<< <i>OJ didnt like the margin hike. Down 5% today. >>
They usually never do. But nearly the entire soft and grain complex got whacked today and OJ went with the flow. Could still be another 10-20% downside in the CCI. If that's the case then OJ may have trouble getting airborne again.
Buyers of orange juice like when it goes on sale! If they like it at $XXXX, they must LOVE it at 80% of XXXX and "keep on stockin" cans until their freezer is full of FCOJ . . . but, then what?
When everyone who wants FCOJ has their freezer full, so demand drops, so prices drop, do they keep on buying FCOJ all the way down? And when it stays down? or do they try to then sell some of the FCOJ, because they need to buy some pork bellies to get bacon, which is found on a bacon lettuce and tomato sandwich? Never mind the GI Joe with the kung fu grip
You can't eat silver, and you can't use frozen concentrate as money. So, analyzing silver's decline and OJ's rise under the same set of circumstances would lead one to think that food is becoming more critical than currency.
Or something.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Diesel fuel or fertilzer so I can plant again next year. >>
Or how bout gold and silver so you can buy diesel & fertilizer next year? Why let that fuel or fertilizer sit around for 8 months and possibly go bad or get contaminated?
<< <i>Diesel fuel or fertilzer so I can plant again next year. >>
Or how bout gold and silver so you can buy diesel & fertilizer next year? Why let that fuel or fertilizer sit around for 8 months and possibly go bad or get contaminated? >>
What if in 8 months the gold or silver doesnt buy as much fuel or fertilizer?
<< <i>What if in 8 months the gold or silver doesnt buy as much fuel or fertilizer? >>
It always comes down to perceived risk and the lesser of the evils. Risk losing value in USD, risk losing value in gold/silver, or risk holding large quantities of commodities that may spoil or ruin. Pick your poison.
Oftentimes we perceive risk to be greater or lesser than it really is. Human nature is to overestimate risk. The SHTF will most likely not occur as many perceive.
So when push comes to shove, people will buy what they need, rather than speculate. In your example, the farmer would buy fuel and fertilizer, rather than speculate on the future trade value of another asset. Same would happen in the general populace as they would rather have a can of beans than an ASE.
What it all tells me is there is no solid base to rely on, and you better be able to adapt and plan - for the best odds of better relative position, ahead of the bear.
Some drastic changes are possible, in this smaller/tighter dynamic world. I always knew about diversification, but only in stocks and funds. Now I see a bigger picture and realize that one has to be diversified over many things, in all aspects, being flexible and able to adapt. It all depends upon how far you want to follow this down the rabbit hole. The bliss of just having $50k in the bank and retiring on SS out in the country, or off the grid, may be less complicated and help you live longer. In the end, we all end up equal.
Baley you are not one of those that thinks when your body takes a dirt nap that is the end?? >>
I have the sense that the FED is ready to begin abandoning $1500 as the benchmark for gold and will let it run to $2400. They run the risk that investors will eventually determine gold has to go even higher and will try to get there before the FED. But for now we are getting very close to another running of the bull.
It's going to be years in my opinion but you have to be out of gold except for 5% of your assets when the world approaches financial balance. The amount of gold hitting the market as the end approaches will drive the price down 80% or more. I still don't believe it's possible this side of 10,000. Don't be too greedy. Get into income and growth areas before the peak. There is a huge transfer of power and wealth taking place and this can confound any prediction. Staying fleet of fooyt is very important in an age like this.
<< <i>It seems odd to have the dollar appreciate relative to other currencies because of fear. >>
not odd at all when the fear is in those other currencies. gotta put your holdings where you think they are safe. As I'm sure you have noticed, opinions here vary - all with legitmate footing.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The article pulls together a number of things rather well. I find the last few paragraphs the most interesting. Note that the author suggests just cancelling out the otc derivative bets to put the system on more sound footing. That could work. But there are entities carrying "paper profits" on their balance sheets that are counting on these things. Removing them would be the same as a loss. The ones who are already in loss positions would be happy to see them cancelled. The rest of the world (mainly Europe) carries an even larger total in derivative's and would need to cancel theirs out as well to actually make it all work. Note that the author feels that the continued "strength" in Bonds is directly tied to the huge pile of interest rate swaps/bets carried by our 6 largest banks.
Eventually, inflation would erode the dollar’s purchasing power and use as the reserve currency, and the US government’s credit worthiness would waste away. However, the Fed, the politicians, and the financial gangsters would prefer a crisis later rather than sooner. Passing the sinking ship on to the next watch is preferable to going down with the ship oneself. As long as interest rate swaps can be used to boost Treasury bond prices, and as long as naked shorts of bullion can be used to keep silver and gold from rising in price, the false image of the US as a safe haven for investors can be perpetuated.
