Whippet

Gold's getting all the attention, but ratio charts show its sisters silver and platinum have been outperforming.

There has only been one direction for silver to move in this ratio for a long time now. Even a protracted "crisis" scenario will only see a temporary spike in the ratio - all of the fundamentals are on the side of silver in the long run. Gold is not consumed; silver is and has been at a tremendous rate since the turn of the 19th century- ironically at the same time the 15.5:1 crust ratio was violated and has never been restored.
Once the world wakes up and realizes that silver is AS SCARCE or even SCARCER than gold and has MORE, ENTRENCHED industrial applications, we'll see a ratio around 5:1.

A Brief History of Goldman Sachs Heads

Christian Scientists are like the Holy Roman Empire- which was neither Holy nor Roman nor an Empire...


On Nov 04 03:30 PM History Buff 24/7 wrote:

> If REAL Christian Scientists were in charge of the Fed, at least
> we wouldn't be spending tens of trillions of dollars trying to keep
> Wall Street intact in its present form.

Marc Faber: ‘Gold a Bargain Compared to S&P500′

No; they will raise the cost of SOME of the inputs (fuel, wages, new ventures) proportionately while others will stay the same (existing long term contracts, owned real estate). When you leverage the margin you see Very Nice returns...


On Nov 02 10:12 AM Doc 224899 wrote:

> If gold goes to $2000, what do you think happens to the dollar, or
> the yuan, or the ruble? Most scenarios that would bring gold to $2000
> are going to raise the costs of gold production proportionately.
>
>
> So here's the homework assignment: figure out what global market
> conditions raise the price of gold but raise the costs of gold production
> proportionately less, that would also permit Americans to profit
> from investing in international gold miner stocks (forget American
> gold miners - too many regulations and lawyers and environmentalist
> plaintiffs).
>
> My guess is that such a scenario would involve OPEC or China/India/Brazil/Russia
> replacing the dollar as the trading currency for commodities.

Marc Faber: ‘Gold a Bargain Compared to S&P500′

Neither does the FRN. And what good is a 5% taxable dividend yield in a stagflationary environment??? And stagflation is the best you can hope for.


On Nov 01 05:52 PM yblarrr wrote:

> You can't eat it. It doesn't get dividends.
>
> Just like stocks alot of you will be left at the top of the market
>
> wondering what happen.

After trading largely higher in the morning on a positive data dump, stocks spent the lunch hour headed straight for negative territory. At midday, the Dow -0.2% to 9,690. S&P 500 -0.3% to 1,033. Nasdaq -0.4% to 2,037. Crude +1.4%. Gold +1.7%.

Are we starting to see a long overdue de-coupling of commodities and equities? Stay tuned.

Paul Krugman says you need to read today's WSJ editorial "The Dollar Adrift" with an eye to the paper's long-term goldbugism: Focusing on currency stability over domestic recovery is a path to disaster.

Great- a second piece of evidence in the same day that the Nobel Prize committee is nothing but a bunch of tundra-dwelling Progressive brumhildes!

Yellowhoard- I thought you were putting this swine on the smoker! Did you run out of mesquite chips?

Can't wait to see the laundry list of NYT editorial-page gaffes. Just slap down another post hoc ergo procter hoc fallacy in the name of "economic science". The fashion designers, Broadway play actors and bums in need of toilet paper that make up 90% of his current readership can't pick up on that...

Despite representatives Ron Paul and Alan Grayson's entreaty to Sen. Chris Dodd to slow down Bernanke's reconfirmation as Fed chairman to determine whether he's "fit to serve," Dodd's expecting no roadblocks.

Paul wants to restore the Constitutional authority of Congress over the currency.
Grayson and Frank want to restore THEIR Constitutional authority over the currency.
Strange bedfellows, indeed.

Volcker Should Advocate VAT and Drop the Carbon Tax Recommendation

I love a VAT- it will enrage consumers even more than they already are. It's also a great whipping boy for the soon-to-be inflation apologists in Washington- "It's not inflation, it's the effects of the VAT trickling down. This is a GOOD THING for YOU, your CHILDREN, the PLANET, and the COUNTRY.

Hopefully, it will create more opportunities for a true barter trade underground. Consumers will find substitutes for manufactured goods, whether they be recycled, reused, rebuilt, or shop-made. Repairmen will have jobs again. We won't throw out our TVs because the part costs more than a new set.

Mostly, the fomenting of grassroots anger is what I'm rooting for in Washington these days. Utter rage by the serfs directed at their lords. When the government fears us, we will start to taste Liberty again (hat tip- TJ).

Beware Fortune Magazine's Gold Warning

Not to mention that the world's population has grown from 5 to 7 billion (40% increase), United States M3 has gone from $2 to $15 TRILLION (750% increase), and marketable gold supplies have FALLEN precipitously between 1980 and 2009. Central bank holdings have fallen dramatically. "Monetary" jewelry consumption has skyrocketed in the developing world.

Private gold owners are not selling. Western central banks/IMF are running out of gold to sell. The Chinese would buy more but would destroy their dollar holdings if they're too aggressive.


