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Avery Goodman  

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  • Spring Market Outlook [View article]
    The situation has not been reversed at all. You apparently do not understand the French election system. There are two rounds, not one, as in America.

    In the first round, this April, Sarkozy will do better than previously expected, partly because of the transient influence of a "successfully" concluded terrorist incident on the minds of "on-the-fence" voters. However, there are too many candidates, and no one will receive a majority.

    There will be a runoff in May, and Hollande leads by 10% in the final runoff. The lead there is composed of hard-core socialist-oriented support, and is unlikely to be diminished much further even if there are more such incidents. On the other hand, since Sarkozy's recovery is largely based upon one incident, assuming that a series of them don't happen as we move closer to the election, the new supporters may fade away by the runoff. That is likely to increase Hollande's lead.

    Although I disagree with some of his policies, I personally prefer Sarkozy. I were a Frenchman, I might even vote for him in the runoff election. Anything is possible, and a miracle could happen. But, the reality is what it is and it is very unlikely that he will be able to win another term.
    Mar 30, 2012. 02:14 AM | 4 Likes Like |Link to Comment
  • Government Says 4.1%, But General Mills Reports 10-11% Inflation [View article]
    All of General Mills inputs, other than labor costs, are for crude materials, mostly crude food, but also other materials. The inflation rate for all these materials, including but not limited to crude food, is supposedly tracked by that portion of the "producer price index" (PPI) known as the "crude materials price index". It is also disseminated by the Bureau of Labor Statistics.

    The crude materials price index portion of the PPI has increased by less than the crude foods index. In fact, it has supposedly increased by less than 1% (0.7% to be exact)! In other words, our government's "formula" has managed to read crude materials inflation at about 10% below the rate experienced by General Mills. The General Mills experience is shared by everyone of us who shop in stores, buy airplane tickets, go on business trips, fill cars up at gas stations, pay for hotels, rental cars, etc. Yet, Fed Chairman Bernanke, and his underlings, such as New York Fed President William Dudley, love to quote BLS statistics to support their policies.
    Mar 27, 2012. 03:56 PM | 9 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    Further research indicates a flaw in the Goldmoney system. Apparently, you do NOT own a piece of a specified bar. But, you do own, in common with other investors, a specified number of ounces in a collection of bars that are titled to the names of the owners. The system is not a particularly good one, in my opinion, and is clearly inferior to true allocated storage, although it may save on costs. They do state that, if you want, you can somehow register the bars in your name, or, I assume, in the name of several investors with specified interests.

    In the Morgan Stanley Smith Barney scheme, the bars are not clearly titled in the name of the investors, and are not immune from the claims of creditors. The stored metal appears to be a general asset of the brokerage firm. Thus, unless MSSB changes the terms of the deal, investors will end up as unsecured creditors should Morgan Stanley ever become insolvent from losing big on a derivatives deal, or go bankrupt for some other reason.
    Mar 24, 2012. 02:46 PM | 3 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    I could be wrong, because I am not deeply familiar with Goldmoney. I don't endorse or not endorse their services. However, my general understanding is that Goldmoney provides a specifically described and defined interest in 400 ounce banker's bars. You may not own the entire bar, but you and others do own a particular bar. If they are not doing that, they should be.

    Based upon the description, it appears that whatever bars will be kept, in the Morgan Stanley scheme, will be titled in the name of Morgan Stanley Smith Barney, itself, while they are being stored, and not in the name of customers. If they change their policies, and put a guarantee that the physical metals will be bought, and titled in the name of customers, the scheme would be dramatically improved.

    But, right now, the Smith Barney arrangement appears to allow for hypothecation to derivatives counter-parties. The company website does not even guarantee that the metal will be in the vault at all, nor does it identify any bar, big or small, that will be owned by you partially or in its entirety.

