I guess your better off in something of value that will recover rather than being in any fiat currency that never will. I think even the super rich are spooked at the present climate and how they need to perserve their wealth.
The U.S. spends half a trillion on defense each year. If the U.S. collapses there will be absolutely no one to police the world. Granted we don't need to be in Iraq or Afghanistan. Who will take over the U.S.'s role? France, Great Britain.....? The U.N? Do they have the financial means to do so without going into debt like the U.S. Should the dollar collapse would the U.S. depend solely on its own resources and become an isolationist nation while the world is thrown into chaos. Abandoning the dollar will have its consequences not only for the U.S. but the rest of the world.
Pf70, These are the very reasons I disagree with Jim Sinclair. No one really wants to give up the dollar, and the World needs someone to play the Fool, and that would be us.
Even in COMMUNIST China they want to know what our Congress of fools think they are doing passing social programs that not even communist countries have.
The World laughs at us as we refuse to protect our borders, as we spend Trillions on wars, trillions on social programs, billions on foreign aid, when we are basically bankrupt.
Personally I used to believe as Sinclair did, that one-day China, or Japan, or the Arabs, would just say no more Dollars, but now I believe that that will only happen when our debtors can no longer spend the dollars.
One day one of our large debtor countries will go to buy an oil field, or a gold mine, or some other hard assets and the seller will refuse to take dollars as payment.
Until that time all of our creditors will continue to play us as the idiots we have been for nearly 30 years now!
I mentioned this chart a week or so ago. This is the FED's foreign slush fund which is basically debt owed around the world. Over the past 7 or so years it has increased from $600 BILL to almost $3 TRILLION. Just this past year alone about $400 BILL has been added. That kind of debt can buy a lot of TBonds.
Manipulation of the gold market was quite obvious in the '90's. The FED simply adjusted interest rate policies to keep gold at $300. How this was possible still might not be obvious but it's entirely possible that it involved means that were esoteric and improper.
One thing is certain. So long as interest rates remain low demand for gold will remain high and it's impossible under existing conditions to raise interest rates. It appears we have a franenstein's monster of an economic behemoth held to- gether with baling wire and duct tape.
If the gold isn't where they say it is there's going to be mess.
Why is everyone so afraid of change?
Surely someone has at least devised a contingency plan more complicated than "let them eat cake" in the event that propping up the status quo doesn't work!!!
you must admit the USD index is falling and Au is rising
the DOW may make a 180 someday when the USD falls, but one thing that has been brought to light is that more companies are investing and growing by going overseas, so a weak $$ is "good" but that still could and I think will change in a year or so.
do NOT underestimate China
(or Sinclair's wisdom)
everyone have a blessed Thanksgiving and know that it isn't about what we have it's about who we are
<< <i>Japan’s debt burden is approaching 200 percent of gross domestic product
Doesn't that mean that Japan is really, really screwed? >>
So would you believe, or does it make sense, that the Japanese currency has appreciated 11% vs the dollar since June?
Here are some more laughs.....
Since June..
The Romanian Leus is up 7%. The Croatian currency up 7%, Hungary up 11%, Bulgaria up 9%. Even Botswana is up 8%
Can you guys seen the massive manipulation that is going on here? My greatest fear is not that inflation will run rampant, but that 80 years of continuous and uninterrupted inflation could be reversed in 24 months.
Japan's stated debt burden is 200% GDP. The actual question should be what is the real debt burden with all liabilities taken into account. The US govt has its fingers into the big banks, GM, Fannie, Freddie, AIG, etc. On top of that we have entities like FDIC, FHA, SS, Medicare, FED, etc. that are insolvent. The US govt has implied that they will cover the big banks off balance sheet losses as they spring up (ie $203 TRILL in derivatives). I don't think the Japanese are in anywhere near as deep as the US when all factors are included. Comparing one insolvent fiat currency to the next is an exercise in futility. All of them are losing value vs. PM's. If there is a scenario that wipes out 80 years of inflation in 24 months, gold will come out of that ok on a relative basis. I'm not so sure the dollar will.
