Geezer Bela in Exile

Is the Dollar Too Big to Fail?

I agree that the dollar will not fail dramatically and soon. Someone can keep it afloat by buying heavily into UUP and that drives up the dollar and down goes gold. Eventually though, we know how these capers turn out.

Appone: E Europe failed because they had central planning done by bureaucrats. Eurosocialists, on the other hand, are parasites that suck the vital juices of their country and people re-elect them to get the meager benefits.

jd151. The Bush deficits were nearing $200B when the accounting system was changed to make the banks appear insolvent (Sep, 15, 2008). The Bush deficits were less than 500B even with the bailouts, which Obama drove to 1.5T. Of this deficit, 800B is the slush fund where twice as much money (I use the term loosely) goes to Democrat districts as compared to Republican districts. There is no end in site for Obamanomics, as there was no end in site for the New Deal. Cap and Trade, Obamacare and the continually induced deflation is bankrupting the country.

Employement hit records under Bush and the econome started to cool only because of the increase in prices for oil. If it were not for the deflation, ....

The Truth About Goldman and AIG Becomes Clearer

American in Paris,

Thqanks for correcting me. The crooks were at Fannie Mae and they were Clinton appointees. AIG simply insured the mortgages written by Fannie Mae. The subprime fiasco, however, did originate with Bill Clinton.

The Truth About Goldman and AIG Becomes Clearer

Investigate Goldman-SUX and AIG? It will not happen. One Goldman executive collected for the Obama campaign and in an article, a new appointee wrote that he was told that if he wanted to work there, he had to contribute. AIG was already investigated and its Clinton-appointed execs had cooked the books. The Black Caucus ran to their defense. Their speeches are on YouTube.

What we need is not more ethics reform but more enforcement. But first, we need an impartial Media that will not cover up for perps, because they are Democrats. Republican crooks are exposed with fair regularity, but Democrats are allowed to slide.

I favor laissez faire economics. Just so everyone knows where I am coming from: laissez faire does not mean let them steal, cheat and do fraud. The one party control of the Media is the weak link in our system.

The attitude of bankers remind me of Sarah Palin's book: Going Rogue. She describes how the oil companies in Alaska came to believe that doing business meant that they would get their way every time. When her administration finished cleaning house, the oil industry came to see that the idea of doing business ethically was in fact in their interest. That is not the way the Obama regime works. These folks want to control the banking industry, not reform it. That leads to corruption and inefficiency. It's like Sparta and Athens all over again. Sparta concuered Athens. But, the Spartan generals became corrupted and Sparta's unique strength (based in its fascist sytem) began to wane. Between the lure of their radical ideology and the corrupting influence of big money, I BET ON BIG MONEY. The Obama regime has already been corrupted.

Matt Taibbi: Obama's Big Sellout

Some of you folks live in an alternate Universe where rhetoric bocomes fact. Have you forgottrn these facts that 1. Obama was the Attorney on record for ACORN as it sought (succesfully) to force CITIBANK to make the very toxic mortgages you now decry? 2.. that in 1993 McCain and others tried to rein in AIG and its faudulent practices (for which they were excoriated by members of the Black Caucus as being engaged in lynching of the AIG perps)? 3. that the economic crises was set off by changing the accounting system on 15, Sep, 2008 that declared certain mortgage assets valued zero? 4. that things aren't really getting better in spite the jeapardy to the dollar to finance the hair brain schemes of the regime?

Yeah, W sort of gone to sleep during the last two years of his Presidency as he and the GOP were under a tsunami of attacks. The banks were allowed to get bigger and bigger and were assured that if they screwed up, they would get bailed out. And the regulators and bankers scratched each others' backs. Why are you surprised? It's always like that.

The Socialism proposed by Obama will fail as Roosevelt failed to revive the economy. Not untill 'mark to market' was repealed and Roosevelt grudgingly agreed to stop his Munchausen by proxy policies in order to win the war did the country recover.

One final thought. Some of you rail against the injustices of Capitalism. But it works. Yeah, some people accumulate ill-gotten riches, but the system works. On the other hand, the so-called justice of Socialism is a failure. It never works. Not because the people running things are stupid, or make some accomodations like Obama, but because Socialism is against human nature.

Record Volumes in Gold Market Indicate a Gold Top

We have seen a number of things indicating that a correction is coming in gold price. That is not an indication of a top, just the opposite. Have gold prices continued with a new record each day - that might have meant we were near the top. That's the technical aspect.

The fundamentals are still in place as several posters pointed it out. The current crop of radicals infesting Washington DC suffers from a terminal case of hubris. They believe that by spending, printing money and public relations they can escape the usual consequences Socialism brings. It is precisely that attitude that precipitates disasters.

