Marc Faber: Equities Safer than Dollars 66 comments
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Here is a terrifying interview with Marc Faber, editor of the Gloom Doom & Boom Report. I find it unsettling how calm and polite he is as he lays out the case for an inevitable collapse of the US dollar hegemony and the destruction of our economic system.
And in case you think he is some sort of doomsayer who just now happens to be correct, keep in mind that throughout his lengthy career, he has made some unbelievable calls - both long and short. So he clearly is not a perma-bear of the Howard Ruff variety. The last time Ruff was on CNBC hoarsely growling his ever pessimistic prognosis, I wondered if this was a contrarian signal from the trading gods. With hindsight’s approval we know that it most certainly was.
In contrast, Marc Faber was bullish at almost the exact bottom of the market earlier this year. So while he is a long term bear, he is the rare breed that is actually able to bob and weave, catching shorter term rallies. Listen to the full interview (in three parts) to find out his case for the utter collapse of capitalism as we know it:
Marc Faber Bloomberg Interview: Part 1
Marc Faber Bloomberg Interview: Part 2
Marc Faber Bloomberg Interview: Part 3
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This article has 66 comments:
But, gosh, to say equities are stronger than dollars may be damning with faint praise. Diving with great whites with chum dangling from your dive belt may be safer than dollars. Walking down dark alleys in Detroit with $50 bills hanging out of your pocket may be safer than dollars. Wandering into caves in Afghanistan with two Mormon missionaries shouting, "Hello, is anybody home?" may be safer than dollars...
What is your point?
Holding US dollars, then you have nothing to gain and every thing to lose. This is the most risky thing you could hold.
Holding a physical commodity that you know you bought BELOW its production cost, then you have an investment with guaranteed return. Economic 101 says the commodity price must go back to above cost, or producers will eventually have to stop producing it.
The need for people to rush out of their cash position and hoard physical assets, means equities of physical commodity producers will be bullish. This is an unescapable conclusion.
I guess some people have confused the concept of "RISK" and the concept of "VOLATILITY". Volatility is NOT risk. Low risk does not equal to low volatility.
What has the lowest volatility? The US dollar cash. One dollar of paper money is always worth one dollar, no more and no less, the volatility is ZERO. But the risk in paper money can not be higher.
On Sep 29 11:45 AM Joseph L. Shaefer wrote:
> Marc Faber and I agree that equities are safer than dollars -- and
> that foreign equities denominated in stronger currencies are an even
> better bet.
>
> But, gosh, to say equities are stronger than dollars may be damning
> with faint praise. Diving with great whites with chum dangling from
> your dive belt may be safer than dollars. Walking down dark alleys
> in Detroit with $50 bills hanging out of your pocket may be safer
> than dollars. Wandering into caves in Afghanistan with two Mormon
> missionaries shouting, "Hello, is anybody home?" may be safer than
> dollars...
Now, in the hands of the US Govt, the fiat dollar has become an instrument of global fraud , a tool for amassing power, ignoring voters and markets and debasing the constitution.
The fiat dollar allows the US Govt, for a while, to decouple itself from moral restraints, the majority of the Middle Class and the discipline of markets. Thus, the fiat dollar has become an instrument of despotism and the serial conduct of Un-American activities by the bosses.
While there will be adverse economic consequences for America as the dollar is demoted by the world , there will also be a profoundly positive effect: it will take away a terrifying weapon of domestic tyranny from the Bosses; as the Bosses lose this WMD, so too they may be driven from power.
For scores of millions of Americans the choice might be : keep the dollar and lose the Nation or lose(i.e reconstitute fundamentally) the currency and regain the Nation.
2. Only certain kinds of equities, I think, are a hedge against dollar debasement:
---Companies with global reach and multinational internal supply chains that limit their exposure to the US economy to under 20% of global earnings
------Companies that own substantial, non-replicable intellectual property rights which convey major pricing power to offset dollar declines
-------Companies with leading global brands and unbeatable logistical and distribution capabilities which also convey important pricing power to offset dollar declines
-------Companies with real physical assets ranging from energy to minerals and metals(including gold, silver, platinum and rare earths) to land to food, water and agri-goods to large world class manufacturing facilities that are direct hedges against dollar debasement: as the dollar goes down the price of their assets increase
www.cnbc.com/id/158402...
On Sep 29 12:12 PM 1st STAR wrote:
> FDIC keep their BANK WATCHLIST secret because they don't have money
> to cover $$$$ trillions of deposits.
> We offer free list RUN ON THE BANK, check if your bank is on our
> list too.
