutely the road to disaster, aside from being someone's impossible pipe dream. Creating money out of thin air to finance government give-aways and to prop up ineffective companies is exactly the reason that hyperinflation is a distinct possibility. "Magical thinking" is no substitute for seeing reality as it is. There is no defense for the indefensible.
I knew it would happen.
That seems to be an interesting reflection on this and the mother thread but in my mind, a bit over stated. Many of the earlier predictions in that thread weren't so much predictions as they were observations. Observations such as people have wayyyyyy too much personal debt. And no one is saving any money. And the boomers are seriously stretched out and that is causing the X's and Y's to expand on that behaviour, we were becoming a nation of debtors and that was 6 years ago when that was being discussed. Other observations included the bankers and credit card usury and abuses of the public by the banksters like 29% interest rates on outstanding balances and the banksters doing that to produce income by soaking those that they could. There were observations on gold manipulation and inside games with the COMEX and bankers jimmying the reports just as there were observations about the M-1 report and even more esoteric subjects like how forward sellling by miners was skewing the real price of gold.
Most of the predictions in the earlier works were about where will gold and silver go and why, that was the thrust of the prediction part of the thread. As discussions became more evolved then things got to the offerings of predictions. Most of them were pretty right on ie. the housing discussions were well ahead of the actual blossoming of the event but our predictions on gold and silver being favored in response to economic weakness and the expansion of worthless fiat were even more brave.
A few short years ago, gold bugs were all but cussed because we were nay sayers, we were the guy standing at the craps table rail yelling for the 7 or 11...we were the "no" betters and everyone hated us except ourselves and we stuck it out. Swimming against the tide was an understatement, bugs were pariahs in the economics world, derided in their own forum. But we stuck with it, talking and discussing, observing and even predicting but we stuck with it. While everyone was scoffing at us, we were out there vacuuming up what ever $400-$600 metal we could afford. There were many folks, I suspect, that were swayed and started increasing their position in physical metal and their reward is now worth generally twice what their risk was so the predictions weren't all dire and they weren't all for shock either. Even now, "bubble" talk, "stock market rally" and all the other anti-gold hype is falling on deaf ears. We've watched financial soothsayers going from recommending 5% metal in portfolios to now confidently recommending 10%. We've watched the hoards of "smart" people that denigrated gold and any investment holding real assets in lieu of holding stocks, etf's, bonds , any paper, slowly recede into just a few small voices trying to sell their blogs to keep people in the paper mix and even the gov is in it, pumping stocks out of one side of their mouth to mulling over retirement vouchers out of the other.
Predictions that didn't happen: A run on the COMEX as in people demanding delivery and collapsing the exchange but it hasn't happened yet. Bankers owning the country, yep that happened but it hasn't played out yet. Contagation happened somewhat but we likely haven't seen nothing yet. There are more but the point is that predictions seem to come from observations...first you put your observations together and predictions/suppositions/prognostications (call 'em what you will) just naturally flow from that. Predictions here seem more like intelligent responses to a presentation of the arguments than just some wild assed guess; there are actually some very observant, astute posters on this thread or at the least, there are some posters here that do have their moments of vision and offer to share them.
There are plenty of predictions floating around and they can't all be right even as they likely aren't all wrong...theres a hard rain that's gonna fall and those that are interested in coming out of this in any shape at all are paying attention. This is an excellent forum to discuss these things...it's about the money. It's nice to be alerted to possibilities and watch how they play out so you can develop a response rather than read about it, after the fact, in the newspaper. For what it's worth.
New shooter...
No, it's mistrust of the official monetary system. Specifically the fact that a huge amount of new "money" is being created. The purpose for which it is being created - in this case to pay off the debts of several well-connected firms - is irrelevant. If the tons of new money were being created for some other purpose, the official monetary system would still come into disrepute. If the debt/credit system were to collapse of its own weight, it wouldn't create mistrust of the official monetary system. The mistrust is due fundamentally to money creation, not the rise or fall of credit and debt.
My Adolph A. Weinman signature
I never thought I'd be attacked and demonized on a hobby chatboard for having a legitimate opinion on a business and free enterprise issue. I think it's very inappropriate to be calling out "traitor" in an attempt to silence someone for advocating that bankruptcy law be followed instead of what actually happened with GM.
For the record, GM did fail and SHOULD FAIL, the bondholders should be paid off per contract law instead of being stiffed, the unions should retrain their people by utilizing reserves from the excesses that they've extorted from GM over the years, and the government should never be allowed to take over a private business - ever.
Anyone who has ever worked in a real job for a real company knows that the only way to revitalize an industry is to stop rewarding sloth and incompetance and to allow incentives to stimulate creative and competitive excellence. That's how the auto industry was built. It wasn't done by government committee.
I deserve an apology, but I'm pretty certain that one won't be forthcoming.
