huskerbob

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  • Gold: The Next Reserve Currency Player
    Dr. Jackpot: They have piles of oil now. Is it like living on a desert island with "no food and no way to get off"?
    You may find this suprising, but some people will accept gold in exchange for currency, food, farmland, machinery, etc. You can exchange gold for lots of useful things. Maybe even an airplane to fly you out of the desert! So no need to worry about the Saudi's sitting on their piles of gold.
    Nikhil- a comment from James Turk will help explain why many people worry that GLD exists only to soak up money that would otherwise support the physical gold market: "Thus, for example, when GLD adds a gold bar, there is no assurance that the gold bar really exists unless it is in the vault of the custodian, HSBC. But the prospectus discloses that HSBC uses subcustodians and even sub-subcustodians, and what's worse, "the Custodian is not liable for the acts or omissions of its subcustodians". In other words, if the subcustodian does not have the gold, GLD "Shareholders cannot be assured that the Trustee will be able to recover damages from subcustodians...for any losses relating to the safekeeping of gold by such subcustodian". This means that "Because neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians who may hold the Trust's gold, failure by the subcustodians to exercise due care in the safekeeping of the Trust's gold could result in a loss to the Trust." To be blunt, these disclosures mean that there is no certainty that the gold supposedly owned by GLD really exists. After all, if there was complete certainty that the gold did exist, the objective of GLD would be to provide investors with the opportunity to own gold bullion by investing in shares of an ETF, rather than its stated objective to just track the price of gold."
    Dec 01 10:26 am |Rating: 0 0 |Link to Comment |View article
  • Intelligent Government Action Is Key to a Market Turnaround
    I'm sorry, I missed the part of your article explaining how we get an intelligent government.
    "The market will start to turn, and fear will start to abate" when equities reach what people believe are reasonable valuations in light of the economic downturn. This would happen swiftly if the government could butt out.
    The government is only confusing the markets, rewarding bad actors and shifting resources to where they would flee in a free market. The market can find a bottom and begin the process of rebuilding on a more solid foundation, or the government can continue the decades-long process of misleading the markets with easy money and bailouts and try to rebuild on a foundation of sand.
    Nov 25 04:25 am |Rating: +1 0 |Link to Comment |View article
  • Take a Stand Against Government Spending
    BrianZach, the point is that all this spending will not and is not preventing an economic meltdown, which should be obvious to anyone.
    An economy based entirely on debt: consumers dependent on debt to compensate for decline in real income; companies not viable without continuous issuance of new debt; local, state, and federal governments completely dependent on debt to provide even basic functions, and now sustaining more debt to bail out the debtors by giving them high quality debt in exchange for garbage debt to encourage them to continue lending even more! As if the problem will be solved by borrowing more money. Sigh.
    At some point, there is too much debt. Then who is going to lend to us?
    Please realize that you cannot keep piling debt on debt forever. Rip off the bandaid now, get assets (homes, equities, cars, etc.) down to affordable prices, and start over.
    It will happen sooner or later. There is no getting around it by making more idiotic loans. Why prolong the agony?
    But if you think bailouts with borrowed money are great for the economy, please put all your money in a Dow index, because you will get to enjoy trillions of dollars of stimulus and bailouts for the forseeable future. Bon appetite!
    Nov 25 03:43 am |Rating: 0 0 |Link to Comment |View article
  • Another Call for the Gold Standard in the WSJ
    The Hand has a good point. Any currency will be manipulated by whomever is in charge at the moment. Don't think a gold standard will keep our government honest - it didn't in the past!
    We have competing currencies now: the fed makes dollars and the US Mint makes gold and silver. Demand for bullion is soaring as confidence in federal reserve notes wanes. When consumers are more confident, demand for bullion wanes. Pretty simple, if the Mint was actually interested in upholding its Constitutional obligations.
    An interesting article about an IRS case dealing with real money versus the tissue paper we use now. An employer legally payed no withholding on $114 million payroll: www.wethepeoplefoundat...