Gold Bruised by U.S. Jobs Claims

Financial reporters like to show that they are smart and attach an "explanation" as to why the market goes up or down. In reality, it is the amount of money being used to buy. More buyers, higher prices. But it sounds better if they say " better jobs data has caused gold to drop." The fact is that there was a tremendous rise in buying UUP in November.

geezerbinexile.blogspo...

This made the dollar rise. Since the dollar and gold move reciprocally, gold went down. Gold mining stocks, however, are holding up well and I would bet that gold sales are running high.

Investors are not stupid. They know that printing paper money will not revive the economy, nor will the paper money reduce the price of gold. I think the whole show is staged to convince the Senate that the economy will recover and it is safe to nationalize healthcare as well.

Is a Gold Correction Imminent?

Looks like someone is selling more paper gold again. Just like after the Dubai World announcement.

Is a Gold Correction Imminent?

The myth of contrarien investment fascinates me. Most people were dumping AIG and GM earlier this year. Were Contrarians wise to buy those stocks? NO. People are dumping dollars and buying gold. The reasons are obvious. Are contrarians right? NO. Will there be a 10% correction in gold price? OF COURSE, but when? A forty percent correction? Why? Will the Obama regime stop printing money? NO. Let's not fall for the double doomers.

The King Canute Economy: Governments' Futile Attempt to Stem the Tide

"Growth in US GDP can make debt less of a problem. "Transfer of wealth" is not the correct concept, "transfer of economic growth" is. "

You got that righ americaninc, except that govt spending must go down. But, there are a number of points (raised all across the board) over which one must express disagreement:
1. Economic freedom is not like smoke that diffuses across from the more to the less. It is a choice by a people and their leaders;
2. America's well-being was NOT due to people borrowing money on their house. We have real industry, real earnings;
3. The financial meltdown was artificially induced by changing the accounting rules;
4. Houses are NOT all insolvent;
5. The Obama regime is consciously trying to reduce America's wealth. And it does not want economic growth;
6. There are two social issues: abortion and gay marriage. A Republican stand on either should not be objectionable to the majority of Americans;

One final point. It is high time for the rest of the world to use market economics and build more wealth. But, if the Obama regime is allowed to wreck the dollar wealth transfer will be real. Also, I think it is premature to write off the United States. At one time, the Media touted Japan as the one that was going to overtake us. Then they chose government spending. Where is Japan now?

3 Reasons Not to Believe In Gold's Recent Rally

Can the dollar stage a rally? Yes, the govt can pressure the zomby banks to buy foreign currency then buy dollars. But, that's like trying to lift yourself out of mud by pulling on one leg. That leg would go higher but at the expense of the other leg sinking deeper. You can no more cheat the laws of economics than you can cheat Newton's laws.

3 Reasons Not to Believe In Gold's Recent Rally

There is a simple explanation as to why gold miners are suddenly lagging behind the gold price. When gold broke out of its wedge formation this September, my premier gold miner stock began to advance at 4-10 times the rate of the rally in gold. Now, the gold miner responds to rising gold prices at the same pace or less. I think that what is happening is that this is the way the gold miners are staging a correction. Also, gold prices rising made the value of gold in the ground rise fast, because it costs to mine the gold and for an exploration company the value of the gold is discounted due to the price of exploration and mining. At some point, the rise in the value of gold in the ground becomes the rise of the value of the gold sold in the market, so gold miners will lag previous performance and will merely respond to the price of gold.

As to the price of gold in dollars, there are more dollars but not significantly more gold. The US govt plans to add about $1.5T/yr more dollars and most will have to come out of the printing press. And that $1.5T deficit counts on a 3.5% annual growth and does not include the cost of Cap and Trade or ObamaCare.

Another factor is the Carry Trade in dollars. While, the govt policy of no growth and continuing deflation at home prevents people getting higher wages, the value of the dollar abroad continues to sink. At some point, when interest rates rise, those dollars will come home and ignite hyperinflation.

One more thing..For those of you that think that devaluing the dollar is good for export. Please recall that we also import (and import more than export), so paying more for imports is not cool. Also, we get paid less for export which reduces earnings.

Silver Prices Are About to Fall

Forecasters of gold and silver prices should take a lesson from weathermen, who look thorough the window one last time before releasing the day's forecast.

Equally funny is the reasoning given for a significant dollar rally. These volk say that the dollar is going to get so cheap (because of the FED printing it at record pace) that everyone will just rush to get more. And the debt does not matter because we owe it to ourselves. And the economy is going to get better as we print more dollars. Any day now.

Gold Is Not in a Bull Market

Mr Nadler's article brings up a few questions:
1. What is it called when the price of an asset keeps going up?
2. Why is it that thousands of dealers are trying to buy gold for paper dollars?
3. Why is it that the price of stocks and gold are going up at the same time? Could it be that they are both denominated in dollars and dollars are losing value?
4. If there is such a glut of gold supply, how come price is rising?
5. Is there a country whose currency increased in value as they cranked up the printing presses?

and StockTraderX has some strange things to say:

The US dollar is not dead yet.
True, it is just losing value.

