The bond ponzi will fuel PM prices
derryb
Posts: 36,824 ✭✭✭✭✭
The Heart of the Ponzi
"Bottom line, the Federal Reserve created false demand for real debt created by the Treasury…and now the Federal Reserve wants to pretend it can step aside for a real buyer somewhere out there for all this debt."
"Bottom line, the Federal Reserve created false demand for real debt created by the Treasury…and now the Federal Reserve wants to pretend it can step aside for a real buyer somewhere out there for all this debt."
"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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Box of 20
"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>Who is going to buy all those mortgage securities that the Fed was purchasing these last few years from the zombie banks? >>
So the mess still exists that started this whole fiasco
But this "fundamental" is the same we've heard for the last 5 years. Gold will move when something happens that we don't yet know about...although I have a idea.
Knowledge is the enemy of fear
Box of 20
<< <i>Debt has a finite life. >>
Does this include sovereign (national) debt?
What is more likely to happen first: The US pays off its debt, it defaults on its obligation, or the Ponzi goes on forever?
"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
Forever comes first....humans also have a finite life.
Knowledge is the enemy of fear
When a company issues more stock it's called "dilution". More shares are worth less per share.
When the Treasury issues more debt and it gets monetized by the Fed, which prints or keystrokes more money into existence in order to buy the debt, it's now called Quantitative Easing.
A key point: the stockholders have more shares that are worth less per share and they still retain the same amount of value.
When QE is issued, the holders of currency do not have more shares, but the shares are worth less per share and they are net losers of value.
This is theft, or taxation - whichever you find more appealing.
It's not really taxation because it was never passed on a vote, and "no taxation without representation" is a salient point on which our whole society was founded. Hardly insignificant.
Therefore it is more accurately called a form of theft because it's done surreptitiously without even the knowledge of most of the victims.
Yeah, I know. Complain, complain, complain. It's no biggie, right?
I knew it would happen.
<< <i>The FED doesn't need to sell anything. Eventually the underlying homes get sols and the mortgage is paid. Debt has a finite life.
But this "fundamental" is the same we've heard for the last 5 years. Gold will move when something happens that we don't yet know about...although I have a idea.
Mortgage debt is only a tiny bit of the the total debt out there. Toss in derivatives as debt also. Anything that's an obligation to pay is a debt...including FRN's.
Debt rather than a finite life, has an infinite life under the Federal Reserve System. When has the sovereign, state, municipal, and corporate debt ever shrunk? As far as I can tell, debt is like entropy, it only increases.
Only a tangible asset can retire debt (ie gold is an example). Paper or new loans cannot retire old debt....they just extend the life of it out.
This article says that 17% of US homes were "seriously" underwater in April 2014
How many more homes are just plain underwater? This is not "very few" in my opinion. I know here in New England the number is much higher than the national average. How many people were underwater back in 2007-2008 that helped fuel the mortgage crisis. I'd bet it wasn't all that much different from 17%. The banks also don't want to report on all the underwater properties and those meeting foreclosure conditions because the market still can't handle all of them. The number is probably much larger than 17%.
<< <i>Yeah, I know. Complain, complain, complain. It's no biggie, right? >>
As long as the average American can get a hot Starbucks, a cold Baskin Robbins and schtupped twice a month......all is well.
I knew it would happen.
<< <i>Once the debt can no longer be held back, everything else goes. Everything. >>
Of course, but that takes logic and foresight to understand and accept.
Is the doing of work product a "tangible asset"? because people, companies, and countries can work to pay off debt. they work for money, they owe money, they pay money, and retire debt.
No tangible assets need be involved? Millions of people have paid off mortgages without so much as laying eye or hand on a piece of gold or other tangible asset.
Liberty: Parent of Science & Industry
I knew it would happen.
"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>only an asset or a default can extinguish debt. Labor produces currency, currency is an asset as long as it has value. Currency normally extinguished debt. >>
100s of millions of humans throughout history have paid off debt via labor with never a currency exchanging hands.
Knowledge is the enemy of fear
Likely.
100s of millions of humans throughout history have paid off debt via labor with never a currency exchanging hands.
That being the case, are we regressing to that situation? If so, gold will probably ascend to a much more elevated status as money than it is right now.
Less Likely.
I have to call this round for derryb.
I knew it would happen.
<< <i>Only a tangible asset can retire debt (ie gold is an example). Paper or new loans cannot retire old debt....they just extend the life of it out.