In the long run all fiat currencies disappear and/or get replaced. In such an end-game most nations would just print money to stave off the deflationary effects, in essence an inflationary depression. Aren't there far more examples of that in the past 80 years than deflationary depressions where the currency was kept strong? Since the world went all fiat in 1971 the major tool has been the printing press...and today the keyboard. Central Bankers hate deflation. They'll fight it tooth and nail and drive the currency into the ground if they have to.
My greatest fear is not that inflation will run rampant, but that 80 years of continuous and uninterrupted inflation could be reversed in 24 months.
Central Bankers hate deflation. They'll fight it tooth and nail and drive the currency into the ground if they have to.
Resulting in a repudiation of debt via hyperinflation of the currency. That works great for the bankers and the government, but not so great for most folks.
That's where the next step gets real hazy for me.
Q: Are You Printing Money? Bernanke: Not Literally
If Soros truly thinks the economy is slipping back into recession, he's not going to be happy with the performance of anything on that list of investments, particularly energy and silver. It doesn't add up. >>
If this is true this is beyond scary!
PEACE! This is the first day of the rest of your life.
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 Soros truly thinks the economy is slipping back into recession, he's not going to be happy with the performance of anything on that list of investments, particularly energy and silver. It doesn't add up. >>
If this is true this is beyond scary! >>
I don't believe that Soros is above putting out disinformation. Perhaps that is why it does not add up.
What govt agencies that have their hands in markets are not a disaster?
The FDIC is handling bank failures much the same way the smaller banks are handling mortgage foreclosures. That is only slowly bring them to the surface so as not to shock the system. The FDIC could probably shutter 500-1000+ banks tomorrow if they went by older metrics and had the cash to cover it. Likewise the banks are sitting on a million+ properties that probably could/should be foreclosed upon. But in doing so they would only cut their own throats and drive prices further down thus netting less and reducing their capital ratios. The piece meal method works better for budgeting purposes as well as for sheeple psychology. And better to keep a delinquent "homeowner" in the property providing minimal maintenance upkeep rather than letting it degrade while waiting for a sale.
Willie spins the tungsten gold bar story a bit further. Interesting that he says that the world's assayers are now all tied up verifying gold bars. This would be very odd since no hard evidence has been reported and the media has ignored the story. Funny behavior for just a rumor. One way to corroborate would be to try and hire an assayer.
Chuck DiFalco offers up 2 points worth analyzing. One, that the last gold bull didn't begin in 1971, but rather in 1964 when the US left 90% silver coins behind. Second, the removal of the gold standard in 1971 has parallels to the reduction of the US dollar from the world stage beginning in 2009.
Socialism is the root of all evil in any healthy society. When ever any healthy country heads down that path it is only a matter of time until that country collapses and must reorganize.
Here in the United States our government and the big bankers have decided to try to manage that collapse. Their new management theory consists of several parts.
First since their sales of debt to foreigners are beginning to fall they have devised a new method to fund our socialism. The Federal reserve is creating money off the printing press, lending it to the banks at 0 interest rates, the banks then buy the notes and bonds that cannot be sold to outsiders, or the American suckers. Or the Fed just buys the debt direct, and the whole thing goes in a circle.
Sometimes the bankers borrow 0 interest money from the Fed and buy other investments to make free money and then but notes and bonds.
No inflation is created by this scheme, as the money never reaches the main system.
Naturally this causes higher than normal unemployment as no risk money is lent to businesses, and therefore no real growth occurs.
An additional part of this scheme that of keeping interest rates at 0 causes the dollar to drop in value against other currencies. This encourages Joe Six Pack to spend his money on goods rather than save, or invest in the stock market in order to try to make some type of return. Once many of the suckers are back in the stock market the tax rates can be increased to produce more money for the government.
Once many of the suckers are back in the stock market the tax rates can be increased to produce more money for the government.
This is a very important observation. Inflated asset prices and inflated stock prices will create more tax revenues, and when tax rates are increased it's a double whammy.
