KAIMU BIZ's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/419408/comments http://seekingalpha.com/article/193370/comments?source=feed#comment-935801 935801
Let me understand this ... If unemployment has not improved and sales tax revenues and consumer credit is in reverse then where is the consumer getting money from to make the purchases that are driving retail sales higher?

After studying the US Treasury Statements I see one major source to put a temporary boost in retail sales is coming from "record" tax refunds. We are in the time zone when many Americans are getting their refund checks in the mail.

To show you I will go back to FY2007. These numbers are for the latest US Treasury data based on March 5th for each fiscal year. This data can be found at the US Treasury Daily Statement web page.

TOTAL TAX DEPOSITS(in BIL)
3/5/10 - $848.209
3/5/09 - $890.432
3/5/08 - $964.896
3/5/07 - $947.353

TOTAL TAX REFUNDS(in BIL)
3/5/10 - $226.043
3/5/09 - $179.277
3/5/08 - $155.973
3/5/07 - $134.043

TOTAL NET TAX REVENUES(in BIL)
3/5/10 - $622.17
3/5/09 - $711.15
3/5/08 - $808.92
3/5/07 - $813.31

As you can see there has been a substantial increases in TOTAL TAX REFUNDS, a 68% increase, to individuals and businesses since 2007. I believe the reason we are seeing such increases in tax refunds is due to mounting losses and the use of what the IRS calls a "loss carryback". A number of individuals and businesses I know of have filed "loss carrybacks" going back to five years, which allows you to carry losses back to years when you had gains, which gives you a much larger refund in the current tax year, like borrowing from past profits. Still a "loss carryback" puts a much higher fiscal burden on Treasury. If we were all having profitable years then nobody would be filing a "loss carryback". I would be interested to see data on how many tax returns this year are filing for a loss carryback. No matter clearly the US Treasury data shows a large increase in tax refunds being issued now.

Why is it that the first calendar quarter of every year that none of the pundits consider the tax refund factor as a contributor to increased retail sales? Most people who know they are getting refunds file early. If you are not going to get a refund or you are getting a small refund or you owe then you usually have no incentive to file early and many in that camp wait until April to file. After all what is it that every red-blooded American does when they get their tax refunds? ]]> Sat, 13 Mar 2010 13:12:20 -0500
Let me understand this ... If unemployment has not improved and sales tax revenues and consumer credit is in reverse then where is the consumer getting money from to make the purchases that are driving retail sales higher?

After studying the US Treasury Statements I see one major source to put a temporary boost in retail sales is coming from "record" tax refunds. We are in the time zone when many Americans are getting their refund checks in the mail.

To show you I will go back to FY2007. These numbers are for the latest US Treasury data based on March 5th for each fiscal year. This data can be found at the US Treasury Daily Statement web page.

TOTAL TAX DEPOSITS(in BIL)
3/5/10 - $848.209
3/5/09 - $890.432
3/5/08 - $964.896
3/5/07 - $947.353

TOTAL TAX REFUNDS(in BIL)
3/5/10 - $226.043
3/5/09 - $179.277
3/5/08 - $155.973
3/5/07 - $134.043

TOTAL NET TAX REVENUES(in BIL)
3/5/10 - $622.17
3/5/09 - $711.15
3/5/08 - $808.92
3/5/07 - $813.31

As you can see there has been a substantial increases in TOTAL TAX REFUNDS, a 68% increase, to individuals and businesses since 2007. I believe the reason we are seeing such increases in tax refunds is due to mounting losses and the use of what the IRS calls a "loss carryback". A number of individuals and businesses I know of have filed "loss carrybacks" going back to five years, which allows you to carry losses back to years when you had gains, which gives you a much larger refund in the current tax year, like borrowing from past profits. Still a "loss carryback" puts a much higher fiscal burden on Treasury. If we were all having profitable years then nobody would be filing a "loss carryback". I would be interested to see data on how many tax returns this year are filing for a loss carryback. No matter clearly the US Treasury data shows a large increase in tax refunds being issued now.

Why is it that the first calendar quarter of every year that none of the pundits consider the tax refund factor as a contributor to increased retail sales? Most people who know they are getting refunds file early. If you are not going to get a refund or you are getting a small refund or you owe then you usually have no incentive to file early and many in that camp wait until April to file. After all what is it that every red-blooded American does when they get their tax refunds? ]]> http://seekingalpha.com/article/193357/comments?source=feed#comment-935789 935789
Let me understand this ... If unemployment has not improved and sales tax revenues and consumer credit is in reverse then where is the consumer getting money from to make the purchases that are driving retail sales higher?

After studying the US Treasury Statements I see one major source to put a temporary boost in retail sales is coming from "record" tax refunds. We are in the time zone when many Americans are getting their refund checks in the mail.

To show you I will go back to FY2007. These numbers are for the latest US Treasury data based on March 5th for each fiscal year.

TOTAL TAX DEPOSITS(in BIL)
3/5/10 - $848.209
3/5/09 - $890.432
3/5/08 - $964.896
3/5/07 - $947.353

TOTAL TAX REFUNDS(in BIL)
3/5/10 - $226.043
3/5/09 - $179.277
3/5/08 - $155.973
3/5/07 - $134.043

TOTAL NET TAX REVENUES(in BIL)
3/5/10 - $622.17
3/5/09 - $711.15
3/5/08 - $808.92
3/5/07 - $813.31

As you can see there has been a substantial increases in TOTAL TAX REFUNDS, a 68% increase, to individuals and businesses since 2007. I believe the reason we are seeing such increases in tax refunds is due to mounting losses and the use of what the IRS calls a "loss carryback". A number of individuals and businesses I know of have filed "loss carrybacks" going back to five years, which allows you to carry losses back to years when you had gains, which gives you a much larger refund in the current tax year, like borrowing from past profits. Still a "loss carryback" puts a much higher fiscal burden on Treasury. If we were all having profitable years then nobody would be filing a "loss carryback". I would be interested to see data on how many tax returns this year are filing for a loss carryback. No matter clearly the US Treasury data shows a large increase in tax refunds being issued now.

Why is it that the first calendar quarter of every year that none of the pundits consider the tax refund factor as a contributor to increased retail sales? Most people who know they are getting refunds file early. If you are not going to get a refund or you are getting a small refund or you owe then you usually have no incentive to file early and many in that camp wait until April to file. After all what is it that every red-blooded American does when they get their tax refunds?]]> Sat, 13 Mar 2010 13:01:23 -0500
Let me understand this ... If unemployment has not improved and sales tax revenues and consumer credit is in reverse then where is the consumer getting money from to make the purchases that are driving retail sales higher?

After studying the US Treasury Statements I see one major source to put a temporary boost in retail sales is coming from "record" tax refunds. We are in the time zone when many Americans are getting their refund checks in the mail.

To show you I will go back to FY2007. These numbers are for the latest US Treasury data based on March 5th for each fiscal year.