    Article I of the Constitution outlaws paper money and assures that only gold and silver are money. The U.S. Mint has reluctantly been following that law, rationing bullion as the demand for real money skyrockets. Try buying gold or silver anywhere on earth right now!
    Supplying competing currencies would work if they could force the Mint to keep up with demand. Competing currencies is the only thing that can keep the kleptocracy under control, which is why the mint refuses to supply coins to all those demanding them.
    I
    Nov 25 03:11 am |Rating: +1 0 |Link to Comment |View article
  • There's Nothing to Fear But Fearmongers Themselves
    Ha ha. Are you one of the folks that thought the Iraq war could be won if it wasn't for all the negative reporting?
    "But, other than housing prices which were arguably too high anyway, the real economy seemed to be doing pretty well."
    Aside from the fact that the average American was spending more than he saves, there are some other factors you could look at.
    The average homeowner lost $85,000 in value this year, with 74% of homes losing value. Would that make a rational person think about putting their "credit card under the mattress", as you put it?
    Banks have written down $500 billion in mortgage losses, on their way to probably $2 trillion dollars. Could this cause a clampdown on credit? Seeing as how total credit is 340% of our GDP, could this have a negative effect on the economy?
    In addition, how many people formerly employed selling homes, funding, building, remodeling, furnishing, and so on, are now out of a job?
    Yes, the powers that be are absolutely taking advantage of the situation.
    But people have myriad reasons to cut back on expenditures and start saving money! Don't expect the hoi polloi to renew their appetite for more junk to fill up their rented storage units anytime soon.
    Nov 20 06:51 am |Rating: +1 0 |Link to Comment |View article
  • Precious Metals Will Depose Cash from Its Temporary Throne
    pangaea: the coming bottom in the stock market doesn't necessarily mean a bull market for equities.  The market could bounce along the bottom for the next decade or two (as it did before the last great bull market) while we deal with the consequences of this mess.
    And the Fed and it's European counterpart are openly trying to weaken their respective currencies. It's a struggle right now, but they will succeed mightily at some point!
    Gold is the enemy of inflation, and the gold market recognizes this. That is why central banks and their allies continue to fight the gold price, as all central banks must.
    Do yourself a favor and buy some artificially cheap gold. Get out of dollars while the gettin's good!
    Nov 18 02:18 am |Rating: 0 0 |Link to Comment |View article
  • White-Hot Mad over AIG
    K-9: Are you being facetious when you write: "we have to pay first if we want to have any chance of avoiding the kind of unemployment, bankrupt businesses and overall economic turmoil that our initial and likely, additional capital infusions, may possibly ward off."?
    Or are you seriously looking forward to low unemployment, few bankruptcies, and no economic turmoil in the next few years? All thanks to the organized looting of our treasury.
    Nov 11 21:01 pm |Rating: 0 0 |Link to Comment |View article
  • The Winners Will Be Those Who Look to Gold and Commodities
    J Rancher - You are right: I apologize for the tone of my response.
    Two things:
    1. The government can't keep borrowing at this pace without raising interest rates. Total Fed lending now over $2 trillion. Bailout plans approaching $2.5 trillion, and certain to increase as Congress feels the need to "do something". The tax base is being destroyed by the minute, destroying the ability to service debt.
    2. What is a bank that doesn't lend money? It's not going to sit in a virtual vault gathering dust. Now that the government has shown that some banks will not be allowed to fail, will they become responsible stewards of taxpayer largesse?
    Nov 10 04:27 am |Rating: 0 0 |Link to Comment |View article
  • The Winners Will Be Those Who Look to Gold and Commodities
    "Currency value is determined by relative cost of inputs to the manufacturing process." "Debt in and of itself is not inflationary and does not determine currency value. Government cutting services is deflationary."