However, the $230,000,000,000,000 in derivative bets by US banks might bring its own surprises. JPMorgan Chase has had to admit that its recently announced derivative loss of $2 billion is more than that. How much more remains to be seen. According to the Comptroller of the Currency http://www.occ.treas.gov/topics/capital-markets/financial-markets/trading/derivatives/dq411.pdf the five largest banks hold 95.7% of all derivatives. The five banks holding $226 trillion in derivative bets are highly leveraged gamblers. For example, JPMorgan Chase has total assets of $1.8 trillion but holds $70 trillion in derivative bets, a ratio of $39 in derivative bets for every dollar of assets. Such a bank doesn’t have to lose very many bets before it is busted.
Assets, of course, are not risk-based capital. According to the Comptroller of the Currency report, as of December 31, 2011, JPMorgan Chase held $70.2 trillion in derivatives and only $136 billion in risk-based capital. In other words, the bank’s derivative bets are 516 times larger than the capital that covers the bets.
It is difficult to imagine a more reckless and unstable position for a bank to place itself in, but Goldman Sachs takes the cake. That bank’s $44 trillion in derivative bets is covered by only $19 billion in risk-based capital, resulting in bets 2,295 times larger than the capital that covers them.
Bets on interest rates comprise 81% of all derivatives. These are the derivatives that support high US Treasury bond prices despite massive increases in US debt and its monetization. US banks’ derivative bets of $230 trillion, concentrated in five banks, are 15.3 times larger than the US GDP. A failed political system that allows unregulated banks to place uncovered bets 15 times larger than the US economy is a system that is headed for catastrophic failure. As the word spreads of the fantastic lack of judgment in the American political and financial systems, the catastrophe in waiting will become a reality.
Everyone wants a solution, so I will provide one. The US government should simply cancel the $230 trillion in derivative bets, declaring them null and void. As no real assets are involved, merely gambling on notional values, the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system. The financial gangsters who want to continue enjoying betting gains while the public underwrites their losses would scream and yell about the sanctity of contracts. However, a government that can murder its own citizens or throw them into dungeons without due process can abolish all the contracts it wants in the name of national security. And most certainly, unlike the war on terror, purging the financial system of the gambling derivatives would vastly improve national security.
I find it odd that the Fed says they will again try Operation Twist and the stock market goes up 400 points a few days ago. This program is a failure. It was used in the 60s and it was a failure when they tried it last year.
December Silver is beating its head against the 72 hour EMA today on the hourly chart. If we can get above the 72 hour ema and hold it for 3 full trading days then we will most likely see a significant move upward. If Silver can not do that at this juncture and we stay below the 72 hour EMA and we break the recent lows then we may be looking for another month or so of downward migration into further bear territory. Therenis a lot of support at the recent lows on the monthly chart but if the 3 year Ema is broken which would also violate the 50% point we may be heading to the 75% retracement area and the 144 month EMA on the monthly chart which currently resides at $16.00
We need to see a break above 30.00 and on the daily and a break above 32.00 on the weekly to be clear of the recent months carnage and to provide a movemnt once again on the $38.00 area.
NumbersUsa, FairUs, Alipac, CapsWeb, and TeamAmericaPac
As stated in the article, most of those losses was in houses. Most things we buy the packaging is smaller or the prices are up. I'd call that inflation. I guess you don't do much shopping.
The most money I made are on coins I haven't sold.
Even in a typical demographic situation, you would expect this kind of a hit on housing prices to create a drag on the economy.
WIth the baby boom moving towards and into retirement, it should be even more deflationary. The housing bust likely provided a wake-up call to boomers who knew they really hadn't saved for retirement, but felt they might get away with it by using the house as piggy bank. Many of these may never move back into borrow and spend mode.
This should be quite deflationary, but there is always a catch -- if the Fed tries too hard to counter a mildly deflationary situation, at some point, they may create inflation. Arguably the best Fed policy is to try to let things deflate ever so slightly for an extended period of time, rather than live by the fiction that monetary policy can stimulate a recovery.
Arguably the best Fed policy is to try to let things deflate ever so slightly for an extended period of time, rather than live by the fiction that monetary policy can stimulate a recovery.
Which I think is what they are trying to do. It is a very fine line to walk though. As they say, time heals all wounds.