TOTAL TAX DEPOSITS(in BIL)
3/5/10 - $848.209
3/5/09 - $890.432
3/5/08 - $964.896
3/5/07 - $947.353

TOTAL TAX REFUNDS(in BIL)
3/5/10 - $226.043
3/5/09 - $179.277
3/5/08 - $155.973
3/5/07 - $134.043

TOTAL NET TAX REVENUES(in BIL)
3/5/10 - $622.17
3/5/09 - $711.15
3/5/08 - $808.92
3/5/07 - $813.31

As you can see there has been a substantial increases in TOTAL TAX REFUNDS, a 68% increase, to individuals and businesses since 2007. I believe the reason we are seeing such increases in tax refunds is due to mounting losses and the use of what the IRS calls a "loss carryback". A number of individuals and businesses I know of have filed "loss carrybacks" going back to five years, which allows you to carry losses back to years when you had gains, which gives you a much larger refund in the current tax year, like borrowing from past profits. Still a "loss carryback" puts a much higher fiscal burden on Treasury. If we were all having profitable years then nobody would be filing a "loss carryback". I would be interested to see data on how many tax returns this year are filing for a loss carryback. No matter clearly the US Treasury data shows a large increase in tax refunds being issued now.

Why is it that the first calendar quarter of every year that none of the pundits consider the tax refund factor as a contributor to increased retail sales? Most people who know they are getting refunds file early. If you are not going to get a refund or you are getting a small refund or you owe then you usually have no incentive to file early and many in that camp wait until April to file. After all what is it that every red-blooded American does when they get their tax refunds?]]> http://seekingalpha.com/article/191572/comments?source=feed#comment-924493 924493
VOX
"Not sure who's lazy, me for not trying to track down your source or you for neglecting to source your own data in the first place."

I have not seen you post a single link to any of your sources ... Not a one.

"I'm not going to fact-check your numbers. Why didn't you do the basic math I did to determine that these CAN'T be representative of an average day's activities?"

Pick a day any day ... Every day the US Treasury "leverages" revenues in order to live beyond its means. I pointed out those numbers to show the 840% leverage. On any given day at the US Treasury there is more debt issued and more outlays than total net revenues.

"Um, yeah, so what? Did you look at the right side? Those are REDEMPTIONS."

Now why would I point out the ISSUES and not the redemptions? Think about that more.

"Well, you caught me in an error - the info I was using was incomplete."

" So the % of GDP numbers are a few percent higher than I stated."

Yep, whats a few percentage points in the trillions?

"Then why are you quoting a Treasury daily report, conspiracy man?"

Let me just say that there is no "conspiracy" when you use the US Treasury numbers, its their numbers not mine. Either way you want to spin it there is a clear and visible abuse of fiscal trust. If these are their "look good" numbers, then what must their "real" numbers look like.

No doubt there are some smoke and mirrors in action and numerous times I have grilled my own Senator, Daniel Akaka(D) on one of those mirrors, the line item listed as UNCLASSIFIED and he has yet to offer a plausible explanation. His last reply was that UNCLASSIFIED was a "clearinghouse". If so it doesn't "clear" anything as that number continues to grow ever larger. Yet the US Treasury Statements have 1000 times more clarity than FOMC meeting minutes since you must wait six years before the US FED will allow the public to view the actual "transcripts" and even those are blanked out. The numerous flaws at the government level are staggering and even the GAO has been highly critical, so perhaps the failure of the US Treasury to comply with all the GAOs reporting requirements was yet another reason for David Walker to quit. Still not even 60Minutes put a dent in the US Treasury's debt pace.

I must say you certainly are the self-appointed COMMENT POLICE. 68 comments so far and you account for 10 of them, so 15% of the comments here are yours. Then another 8 are replies to your comments so you have some 27%(18 out of 68) of the comment section locked up Must have a lot of free time on your hands.]]> Fri, 05 Mar 2010 03:38:02 -0500
VOX
"Not sure who's lazy, me for not trying to track down your source or you for neglecting to source your own data in the first place."

I have not seen you post a single link to any of your sources ... Not a one.

"I'm not going to fact-check your numbers. Why didn't you do the basic math I did to determine that these CAN'T be representative of an average day's activities?"

Pick a day any day ... Every day the US Treasury "leverages" revenues in order to live beyond its means. I pointed out those numbers to show the 840% leverage. On any given day at the US Treasury there is more debt issued and more outlays than total net revenues.

"Um, yeah, so what? Did you look at the right side? Those are REDEMPTIONS."

Now why would I point out the ISSUES and not the redemptions? Think about that more.

"Well, you caught me in an error - the info I was using was incomplete."

" So the % of GDP numbers are a few percent higher than I stated."

Yep, whats a few percentage points in the trillions?

"Then why are you quoting a Treasury daily report, conspiracy man?"

Let me just say that there is no "conspiracy" when you use the US Treasury numbers, its their numbers not mine. Either way you want to spin it there is a clear and visible abuse of fiscal trust. If these are their "look good" numbers, then what must their "real" numbers look like.

No doubt there are some smoke and mirrors in action and numerous times I have grilled my own Senator, Daniel Akaka(D) on one of those mirrors, the line item listed as UNCLASSIFIED and he has yet to offer a plausible explanation. His last reply was that UNCLASSIFIED was a "clearinghouse". If so it doesn't "clear" anything as that number continues to grow ever larger. Yet the US Treasury Statements have 1000 times more clarity than FOMC meeting minutes since you must wait six years before the US FED will allow the public to view the actual "transcripts" and even those are blanked out. The numerous flaws at the government level are staggering and even the GAO has been highly critical, so perhaps the failure of the US Treasury to comply with all the GAOs reporting requirements was yet another reason for David Walker to quit. Still not even 60Minutes put a dent in the US Treasury's debt pace.

I must say you certainly are the self-appointed COMMENT POLICE. 68 comments so far and you account for 10 of them, so 15% of the comments here are yours. Then another 8 are replies to your comments so you have some 27%(18 out of 68) of the comment section locked up Must have a lot of free time on your hands.]]> http://seekingalpha.com/article/191572/comments?source=feed#comment-922453 922453
MR VOX

Please re-read my words "on March 1st, Monday" you could have saved yourself a lot of typing and "nonsense" ...

Next go look here since you are too lazy to do this on your own then report back!
US TREASURY 03/01 LINK: fms.treas.gov/webservi...

Go to TABLE II and "add" the numbers. You have to add on your own since the US Treasury will not separate out the pertinent sectors.

Go to TABLE III-A and on the left side where it say "ISSUES". You will see the table broken into two parts. One at the top lists "marketable" the other below lists "unmarketable" debt issues. Go to the very bottom line of that left side and read the number there that adds up the "total" US Debt issued YTD for FY 2010. Let me help you ... here it is ... "24,052,849" ... That is not to be mistaken for $24 million or billion as the tables are "rounded and in millions" so that number is $24TRIL.

Also go Google to see that the info I posted on total government GDP expenditures, that average near 32% from 1970 to 2007. In 2007 that percent was 31.6% as these numbers combine "on budget and off budget". Do your numbers cover both "on budget and off budget"?

Here are your key words to Google ...
HISTORICAL TABLES
TABLE 15.3 TOTAL GOVERNMENT EXPENDITURES AS PERCENTAGES OF GDP 1948-2007

BUDGET OF THE UNITED STATES FY 2009
OFFICE OF THE PRESIDENT


Historical Tables, Budget of the United States Government,
Fiscal Year 2009 provides data on budget receipts, outlays, surpluses or deficits, Federal debt, and Federal employment over an extended time period, generally from 1940 or earlier to 2009 or 2013.