Instead of a nominal increase, we will have a 4X increase in taxes.
All the more reason to resist hard, and now.
Q: Are You Printing Money? Bernanke: Not Literally
As we look at this circle jerk of monetary manipulation a couple of other questions come to mind.
First, was the 500 billion that Ben sent to the foreign central banks 0 interest money they could use to buy U.S. debt?
Second, If the Fed lends money to our large money central banks at 0 interest, but requires them to buy up U.S. debt that foreigners no longer will buy, then exactly how does the Fed suck all of this money out of the system with out crashing the U.S. debt market?
If the banks and the Fed are buying the ever increasing amounts of U.S. debt where is the exit strategy when you can never sell without crashing the U.S. debt market.
Third, what happens to the banks U.S. debt holdings if Japan, the Arabs, or the Chinese decide to get out of the dollar and their U.S. debt holdings as Jim Sinclair has suggested? Do all the big banks go broke again?
Fourth, If the large money center banks have a large percentage of their money in U.S. debt that cannot be sold, how will they ever have liquidity to make business loans again?
<< <i>Once many of the suckers are back in the stock market the tax rates can be increased to produce more money for the government.
This is a very important observation. Inflated asset prices and inflated stock prices will create more tax revenues, and when tax rates are increased it's a double whammy.
Instead of a nominal increase, we will have a 4X increase in taxes.
All the more reason to resist hard, and now. >>
This is a very important observation of the observation. "resist hard and now", it looks like government will pass the scam" health care" bill despite a majority of americans against it. As we see it's bribery/corruption of the feds to get needed votes. People have been voicing their opinions with no avail. Another form of socialism, bringing about more taxes, bigger government i.e. more corruption. I am seriously considering going against any form of the current health care bill, refuse to pay.
If Pelosi gets her way, I may go to jail for 5 years. On the bright side, America will come out of this government socialism if we "resist hard, and now. I wish all a blessed Thanksgiving and I will continue to sell dollars for PM's. Bought some yesterday. Will buy some next week. I do think inflation or hyperinflation will become a reality in 2010.
StreetTalk Run With The Gold Bulls Robert Lenzner, 11.25.09, 06:15 PM EST
We're seeing demand for gold all over the world. Pension funds allocate about 5% as protection against the weakening dollar. Chinese citizens are encouraged by their government to hold gold, not dollars. On Nov. 18, Russia's central bank announced it would buy any and all gold its sister organization, the State Depositary for Precious Metals and Gems, was willing to sell. Now the Vietnamese central bank has granted quotas to import 10 tons of gold for use by its banking system and gold traders.
Demand for gold is growing faster than supply. In London, market makers trying to settle gold futures contracts with more contracts, not bullion, because there's not enough gold to deliver. Buyers who elect to forego payment in gold are offered cash premiums for doing so.
Built in 1788 by the leader of the Whiskey Rebellion. Hamilton instituted a vice tax, Pennsylvanians rebelled, tax collectors were tarred and feathered, a militia laid down a heavy hand and Bradford "retired" to Spanish Florida.
Yup. The whole Dubai debt fiasco followed immediately by "sparkling" jobs and unemployment data seem to be made to order. The BLS Birth Death Model tossed in +30K jobs this month and will add +60K next month for a total of around 880,000 jobs "created" this year via its black box job machine. It's very odd that the model is calculating in 90% of the jobs that it put out during the peak of the 2004-2007 boom period. It clearly cannot distinguish recession from growth.
Treasury yields have been rising for several days in order to entice a few more bond buyers next week. Those same bond buyers will then turn around and sell those bonds right back to the Treasury/FED on the side. What J6P doesn't know won't hurt him. And by 12/10 when the 30 yr bond auction ends, gold should be on its way back up....with the dollar headed down.
These twice a month auctions are scheduled through April 29th. That's another 10 auctions on the schedule with probably $1 TRILL+ being sold....with of course zero growth in the money supply.