    Furthermore, Smith Barney represents that it is selling 1 ounce bars and coins, as well as other small denominations. Goldmoney makes clear that all gold will be held as partial interests in 400 ounce banker's bars. Since Smith Barney is selling small bars and coins, there is absolutely no reason not to identify them, put them in a specific part of the vault, and hold them in your name.
    Mar 24, 2012. 02:23 PM | 2 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    Oh, yes, one more important point comes out of early 2009. Precious metals prices started to shoot up in January, even as the stock market was collapsing. Even as a 35% or so deflation occurred in the stock market in a few months, and before any hint of QE, metals prices were rising fast. And, that, in spite of the fact that the paper exchanges were still in existence, busily issuing paper claims in a ratio of about 100 to 1 against physical collateral!
    Mar 19, 2012. 04:44 PM | 2 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    Yes. If you are trading metals on the market, buying GLD< SLV, SIVR, et. al., you must accept what the market makers do. I am pointing out that, however, that in the event of a complete implosion scenario actually playing out, there will be no more exchange.

    It is also important to note that the market makers in the paper markets are not immune to what happens in the physical market. It is interesting to note that even as the trade I described was growing larger, intentionally or unintentionally, a stop was placed upon the increasingly lucrative business of buying on and selling off the exchange. The occurrence of a subsequent big rise in the "spot" price in early 2009 caused premiums in early 2009 to fall in proportion with the rise in the "spot" price.

    One may speculate that this could have had something to do with the fact that silver mining companies were trying to get in on that trade, also, after a few month. One actually opened its own retail division, to sell at a higher price, to end users and investors and avoid the bullion banks. Right after that, the price shot up.

    Mar 19, 2012. 04:18 PM | 1 Like Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]

    You are seeing things solely from the viewpoint of the stock market, and exchange-traded items. The real economy has nothing to do with the markets these days, which are driven by liquidity. The stock market was declining because banks were selling desperately seeking to raise cash. They had foolishly taken on assets that had suddenly become worthless and were trying to pay their bills. Banks were selling "gold" even more vigorously than stocks, at least until early 2009, when the situation reversed. But it was actually paper, not real gold being sold. This paper exists in a 100 to 1 or greater ratio to the real thing.

    It was very difficult to obtain physical tonnage of gold and silver at that time. The demand for physical metals shot up dramatically during 2008-2009, all over the world. If you think this didn't happen, I am not sure where you were during the time period. It is not intellectually honest or dishonest, but simply a historical fact. Very large premiums were being paid for physical gold and silver, far above what was being paid by paper traders at COMEX. It was profitable to buy at COMEX, take physical delivery, melt and pour the bars into smaller formats, and sell them.

    In fact, I know of at least one person who was buying at COMEX every month, sending the bars to a private Mint, where he had a fabrication deal, and selling 100 ounce bars for a 50% profit within days. The profit came from the premium of physical metal over the paper claims to it that existed during that period of time. While theoretical 1,000 ounce bar paper silver contracts were trading hands at a notional $9 per ounce at COMEX, 100 ounce bars were being sold for $16 + in coin shops, on Ebay, etc. all over the world. Even after fabrication costs, the trade was profitable, because bank selling caused futures prices to disconnect with the real world.

    When and if COMEX & NYMEX & LBMA disappear, and they would disappear if the big banks and Fed collapse, the only market is the physical one. Price will be set there. It won't be possible to trade SLV, SIVR, GLD, or COMEX gold, silver, etc. Everything will trade off such exchanges, and at prices that account for the current 100 to 1 paper to physical ratio,

    All that said, as I have noted, while I accept that total systemic collapse is a real possibility, the likelihood is that, over the long term, there will simply be a huge amount of financial repression and money printing. Either way, however, the precious metals will rise to many multiples of where they are now, though by different paths. The long term financial repression pathway will see periodic declines and temporary rallies in the Federal Reserve Note, all of which may be very interesting to short-term traders, but are basically irrelevant to long term investors.
    Mar 19, 2012. 03:41 PM | 2 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    They were knocked down because of the existence of a derivatives market. In its absence, the several months, during which they declined would not have happened. Physical buying demand was booming during the same period of time that heavy paper selling was happening at the futures exchanges. Take the futures exchanges out of the picture, as in systemic failure, and gold and silver prices would go up in proportion to increased physical buying demand. With discredited derivatives markets, banks could not hope to raise money by "selling" paper gold. Paper gold would have no value at all, even as the real thing skyrocketed in price.

