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Robert Kientz  

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  • Bernanke's Absurd Proposal to Eliminate Reserve Requirements [View article]
    Jeff,

    To answer the debt question. When the government creates a debt, it is purchased by the Fed (who has no money to do so). Then the check is not cashed by Congress, but deposited into a Fed bank. Then congress writes their bills of of it.

    That money hits the fractional reserve system, and multiplies.

    The government HAS to issue debt to print money, they are related.

    So now, why do they have to issue debt and get more money? Because they have to pay off the past debt, or risk default. If they default, the jig is up. Which would be actually a good thing instead of building the bubble further, but they don't see it that way...

    The default of debt would end the power of congress to spend as they wish, and end the ability of banks to harness their money engine to the American middle class through inflation as a hidden tax.

    It does not matter if American angers the Chinese, in the mind of the government. At least the anger of the Chinese matters less than becoming insolvent. American government thinks they can turn to others to buy their debt to create more fake money.

    First, it will be other nations. But as they figure the game out (which is the phase we are currently in), the US government has to find another patsy.

    That would be the American people. Which is why you hear about 'automated' national savings plans, where the government wants to take 5% of your pay off the top and put it into a government sponsored program.

    Why would they do this? To pay their debt so they can continue to print more money. Of course!

    Eventually, they won't be able to take themiddle class monies anymore. The entire central banking system is a Ponzi scheme, and will have to end eventually.

    In this case, I think, the ending will be more dramatic than depressions of yester years. At least last time we had the dollar pegged to gold. Now there is not regulator on the engine, and when she overheats and blows, it will be nuclear.

    By the way other governments run on the same Keynesian philosophy. (Except Panama - check out their money scheme .. it's much sounder than ours). China has to play along because they are doing the same thing we are. So is Japan, Europe, UK, etc etc ..

    The winners and losers will depend on a few things. One, which countries are richest in natural resources? China has lots of metals, as does South Africa and Russia. Australia does too, and has better financials to begin with than most everyone else.

    The US has a lot of natural gas and education talent. UK? Europe?

    We will all hit depression, and begin anew, and then the actual commodities will determine the starting points of barter/economic production. The relative demand and supply of each will determine growth rates.

    Ingenuity and innovation will be multipliers. Could the US again rise to the top? Perhaps, but it could also be someone else too. This, from where ever you sit, will be an interesting chapter in World History.
    Mar 25, 2010. 03:16 PM | Likes Like |Link to Comment
  • Bernanke's Absurd Proposal to Eliminate Reserve Requirements [View article]
    Agree, and I think the fact he had to make constant changes showed he wasn't as shrewd as many thought.

    Keynes was a great Orator. Those seem to do well in America .. see Obama. Good orators win people over on emotion, not analysis.

    But his written works are pretty easy to tear apart, based upon time to analyze them and test them in application (see our current state of affairs).
    Mar 25, 2010. 03:01 PM | Likes Like |Link to Comment
  • Two Keynes Quotes Everyone Should See [View article]
    Page 335 - 339 on the paradoxes. It will take me longer to find the other information.
    Mar 25, 2010. 02:57 PM | 1 Like Like |Link to Comment
  • Two Keynes Quotes Everyone Should See [View article]
    There is another quote elsewhere in the book, before he died, that states he did not agree with the current application of his ideas.

    I don't think Keynes ever intended to repudiate his philosophy, just that he would question how it was being applied in current circumstances.

    In other words, Keynes though himself smarter than everyone else. Time has proven him wrong. Hunter Lewis made him look like a boobie. And a modern mercantilist.

    I think Keynes saw some of the flaws in his ideas, and intended to write a new book to 'fix them', but never got around to it before he died. Read farther along and you'll find it.

    By the way Keynes did switch positions as often as it suited him to make his point. He did this in his theory book, often trying to 'clarify' previous points to fit his current argument.

    Check out the end of the Hunter Lewis books with all of the paradoxes Lewis found in Keynes theory.
    Mar 25, 2010. 02:54 PM | 1 Like Like |Link to Comment
  • U.S. Natural Gas Hockey Stick: The Technology-Driven Energy Boom [View article]
    There have been incidents in other areas, drilled for longer than the Barnett and Haynesville in TX, where ground water was polluted. In addition, the use of dangerous chemicals and how that dirty water is disposted of after use in drilling.

    So while yes I agree with natural gas drilling, and am counting on natural gas to replace oil for our immediate main transportation fuel, I also look at the environmental issue as important.

    We will have a balance such that our energy is cheap enough to compete economically. I think the US is lucky in that they have enough shale gas to last for 100 years, at current consumption. Many countries do not have this.

    But we have to be careful not to poison our MOST PRECIOUS natural resources, which is the water we use and the air we breathe. So some discussion needs to be made on the topic and some regulation of fraccing chemicals needs to take place to protect our important resources.
    Mar 25, 2010. 02:34 PM | Likes Like |Link to Comment
  • Why to Expect Higher Treasury Yields [View article]
    You are tying treasury yields to bullish economic outcomes? I have two questions.

    1) First, with consumer confidence again moving down, and most informed traders bearish on government debt, where do you think this optimism comes from?

    2) Second, what underlying economic indicators give you hope of a rise in GDP? Would it be stubborn unemployment, escalating debt, the ballooning money supply (related directly to debt if you know how this works), or the fact that people are defaulting on their credit cards and homes (and not paying them off) which is the only reason household debt is actually moving down?

    Really ?

    The stock market is in a bubble because we have excess money supply, not because fundamentals are any good. It's a classic bubble. If we didn't issue so much debt, and therefore multiply that debt money in the fractional reserve system, we wouldn't have a bubbled stock or real estate market.

