Celcius

Why Value Investors Should Avoid Gold

Saj, if gold is not a sound preservation of wealth than every bank and central bank on the planet would have sold all of their gold holdings.

A sound investor will, like a bank, keep a percentage of their wealth in gold bullion. It is the base asset in the financial pyramid relative to risk.

The Next Major Crisis Brewing

It's time to end the socialist experiment with wealth redistribution. Shutdown Medicare, Medicaid, Social Security, the FED, and dramatically shrink the size of government. Let private enterprise fill the gap without subsidies, since subsidies only distort the economy.

And, lastly remove property taxes, since we are no longer an agrarian society that generates income from our land.

And, finally tax income at 20% and wealth (assets) at 1% at a flat rate rate with no exemptions! This should produce more than enough treasury revenue to run the government. Especially, the wealth tax, since it would counteract the macro-economic tendency to concentrate 90% of the wealth in the hands of 1% of the population.

Why There Will Be No Recovery and Markets Will Trend Lower

On Sep 29 07:08 AM bluesky123 wrote:

"China's population has a savings rate of 40%. " &
"In China the consumer provides for their own health care, retirement etc."

This is exactly what we need here. Get the government out of healthcare and retirement and our savings rate will dramatically increase.

Our government should also consider making the interest gains from CD's tax free. This would provide the savings for commercial bank lending. It's a win/win incentive.

U.S. Quantitative Easing Has Just Begun

The US has more than enough qualified workers within our citizenry. This is a game of wage economics using an immigration law to undercut domestic wage earners. I am in the tech industry which is under assault from lower wage foreign workers who have lower qualifications that are replacing higher qualified US workers. My brother who has worked at Microsoft has had to train multiple Indian workers to perform his job. And, if you refuse to train them then Microsoft puts you on a blacklist and will not hire you for any other projects. I have worked with H-1b employees who have told me that their Indian friends have blatantly lied on their qualifications to land very high paying jobs. One of them was hired by Fannie Mae for a six figure salary with no experience in the job role he was hired.

If US companies want to hire foreign workers then they should outsource them to India or China. At least these wages are recorded in the Current Account Balance and will cause currency appreciation in the outsourcing country. H-1b's undercut this process by suppressing local wages indefinitely. Outsourcing wage costs would rise with the currency appreciation. Especially, as the dollar depreciates against other major currencies making domestic wages more competitive.


On Sep 23 08:21 PM inthemoney wrote:

> > If Obama wants to create jobs for US citizens he needs to permanently
> end the H-1B, H-2B, etc.. foreign worker programs. This would significantly
> reduce unemployment for US CITIZENS. There is no excuse as to why
> these programs should remain with 16+% unemployment (full & part-time).
> Corporate America has used these foreign worker programs to undercut
> US salaries, and fatten executive salaries.
>
> If you ban H1Bs these jobs will simply be exported as well because
> there are simply not enough qualified americans in certain areas.
> We need to get more H1Bs , they are educated hardworking people who
> will be spending their money here in the US, buying the houses in
> the US, they don't need our tax dollar support like illegal immigrants,
> they pay SSN even though they are never going to use it unless they
> eventually become citizens.
> In short, you are barking at a wrong tree.

U.S. Quantitative Easing Has Just Begun

I am not blaming the H-1b workers. And, yes they are very hard working people. I am advocating that we can resolve a major part of our unemployment problem by eliminating laws that increase the available domestic pool of workers. It is a supply side issue to a demand problem.

In regards to the economic meltdown there are several major factors that have contributed: greed, repeal of the Glass-Steagal Act, Greenspan's creation of cyclical bubbles via low interest rates, the shadow banking system (GS & crew), CDO's, SIV's, CDS's, ratings agencies, and the failure of our government regulatory agency's.


On Sep 23 05:55 PM cash wrote:

> >>If Obama wants to create jobs for US citizens he needs to permanently
> end the H-1B, H-2B, etc.. foreign worker programs.
>
> That is it! Blame the unemployment on these earnest, hard-working,
> educated and under paid folks! Not the banksters, house flipping
> spend-thrifts and the union thugs that pocketed billions at the expense
> of tax payers. Of course not, the banksters own the treasury &
> fed, the unions own the politicians. They are untouchable.

U.S. Quantitative Easing Has Just Begun

If Obama wants to create jobs for US citizens he needs to permanently end the H-1B, H-2B, etc.. foreign worker programs. This would significantly reduce unemployment for US CITIZENS. There is no excuse as to why these programs should remain with 16+% unemployment (full & part-time). Corporate America has used these foreign worker programs to undercut US salaries, and fatten executive salaries.

Corporate law should also require cost cutting employee pay cuts to start from the top down at the same proportional rate as all workers. If labor gets a haircut, then start at the top! The same with layoff's, top down.

