And a quote from the article which disputes cohodk's contention that gold didn't help stabilize the economy during the US's major drive to becoming the industrial giant that it became from the 1870's and onward:
Those familiar with the 1870s will note that there are now strong parallels with that important decade. Following German unification and the US recovery from the Civil War, both of these economies were catching up rapidly with Britain. Japan had begun to industrialise. Under these multipolar conditions arose spontaneously, absent formal diplomacy, the classical gold standard system that would underpin decades of arguably the fastest sustained global economic growth ever experienced in history.[10]
Q: Are You Printing Money? Bernanke: Not Literally
Youre going to pick a 10 yr period after global strife and argue that gold produced a strong global economy? Have you switched icons with WRM?
What I wrote, and I thought it was pretty simple and even provided evidence to support my claim, is that the US economy fluctuated wildly from boom to bust and that since the FED was created and FDR removed the dollar from a "standard", growth has been quite linear without major interruptions.
More signals of mild worldwide deflation today. Draghi commits to increasing inflation in Europe, China cuts interest rates to stimulate domestic economy.
Stocks soaring to new record highs in pre-market. Perfect conditions for stocks as corporate earnings continue to grow amidst low interest rates.
Gold and silver cannot get any traction as would be expected in low inflation expectation environment.
<< <i>Youre going to pick a 10 yr period after global strife and argue that gold produced a strong global economy? Have you switched icons with WRM?
What I wrote, and I thought it was pretty simple and even provided evidence to support my claim, is that the US economy fluctuated wildly from boom to bust and that since the FED was created and FDR removed the dollar from a "standard", growth has been quite linear without major interruptions. >>
What was wrong with it fluctuating if it needed to? Those were just the markets working out the kinks . What we have had since is a small sub set of the population repeatedly running up the economy , then crashing it but not suffering for their actions. They get to keep the gains and pass the losses on to the US dollar.
What's the issue with a measly 10 year period of global strife ? we have just had a full century of it. Easy enough to overlook I suppose whats a few hundred million dead amIright?
Youre going to pick a 10 yr period after global strife and argue that gold produced a strong global economy?
Read my post. To clarify, "onward" means from the 1870's and for several decades after that until 1929. We've had comparable bursts since then as well.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Youre going to pick a 10 yr period after global strife and argue that gold produced a strong global economy? Have you switched icons with WRM?
What I wrote, and I thought it was pretty simple and even provided evidence to support my claim, is that the US economy fluctuated wildly from boom to bust and that since the FED was created and FDR removed the dollar from a "standard", growth has been quite linear without major interruptions. >>
What was wrong with it fluctuating if it needed to? Those were just the markets working out the kinks . What we have had since is a small sub set of the population repeatedly running up the economy , then crashing it but not suffering for their actions. They get to keep the gains and pass the losses on to the US dollar.
What's the issue with a measly 10 year period of global strife ? we have just had a full century of it. Easy enough to overlook I suppose whats a few hundred million dead amIright? >>
Thanks for clarifying, so any major recession or business cycle prior to going off the gold standard was "just working out the kinks", but in the last hundred years any fluctuation to the business cycle was because of the Fed. And apparently things were always so much better for virtually every period other than the last 100 years, albeit for a few short measly periods of time every now and again. Do I have that right?
Thanks for clarifying, so any major recession or business cycle prior to going off the gold standard was "just working out the kinks", but in the last hundred years any fluctuation to the business cycle was because of the Fed. And apparently things were always so much better for virtually every period other than the last 100 years, albeit for a few short measly periods of time every now and again. Do I have that right? >>
No not really. Before the Fed , bets were made and when the bettors were right they succeeded and when they were wrong they just failed for the most part. The improvements would have happened with or without the Fed. The Fed only allowed the parasite class to profit from the downs as well as the ups by socializing the losses onto the backs of the taxpayer.
Yes, before, everything was perfect for everyone everywhere all the time, and the sole cause of this utopia was the gold standard. Nothing else mattered.
And for the past 100 years, everything has been terrible for everyone everywhere all the time, and the sole cause for all this misery is the Fed. Nothing else matters. Got it?
No not really. Before the Fed , bets were made and when the bettors were right they succeeded and when they were wrong they just failed for the most part. The improvements would have happened with or without the Fed. The Fed only allowed the parasite class to profit from the downs as well as the ups by socializing the losses onto the backs of the taxpayer. >>
The taxpayer did not get hit with the costs of the 2008 financial crisis. The US Govt. did take a huge risk, but was paid back in full for the bailout of the banks and even made a profit. GM and Chrysler were different, but that was a political decision.