The Treasury is still playing games with the monetary base (M0). In Oct they added 156 BILL to it which brought it up to $1.975 TRILL. That same amount ended up in total reserves. None of it shows up in M1 which is what used to happen. If one looks back to monthly data of 3rd qtr of 2008 the $500 BILL gap betw M0 and M1 that had existed for years was closed...then exceeded. Now the part (M0) is bigger than the whole (M1). It's nice that the FED has decided to hide $650 BILL in monetary increases over the past year in the M0 number. The economists and chartists only use M1/M2 to analyze the money growth. What they should be looking at is M0 as well as the FED's foreign custodial account. Between the 2 of those there's a TRILLION in money growth over the past year that doesn't show up in M1 or M2.
Check out the Sinclair site for today on the 6 banks that were shuttered this weekend. The FDIC is getting into these banks way too late with losses in the 20-40% range. Worse yet the banks taking over are now requesting share-loss deals with the FDIC because they question the value of the majority assets of the failed banks. This kind of share the risk mentality was not around when the banks first started failing in 2007. Marked to market accounting is taking its toll. The FDIC can't even keep up.
Allow me to answer that. It means that nothing has changed. So, if nothing has changed, it means that in light of the Fed's penchant for manipulation of gold and Treasuries, there is no good way to predict short term fluctuations.
It also means that we are screwed and that gold is about the best insurance available. Insurance against what? That is the question. I know what I'd like to do with my pitchfork.
Q: Are You Printing Money? Bernanke: Not Literally
I had an old friend drop in today who wanted a few names of places to buy some gold.
This is a gentleman rancher who I have known for many decades. His biggest complaint was not how things were going for himself, but what would happen to his children and grandchildren.
As the discussion preceded it occurred to me that all of the Glen Beck types that keep harping on how terrible things will be for the next two generations are WRONG! It is not that things might not be unpleasant under a socialistic government, things never are, but we will not leave 70 trillion in debt to our heirs, there is no way this current system, on its current trajectory will ever last that long.
Some time in the next few years all of this MUST come to a head. Either we have a sever depression, or we have hyperinflation. I do not think that any middle ground is possible at this time, and there is no way this government of ours is ever going to turn in the opposite direction.
So we need not spend any more time worrying about the future generations, we will either have a one for ten currency devaluation, riots in the streets, permanently high unemployment, and money that will buy nothing, or no money whatsoever, maybe all of the above.
Has anyone here ever wondered if the Trillion dollars the Fed has put in the banks has a string attached. A string that says with this interest free money you must buy U.S debt so that these auctions always go well?
Gross domestic product rose at an annual 1.3 percent pace, slower than the 4.8 percent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The revision was deeper than the predictions of all but one of the 17 economists surveyed by Bloomberg News.
Deflation is a tough beast to contain........"Falling prices have been squeezing profit at home, prompting the government to declare last month that the country is back in deflation and push the Bank of Japan to do more to spur the economy. The central bank released a 10 trillion yen credit program last week, a move that Deputy Prime Minister Naoto Kan said yesterday had a “considerable impact” on weakening the yen."
Gross domestic product rose at an annual 1.3 percent pace, slower than the 4.8 percent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The revision was deeper than the predictions of all but one of the 17 economists surveyed by Bloomberg News.
Deflation is a tough beast to contain........"Falling prices have been squeezing profit at home, prompting the government to declare last month that the country is back in deflation and push the Bank of Japan to do more to spur the economy. The central bank released a 10 trillion yen credit program last week, a move that Deputy Prime Minister Naoto Kan said yesterday had a “considerable impact” on weakening the yen."
Japan is a great study for those that believe that huge annual gov't deficits and debt burden must lead to inflation. Or, for that matter, that gov't can spend it's way out of a recession.
Comments
Société Générale tells clients how to prepare for potential 'global collapse'
Gold Market Breakdown
Looks like SA killed the golden goose:
SA gold miners on final deathwatch as scientist finds gold reserves more than 90% less than claimed
http://www.bloomberg.com/apps/news?pid=20603037&sid=ajSyUvek1EtE
http://money.cnn.com/2009/11/19/news/economy/debt_interest/
My http link is not working??