Get Long the U.S. Dollar

I agree with your dollar position. We still have a significant amount of capital destruction coming with the pending Option Arm, Alt-A, and CRE loans. IMO in the next 6 month's we will have another banking crisis. As the banks sell their repossessed homes and CRE inventories, they are going to have to realize the losses on their books at market prices vs. mark-to-magic. This will put significant pressure on their reserve requirements further limiting lending and expansion of the commercial money supply. I don't think we will see any inflation until after all the repossessed real estate inventories are sold - sometime in 2013 to 2014.

Housing Bottom - Oh Really?

Let's not forget that Fannie Mae, Freddie Mac, and FHA are now providing 90% of all home loans. If you remove government lending out of the equation, then housing prices would collapse. The government is putting a false floor underneath housing prices. And, if these new home purchases default, then the tax payer picks up the bill. The government is buying time, but the collapse will still come.

Obama Faces Decision Time on Trade

"A study by a Rutgers University economist suggests that higher tire prices due to tariffs could cost US consumers $600 million to $700 million a year, lower national income by between $250 million and $300 million a year, and cost 25,000 American jobs in sales, marketing, and distribution. Even if they worked, tariffs would cost $300,000 per manufacturing job protected, and destroy 12 times as many jobs as they save."

What about the economic value of the US tire manufacturers salaries? The income tax revenue, the money multiplier of their bank deposits, the income spent within their local economies, the velocity of the money within their local economy, and the tax multiplier as the money is spent within the local economy. The fuel savings to ship the tires locally vs. across the pacific. What is the environmental cost to global warming of the additional CO2 produced from the Chinese tire factory? What is the cost of the Chinese pollution: air, water, and soil to the global economy? Are the Chinese using prison labor to produce the tires? What is the local market purchasing power of the Chinese Yuan vs. the US dollar? And, if the Yuan is kept artificially low, then the sales of the Chinese made tires on the US market is actually dumping, since they are being sold artificially below their real market value in the US. What are the US health care costs due to the Chinese pollution created? What is US insurance cost of the global warming due to more extreme weather patterns? I can go on...

The sad thing is that when most financial comparisons are done only the labor costs are examined and compared. There are significant financial losses to the local economy from imports. Especially, when they are not in balance with exports. What we need is a rising tariff on all imports by country until imports and exports are in balance. Currency value manipulation has prevented free trade with our trade partners for decades, and what we need is fair trade: where both countries can prosper and build wealth.

EUR / USD Parked in Neutral and Going Nowhere

IMO we are in a monetary deflationary stage of the crisis with more capital destruction than the QE capital inflows. This should keep the EUR/USD range bound if the US economy gracefully bottoms. But once the bottom is found and monetary base rapidly expands due to QE lookout inflation or hyperinflation over the long-term.

A fear of US economic collapse due to violent economic events, bank failures, could reach a tipping point that sends everyone rushing out of the USD to other asset classes like gold, euro's, commodities, etc...

Either way violent of graceful I think investors will leave the dollar over the long-term.

Money Supply: The Myth of Hyperinflation

Wikipedia has a great reference on QE and ex nihilo (printing money)
en.wikipedia.org/wiki/...
The act of ex nihilo disgusts me, since they are creating something of value and purchasing something of value - US treasuries or toxic assets. The toxic assets are probably worthless, but ultimately they have an asset. At some point though they will have to reverse the process and remove the excess capital from the market. I wonder how much the FED earns from the ex nihilo QE process.

Money Supply: The Myth of Hyperinflation

I think the audit is more about the who then the how...


On Sep 03 06:55 PM CC_Gold wrote:

> Celcius -
> That's why the Non-Federal Reserve doesn't want to audited. They
> claim it's a state secret.

Money Supply: The Myth of Hyperinflation

Bricki, I am with you 100%... I think the inflation fears are way overblown. IMO Deflation will rule the day until the economy bottoms and shows some consistent multi-quarter growth.

Money Supply: The Myth of Hyperinflation

Thanks CC_Gold, but step 2 defies double entry accounting. In step 2, the commercial banks purchase a US treasury note with a face value at maturity and the US government gets spending cash. No new money is created because the debit and credit cancel each other out.

Also, how is the FED expanding its balance sheet. What cash are they using to purchase the assets?

Money Supply: The Myth of Hyperinflation

I liked this article, but I don't think anyone has yet written an article that clearly and explicitly explains the FED's current strategy at an accounting transactional level to explain how all the commercial lending and toxic asset purchases appear on the FED's balance sheet. Specifically, where are they getting the cash to purchase all the toxic assets? And, is this just an accounting trick. And if so, please explain how it is done?