Most of the debt is denominated in US dollars.
And this is inportant how?

We did not borrow in gold, we borrowed in US dollars.
The point is that because more dollars are printed, gold becomes more expensive.

When we borrow, banks create new money and give it to us. They do not lend existing money.
On the contrary. We borrow existing money. Only the FED is no longer borrowing, but printing money.

For 50 years, bank credit has been inflated. It is a bubble now. When it deflates, debt (which is our money supply) will dissapear. Here is how banks create money and how it causes inflation and then deflation:

Standard college nonsense that we owe the debt to ourselves. We do not. We had deflation to elect Obama, but it did not make the debt go away. The debt is real. We pay interest on it. Now, the Fed "buys" Treasury Bills and counts it as asset. You try that and you go to jail. It is folly to believe that our creditors do not know that the monet supply is being inflated at a tremendous rate, so that their loans to us will be paid back in cheaper dollars.

Here's Why Asia Must Eventually Ditch the Dollar

Whether people like to acknowledge or not, the question of the dollar IS a political one when all is said and done. By now we understand the variables that govern the economy. And we know the outcome from experience. In the Depression of 1920, the economy was restored by cutting government spending and cutting taxes. The resultant prosperity that followed was named the Roaring Twenties. It was ended by a Stock Market bubble, fueled by low margin requirements and excessive speculation. An economic correction (exacerbated by protectionist tariffs and the raising of taxes), followed by a Stock Market crash, ushered in Roosevelt and Munchausen by proxy economics. The adoption of graduated income tax took the money from the hands of the entrepreneurs (who were best at producing income) and let it be spent on government handouts and make work that was low in efficiency. Roosevelt never got the US out of economic Depression, just made it possible for people to endure it. The Depression ended when WWII forced the govt to end 'mark to market' so the war could be won. Jimmy Carter tried to relive the Rooseveltian years and produced stagflation. Bill Clinton knew better.
The Obama regime is embarked on restoring the Rooseveltian economics and finish the job of destroying capitalism. Their tool is once again 'mark to market' to produce enough deflation to mask the effects of devaluing the dollar. And the dollar is being devalued to obtain control over industries and alleviate the suffering that Obamanomics brings about. The Chinese and Indians are no fools and they do not like the idea that the Obama regime is planning to destroy the value of their dollar reserves. And that is what is at the bottom of Asian nations scrambling for a new reserve currency.

We're Living Through the Best of Times

This article refers to the Money Velocity as a factor in holding back Ibflation. We then should cite the entire equation: QxV = GNPxP; where Q is the money, V is Money Velocity, GNP is the sum of the economy and P is prices. It is readily evident that the economy (GNP) can be wrecked either by reducing Q ot by reducing V. In early September of 2008, there was an attempt to drain Money Market funds and a total of 500 Billion dollars were drawn out in two hours. The authorities stepped in and stopped the attempt to reduce Q. On September 15, 2008, the 'mark to market' accounting was adopted. This changed how banks could use their resources. If an asset was declared a "troubled asset" then it could be only counted at zero value and the banks had to increase deposits to cover that value. This move dropped V instanteneously and made the GNP fall precipiteously. I have collected the relevant graphs from the St Louis FED and republished them on my own blog (geezerbinexile.blogspo..., How the FED manipulates the economy). That was what elected Obama. The FED continues to tinker with 'mark to market' in order to keep prices from escalating, even though Q is being inflated. The result is that GNP is languishing and the dollar is losing value and gold and oil are going up. Thus, the FED is ruining the dollar so the govt can run up huge deficits to get control of companies.
Diogeron: your recollection of facts is incomplete. The Economic Recovery Tax Act of 1980 (under Reagan) reduced income taxes by 25% across the board. The demagoging that this was a "tax cut for the rich" ignores the fact that the taxes the rich paid actually went up. The Tax Return Act of 1986 set up three levels of income tax: 15%, 28% and 33%. This ushered in almost two decades of prosperity.
This was not the only time taxes were cut to improve the economy. In 1920 the Depression was cured by cutting government spending and reducing taxes. This ignited the roaring twenties. In 1960, JFK cut tax rates and the economy flourished. Russia has fixed its economy by adopting a modified (and low) flat tax. And the Chinese had abolished taxes on capital gaines. All but our Sociaists understand that low taxes lead to more work and prosperity.
Bolton Peck: You state re France that 'people own the government as opposed to the corporations like here.' The corporations are owned by people in France as here. We just have more corporate wealth. Remeber! Business = jobs and taxes that run a lot of things. Reduce business activity and we all suffer.