<< <i>The only mining company that has gone down while gold has gone up. Lets get out and tout this doggy before it goes to a nickel. LOL
You must be looking at different charts than the rest of us.
TRE went up 9X or more from 2004 into the 2006 gold peak. Unfortunately that was the top for many juniors of which most were crushed in the November 2008 dump where the majority of miners fell from 65 to 95% of their 2008 highs. Some juniors such as GSS peaked as early as 2004. TRE has gone up 3X since Nov. 2008 which is pretty much on par for many of the miners. If one looks back over the past 4-5 years TRE's gains are similar to many other gold miners. It's done better than Barrick which has still made money on its stock price.
Golden Star Resources, a fairly well thought of producing junior since the November 2008 dump, has not made money since it's peak back in 2004. Many juniors have basically counted 5 waves down since their specific highs in 2004/2006/2008. It's been a very slow process as all the attention was then shifted to the intermediates and seniors. It looks to me that most of the smaller miners have been under years of consolidation. Look at how far CDE and HL have fallen since their peaks. CDE was the favorite naked short silver play of the banks in the last smackdown. TRE has been one of their favorites to short to short as well. The hatchet jobs that Barron's has done on royalty companies only goes to show their lack of understanding of the process. TRE might go to a nickel but I doubt it since they are sitting on lots of real nickle and have leased rights on some properties to the Chinese. Let's see who gets to a nickel first: Citi, AIG, Fannie, Freddie, SLV, GLD, or TRE.
All the beat down miners will have their say again when gold makes a new ATH and remains above $1000 for good. Even insolvent/bankrupt dogs of the Dow like C and AIG are having their day in the sun right now. It's not surprising that that tens to hundreds of billions (or even trillions) in govt ransom money and marked to myth accounting can do to one's bottom line/balance sheet...at least for a short period of time.
roadrunner >>
Apparently so. LOL
Here is a chart og GLD over the last 6 weeks. Nice uptrend, even if it is just paper.
And here is a chart of TRE over the last 6 weeks. Nice downtrend.
I dont suppose you know who dumped that block of 354,000 shares on the 18th, do you? Or maybe the block of 377,000 shares on the same day? Are you holding back on us Roadrunner?
Were you a DJ in a former life, cuz you really know how to spin the record?
I don't see any spin. I do see that Cohodk may have not been specific about the time frame he was referring to. According to my 5 year monthly chart for TRE, it was $1.12 5 years ago and peaked at $9.1 in May 2005. Then TRE had a low of $1.58 in 10/08 and hit $5.29 (a gain of about 3x) in March 09 and is at $2.83 at the moment. An increase of 2.5x from 5 years ago.
Meanwhile, GLD has gone from ~45 5 years go to ~99 at the moment, an increase of 2.2X.
Over the past 5 years, money put into TRE would have done far better and lead to greater profit opportunities than GLD.
TRE participated on 75% of that gold move going from 2.77 to 3.50. That's pretty darn impressive considering it did it in fewer days. It topped out on the 2nd and largest pulse up. In fact TRE came back to a relatively high level at 3.50. On a 26% gain it did as well as the other miners on the up move and doubled the % increase in the pog....which is what miners should do. It's a very volatile stock as the charts show. I've mentioned a number of times here already that TRE often moves a day or two before or after the other miners or the pog. The fact that it came down early before gold peaked was basically a warning sign that the rest of the miners were coming down shortly as well. And they indeed did...some on the same day that TRE came down hard. Are the other miners all junk now too because they intially gave back 12% of their gains? The big 3, Barrick, Goldcorp, and Newmont also fell off before this gold move was completed on the very same day TRE caved. No doubt institututions' black boxes were tossing out these "junk" stocks by the pail full. One day they are treasure, the next day pure junk.
With a quick check of other miners, juniors Seabridge and Jaguar also were taken down the same day along with UXG, Banro, New Gold, and others. These aren't all crap companies. Seabridge and Jaguar came crashing down right with TRE and ABX,GG, NEM. I see that more as liquidity and speculation than anything else. And like TRE, SA and JAG have stayed down. Why analyze TRE share price in isolation to what is going on with the rest of the gold and silver stockers? So what if it didn't continue on with gold for another week and get another 5% of the run. Not all miners did.
I'm not surprised TRE was hammered all the way back down as the stock has been bouncing from 2.7 to 3.5 most of the year. It's tended to be pushed up and down quickly when it moves. The volume has averaged a very high 784,000 for the past 10 trading days and has been elevated for the past 4 weeks..... including the days following those share dumps you mention. Someone is still buying the stock and the volume is still well above trend. It's basically still in a consolidation pattern from 2006....maybe its final one before the nickel tour...who really knows. I have no idea who the big sellers were or how many of those shares were naked shorts. Out of approx 90,000,000 shares outstanding, why get excited about the sale of less than 1%? The institutions or brokerages frequently sell much bigger blocks of the other gold miners. And those guys did just that when the big 3 came down.
Over the past 5 years, money put into TRE would have done far better and lead to greater profit opportunities than GLD.
Lets not confuse the more interesting spin with the bothersome facts. It makes for better copy to say that a stock has lost money since the gold bull started even if it didn't. And its also more interesting to spin the fact that TRE couldn't follow the gold price all the way up to $1020 when the 3 biggest miners who make up around 40% of the gold mining indicies couldn't do it either. That entails a lot of dumb shareholders. Everyone's favorite GDX is comprised of 30% from ABX, NEM, GG. Facts are a bummer when they get in the way of a spun story.
The mining report says that TRE has 90 sq. kilometers in the same region (and same geology) as another gold mine. They made that up? I guess the consulting geologist must be on the take as well. Was he the seller of those 700,000 shares? TRE's volatility actually makes it a decent trading vehicle. Like GLD it just might have nothing behind it but paper. But you can still trade them both.
<< <i>There is no reason to believe anything they say. Oh, yeah they will agree to discuss a world currency only so that they can control the process and make sure it doesnt ever get done. If not then others might try to make things happen without them.
Its like telling the wife not to go to Home Depot because you want to plan out the new upgrades even though you have no intention of ever doing any work. >>
I'm with you. Another article that suspends belief.
US Issues 7 trillion in debt? The heavily-indebted U.S. government has seen tremendous demand for Treasury debt securities this year due to a flight-to-quality into the safe haven assets.
Someone is still buying the stock and the volume is still well above trend
Then why has the stock been going lower? Seems to me like heavy selling. But, WDIK?
And, I really dont believe any "real" institutions own this POS. And those that might, certainly dont have any black boxes. This company has ZERO revenue and increasingly negative cash flow. I would also like to see a legitimate photo of some of their "plant and equipment" which they say is worth $24 million.
I only posted the news item as it appears to me as an attempt to bump the stock price because someone wants out and their previous selling drove the stock down 20%. This my friends, is true "manipulation." I also seems to be promoted by some on this board. Nothing wrong with having a differing opinion supported by fact, is there?
A nickel on C before TRE, you're on. These little POS stocks can be great trades, just dont get caught up in the hype. Thats all, carry on.
These junior miners havent made any money on a gold run from $250 to $1000??? What are they waiting for? Maybe they need to apply for TARP money.
Lots and lots of companies and investments have done better than GLD over the past 5 years.
<< <i>Lots and lots of companies and investments have done better than GLD over the past 5 years. >>
How true ... how about just in the last 12 month or 6 month.... One "very close to home" company comes to mind. Our host is of to the races...now if they would only resume their dividends.
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
These junior miners haven't made any money on a gold run from $250 to $1000??? What are they waiting for? Maybe they need to apply for TARP money.