If any entity in the World has a bigger agenda to skew numbers in their favor it is the the Office of the President and the US Treasury. None of "their" numbers look reassuring to me at all and absolutely none look "deflationary" in nature.]]> Wed, 03 Mar 2010 17:32:46 -0500
MR VOX

Please re-read my words "on March 1st, Monday" you could have saved yourself a lot of typing and "nonsense" ...

Next go look here since you are too lazy to do this on your own then report back!
US TREASURY 03/01 LINK: fms.treas.gov/webservi...

Go to TABLE II and "add" the numbers. You have to add on your own since the US Treasury will not separate out the pertinent sectors.

Go to TABLE III-A and on the left side where it say "ISSUES". You will see the table broken into two parts. One at the top lists "marketable" the other below lists "unmarketable" debt issues. Go to the very bottom line of that left side and read the number there that adds up the "total" US Debt issued YTD for FY 2010. Let me help you ... here it is ... "24,052,849" ... That is not to be mistaken for $24 million or billion as the tables are "rounded and in millions" so that number is $24TRIL.

Also go Google to see that the info I posted on total government GDP expenditures, that average near 32% from 1970 to 2007. In 2007 that percent was 31.6% as these numbers combine "on budget and off budget". Do your numbers cover both "on budget and off budget"?

Here are your key words to Google ...
HISTORICAL TABLES
TABLE 15.3 TOTAL GOVERNMENT EXPENDITURES AS PERCENTAGES OF GDP 1948-2007

BUDGET OF THE UNITED STATES FY 2009
OFFICE OF THE PRESIDENT


Historical Tables, Budget of the United States Government,
Fiscal Year 2009 provides data on budget receipts, outlays, surpluses or deficits, Federal debt, and Federal employment over an extended time period, generally from 1940 or earlier to 2009 or 2013.

If any entity in the World has a bigger agenda to skew numbers in their favor it is the the Office of the President and the US Treasury. None of "their" numbers look reassuring to me at all and absolutely none look "deflationary" in nature.]]> http://seekingalpha.com/article/191572/comments?source=feed#comment-922114 922114
I have always been perplexed why the mainstream as well as this article dismisses the US Treasury? I agree bank lending is a factor for "monetisation" but what of the US Treasury and their monetisation of the economy. Clearly the US GDP is largely based on "consumers", in fact statistically it is 70%. While US Treasury Historical Data since 1970 shows that the average outlays of the US Treasury account for 31.7% of US GDP, so nearly half of all consuming in America can be traced to the US Treasury.

Lets look closer at the US Treasury for just one day, March 1st, Monday ...

On Feb 12th the US Public Debt ceiling was raised to $14.249TRIL and on March 1st, ten reporting days later the Debt sits at $12.452TRIL, so we have $1.82TRIL left to go before the Ceiling has to be raised again. In those ten days the US Public Debt increased $203BIL USD or $20.3BIL per day.

On Monday, March 1st the US Treasury spent $86BIL USD. Total Withdrawals for FY 2010 is $1.84TRIL or $18.3BIL USD per day(100 days of FY 2010).

The US Treasury created $121BIL in marketable US Treasury Notes on Monday, which brings the total Notes issued for the FY 2010 to $957BIL USD. Total "marketable" US Debt issued(includes bills, notes, bonds and CMB) for FY 2010, a five month period, is $3.18TRIL USD or $31.8BIL USD per reporting day, which this is the 100th day of US Treasury operations for FY 2010.

To sum up the US Congress is spending $18.3BIL per day and the US Treasury is issuing "marketable" debt at the rate of $31.8BIL USD per day. Add the two and you get $50.1BIL USD per day that is being created out of thin air. Now if there are 240(12x20) reporting days in FY 2010 that means that if we extrapolate $50.1BIL per day we come up with $12.02TRIL USD(nearly 100% of US GDP) that has nothing to do with QE or deflation.

Where did those new US Dollars go to on March 1st(one day)? Really they went to the "usual suspects". Here ...

MILITARY = $12.4BIL
SS/MED & MEDI = $17.81BIL
HUD = $2.7BIL
DIF = $520MIL
TRUST FUNDS = $5.4BIL
DEBT INTEREST = $5.1BIL
FED EMPLOYEES = $697MIL
UNEMPLOYMENT = $783MIL
UNCLASSIFIED = $1.32BIL

How much did the US Treasury receive in net tax revenues for March 1st? $24.67BIL USD. Total debt and withdrawals for the same day were $207BIL USD, so the US Treasury "leveraged" 8.4 times "earnings" or in percentage terms 840%. In reality US tax revenues are woefully inadequate as Obama would have to raise taxes 840% to cover what the US Treasury printed away on Monday.

Where is the US Treasury in any of these "inflation" equations? Is it not agreed that all these government checks being issued to the tune of TRILLIONS are being spent either by Lockheed Martin or John Q Public? Where would America and its economy be without government checks? Imagine America with no Social Security checks, no Medicare, no unemployment checks, no military spending, no infrastructure spending, no government employees ... the domino effect is staggering to think about. It seems to me that the US Treasury is engaged in massive PRICE FIXING, which is ultimately massive misallocation and malinvestment, which exerts inflationary pressure not deflationary pressure.

What is the difference between Bank America making a loan to a US citizen who then turns around and spends that loan versus the US Treasury issuing debt(accepting loans on behalf of its citizens) whereby the proceeds from that debt issuance are spent by Congress and US citizens?

The US Treasury not only speaks fluent Greek they are even giving the Greeks lessons on how to speak Greek! There is the HUBRIS.]]> Wed, 03 Mar 2010 14:24:23 -0500
I have always been perplexed why the mainstream as well as this article dismisses the US Treasury? I agree bank lending is a factor for "monetisation" but what of the US Treasury and their monetisation of the economy. Clearly the US GDP is largely based on "consumers", in fact statistically it is 70%. While US Treasury Historical Data since 1970 shows that the average outlays of the US Treasury account for 31.7% of US GDP, so nearly half of all consuming in America can be traced to the US Treasury.

Lets look closer at the US Treasury for just one day, March 1st, Monday ...

On Feb 12th the US Public Debt ceiling was raised to $14.249TRIL and on March 1st, ten reporting days later the Debt sits at $12.452TRIL, so we have $1.82TRIL left to go before the Ceiling has to be raised again. In those ten days the US Public Debt increased $203BIL USD or $20.3BIL per day.

On Monday, March 1st the US Treasury spent $86BIL USD. Total Withdrawals for FY 2010 is $1.84TRIL or $18.3BIL USD per day(100 days of FY 2010).

The US Treasury created $121BIL in marketable US Treasury Notes on Monday, which brings the total Notes issued for the FY 2010 to $957BIL USD. Total "marketable" US Debt issued(includes bills, notes, bonds and CMB) for FY 2010, a five month period, is $3.18TRIL USD or $31.8BIL USD per reporting day, which this is the 100th day of US Treasury operations for FY 2010.

To sum up the US Congress is spending $18.3BIL per day and the US Treasury is issuing "marketable" debt at the rate of $31.8BIL USD per day. Add the two and you get $50.1BIL USD per day that is being created out of thin air. Now if there are 240(12x20) reporting days in FY 2010 that means that if we extrapolate $50.1BIL per day we come up with $12.02TRIL USD(nearly 100% of US GDP) that has nothing to do with QE or deflation.