Is the doing of work product a "tangible asset"? because people, companies, and countries can work to pay off debt. they work for money, they owe money, they pay money, and retire debt.
No tangible assets need be involved? Millions of people have paid off mortgages without so much as laying eye or hand on a piece of gold or other tangible asset. >>
You're forgetting that cash (currency) is an asset as long as it has value.
"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 must also point out that the value 17.8 Trillion that the US goverment claims as the curent US Dept could literaly be thousands or millions of times larger and you/we would never know, until its too late. >>
Doubtful that the number is off by any significant number. What is not included though is the unfunded liability for unfunded entitlements, not to mention the Trillion in student loans and the trillion in auto loan debt, both of which are ready to go bustoid.
....and lets not forget the next bank bailout.....3...2...1...
"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>I must also point out that the value 17.8 Trillion that the US goverment claims as the curent US Dept could literaly be thousands or millions of times larger and you/we would never know, until its too late. >>
Doubtful that the number is off by any significant number. What is not included though is the unfunded liability for unfunded entitlements, not to mention the Trillion in student loans and the trillion in auto loan debt, both of which are ready to go bustoid.
....and lets not forget the next bank bailout.....3...2...1... >>
Why Doubtful? It would be the only statistic that the government isnt known to be lieing about.
And there will not be another bank bailout. The next great plots are called bail-ins, where the funds will simply be transfered from your bank accout to the banks bank account.
<< <i>
<< <i>Only a tangible asset can retire debt (ie gold is an example). Paper or new loans cannot retire old debt....they just extend the life of it out.
Is the doing of work product a "tangible asset"? because people, companies, and countries can work to pay off debt. they work for money, they owe money, they pay money, and retire debt.
No tangible assets need be involved? Millions of people have paid off mortgages without so much as laying eye or hand on a piece of gold or other tangible asset. >>
You're forgetting that cash (currency) is an asset as long as it has value. >>
Well, old cash has tendency to INCREASE in value above the face value if kept in new condition and held long enough.
How much is that gem 1913 federal reserve note worth today? A lot more than the 3 cents that is always shown on the graph
Liberty: Parent of Science & Industry
<< <i><<only an asset or a default can extinguish debt. Labor produces currency, currency is an asset as long as it has value. Currency normally extinguished debt. >>
Likely.
100s of millions of humans throughout history have paid off debt via labor with never a currency exchanging hands.
That being the case, are we regressing to that situation? If so, gold will probably ascend to a much more elevated status as money than it is right now.
Less Likely.
I have to call this round for derryb.
Only if people want gold. They may want coal instead.
Knowledge is the enemy of fear
<< <i>
<< <i>I must also point out that the value 17.8 Trillion that the US goverment claims as the curent US Dept could literaly be thousands or millions of times larger and you/we would never know, until its too late. >>
Doubtful that the number is off by any significant number. What is not included though is the unfunded liability for unfunded entitlements, not to mention the Trillion in student loans and the trillion in auto loan debt, both of which are ready to go bustoid.
....and lets not forget the next bank bailout.....3...2...1... >>
Its the end of the world. We're all gonna die. Well at least im 50% right.
Knowledge is the enemy of fear
Fixed it for ya.
Knowledge is the enemy of fear
<< <i>Why Doubtful? It would be the only statistic that the government isnt known to be lieing about. >>
It may well be off. I consider the ill advised fed holdings to be retired debt, though virtually everyone disagrees with that idea.
At any rate your 1000 to millions or any real multiple of the published figure is incorrect.
The Fed paid for the Treasuries with imaginary money. That imaginary money went somewhere. It went onto bank balance sheets to pay for gambling losses on interest rate swaps and collateralized debt obligations from 2008. The losers in that equation are being made whole, as was Goldman Sachs when AIG was bailed out. The winners took their money off the table at the time of the bailouts.
So let's analyze it. The obvious winners were Goldman Sachs, JP Morgan, Morgan Stanley et al. Oddly, the Fed is owned and run by the same group of unidentified insiders who have the ability to conjure up money to pay themselves off when they mismanage their own businesses, but the Treasury is still left with the outstanding debt obligations that are held by these same people to whom the Treasury must continue to pay coupon payments, which are funded tax money from *our* earnings.
The debt isn't retired when our tax money is being siphoned off to the Fed in order to pay the coupon payments. It's only retired when the contract expires and after the principal is paid back.
I knew it would happen.