    All that being said, the most likely scenario is the continued process of money printing and financial repression by the Fed, at least for the next 4 -10 years, with a gradual loss of credibility, even as gold, silver and platinum enter Tier 1 asset status, and banks stock up on enough precious metals. The Fed will probably be phased out slowly, rather than spectacularly collapsing, but, before that happens, and before the US Note replaces the Federal Reserve Note, so many FRNs are going to be printed that all the precious metals will rise much higher than they are now. Then, the price will probably deflate, for a while, but we are far from that point. The eventual deflation of the price of gold may be from, let's say $12,000 per ounce, down to $4,000 per ounce, by 2018, just to pick a point in time randomly.

    That being said, it does not stop a lot of people from buying gold because they believe in the sudden collapse scenario. And, with sudden collapse, the issue of whether or not Morgan Stanley would stay in business is very important to a person storing gold in an unallocated storage scheme. So, that is the reason I mention the issue in the article, not because I am predicting that scenario will unfold. My discussion of it is academic, and, to some extent, I am playing "devil's advocate", but it is one possible scenario, and cannot be ruled out. Personally, I hope things do not pan out that way.
    Mar 19, 2012. 01:47 PM | 4 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    Debt destruction is always an incredibly deflationary event. That's why the price of gold, silver, et. al. has been soaring since the Financial Crisis began. When denominated in currencies that maintain legitimacy, such as gold and other precious metals, the natural currencies, the end of the Fed Ponzi scheme is going to be incredibly deflationary. But, it will be hyper-inflationary, when viewed and denominated in terms of currencies printed by entities which, in that time period, will be in the dying phase (a/k/a Federal Reserve, probably the ECB, et. al.).
    Mar 19, 2012. 12:50 PM | 4 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    We can go back and forth in discussing theoretical future scenarios and reach no conclusion. In a theoretical "end of Ponzi scheme" scenario, a severe deflationary step is possible. It would happen, however, only if the monetary system came under severe stress but didn't entirely collapse.

    But, as you have said many times, events are not linear. Just because something happened in the past, doesn't mean the same thing will happen in the future. The next implosion is not going to be one bank going down, and stressing the system. It will be the triggering of derivatives obligations, probably, bringing down all the banks simultaneously, with the Fed going down with them, along with COMEX, NYMEX and LBMA. The only market for gold will be the physical market, which boomed throughout the debt destruction caused by the implosion of Lehman in 2008. In fact, premiums for physical silver went so high that you generally needed to pay in the high teens per ounce, at that time, for physical silver, even when silver was trading for $9 per ounce.

    But, in the end-of-Ponzi, there will no longer be a derivatives market, so nothing will exist that can restrain precious metals prices. No one will be trying to sell their gold, silver and platinum "positions" cheap, because no one will be selling anything at all. You won't be able to sell on COMEX, because it will cease to exist, because its biggest clearing members will have gone belly up.

    To understand what happens with total systemic implosion, as opposed to a Lehman-like scenario, it is more instructive to look at the Euro Crisis, prior to the LTROs. People were beginning to believe that the Euro would cease to exist. That was leading them to sell off the Euro and Euro debt. The Euro was depreciating in buying power very quickly, even in the midst of the heavy-debasement policies of the Federal Reserve. This was leading to higher inflation in the Euro-zone, even in the midst of massive debt destruction. All that happened even though the Euro was not likely to end for a decade at minimum.

    This is where Mr. Prechter errs. He assumes that banks will fail, but the system will stay intact. The logical result is deflation and a rise in the purchasing power of the Federal Reserve Note. But, that is not likely to happen. The system, itself, will fail and that means the Federal Reserve Note loses the faith of those who use it because it is a fiat currency, anchored only to the credibility of the Federal Reserve.

    Immediately before the removal of FRNs from circulation, the Fed, as outlined previously, will be forced to do one more act. It will have to print trillions of new dollars to fund the government's FDIC guarantees. The flood of new Federal Reserve Note dollars will be used to buy tangible goods, including houses etc. Or, they will want to get rid of the old currency by turning it in to the US Treasury in exchange for the new US Note dollars.