Where did those new US Dollars go to on March 1st(one day)? Really they went to the "usual suspects". Here ...

MILITARY = $12.4BIL
SS/MED & MEDI = $17.81BIL
HUD = $2.7BIL
DIF = $520MIL
TRUST FUNDS = $5.4BIL
DEBT INTEREST = $5.1BIL
FED EMPLOYEES = $697MIL
UNEMPLOYMENT = $783MIL
UNCLASSIFIED = $1.32BIL

How much did the US Treasury receive in net tax revenues for March 1st? $24.67BIL USD. Total debt and withdrawals for the same day were $207BIL USD, so the US Treasury "leveraged" 8.4 times "earnings" or in percentage terms 840%. In reality US tax revenues are woefully inadequate as Obama would have to raise taxes 840% to cover what the US Treasury printed away on Monday.

Where is the US Treasury in any of these "inflation" equations? Is it not agreed that all these government checks being issued to the tune of TRILLIONS are being spent either by Lockheed Martin or John Q Public? Where would America and its economy be without government checks? Imagine America with no Social Security checks, no Medicare, no unemployment checks, no military spending, no infrastructure spending, no government employees ... the domino effect is staggering to think about. It seems to me that the US Treasury is engaged in massive PRICE FIXING, which is ultimately massive misallocation and malinvestment, which exerts inflationary pressure not deflationary pressure.

What is the difference between Bank America making a loan to a US citizen who then turns around and spends that loan versus the US Treasury issuing debt(accepting loans on behalf of its citizens) whereby the proceeds from that debt issuance are spent by Congress and US citizens?

The US Treasury not only speaks fluent Greek they are even giving the Greeks lessons on how to speak Greek! There is the HUBRIS.]]> http://seekingalpha.com/article/190993/comments?source=feed#comment-916967 916967
Aluminum stocks at the LME are anything but "slowmo" as it seems the inventories rose dramatically right in the heat of the banking crisis. Rising from the 1mil level in mid 2008 to 4.5mil one year later, however the LME aluminum stocks have stayed at the 4.5mil range bound (record highs)for a year now without any major moves up or down. While the LME stocks remain steady at the 4.5mil range over the past year the spot price has been moving upward over the past year from $0.60 to $0.94/lb, a 60% rise.

What's next a re-weighting of the GSCI like what happened with oil in 2005? Plenty of oil tankers sitting around outside various Asian ports and as I recall I believe GS has an interest in some tank farms.

Perhaps the "re-weighting" in the aluminum contango is on the horizon, starting April 1st. A report from the LME where that burdensome "storage cost factor" comes into play. The LME plans to raise such costs on all metals but they are singling out aluminum in particular. So the LME is well aware of the arbitrage ... the "aluminum carry trade". Look for some unwinding in March.

From: LME Rent Increases Could Prompt Flood of Metal Taken off Market
by stuart on February 12, 2010

"The size and timing of the rises, to take effect from April 1, will have the biggest impact on aluminum which has seen a massive stock and sale play over the last year. Because the contango on aluminum has been high, typically $32/ton over 3 months and $100/ton over 12 months traders and banks have sold excess production forward on the exchange at a premium over spot. From that premium they have paid storage, insurance and financed the deal at historically low interest rates, after which the balance is profit. So attractive has the deal been that some 3.5 million tons of the 4.56 million tons of aluminum on the LME is tied up in such deals. The new rates will push the average cost of storage up to $32/ton over 3 months and $140/ton over 12 months making the future for such deals highly questionable."END

LINK: agmetalminer.com/2010/.../]]> Sun, 28 Feb 2010 05:11:26 -0500
Aluminum stocks at the LME are anything but "slowmo" as it seems the inventories rose dramatically right in the heat of the banking crisis. Rising from the 1mil level in mid 2008 to 4.5mil one year later, however the LME aluminum stocks have stayed at the 4.5mil range bound (record highs)for a year now without any major moves up or down. While the LME stocks remain steady at the 4.5mil range over the past year the spot price has been moving upward over the past year from $0.60 to $0.94/lb, a 60% rise.

What's next a re-weighting of the GSCI like what happened with oil in 2005? Plenty of oil tankers sitting around outside various Asian ports and as I recall I believe GS has an interest in some tank farms.

Perhaps the "re-weighting" in the aluminum contango is on the horizon, starting April 1st. A report from the LME where that burdensome "storage cost factor" comes into play. The LME plans to raise such costs on all metals but they are singling out aluminum in particular. So the LME is well aware of the arbitrage ... the "aluminum carry trade". Look for some unwinding in March.

From: LME Rent Increases Could Prompt Flood of Metal Taken off Market
by stuart on February 12, 2010

"The size and timing of the rises, to take effect from April 1, will have the biggest impact on aluminum which has seen a massive stock and sale play over the last year. Because the contango on aluminum has been high, typically $32/ton over 3 months and $100/ton over 12 months traders and banks have sold excess production forward on the exchange at a premium over spot. From that premium they have paid storage, insurance and financed the deal at historically low interest rates, after which the balance is profit. So attractive has the deal been that some 3.5 million tons of the 4.56 million tons of aluminum on the LME is tied up in such deals. The new rates will push the average cost of storage up to $32/ton over 3 months and $140/ton over 12 months making the future for such deals highly questionable."END

LINK: agmetalminer.com/2010/.../]]> http://seekingalpha.com/article/189934/comments?source=feed#comment-909849 909849
Someone please explain the following "deficits", based on US Treasury net tax revenue:

1 - net revenue-outlays = ($3.789TRIL)
2 - net revenue-total debt = ($21.8TRIL)
3 - net revenue-marketable debt = ($2.33TRIL)

The above deficits apply from Oct 1 2009 to Feb 19 2010, 4 months and 3 weeks of FY 2010.

UST source: fms.treas.gov/webservi...

I am not sure why we even need GDP, GNP, GAAP, NON-GAAP, off budget, on budget, OMB or GAO to figure out the US Treasury speaks fluent Greek!

The Greek Philosopher Of Debt ...

Socrates' death is described at the end of Plato's Phaedo ... "Shortly before his death, Socrates speaks his last words to Crito: "Crito, we owe a cock to Asclepius. Please, don't forget to pay the debt." ..."]]> Tue, 23 Feb 2010 11:44:35 -0500
Someone please explain the following "deficits", based on US Treasury net tax revenue:

1 - net revenue-outlays = ($3.789TRIL)
2 - net revenue-total debt = ($21.8TRIL)
3 - net revenue-marketable debt = ($2.33TRIL)

The above deficits apply from Oct 1 2009 to Feb 19 2010, 4 months and 3 weeks of FY 2010.

UST source: fms.treas.gov/webservi...

I am not sure why we even need GDP, GNP, GAAP, NON-GAAP, off budget, on budget, OMB or GAO to figure out the US Treasury speaks fluent Greek!

The Greek Philosopher Of Debt ...