> medayski.tripod.com/id...
Also For anyone who believes that the next few years would be one associated with high inflation (lead by commodities) - Resource Producing Stocks are the ones to watch out for and Resource Consuming Stocks are an avoid.
I am generally disregard Marc Faber, but on this point I agree with Faber's general sentiment that real assets (not just equities) are safer than dollars.
In today's era of likely dollar devaluation, likely high inflation and zero interest rates, it would seem that REAL ASSETS are the safer bet. Faber's statement is true now just as it was true in 1971 when the US went off the Gold Standard.
Faber says equities are safer than the dollar. Equities are only part of the answer. As we have all learned, equities can be very risky.
However, a diversified portfolio of real assets specifically US Equities, CRE, Foreign Equities and Inflation Protected Securities is a safer way of maintaining purchasing power. While others prefer commodities and PME's, I prefer income generating investments. Real Assets always hold their value better than fiat currencies.
The old saying goes "your cash aint nothing but trash."
I have read scores of academic studies. In nearly all papers, the wonks have defined risk as "risk equals volatility." Usually the safest asset is deemed to be the US T-Bill, often called by the academics the "risk free asset." This is misleading because it is merely an academic reframing of the definition of real risk.
Real risk equals loss of purchasing power.
On Sep 29 01:01 PM Mark Anthony wrote:
>
> I guess some people have confused the concept of "RISK" and the concept
> of "VOLATILITY". Volatility is NOT risk. Low risk does not equal
> to low volatility.
>
> What has the lowest volatility? The US dollar cash. One dollar of
> paper money is always worth one dollar, no more and no less, the
> volatility is ZERO. But the risk in paper money can not be higher.
>
>
> On Sep 29 11:45 AM Joseph L. Shaefer wrote:
That's how.
On Sep 29 03:41 PM Thomas J. Gordon wrote:
> Faber is an interesting guy. I watched the videos. I have a question.
> Faber said the stock market was going up be Bernanke was giving people
> money to buy stocks. What is the mechanism for that? When I took
> macroeconomics, the fed increased the money supply, the banks applied
> the multiplier affect, and overall prices rose. Overall prices aren't
> rising (yet?). How does money printed by the fed wind up in the hands
> of people that want to buy the overall stock market? I have a problem
> with the recurring statements that excess money printed by the fed
> ends up in some particular market (real estate, oil, etc..)
The accumulated official US Public Debt of $11.3 Trillion at May 2009 has grown by over $2.1 Trillion in the past twelve months alone, with multi-trillions more ahead and no end in sight. The immediate future suggests massive additional bailouts for commercial real estate, credit card debt portfolios and insurance companies - plus the bubbling up of a Witches’ Brew from hundreds of trillions of toxic OTC derivatives now in jeopardy - as the next major dominoes likely to fall. The usdebtclock.org website provides the following:
US Public Debt $11.317 Trillion
US Government Bailouts $11.650 Trillion
Estimated Currency and Financial Derivatives $642.184 Trillion
Note: In March 2006 the Federal Reserve discontinued its separate publishing of the critical M3 money supply data, and so we are left to the estimate the parabolic increases in the printing of money within the larger ‘Estimated Currency and Financial Derivatives’ data.
At some point in the near future, the market may finally acknowledge that the boasted about US Dollar, the Emperor, is no longer wearing any clothes. And for both Wall Street and the average American alike, the Buck may stop here...be prepared for the inevitable rise of Gold, Equities and any Hard asset in a long run....in a short term we are in the war with deflation....
As for equities, the only real safe ones of foreign ones or ones tied to exports. If he is right and the US economy collapses everything shuts down. The few dollars remaing will be worth a lot and there won't be many buyers and nothing new to sell. US equities with no business will shut down like a string of lights with no electricity. You can basically refer to the great Depression. No foreign entity will buy US bonds if tax revenues fall off precipously due to such a depression leaving the US with no ability to deficit spend its way further into the grave.
Thus US equities dependent on US demand are no good for safety unless they are commodity manufacturers that can export to someone who actually has a working economy in such a catastrophic situation. The only reason they afford relative safety now is that they hedge somewhat against Bernake style insane monetary expansinist induced inflation should he choose to go the route of complete economic insanity.
Bernanke could be anybody. He's in a tough position and looks to be taking the lead from the leaders now. Look at AUD. They'll be raising rates soon. That's just going to set off the dominoes in tightening policy with the last being the US, and maybe even after Japan!