Gold is holding $1000 well.
Gold is holding $1050 well.
Gold is holding $1100 well.
Gold is holding $1140 well.
Life is good.
Box of 20
These are the very reasons I disagree with Jim Sinclair. No one really wants to give up the dollar, and the World needs someone to play the Fool, and that would be us.
Even in COMMUNIST China they want to know what our Congress of fools think they are doing passing social programs that not even communist countries have.
The World laughs at us as we refuse to protect our borders, as we spend Trillions on wars, trillions on social programs, billions on foreign aid, when we are basically bankrupt.
Personally I used to believe as Sinclair did, that one-day China, or Japan, or the Arabs, would just say no more Dollars, but now I believe that that will only happen when our debtors can no longer spend the dollars.
One day one of our large debtor countries will go to buy an oil field, or a gold mine, or some other hard assets and the seller will refuse to take dollars as payment.
Until that time all of our creditors will continue to play us as the idiots we have been for nearly 30 years now!
I mentioned this chart a week or so ago. This is the FED's foreign slush fund which is basically debt owed around the world. Over the past 7 or so years it has increased from $600 BILL to almost $3 TRILLION. Just this past year alone about $400 BILL has been added. That kind of debt can buy a lot of TBonds.
Katz on real vs. inflated wages over the past 200 yrs. Real wages have been dropping since 1972.
It's no surprise that the ending of the gold standard pretty much ended the rise in real wages. Just don't tell J6P.
roadrunner
<< <i>Vary scary if true:
Gold Market Breakdown
Looks like SA killed the golden goose:
SA gold miners on final deathwatch as scientist finds gold reserves more than 90% less than claimed >>
Manipulation of the gold market was quite obvious in the '90's. The FED simply
adjusted interest rate policies to keep gold at $300. How this was possible still
might not be obvious but it's entirely possible that it involved means that were
esoteric and improper.
One thing is certain. So long as interest rates remain low demand for gold will
remain high and it's impossible under existing conditions to raise interest rates.
It appears we have a franenstein's monster of an economic behemoth held to-
gether with baling wire and duct tape.
If the gold isn't where they say it is there's going to be mess.
Why is everyone so afraid of change?
Surely someone has at least devised a contingency plan more complicated than
"let them eat cake" in the event that propping up the status quo doesn't work!!!
you must admit the USD index is falling and Au is rising
the DOW may make a 180 someday when the USD falls, but one thing that has been brought to light is that more companies are investing and growing by going overseas, so a weak $$ is "good" but that still could and I think will change in a year or so.
do NOT underestimate China
(or Sinclair's wisdom)
everyone have a blessed Thanksgiving and know that it isn't about what we have it's about who we are
Knowledge is the enemy of fear
Doesn't that mean that Japan is really, really screwed?
I knew it would happen.
<< <i>Japan’s debt burden is approaching 200 percent of gross domestic product
Doesn't that mean that Japan is really, really screwed?
Especially with a shrinking population. Fewer people to pay off the debt.
<< <i>Japan’s debt burden is approaching 200 percent of gross domestic product
Doesn't that mean that Japan is really, really screwed?
So would you believe, or does it make sense, that the Japanese currency has appreciated 11% vs the dollar since June?
Here are some more laughs.....
Since June..
The Romanian Leus is up 7%. The Croatian currency up 7%, Hungary up
11%, Bulgaria up 9%. Even Botswana is up 8%
Can you guys seen the massive manipulation that is going on here? My greatest fear is not that inflation will run rampant, but that 80 years of continuous and uninterrupted inflation could be reversed in 24 months.
Knowledge is the enemy of fear
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
In the long run all fiat currencies disappear and/or get replaced. In such an end-game most nations would just print money to stave off the deflationary effects, in essence an inflationary depression. Aren't there far more examples of that in the past 80 years than deflationary depressions where the currency was kept strong? Since the world went all fiat in 1971 the major tool has been the printing press...and today the keyboard. Central Bankers hate deflation. They'll fight it tooth and nail and drive the currency into the ground if they have to.
roadrunner
<< <i>I noticed that even the Mexican Peso is higher then the U.S. dollar! no wonder they are all going home! LOL >>
Yes, the Mexican peso is up about 7% since June and their soverign debt rating was lowered.
