DenisL

Why the SDRs Are DOA

Wonderfully clear article!
There is a great deal of potential mischief possible in these statements:
"There are two ways holders of SDRs can obtain the underlying currencies in exchange. First, members can arrange a bilateral voluntary agreement. Second, according to the IMF, it can designate members with strong external positions (current account surpluses) to purchase the SDRs from members with weak external positions. This second method of obtaining SDRs is more suggestive, and does not appear to have ever been used."

How about if the Federal Reserve starts buying these up with printed dollars....or another country does? This is a way for the Fed to give money to the UK to save it from bankruptcy, and hide/obscure that one is doing it.

Interesting times.

Are You Kidding? CBO's Laughable TARP Claims

They are government bureaucratrs hired by politicians.

Their lips are moving ( or in this case their fingers are typing) THEREFORE they are lying.

What else is new?

Buy gold and forget about this nonsense.
Oh and I guess you could keep 3 months worth of food on hand, buy a shotgun to defend it (AND a LOT of shotgun shells) AND pray!

Gold's Not the Best Investment in Inflationary Times

Of course, Noriel Roubini thinks there will be
STAGdeFLATION!!
I guess this is because M2 and M3 are collapsing.

Question:
So what happens when these measures of money supply are going down AND M1 and the adjusted monetary base (ABM) are going up?

Answer:
Interesting times.

Way too interesting for me.
So I will buy some more gold until the "experts" sort this out.
Or better yet the market does.

Gold's Not the Best Investment in Inflationary Times

12345,
That is my thinking exactly.
We can not raise rates to Volcker's 20% levels to prevent inflation without risking default........
so we must get mass inflation.

The adjusted monetary base has doubled in the last few months. That is the money measurement that correlates best with inflation. Please remember that there is a 6-12 month lag between changes in the AMB or other money supply measurements and price increases. Inflation by DEFINITION is an increase in the money supply. Price inflation lags that money supply increase.

I do not see the alternative unless the Fed requires banks to increase their reserve holdings to higher than their current levels, which is possible but it would then throttle lending and business activity.

Alternatively, the Fed could issue Federal Bills, Notes and Bonds as suggested in a trial balloon recently. This would allow the Federal Reserve to pay high interest rates, soak up excess dollars, and compete with the Treasury's Bills, Notes and Bonds. This would be OK because the Fed would buy the government debt at low interest rates (keeping US government interest payments low) but the Fed would pay everyone else high rates. This would be blatantly inflationary long term but if they took advantage of the lag time it might work short term.

In any case, buy some gold. You are going to need it. This is NOT going to end well with a $50 trillion world GDP and $1.3 quadrillion worth of world debt obligations. The popping bubble is going to be a might loud. We ain't heard anything yet!

Investing in Basic Needs: Hedging Your Expenses

All good ideas.
Just hold cash a while longer.
This thing is going down a lot more, then the stocks above will be even better buys.

Gold Poised to Move Higher

On Dec 28 10:09 AM otbricki wrote:
> Sooner or later people are going to realize that value of gold is
> psychological only, and our past obsession with this metal will be
> regarded as a historical curiosity.

Yep.
And believing in paper money is also psychological. Our fellow humans CAN print as much as they want AND DO.

Physical gold can not be inflated.
EVERY country in the world is inflating its paper money right now.
Does that make you feel safe?
They are in a race to the bottom to see who can inflate the most and help their trade balance the most.

Does THIS help your psychology?

Look the choice of what to believe in for money is arbitrary. No system is perfect.

I trust the free market. I do not trust my fellow men, when they are politicians needing to print more money for war and for government programs to "help" our fellow man and to "help" get them re-elected!

Monetary policy, particularly inflation, has likely destroyed more countries and killed more people than war has, especially when you consider that monetary policies have led to many wars.

Let the market choose.

Not Your Grandfather's Great Depression

Schiff said we are dead meat IF we keep allowing the government to help.
If we keep the government out and let things go bankrupt, we will hurt short term but be OK. If we allow government to help we are in for an inflationary holocaust lasting a decade likely longer.
Their cure is worse than the disease.
Bush is NOW HOOVER, and Obama or McCain (it matters not because both voted for the $700 billion+ bailout) will be FDR.
We are screwed but we did not have to be.

Buy gold and pray. Lots and lots of gold AND lots and lots of prayers.

Batten Down the Hatches: Economic Forecast

Until we resolve who is responsible for and capable of paying for $1.3 quadrillion in derivatives and credit, it will NOT be over. And if we keep putting on $700 billion band aides to deal with symptoms rather than causes it will not end. $1 trillion is less than a thousandth of what is needed. I do not want to be in the US if we deflate our currency by a factor of one thousand.
If we destroy the dollar, we will wish it will end but it will take generations.
Let the big banks go broke like in 1907. Let the free market work.
Two years of agony and then we are through it. Or two decades of misery to reach the same point AND no lessons will have been learned.
It is OK to go broke in a capitalist society, even if you are a rich member of the power establishment.

Avoid Broken Buck Syndrome with Treasuries Money Market Funds

jse17
Boy are you dreaming!?!? I wish you were right but.....
The only one who understood what is happening was Ron Paul.

Austrian economics predicted this economic crisis well in advance.
I am not sure if McCain or Obama ever took an economics class.
And I will wager you that Bernanke and Paulsen, AND any other people McCain/Obama may hire to help them, took the WRONG economic classes.
We havea minimum of two more years of economic bad news with the current wrong-headed policies in place. If they keep doing the same as they have been, it will be two more decades!
Buy gold and pray.