The FED has no clue, they are guessing as they go and making decisions based on unproven theory. This monster of an economy in turmoil will be more than they can deal with.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I call it a full house & Senate sitting on they A$$'s doing squat for the American people! To hadees with Europe & China my concern is USA only! >>
Shame on you for putting America first...
.....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
<< <i>The FED has no clue, they are guessing as they go and making decisions based on unproven theory. This monster of an economy in turmoil will be more than they can deal with. >>
Exactly! Just who are these members of the Federal Reserve Board? How are they qualified to understand economics?? What education and/or experience do they have???
The monetary policy of the United States of America should obviously be dictated by "chat board guy" who knows this subject far better than all of their "collective wisdom"
<< <i> Exactly! Just who are these members of the Federal Reserve Board? >>
They are from the government (or attempting to appease their government appointers) and they are here to help. They are Greenspan clones. I rest my case.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Gold should now move up steadily until the end of the month if the Chinese are controlling the action. They should want a gold price of at least $1,700 by June 28th.
As far as the Fed goes they may be privately owned, but they are the salve of the U.S. congress who mandates how much money, or debt, they should print in order to cover government shortfalls.
I thought the news was interesting yesterday concerning unemployment. U.S. government unemployment rate is 4.2% and industry is nearly 10%. What do those government employees make again?
<< <i>Gold should now move up steadily until the end of the month if the Chinese are controlling the action. They should want a gold price of at least $1,700 by June 28th. >>
China is buying, they probably would like to see it not rise just yet.
<< <i>I thought the news was interesting yesterday concerning unemployment. U.S. government unemployment rate is 4.2% and industry is nearly 10%. What do those government employees make again? >>
I was one for 35 years - the first 25 years, not enough pay when compared to the private sector. The last 10 years - too much pay when compared to the private sector (raises = votes). I will give them credit for changing their retirement plan about 12 years ago to where employees had to put much more of their own skin into the game and the age was raised from 55 to 62 (not retroactive for current employees).
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Comments
Knowledge is the enemy of fear
<< <i>OJ didnt like the margin hike. Down 5% today. >>
They usually never do. But nearly the entire soft and grain complex got whacked today and OJ went with the flow. Could still be another
10-20% downside in the CCI. If that's the case then OJ may have trouble getting airborne again.
OJ up 6% today.
Knowledge is the enemy of fear
Definately some demand destruction occuring.
Knowledge is the enemy of fear
When everyone who wants FCOJ has their freezer full, so demand drops, so prices drop, do they keep on buying FCOJ all the way down? And when it stays down? or do they try to then sell some of the FCOJ, because they need to buy some pork bellies to get bacon, which is found on a bacon lettuce and tomato sandwich? Never mind the GI Joe with the kung fu grip
Man can not live on FCOJ alone.
Liberty: Parent of Science & Industry
Damn conspiracies!!
Knowledge is the enemy of fear
" F#@& Him! Turn those machines back on! Turn those machines back on!"
Liberty: Parent of Science & Industry
Or something.
I knew it would happen.
Why not? Suppose you pay me in OJ for installing your washing machine?
Knowledge is the enemy of fear
<< <i>And if you had a field full of ripe crops which will spoil if not picked within a few weeks, what would you accept as payment? >>
Diesel fuel or fertilzer so I can plant again next year.
Knowledge is the enemy of fear
<< <i>Diesel fuel or fertilzer so I can plant again next year. >>
Or how bout gold and silver so you can buy diesel & fertilizer next year? Why let that fuel or fertilizer sit around for 8 months and possibly go bad or get contaminated?
<< <i>
<< <i>Diesel fuel or fertilzer so I can plant again next year. >>
Or how bout gold and silver so you can buy diesel & fertilizer next year? Why let that fuel or fertilizer sit around for 8 months and possibly go bad or get contaminated? >>
What if in 8 months the gold or silver doesnt buy as much fuel or fertilizer?
Knowledge is the enemy of fear
<< <i>What if in 8 months the gold or silver doesnt buy as much fuel or fertilizer? >>
It always comes down to perceived risk and the lesser of the evils. Risk losing value in USD, risk losing value in gold/silver, or risk holding large quantities of commodities that may spoil or ruin. Pick your poison.
Oftentimes we perceive risk to be greater or lesser than it really is. Human nature is to overestimate risk. The SHTF will most likely not occur as many perceive.
So when push comes to shove, people will buy what they need, rather than speculate. In your example, the farmer would buy fuel and fertilizer, rather than speculate on the future trade value of another asset. Same would happen in the general populace as they would rather have a can of beans than an ASE.