    This is a vastly different scenario than one that emphasizes deflation. If there is a deflationary episode, it is likely to be very short. But, events could easily proceed directly to the hyper-inflationary scenario, depending on how quickly confidence in the Federal Reserve disappears.
    Mar 19, 2012. 08:08 AM | 4 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    One further thought. The way to sum it up is that in the theoretical deflation scenario, it is assumed that the banks fail, while the Fed continues to exist as before, as a perfectly credible institution, perhaps with different policies. But, that cannot happen. Deflation of the type foreseen by Prechter can only happen in a gold standard world, where faith in the currency is not anchored to a discredited institution, but to gold.

    In the theoretical scenario outlined above, however, both the banks and the Fed fail together. That is a hyper-inflationary scenario, at least in terms of fiat cash backed by the credibility of the institution that is failing.

    The latter scenario is more likely than the former. If the banks fail, insolvency law provide first priority over all bank assets to derivatives counter parties. Since the net derivatives obligations are many multiples of the actual bank assets, that means nothing will be left for the FDIC to use to repay depositors. That, in turn, means that, to maintain its full faith and credit" guarantee, the USA must issue six or seven trillion worth of new treasuries just to pay off the depositors of the "too-big-to-fail" banks. Then, another 10 trillion or so for all the other smaller banks that will fail as a result. There will be no one to buy these except the Federal Reserve, which will be forced to print federal reserve notes.

    This forced printing process, after all the voluntary printing processes that will have already occurred by then, will surely "break the camel's back". It will surely lead to extreme anger at a highly discredited Federal Reserve, and, subsequently, complete closure and restoration of a Treasury issued "US Note", backed by gold.

    Or, in the alternative, even if it didn't lead to closure of the Fed, the $16-17 trillion extra federal reserve notes are going to be floating in the monetary base, all issued by a highly discredited organization, the Federal Reserve. The recipients are going to try to get rid of them as quickly as possible, buying gold and other tangible assets, at whatever price is asked.
    Mar 18, 2012. 12:42 PM | 7 Likes Like |Link to Comment
  • Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk [View article]
    I do not make a value-judgment. But, people buy gold in fear of a discredited Federal Reserve. Their purpose is defeated by counter-party risk. Whether they will profit or lose money from buying gold, as opposed to keeping money in the form of cash Federal Reserve Notes, is another related, but separate question.

    But, it is an interesting question. So, let us consider the total breakdown situation. I believe that holders of gold will be in a much better position than holders of Federal Reserve Note dollars, when the end comes. If and when the Federal Reserve is discredited, a cascade of dollar selling will occur. This is especially true at the point when the Fed is on the verge of being closed down by Congress. At any rate, it will no longer be able to prop up "too-big-to-fail" banks. Those banks, being very dependent upon the Fed, will fail.

    The nation, being bankrupt itself by that time (except for its gold hoard) will behave much as Rome once did during the Italic civil war in 146 BC. It will concentrate on survival. Congress will not be in the mood to, nor will it have the financial resources to backstop bank obligations. Nor, will anyone really care if they do, because credibility, which is the single most important driving force behind the monetary system, will have been lost. So, the TBTF banks will default, most significantly on their tens of trillions worth of net derivatives.

    LBMA, COMEX and NYMEX, in the absence of their most powerful clearing members, will all go down with the banks. The derivatives market for gold will end. It is significant to note that, even as massive gold and silver selling was happening in late 2008, on derivatives markets all over the world, sales of physical gold in the real market were booming like never before. But, after the futures and OTC markets close, the only gold market left is the physical market. Remember, the TBTF banks have finally failed, and no one is going to trust derivatives after that.

    It is always a mistake for a driver to concentrate attention too much on the rear view mirror. He must be aware of what is ahead of the car, or he will crash. So, it is with money. The upcoming implosion that the Fed, ECB, et. al. are leading us to will be very different than the failure of Lehman Brothers. To heighten that difference, of course, will be the 100 to 1 ratio between derivatives and physical collateral in the precious metals.

    The derivatives to collateral ratio implodes after the exchanges, and the OTC market, are no longer viewed as credible places to trade. During the failure of Lehman, American TBTF banks were owed tens of billions by hapless fools around the world who had bought derivatives and other assets, and didn't have enough dollars to service those assets anymore. They went around scrounging the world for dollars, lifting demand, and causing the exchange value of the currency to temporarily rise a large amount.