Roadrunner, I will agree 100% with your last sentence as we are witnessing that today.
Knowledge is the enemy of fear
Central Bankers hate deflation. They'll fight it tooth and nail and drive the currency into the ground if they have to.
Resulting in a repudiation of debt via hyperinflation of the currency. That works great for the bankers and the government, but not so great for most folks.
That's where the next step gets real hazy for me.
I knew it would happen.
<< <i>
<< <i>Bearish Soros Stashes Cash in Gold, Ag, and Energy Names
Mauritius buys 2 tons of gold from IMF >>
If Soros truly thinks the economy is slipping back into recession, he's not going to be happy with the performance of anything on that list of investments, particularly energy and silver. It doesn't add up. >>
Fred, Las Vegas, NV
FDIC quarterly banking profile
Knowledge is the enemy of fear
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......
124 failed banks in 2009 to date. 500+ in trouble.
<< <i>
<< <i>
<< <i>Bearish Soros Stashes Cash in Gold, Ag, and Energy Names
Mauritius buys 2 tons of gold from IMF >>
If Soros truly thinks the economy is slipping back into recession, he's not going to be happy with the performance of anything on that list of investments, particularly energy and silver. It doesn't add up. >>
I don't believe that Soros is above putting out disinformation. Perhaps that is why it does not add up.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
The FDIC is handling bank failures much the same way the smaller banks are handling mortgage foreclosures. That is only slowly bring them to the surface so as not to shock the system. The FDIC could probably shutter 500-1000+ banks tomorrow if they went by older metrics and had the cash to cover it. Likewise the banks are sitting on a million+ properties that probably could/should be foreclosed upon. But in doing so they would only cut their own throats and drive prices further down thus netting less and reducing their capital ratios. The piece meal method works better for budgeting purposes as well as for sheeple psychology. And better to keep a delinquent "homeowner" in the property providing minimal maintenance upkeep rather than letting it degrade while waiting for a sale.
Jim Willie apologizes for calling post-1964 coinage zinc
Willie spins the tungsten gold bar story a bit further. Interesting that he says that the world's assayers are now all tied up verifying gold bars. This would be very odd since no hard evidence has been reported and the media has ignored the story. Funny behavior for just a rumor. One way to corroborate would be to try and hire an assayer.
Gold at $6000?
Chuck DiFalco offers up 2 points worth analyzing. One, that the last gold bull didn't begin in 1971, but rather in 1964 when the US left 90% silver coins behind. Second, the removal of the gold standard in 1971 has parallels to the reduction of the US dollar from the world stage beginning in 2009.
roadrunner
<< <i>
Jim Willie apologizes for calling post-1964 coinage zinc
>>
LOL.
He still can't get it quite right.
<< <i>(ok, so pre-1964 silver was copper core -- my bad), >>
Here in the United States our government and the big bankers have decided to try to manage that collapse. Their new management theory consists of several parts.
First since their sales of debt to foreigners are beginning to fall they have devised a new method to fund our socialism. The Federal reserve is creating money off the printing press, lending it to the banks at 0 interest rates, the banks then buy the notes and bonds that cannot be sold to outsiders, or the American suckers. Or the Fed just buys the debt direct, and the whole thing goes in a circle.
Sometimes the bankers borrow 0 interest money from the Fed and buy other investments to make free money and then but notes and bonds.
No inflation is created by this scheme, as the money never reaches the main system.
Naturally this causes higher than normal unemployment as no risk money is lent to businesses, and therefore no real growth occurs.
An additional part of this scheme that of keeping interest rates at 0 causes the dollar to drop in value against other currencies. This encourages Joe Six Pack to spend his money on goods rather than save, or invest in the stock market in order to try to make some type of return. Once many of the suckers are back in the stock market the tax rates can be increased to produce more money for the government.