    Fantastic! Now that I know that debt and currency supply don't determine currency value, I am wondering: where is my million dollar stimulus check? Why not send a million dollars to everyone on earth? Then just cut the government budget to strengthen the dollar. That should get the economy going! Things are looking up!
    Also, if our government cuts service to US citizens in order to pay foreign debtholders, will anyone be upset?
    Nov 09 20:01 pm |Rating: 0 0 |Link to Comment |View article
  • 'The Shallowest Generation': A Rebuttal
    "Live for today, tax and spend, don't save, use leveraged debt, and there will always be a new car in the driveway every 3 years and food in the grocery store. "
    That has been our official economic policy since the Keynsians took over. If you read Greenspan and Bernanke, they have written extensively on the need for inflation to punish savers and encourage lending. If the savings rate goes too high, they wrote of the need to increase inflation to punish savers. Negative savings rate? Mission accomplished, according to our economic masters!
    Why save money if it will be devalued by inflation? Our government and the Fed reward speculation and punish the savers, thus most people's main savings is their home.
    Nov 09 18:47 pm |Rating: 0 0 |Link to Comment |View article
  • The Winners Will Be Those Who Look to Gold and Commodities
    "The bail out programs are not inflationary. They are deflationary." Huh? Most people agree that the deleveraging is deflationary, but the bailout? How can the creation of trillions of new dollars make the dollar stronger, even if they are backed by new debt? Won't people begin to lose confidence in our ability to service that debt?
    "The price of a commodity will always revert to its value." Doesn't everything? What will the value of a dollar be after 5 years? You can't expect demand for US debt to continue unabated, especially as we need to fund medicare, social security, and our bloated military.
    Commodities have real, tangible value and are limited in supply. The value of dollars are based on faith in the government and are in infinite supply.
    Nov 09 18:29 pm |Rating: +6 0 |Link to Comment |View article
  • Where Have All the Peak Oil Believers Gone?
    I hate to pile on, but this article is terrible. At least have a shallow knowledge of your subject matter!
    Nov 03 09:36 am |Rating: 0 0 |Link to Comment |View article
  • Why Oil and Gold Are Headed Much Higher
    Yipes! Killing millions of people and throwing money away on bombs and bullets will not lift us out of a recession. In case you forgot, we are fighting multiple wars all over the world and here in the "homeland". The war in Iraq, the war in Afghanistan, the war on Terror, the war on Drugs, the war against the Constitution, etc.
    Billions and billions are poured into these wars every day. So far, not helping America one bit.
    What helped from WW2 was a lot of GI's coming home ready to make families, buy cars, dinette sets, lawn mowers, go to the movies, etc. The money spent for destructive purposes (beyond wages) really didn't do much for the economy. Like the pallets of money flown to Iraq. How will that help America?
    Oct 25 12:14 pm |Rating: 0 0 |Link to Comment |View article
  • Impending Inflation? The Global 'New Deal' All but Guarantees It
    In an extended deflationary situation, how will the U.S. service its massive debt? Would it even be possible? They would probably have to print more money just for that purpose. Wouldn't the erosion of the ability to service that debt lead to a weakening of the dollar and massive price inflation?
    Beyond that, the Fed and Treasury working together should be able to get inflation back on track. They destroyed 90% of the dollar's value so far, what makes the last 10% so special?
    Oct 25 11:47 am |Rating: 0 0 |Link to Comment |View article
  • Inflation: One Worry to Cross Off the List
    An interesting note from MacroMaven's Stephanie Pomboy:

    "More disturbing still, Stephanie goes on, is that the households with the cash (and assets) "are not the ones with the debt." Rather, alas, the top 1% of householders hold 30% of the assets and 7% of the debt, while the bottom 50% hold a mere 6% of assets but a burdensome 24% of the debt."

    A huge proportion of Americans are net debtors.
    Total assets vs. debt not so useful. How much of those assets are tied up in housing? Can't be accessed without borrowing against or selling the house, making that portion of assets highly inaccesable.
    Oct 23 15:37 pm |Rating: 0 0 |Link to Comment |View article

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