Since 2009 we have had a very slow growth economy which is mostly benefitting owners of financial assets. Because of worldwide deflationary pressures, there is little real job growth. No trickle down this time.
<< <i>The taxpayer did not get hit with the costs of the 2008 financial crisis. >>
Our nation lost more from those bailouts, a lot more. We lost the concept of free enterprise, market competition and more importantly a level playing field. Sadly today, most Americans are content to crawl into the cocoon of a warm cubicle and serve a government protected entity for the duration of their career.
They have little thought or regard for the next Henry Ford or Thomas Edison who will be stifled going forward from forming their own enterprise and would no doubt end up at a General Motors designing a new hubcap or at GE tweaking a new LED light bulb.
The repercussions though will of course extend far beyond the brilliant entrepreneurs as nearly anyone with a hope or a dream will smell reality and become a corporate clone.
"Our nation lost more from those bailouts, a lot more. We lost the concept of free enterprise, market competition and more importantly a level playing field. Sadly today, most Americans are content to crawl into the cocoon of a warm cubicle and serve a government protected entity for the duration of their career.
They have little thought or regard for the next Henry Ford or Thomas Edison who will be stifled going forward from forming their own enterprise and would no doubt end up at a General Motors designing a new hubcap or at GE tweaking a new LED light bulb.
The repercussions though will of course extend far beyond the brilliant entrepreneurs as nearly anyone with a hope or a dream will smell reality and become a corporate clone."
Don't tell Elon Musk, he has no idea that bailing out GM, is going to turn him into a corporate clone.
Clearly, on this forum, hyperbole and histrionics have always ruled the roost.
Clearly, on this forum, hyperbole and histrionics have always ruled the roost
Indeed, there is very little room for facts, which in fact , are quickly and emotionally dismissed.
Tis the nature of PMs whose value is deep seated in emotion and belief.
Jmski, take a look at these recessions. Read about 1873, 1893, 1896, 1907, 1913, 1921. 2008 could be argued to be in the same league as those recession and I would not disagree, but it was the first in 70 years. Very few Americans alive today had ever experienced such a time, and thats why it feels so overwhelming, frustrating, and dire. Imagine living through a 2008 every 10 years. Had you been born in 1850 instead of 1950, thats what you would have experienced. Is it just coincidence that going off the gold standard reduced the magnitude and frequency of recessions? I think not. However, I do believe the lack of recessions and cumulative effects of 80 years of inflation will eventually be checked. What impact this will have on PMs is yet to be determined.
<< <i>Don't tell Elon Musk, he has no idea that bailing out GM, is going to turn him into a corporate clone. >>
Elon Musk made his money from Paypal. Opportunity was respected two decades ago. Next generation up is screwed.
We are acting as if no action has a reaction. Bailouts and reckless monetization of debt has dire consequences. Wish it were not true and we could simply print ourselves out of trouble, but the victims will be those that we should be protecting. We have buried the next generation of workers $17,000,000,000,000 into the hole and glibly smirk as the market notches another nominal high.
I'm really not sure what the presentation of economic data has to do with ones character.
I find your psychology to be fascinating. >>
There's no point in doing detailed comparison prior to 1933/1929, because according to the link itself, that data "cannot be considered accurate." Motive/character in regards to being "thankful" for the untrustworthy liars/fraudsters (FRB).
Cheers, >>
So use your brain and find another source or 2 or 3 or 4 and you will clearly see the data. Or you can look into your Bible because that information is absolute and accurate. Someone once said it is impossible to reason with ignorance. What a wise man he was.
<< <i>You're the one who made the claim and failed to provide proper evidence to support it.
Another typical ad hominem. Ignore the focus of the reply and attack the messenger - call them ignorant. Disrespect the Bible.
I'll explain that "untrustworthy liars/fraudsters" comment for you. Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain. They got caught twice when they lied about how much paper they printed vs. gold backing, with the intent to defraud the public, and "got caught" in 1933/1971. They won't show anyone their books, and nobody is allowed to see the gold, either.
You think we should "thank them" for doing this to us - lick their boots. I say they can kiss my butt....
Cheers, >>
Houdini did quite well with his "illusions"
Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
<< <i>We are in a mild worldwide deflation. This began with the financial crisis in 2008 and has not ended. >>
So what?... Big deal... Aside from the bs, it's a great time to be alive and a great time for huge opportunities... Best to keep ones head out of the ostrich position, and eyes away from the pendulum...