On an on the game goes until the final collapse.
This is a very important observation. Inflated asset prices and inflated stock prices will create more tax revenues, and when tax rates are increased it's a double whammy.
Instead of a nominal increase, we will have a 4X increase in taxes.
All the more reason to resist hard, and now.
I knew it would happen.
<< <i>The dollar is getting hit pretty hard on Thanksgiving. >>
Profit-taking on gold, US$ index up and the dollar is getting hit pretty hard?
First, was the 500 billion that Ben sent to the foreign central banks 0 interest money they could use to buy U.S. debt?
Second, If the Fed lends money to our large money central banks at 0 interest, but requires them to buy up U.S. debt that foreigners no longer will buy, then exactly how does the Fed suck all of this money out of the system with out crashing the U.S. debt market?
If the banks and the Fed are buying the ever increasing amounts of U.S. debt where is the exit strategy when you can never sell without crashing the U.S. debt market.
Third, what happens to the banks U.S. debt holdings if Japan, the Arabs, or the Chinese decide to get out of the dollar and their U.S. debt holdings as Jim Sinclair has suggested? Do all the big banks go broke again?
Fourth, If the large money center banks have a large percentage of their money in U.S. debt that cannot be sold, how will they ever have liquidity to make business loans again?
<< <i>Once many of the suckers are back in the stock market the tax rates can be increased to produce more money for the government.
This is a very important observation. Inflated asset prices and inflated stock prices will create more tax revenues, and when tax rates are increased it's a double whammy.
Instead of a nominal increase, we will have a 4X increase in taxes.
All the more reason to resist hard, and now. >>
This is a very important observation of the observation. "resist hard and now", it looks like government will pass the scam" health care" bill despite a majority of americans against it. As we see it's bribery/corruption of the feds to get needed votes. People have been voicing their opinions with no avail. Another form of socialism, bringing about more taxes, bigger government i.e. more corruption. I am seriously considering going against any form of the current health care bill, refuse to pay.
If Pelosi gets her way, I may go to jail for 5 years. On the bright side, America will come out of this government socialism if we "resist hard, and now. I wish all a blessed Thanksgiving and I will continue to sell dollars for PM's. Bought some yesterday. Will buy some next week. I do think inflation or hyperinflation will become a reality in 2010.
WHERES THE BEEF, I MEAN GOLD?
StreetTalk
Run With The Gold Bulls
Robert Lenzner, 11.25.09, 06:15 PM EST
We're seeing demand for gold all over the world. Pension funds allocate about 5% as protection against the weakening dollar. Chinese citizens are encouraged by their government to hold gold, not dollars. On Nov. 18, Russia's central bank announced it would buy any and all gold its sister organization, the State Depositary for Precious Metals and Gems, was willing to sell. Now the Vietnamese central bank has granted quotas to import 10 tons of gold for use by its banking system and gold traders.
Demand for gold is growing faster than supply. In London, market makers trying to settle gold futures contracts with more contracts, not bullion, because there's not enough gold to deliver. Buyers who elect to forego payment in gold are offered cash premiums for doing so.
<< <i>Hi, ttown...gotta subscribe to see the link. Can you post it? >>
Sorry about that. The link above is fixed now I hope.
Built in 1788 by the leader of the Whiskey Rebellion. Hamilton instituted a vice tax, Pennsylvanians rebelled, tax collectors were tarred and feathered, a militia laid down a heavy hand and Bradford "retired" to Spanish Florida.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Treasury yields have been rising for several days in order to entice a few more bond buyers next week. Those same bond buyers will then turn around and sell those bonds right back to the Treasury/FED on the side. What J6P doesn't know won't hurt him. And by 12/10 when the 30 yr bond auction ends, gold should be on its way back up....with the dollar headed down.
These twice a month auctions are scheduled through April 29th. That's another 10 auctions on the schedule with probably $1 TRILL+ being sold....with of course zero growth in the money supply.