On Oct 08 09:43 AM Jeff Nielson wrote:

> Hi Chap08.
>
> For argument's sake, let's concede that the 1980 price was a "bubble"
> - instead of the new, REAL value for gold after the gold standard
> was abandoned.
>
> Even if we cut that price in half, gold STILL hasn't reached that
> level in REAL dollars - and its fundamentals are MUCH stronger today
> than in 1980. How much have the prices of everything else increased
> since then, 200%? 300%?
>
> Personally, I see that 1980 price as an accurate indicator of gold's
> wealth at that time - and what prompted a three-decade campaign of
> ruthless price-fixing.

New Taibbi Feud with Goldman

Always has been, always will be. McCain-Feingold, for instance. Can you imagine the obscenity that even "term limits" would lead to? The revolving doors would simply spin faster.

Nice article, John. This was my favorite line: "Taibbi maintains (in blog postings) that he believes that Goldman has deliberately attempted to confuse congressmen, conflating traditional short selling with naked short selling by selectively "cherry picking" data for their presentation."

I'm trying to figure out if it's easier for Goldman to trick the mental midgets on Capitol Hill or for the Roadrunner to trick Wile E. Coyote. It's a tough one.


On Oct 02 09:46 AM yellowhoard wrote:

> Be careful what you wish for D.
>
> Communication with congressmen is a double edged sword.
>
> The wealthy will always find ways to influence politicians.
>
> A gatekeeper on access would probably be used to silence the little
> guy.

Manufacturing: Will This Be a V-Shaped Recovery After All?

How dem numbaz lookin' now???

Macroeconomic Policy for a Stronger Recovery, Part 2

I completely agree with your comment, except for the fact that the dynamics of taxation are much different. The government spends over TWICE what it receives in taxes on a rolling monthly basis, and that was when times were good (in 2009, they're spending $4 for each dollar they collect.)

The stimulus we've had so far has been equivalent to giving Viagra to a eunuch and subsequently chastising him for not getting it on.


On Oct 01 07:43 AM markfl wrote:

> My argument would be that collecting taxes and then taking 12 months
> to inefficently have government spend it is a hopelessly sluggish
> stimulant. Something's going to have to be done with payroll taxes
> or we are headed for a lengthy jobless recovery. So far there have
> been powerful motives for businesses to structurally and permanently
> reduce their workforces by changing cost structures. Stimuli in place
> don't really scratch the surface of that.

Chrysler (FIATY.PK) September U.S. sales: -42.1% to 62,197, vs. estimate of -48.7%. Dodge brand -43% to 35,864 vehicles; Jeep brand -19% to 17,287; Chrysler brand -61% to 9,046. (PR)

Some new tagline suggestions:

"Chrysler- We'll treat you like our only customer."

"Chrysler- Our only waiting list is held by our creditors."

Michelle Girard: Recovery Ahead — With Jobs

You're right- we should all follow Nero's example. Let's hit the fiddle while the world is on fire.

You can't cure an economy with unwarranted optimism, either- even if you are a delusional hyper-Keynesian. And I would argue that pessimism CAN cure an economy-especially one that has been inundated with painkillers (government backstops), amphetamines (obscenely low interest rates, money printing, and unsustainable consumer tax cuts), and Valium (paying all debts forward one to three generations). We need to dry out, in the worst way.


On Sep 27 11:52 PM rick12345 wrote:

> Like a manic depressant on a downward binge, most of you are determined
> to live out your self fulfilling prophecy in despair and gloom while
> censuring anyone who would dare to offer an alternate or incongruent
> view. Just like you can't cure an alcoholic with alcohol, you cannot
> fix the economy with pessimism.

Why It's Time to Audit the Fed

Umm- no. Cycles cannot be broken- even before Pharoah's seven years of plenty and seven years of famine, cycles are part of life and economics. Free markets use cycles to clear out bad firms and redistribute capital to new entrepreneurs and successful firms. Cycles drive consumers to be risk-averse, to avoid credit, to see debt as the slave master it is, to save their hard-earned money. All of this counter-cyclical bull$hit is a pipe dream- it has not worked, and has only created systemic problems that jeopardize our very liberty.

Individual risk has been replaced with socialized risk- Social Security, Medicare, Pension Bailouts, FDIC. "Too-big-to-fail" status and the Greenspan Put first created a moral hazard epidemic; next, they will lead to Corporatism as the Government exerts both excessive regulation and outright ownership.

The Fed was the bastard offspring of an unholy union of Bankster Oligarchs and Progressive Elites. Daddy wanted the power of monetary control, Mommy wanted the promise of State security.


On Sep 27 10:25 PM THofler wrote:

> I'm sympathetic to most of these views. But Milton Friedman recognized
> that history is the economist's laboratory.
>
> A little history:
> 1807 - depression
> 1839 - depression. The longest &amp; deepest in U.S. history.<br/>1873
> - panic &amp; depression. The worst recorded by NBER.
>
> Then there were 14 more recessions and panics before the Great Depression
> occuring with an average frequency of every 4 years.
>
> The obvious conclusion is that human behaviour in combination with
> the simplest forms of free market capitalism is highly pro-cyclical
> and unstable. Right now, the Fed is the only significant counter-cyclical
> force in our economy. Now I'm sure that there are other hypothetical
> counter-cyclical systems that are superior to the current one. But
> this one, with all its warts, is a lot better than the previous era.
>
>
> Besides, are you really proposing junking the Fed and turning the
> whole economy over to the tender mercies of Pelosi, Reid, Frank,
> Dodd, &amp; Obama?