Knowledge is the enemy of fear
Some drastic changes are possible, in this smaller/tighter dynamic world. I always knew about diversification, but only in stocks and funds. Now I see a bigger picture and realize that one has to be diversified over many things, in all aspects, being flexible and able to adapt. It all depends upon how far you want to follow this down the rabbit hole. The bliss of just having $50k in the bank and retiring on SS out in the country, or off the grid, may be less complicated and help you live longer. In the end, we all end up equal.
Diversification is good but adaptability is what will keep the wolf from your door.
"In the end, we all end up equal."
We were not all equal here so what makes you think we will be equal there?
<< <i>What does this mean?
"In the end, we all end up equal."
We were not all equal here so what makes you think we will be equal there? >>
where?
Liberty: Parent of Science & Industry
Where ever we are going next.
Baley you are not one of those that thinks when your body takes a dirt nap that is the end??
<< <i>Where?
Where ever we are going next.
Baley you are not one of those that thinks when your body takes a dirt nap that is the end?? >>
I have the sense that the FED is ready to begin abandoning $1500 as the benchmark for gold and will
let it run to $2400. They run the risk that investors will eventually determine gold has to go even higher
and will try to get there before the FED. But for now we are getting very close to another running of the
bull.
It's going to be years in my opinion but you have to be out of gold except for 5% of your assets when
the world approaches financial balance. The amount of gold hitting the market as the end approaches
will drive the price down 80% or more. I still don't believe it's possible this side of 10,000. Don't be too
greedy. Get into income and growth areas before the peak. There is a huge transfer of power and wealth
taking place and this can confound any prediction. Staying fleet of fooyt is very important in an age like
this.
It seems odd to have the dollar appreciate relative to other currencies because of fear.
That tide would turn when other parts of the world get over their fear.
Risk aversion seems to hold the current financial climate. Somehow this should be shifting.
At least I'd think so if I wasn't working hard so I don't lose my job and saving more than usual because I'm afraid of losing my job....
This seems to be a common thought. Why do you feel this way?
Knowledge is the enemy of fear
<< <i>It seems odd to have the dollar appreciate relative to other currencies because of fear. >>
not odd at all when the fear is in those other currencies. gotta put your holdings where you think they are safe. As I'm sure you have noticed, opinions here vary - all with legitmate footing.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Nicely stated.
<< <i>It seems odd to have the dollar appreciate relative to other currencies because of fear
This seems to be a common thought. Why do you feel this way? >>
We have the most and biggest GUNs!
The article pulls together a number of things rather well. I find the last few paragraphs the most interesting. Note that the author suggests just cancelling out the otc
derivative bets to put the system on more sound footing. That could work. But there are entities carrying "paper profits" on their balance sheets that are counting on these
things. Removing them would be the same as a loss. The ones who are already in loss positions would be happy to see them cancelled. The rest of the world (mainly Europe)
carries an even larger total in derivative's and would need to cancel theirs out as well to actually make it all work. Note that the author feels that the continued "strength" in
Bonds is directly tied to the huge pile of interest rate swaps/bets carried by our 6 largest banks.
Eventually, inflation would erode the dollar’s purchasing power and use as the reserve currency, and the US government’s credit worthiness would waste away. However, the Fed, the politicians, and the financial gangsters would prefer a crisis later rather than sooner. Passing the sinking ship on to the next watch is preferable to going down with the ship oneself. As long as interest rate swaps can be used to boost Treasury bond prices, and as long as naked shorts of bullion can be used to keep silver and gold from rising in price, the false image of the US as a safe haven for investors can be perpetuated.
However, the $230,000,000,000,000 in derivative bets by US banks might bring its own surprises. JPMorgan Chase has had to admit that its recently announced derivative loss of $2 billion is more than that. How much more remains to be seen. According to the Comptroller of the Currency http://www.occ.treas.gov/topics/capital-markets/financial-markets/trading/derivatives/dq411.pdf the five largest banks hold 95.7% of all derivatives. The five banks holding $226 trillion in derivative bets are highly leveraged gamblers. For example, JPMorgan Chase has total assets of $1.8 trillion but holds $70 trillion in derivative bets, a ratio of $39 in derivative bets for every dollar of assets. Such a bank doesn’t have to lose very many bets before it is busted.
Assets, of course, are not risk-based capital. According to the Comptroller of the Currency report, as of December 31, 2011, JPMorgan Chase held $70.2 trillion in derivatives and only $136 billion in risk-based capital. In other words, the bank’s derivative bets are 516 times larger than the capital that covers the bets.