Socrates' death is described at the end of Plato's Phaedo ... "Shortly before his death, Socrates speaks his last words to Crito: "Crito, we owe a cock to Asclepius. Please, don't forget to pay the debt." ..."]]> http://seekingalpha.com/article/189741/comments?source=feed#comment-906997 906997
So many here vastly underestimate the power of the US Treasury and the extreme debt that is created. You can only see this if you take the time to go to the US Treasury Daily Statement(Google it)as you will find very little reference to this document in the media.

Some important numbers to consider ...

As of Feb 18th the US Treasury has issues close to $2TRIL in short term debt, Treasury Bills, sitting at $1.92TRIL. Since I never see this mentioned on Seeking Alpha I will have to assume this is not known to those here in the know. Lets go further and look at the other debt maturities issued. Next we have US Treasury Notes. How many issued for FY 2010 so far? $836BIL. How many bond issues? $74.4BIL. Who here knows what a CMS issue is? Well, if not then you won't care to know that the US Treasury issued $87BIL worth of them. Add all those debt issues up and what do you get? Almost $3TRIL at $2.92TRIL USD since the beginning of FY 2010, which started October 2009, only four and a half months time. That comes to $650BIL per month in debt issues pushing a TARP per month.

Now what is the reason so much debt must be issued? It is because the US Treasury hardly has any tax revenues and the US Congress still spends like a drunken sailor in its many attempts at "price fixing" the US GDP. So how much has the US Treasury put out in outlays(withdrawals) since October 2009? The answer is $4.34TRIL USD. Who here knew that? So if you add up outlays(spending) and debt issues we have a combined total of $7.26TRIL USD in Balance Sheet "liabilities" or $1.61TRIL per month, more than two TARPS per month. I heard a lot of us anti-bankers complaining about banks getting $700BIL in TARP for one year, but I never hear a peep about two plus TARPS per month ... Who's getting those TARPS?

Now do not forget the other half of every Balance Sheet is assets. In this case for the US Treasury it is simply "tax revenues", all taxes from income, corporate, excise, estate, etc. The US Treasury tries to trick you into thinking that "debt" is income because they list the debt issues on the "asset"(receipt) side, but just ignore that, unless you really do believe that debt is income. If you do then start listing all your credit card debt as income on your 1040. Lets look at what the assets are as of Feb 18th. I read total gross tax revenues of $760.4BIL USD shown under Table IV, but that is gross, so unless you forgot that the US Treasury also issues things called "refunds" then you need to subtract out refunds under Table VI from gross revenues. Total refunds issued for individuals and businesses now sits at $157BIL USD so that leaves a "net" tax revenue for the US Treasury of $603.4BIL USD under the asset column(receipts). What do you think I would get if I divided total outlays and debts(liabilities) by total tax revenue assets? I would get 12. In other words for every $1 USD of tax revenues the US Treasury is leveraging $12USD. To put that in layman's terms we are in the hole at a rate of 1200% per $1USD of revenue. We are living beyond our means at an incredible rate.

All that would be bad enough except that I have only discussed what the US Treasury calls "marketable debt". I have yet to even look at "non-marketable" debt but then that is listed on the same US Treasury statement under Table IIIA-Public Debt. See how they separate out marketable debt from non-marketable debt on the left side. So what is the "non-marketable" debt issuance so far in the past four and a half months? It is $19.2TRIL USD, running around $4.3TRIL per month, pr six plus TARPS per month! I guess "non-marketable" debt is so unimportant that it is never mentioned in the media. I never hear two words every time a US Treasury auction result is announced. One, I never hear the word "redemptions" and two, I never hear "non-marketable".

So if we add the "non-marketable" debt liabilities to the "marketable" debt liabilities we get $22.2TRIL USD in four and a half months. Then if we add in outlays of $4.34TRIL we get $26.54TRIL USD. So where is the money going to come from to cover this spending and debt? Remember we have another 7.5 months to go until FY 2010 is over with. Imagine what the spending and debt(the liabilites) will be then ... I think the US Congress knows where this is going or they would not have raised the US Debt Ceiling by another $1.9TIL on Friday, Feb 12th. Add in the prior month increase in the US Debt Ceiling of $290BIL USD and the US Congress has moved the US Debt Ceiling up $2.19TRIL USD. Where the money going to come from. I can tell you where it is not going to come from and that is tax revenues, so that leaves only one other source "more debt"!

This explains why I call the US Dollar a "debt derivative", nothing any more different than MBS when MBS was rated AAA. In reality we only have the "human condition" backing the US Dollar, which explains the Gang Of 535 in Congress, Obama in the White House and Uncle Ben at the US FED. Their only agenda is to stay in power and being humans what do you think they will do when they are handed a blank check?

Instead of focusing on the inflation/deflation debate I would focus on the LIABILITY debate as what we have now is a LIABILITY BUBBLE. The asset side of global Balance Sheets are not inflating as fast as the liability side is, yet the only way more debt can be issued is to create more money, lest you forget the lesson of fractional reserve banking. Banks may not lend much any more but governments and their central banks have filled the gap and then some with their own debt. In some circles that is called PRICE FIXING ...

Let me just say this about "interest rates". I think when it comes to the number one agenda of the US FED, currency devaluation, that interest rates are nothing but a diversionary "side show" at the DEBT CIRCUS! If interest rates meant anything then why is it when Volcker raised Fed Funds to 20% in 1979 the US Congress spent more and increased the debt more? In other words interest rates have no effect on government largess, NONE! Raising rates may cause us mortal citizens concern and a tendency towards thrift but it does nothing to slow the growth rate of the US government, which is the 900 lbs gorilla in your living room. I also have to ask if raising rates is about strength or is it about weakness? If debt is perceived as more risky then does the rate go down or up? Ask a Greek banker about that.]]> Sun, 21 Feb 2010 15:50:21 -0500
So many here vastly underestimate the power of the US Treasury and the extreme debt that is created. You can only see this if you take the time to go to the US Treasury Daily Statement(Google it)as you will find very little reference to this document in the media.

Some important numbers to consider ...

As of Feb 18th the US Treasury has issues close to $2TRIL in short term debt, Treasury Bills, sitting at $1.92TRIL. Since I never see this mentioned on Seeking Alpha I will have to assume this is not known to those here in the know. Lets go further and look at the other debt maturities issued. Next we have US Treasury Notes. How many issued for FY 2010 so far? $836BIL. How many bond issues? $74.4BIL. Who here knows what a CMS issue is? Well, if not then you won't care to know that the US Treasury issued $87BIL worth of them. Add all those debt issues up and what do you get? Almost $3TRIL at $2.92TRIL USD since the beginning of FY 2010, which started October 2009, only four and a half months time. That comes to $650BIL per month in debt issues pushing a TARP per month.

Now what is the reason so much debt must be issued? It is because the US Treasury hardly has any tax revenues and the US Congress still spends like a drunken sailor in its many attempts at "price fixing" the US GDP. So how much has the US Treasury put out in outlays(withdrawals) since October 2009? The answer is $4.34TRIL USD. Who here knew that? So if you add up outlays(spending) and debt issues we have a combined total of $7.26TRIL USD in Balance Sheet "liabilities" or $1.61TRIL per month, more than two TARPS per month. I heard a lot of us anti-bankers complaining about banks getting $700BIL in TARP for one year, but I never hear a peep about two plus TARPS per month ... Who's getting those TARPS?