The taxpayer did not get hit with the costs of the 2008 financial crisis. The US Govt. did take a huge risk, but was paid back in full for the bailout of the banks and even made a profit. GM and Chrysler were different, but that was a political decision.
And I have a bridge in Arizona that I would like to sell you, cheap. According the US Govt, the bailouts were paid back at a profit. According to everyone else, they weren't. The GM and Chrysler bailouts were a political payoff to the unions and a golden parachute to incapable managements. Wrong on every level.
We have a lot of believers here in this forum - in the George Bush Doctrine, "we had to abandon free market principals in order to save the free market". What baloney. In the free market, the bad managements of the largest banks and car manufacturers would NEVER be rewarded for running their businesses into the ground for their own personal gain. They would have failed and suffered the consequences of failure. Other businesses, with better managements and better business models - would have superceded these abject failures, and rightfully so. The demand for good products and good services doesn't disappear just because some bozo can't run a business.
Either you understand free market capitalism and believe in it, or you don't. The fact that you can make money from QE injections that juice the stock market simply illustrates your underlying bias. It is what it is.
Q: Are You Printing Money? Bernanke: Not Literally
Read about 1873, 1893, 1896, 1907, 1913, 1921. 2008 could be argued to be in the same league as those recession and I would not disagree, but it was the first in 70 years. Very few Americans alive today had ever experienced such a time, and thats why it feels so overwhelming, frustrating, and dire. Imagine living through a 2008 every 10 years. Had you been born in 1850 instead of 1950, thats what you would have experienced. Is it just coincidence that going off the gold standard reduced the magnitude and frequency of recessions? I think not. However, I do believe the lack of recessions and cumulative effects of 80 years of inflation will eventually be checked. What impact this will have on PMs is yet to be determined.
I seem to recall that the early '1970s were pretty slow in terms of opportunity, and 1981-2 does qualify as a somewhat painful recession, with some significant layoffs in my industry at that time. Comparing those recessions to the earlier ones you mention may be somewhat difficult as the severity of each recession depends on the personal experiences of the historians at those times, donch'a think? Note that even during the Great Depression, the well-to-do did just fine. It's all about perspective, and my perspective is that industrialization and technology have indeed allowed the general condition to improve since the 1870's, but that has nothing to do with the Gold Standard, nor does it have much, or anything to do with the Fed or Bretton Woods.
My main issue with the Fed-controlled fiat monetary system is the straightforward observation that it concentrates power in the hands of a few elitist bankers and is prone to corruption and top-down cronyism from Day One. A Gold System places constraints on the banking system in that it offers physical accountability, which is so sorely needed in both the banking and political arenas. It doesn't matter what price per ounce is eventually arrived at, all markets will adjust. The idea that credit would be constrained because "there isn't enough gold to support an economy" or some such bs, is exactly that - BS. Credit can be created without gold and without fiat as well. Contracts can be had just as they've always been created, with terms & conditions between two parties.
The larger issue that I see is that our social contracts are being broken repeatedly, and ultimately this is the result of our monetary system being broken, root and cause. A monetary system based on some physical resource, limited in nature such as gold - will provide accountability. Accountability. Get it?
Q: Are You Printing Money? Bernanke: Not Literally
"The only other way to "resolve" a debt crisis is to assign the losses to one group or another. It is usually workers through unemployment and middle class savers through hidden or explicit taxes who end up paying." - Michael Pettis
2008 financial crisis was the result of a debt crisis that was temporarily resolved by diverting the losses away from the banks. When banks to not have to suffer from bad lending choices, the misery must be passed on to someone else. It was. Do not forget that many of the banks' bad investment choices were from corrupt products (repackaged loans) created by fellow banks and their partners in crime. If the banks will eat their own, does one really believe they will spare the consumer?
<< <i>A monetary system based on some physical resource, limited in nature such as gold - will provide accountability. >>
Those who illegally and immorally profit from corruption in the financial arena need to be held personally accountable. There is no effective alternative.
"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
For the large financial institutions the debt crisis is resolved. Their balance sheets are restored to health.
All of them either are broker/investment banks or own a subsidiary in that business which has been very profitable in the "mild worldwide deflation."