On Sep 29 10:54 PM Moon Kil Woong wrote:
> As long as Bernake is in power the dollar has nowhere to go but down.
There are many nations that have a significant portion of their economy aimed at our markets - it is not going to change with a collapse in the US economy - it might even be aggravated. I think the false credit prosperity brought a small decoupling of emerging markets. But unfortunately the most unbearable argument is that we are all in this together and commodities such as metals and oil require growth in demand- not one time keynesian projects for simply sustaining current demand.
I am a very typical consumer and I spend about 80% of my monthly purchases on things that stay in the US. My mortgage, education for my children, telcom, entertainment and food. I heat and cook my food with natural gas which is in vast oversupply and mostly American.
I fly mostly on American built planes, I buy mostly American built software and I hire Americans to run my town and educate and protect my family.
Yes my cars are foreign but my Toyota was built here by Americans.
Investing guru Marc Faber advises investors to switch off Ben Bernanke, ignore his government-sponsored “We will keep inflation in check” line — and be sure to buy gold to protect yourself.
“Government is there to do something for itself, not for people,” he observes.
Faber says the government will have no choice but to print money like crazy and soon.
But what he's wrong about is that this will mean a collapse of capitalism. These things will happen because market forces will make it so. A US engineer earning 6X what one in India earns is not sustainable. But just because living standards go up in India does not mean they have to go down in the US- unless Obama and his union pals try to remove us from the global economy, in which case the rest of the world will boom while we stagnate.
While I appreciate tedstr's comment about most of our money being spent on US purchases, let me remind that a typical 1980's Soviet spent most of their money on domestic purchases. But a socialist economy ends up not having as much to buy. Capitalism will fail only if we let it.
America
Canada
Mexico
Now are American Engineers 6X better. Generally. Indians get rote learning Americans get problem solving. Give the Indian a problem that does not have a book solution in a form he has learned and he is lost. Not true in all cases of course. True in the vast majority of cases.
I'm a retired engineer and have studied the matter some.
1. Biotech
2. Fusion
What do I like in fusion? Polywell Fusion. You can't buy it.
Let's look at what the Unions have done so far. They have destroyed or crippled the U.S. steel industry, automotive industry, education, maritime industry, newspaper industry, railroad industry, airline industry, postal service...God, the list could go on.
And until recently the union were on the ropes for the very reason that they so ruined the very industries and business they were involved with they had lost much of their power.
And then...and then....AND THEN...:Along comes President OBAMA!
Yeah! Hooray! Whoopy!
"But just because living standards go up in India does not mean they have to go down in the US- unless Obama and his union pals try to remove us from the global economy, in which case the rest of the world will boom while we stagnate."
If the USA goes under, and it will eventually, and probably in the not too distant future, it will be like an atom bomb.
Whether we like to admit it or not, we in the USA have been living in a fantasy world for more than 20 years and have done nothing to stop it - especially our government and Wall Street. In a paper I wrote for an advanced economic course I took in 1994 I wrote that Wall Street's myopic and short sighted view will eventually eviscerate the USA as a result of their pressure for companies to become ever more profitable no matter the toll it takes on a company's log term health. CEOs and CFOs too weak to stand up to the pressure of Wall Street cut R&D and other non-profit making centers without seeing the long-term affect it would have on the company. Another result of the pressure was the export of manufacturing to low wage countries without seeing the result it would do in time to the USA economy - essentially gutting the industrial belly of this country. Almost NO consumer products are made in the USA today and when Americans go shopping it will put others to work and not Americans. Once the money leaves the US it generally doesn't return and be recycled throughout the economy. Sure, the stock prices rise higher for those companies and people appear richer as they look at their investments but it's just paper and can quickly disappear. Puff.
On Sep 30 10:17 AM wg wrote:
> What exactly do you mean, "unless?" It is happening as we speak.
> Labor unions have long outlived whatever usefullness they might have
> had. Obama and his union pals are determined to destroy wealth and
> prosperity in this country, so as to substitute their own failed
> little economic system.
>
> Let's look at what the Unions have done so far. They have destroyed
> or crippled the U.S. steel industry, automotive industry, education,
> maritime industry, newspaper industry, railroad industry, airline
> industry, postal service...God, the list could go on.
>
> And until recently the union were on the ropes for the very reason
> that they so ruined the very industries and business they were involved
> with they had lost much of their power.
>
> And then...and then....AND THEN...:Along comes President OBAMA!<br/>
>
> Yeah! Hooray! Whoopy!
>
>
> "But just because living standards go up in India does not mean they
> have to go down in the US- unless Obama and his union pals try to
> remove us from the global economy, in which case the rest of the
> world will boom while we stagnate."
Industrial output in the US is around 20% of the economy. About the same as it has been +/- for the last 50 years. What is different? Robots (automated machine tools) are doing the work. The unskilled no longer have a place in industry. The same thing happened in farming and the blow off (carny term) happened in 1929. Our iddustrial blow off happened in 2008.
So where will the unskilled find work in the new America? Changing bedpans in nursing homes.
Canada will need some of its declining and increasingly expensive oil for itself.
Mexico's overall production is declining at roughly 8-9% a year, and its exports are declining at 20% a year, or more than that net, since it re-imports considerable oil as refined products (ironically, during the high gas price period last year when Mexico was selling gas for less than cost of re-imported refined gas from the US, San Diego gas customers could cross the border and get cheap
Tiajuana gas).
About three years ago, Jeffrey Brown (westexas on the oil drum) began talking about how oil exporting countries (e.g., US and Indonesia at an earlier time, UK, Venezuela, Mexico) continued to increase their internal consumption even as their exports decline down to zero and they become importers. Google: "Export Land Model"
Economies are based on energy. Notwithstanding climate issues, the US will move to a lower-carbon, lower-energy economy. The only issue is whether this happens voluntarily within societal mechanisms or is imposed upon us by reality.
We can do nothing and rely on magic bullets, like Polywell or EEStor, to save us. Are you feeling lucky?
On Sep 30 09:53 AM MSimon wrote:
> America gets most of its oil from:
>
> America
> Canada
> Mexico
On Sep 29 11:45 AM Joseph L. Shaefer wrote:
> Marc Faber and I agree that equities are safer than dollars -- and
> that foreign equities denominated in stronger currencies are an even
> better bet.
>
> But, gosh, to say equities are stronger than dollars may be damning
> with faint praise. Diving with great whites with chum dangling from
> your dive belt may be safer than dollars. Walking down dark alleys
> in Detroit with $50 bills hanging out of your pocket may be safer
> than dollars. Wandering into caves in Afghanistan with two Mormon
> missionaries shouting, "Hello, is anybody home?" may be safer than
> dollars...
EEStor is a scam IMO. The jury is still out on Polywell.
The greens have done a LOT to cripple the US. Can it be turned around - depends on who controls Congress and if the current President wants to be re-elected.
Most of our wounds are self inflicted.
I'm talking oil flows, not oil in the ground. There's a lot of oil in the ground, more than we've taken out in 150 years. The trick is, the accessible cheap oil has all been found and most of it has been pumped. The percentage of energy used to get energy is rapidly rising. So, while the price of oil has tripled, total world production has basically flat-lined at 2005 levels (now actually down, but due to demand destruction). Economists say if you want to get more of something, raise the asking price. So what gives?
"Mistakes were made" is not a plan for the future. Just think about the next few years, not 20 or 30. Whatever Mexico does to reform its energy sector, won't help in the next five years, during which it will probably become a net importer (unless its ecomony and internal oil consumption crash).
Hope is not a plan. Yes, EEStor is likely a scam (or at least not much of an improvement). Polywell stays alive cuz the Navy is covering its bets - - were Polywell to prove out, it'd be a really great carrier-driver.
On Sep 30 11:43 AM MSimon wrote:
> The US could supply its oil needs from oil shale for the next century
> if the government got out of the way. Not to mention Alaska and off
> shore.
>
> EEStor is a scam IMO. The jury is still out on Polywell.
>
> The greens have done a LOT to cripple the US. Can it be turned around
> - depends on who controls Congress and if the current President wants
> to be re-elected.
>
> Most of our wounds are self inflicted.
It hasn't been a year yet, so he may still prove correct. I'm going to wait awhile longer to see what happens. My point is that no one should blindly accept his predictions, but I guess that goes without saying.
seekingalpha.com/artic...
On jsmineset.com they have said that the BIS originally reported it as $1,400,000,000,000 before lowering the figure, but they believe the larger figure.
This paper cannot and should not be honored. Let the issuers eat it and go into poverty (if there's any justice). The financial system has to be rebuilt, and it should not include the crooks and incompetents who destroyed it. Problem is the foxes are in charge of the henhouse.
I also understand that the total debt and unfunded liabilities of the US gov't are about $63 trillion, which equals about $200,000 for every person in the U.S.
The only two options I can see here are to default or to pay in devalued (inflated) dollars. Inflation seems the only politically realistic path. Inflation may result not only from an overheated economy, which we don't have, but from confidence dropping out from under a currency.
We seem to be in the midst of an attempt at a controlled devaluation. But if the US dollar continues to devalue (and what's to hold it up?), at some point holders of dollar denominated assets will bolt and we'll see a hard fall.
In the event of inflation equities will likely go up, but will they keep up with inflation or just cushion the loss in real terms? Some smart folks argue the latter.
The smart $ is out already, or in targeted equities in U$ that they think will go up enough to more than compensate for dollar devaluation.
On Sep 29 07:08 PM twitee wrote:
" US Public Debt $11.317 Trillion
> US Government Bailouts $11.650 Trillion
> Estimated Currency and Financial Derivatives $642.184 Trillion"
I think you misplaced the decimal here. A year ago during the meltdown, financial derivatives were around $60 trillion and some of that has been wound down. Next month, the
last Bush budget will expire. So aside from the stimulus spending this year, somewhere around $100 billion, all of the deficits accumulated since 1980, around $11 trillion, are from the last three republican presidents. The borrow and spend policies of the last three decades has nearly destroyed our economy, and may yet destroy our economy. So much for deficits don't matter.
On Sep 29 07:08 PM twitee wrote:
> For those less inclined to Scripture, we can readily turn to mathematics
> and to our instructive friend, the parabola, for clues about what
> lies ahead. Simply stated, parabolic growth rates herald major changes
> just ahead in virtually any arena of life, and the parabolic increases
> in the Federal Reserve’s creation of dollars will prove to be no
> exception.
>
> The accumulated official US Public Debt of $11.3 Trillion at May
> 2009 has grown by over $2.1 Trillion in the past twelve months alone,
> with multi-trillions more ahead and no end in sight. The immediate
> future suggests massive additional bailouts for commercial real estate,
> credit card debt portfolios and insurance companies - plus the bubbling
> up of a Witches’ Brew from hundreds of trillions of toxic OTC derivatives
> now in jeopardy - as the next major dominoes likely to fall. The
> usdebtclock.org website provides the following:
>
> US Public Debt $11.317 Trillion
> US Government Bailouts $11.650 Trillion
> Estimated Currency and Financial Derivatives $642.184 Trillion <br/>
>
>
> Note: In March 2006 the Federal Reserve discontinued its separate
> publishing of the critical M3 money supply data, and so we are left
> to the estimate the parabolic increases in the printing of money
> within the larger ‘Estimated Currency and Financial Derivatives’
> data.
>
> At some point in the near future, the market may finally acknowledge
> that the boasted about US Dollar, the Emperor, is no longer wearing
> any clothes. And for both Wall Street and the average American alike,
> the Buck may stop here...be prepared for the inevitable rise of Gold,
> Equities and any Hard asset in a long run....in a short term we are
> in the war with deflation....
And the comments about "massive involvement in every aspect of economic life and accounting standards that are a joke." - Where have you been for more than a year???
It is the US financial system that blew up (partially due to lax accounting standards which have gotten even worse) ! And Uncle Sam has grown into a monster that has his hands into every nook and cranny of the US economy.
On Sep 30 09:12 AM kiers wrote:
> Oh and i forgot to mention...massive government involvement in EVERY
> aspect of economic life, and also, accounting standards are a joke.
> But those crony capitalist companies that are already in good stead
> may be "good investments" till....
----------------------...
The FY09 budget was split in 2 by the Dems last year because they wanted the second half to be an Obama budget. The "last Bush budget" expired in March when the Dems passed a pork-filled, earmark filled second half budget. I'm not sure how the last 3 years have been "Bush budgets" since congress has been Dem since Jan 2007. Beside that, budgets, as passed and implemented, are NOT Presidential budgets, they are Congressional budgets at the end of the day and the Pres, Dem or GOP can only sign or veto. Note that during the, as you say, "last 3 Republican Presidents", the Dems have had Congressional control for all but 6 of those 20 years. Now who did the borrowing and spending? Most of us fiscal conservative Republicans puked at the GWB/GOP Congress budgeting from 02 to 06 and that is a big reason why they lost control, but this Pres and Congress are taking us to entirely new territory "where no man has gone before".
In case you haven't noticed, people haven't stopped buying American cars. Sure they slowed down for the reasons you cite,
but what hit the U.S. car companies mostly (in addition to the crash) was having to pay somebody whose sole job was to screw on bumpers on automobiles $600 a day in salary and benefits. That's what hit the companies, cause they couldn't afford to produce a compeditive car, and they couldn't afford to pay all those salaries and benefits to...to? To who? UNION MEMBERS! which fact you somehow neglected to mention in your laundry list of faults.
Concur
Either fortunately, or not, the short squeeze won't occur again because our Fed will provide ample swap/liquidity (the more trillions the better for devaluation of "our" debt) with any of the g-20 countries that require it.
It may effect countries that America wishes to punish (eg: Venezuela or Cuba); but there's zero chance that the central banks will allow another implosion. It could only come from revolution...and the American poor are far to rich, lazy and fat to revolt.
On Sep 30 04:09 PM Dirtt wrote:
> "The staggering amount of dollar-denominated debt in the system,
> $50 trillion or so, is a gigantic synthetic short against the dollar.
> If you're a publicly traded company and have $10 billion in bonds
> outstanding, you can't repay that debt in Euros or yen or pesos.
> You have to repay it in dollars, and if you have other currencies
> you have to sell them for dollars to repay the loan. So the dollar
> may go a lot higher in the short run if the economy starts to implode.
> After the carnage is over -- whenever that may be -- the dollar will
> likely sink into the sunset. "
>
> Concur
China process food for restaurants, frozen food companies, cereal, juice, meat, shampoo, soap, tissue and the like.
If your package says "distributed by" American company, that usually means NOT MADE HERE.
Kid yourself all you want, the day China decides to finish us off, all they have to do is raise the price of the products we no longer make here. Which is basically everything.
On Sep 30 08:54 AM tedstr wrote:
> Faber may be a smart guy but we need to stop all this alarmist talk
> and get on with fixing the problems.
>
> I am a very typical consumer and I spend about 80% of my monthly
> purchases on things that stay in the US. My mortgage, education
> for my children, telcom, entertainment and food. I heat and cook
> my food with natural gas which is in vast oversupply and mostly American.
>
>
> I fly mostly on American built planes, I buy mostly American built
> software and I hire Americans to run my town and educate and protect
> my family.
>
> Yes my cars are foreign but my Toyota was built here by Americans.
Clinton may have cut spending, but he still borrowed from social security AND raised taxes on everything and everyone (and when Bush's tax cuts expire, you will see why they were cut). And the SOB sold out our wealth generating base to a declared enemy. Which is a huge reason why there are no jobs now.
Bush 1 was just worthless, and Reagan managed to lower taxes AND reduce the deficit, during a recession. Clinton couldn't do that in our largest ever economy.
Quit picking sides and realize that in order to fix this mess, we first have to realize BOTH SIDES ARE AT FAULT.
BOTH sides. Pointing fingers and thinking Obama is your savior is a prescription for our demise.
On Sep 30 01:57 PM jdl51 wrote:
> "Estimated Currency and Financial Derivatives $642.184 Trillion"
>
>
> I think you misplaced the decimal here. A year ago during the meltdown,
> financial derivatives were around $60 trillion and some of that has
> been wound down. Next month, the
> last Bush budget will expire. So aside from the stimulus spending
> this year, somewhere around $100 billion, all of the deficits accumulated
> since 1980, around $11 trillion, are from the last three republican
> presidents. The borrow and spend policies of the last three decades
> has nearly destroyed our economy, and may yet destroy our economy.
> So much for deficits don't matter.
>
> On Sep 29 07:08 PM twitee wrote:
We've been shipping whole industries over there ever since.
Thanks Bush, Clinton, Bush, Obama!
Way to stick it to us sans the lube.
On Sep 29 01:09 PM User 353732 wrote:
> 1. The role of the dollar as reserve currency brought multiple benefits
> to the US for several decades and was a symbol of its global stature......Until
> the privilege and responsibility were both abused and abnegated by
> the grossly negligent and now irredeemably addictive printing of
> fiat money.
> Now, in the hands of the US Govt, the fiat dollar has become an instrument
> of global fraud , a tool for amassing power, ignoring voters and
> markets and debasing the constitution.
> The fiat dollar allows the US Govt, for a while, to decouple itself
> from moral restraints, the majority of the Middle Class and the discipline
> of markets. Thus, the fiat dollar has become an instrument of despotism
> and the serial conduct of Un-American activities by the bosses.<br/>
>
> While there will be adverse economic consequences for America as
> the dollar is demoted by the world , there will also be a profoundly
> positive effect: it will take away a terrifying weapon of domestic
> tyranny from the Bosses; as the Bosses lose this WMD, so too they
> may be driven from power.
> For scores of millions of Americans the choice might be : keep the
> dollar and lose the Nation or lose(i.e reconstitute fundamentally)
> the currency and regain the Nation.
>
> 2. Only certain kinds of equities, I think, are a hedge against dollar
> debasement:
> ---Companies with global reach and multinational internal supply
> chains that limit their exposure to the US economy to under 20% of
> global earnings
> ------Companies that own substantial, non-replicable intellectual
> property rights which convey major pricing power to offset dollar
> declines
> -------Companies with leading global brands and unbeatable logistical
> and distribution capabilities which also convey important pricing
> power to offset dollar declines
> -------Companies with real physical assets ranging from energy to
> minerals and metals(including gold, silver, platinum and rare earths)
> to land to food, water and agri-goods to large world class manufacturing
> facilities that are direct hedges against dollar debasement: as the
> dollar goes down the price of their assets increase
On Sep 29 03:41 PM Thomas J. Gordon wrote:
> Faber is an interesting guy. I watched the videos. I have a question.
> Faber said the stock market was going up be Bernanke was giving people
> money to buy stocks. What is the mechanism for that? When I took
> macroeconomics, the fed increased the money supply, the banks applied
> the multiplier affect, and overall prices rose. Overall prices aren't
> rising (yet?). How does money printed by the fed wind up in the hands
> of people that want to buy the overall stock market? I have a problem
> with the recurring statements that excess money printed by the fed
> ends up in some particular market (real estate, oil, etc..)
On Sep 29 01:09 PM User 353732 wrote:
> 2. Only certain kinds of equities, I think, are a hedge against dollar
> debasement:
---Companies with global reach and multinational internal supply chains that limit their exposure to the US economy to under 20% of global earnings.
------Companies that own substantial, non-replicable intellectual
property rights which convey major pricing power to offset dollar
declines
-------Companies with leading global brands and unbeatable logistical and distribution capabilities which also convey important pricing power to offset dollar declines
-------Companies with real physical assets ranging from energy to
minerals and metals(including gold, silver, platinum and rare earths) to land to food, water and agri-goods to large world class manufacturing facilities that are direct hedges against dollar debasement: as the dollar goes down the price of their assets increase
----------------------...
Along these lines, I suggest a read of Peter Schiff's book; "Crash Proof". Peter shows up in these here parts once in a while.
economic issues and the economy. I thought I was the only one
who recognized that our government houses 'fiscal criminals' as
a matter of course!
But as they say, "it takes two to tango"! Of course only a brain- washed, apathetic public allows such vermin to be elected and
appointed in the first place!
E. Tippett
Chicago, Illinois
On Sep 29 01:01 PM Mark Anthony wrote:
>
> What has the lowest volatility? The US dollar cash. One dollar of
> paper money is always worth one dollar, no more and no less, the
> volatility is ZERO. But the risk in paper money can not be higher.
The US Autos must be a great investment.
On Sep 29 01:01 PM Mark Anthony wrote:
> Joseph:
>
> What is your point?
>
> Holding US dollars, then you have nothing to gain and every thing
> to lose. This is the most risky thing you could hold.
>
> Holding a physical commodity that you know you bought BELOW its production
> cost, then you have an investment with guaranteed return. Economic
> 101 says the commodity price must go back to above cost, or producers
> will eventually have to stop producing it.
>
> The need for people to rush out of their cash position and hoard
> physical assets, means equities of physical commodity producers will
> be bullish. This is an unescapable conclusion.
>
> I guess some people have confused the concept of "RISK" and the concept
> of "VOLATILITY". Volatility is NOT risk. Low risk does not equal
> to low volatility.
>
> What has the lowest volatility? The US dollar cash. One dollar of
> paper money is always worth one dollar, no more and no less, the
> volatility is ZERO. But the risk in paper money can not be higher.
>
>
> On Sep 29 11:45 AM Joseph L. Shaefer wrote:
It seems that freedom from competition leads to big profits. I am shocked, shocked! As we have seen, the corporations will fight ferociously to avoid competing. Is that free market capitalism?
Oh yes, big agribusiness has its hand in our pockets also and most of our manufacturers have quietly folded their tents and departed for the lure of cheap labor. The treasury will pick up the tab for unemployment benefits and social services, the congressmen will continue to spend for all of their various constituencies, and the fed will create dollars out of thin air.
May I modestly suggest that there is a world of difference between prudent longer term economic stewardship and near term squabbling in unproductive ways: lying, spinning, smoke and mirrors. Obama may not be the messiah and he may have come along too late but he is the best we have had in a long time.