I knew it would happen.
No it isn't. GM isn't even an industry - it's one of many automobile manufacturers. But that's beside the point.
During its history the U.S. has seen many so-called "core" industries bite the dust, and has emerged all the stronger for it. GM and other auto manufacturers helped make obsolete the "core" horse-and-buggy industry, along with all the smaller businesses that depended on it. Bailing out the horse-and-buggy industry wouldn't have made the American economy stronger, it would have made it weaker.
The government money currently being poured into bailing out "core" industries would be better spent in the private sector, creating jobs the old-fashioned way - producing goods and services that people actually want to buy.
My Adolph A. Weinman signature
If that's the case please show me with an M1, M2, M3, or MZM chart that shows this huge amount of "official" new money being created since 2006 that has caused so much distrust. The FED alone has piled over $1 TRILL in debt on to their balance sheet and porked up their Foreign Custodial Account by over 1/2 TRILLION in the past couple of years (now at $3 TRILL). The Treasury has sold $1-2 TRILLION in TBonds via 2x/month bond auctions for the past 18-24 months. What about the $780 BILL in TARP1 money? How about the $150 BILL or so dumped into Fannie & Freddie? What about the POMO operations that are dumping tens of billion each month into the financial markets? My point is that none of this shows up in the M's....therefore you "should" have no reason to distrust the monetary system based solely on official M1,2,3 changes. It's all good. My contention is that there is a growing distrust of the "unofficial" monetary system (ie the one that counts more). All this monetization is happening outside the official monetary system and it's not fooling too many people any more.
GM didn't fail because of it's auto manufacturing, it failed because it was primarily acting as a bank, lender, and credit facility (GMAC). It was/is loaded with toxic otc derivatives. Leveraged losing bets can really hurt when the tide turns against you. GMAC/GE did great when the times were booming even if that was smoke and mirrors. In free markets, the weak are allowed to fail. It's pretty clear we don't anything close to free markets. That "Team-USA" slogan is hoot. Next thing you'll be whipping out your Whip Inflation Now button from the 1970's. "Team-USA" are the banksters, govt, regulators, and corporatacracy. There's no room on that team for J6P. Joe remains as the taxpayer on the hook to pay for any of the Team's losses...present or future. But the credit and rewards for all the wins goes 100% to them. We are falling behind the rest of the world because we have allowed "Team-USA" over the past 40-50 years to take full reigns of the financial system w/o any responsibility or accountability. This is also one of those "dire" predictions in the main thread that has been slowly coming to the forefront...the depth of outright fraud throughout our entire system. It's getting to the point where no part of the financial system will be left unscatched. Look under rock and you'll probably find rampant fraud. We've only brushed the surface Team. If things are so squeaky clean why go to such great lengths to keep things covered up? The latest rush by both the Congress and Senate to pass the legality of interstate foreclosure robo-signings was a real piece of artistry by our Team.
roadrunner
<< <i>There are whole industries who's sole customer is GM. >>
Not just companies, but whole industries? And these industries supply nobody but GM? I had no idea. If you would, could you tell me which industries these are, and which companies comprise these industries?
There were many dire predictions made about the banking system collapsing prior to 2007. All one has to do is Goggle. The banking system did collapse. It was proped up immediately after it seized up. Without an AIG bailout it was game over globally.
There were many dire predictions made about the housing crisis pre 2006. The housing crisis happened. Many were correct. All one has to do is Google.
To be perfectly honest I understand why GM and AIG were saved and I'm at odds with it inside my thick head on the correct course of action. I could argue both sides against the middle. My libertarian core is not happy with me on this......I would have saved both and let the rest fail. It's not fair but it's what I would have done. Picking who lives and dies is never easy.
I've just spent the past week in Japan. I have some G20 smackdown from two hedgies I know. Will share later. Time to catch a flight to the "evil" China.
mhammerman.........I like your style.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Well, here's M1. Not exactly confidence-inspiring. And here's M2. Seems to be headed in the same general direction. The government has conveniently quit reporting M3. Here's MZM, headed back up after a short blip.
Not that the "official" M's are any more trustworthy than other government statistics. (See this article, "US Dollar Money Supply Is Underreported", and the chart at the bottom of the webpage.) But the public generally ignores changes in the official M statistics. Most of the distrust is the public's reaction to uncontrolled spending. The most striking manifestation of distrust is the relentless rise in the gold price, as expressed in "official" U.S. dollars, not an "unofficial" money system.
GM didn't fail because of it's auto manufacturing, it failed because it was primarily acting as a bank, lender, and credit facility (GMAC).
A bit of both: check out Hummer and Saturn.
In free markets, the weak are allowed to fail. It's pretty clear we don't anything close to free markets.
I agree with you there.