JP Morgan Chase (large investment bank) + derivatives Bank of America (owns Merrill) + derivatives Citi (large investment bank) + derivatives Wells Fargo (large brokerage, investment bank) Goldman Sachs is officially a bank, but actually a large investment bank + derivatives Morgan Stanley is officially a bank but actually a large investment bank + derivatives
In addition, thanks to the financial crisis, they were allowed to get larger than would have other wise been the case: JPM acquired Bear Stearns and Wash Mutual. BofA acquired Merrill Lynch. Morgan Stanley acquired Smith Barney from Citi. Citi greatly increased their investment banking business. Wells Fargo acquired Wachovia and Wachovia Securities.
They all benefitted from the AIG bailout in 2008.
They are all benefitting from the very low cost of funds.
<< <i>For the large financial institutions the debt crisis is resolved. Their balance sheets are restored to health. >>
A PR scam thanks to FASB accounting standard changes that allow them to lie on paper about the value of their holdings. If nothing else 2008 taught us that "investment" and "banks" should never be allowed in the same sentence. The fix for being too big to fail was to make them too bigger to fail? Nothing was fixed, just compounded, papered over and delayed.
Those "+ derivatives" are a ticking time bomb as were bad mortgages that got badder when bundled together and declared "sound." Consider derivatives no less risky than a highly leveraged ETF with the added benefit of placing the risk on someone else.
"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
Good synopsis, s4ny. I don't believe that I've ever heard the reason why US taxpayers were the ones chosen to pay for it all. I find it difficult to believe that the loss of these big banks would have been the end of Western Civilization as we know it. Evidently, someone did think that though.
A PR scam thanks to FASB accounting standard changes that allow them to lie on paper about the value of their holdings. If nothing else 2008 taught us that "investment" and "banks" should never be allowed in the same sentence. The fix for being too big to fail was to make them too bigger to fail? Nothing was fixed, just compounded, papered over and delayed.
One of the problems is that not many people even knew what FASB was, or what they did when they were a real organization. They had to be taken out, period. I'd like to know what Bidask thinks about the integrity of bank accounting these days, since we know that nothing is rigged.
But trashing the FASB was so, so long ago and so old hat. Now we're up to the bail-in era. While owning your own bank deposits worked for many many decades in this country, it now no longer makes sense, for some reason. If FDIC protects your deposits, why was this switcheroo necessary, and for whose benefit? For all of your sweat and toil, putting money into a bank account gives you the privilege of standing at the back of the line if the banking officers decide to lose big at the craps table in NYC, or even if they're simply greedy & incompetent.
Oh, I know! Better plow that money into the stock market. It's going UP forever, donch'a know?
Q: Are You Printing Money? Bernanke: Not Literally
JPM certainly didn't get "healthier" by swallowing up the diseased BSC and WalMu. JPM was big enough to offset the stench of those acquisitions (ie failed companies with huge liabilities) in one way or another. No doubt they received some other benefits from the govt for playing ball. The few trillion (or less) in derivative's losses from those guys were sort of lost in the mix of $80 TRILL or so that JPM already carried. In taking over BSC's huge silver short derivatives, they were able to use those to help crush the silver market from July-August. In fact JPM doubled them from $100 BILL to $200 BILL by July 2008. Had BSC and/or Walmu been allowed to fail like Lehman did, the outcomes would have been far worse. In the event of complete failure, all assets get sold at prevailing market prices. In the case of Lehman, all those marked to model derivatives on the books at 100% FMV (fake market value) in August 2008 were worth 8c on the dollar when they fully settled. That's the best marker so far on what these things might be worth at crunch time.
How can any of these banking behemoths be considered returned to "health" when there's no true accounting for their largest paper assets (ie $50-$75 TRILL in otc notional derivatives). That would be like you or me saying we have a $100,000 net worth (no home, $5K in the bank, and an IOU stating someone owes us $95,000 if a certain financial contract fails to perform on 50-1 leverage). And what do you do when the counter-party to our contract goes belly up? There's no way to assess the health of the big banks until all their contracts are marked to market. The FASB took care of that for them. The big banks now do accounting with either the CMIYC or ICMCITTB-IDC-ILI models (see description below).
I never said the financial system would have collapsed western civilization. But you can imagine the weeks of hardships we'd go through without a properly functioning banking system. How do you handle even the simplest of savings and checking account or credit card transactions if your banks are down? If the larger banks don't trust each other, and it takes time to settle out the millions of derivatives trades on the books, what gets used for money? A workable system would rise out of a complete seizure....but it would take weeks or months. And that includes paying out your insured FDIC accounts under the umbrella of these derivative banks....assuming they didn't pull an MFGlobal on you and just took your deposits to pay off their banking buddies first.