Now do not forget the other half of every Balance Sheet is assets. In this case for the US Treasury it is simply "tax revenues", all taxes from income, corporate, excise, estate, etc. The US Treasury tries to trick you into thinking that "debt" is income because they list the debt issues on the "asset"(receipt) side, but just ignore that, unless you really do believe that debt is income. If you do then start listing all your credit card debt as income on your 1040. Lets look at what the assets are as of Feb 18th. I read total gross tax revenues of $760.4BIL USD shown under Table IV, but that is gross, so unless you forgot that the US Treasury also issues things called "refunds" then you need to subtract out refunds under Table VI from gross revenues. Total refunds issued for individuals and businesses now sits at $157BIL USD so that leaves a "net" tax revenue for the US Treasury of $603.4BIL USD under the asset column(receipts). What do you think I would get if I divided total outlays and debts(liabilities) by total tax revenue assets? I would get 12. In other words for every $1 USD of tax revenues the US Treasury is leveraging $12USD. To put that in layman's terms we are in the hole at a rate of 1200% per $1USD of revenue. We are living beyond our means at an incredible rate.

All that would be bad enough except that I have only discussed what the US Treasury calls "marketable debt". I have yet to even look at "non-marketable" debt but then that is listed on the same US Treasury statement under Table IIIA-Public Debt. See how they separate out marketable debt from non-marketable debt on the left side. So what is the "non-marketable" debt issuance so far in the past four and a half months? It is $19.2TRIL USD, running around $4.3TRIL per month, pr six plus TARPS per month! I guess "non-marketable" debt is so unimportant that it is never mentioned in the media. I never hear two words every time a US Treasury auction result is announced. One, I never hear the word "redemptions" and two, I never hear "non-marketable".

So if we add the "non-marketable" debt liabilities to the "marketable" debt liabilities we get $22.2TRIL USD in four and a half months. Then if we add in outlays of $4.34TRIL we get $26.54TRIL USD. So where is the money going to come from to cover this spending and debt? Remember we have another 7.5 months to go until FY 2010 is over with. Imagine what the spending and debt(the liabilites) will be then ... I think the US Congress knows where this is going or they would not have raised the US Debt Ceiling by another $1.9TIL on Friday, Feb 12th. Add in the prior month increase in the US Debt Ceiling of $290BIL USD and the US Congress has moved the US Debt Ceiling up $2.19TRIL USD. Where the money going to come from. I can tell you where it is not going to come from and that is tax revenues, so that leaves only one other source "more debt"!

This explains why I call the US Dollar a "debt derivative", nothing any more different than MBS when MBS was rated AAA. In reality we only have the "human condition" backing the US Dollar, which explains the Gang Of 535 in Congress, Obama in the White House and Uncle Ben at the US FED. Their only agenda is to stay in power and being humans what do you think they will do when they are handed a blank check?

Instead of focusing on the inflation/deflation debate I would focus on the LIABILITY debate as what we have now is a LIABILITY BUBBLE. The asset side of global Balance Sheets are not inflating as fast as the liability side is, yet the only way more debt can be issued is to create more money, lest you forget the lesson of fractional reserve banking. Banks may not lend much any more but governments and their central banks have filled the gap and then some with their own debt. In some circles that is called PRICE FIXING ...

Let me just say this about "interest rates". I think when it comes to the number one agenda of the US FED, currency devaluation, that interest rates are nothing but a diversionary "side show" at the DEBT CIRCUS! If interest rates meant anything then why is it when Volcker raised Fed Funds to 20% in 1979 the US Congress spent more and increased the debt more? In other words interest rates have no effect on government largess, NONE! Raising rates may cause us mortal citizens concern and a tendency towards thrift but it does nothing to slow the growth rate of the US government, which is the 900 lbs gorilla in your living room. I also have to ask if raising rates is about strength or is it about weakness? If debt is perceived as more risky then does the rate go down or up? Ask a Greek banker about that.]]> http://seekingalpha.com/article/189447/comments?source=feed#comment-903751 903751
Lots of talk about "tightening" ... Due to the rate hike the US FED is "tightening"!

I just finished reading the Mish take on the US FED raising the discount rate to 0.75%. He pretty much says the same as I do in terms of the effect on "lending" Then he goes on to say this:

"All the news articles on this hike are reiterating this is not a change in policy. Say what you want, but this appears to be a change in policy from doing nothing to tightening."

This is the same as the Bloomberg article says "tightening" and the same as the Hoenig rant about "pain" and "tightening". I have to ask ... who are they "tightening"? I also have to ask Mr. Hoening ... "Who isn't feeling some pain already besides Goldman Sachs execs and Oprah?" Is it the rampant huge spending in the retail sector with credit card rates at 30%? Is it all those SubPrimers buying McMansions again as the media keeps announcing record foreclosures? Is it all those small business guys who are borrowing wildly starting the SBAPRIME BUBBLE, to expand their business as they file loss carry backs on their 1040s? Is it those 52 million Americans on unemployment and food stamps that need to stop spending like drunken sailors? Among all my friends and business associates I know of none that are even taking out a car loan! I know many who have cut their credit cards in half and I know many who have essentially gone into credit hibernation.

The only "tightening" needs to happen over at the US Treasury via Capital Hill ...

To think the US Treasury will "tighten" is misguided. By raising the US Debt Ceiling another $1.9TRIL on Friday, 2/12, it seems moronic to think the US Treasury will force Congress to tighten by cutting spending just because the US FED hikes the discount rate or any rate for that matter. US Treasury historical data shows that since 1970 the US Treasury has average outlays(spending) of 31.7% of GDP over this 40 year period, even when Volcker had Fed Fund Rates at 20%. I mean the US Congress is committed to spend trillions more to stay in power if they have to. I have never seen a trend reversal there. I have to say that one of the main distractions to the US FED policy of currency destruction has been the "interest rate side show"! If interest rates meant anything in terms of the USD maintaining its "store of value"(aka purchasing power)or in terms of the US government spending less and being fiscally responsible then I must have blinked and missed it all.

When it comes to the USD and the US Congress the "short term" is just that as "image" is everything!]]> Fri, 19 Feb 2010 06:11:29 -0500
Lots of talk about "tightening" ... Due to the rate hike the US FED is "tightening"!

I just finished reading the Mish take on the US FED raising the discount rate to 0.75%. He pretty much says the same as I do in terms of the effect on "lending" Then he goes on to say this:

"All the news articles on this hike are reiterating this is not a change in policy. Say what you want, but this appears to be a change in policy from doing nothing to tightening."

This is the same as the Bloomberg article says "tightening" and the same as the Hoenig rant about "pain" and "tightening". I have to ask ... who are they "tightening"? I also have to ask Mr. Hoening ... "Who isn't feeling some pain already besides Goldman Sachs execs and Oprah?" Is it the rampant huge spending in the retail sector with credit card rates at 30%? Is it all those SubPrimers buying McMansions again as the media keeps announcing record foreclosures? Is it all those small business guys who are borrowing wildly starting the SBAPRIME BUBBLE, to expand their business as they file loss carry backs on their 1040s? Is it those 52 million Americans on unemployment and food stamps that need to stop spending like drunken sailors? Among all my friends and business associates I know of none that are even taking out a car loan! I know many who have cut their credit cards in half and I know many who have essentially gone into credit hibernation.