    But, in the theoretical final implosion of the Fed Ponzi scheme, the entire structure of the derivatives market will fail, not just one bank. Meanwhile, China, Russia, the oil exporters, etc. will continue on their current path, trying to deal in either gold, their own currencies, or claims upon US gold (ie: the US Note dollars) rather than in the Federal Reserve Note dollar. Several years will probably pass between now and the implosion least late 2014 or later, and as the years pass, these nations are going to wean themselves more and more off the dollar.

    When Lehman went down, the Fed had extremely high levels of credibility, and didn't go down with it. But, when the Fed itself goes down, the Federal Reserve Note dollar, its obligation, goes down with it. The price of physical precious metals will soar exponentially, in terms of Federal Reserve Notes and all other old currencies, because no one will trust those currencies. In this scenario, gold soars into the stratosphere even if everything else is wracked by deflation. But, since the dollar has become non-credible, deflation in the dollar-world cannot happen no matter how much debt destruction occurs.

    Destruction is normally deflationary, but just like many things in nature, when a chemical phase change occurs, a thing can change its fundamental properties. If debt destruction is partial, and people scramble to try to pay back their bills, the value of whatever they are scrambling for goes up, and prices denominated in that currency go down. That is deflation. But, when debt destruction is complete and utter, the entire system becomes non-credible. No one scrambles to find money to repay bills anymore. They simply don't pay. And, no one wants their money anymore for any new things that are sold, because the money is viewed as non-credible, and, therefore, worthless.

    Financial institutions and people will not desperately try to find FRN dollars to pay their bills, in a total breakdown situation in which the Fed failed. This is very unlike the situation that occurred during the implosion of Lehman Brothers. No one will be propping up the value of the FRN dollar. Real money is going to be demanded for real goods and services, not Federal Reserve Note dollars, Euros, or other discredited currencies.

    Now, let us assume that Congress is smart enough to quickly replace the discredited FRN with a new type of dollar, as I am sure it will be. Once the old "US Note" is reincarnated, it will replace the Federal Reserve Note. To gain credibility, the US gold reserve must come into play as some sort of backing for the new currency. So, the US Notes will replace the old dollar at the ratio equal to the amount of the US gold reserve divided by the number of physical Federal Reserve Notes then in circulation. And, the FRN will be taken out of circulation.

    In terms of Federal Reserve Notes, in this scenario, gold must rise to a minimum of the $12,000 range, although the fear factor means that it will probably rise to several times that, and this is assuming no more printing between now and then. This would, perhaps, happen even if, at the same time, gold sells for $35 per ounce, when paid for in US Notes. So, you can have theoretical "deflation" in the nominal value of US Note dollars, while having incredible levels of inflation in the by then discredited former money.

    We can only deal in terms of federal reserve notes, right now. Or, Euros, pounds, etc. which are all currencies that are doomed to deep devaluation. Remember that, in 1538, a British pound was actually worth a pound of sterling silver. And, the measuring pound unit was comprised of more troy ounces than it is today. The US dollar has been debased to the point of retaining only about 1.7% of its 1913 gold value.

    The US Note dollar has not been reincarnated yet. If it was in existence, maybe it would be wise to buy them. But, now, people can only turn to metals with monetary tendencies, like gold, silver, platinum, etc. to preserve assets if they believe that the final implosion of the American centric world financial system is going to be accompanied by the closure of the Federal Reserve.

    Whether this future does unfold, or does not, the expectation that it will unfold is one of the driving forces behind gold buying. Thus, when a firm fails to segregate assets, thereby depriving its clients of the legal right to recover their physical gold, it defeats the essential purpose for which they are doing business with that company.
    Mar 18, 2012. 11:30 AM | 12 Likes Like |Link to Comment
  • QE, Inflation, And The Case For Precious Metals [View article]

    You appear to believe that everything involves taking positions and trading on exchanges. Thank heaven this is not true. If your world vision were eve to become a reality, no one would do the honest work that is necessary for society to run. The wheels of industry would come to a screeching halt. You've illustrated the unfortunate fact that many people involved in finance are narrow minded, and poorly educated. You have little to no knowledge of history and/or human affairs.