Schedule of Treasury securities
The Treasury is still playing games with the monetary base (M0). In Oct they added 156 BILL to it which brought it up to $1.975 TRILL. That same amount ended up in total reserves. None of it shows up in M1 which is what used to happen. If one looks back to monthly data of 3rd qtr of 2008 the $500 BILL gap betw M0 and M1 that had existed for years was closed...then exceeded. Now the part (M0) is bigger than the whole (M1). It's nice that the FED has decided to hide $650 BILL in monetary increases over the past year in the M0 number. The economists and chartists only use M1/M2 to analyze the money growth. What they should be looking at is M0 as well as the FED's foreign custodial account. Between the 2 of those there's a TRILLION in money growth over the past year that doesn't show up in M1 or M2.
St Louis FED data - M0 vs. M1
Check out the Sinclair site for today on the 6 banks that were shuttered this weekend. The FDIC is getting into these banks way too late with losses in the 20-40% range. Worse yet the banks taking over are now requesting share-loss deals with the FDIC because they question the value of the majority assets of the failed banks. This kind of share the risk mentality was not around when the banks first started failing in 2007. Marked to market accounting is taking its toll. The FDIC can't even keep up.
roadrunner
Allow me to answer that. It means that nothing has changed. So, if nothing has changed, it means that in light of the Fed's penchant for manipulation of gold and Treasuries, there is no good way to predict short term fluctuations.
It also means that we are screwed and that gold is about the best insurance available. Insurance against what? That is the question. I know what I'd like to do with my pitchfork.
I knew it would happen.
I had an old friend drop in today who wanted a few names of places to buy some gold.
This is a gentleman rancher who I have known for many decades. His biggest complaint was not how things were going for himself, but what would happen to his children and grandchildren.
As the discussion preceded it occurred to me that all of the Glen Beck types that keep harping on how terrible things will be for the next two generations are WRONG! It is not that things might not be unpleasant under a socialistic government, things never are, but we will not leave 70 trillion in debt to our heirs, there is no way this current system, on its current trajectory will ever last that long.
Some time in the next few years all of this MUST come to a head. Either we have a sever depression, or we have hyperinflation. I do not think that any middle ground is possible at this time, and there is no way this government of ours is ever going to turn in the opposite direction.
So we need not spend any more time worrying about the future generations, we will either have a one for ten currency devaluation, riots in the streets, permanently high unemployment, and money that will buy nothing, or no money whatsoever, maybe all of the above.
Has anyone here ever wondered if the Trillion dollars the Fed has put in the banks has a string attached. A string that says with this interest free money you must buy U.S debt so that these auctions always go well?
Japan’s economy expanded less than a third of the pace initially reported
Gross domestic product rose at an annual 1.3 percent pace, slower than the 4.8 percent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The revision was deeper than the predictions of all but one of the 17 economists surveyed by Bloomberg News.
Deflation is a tough beast to contain........"Falling prices have been squeezing profit at home, prompting the government to declare last month that the country is back in deflation and push the Bank of Japan to do more to spur the economy. The central bank released a 10 trillion yen credit program last week, a move that Deputy Prime Minister Naoto Kan said yesterday had a “considerable impact” on weakening the yen."
Another of the Govt's minions talking the dollar lower
Knowledge is the enemy of fear
<< <i>And we thought our Govt had a hard time with the numbers....
Japan’s economy expanded less than a third of the pace initially reported
Gross domestic product rose at an annual 1.3 percent pace, slower than the 4.8 percent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The revision was deeper than the predictions of all but one of the 17 economists surveyed by Bloomberg News.
Deflation is a tough beast to contain........"Falling prices have been squeezing profit at home, prompting the government to declare last month that the country is back in deflation and push the Bank of Japan to do more to spur the economy. The central bank released a 10 trillion yen credit program last week, a move that Deputy Prime Minister Naoto Kan said yesterday had a “considerable impact” on weakening the yen."
Another of the Govt's minions talking the dollar lower >>
Japan is a great study for those that believe that huge annual gov't deficits and debt burden must lead to inflation. Or, for that matter, that gov't can spend it's way out of a recession.
Congrats GS and thanks to all contributors.