CMIYC - catch me if you can
ICMCITTB-IDC-ILI - I crashed my car (or bank) into the bridge - I don't care - I love it (repeat refrain).
I'm sure that Hank Paulson had "the end of Western Civ" running through his brain when he was asking Congress for $800 billion in TARP with a single piece of paper in his hand as justification.
For old Hank, the banking system = Western Civ.
The amazing part of the story is that Congress simply handed over the money. Let there be no doubt about "who" owns "whom".
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>I'm sure that Hank Paulson had "the end of Western Civ" running through his brain when he was asking Congress for $800 billion in TARP with a single piece of paper in his hand as justification.
For old Hank, the banking system = Western Civ.
The amazing part of the story is that Congress simply handed over the money. Let there be no doubt about "who" owns "whom". >>
I had no problem with that.
That's why they call him Uncle Sam. 😉
I manage money. I earn money. I save money . I give away money. I collect money. I don’t love money . I do love the Lord God.
Comments
<< <i>
<< <i>You should be thankful for the creation of the FED. >>
If silver was at $100 you would be very thankful, wouldnt you? Someday you will be.
Knowledge is the enemy of fear
I knew it would happen.
<< <i>
<< <i>You should be thankful for the creation of the FED. >>
Ditto!
<< <i>Cash is King. It ought to be, they're making tons of it. >>
cash is a special kind of money
Will Putin play his "Gold Card"?
And a quote from the article which disputes cohodk's contention that gold didn't help stabilize the economy during the US's major drive to becoming the industrial giant that it became from the 1870's and onward:
Those familiar with the 1870s will note that there are now strong parallels with that important decade. Following German unification and the US recovery from the Civil War, both of these economies were catching up rapidly with Britain. Japan had begun to industrialise. Under these multipolar conditions arose spontaneously, absent formal diplomacy, the classical gold standard system that would underpin decades of arguably the fastest sustained global economic growth ever experienced in history.[10]
I knew it would happen.
What I wrote, and I thought it was pretty simple and even provided evidence to support my claim, is that the US economy fluctuated wildly from boom to bust and that since the FED was created and FDR removed the dollar from a "standard", growth has been quite linear without major interruptions.
Knowledge is the enemy of fear
cuts interest rates to stimulate domestic economy.
Stocks soaring to new record highs in pre-market. Perfect conditions for stocks as
corporate earnings continue to grow amidst low interest rates.
Gold and silver cannot get any traction as would be expected in low inflation expectation environment.
<< <i>Youre going to pick a 10 yr period after global strife and argue that gold produced a strong global economy? Have you switched icons with WRM?
What I wrote, and I thought it was pretty simple and even provided evidence to support my claim, is that the US economy fluctuated wildly from boom to bust and that since the FED was created and FDR removed the dollar from a "standard", growth has been quite linear without major interruptions. >>
What was wrong with it fluctuating if it needed to? Those were just the markets working out the kinks . What we have had since is a small sub set of the population repeatedly running up the economy , then crashing it but not suffering for their actions. They get to keep the gains and pass the losses on to the US dollar.
What's the issue with a measly 10 year period of global strife ? we have just had a full century of it. Easy enough to overlook I suppose whats a few hundred million dead amIright?
Read my post. To clarify, "onward" means from the 1870's and for several decades after that until 1929. We've had comparable bursts since then as well.
I knew it would happen.
<< <i>
<< <i>Youre going to pick a 10 yr period after global strife and argue that gold produced a strong global economy? Have you switched icons with WRM?
What I wrote, and I thought it was pretty simple and even provided evidence to support my claim, is that the US economy fluctuated wildly from boom to bust and that since the FED was created and FDR removed the dollar from a "standard", growth has been quite linear without major interruptions. >>
What was wrong with it fluctuating if it needed to? Those were just the markets working out the kinks . What we have had since is a small sub set of the population repeatedly running up the economy , then crashing it but not suffering for their actions. They get to keep the gains and pass the losses on to the US dollar.
What's the issue with a measly 10 year period of global strife ? we have just had a full century of it. Easy enough to overlook I suppose whats a few hundred million dead amIright? >>
Thanks for clarifying, so any major recession or business cycle prior to going off the gold standard was "just working out the kinks", but in the last hundred years any fluctuation to the business cycle was because of the Fed. And apparently things were always so much better for virtually every period other than the last 100 years, albeit for a few short measly periods of time every now and again. Do I have that right?