    You claim that "Holders of dollars are responsible for the future exchange value effects of their trading decisions and commodity positions." That is nonsense. You have blinders on. Money is not a commodity. Faith in its value is the basic unit upon which the entire economy is built. It represents the value of a man's work in the past, placed into storage so that he can be confident that he can use it to get repaid for the goods and services he gives today by another member(s) of society, some time in the future of his choice.

    In realizing your vision, regrettably, you have a strong ally in the form of the Federal Reserve. However, as more and more Main Street citizens are forced into involuntary speculation by the actions of that institution in debasing the currency, they will come with an inherent disadvantage. Specialists on Wall Street, with strong ties to structurally corrupt central banks, will always win the game. These new mostly unwilling participants, who came to the gambling table kicking and screaming, will always lose.

    That may be the world you would like to see, but not many would agree, and I doubt you'd enjoy living there if it came fully into fruition. Indeed, your envisioned world would not last very long. History tells us that such tyrannies always come to a violent end. On the contrary, those systems that facilitate an open economic system in which the plumber, carpet installer, carpenter, engineer, auto repairman, dental tech, factory worker and every other person who does productive work, can concentrate on doing his job prosper.

    Our society will not survive and prosper if everyone is forced into speculation by the power of the Federal Reserve. On the contrary, people have an inherent right to preserve the value of their work. That right is being impaired now, by the complicated scheme of a banking elite, that seeks to transfer the value of their money to itself in order to compensate for its own mistakes.

    The Founding Fathers recognized the corrupting power of paper money early on. The inferiority of paper money was discussed, at length, during the Constitutional Convention. That is why our Founding Fathers wrote, into our Constitution, that no state shall make anything but gold and silver legal tender. What they didn't anticipate was a huge error a hundred years later, when the Supreme Court, in 1870, reversed a prior ruling prohibiting the Federal government from issuing paper money. The Court carved an exception for the Federal government. That eventually led to the formation of the Federal Reserve, one of the worst institutions the United States has ever suffered. Even Bernanke admitted that the Fed caused the Great Depression, and most economists today, other than him, believe that it also was a primary cause for the real estate crash that catalyzed the current Financial Crisis.

    Once the mistake that the Supreme Court made, back in 1870, is cured by appropriate clarifications and amendments, America will return to the proper path set forth by our Founding Fathers.
    Mar 16, 2012. 10:48 AM | 7 Likes Like |Link to Comment
  • QE, Inflation, And The Case For Precious Metals [View article]

    You argue that the Federal Reserve is not "stealing" when it engages in quantitative easing, even though its behavior artificially devalues existing money, and shifts the value of money from one group to another. You claim that this is so because the Fed is engaging in alleged "banking" or "finance" and its acts are under color of US law.

    Extending your reasoning, Hitler never "murdered" millions of innocent people in Europe, because, under Nazi-era German law, he was absolute "Leader", with a legal right to operate death camps and gas chambers.

    Obviously, one cannot compare the Federal Reserve to the Nazi Reich, nor would any reasonable person compare Bernanke to Hitler. However, the vast exaggeration I have just engaged in is an academic exercise that suffices to illustrate the intellectual bankruptcy of your argument and reasoning process.
    Mar 14, 2012. 10:14 AM | 5 Likes Like |Link to Comment
  • QE, Inflation, And The Case For Precious Metals [View article]

    Are you really unable to discern the difference between 1982 and now? Let's consider the realities, rather than fear-mongering about 30 years ago...

    NOW: A promise by the Fed to keep the Fed funds rate at zero to 0.25% until 2014.
    THEN: A 10% federal funds rate.

    NOW: Continuing hints that more "accommodation" (meaning money printing) may occur depending on the state of the economy.
    THEN: Constriction of the money supply under Paul Volcker.

    NOW: About $1.3 trillion in ECB LTROs, the likelihood of more ECB bond-buying and money printing to help Euro-sovereigns sell their bonds, and intense physical gold and silver buying in Europe.
    THEN: Constriction of the money supply in the UK, Germany, France and Italy.

    NOW: The rise of China and India, both voracious gold consumers.
    THEN: A US centric world, where gold price movements were solely based on what happened in the USA.

    Wake up to the world as it is, not as it once was.
    Mar 14, 2012. 07:44 AM | 5 Likes Like |Link to Comment