It is difficult to imagine a more reckless and unstable position for a bank to place itself in, but Goldman Sachs takes the cake. That bank’s $44 trillion in derivative bets is covered by only $19 billion in risk-based capital, resulting in bets 2,295 times larger than the capital that covers them.
Bets on interest rates comprise 81% of all derivatives. These are the derivatives that support high US Treasury bond prices despite massive increases in US debt and its monetization.
US banks’ derivative bets of $230 trillion, concentrated in five banks, are 15.3 times larger than the US GDP. A failed political system that allows unregulated banks to place uncovered bets 15 times larger than the US economy is a system that is headed for catastrophic failure. As the word spreads of the fantastic lack of judgment in the American political and financial systems, the catastrophe in waiting will become a reality.
Everyone wants a solution, so I will provide one. The US government should simply cancel the $230 trillion in derivative bets, declaring them null and void. As no real assets are involved, merely gambling on notional values, the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system. The financial gangsters who want to continue enjoying betting gains while the public underwrites their losses would scream and yell about the sanctity of contracts. However, a government that can murder its own citizens or throw them into dungeons without due process can abolish all the contracts it wants in the name of national security. And most certainly, unlike the war on terror, purging the financial system of the gambling derivatives would vastly improve national security.
Knowledge is the enemy of fear
Box of 20
We need to see a break above 30.00 and on the daily and a break above 32.00 on the weekly to be clear of the recent months carnage and to provide a movemnt once again on the $38.00 area.
Liberty: Parent of Science & Industry
<< <i>So, the chart drives the performance? always thought it was the other way around.
We who are mesmerized by charts irrationaly beleive in their ability to direct performance of all things chartable, and most things are chartable.
Knowledge is the enemy of fear
<< <i>Unemployment Drop Masks >>
As stated in the article, most of those losses was in houses.
Most things we buy the packaging is smaller or the prices are up. I'd call that inflation.
I guess you don't do much shopping.
Got quoins?
Knowledge is the enemy of fear
WIth the baby boom moving towards and into retirement, it should be even more deflationary. The housing bust likely provided a wake-up call to boomers who knew they really hadn't saved for retirement, but felt they might get away with it by using the house as piggy bank. Many of these may never move back into borrow and spend mode.
This should be quite deflationary, but there is always a catch -- if the Fed tries too hard to counter a mildly deflationary situation, at some point, they may create inflation. Arguably the best Fed policy is to try to let things deflate ever so slightly for an extended period of time, rather than live by the fiction that monetary policy can stimulate a recovery.
Which I think is what they are trying to do. It is a very fine line to walk though. As they say, time heals all wounds.
Knowledge is the enemy of fear
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I call it a full house & Senate sitting on they A$$'s doing squat for the American people! To hadees with Europe & China my concern is USA only! >>
Shame on you for putting America first...
"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
<< <i>The FED has no clue, they are guessing as they go and making decisions based on unproven theory. This monster of an economy in turmoil will be more than they can deal with. >>
Exactly! Just who are these members of the Federal Reserve Board? How are they qualified to understand economics?? What education and/or experience do they have???
The monetary policy of the United States of America should obviously be dictated by "chat board guy" who knows this subject far better than all of their "collective wisdom"
Liberty: Parent of Science & Industry
<< <i> Exactly! Just who are these members of the Federal Reserve Board? >>
They are from the government (or attempting to appease their government appointers) and they are here to help. They are Greenspan clones. I rest my case.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
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As far as the Fed goes they may be privately owned, but they are the salve of the U.S. congress who mandates how much money, or debt, they should print in order to cover government shortfalls.
I thought the news was interesting yesterday concerning unemployment. U.S. government unemployment rate is 4.2% and industry is nearly 10%. What do those government employees make again?
Don
Hi Don. Why not delete your listing and put it in the BST thread? It doesn't fit very well with the discussion, and that's why there is a BST thread.
I knew it would happen.
<< <i>Gold should now move up steadily until the end of the month if the Chinese are controlling the action. They should want a gold price of at least $1,700 by June 28th. >>
China is buying, they probably would like to see it not rise just yet.
<< <i>I thought the news was interesting yesterday concerning unemployment. U.S. government unemployment rate is 4.2% and industry is nearly 10%. What do those government employees make again? >>
I was one for 35 years - the first 25 years, not enough pay when compared to the private sector. The last 10 years - too much pay when compared to the private sector (raises = votes). I will give them credit for changing their retirement plan about 12 years ago to where employees had to put much more of their own skin into the game and the age was raised from 55 to 62 (not retroactive for current employees).
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey