The Gold Standard Gets Another Look [View article]
You, your wife, your children and grandchildren are enslaved to the Federal Reserve right now. You just don't know it. So don't be so smug, Mr. Rhianni32.
Buffett Agrees - Doing Nothing Is The Path To Investment Success [View article]
For the contrarian opinion:
Price appreciation of dividend stocks barely keeps up with the real rate of inflation over the long term. Growth stocks do somewhat better, but even so, most of the profit comes from inflation, not real growth. Most people who have made a fortune have done so by investing in real estate. Another significant group of people made a fortune by starting their own business. In both cases, leverage was an important component to their success.
Invest in dividend stocks after you have made a fortune elsewhere and now need to earn an income from your excess capital.
The criminal banking establishment has clearly accomplished the largest asset collection operation since the great depression, and the Fed aided and abetted those criminals. Not surprising, since they are hirelings of those same criminals. The fed and the federal government has effectively sold our grandchildren into slavery to these criminals.
The fed should be abolished. TBTF banks should be broken up and laws restricting banks to single states only should be re-passed. The worst offenders among the CEOs should be jailed. A new non-debt based monetary system without a fractional reserve feature should be instituted.
The Gold Standard Gets Another Look [View article]
The article you read is just plain wrong. There is nothing illegal about suppliers extending credit to retailers for short term notes, and there's nothing illegal about selling short term notes for cash if necessary, and greenbacks can be used to pay off short term notes just as readily as gold coins.
The problems with the banking system are:
1) A central bank owned by the Rothschilds is not a benign entity. It is at least as likely to manipulate the money supply for the profit of its owners as the government is to manipulate the money supply for political favors.
2) A fractional reserve banking system is inherently fraudulent. If non-banks did what banks do, they would be put in jail.
3) A national government should not be paying interest on the currency in circulation. Coinage is a governmental function, not a banking function.
4) A debt-based monetary system is inherently unstable. Currency must represent value, not debt.
5) Inflation is inherently as bad as deflation. It discourages saving and therefore capital formation. A capitalistic system cannot function without capital formation.
When you compare the ratio of PBOC gold reserves versus the renminbi it has printed to other central banks gold reserves to their currency units, it becomes obvious why the Chinese are producing gold as fast as they can. For me, that's the anomaly.
My understanding is that the Imperial Chinese gold reserves left the country with the Nationalist government during the revolution so the PBOC was left with nothing. Some say the gold ended up being loaned to the US and has been misappropriated by the Fed and others. It's a fascinating story. But the point is that the PBOC now has to work overtime to create a reasonable gold reserve in order for the renminbi to stay competitive. They're buying as much gold as they can internally to avoid pushing the international price of gold too high. They don't want to be left with only worthless euros and dollars in their vault.
The saying is "cutting off one's nose to spite their face" not "cutting off one's nose despite their face."
I agree with the assessment of this article, and disagree with elsrmp56 that you must be living on another planet, or in 5th grade.
IBM made much the same mistake when they brought out the original PC. It used ASCII instead of EBCDIC, used x86 instead of the 360 instruction set, and used an outsourced operating system and CPU chip. The PC wrecked havoc on the mainframe market because they hadn't thought through how the new device would integrate into their new product line. It also gave birth to two major competitors, Microsoft and Intel.
Microsoft didn't consider its customer base (its OEM manufacturers) when it decided to develop its own hardware platform. Instead it brought out its own hardware that will have to compete on price, in other words it is suddenly in a slim margin commodity business. Alienated hardware manufacturers are more likely to turn to Android for an OS for their competitive systems, which means that Microsoft just cannibalized the operating system sales it would have had. Plus it risks alienating end users who don't want their desktop computing device to act like a smartphone, they want it to act like the Windows XP or Windows 7 system they know and love. Microsoft also did not take into account that people don't necessarily want to run Office on a dinky screen with no real keyboard or mouse, and they don't want to have to clean a large touchscreen daily or hourly to remove smudge marks.
An Argument For Gold 'Value' Of $1100 [View article]
You may think liabilities are not money, but your banker disagrees. The entire monetary structure is currently built on debt. Therefore your assumption is false.
Strange as it may seem, the world does not revolve around Facebook! And investing is not about getting in on the next IPO before everybody else.
The late, lamented, small investor is no more because he was middle class, and the middle class itself is shrinking at an alarming rate, therefore the middle class investor is too. He never invested in IPOs, so IPOs are completely irrelevant to him.
Facebook was offered at a ridiculous P/E ratio, so it should not have been of any surprise to anyone that there weren't enough chumps around to drink that particular kool-aid offering.
The Case Against The Case Against Gold [View article]
Every argument that can be made against gold as an investment can be equally made against stocks, bonds, other commodities and currencies, often with even more truth. Stocks, bonds and currencies are all intrinsically worthless. They are only worth what the next buyer is willing to pay, assuming there is a next buyer. That the next buyer generally insists upon being paid to hold stocks and bonds only emphasizes how intrinsically worthless they really are.
At least for the rare, useful and pretty gold metal there is a long history of willing buyers, a history far longer than most markets have even been in existence. Call it barbarian if you will, that only emphasizes its seniority among investible and tradeable commodities. As long as central banks continue to hold gold in their portfolios and count it an asset, it holds pride of place as THE currency of eternal value, invalidating ALL arguments to the contrary.
More to the point,as long as the Fed is so bold as to announce to the world that it intends to debase the US dollar for the indefinite future, without any pretense of restraint, I see every reason to prefer commodities in general, and the historical safe haven among them, gold.
The charts and numbers you pulled out aren't nearly as scary as I thought they would be. You lumped in the Social Security system (which has a trust fund backing it) with the general budget items. Take Social Security off the table and interest and defense becomes a much larger piece of the pie.
Defense spending can and should be cut drastically to reflect the reality that we really have no viable enemies on which to use such a gargantuan force.
Interest can't be reduced without first reducing our appetite for borrowing. It must be paid, and no accounting shenanigans can reduce its impact. Every penny of interest puts pressure on the rest of the budget. I was expecting to see a much higher percentage of the budget currently going to interest. Again, leave out obligations not funded by the general fund and I think we would better see the true extent of the problem.
Social Security is not completely funded, but it is an issue that can be dealt with separately. We need to see the impact of non-SS social programs on the budget. Is that excessive given the current financial crisis? I don't know because you've conflated it with non-general fund accounts.
An Argument For Gold 'Value' Of $1100 [View article]
I don't care how you use statistics to try to argue the price of gold lower, it's not coming down significantly from here. The Fed won't allow it. Not that that is their objective, but they are doing everything in their power to monetize $16T of debt, and doing a d*mn fine job of it. In the process they are giving a lot of investors like me the bucks to bid up the yellow metal as a vote against irresponsibility. That's really all you need to know, but in addition there are a lot of central banks around the world, who if only for diversification's sake, have decided it is prudent to hold additional gold at these prices in preference to dollars.
I should add that technically we can't possibly be in a bubble at this point since we aren't even at a historic high, and the price has been trending lower for most of the month.
Is China The Biggest Malinvestment Case Of All Time? [View article]
A government runs out of money when it has nothing left of value to trade in the international marketplace. Since China has a trade surplus, that is not an issue with China. It has an abundance of foreign currency, commodities, and manufactured goods with which to trade.
A government can also run out of credit to float its sovereign debt. Again, I don't see this being an issue with China, unlike the PIIGS. China is a net lender at this time, not a borrower. China has an immense taxing power with which to repay its loans when it does decide to borrow.
rrdaniel's point is that governments carrying a heavy debt burden inevitably must reduce services and increase taxes, thus leading to social unrest, eventually of the violent sort.
Your hypothetical is totally stupid. Don't you realize that 1613 is before the American revolution, and well before any government in America larger than a single colony? (Virginia, the first colony, was permanently founded only in 1607.) How could dollars even be defined in such a time-frame. Get real! The average life of a fiat currency (i.e. without devaluations) is 40 years, I'm told. Gold is forever.
The main reason to like gold is precisely why Buffet and Allen don't like it. It just sits there. It is its own reason for being, its own unassailable intrinsic value. Gold is one of the few portable assets that not only holds its value over time, but has no counter-party risk. It depends upon no one to repay any debt, ever. Fiat currencies officially depend upon the underlying economy producing goods and services tradeable for said currency. They are otherwise entirely worthless. No one ever collects currency for the portraiture .
Gold can never be dramatically devalued by a sudden economic shift, especially one caused by a central bank. If you ever want to sell it, you can always find a willing buyer at a reasonable price. If you buy a collectible artifact made of high-assay gold (like a rare gold coin in mint condition) you will also get the benefits of artistic merit, execution quality and artifact rarity in addition to material rarity. And these valuations will be largely uncorrelated to economic conditions. Assets uncorrelated to others are what seekingalpha is all about.
If there is no reason to buy and hold gold, then the central banks of the world are "irrationally exuberant" in their gold holdings. In point of fact, they still hold large caches of gold which means that despite official rhetoric to the contrary, fiat currencies depend in large part upon gold holdings for their credibility. That alone is good enough reason to hold gold in your own portfolio.
U.S. Oil And Gas Royalty Trusts: Good Buys For Disciplined Investors [View article]
I'm long PER. I expect that eventually inflation and the next oil crisis will push the price of oil higher, again. So I'm not very worried that I would have to take a loss if I sold today. Plus, the distributions are quite healthy (over 10%). I know some of that represents a return of capital, but even so, as this article states, 7.5% is earnings.
Buyers should know that (PER) trades quite independently of the price of oil and the S&P. I would rate its volatility low. With the market's frequent downdrafts, that's been a good thing so far.
The Gold Standard Gets Another Look [View article]
Buffett Agrees - Doing Nothing Is The Path To Investment Success [View article]
Price appreciation of dividend stocks barely keeps up with the real rate of inflation over the long term. Growth stocks do somewhat better, but even so, most of the profit comes from inflation, not real growth. Most people who have made a fortune have done so by investing in real estate. Another significant group of people made a fortune by starting their own business. In both cases, leverage was an important component to their success.
Invest in dividend stocks after you have made a fortune elsewhere and now need to earn an income from your excess capital.
The Fed Putting America In A Hole [View article]
The fed should be abolished. TBTF banks should be broken up and laws restricting banks to single states only should be re-passed. The worst offenders among the CEOs should be jailed. A new non-debt based monetary system without a fractional reserve feature should be instituted.
Intel: There's Certainly A Bull Case [View article]
The Gold Standard Gets Another Look [View article]
The problems with the banking system are:
1) A central bank owned by the Rothschilds is not a benign entity. It is at least as likely to manipulate the money supply for the profit of its owners as the government is to manipulate the money supply for political favors.
2) A fractional reserve banking system is inherently fraudulent. If non-banks did what banks do, they would be put in jail.
3) A national government should not be paying interest on the currency in circulation. Coinage is a governmental function, not a banking function.
4) A debt-based monetary system is inherently unstable. Currency must represent value, not debt.
5) Inflation is inherently as bad as deflation. It discourages saving and therefore capital formation. A capitalistic system cannot function without capital formation.
China And Gold: A Puzzling Anomaly [View article]
My understanding is that the Imperial Chinese gold reserves left the country with the Nationalist government during the revolution so the PBOC was left with nothing. Some say the gold ended up being loaned to the US and has been misappropriated by the Fed and others. It's a fascinating story. But the point is that the PBOC now has to work overtime to create a reasonable gold reserve in order for the renminbi to stay competitive. They're buying as much gold as they can internally to avoid pushing the international price of gold too high. They don't want to be left with only worthless euros and dollars in their vault.
The Upcoming Microsoft Train Wreck [View article]
I agree with the assessment of this article, and disagree with elsrmp56 that you must be living on another planet, or in 5th grade.
IBM made much the same mistake when they brought out the original PC. It used ASCII instead of EBCDIC, used x86 instead of the 360 instruction set, and used an outsourced operating system and CPU chip. The PC wrecked havoc on the mainframe market because they hadn't thought through how the new device would integrate into their new product line. It also gave birth to two major competitors, Microsoft and Intel.
Microsoft didn't consider its customer base (its OEM manufacturers) when it decided to develop its own hardware platform. Instead it brought out its own hardware that will have to compete on price, in other words it is suddenly in a slim margin commodity business. Alienated hardware manufacturers are more likely to turn to Android for an OS for their competitive systems, which means that Microsoft just cannibalized the operating system sales it would have had. Plus it risks alienating end users who don't want their desktop computing device to act like a smartphone, they want it to act like the Windows XP or Windows 7 system they know and love. Microsoft also did not take into account that people don't necessarily want to run Office on a dinky screen with no real keyboard or mouse, and they don't want to have to clean a large touchscreen daily or hourly to remove smudge marks.
An Argument For Gold 'Value' Of $1100 [View article]
Why Small Investors Are Gone [View article]
The late, lamented, small investor is no more because he was middle class, and the middle class itself is shrinking at an alarming rate, therefore the middle class investor is too. He never invested in IPOs, so IPOs are completely irrelevant to him.
Facebook was offered at a ridiculous P/E ratio, so it should not have been of any surprise to anyone that there weren't enough chumps around to drink that particular kool-aid offering.
The Case Against The Case Against Gold [View article]
At least for the rare, useful and pretty gold metal there is a long history of willing buyers, a history far longer than most markets have even been in existence. Call it barbarian if you will, that only emphasizes its seniority among investible and tradeable commodities. As long as central banks continue to hold gold in their portfolios and count it an asset, it holds pride of place as THE currency of eternal value, invalidating ALL arguments to the contrary.
More to the point,as long as the Fed is so bold as to announce to the world that it intends to debase the US dollar for the indefinite future, without any pretense of restraint, I see every reason to prefer commodities in general, and the historical safe haven among them, gold.
The 3 Scariest Government Charts [View article]
Defense spending can and should be cut drastically to reflect the reality that we really have no viable enemies on which to use such a gargantuan force.
Interest can't be reduced without first reducing our appetite for borrowing. It must be paid, and no accounting shenanigans can reduce its impact. Every penny of interest puts pressure on the rest of the budget. I was expecting to see a much higher percentage of the budget currently going to interest. Again, leave out obligations not funded by the general fund and I think we would better see the true extent of the problem.
Social Security is not completely funded, but it is an issue that can be dealt with separately. We need to see the impact of non-SS social programs on the budget. Is that excessive given the current financial crisis? I don't know because you've conflated it with non-general fund accounts.
An Argument For Gold 'Value' Of $1100 [View article]
I should add that technically we can't possibly be in a bubble at this point since we aren't even at a historic high, and the price has been trending lower for most of the month.
Is China The Biggest Malinvestment Case Of All Time? [View article]
A government can also run out of credit to float its sovereign debt. Again, I don't see this being an issue with China, unlike the PIIGS. China is a net lender at this time, not a borrower. China has an immense taxing power with which to repay its loans when it does decide to borrow.
rrdaniel's point is that governments carrying a heavy debt burden inevitably must reduce services and increase taxes, thus leading to social unrest, eventually of the violent sort.
End Of An Era For Gold Investors [View article]
The main reason to like gold is precisely why Buffet and Allen don't like it. It just sits there. It is its own reason for being, its own unassailable intrinsic value. Gold is one of the few portable assets that not only holds its value over time, but has no counter-party risk. It depends upon no one to repay any debt, ever. Fiat currencies officially depend upon the underlying economy producing goods and services tradeable for said currency. They are otherwise entirely worthless. No one ever collects currency for the portraiture .
Gold can never be dramatically devalued by a sudden economic shift, especially one caused by a central bank. If you ever want to sell it, you can always find a willing buyer at a reasonable price. If you buy a collectible artifact made of high-assay gold (like a rare gold coin in mint condition) you will also get the benefits of artistic merit, execution quality and artifact rarity in addition to material rarity. And these valuations will be largely uncorrelated to economic conditions. Assets uncorrelated to others are what seekingalpha is all about.
If there is no reason to buy and hold gold, then the central banks of the world are "irrationally exuberant" in their gold holdings. In point of fact, they still hold large caches of gold which means that despite official rhetoric to the contrary, fiat currencies depend in large part upon gold holdings for their credibility. That alone is good enough reason to hold gold in your own portfolio.
U.S. Oil And Gas Royalty Trusts: Good Buys For Disciplined Investors [View article]
Buyers should know that (PER) trades quite independently of the price of oil and the S&P. I would rate its volatility low. With the market's frequent downdrafts, that's been a good thing so far.