They made money from $250 to $450 or from $250 to $1033. But most of them don't have a good mid-term 2 or 5 year track record. Nearly all have made money since $250 gold if they were around then. The junior train derailed in 2004 and trailed both gold and the seniors ever since. Guess you could call that a flight to safety. Usually juniors don't lead an initial gold run. I was not following them at that time and don't know why they just got off the train so early. But they will get back on board before the track runs out and will become the biggest gainers of all the gold stocks.
Lots and lots of companies and investments have done better than GLD over the past 5 years.
True. I don't think investing in gold bullion, let along GLD is a good idea. Keeping a stash for a shtf scenario makes some sense or just to balance dollar deflation as a % of one's portfolio. But if you want to make good money in gold you have to go with the leverage which is in gold stocks, futures/options/warrants, and even better MS gold coins. Each of those has different periods when they are stronger.
The gold stocks alone will outperform GLD by multiples over the next few years. I don't know why anyone would want to play with GLD other than on short trading plays.
Pardon JW's ranting later in this article. What's important here is his describing the shift out of the yen carry trade to the dollar carry trade (low interest rate, weakening dollar for 1-2 yrs). This will be bullish for gold as it is a good vehicle to earn a higher % yield from borrowing off the 0% dollar. The yen carry trade financed a lot of the financial world's gains during the past 20 years. Now with the Yen strengthening since last November it's time for the dollar to take over the carry trade. JW's explanation of how this is done is a good primer as is his review of the yen and gold carry trades that are now getting ready to be put away on the shelf. And the shorts needed to be put on the dollar to play this game will certainly help gold. Once the bankers get their teeth into this trade they will be reluctant to let the govt take it away without ransom money being paid out first.
Most everyone is aware that gold has cycled up strongly 3 times every other year going back to 2003-2004. If you toss out the crazy deleveraging event of 2008, gold's basic trend is parabolic as shown by the 200 week moving average (see chart). As this is the 4th two year cycle in a parabolic move upwards (so far), the trend should be your friend. But what it's important from the chart shown in the article is that gold has never violated or even come close to the 200 week average since the march began in 2002. Now the 200 wma is >$750. If one tosses out the 2008 fall insanity induced by doubling down on the gold and silver derivatives, even the 50 week moving average has not really been violated to any extent. The 50 week average is now at $900.
Indeed. As I have been stating over the past 2 years, the majority of the D&G about the dollar is from home grown Americans. It is only in the USA that you hear of the death of the dollar. Americans need to visit the world to realize the value of America and its importance in the global economy.
Japan has a debt to GDP ratio that is 3x the USA. They will be facing a massive demographic problem in the next 2 decades (quickly decline population). Its citzens are taxed out the ying yang. Yet, no one ever talks about the death of the YEN. Japan is the 2nd largest economy, not some fly by night country like Zimbabwe. And Japan enjoys one of the highest living standards in the world. How can that be? Why Americans constantly talk of the demise of America is beyond me. I challenge anyone on this board to leave the country and make a better way of life anywhere in the world.
Do we have problems, yes. Can we overcome them, absolutely. I am not so sure I could answer the same about Russia, or perhaps even Japan. Could we/will we have inflation/deflation, surely/possibly. Would that be the end of the USA, extremely unlikely. Stop living in fear, think positively, and make the most of the opportunities presented. Your world wont end.
Goods cant get from point A to point B without travelling the oceans. Who controls the oceans? Do you think there is any ship that is not under constant surveilance by the US military? It is the USA that allows safe passage of every ship on the seas. Who controls space? Nothing moves without the watchful eye of the USA.
Edited to add....Roadrunner, the junior miners are good trading stocks, just like GLD or C or AIG. My point is to treat them all as such, dont buy the hype, and consider perspective. I just found it interesting that a hype article was issued on one while its performance was horrendous given the movement of its supposed business/industry.
I challenge anyone on this board to leave the country and make a better way of life anywhere in the world.
>>
Been there, done that. And I'm not the only one.
.....GOD
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
As they say, there are lies, damn lies, and statistics which can be manipulated into anything you want them to say. Basic facts, though, don't change. Japan can afford more debt because the exporters are bringing money by the shiploads back in, we here in the USA are importers and sending money abroad. Additionally, Japan has no large defense force - we defend them. They are not the worlds reserve currency. So they can, spend spend spend and get away with it - mostly - and only wreck themselves. We have sold our debt overseas, Japan has not. Now, who in the world can buy our current and coming trillions of dollars of debt? Remember we are talking TRILLIONS here. Not many. China? maybe some. Who else? The Saudis? Nope. Fact is, no one really will (or can afford to). So, it's all to coming to an end. A matter of time. When the world stops buying US debt, it's over for the US dollar as the worlds reserve currency.
So why cant US citizens buy the debt? There is at least $4 trillion sitting in money markets. Japan sells its debt to its citizens, why cant the USA do the same?
If the world stops buying US debt, who will defend the world? I think the USA has the world exactly where it wants it.
So why can't US citizens buy the debt? There is at least $4 trillion sitting in money markets. Japan sells its debt to its citizens, why cant the USA do the same?
If a decent rate of interest were offered it just could happen. But with the current rates I know I won't be buying any time soon. Double digit rates could entice me down the road...assuming there is no risk of a default or hyper-inflation to infinity. It comes down to who do you trust? An ounce of gold in your hand....or the full faith and credit of the USGovt? As far as I can see gold has always been totally upfront as to what it is and what it's worth. No games.
I don't think buying $4 TRILL in debt would even come close to covering the bill that's coming at us. And how much of that $4 TRILL would only end up being wasted via inefficiencies and fraud or handed over the bankers, brokers, and central banks? Let's see. I've been playing in a 35 year poker game where the rules have been clearly posted and abided by on my side. But in the end, I've been fleeced with only my boots and underwear left...and find that the rules were never abided by the other players. In fact they were playing another whole poker game with crazy rules at the same time with my money. The question is...would I fork over another $4 TRILL and continue playing with them?
I dont like having so much capital in PMs, I shake when the market looks like its gonna dive.(like now)
The alternaltives are terrible, I have no desire to hand my money to the bankers and stockbrokers or lend it to the Treasury. What else is left? The 401K idea was a way for the banksters to get our money and look what they did with it. All fraud and corruption and no one but Martha Stewart and maddoff see a prison cell. Whats worse is it looks like no changes, they are gonna let them keep going.
I too dont like the resent plunge in the gold price! I guess we will have to hold on to our gold for next year when the price again goes over $1000. I have 45% of my savings tied up in silver and gold and cant even think of selling at the low prices that look like are coming. I guess I am lucky all our debt in this family is paid off including our home. My wife and I have good jobs and lots of cash savings to ride it out. I am sure someday the gold price will rise to new heights never before seen. I just feel bad for those that will have to sell their gold and silver at a loss!. I am sure someday everyone that holds gold and silver will greatly profit. I am quite sure these new high prices will happen in our liftime.
Many successful BST transactions ajia (x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes, mariner67, and Mikes coins
dont like having so much capital in PMs, I shake when the market looks like its gonna dive.
I too dont like the resent plunge in the gold price!
Whoa here guys I think you are watching to many of the talking heads on T.V.
I agree that paying off ones debt should always come first, but after that where are we to put investment funds?
Unless you were a clever stock trader none of you have made any money in the stock market over the last ten years. A decade after the S&P 500 was around 1,500 it is now 1,000 so you are down by a third. Even if you got those 4% dividends and reinvested them all you might be at break even.
What have we all made on C.D. interest, after taxes, the last ten years?
It is disappointing to see Gold drop below $1,000 this week and perhaps it was a little to optimistic to say “ This is it and it is now” but Gold and silver have not PLUNGED in fact they are going up and down in a 2to5 percent range.