The only "tightening" needs to happen over at the US Treasury via Capital Hill ...

To think the US Treasury will "tighten" is misguided. By raising the US Debt Ceiling another $1.9TRIL on Friday, 2/12, it seems moronic to think the US Treasury will force Congress to tighten by cutting spending just because the US FED hikes the discount rate or any rate for that matter. US Treasury historical data shows that since 1970 the US Treasury has average outlays(spending) of 31.7% of GDP over this 40 year period, even when Volcker had Fed Fund Rates at 20%. I mean the US Congress is committed to spend trillions more to stay in power if they have to. I have never seen a trend reversal there. I have to say that one of the main distractions to the US FED policy of currency destruction has been the "interest rate side show"! If interest rates meant anything in terms of the USD maintaining its "store of value"(aka purchasing power)or in terms of the US government spending less and being fiscally responsible then I must have blinked and missed it all.

When it comes to the USD and the US Congress the "short term" is just that as "image" is everything!]]> http://seekingalpha.com/article/188669/comments?source=feed#comment-899545 899545
The most important factor for any government with a large population, like China, is to provide jobs. Unlike Marx comments that "religion is the opiate of the masses" China rightfully believes "jobs are the opiate of the masses". Jobs can be created via exports or internally providing the economy is growing, whereby wages can pay for products produced within the country that can compete with foreign imports. So far the Chinese have depended on the proliferation of consumer debt from its largest long term trading partner the USA. This door was first opened by Nixon in 1972 and opened wider in 1976 after Mao died.

It makes you wonder what exactly went on when Nixon first went to China in 1972? China was providing weapons to North Vietnam at the time Nixon was shaking hands with Mao. I mean here we are in 1975 and America has just capitulated on the Vietnam War whereby our enemy the North Vietnamese Communists were funded by China and Russia. We lost some 60,000 American youth and then the very next year Nixon is in China "opening doors" with the same country that was our sworn enemy and one of the major lynch pins in the entire Domino Theory of how Communism would take over the entire World. Well, as it turns out now our former Domino Theory enemy is our largest buyer of US Debt and our industrial sector has crashed to levels equal to 1940(Google MANEMP). How exactly have Americans benefited from all this? I know of 60,000 Americans who were essentially thrown under the bus.

With all the naysayers about China and its economic woes I would just say be careful for what you wish for since I see a lot of countries tightening belts and the more they tighten the less they will buy US Debt in the process. In order to retain power what capital is left in Europe and China will be used to keep the masses from rioting in the streets rather than supporting US Congress and its addiction to debt.

I am always suspicious of a company like GS who puts out frontrunning news, a ploy that has been run on Wall Street since stocks were literally traded on the curb! So here is GS under investigation in the EU and possibly facing a ban from doing business in Europe talking up a Yuan revaluation. Not exactly the pinnacle of GS credibility these days. Not to mention a number of US Banks, GS included, who have been recently slapped by China recently in the derivatives markets. I am not sure that China looks upon GS favorably either. I doubt the Chinese government appreciates GS calling for a Yuan revaluation ... as if the US Congress isn't doing enough meddling.

One way or another Americans will have to pay more at WalMart, whether due to the Yuan or the USD. You have to hand it to the Chinese though. I often wonder how Washington DC would handle things if the population of the USA were more than three times what it is now. But still all the Asian exporters are in trouble since Europe and the USA will be unable to expand consumer debt any time soon. The era of the Home ATM is over here in America and in Europe.

A study of American consumerism however, will show you that the US Treasury owns 32% of total US consumption per GDP. If 70% of America's GDP is consumer based then the US government accounts for nearly half. Going back to 1970 the average US Treasury outlays per GDP, meaning "spending" has been 31.7% of GDP. Now if you think that raising the Fed Funds Rate, even to 20%, like Volcker did in Dec 1979, stops the US Congress from spending then think again. The way I see it 32% of America's GDP is impervious to interest rates. Only American citizens switch to austerity not the government. It matters not which political party is in power. If you have a blank check that never runs out there is never an incentive to stop spending. That is just human nature. Is China any different and just how much of China's GDP based on Chinese government outlays (spending)?

China may let the Yuan appreciate 5% or 10%, truly who really knows what a closed Communist government is up to, yet none of that matters to the US Treasury, since nothing stops outlays or debt. Still I would be more concerned about what it will take for the foreigners, or for that matter Americans, to start buying the long bond again? The only way investors will take on more long term risk is to be paid a higher rate of return not a lower one.

Perhaps Obama's next Jobs Summit he should invite the Chinese Communists, since obviously they have done a better job of creating jobs than the American governments over the past 38 years.]]> Tue, 16 Feb 2010 12:33:51 -0500
The most important factor for any government with a large population, like China, is to provide jobs. Unlike Marx comments that "religion is the opiate of the masses" China rightfully believes "jobs are the opiate of the masses". Jobs can be created via exports or internally providing the economy is growing, whereby wages can pay for products produced within the country that can compete with foreign imports. So far the Chinese have depended on the proliferation of consumer debt from its largest long term trading partner the USA. This door was first opened by Nixon in 1972 and opened wider in 1976 after Mao died.

It makes you wonder what exactly went on when Nixon first went to China in 1972? China was providing weapons to North Vietnam at the time Nixon was shaking hands with Mao. I mean here we are in 1975 and America has just capitulated on the Vietnam War whereby our enemy the North Vietnamese Communists were funded by China and Russia. We lost some 60,000 American youth and then the very next year Nixon is in China "opening doors" with the same country that was our sworn enemy and one of the major lynch pins in the entire Domino Theory of how Communism would take over the entire World. Well, as it turns out now our former Domino Theory enemy is our largest buyer of US Debt and our industrial sector has crashed to levels equal to 1940(Google MANEMP). How exactly have Americans benefited from all this? I know of 60,000 Americans who were essentially thrown under the bus.

With all the naysayers about China and its economic woes I would just say be careful for what you wish for since I see a lot of countries tightening belts and the more they tighten the less they will buy US Debt in the process. In order to retain power what capital is left in Europe and China will be used to keep the masses from rioting in the streets rather than supporting US Congress and its addiction to debt.

I am always suspicious of a company like GS who puts out frontrunning news, a ploy that has been run on Wall Street since stocks were literally traded on the curb! So here is GS under investigation in the EU and possibly facing a ban from doing business in Europe talking up a Yuan revaluation. Not exactly the pinnacle of GS credibility these days. Not to mention a number of US Banks, GS included, who have been recently slapped by China recently in the derivatives markets. I am not sure that China looks upon GS favorably either. I doubt the Chinese government appreciates GS calling for a Yuan revaluation ... as if the US Congress isn't doing enough meddling.

One way or another Americans will have to pay more at WalMart, whether due to the Yuan or the USD. You have to hand it to the Chinese though. I often wonder how Washington DC would handle things if the population of the USA were more than three times what it is now. But still all the Asian exporters are in trouble since Europe and the USA will be unable to expand consumer debt any time soon. The era of the Home ATM is over here in America and in Europe.