<< <i>
Thanks for clarifying, so any major recession or business cycle prior to going off the gold standard was "just working out the kinks", but in the last hundred years any fluctuation to the business cycle was because of the Fed. And apparently things were always so much better for virtually every period other than the last 100 years, albeit for a few short measly periods of time every now and again. Do I have that right? >>
No not really. Before the Fed , bets were made and when the bettors were right they succeeded and when they were wrong they just failed for the most part. The improvements would have happened with or without the Fed. The Fed only allowed the parasite class to profit from the downs as well as the ups by socializing the losses onto the backs of the taxpayer.
And for the past 100 years, everything has been terrible for everyone everywhere all the time, and the sole cause for all this misery is the Fed. Nothing else matters. Got it?
Liberty: Parent of Science & Industry
There is certainly no deflation in the level of hyperbole in this thread
<< <i>
<< <i>
No not really. Before the Fed , bets were made and when the bettors were right they succeeded and when they were wrong they just failed for the most part. The improvements would have happened with or without the Fed. The Fed only allowed the parasite class to profit from the downs as well as the ups by socializing the losses onto the backs of the taxpayer. >>
The taxpayer did not get hit with the costs of the 2008 financial crisis. The US Govt. did take a huge risk, but was paid back in full for
the bailout of the banks and even made a profit. GM and Chrysler were different, but that was a political decision.
Since 2009 we have had a very slow growth economy which is mostly benefitting owners of financial assets. Because of worldwide deflationary pressures, there
is little real job growth. No trickle down this time.
<< <i>The taxpayer did not get hit with the costs of the 2008 financial crisis. >>
Our nation lost more from those bailouts, a lot more. We lost the concept of free enterprise, market competition and more importantly a level playing field. Sadly today, most Americans are content to crawl into the cocoon of a warm cubicle and serve a government protected entity for the duration of their career.
They have little thought or regard for the next Henry Ford or Thomas Edison who will be stifled going forward from forming their own enterprise and would no doubt end up at a General Motors designing a new hubcap or at GE tweaking a new LED light bulb.
The repercussions though will of course extend far beyond the brilliant entrepreneurs as nearly anyone with a hope or a dream will smell reality and become a corporate clone.
They have little thought or regard for the next Henry Ford or Thomas Edison who will be stifled going forward from forming their own enterprise and would no doubt end up at a General Motors designing a new hubcap or at GE tweaking a new LED light bulb.
The repercussions though will of course extend far beyond the brilliant entrepreneurs as nearly anyone with a hope or a dream will smell reality and become a corporate clone."
Don't tell Elon Musk, he has no idea that bailing out GM, is going to turn him into a corporate clone.
Clearly, on this forum, hyperbole and histrionics have always ruled the roost.
Indeed, there is very little room for facts, which in fact
Tis the nature of PMs whose value is deep seated in emotion and belief.
Jmski, take a look at these recessions. Read about 1873, 1893, 1896, 1907, 1913, 1921. 2008 could be argued to be in the same league as those recession and I would not disagree, but it was the first in 70 years. Very few Americans alive today had ever experienced such a time, and thats why it feels so overwhelming, frustrating, and dire. Imagine living through a 2008 every 10 years. Had you been born in 1850 instead of 1950, thats what you would have experienced. Is it just coincidence that going off the gold standard reduced the magnitude and frequency of recessions? I think not. However, I do believe the lack of recessions and cumulative effects of 80 years of inflation will eventually be checked. What impact this will have on PMs is yet to be determined.
Knowledge is the enemy of fear
<< <i>Don't tell Elon Musk, he has no idea that bailing out GM, is going to turn him into a corporate clone. >>
Elon Musk made his money from Paypal. Opportunity was respected two decades ago. Next generation up is screwed.
We are acting as if no action has a reaction. Bailouts and reckless monetization of debt has dire consequences. Wish it were not true and we could simply print ourselves out of trouble, but the victims will be those that we should be protecting. We have buried the next generation of workers $17,000,000,000,000 into the hole and glibly smirk as the market notches another nominal high.
<< <i>
<< <i>Ok WRM, look at the data pre 1933.
Honestly, I can't tell if you are Bart or Homer.
I'm really not sure what the presentation of economic data has to do with ones character.