Wall Street and the Gov. want us back in there manipulated stock market, and want us all out of all the commodities, but in true reality the commodities are the only thing that has held up during this recession.
If the PM’s act this good in the recession what are they going to look like when we get the inflation next year? HUM?
Oh and Dave, all of our American money, in all the banks, and all the money in the stock market, and all the money in all our bond market, would not pay the short fall in our current and upcoming national debt. Its down the toilet, and the only question is when.
Oh and Dave, all of our American money, in all the banks, and all the money in the stock market, and all the money in all our bond market, would not pay the short fall in our current and upcoming national debt. Its down the toilet, and the only question is when.
GS,
I just dont agree with that. There are many, many options available. The question is how much pain are we willing to take? For example, the SS deficit could be wiped out if we just raised retirement age. And maybe if instead of handing out unemployment checks, we gave out payroll checks via REAL infrastructure projects such as we did in the 30's with the TVA program and in the 50's with the interstate highway system. Maybe if we built coal gasification or nuke plants, we could even kill 2 birds with 1 stone.
The problem is in the politics. Not the monetary system. Get our politicians to do whats right for the country rather than themselves and it would become quite apparent that the problem is very fixable.
Do your best to avoid circular arguments, as it will help you reason better, because better reasoning is often a result of avoiding circular arguments.
Oh and Dave, all of our American money, in all the banks, and all the money in the stock market, and all the money in all our bond market, would not pay the short fall in our current and upcoming national debt. Its down the toilet, and the only question is when.
Those shortfalls are only what's obvious right now. The main problem that got us to this point (otc derivatives) is still largely unaddressed and currently pushed to the side by another round of marked to myth accounting. It's not going away and the largest shoe left to initiate (interest rate swaps) will be the worst. By allowing Lehman to fail, and paying out through AIG essentially eliminated the last chance to change course by attempting to cancel out contracts. The Chinese are now hinting that they might not pay up on their end of these fraudulent contracts. Others would follow. These are contracts where the big banks are counting on huge payoffs to their bottom lines to offset other losses....to keep on getting big bonuses on paper profits. And now the dispute over these is ending up in the courts where only the lawyers will end up profting. Citi is currently suing Morgan Stanley for hundreds of millions owed on some blown up contracts. MS apparently does not want to pay notional value but only some fraction of that. There are thousands if not millions of contracts to resolve. It's a great time to be a contract lawyer.
The goal of the administration's strategy is to secure China's commitment to continuing a trend that emerged during the recession: more reliance on consumer spending and less dependence on exports to the U.S. to drive economic growth.
You've got to be kidding me. They want to continue to make our economy based on consumer spending?
The new dollar carry trade should keep the dollar low and depressed for many many years. The writer sees this as creating support for $2000+ gold over the long term.
They both copied that from CNBC Friday morning. When asked if the dollar was the new carry trade, Peter Schiff said "No, it's the new peso" which me LOL.
How high up can this stock market keep climbing this wall of worry? The company I work for (overnight shipping) states that we have troughed and sees a light at the end of the tunnel. I hope it's not another train.
Katz's interesting view on retirement up until 1929 vs. today. They don't teach his brand of economics in school. While he has been bullish on gold and commodities since 2002 and as well in the 1970's, he also feels the stock market is first headed to >12,000 by next year.
The first thing to learn about retirement is that it is a fairly new idea in the scheme of things. Prior to 1785-86, there was no retirement. Everybody worked until they died (unless they were rich, in which case they did not work at all).
Retirement was invented in 1785-86 by Noah Webster, who is best known for being the author of the first American dictionary. Webster, then a young man, took a trip through the 13 newly independent states in 1785-86. He talked to state legislators and other influential people, and he convinced them to legalize interest. (This was only done in the northern states; the South waited until after the Civil War.) The following year the British philosopher, Jeremy Bentham, wrote a paper entitled, “In Defense of Usury [Interest],” and interest was legalized in Britain shortly thereafter.
Once receiving interest was legal, people began to save. A normal rate of interest from 1788 until 1933 was 5%. As people saved, they would put their money in the savings bank or purchase a corporate bond. Here is how it worked. Suppose a man whose average salary was 30 oz. of gold per year saved an average of 6 oz. each year. His first year’s savings receives interest for 49 years (age 16 to 65). His last year’s savings receives interest for 1 year. His average year’s savings receives interest for 25 years. This means that the money he saves multiplies by 3.4 times due to the working of compound interest. If you can save 6 oz. of gold each year, then over a 49 year working lifetime, he has saved 294 oz. of gold. Since compounding at 5% per year multiplies this by 3.4, he now as a total capital of 999 oz. of gold. At 5% interest, he would receive earnings of 50 oz. of gold per year, 1.7 times his annual salary. With this incentive, Americans (and British) began to save. They would quit work at age 65 and live off the interest on their accumulated savings. This had never before happened in world history.
Notice that this system of retirement does not depend on the young supporting the old. Once the 65-year old has accumulated his capital, he can live off of the interest for the remainder of his life, even if the human lifespan is extended to 200.
Now it may be asked from whence comes the wealth that the retired person consumes? After all, a person who is retired consumes wealth, but he does not produce it. He lives in a house or apartment. He drives a car. He wears clothes and eats food. And he indulges in some of the amenities.
How can a large class of people consume all of this wealth without putting a terrible burden on society?
The answer is that, under Noah Webster’s system, the businessman, whose corporate bonds paid the saver his interest, would use the borrowed money to build/buy machines. These new machines increased the amount of wealth a worker could produce in a given day. With the workers creating more wealth, there was more wealth in the world. It was this extra wealth which produced the goods consumed by the retirement community. No young person had to support any retired people. The retired supported themselves by the interest on their own capital. The system worked brilliantly for well over a century.......Then along came John Maynard Keynes. He hated interest. He worked out an underhanded way to undo Webster’s brilliant achievement and abolish interest. You know that, at present, short term interest rates in the United States are virtually zero. However, you have probably not been aware that they have been zero for the past 76 years. This is because what is important is the real rate of interest. This is the rate of interest minus the rate at which the currency depreciates. THIS REAL RATE OF INTEREST HAS AVERAGED ZERO FOR THE PAST 76 YEARS. That is, Keynes (via F.D.R. and Nixon) set up a system of depreciating the currency, and the rate at which the currency has depreciated has almost exactly kept up with the nominal rate of interest. That is, if your savings in the bank were $100,000 and you were receiving 6% interest, you would get $6,000 per year. However, if average prices were rising by 6% per year, then the buying power of your bank account would decline by $6,000 each year. In real terms, you would be receiving zero interest.
We've talked about the summer bond auctions quite a bit, including how "strong" the coverage has been. So it should come as no surprise that the FED was picking up half the tab. Full kitco article linked below along with FED supplied chart. Just maybe US debt is not as hot a commodity as the media states.
This particular development is key. A little known fact (and one totally ignored by the mainstream media) is that the Fed accounted for nearly HALF of all Treasury purchases in the second quarter ($164 billion out of $339 billion). In fact, the Fed bought more Treasuries than the next three largest purchasers combined!!
The Fed’s purchases outnumber foreign holders (foreign governments), US household, and Primary Dealers (mega banks) COMBINED. One should also note that Foreign holders reduced their purchases of US debt from $159 billion in 1Q09 to $101 billion in 2Q09 (a 40% DECREASE). To read the below chart, you need to know that SOMA refers to the Fed.
In simple terms, these numbers indicate that if it were not for the Fed, the US Treasury market would have almost assuredly had numerous failed auctions in the second quarter. It also shows us that foreign holders (China, Japan, etc) are reducing their purchases of US debt at an incredible rate.
RR (or anyone), We've read about this for a while and this was actually exposed, but there seems to have been no repurcussions, which is mindboggling. When or at what point do you think this will have an effect on the USD and thus gold? Or would you argue that the USD has been declining (and gold increasing) because of this?
<< <i>We've talked about the summer bond auctions quite a bit, including how "strong" the coverage has been. So it should come as no surprise that the FED was picking up half the tab. Full kitco article linked below along with FED supplied chart. Just maybe US debt is not as hot a commodity as the media states.
This particular development is key. A little known fact (and one totally ignored by the mainstream media) is that the Fed accounted for nearly HALF of all Treasury purchases in the second quarter ($164 billion out of $339 billion). In fact, the Fed bought more Treasuries than the next three largest purchasers combined!!
The Fed’s purchases outnumber foreign holders (foreign governments), US household, and Primary Dealers (mega banks) COMBINED. One should also note that Foreign holders reduced their purchases of US debt from $159 billion in 1Q09 to $101 billion in 2Q09 (a 40% DECREASE). To read the below chart, you need to know that SOMA refers to the Fed.
In simple terms, these numbers indicate that if it were not for the Fed, the US Treasury market would have almost assuredly had numerous failed auctions in the second quarter. It also shows us that foreign holders (China, Japan, etc) are reducing their purchases of US debt at an incredible rate.
Everyone who has bought any of the debt issues is sitting at a nice profit. Everyone. And they may be sitting on huge profits if the bond yield charts dont turn around soon. The 10yr has very nice support at 3.25%. If it breaks that it could go to 2.50%.
Let's assume the FED is sitting on tens of billions in profits from their recent bond purchases. Will that offset the possible losses of the $TRILLION or so in derivatives they added to their balance sheet? What if those SIVs only bring 90%? 70%? or even the 9% average that Lehman derivatives returned once settled. But since they can't afford to ever sell these SIVs, we'll never know. Of course on paper they will be gaining value.
I suppose those TBonds must make money in the short term or the FED will be stuck with buying 100% of them before too long. Gotta show a profit potential for the buyers.
The govt also told us "we" made money when TARP payments were returned, something on the order of a couple of billion dollars. Well that's a good start towards the $12 TRILLION.
I think "we" even made money on the AIG deal too. Pretty soon we'll have it all back. I'm feeling better all ready and raring to hit the local shopping mall tomorrow.
We all assume that the derivative problem will blow up and cost 10's of Trillions. What if it doesnt happen? Usually the most likely scenerio is the one no expects. Maybe it will cost 100's of trillions.
The easiest trade in the world is to short the dollar.
The $4500 is taxable and the IRS will have your name. This may be the same department as the one who has the UBS client list.
Now you have two debts – GMAC (regardless of what company you bought from), and the IRS.
While I was considering buying a new car I never considered having to pay taxes on the $4500. That will be a shock to many new car buyers who used the program and will have to cough up around a grand.
-----------------
The OOC reported that our big banks were back at it again in the 2nd QTR. The volume of derivatives transacted climbed $1.92 TRILL in Q2 to over $191 TRILL. While JPM actually dropped their amount slightly, too- big-to-fail Citi increased their derivatives by $2.3 TRILL to $31.9 TRILL. Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?
$2 BILL Georgian Bank wasn't even on the FED's watch list and just went down. Cost to FDIC: almost $1 BILL. They had of course overvalued their toxic assets. Reggie provides more detail including why the continued marked to myth accounting will continue to provide failures like this one.
<< <i>Some snippets from Sinclair's website today:
Here is the flip side of Cash for Clunkers.
The $4500 is taxable and the IRS will have your name. This may be the same department as the one who has the UBS client list.
Now you have two debts – GMAC (regardless of what company you bought from), and the IRS.
While I was considering buying a new car I never considered having to pay taxes on the $4500. That will be a shock to many new car buyers who used the program and will have to cough up around a grand.
-----------------
The OOC reported that our big banks were back at it again in the 2nd QTR. The volume of derivatives transacted climbed $1.92 TRILL in Q2 to over $191 TRILL. While JPM actually dropped their amount slightly, too- big-to-fail Citi increased their derivatives by $2.3 TRILL to $31.9 TRILL. Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?
I believe JS is wrong regarding the $4500 being taxable (Federal). I have read in a number of places that it is not reportable income. Many states however may want it reported.
American Numismatic Association Governor 2023 to 2025 - My posts reflect my own thoughts and are not those of the ANA.My Numismatics with Kenny Twitter Page
"why are they still adding derivatives while being supported by the taxpayers?"
Since they are deemed too big to fail by our leaders, they have thus become national icons and as such they certainly deserve our support. If you really want to help out, go get a few of their credit cards.
"Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?"
Why would the banks not? Looks like a risk free gamble for them.... after all, the government bailed them out once since the were too big to fail.... they figure the government will do so again if their bets fail.
Bank of America to pay $713 mln in TARP preferred dividends (16.21 ) -Update-
Co announces the Board of Directors has authorized approximately $713 mln in dividend payments to the U.S. government under the Troubled Asset Relief Program. The company this year has paid the government $1.83 bln in TARP dividends through Sep 30. Dividends related to the government's investment in the company under TARP include the following: The cash dividend of $312.50 per share, or a total of approximately $188 mln, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series N, is payable on Nov 16, 2009 to the U.S. Department of the Treasury, the shareholder of record, as of Oct 31, 2009. This quarterly dividend payment relates to the government's $15 bln investment in Bank of America made under the Capital Purchase Program of TARP. The cash dividend of $312.50 per share, or a total of approximately $125 mln, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series Q, is payable on Nov 16, 2009 to the shareholder of record, the Treasury Department, as of Oct 31, 2009. This quarterly dividend payment relates to the government's $10 bln investment in Merrill Lynch & Co., made under the Capital Purchase Program of TARP. The cash dividend of $500 per share, or a total of approx $400 mln, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series R, is payable on November 16, 2009 to the shareholder of record, the Treasury Department, as of Oct 31, 2009. This quarterly dividend payment relates to the government's $20 bln investment in Bank of America on Jan 16, 2009 under TARP.
HELP, a while ago someone had a link to the list of bank with their risks. Just trying to find out which banks people think are some of the good ones.lol
<< <i>Some snippets from Sinclair's website today:
Here is the flip side of Cash for Clunkers.
The $4500 is taxable and the IRS will have your name. This may be the same department as the one who has the UBS client list.
Now you have two debts – GMAC (regardless of what company you bought from), and the IRS.
While I was considering buying a new car I never considered having to pay taxes on the $4500. That will be a shock to many new car buyers who used the program and will have to cough up around a grand.
-----------------
The OOC reported that our big banks were back at it again in the 2nd QTR. The volume of derivatives transacted climbed $1.92 TRILL in Q2 to over $191 TRILL. While JPM actually dropped their amount slightly, too- big-to-fail Citi increased their derivatives by $2.3 TRILL to $31.9 TRILL. Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?
I believe JS is wrong regarding the $4500 being taxable (Federal). I have read in a number of places that it is not reportable income. Many states however may want it reported. >>
Would not be the first time that JS is wrong....
Cash for Clunkers taxable income rumors are false! The below info is taken from the official US Gov't website related to Cash for Clunkers Q&A
Is the credit subject to being taxed as income to the consumers that participate in the program?
NO. The CARS Act expressly provides that the credit is not income for the consumer.
<< <i>Some snippets from Sinclair's website today:
Here is the flip side of Cash for Clunkers.
The $4500 is taxable and the IRS will have your name. This may be the same department as the one who has the UBS client list.
Now you have two debts – GMAC (regardless of what company you bought from), and the IRS.
While I was considering buying a new car I never considered having to pay taxes on the $4500. That will be a shock to many new car buyers who used the program and will have to cough up around a grand.
-----------------
The OOC reported that our big banks were back at it again in the 2nd QTR. The volume of derivatives transacted climbed $1.92 TRILL in Q2 to over $191 TRILL. While JPM actually dropped their amount slightly, too- big-to-fail Citi increased their derivatives by $2.3 TRILL to $31.9 TRILL. Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?
I believe JS is wrong regarding the $4500 being taxable (Federal). I have read in a number of places that it is not reportable income. Many states however may want it reported. >>
Would not be the first time that JS is wrong....
Cash for Clunkers taxable income rumors are false! The below info is taken from the official US Gov't website related to Cash for Clunkers Q&A
Is the credit subject to being taxed as income to the consumers that participate in the program?
NO. The CARS Act expressly provides that the credit is not income for the consumer.
Comments
<< <i>The only mining company that has gone down while gold has gone up. Lets get out and tout this doggy before it goes to a nickel. LOL
You must be looking at different charts than the rest of us.
TRE went up 9X or more from 2004 into the 2006 gold peak. Unfortunately that was the top for many juniors of which most were crushed in the November 2008 dump where the majority of miners fell from 65 to 95% of their 2008 highs. Some juniors such as GSS peaked as early as 2004. TRE has gone up 3X since Nov. 2008 which is pretty much on par for many of the miners. If one looks back over the past 4-5 years TRE's gains are similar to many other gold miners. It's done better than Barrick which has still made money on its stock price.
Golden Star Resources, a fairly well thought of producing junior since the November 2008 dump, has not made money since it's peak back in 2004. Many juniors have basically counted 5 waves down since their specific highs in 2004/2006/2008. It's been a very slow process as all the attention was then shifted to the intermediates and seniors. It looks to me that most of the smaller miners have been under years of consolidation. Look at how far CDE and HL have fallen since their peaks. CDE was the favorite naked short silver play of the banks in the last smackdown. TRE has been one of their favorites to short to short as well. The hatchet jobs that Barron's has done on royalty companies only goes to show their lack of understanding of the process. TRE might go to a nickel but I doubt it since they are sitting on lots of real nickle and have leased rights on some properties to the Chinese. Let's see who gets to a nickel first: Citi, AIG, Fannie, Freddie, SLV, GLD, or TRE.
All the beat down miners will have their say again when gold makes a new ATH and remains above $1000 for good. Even insolvent/bankrupt dogs of the Dow like C and AIG are having their day in the sun right now. It's not surprising that that tens to hundreds of billions (or even trillions) in govt ransom money and marked to myth accounting can do to one's bottom line/balance sheet...at least for a short period of time.
roadrunner >>
Apparently so. LOL
Here is a chart og GLD over the last 6 weeks. Nice uptrend, even if it is just paper.
And here is a chart of TRE over the last 6 weeks. Nice downtrend.
I dont suppose you know who dumped that block of 354,000 shares on the 18th, do you? Or maybe the block of 377,000 shares on the same day? Are you holding back on us Roadrunner?
Were you a DJ in a former life, cuz you really know how to spin the record?
Knowledge is the enemy of fear
Meanwhile, GLD has gone from ~45 5 years go to ~99 at the moment, an increase of 2.2X.
Over the past 5 years, money put into TRE would have done far better and lead to greater profit opportunities than GLD.
With a quick check of other miners, juniors Seabridge and Jaguar also were taken down the same day along with UXG, Banro, New Gold, and others. These aren't all crap companies. Seabridge and Jaguar came crashing down right with TRE and ABX,GG, NEM. I see that more as liquidity and speculation than anything else. And like TRE, SA and JAG have stayed down. Why analyze TRE share price in isolation to what is going on with the rest of the gold and silver stockers? So what if it didn't continue on with gold for another week and get another 5% of the run. Not all miners did.
I'm not surprised TRE was hammered all the way back down as the stock has been bouncing from 2.7 to 3.5 most of the year. It's tended to be pushed up and down quickly when it moves. The volume has averaged a very high 784,000 for the past 10 trading days and has been elevated for the past 4 weeks..... including the days following those share dumps you mention. Someone is still buying the stock and the volume is still well above trend. It's basically still in a consolidation pattern from 2006....maybe its final one before the nickel tour...who really knows. I have no idea who the big sellers were or how many of those shares were naked shorts. Out of approx 90,000,000 shares outstanding, why get excited about the sale of less than 1%? The institutions or brokerages frequently sell much bigger blocks of the other gold miners. And those guys did just that when the big 3 came down.
roadrunner
Lets not confuse the more interesting spin with the bothersome facts. It makes for better copy to say that a stock has lost money since the gold bull started even if it didn't. And its also more interesting to spin the fact that TRE couldn't follow the gold price all the way up to $1020 when the 3 biggest miners who make up around 40% of the gold mining indicies couldn't do it either. That entails a lot of dumb shareholders. Everyone's favorite GDX is comprised of 30% from ABX, NEM, GG. Facts are a bummer when they get in the way of a spun story.
The mining report says that TRE has 90 sq. kilometers in the same region (and same geology) as another gold mine. They made that up? I guess the consulting geologist must be on the take as well. Was he the seller of those 700,000 shares? TRE's volatility actually makes it a decent trading vehicle. Like GLD it just might have nothing behind it but paper. But you can still trade them both.
roadrunner
<< <i>There is no reason to believe anything they say. Oh, yeah they will agree to discuss a world currency only so that they can control the process and make sure it doesnt ever get done. If not then others might try to make things happen without them.
Its like telling the wife not to go to Home Depot because you want to plan out the new upgrades even though you have no intention of ever doing any work. >>
I'm with you. Another article that suspends belief.
US Issues 7 trillion in debt?
The heavily-indebted U.S. government has seen tremendous demand for Treasury debt securities this year due to a flight-to-quality into the safe haven assets.
Since Ben is buying them back of course!
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Then why has the stock been going lower? Seems to me like heavy selling. But, WDIK?
And, I really dont believe any "real" institutions own this POS. And those that might, certainly dont have any black boxes. This company has ZERO revenue and increasingly negative cash flow. I would also like to see a legitimate photo of some of their "plant and equipment" which they say is worth $24 million.
I only posted the news item as it appears to me as an attempt to bump the stock price because someone wants out and their previous selling drove the stock down 20%. This my friends, is true "manipulation." I also seems to be promoted by some on this board. Nothing wrong with having a differing opinion supported by fact, is there?
A nickel on C before TRE, you're on.
These junior miners havent made any money on a gold run from $250 to $1000??? What are they waiting for? Maybe they need to apply for TARP money.
Lots and lots of companies and investments have done better than GLD over the past 5 years.
Knowledge is the enemy of fear
<< <i>Lots and lots of companies and investments have done better than GLD over the past 5 years. >>
How true ... how about just in the last 12 month or 6 month.... One "very close to home" company comes to mind. Our host is of to the races...now if they would only resume their dividends.
They made money from $250 to $450 or from $250 to $1033. But most of them don't have a good mid-term 2 or 5 year track record. Nearly all have made money since $250 gold if they were around then. The junior train derailed in 2004 and trailed both gold and the seniors ever since. Guess you could call that a flight to safety. Usually juniors don't lead an initial gold run. I was not following them at that time and don't know why they just got off the train so early. But they will get back on board before the track runs out and will become the biggest gainers of all the gold stocks.
Lots and lots of companies and investments have done better than GLD over the past 5 years.
True. I don't think investing in gold bullion, let along GLD is a good idea. Keeping a stash for a shtf scenario makes some sense or just to balance dollar deflation as a % of one's portfolio. But if you want to make good money in gold you have to go with the leverage which is in gold stocks, futures/options/warrants, and even better MS gold coins. Each of those has different periods when they are stronger.
The gold stocks alone will outperform GLD by multiples over the next few years. I don't know why anyone would want to play with GLD other than on short trading plays.
From the Yen Carry trade....to the gold carry trade....to the new dollar carry trade
Pardon JW's ranting later in this article. What's important here is his describing the shift out of the yen carry trade to the dollar carry trade (low interest rate, weakening dollar for 1-2 yrs). This will be bullish for gold as it is a good vehicle to earn a higher % yield from borrowing off the 0% dollar. The yen carry trade financed a lot of the financial world's gains during the past 20 years. Now with the Yen strengthening since last November it's time for the dollar to take over the carry trade. JW's explanation of how this is done is a good primer as is his review of the yen and gold carry trades that are now getting ready to be put away on the shelf. And the shorts needed to be put on the dollar to play this game will certainly help gold. Once the bankers get their teeth into this trade they will be reluctant to let the govt take it away without ransom money being paid out first.
Gold trends - 4th time it's been in this situaton
Most everyone is aware that gold has cycled up strongly 3 times every other year going back to 2003-2004. If you toss out the crazy deleveraging event of 2008, gold's basic trend is parabolic as shown by the 200 week moving average (see chart). As this is the 4th two year cycle in a parabolic move upwards (so far), the trend should be your friend. But what it's important from the chart shown in the article is that gold has never violated or even come close to the 200 week average since the march began in 2002. Now the 200 wma is >$750. If one tosses out the 2008 fall insanity induced by doubling down on the gold and silver derivatives, even the 50 week moving average has not really been violated to any extent. The 50 week average is now at $900.
roadrunner
<< <i>The comments after the interesting article on the USD are interesting from a global perspective >>
Indeed. As I have been stating over the past 2 years, the majority of the D&G about the dollar is from home grown Americans. It is only in the USA that you hear of the death of the dollar. Americans need to visit the world to realize the value of America and its importance in the global economy.
Japan has a debt to GDP ratio that is 3x the USA. They will be facing a massive demographic problem in the next 2 decades (quickly decline population). Its citzens are taxed out the ying yang. Yet, no one ever talks about the death of the YEN. Japan is the 2nd largest economy, not some fly by night country like Zimbabwe. And Japan enjoys one of the highest living standards in the world. How can that be? Why Americans constantly talk of the demise of America is beyond me. I challenge anyone on this board to leave the country and make a better way of life anywhere in the world.
Do we have problems, yes. Can we overcome them, absolutely. I am not so sure I could answer the same about Russia, or perhaps even Japan. Could we/will we have inflation/deflation, surely/possibly. Would that be the end of the USA, extremely unlikely. Stop living in fear, think positively, and make the most of the opportunities presented. Your world wont end.
Goods cant get from point A to point B without travelling the oceans. Who controls the oceans? Do you think there is any ship that is not under constant surveilance by the US military? It is the USA that allows safe passage of every ship on the seas. Who controls space? Nothing moves without the watchful eye of the USA.
Edited to add....Roadrunner, the junior miners are good trading stocks, just like GLD or C or AIG. My point is to treat them all as such, dont buy the hype, and consider perspective. I just found it interesting that a hype article was issued on one while its performance was horrendous given the movement of its supposed business/industry.
Knowledge is the enemy of fear
<< <i>
<< <i>The comments after the interesting article on the USD are interesting from a global perspective >>
I challenge anyone on this board to leave the country and make a better way of life anywhere in the world.
>>
Been there, done that. And I'm not the only one.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
are bringing money by the shiploads back in, we here in the USA are importers and sending money abroad. Additionally, Japan has no large defense force - we defend them. They are not the worlds reserve currency. So they can, spend spend spend and get away with it - mostly - and only wreck themselves. We have sold our debt overseas, Japan has not. Now, who in the world can buy our current and coming trillions of dollars of debt? Remember we are talking TRILLIONS here. Not many. China? maybe some. Who else? The Saudis? Nope. Fact is, no one really will (or can afford to). So, it's all to coming to an end. A matter of time. When the world stops buying US debt, it's over for the US dollar as the worlds reserve currency.
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So why cant US citizens buy the debt? There is at least $4 trillion sitting in money markets. Japan sells its debt to its citizens, why cant the USA do the same?
If the world stops buying US debt, who will defend the world? I think the USA has the world exactly where it wants it.
Knowledge is the enemy of fear
<< <i>When the world stops buying US debt
So why cant US citizens buy the debt? >>
Don't we already have enough? Isn't a Federal Reserve Note considered US Debt?
If a decent rate of interest were offered it just could happen. But with the current rates I know I won't be buying any time soon. Double digit rates could entice me down the road...assuming there is no risk of a default or hyper-inflation to infinity. It comes down to who do you trust? An ounce of gold in your hand....or the full faith and credit of the USGovt? As far as I can see gold has always been totally upfront as to what it is and what it's worth. No games.
I don't think buying $4 TRILL in debt would even come close to covering the bill that's coming at us. And how much of that $4 TRILL would only end up being wasted via inefficiencies and fraud or handed over the bankers, brokers, and central banks? Let's see. I've been playing in a 35 year poker game where the rules have been clearly posted and abided by on my side. But in the end, I've been fleeced with only my boots and underwear left...and find that the rules were never abided by the other players. In fact they were playing another whole poker game with crazy rules at the same time with my money. The question is...would I fork over another $4 TRILL and continue playing with them?
roadrunner
I dont like having so much capital in PMs, I shake when the market looks like its gonna dive.(like now)
The alternaltives are terrible, I have no desire to hand my money to the bankers and stockbrokers or lend it to the Treasury. What else is left? The 401K idea was a way for the banksters to get our money and look what they did with it. All fraud and corruption and no one but Martha Stewart and maddoff see a prison cell. Whats worse is it looks like no changes, they are gonna let them keep going.
I want value in hand, no more lies
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dont like having so much capital in PMs, I shake when the market looks like its gonna dive.
I too dont like the resent plunge in the gold price!
Whoa here guys I think you are watching to many of the talking heads on T.V.
I agree that paying off ones debt should always come first, but after that where are we to put investment funds?
Unless you were a clever stock trader none of you have made any money in the stock market over the last ten years. A decade after the S&P 500 was around 1,500 it is now 1,000 so you are down by a third. Even if you got those 4% dividends and reinvested them all you might be at break even.
What have we all made on C.D. interest, after taxes, the last ten years?
It is disappointing to see Gold drop below $1,000 this week and perhaps it was a little to optimistic to say “ This is it and it is now” but Gold and silver have not PLUNGED in fact they are going up and down in a 2to5 percent range.
Wall Street and the Gov. want us back in there manipulated stock market, and want us all out of all the commodities, but in true reality the commodities are the only thing that has held up during this recession.
If the PM’s act this good in the recession what are they going to look like when we get the inflation next year? HUM?
Oh and Dave, all of our American money, in all the banks, and all the money in the stock market, and all the money in all our bond market, would not pay the short fall in our current and upcoming national debt. Its down the toilet, and the only question is when.
GS,
I just dont agree with that. There are many, many options available. The question is how much pain are we willing to take? For example, the SS deficit could be wiped out if we just raised retirement age. And maybe if instead of handing out unemployment checks, we gave out payroll checks via REAL infrastructure projects such as we did in the 30's with the TVA program and in the 50's with the interstate highway system. Maybe if we built coal gasification or nuke plants, we could even kill 2 birds with 1 stone.
The problem is in the politics. Not the monetary system. Get our politicians to do whats right for the country rather than themselves and it would become quite apparent that the problem is very fixable.
Knowledge is the enemy of fear
FED backed into a corner/ new USD carry trade
Those shortfalls are only what's obvious right now. The main problem that got us to this point (otc derivatives) is still largely unaddressed and currently pushed to the side by another round of marked to myth accounting. It's not going away and the largest shoe left to initiate (interest rate swaps) will be the worst. By allowing Lehman to fail, and paying out through AIG essentially eliminated the last chance to change course by attempting to cancel out contracts. The Chinese are now hinting that they might not pay up on their end of these fraudulent contracts. Others would follow. These are contracts where the big banks are counting on huge payoffs to their bottom lines to offset other losses....to keep on getting big bonuses on paper profits. And now the dispute over these is ending up in the courts where only the lawyers will end up profting. Citi is currently suing Morgan Stanley for hundreds of millions owed on some blown up contracts. MS apparently does not want to pay notional value but only some fraction of that. There are thousands if not millions of contracts to resolve. It's a great time to be a contract lawyer.
roadrunner
U.S. offers China more power in world group
The goal of the administration's strategy is to secure China's commitment to continuing a trend that emerged during the recession: more reliance on consumer spending and less dependence on exports to the U.S. to drive economic growth.
You've got to be kidding me. They want to continue to make our economy based on consumer spending?
How bad?
"So bad that on 'Sesame Street,' they won't even talk about the letters A, I or G anymore."
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New Deadly Dollar Carry Trade
The new dollar carry trade should keep the dollar low and depressed for many many years. The writer sees this as creating support for $2000+ gold over the long term.
<< <i>Interesting both Jackass and KD writing about the new USD carry trade. KD's entry from Monday Sept 21 "...Ponzi finance" is a good read, too.
FED backed into a corner/ new USD carry trade >>
They both copied that from CNBC Friday morning. When asked if the dollar was the new carry trade, Peter Schiff
said "No, it's the new peso" which me LOL.
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R95
The first thing to learn about retirement is that it is a fairly new idea in the scheme of things. Prior to 1785-86, there was no retirement. Everybody worked until they died (unless they were rich, in which case they did not work at all).
Retirement was invented in 1785-86 by Noah Webster, who is best known for being the author of the first American dictionary. Webster, then a young man, took a trip through the 13 newly independent states in 1785-86. He talked to state legislators and other influential people, and he convinced them to legalize interest. (This was only done in the northern states; the South waited until after the Civil War.) The following year the British philosopher, Jeremy Bentham, wrote a paper entitled, “In Defense of Usury [Interest],” and interest was legalized in Britain shortly thereafter.
Once receiving interest was legal, people began to save. A normal rate of interest from 1788 until 1933 was 5%. As people saved, they would put their money in the savings bank or purchase a corporate bond. Here is how it worked. Suppose a man whose average salary was 30 oz. of gold per year saved an average of 6 oz. each year. His first year’s savings receives interest for 49 years (age 16 to 65). His last year’s savings receives interest for 1 year. His average year’s savings receives interest for 25 years. This means that the money he saves multiplies by 3.4 times due to the working of compound interest. If you can save 6 oz. of gold each year, then over a 49 year working lifetime, he has saved 294 oz. of gold. Since compounding at 5% per year multiplies this by 3.4, he now as a total capital of 999 oz. of gold. At 5% interest, he would receive earnings of 50 oz. of gold per year, 1.7 times his annual salary. With this incentive, Americans (and British) began to save. They would quit work at age 65 and live off the interest on their accumulated savings. This had never before happened in world history.
Notice that this system of retirement does not depend on the young supporting the old. Once the 65-year old has accumulated his capital, he can live off of the interest for the remainder of his life, even if the human lifespan is extended to 200.
Now it may be asked from whence comes the wealth that the retired person consumes? After all, a person who is retired consumes wealth, but he does not produce it. He lives in a house or apartment. He drives a car. He wears clothes and eats food. And he indulges in some of the amenities.
How can a large class of people consume all of this wealth without putting a terrible burden on society?
The answer is that, under Noah Webster’s system, the businessman, whose corporate bonds paid the saver his interest, would use the borrowed money to build/buy machines. These new machines increased the amount of wealth a worker could produce in a given day. With the workers creating more wealth, there was more wealth in the world. It was this extra wealth which produced the goods consumed by the retirement community. No young person had to support any retired people. The retired supported themselves by the interest on their own capital. The system worked brilliantly for well over a century.......Then along came John Maynard Keynes. He hated interest. He worked out an underhanded way to undo Webster’s brilliant achievement and abolish interest. You know that, at present, short term interest rates in the United States are virtually zero. However, you have probably not been aware that they have been zero for the past 76 years. This is because what is important is the real rate of interest. This is the rate of interest minus the rate at which the currency depreciates. THIS REAL RATE OF INTEREST HAS AVERAGED ZERO FOR THE PAST 76 YEARS. That is, Keynes (via F.D.R. and Nixon) set up a system of depreciating the currency, and the rate at which the currency has depreciated has almost exactly kept up with the nominal rate of interest. That is, if your savings in the bank were $100,000 and you were receiving 6% interest, you would get $6,000 per year. However, if average prices were rising by 6% per year, then the buying power of your bank account would decline by $6,000 each year. In real terms, you would be receiving zero interest.
The rest of the article is linked below.
No retirement...welcome back to 1784....100 yrs before Orwell
Gold went basically nowhere for 30 years....just like stocks have in 2 previous major market cycles.
The author concludes that typically when an asset class has gone nowhere for a long period of time is precisely when it is undervalued the most.
roadrunner
This particular development is key. A little known fact (and one totally ignored by the mainstream media) is that the Fed accounted for nearly HALF of all Treasury purchases in the second quarter ($164 billion out of $339 billion). In fact, the Fed bought more Treasuries than the next three largest purchasers combined!!
The Fed’s purchases outnumber foreign holders (foreign governments), US household, and Primary Dealers (mega banks) COMBINED. One should also note that Foreign holders reduced their purchases of US debt from $159 billion in 1Q09 to $101 billion in 2Q09 (a 40% DECREASE). To read the below chart, you need to know that SOMA refers to the Fed.
In simple terms, these numbers indicate that if it were not for the Fed, the US Treasury market would have almost assuredly had numerous failed auctions in the second quarter. It also shows us that foreign holders (China, Japan, etc) are reducing their purchases of US debt at an incredible rate.
Full article - Graham Summers
roadrunner
<< <i>We've talked about the summer bond auctions quite a bit, including how "strong" the coverage has been. So it should come as no surprise that the FED was picking up half the tab. Full kitco article linked below along with FED supplied chart. Just maybe US debt is not as hot a commodity as the media states.
This particular development is key. A little known fact (and one totally ignored by the mainstream media) is that the Fed accounted for nearly HALF of all Treasury purchases in the second quarter ($164 billion out of $339 billion). In fact, the Fed bought more Treasuries than the next three largest purchasers combined!!
The Fed’s purchases outnumber foreign holders (foreign governments), US household, and Primary Dealers (mega banks) COMBINED. One should also note that Foreign holders reduced their purchases of US debt from $159 billion in 1Q09 to $101 billion in 2Q09 (a 40% DECREASE). To read the below chart, you need to know that SOMA refers to the Fed.
In simple terms, these numbers indicate that if it were not for the Fed, the US Treasury market would have almost assuredly had numerous failed auctions in the second quarter. It also shows us that foreign holders (China, Japan, etc) are reducing their purchases of US debt at an incredible rate.
Full article - Graham Summers
roadrunner >>
Everyone who has bought any of the debt issues is sitting at a nice profit. Everyone. And they may be sitting on huge profits if the bond yield charts dont turn around soon. The 10yr has very nice support at 3.25%. If it breaks that it could go to 2.50%.