The Bedrock Case for the Return of the Gold Bull

Gold is a disaster hedge...not an investment.
It is for times of war, hyperinflation, banks failing and governments going crazy with spending. It is NOT an inflation hedge unless it is hyperinflation.

I still think we are in for some VERY rough economic water (at least another $1 trillion dollar loss in the housing markets) AND the powers that be will need a WAR to distract the masses from the economic problems/fallout. Before then we WILL see some price deflation. Hang on to your gold if you can not time this. Sell your gold if YOU can predict WHEN the next disaster will hit. In ANY case with the current folks in charge it is silly NOT to have at least 10% of your assets in gold at ALL times, more if you think, as I do, that disaster is looming. Deflation in housing prices WILL not help the heavily leveraged financial markets AND no one is predicting a rise in housing prices until late 2009 or early 2010, the housing bubble is still popping even if there is inflation in other areas. I think that one could sell gold now IF you believe we will NOT be in a WAR in the next year. AND then buy it back again once the gold bubble has popped. I do not have that kind of nerve. I will hold on to gold AND sleep better at night.

Gold Price Plunges: Might as Well Hold Stocks

Old conservative investors always believed that one should Hold at least 10% of assets in gold....always for unforeseen crises. I think that is prudent nowadays. This 10% is a minimum until we see what the monetary base/M1 money supply do next month. The monetary base had a huge jump this month giving a hint of future inflation. At some point the Fed MUST inflate. Government spending had gone nuts even BEFORE the housing price decline. The continuing decline at least until late 2009 underpins WAY too many overleveraged debt instruments held by banks that we are not even thinking about yet....but we will! The presumption now is that M1 inflation will kick in after next year. Then gold will be a great buy, but if they are inflating the base now (at it sure looks like they just might be), THEN one might want to hold a LOT more than 10% of assets in gold. Gold is GREAT to hold in economic crises (like we are in now) and in war. War with Iran is possible, not likely if we are sane, but if we go to war and we will then get $400+ oil, then one would be very happy to be holding gold. VERY happy.
So own some gold now....and buy a LOT more if it goes lower. It will go back up, the question is when. Just keep an eye on the warmongers, Bush/Cheney/McCain and the spend us into oblivion guy, Obama. The M1/monetary base and declining housing prices will dictate the timing...or a war or something other crisis. Everthing is kind of brittle and jittery and skittish right now. Just my opinion. Take it for what it is worth.

Fannie and Freddie Rescued at Last

I fail to see why in the long run that this is good news. It sure sounds like a guarantee of high inflation in the future. Neither the Government or Fannie/Fred have shown ANY signs of fiscal discipline. To quote a modern economic pundit: "We are all freaking doomed!" That statement likely warrants several exclamation points!!!

The Fed is Deflating: 10 Reasons Why

Wonderful article because it raises so many questions!
Thanks.
Just curious. Most of our arguments about money and the economy are based on the idea that M1 is conceptually like gold, and that the value of M1 is not subject to manipulation or fudging like CPI statistics.
Lately I have read that gold itself is subject to manipulation because there may not be the gold in the National vaults around the world that we are told. Everything including the old economists back in the 1800s is based on a mathematical model that is true only if it predicts the real world. My problem is: "The real world adapts to and thus changes all economic models. Is M1 really like gold? And is gold nowadays like gold was in the old days. This idea that the economic world changes when we think about it (I am thinking about what he is thinking about what everyone else is thinking everyone else is thinking, if you know what I mean) gives me a headache when trying to decide what to do economically to protect my family."

Get Out of Commodities - Barron's

Jersey:
"This is absolute insanity.......Half of the the "experts" are screaming to get out of commodities as quickly as you can while the other half is screaming to get into commodities as quickly as you can."

And you know what is really scary. Both halves are LIKELY correct. I too am bewildered.

Just hang on to your job and to your gold. You may not get rich but you will eat and you will NOT go broke. You could get rich. Maybe not. But at least you will not be broke.

Maybe have BOTH gold and have cash FDIC insured. I have a friend who just bought a 4 year CD at 5% interest. He may be nuts but who knows, maybe I am to think that he is.

This is just a wild time right now. Who knows what the Plunge Protection Team is going to do? You tell me how to plan for NEW regulations, an unknown President in January, both inflation & deflation at the SAME time, and a creative Fed Reserve Chair who likes to print lots of money but does not seem to affect inflation or the M1 money supply. Something is whacky. Are the formulas fudged? It is all very wild and crazy AND unpredictable.

A war in Iran would provide a lot of excuses for a lot of people right now AND make many folks even richer. Hang on it is going to get exciting. You ain't seen nuthin yet.

CPI: 2008 vs. 1980

It may be OK to pick a few specific individual stocks that you believe will do well ( I have some pharmaceutical favorites) and buck the trend but for now buying any stock index funds is not logical. They are gong down a lot more. The interest rate cut is not likely to do much tomorrow. As Greenspan has said, gold is well known as a long term protection against inflation and as a safe haven.
Currently with REAL US inflation at nearly 10% it is foolish to TODAY have money in T-bills, US stock funds (some foreign funds, as well as currencies, are still doing relatively GREAT), bonds or CDs. Buy gold. The price of gold has more than tripled since 2000, Up 30% in 2007 and up more than 15% just this year alone. The nuts in DC have still not understood that we can not inflate our way out of the economic problems that are being caused BY the inflation of currencies world wide.

When Bernanke and the gang get serious about inflation like Reagan and Volcker did in the early eighties and RAISE interest rates 3 successive times, THEN it will be time to sell your gold. I would NOT hold my breath. They just do not get it. If you buy gold you will have some capital left to help rebuild America and the world when the dust settles on the remaining economic rubble.