My Adolph A. Weinman signature
Artistry is one way of looking at it. It's almost like watching a building-demolition team at work, setting the explosive charges in place. Waiting for the implosion that will take down the whole building. More bad policy that benefits the frauds, liars, cheats and the incompetant. The question is "why?" Papering-over the problem (instead of fixing it) will only make things worse.
If the legal system wasn't complicated enough before, it is now becoming a snarl of insolvable claims and counterclaims that promises to bring commerce to a dead standstill. The implications for the economy and for the dollar are profound.
If the economy isn't producing, then it doesn't matter how many dollars are printed, how many dollars are dropped from helicopters, how much liquidity is injected, or how much quantitative easing takes place. If real shortages develop, then you can bet that the government will be called upon to "solve the problem" with rationing, quotas of all sorts, and price controls.
It should be the government's job to keep this from happening by enforcing the laws, not by changing them when their buddies get caught red-handed jerking the system.
I knew it would happen.
If I were to soften "traitor" maybe I could have said you (not you personally Jminski) want the country to become Somalia. None of that horrible government intervention there.
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
M1 +94 BILL (+5.6%)
M2 +240 BILL (+2.8%)
MZM +100 BILL (+1.0 %)
An extra $240 BILL didn't cause gold to rise 32% from Feb. did it? And even using peak to peak from Dec 2009 to Oct 2010 gold was up 13%. Using the adjusted M1 chart you posted it doesn't appear to have changed more than $240 BILL. in the past year. That would be about a 9% change. Possibly that can account for the 13% change in the gold price? Of course such an adjusted M1 curve is not posted at the FED.
I don't think Hummer or Saturn was the true death blow to GM. Much of the carnage was in behind the scenes otc derivatives just like at the big banks. And a lot of the mess has not been brought to the surface for public scrutiny. Same thing that took down Lehman and Bear Stearns. Wasn't GMAC heavily into mortgage backed securities as well?
If you are against the US's success, then that's the label you deserve
Is that another way of saying that the big banks, mortgage companies, AIG, FED, Treasury, Fannie & Freddie, politicians, lobbyists, and others have all been doing God's work for the success of their country? In other words, they just made some slight error in judgements along the way but their intentions were all honorable?
roadrunner
<< <i>Traitor is not too strong, but it wasn't directed at you Jminski, but if you feel you deserve the moniker, so be it. If you are against the US's success, then that's the label you deserve.
If I were to soften "traitor" maybe I could have said you (not you personally Jminski) want the country to become Somalia. None of that horrible government intervention there. >>
The name calling has no place here. Even sleeping on it, you stick to this language? Are the Swedes that opposed the bailout of their auto makers Saab and Volvo traitors to their country? Just because they oppose policy? Did they wish Sweden would become Somalia? What? I would say an apology, now two apologies are warranted. If a person wants to resort to name calling to make their arguments, there are plenty of vile names that I have heard for those that favored the GM bailout as structured.
Treason is an offense where the maximum penalty is death. The minimum if convicted is like 20 years in prison. Literally millions of honorable Americans, many of them veterans that served in combat opposed the GM bailout as it was structured. Is there any calm person advocating prison camps for them? Or worse, mass gas chambers? That is what traitor means, and the weight that word carries. Think before you throw around such strong emotion laced language. Many people opposed the bailout. Many wish it was structured very differently. Perhaps a tiny minority wanted the millions involved with the company thrown out on the street with no recourse, no hope, but differences on policy are often wide.
What is ironic is that one president ago, there were bumper stickers saying "dissent is patriotic." Now that there is a new president, much of the same crowd now views opposition to POLICY as sedition (= treason). Which is it? Can't honest people disagree without the name calling? Why is it patriotism when one side of the aisle disagrees with the president's policy, but sedition when the other side disagrees?
Again, I'd say an apology, now two apologies are warranted.
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
My Adolph A. Weinman signature
If I were to soften "traitor" maybe I could have said you (not you personally Jminski) want the country to become Somalia. None of that horrible government intervention there.
I'm truly glad that I don't belong to the same organization. Not directed specifically at you Eqelsaeyhe, but if you feel you deserve the moniker of class fool, so be it.
If I were to pretend that I were talking about someone else in order to make it seem that I were something that I weren't, I doubt that it would fool a single person reading this thread.
Numismatist of the year? I wonder what that group thinks about this type of behavior. I'm done with this thread. Sorry Renski.
I knew it would happen.
I edited out the statement, but I still am a patriotic flag waver and reserve the right to speak my mind in upholding the values of this country, whether you agree or not.
None of the above was personally directed at EE...even if it the shoe fits.
roadrunner
Also Ford did not need any bailout or reorganization and was harmed by the government giving GM a bailout, I don't hear anyone mentioning that much.