Knowledge is the enemy of fear
I suppose those TBonds must make money in the short term or the FED will be stuck with buying 100% of them before too long. Gotta show a profit potential for the buyers.
The govt also told us "we" made money when TARP payments were returned, something on the order of a couple of billion dollars. Well that's a good start towards the $12 TRILLION.
I think "we" even made money on the AIG deal too. Pretty soon we'll have it all back. I'm feeling better all ready and raring to hit the local shopping mall tomorrow.
roadrunner
The easiest trade in the world is to short the dollar.
If Hugo Chavez Is Selling Dollars, Maybe You Should Be Buying
Knowledge is the enemy of fear
Is the Sun Setting on Japan?
Knowledge is the enemy of fear
Banks in the European Union could face losses of almost €400 billion
Knowledge is the enemy of fear
Here is the flip side of Cash for Clunkers.
The $4500 is taxable and the IRS will have your name. This may be the same department as the one who has the UBS client list.
Now you have two debts – GMAC (regardless of what company you bought from), and the IRS.
While I was considering buying a new car I never considered having to pay taxes on the $4500. That will be a shock to many new car buyers who used the program and will have to cough up around a grand.
-----------------
The OOC reported that our big banks were back at it again in the 2nd QTR. The volume of derivatives transacted climbed $1.92 TRILL in Q2 to over $191 TRILL. While JPM actually dropped their amount slightly, too- big-to-fail Citi increased their derivatives by $2.3 TRILL to $31.9 TRILL. Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?
Seekingalpha link
$2 BILL Georgian Bank wasn't even on the FED's watch list and just went down. Cost to FDIC: almost $1 BILL. They had of course overvalued their toxic assets. Reggie provides more detail including why the continued marked to myth accounting will continue to provide failures like this one.
Reggie sings "Georgian on my mind"
roadrunner
<< <i>Some snippets from Sinclair's website today:
Here is the flip side of Cash for Clunkers.
The $4500 is taxable and the IRS will have your name. This may be the same department as the one who has the UBS client list.
Now you have two debts – GMAC (regardless of what company you bought from), and the IRS.
While I was considering buying a new car I never considered having to pay taxes on the $4500. That will be a shock to many new car buyers who used the program and will have to cough up around a grand.
-----------------
The OOC reported that our big banks were back at it again in the 2nd QTR. The volume of derivatives transacted climbed $1.92 TRILL in Q2 to over $191 TRILL. While JPM actually dropped their amount slightly, too- big-to-fail Citi increased their derivatives by $2.3 TRILL to $31.9 TRILL. Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?
Seekingalpha link
roadrunner >>
I believe JS is wrong regarding the $4500 being taxable (Federal). I have read in a number of places that it is not reportable income. Many states however may want it reported.
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Since they are deemed too big to fail by our leaders, they have thus become national icons and as such they certainly deserve our support. If you really want to help out, go get a few of their credit cards.
Why would the banks not? Looks like a risk free gamble for them.... after all, the government bailed them out once since the were too big to fail.... they figure the government will do so again if their bets fail.
We have been taken for a loooong ride......
Bank of America to pay $713 mln in TARP preferred dividends (16.21 ) -Update-
Co announces the Board of Directors has authorized approximately $713 mln in dividend payments to the U.S. government under the Troubled Asset Relief Program. The company this year has paid the government $1.83 bln in TARP dividends through Sep 30. Dividends related to the government's investment in the company under TARP include the following: The cash dividend of $312.50 per share, or a total of approximately $188 mln, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series N, is payable on Nov 16, 2009 to the U.S. Department of the Treasury, the shareholder of record, as of Oct 31, 2009. This quarterly dividend payment relates to the government's $15 bln investment in Bank of America made under the Capital Purchase Program of TARP. The cash dividend of $312.50 per share, or a total of approximately $125 mln, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series Q, is payable on Nov 16, 2009 to the shareholder of record, the Treasury Department, as of Oct 31, 2009. This quarterly dividend payment relates to the government's $10 bln investment in Merrill Lynch & Co., made under the Capital Purchase Program of TARP. The cash dividend of $500 per share, or a total of approx $400 mln, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series R, is payable on November 16, 2009 to the shareholder of record, the Treasury Department, as of Oct 31, 2009. This quarterly dividend payment relates to the government's $20 bln investment in Bank of America on Jan 16, 2009 under TARP.
Knowledge is the enemy of fear
<< <i>
<< <i>Some snippets from Sinclair's website today:
Here is the flip side of Cash for Clunkers.
The $4500 is taxable and the IRS will have your name. This may be the same department as the one who has the UBS client list.
Now you have two debts – GMAC (regardless of what company you bought from), and the IRS.
While I was considering buying a new car I never considered having to pay taxes on the $4500. That will be a shock to many new car buyers who used the program and will have to cough up around a grand.
-----------------
The OOC reported that our big banks were back at it again in the 2nd QTR. The volume of derivatives transacted climbed $1.92 TRILL in Q2 to over $191 TRILL. While JPM actually dropped their amount slightly, too- big-to-fail Citi increased their derivatives by $2.3 TRILL to $31.9 TRILL. Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?
Seekingalpha link
roadrunner >>
I believe JS is wrong regarding the $4500 being taxable (Federal). I have read in a number of places that it is not reportable income. Many states however may want it reported. >>
Would not be the first time that JS is wrong....
Cash for Clunkers taxable income rumors are false! The below info is taken from the official US Gov't website related to Cash for Clunkers
Q&A
Is the credit subject to being taxed as income to the consumers that participate in the program?
NO. The CARS Act expressly provides that the credit is not income for the consumer.
Cars.govText
<< <i>
<< <i>
<< <i>Some snippets from Sinclair's website today:
Here is the flip side of Cash for Clunkers.
The $4500 is taxable and the IRS will have your name. This may be the same department as the one who has the UBS client list.
Now you have two debts – GMAC (regardless of what company you bought from), and the IRS.
While I was considering buying a new car I never considered having to pay taxes on the $4500. That will be a shock to many new car buyers who used the program and will have to cough up around a grand.
-----------------
The OOC reported that our big banks were back at it again in the 2nd QTR. The volume of derivatives transacted climbed $1.92 TRILL in Q2 to over $191 TRILL. While JPM actually dropped their amount slightly, too- big-to-fail Citi increased their derivatives by $2.3 TRILL to $31.9 TRILL. Considering that they lost $238 MILL in trading that quarter, why are they still adding derivatives while being supported by the taxpayers?
Seekingalpha link
roadrunner >>
I believe JS is wrong regarding the $4500 being taxable (Federal). I have read in a number of places that it is not reportable income. Many states however may want it reported. >>
Would not be the first time that JS is wrong....
Cash for Clunkers taxable income rumors are false! The below info is taken from the official US Gov't website related to Cash for Clunkers
Q&A
Is the credit subject to being taxed as income to the consumers that participate in the program?
NO. The CARS Act expressly provides that the credit is not income for the consumer.
Cars.govText >>
You add the $4500 in the total cost of the car for TTL from what I understand so it is indeed taxed.
<< <i>You add the $4500 in the total cost of the car for TTL from what I understand so it is indeed taxed. >>
Show me ... I'm from Missouri ... or is this another internet bs rumor.
<< <i>
<< <i>You add the $4500 in the total cost of the car for TTL from what I understand so it is indeed taxed. >>
Show me ... I'm from Missouri ... or is this another internet bs rumor. >>
Taxes for Clunkers
Missouri, Illinois charge no sales tax on clunker rebate
<< <i>Here's the answer for your state of Mo. Lazy today huh?
Missouri, Illinois charge no sales tax on clunker rebate >>
Thanks ... I knew there was no tax liability ... just to damn lazy to look it up.