I find your psychology to be fascinating. >>
There's no point in doing detailed comparison prior to 1933/1929, because according to the link itself, that data "cannot be considered accurate." Motive/character in regards to being "thankful" for the untrustworthy liars/fraudsters (FRB).
Cheers, >>
So use your brain and find another source or 2 or 3 or 4 and you will clearly see the data. Or you can look into your Bible because that information is absolute and accurate. Someone once said it is impossible to reason with ignorance. What a wise man he was.
Knowledge is the enemy of fear
<< <i>You think we should "thank them" for doing this to us - lick their boots. I say they can kiss my butt.... >>
....another good entry for the Renman thread!
FDR's confiscation of gold was a fed bailout
<< <i>You're the one who made the claim and failed to provide proper evidence to support it.
Another typical ad hominem. Ignore the focus of the reply and attack the messenger - call them ignorant. Disrespect the Bible.
I'll explain that "untrustworthy liars/fraudsters" comment for you. Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain. They got caught twice when they lied about how much paper they printed vs. gold backing, with the intent to defraud the public, and "got caught" in 1933/1971. They won't show anyone their books, and nobody is allowed to see the gold, either.
You think we should "thank them" for doing this to us - lick their boots. I say they can kiss my butt....
Cheers, >>
Houdini did quite well with his "illusions"
<< <i>We are in a mild worldwide deflation. This began with the financial crisis in
2008 and has not ended. >>
So what?... Big deal...
Aside from the bs, it's a great time to be alive and a great time for huge opportunities...
Best to keep ones head out of the ostrich position, and eyes away from the pendulum...
And I have a bridge in Arizona that I would like to sell you, cheap. According the US Govt, the bailouts were paid back at a profit. According to everyone else, they weren't. The GM and Chrysler bailouts were a political payoff to the unions and a golden parachute to incapable managements. Wrong on every level.
We have a lot of believers here in this forum - in the George Bush Doctrine, "we had to abandon free market principals in order to save the free market". What baloney. In the free market, the bad managements of the largest banks and car manufacturers would NEVER be rewarded for running their businesses into the ground for their own personal gain. They would have failed and suffered the consequences of failure. Other businesses, with better managements and better business models - would have superceded these abject failures, and rightfully so. The demand for good products and good services doesn't disappear just because some bozo can't run a business.
Either you understand free market capitalism and believe in it, or you don't. The fact that you can make money from QE injections that juice the stock market simply illustrates your underlying bias. It is what it is.
I knew it would happen.
I seem to recall that the early '1970s were pretty slow in terms of opportunity, and 1981-2 does qualify as a somewhat painful recession, with some significant layoffs in my industry at that time. Comparing those recessions to the earlier ones you mention may be somewhat difficult as the severity of each recession depends on the personal experiences of the historians at those times, donch'a think? Note that even during the Great Depression, the well-to-do did just fine. It's all about perspective, and my perspective is that industrialization and technology have indeed allowed the general condition to improve since the 1870's, but that has nothing to do with the Gold Standard, nor does it have much, or anything to do with the Fed or Bretton Woods.
My main issue with the Fed-controlled fiat monetary system is the straightforward observation that it concentrates power in the hands of a few elitist bankers and is prone to corruption and top-down cronyism from Day One. A Gold System places constraints on the banking system in that it offers physical accountability, which is so sorely needed in both the banking and political arenas. It doesn't matter what price per ounce is eventually arrived at, all markets will adjust. The idea that credit would be constrained because "there isn't enough gold to support an economy" or some such bs, is exactly that - BS. Credit can be created without gold and without fiat as well. Contracts can be had just as they've always been created, with terms & conditions between two parties.
The larger issue that I see is that our social contracts are being broken repeatedly, and ultimately this is the result of our monetary system being broken, root and cause. A monetary system based on some physical resource, limited in nature such as gold - will provide accountability. Accountability. Get it?
I knew it would happen.
2008 financial crisis was the result of a debt crisis that was temporarily resolved by diverting the losses away from the banks. When banks to not have to suffer from bad lending choices, the misery must be passed on to someone else. It was. Do not forget that many of the banks' bad investment choices were from corrupt products (repackaged loans) created by fellow banks and their partners in crime. If the banks will eat their own, does one really believe they will spare the consumer?
<< <i>A monetary system based on some physical resource, limited in nature such as gold - will provide accountability. >>
Those who illegally and immorally profit from corruption in the financial arena need to be held personally accountable. There is no effective alternative.
"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
All of them either are broker/investment banks or own a subsidiary in that business which has been very
profitable in the "mild worldwide deflation."