On Sep 30 07:39 PM TeresaE wrote:
> Nancy Pelosi has written and submitted the THREE largest single year
> budgets this country has ever seen.
>
> Clinton may have cut spending, but he still borrowed from social
> security AND raised taxes on everything and everyone (and when Bush's
> tax cuts expire, you will see why they were cut). And the SOB sold
> out our wealth generating base to a declared enemy. Which is a huge
> reason why there are no jobs now.
>
> Bush 1 was just worthless, and Reagan managed to lower taxes AND
> reduce the deficit, during a recession. Clinton couldn't do that
> in our largest ever economy.
>
> Quit picking sides and realize that in order to fix this mess, we
> first have to realize BOTH SIDES ARE AT FAULT.
>
> BOTH sides. Pointing fingers and thinking Obama is your savior is
> a prescription for our demise.
<i>A US Engineer earing 6X one from India is sustainable as long as the American Engineer is 6X as productive. Engineers are not bushels of wheat - interchangeable.
Now are American Engineers 6X better. Generally. Indians get rote learning Americans get problem solving. Give the Indian a problem that does not have a book solution in a form he has learned and he is lost. Not true in all cases of course. True in the vast majority of cases.</i>
I worked with scores of Americans and Indians and making any generalizations like that is not only racist it's down right stupid. Even if we suspend belief and imagine that racist crud is true, then how much of an engineers time is actually spent delivering innovative solutions?
<i>The US could supply its oil needs from oil shale for the next century if the government got out of the way. Not to mention Alaska and off shore.</i>
That comment takes the cake. I am bewildered that an engineer does not even grasp simple compounding.
Unions were a good thing at one time, however there are a million reasons why they aren't good for the economy anymore.
On Sep 30 11:07 AM Mike from NYC wrote:
> While Unions are part of the problem, they are by no means the only
> problem - hardly. It was the leaders of the companies who led many
> of the companies to ruination - the car industry is a good example.
> It was poor management, horrible customer service, their refusal
> to stand behind their poorly conceived and designed products, the
> inability of companies to build cars people wanted, and other malfeasance
> which led American consumers to abandon Detroit. People didn't stop
> buying American cars because they were built by union members. People
> stopped buying American cars because Americans were tired of buying
> unreliable and poorly designed cars.
Come to think about it... Throw in MacGayver with five seconds left on a bomb under one of the chairs...
That just about sums it up...
Don't forget the Bushes' and the oil connection. LOL
On Sep 30 07:43 PM yellowhoard wrote:
> Seems like relations with China turned the corner when Bush the elder
> started the ball rolling as Nixon's ambassador to China.
>
> We've been shipping whole industries over there ever since.
>
> Thanks Bush, Clinton, Bush, Obama!
>
> Way to stick it to us sans the lube.
LOL!!! F*cking hysterical.
@ yellowhoard
Here's what you do. Read Atlas Shrugged a couple of times, then drop out. Don't employ anyone. Don't pay payroll tax, workers comp, health insurance. Try to buy your groceries from local growers, in cash. I assume you already have a supply of bullion. Buy more ammunition, try to enjoy life without worrying that any President (Republican or Democrat) would actually give a shit about you. Sit back, relax and watch everything implode from the comfort of your warm, living room couch (with a smile on your face).
There is something terribly wrong in our country. End it...buy gold.
How long will the Chinese continue to buy our debt
My guess is who else can they sell all their stuff to
US is 12 trillion dollar market
Next closest is China at 3 billion and Japan at 3 billion
Newsflash asian peopel dont spend money on all this worthless stuff and probably never will
And china will never trust Japan and visa versa
So the Chinese will continue to buy our dollars which will drop steadily but not nearly as much as DR Doom thinks
I think most of the dollar news for now is factored in: 1) Helicoptor Ben 2) Printing presses 3) Gold 4) US debt 5) Lack of US exports 5) Govt. bailout etc. etc.
The problem is that every other currency is worse than the dollar. Precious metals are the only alternative to dollar.
portfolioforlife.blogs...
I can think of trillions of reasons why - denominated in freshly printed dollars.
>an absolute sure bet, short Treasuries." As an experiment to test
>his hypothesis that interest rates would have to increase
>significantly to sell Treasuries, I bought TBT (ProShares Ultra
>Short) at $45. It's now at $43.90. At one point I could have sold
>around $56.
Do not invest in anything based on somebody else's opinion, and do not make a long-term investment in a double-leveraged instrument. If you really had to hop in immediately, rather than wait for the right moment, you should have shorted TLT (the opposite of TBT).
Source : marcfaberchannel.blogs...