What you are saying is sort of like what is happening to Blockbuster right now, they are going into bankruptcy and should be bailed out to save the people that make DVD's for Blockbuster. Does that make sense? No.
In this Country if you run a business and run it badly then you should fail and others will take over your market share and run it better. That is not being a traitor to expect that, it is what this Country was founded on. many small businesses have gone under without a whimper to help save them. If we help one, then we should help all or do nothing.
<< <i>What If GM Did Go Bankrupt... >>
Article is dated December 12, 2005.
Auto industry within a precious metal forum:
FOCUS: Palladium To Extend 9-Year High On Auto Demand, Supply Issues
<< <i>Already, this demand is strong in China, which last year became the world’s largest auto market, Chang said. Sales of Chinese passenger cars to dealerships rose 19.3% in September from the year-ago period, and sales for January through September were up 36.7% to 9.9 million units, according to a report earlier this month from the Chinese Association of Automobile Manufacturers. >>
<< <i>What If GM Did Go Bankrupt... >>
From the linked article:
Suppliers
Big players like parts maker Tower Automotive Inc. and American Axle & Manufacturing (AXL ) rely on GM for a large chunk of their business. If its market share slid more quickly, they would suffer declines in revenue. The carmaker would try to keep the disruption to key business partners to a minimum, but many smaller parts makers could topple into bankruptcy, predicts Stallkamp. He says Ripplewood considered buying one thriving parts maker recently, a company with about $500 million in revenue. But it was too dependent on GM. If the auto maker stopped paying suppliers even just for a few weeks after filing, that company and a handful of others could end up in bankruptcy, he says.
Unsurprisingly, there are suppliers who would be impacted by a GM failure. I did not see where any companies (let alone whole industries) were described as being suppliers to GM exclusively.
The vast majority in the USA have never experienced a currency-devaluation event (or "hyperinflation"). So it is not even in the back of most peoples' minds. Simply have never had to fear it. Maybe correspondingly, it seems that only a small minority of the US actually own substantial PM's.
Therefore, I cannot imagine a point where the majority of regular people decide "I've got to go spend this money now, it's going to be worth less tomorrow".
But without hyperinflation being initiated by the masses, how do we get from point A to B? How would a hyperinflationary event actually logistically happen? Or is it more likely to be a slow decline of all fiat, relative to PM's, resources, oil, etc? Or, how would a quick series of events trigger HI? Or how could the US gov't just say - here's new fiat, turn in your old fiat (and trim 30% off the top).
What is most likely to happen, and HOW will it happen?
Episodes of Hyperinflation
There is also a link to 'Inflation Dynamics' that is worth a look.
<< <i>Back to hyperinflation for a moment... and I apologize if this question(s) has already been answered.
The vast majority in the USA have never experienced a currency-devaluation event (or "hyperinflation"). So it is not even in the back of most peoples' minds. Simply have never had to fear it. Maybe correspondingly, it seems that only a small minority of the US actually own substantial PM's.
Therefore, I cannot imagine a point where the majority of regular people decide "I've got to go spend this money now, it's going to be worth less tomorrow".
But without hyperinflation being initiated by the masses, how do we get from point A to B? How would a hyperinflationary event actually logistically happen? Or is it more likely to be a slow decline of all fiat, relative to PM's, resources, oil, etc? Or, how would a quick series of events trigger HI? Or how could the US gov't just say - here's new fiat, turn in your old fiat (and trim 30% off the top).
What is most likely to happen, and HOW will it happen? >>
Yes.
This is why I've always expected things are likely to manifest in a bond market panic.
People will get out of the most dangerous assets first and this will be bonds. The FED
must tread very lightly to avoid this. An implosion could occur very rapidly because the
damned bankers have messed around with derivitives tied to these bonds that will move
at multiples the rates that the bonds move. A lightning fast move could easily ensue
within the entire financial system.
If thisis avoided then people will just start noticing higher prices. There are already
anecdotal reports of much higher prices wafting through the system. The closer you are
to the raw materials the more this is visible. Some industry has already experienced
triple digit gains in most of the commodities they use and these prices will work through
the system.
Watch out for coffee.
<< <i>
<< <i> I think that you hope for the best but prepare for the worst. The way some people talk here, its like a contest to see who can spew the more dire prediction. I don't buy it. Hyperinflation would only happen if a majority of the people refused to accept cash, credit cards or paypal. Remember, hyperinflation starts with mistrust of the money, then the value erodes overnight, not the other way around. As long as it can buy me nice things, I'm happy to make it and spend it. >>
Well said.
We have some serious problems in this country. There will be some painful adjustments ahead. But I don't see a basis to conclude that "this time is different" from every other in our history and that we've somehow reached the end of the line as a country. >>
secondrepublic, for arguments sake, how would you conclude a "this time is different" scenario? Is it more debt? Change of gov't fundamentals? Serious question.
r95