JP Morgan Chase (large investment bank) + derivatives
Bank of America (owns Merrill) + derivatives
Citi (large investment bank) + derivatives
Wells Fargo (large brokerage, investment bank)
Goldman Sachs is officially a bank, but actually a large investment bank + derivatives
Morgan Stanley is officially a bank but actually a large investment bank + derivatives
In addition, thanks to the financial crisis, they were allowed to get larger than would have other wise
been the case:
JPM acquired Bear Stearns and Wash Mutual.
BofA acquired Merrill Lynch.
Morgan Stanley acquired Smith Barney from Citi.
Citi greatly increased their investment banking business.
Wells Fargo acquired Wachovia and Wachovia Securities.
They all benefitted from the AIG bailout in 2008.
They are all benefitting from the very low cost of funds.
Don't worry about them, they are fine.
<< <i>For the large financial institutions the debt crisis is resolved. Their balance sheets are restored to health. >>
A PR scam thanks to FASB accounting standard changes that allow them to lie on paper about the value of their holdings. If nothing else 2008 taught us that "investment" and "banks" should never be allowed in the same sentence. The fix for being too big to fail was to make them too bigger to fail? Nothing was fixed, just compounded, papered over and delayed.
Those "+ derivatives" are a ticking time bomb as were bad mortgages that got badder when bundled together and declared "sound." Consider derivatives no less risky than a highly leveraged ETF with the added benefit of placing the risk on someone else.
"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
A PR scam thanks to FASB accounting standard changes that allow them to lie on paper about the value of their holdings. If nothing else 2008 taught us that "investment" and "banks" should never be allowed in the same sentence. The fix for being too big to fail was to make them too bigger to fail? Nothing was fixed, just compounded, papered over and delayed.
One of the problems is that not many people even knew what FASB was, or what they did when they were a real organization. They had to be taken out, period. I'd like to know what Bidask thinks about the integrity of bank accounting these days, since we know that nothing is rigged.
But trashing the FASB was so, so long ago and so old hat. Now we're up to the bail-in era. While owning your own bank deposits worked for many many decades in this country, it now no longer makes sense, for some reason. If FDIC protects your deposits, why was this switcheroo necessary, and for whose benefit? For all of your sweat and toil, putting money into a bank account gives you the privilege of standing at the back of the line if the banking officers decide to lose big at the craps table in NYC, or even if they're simply greedy & incompetent.
Oh, I know! Better plow that money into the stock market. It's going UP forever, donch'a know?
I knew it would happen.
How can any of these banking behemoths be considered returned to "health" when there's no true accounting for their largest paper assets (ie $50-$75 TRILL in otc notional derivatives). That would be like you or me saying we have a $100,000 net worth (no home, $5K in the bank, and an IOU stating someone owes us $95,000 if a certain financial contract fails to perform on 50-1 leverage). And what do you do when the counter-party to our contract goes belly up? There's no way to assess the health of the big banks until all their contracts are marked to market. The FASB took care of that for them. The big banks now do accounting with either the CMIYC or ICMCITTB-IDC-ILI models (see description below).
I never said the financial system would have collapsed western civilization. But you can imagine the weeks of hardships we'd go through without a properly functioning banking system. How do you handle even the simplest of savings and checking account or credit card transactions if your banks are down? If the larger banks don't trust each other, and it takes time to settle out the millions of derivatives trades on the books, what gets used for money? A workable system would rise out of a complete seizure....but it would take weeks or months. And that includes paying out your insured FDIC accounts under the umbrella of these derivative banks....assuming they didn't pull an MFGlobal on you and just took your deposits to pay off their banking buddies first.
CMIYC - catch me if you can
ICMCITTB-IDC-ILI - I crashed my car (or bank) into the bridge - I don't care - I love it (repeat refrain).
ILI.
For old Hank, the banking system = Western Civ.
The amazing part of the story is that Congress simply handed over the money. Let there be no doubt about "who" owns "whom".
I knew it would happen.
<< <i>I'm sure that Hank Paulson had "the end of Western Civ" running through his brain when he was asking Congress for $800 billion in TARP with a single piece of paper in his hand as justification.
For old Hank, the banking system = Western Civ.
The amazing part of the story is that Congress simply handed over the money. Let there be no doubt about "who" owns "whom". >>
I had no problem with that.
That's why they call him Uncle Sam. 😉
I give away money. I collect money.
I don’t love money . I do love the Lord God.