    US Debt would be more attactive because, you know, the government might be able to actually pay if off and not inflating it away.

    Does the fact that China and Japan, our two largest debt holders, are in a race to deleverage not concern your outlook on treasuries?

    The yields are high because they have to be to attract investors who are less and less believing in the 'full faith and credit' of the US government.
    Mar 25, 2010. 02:25 PM | 7 Likes Like |Link to Comment
  • Wednesday's Worries: Wall Street, Greece and China [View article]
    Gold is king. I just went to the local dealer and purchased another $5k yesterday evening. Had to rush to pick up my daughter quickly to make it on time.

    If the velocity of money picks up anytime soon, toilet paper will be worth more than cash.
    Mar 25, 2010. 09:47 AM | 1 Like Like |Link to Comment
  • Wednesday's Worries: Wall Street, Greece and China [View article]
    The only issue I have with your Greece comment is how they get bailed out. If Germany does it, then I agree. If the IMF does it, I disagree. The United States Federal Reserve, for all intents and purposes, IS the IMF. We may need to print more money to bail out other countries, through the IMF, as they start to fall like dominoes.
    Mar 25, 2010. 09:45 AM | 2 Likes Like |Link to Comment
  • Contrarian Trade of the Decade: The U.S. Dollar [View article]
    If you look at whitehouse.gov budget, they estimated the infinate time horizon cost of medicare to be $101 trillion. (Probably using calculus) they figured the limit of the unfunded debt, given fairly robust GDP growth (not shrinkage), to arrive at this number. So, you can double your $50 trillion number for medicare.
    Mar 23, 2010. 05:54 PM | Likes Like |Link to Comment
  • Contrarian Trade of the Decade: The U.S. Dollar [View article]
    Gold isn't an investment as much as it is a better currency. So I don't think most true gold investors are in it for the return. They want preservation of capital. A better bond ?
    Mar 23, 2010. 05:41 PM | 1 Like Like |Link to Comment
  • Contrarian Trade of the Decade: The U.S. Dollar [View article]
    If you look at PPI, raw materials costs are going up for manufacturers at a 9 clip for January. Also energy is running in the 5s for Jan reporting, which is probably indirectly affecting the price of everything.

    I, too, also see inflation at the grocery store. It is un-mistakeable. But the BEA doesn't see rapidly inflating food prices, which is interesting.

    I have started tracking grocery costs just to see where they are going. But as an example, I purchased diapers 4mos ago at 13.97 for 92, and now I get 82 for 14.97. That's inflation, bub. Other products are rising as well, including produce which has been higher than average for food for several years, in my area.
    Mar 23, 2010. 05:33 PM | 1 Like Like |Link to Comment
  • Bernanke's Absurd Proposal to Eliminate Reserve Requirements [View article]
    Keynes started out as an Austrian, and ended up as a Mercantilist.

    Then near the end of his life, he intended to write a book saying his mercantilist doctrine may not actually work ... but alas he died before he could write it.
    Mar 22, 2010. 11:08 AM | Likes Like |Link to Comment
  • Two Keynes Quotes Everyone Should See [View article]
    Read Hunter Lewis, "Where Keynes Went Wrong"

    Available on Amazon

    In letters to friends, Keynes did question his own prescription for the economy because he thought the governments carried it to far. He was going to write a book on the subject, but his health turned south and he died before he could write it. Most of the people around Keynes at the time of his death knew of his misgivings.

    In addition, a younger Keynes was more of an Austrian economist. He changed with General Theory, and then was on the virge of changing again.

    This is not exactly a ringing endorsement for the convictions behind his life work.
    Mar 22, 2010. 10:27 AM | 1 Like Like |Link to Comment
  • Financial Markets, Sovereign Entities and Entropy [View article]
    I agree, and this is the way it has been in the past.
    Mar 18, 2010. 10:13 AM | Likes Like |Link to Comment
  • U.S. Natural Gas Hockey Stick: The Technology-Driven Energy Boom [View article]
    pjcpjc,

    I am sorry you dismiss my comments so quickly. I am not pro or anti hydraulic fracturing in my research. In fact, I own stock in Chesapeake and am long oil and gas ETFs. I am betting on natural gas big time as a natural resource.

    My site was dedicated to providing as much factual material possible for the consumer to find in one area. Especially those like myself who own land on top of various shale formations.

    I currently have 2 leases outstanding on private property to gas companies in the Barnett Shale area. I have also been involved in local gas education and negotiations through grass roots neighborhood associations promoting gas leasing in our area. You can see on my site several good articles discussing local economic impact of gas drilling and potentiall windfall to mineral owners.

    On my wiki, you will see several environmental concerns discussed, including the following:

    Methane Gas
    Water Usage and Recycling
    Chemical Contamination
    Naturally Occuring Radioactive Material (NORM)
    Noise Pollution and Traffic

    This research was done from quite a few authoratative resources, including Texas A&M University Real Estate Center, State of Pennsylvania Department of Environmental Protection, the Environmental Protection Agency, Wilkes University Center for Environmental Quality, Fort Worth Star Telegram, Argonne National Laboratory, Texas Water Development Board, Marketwatch.com, and others.

    Your post did not address all of the environmental concerns that are currently being discussed, and I urge people to educate themselves and address their congressman as the US government seems rather interested in regulating hydraulic fracturing due to environmental concerns.

    (In other words if you make an uneducated argument for hydraulic fracturing, it won't convince anyone and may make the oppositions viewpoint stronger).
    Mar 3, 2010. 01:51 PM | 2 Likes Like |Link to Comment
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