A study of American consumerism however, will show you that the US Treasury owns 32% of total US consumption per GDP. If 70% of America's GDP is consumer based then the US government accounts for nearly half. Going back to 1970 the average US Treasury outlays per GDP, meaning "spending" has been 31.7% of GDP. Now if you think that raising the Fed Funds Rate, even to 20%, like Volcker did in Dec 1979, stops the US Congress from spending then think again. The way I see it 32% of America's GDP is impervious to interest rates. Only American citizens switch to austerity not the government. It matters not which political party is in power. If you have a blank check that never runs out there is never an incentive to stop spending. That is just human nature. Is China any different and just how much of China's GDP based on Chinese government outlays (spending)?

China may let the Yuan appreciate 5% or 10%, truly who really knows what a closed Communist government is up to, yet none of that matters to the US Treasury, since nothing stops outlays or debt. Still I would be more concerned about what it will take for the foreigners, or for that matter Americans, to start buying the long bond again? The only way investors will take on more long term risk is to be paid a higher rate of return not a lower one.

Perhaps Obama's next Jobs Summit he should invite the Chinese Communists, since obviously they have done a better job of creating jobs than the American governments over the past 38 years.]]> http://seekingalpha.com/article/188380/comments?source=feed#comment-896151 896151
The disconcerting part of any of this "marketable debt" analysis is that it leaves the "non-marketable" debt under the radar. The US Treasury issues daily statements that show the balance sheet of the American government ... assets and liabilities.

Right now we are living in a LIABILITY BUBBLE. Far and wide the "liabilities" of the US Treasury and the other major Western governments are rapidly rising. If you break down the assets then essentially all any government has to rely on are tax revenues. Tax revenues made up of every form of tax from Income tax to Corporate tax to Estate tax to Excise tax. In truth no government should spend more than it's receipts(revenues), however thanks to enormous political will to grow government we are caught in a debt trap whereby more and more debt must be issued in order to maintain American lifestyles. In economics there is a term for such actions and it is called "Price Fixing"! Mostly this term is used in relation to commodities such as oil, however I am using it in terms of "lifestyle as a commodity". In America we have voted in such a historical pattern such as to avoid as much financial pain as possible. The two party political monopoly has thus far been successful in providing the American voter with as much "pain free" lifestyle as possible and as a reward for these efforts they have retained power for many decades. This two party political monopoly could not have been this successful without the aid of the money monopoly that was granted the US FED back in 1913. Hand-in-hand these two monopolies own America and are responsible for managing not our "dollar" but our "debt", since what is a US dollar other than a "debt derivative". Every global currency is in fact a debt derivative, whereby each piece of paper money "leverages" debt. As an example of this leverage let me use as an example the Feb 11th US Treasury statement.

The US Treasury and their incurable addiction to "debt" went on a rampage on Thursday to the tune of $111.3BIL USD worth of "withdrawals" (outlays) on that one day. Those withdrawals or outlays included US Treasury marketable debt. It did not include the "non-marketable" debt. This puts the total outlays for the barely four month period since FY2010 began at $4.1TRIL USD.

So how much net(net is gross revenues minus refunds)tax revenues were deposited at the US Treasury that same day that $111.3BIL was spent? A teency $1.4BIL USD ... that's nearly 80 to 1 leverage on each $1USD of net tax revenues. That would make Goldman Sachs green with envy!!!!

Combined marketable(treasuries) and non-marketable(Government Account Series)US Debt based on the Feb 11th US Treasury statement is now over $21TRIL USD, in a four month time period. While we read and hear all day long the huge debt we have with China it pales in comparison to the huge debt the US government owes its own citizens and the many US Trust Funds it has been "borrowing" from for many decades.

Really all any one of us has to do to embarrass one of our elected officials is to hold up the Feb 11th US Treasury statement and ask them to explain the spending and the debt. My guess is that not one in 100 of the Gang of 535(Congress) can explain it and possibly only 5 out of a hundred have ever even seen it.]]> Sat, 13 Feb 2010 14:38:45 -0500
The disconcerting part of any of this "marketable debt" analysis is that it leaves the "non-marketable" debt under the radar. The US Treasury issues daily statements that show the balance sheet of the American government ... assets and liabilities.

Right now we are living in a LIABILITY BUBBLE. Far and wide the "liabilities" of the US Treasury and the other major Western governments are rapidly rising. If you break down the assets then essentially all any government has to rely on are tax revenues. Tax revenues made up of every form of tax from Income tax to Corporate tax to Estate tax to Excise tax. In truth no government should spend more than it's receipts(revenues), however thanks to enormous political will to grow government we are caught in a debt trap whereby more and more debt must be issued in order to maintain American lifestyles. In economics there is a term for such actions and it is called "Price Fixing"! Mostly this term is used in relation to commodities such as oil, however I am using it in terms of "lifestyle as a commodity". In America we have voted in such a historical pattern such as to avoid as much financial pain as possible. The two party political monopoly has thus far been successful in providing the American voter with as much "pain free" lifestyle as possible and as a reward for these efforts they have retained power for many decades. This two party political monopoly could not have been this successful without the aid of the money monopoly that was granted the US FED back in 1913. Hand-in-hand these two monopolies own America and are responsible for managing not our "dollar" but our "debt", since what is a US dollar other than a "debt derivative". Every global currency is in fact a debt derivative, whereby each piece of paper money "leverages" debt. As an example of this leverage let me use as an example the Feb 11th US Treasury statement.

The US Treasury and their incurable addiction to "debt" went on a rampage on Thursday to the tune of $111.3BIL USD worth of "withdrawals" (outlays) on that one day. Those withdrawals or outlays included US Treasury marketable debt. It did not include the "non-marketable" debt. This puts the total outlays for the barely four month period since FY2010 began at $4.1TRIL USD.

So how much net(net is gross revenues minus refunds)tax revenues were deposited at the US Treasury that same day that $111.3BIL was spent? A teency $1.4BIL USD ... that's nearly 80 to 1 leverage on each $1USD of net tax revenues. That would make Goldman Sachs green with envy!!!!

Combined marketable(treasuries) and non-marketable(Government Account Series)US Debt based on the Feb 11th US Treasury statement is now over $21TRIL USD, in a four month time period. While we read and hear all day long the huge debt we have with China it pales in comparison to the huge debt the US government owes its own citizens and the many US Trust Funds it has been "borrowing" from for many decades.

Really all any one of us has to do to embarrass one of our elected officials is to hold up the Feb 11th US Treasury statement and ask them to explain the spending and the debt. My guess is that not one in 100 of the Gang of 535(Congress) can explain it and possibly only 5 out of a hundred have ever even seen it.]]> http://seekingalpha.com/article/187858/comments?source=feed#comment-893373 893373
I am a member of the NFIB ...

Last year when Obama had his Jobs Summit he invited top Fortune 500 CEOs and union bosses but did not invite small business or anyone from the NFIB. I got a letter from the NFIB stating that fact.

My brother-in-law works for a San Diego bank that issues SBA loans and one of the requirements is that you put up your home as collateral for the loan. I can vouch for that as I considered filing for a SBA loan back in 1990 and essentially the requirements were so stringent that you literally had to show the SBA that you did not need a loan to get one. Perhaps that has some influence over reasons why business owners prefer not get a loan. Too bad we never had a SubSBA instead of SubPrime. I would rather see millions of Americans getting easy loans to start businesses and create jobs rather than McMansion flipping..

Next hurdle for small business in America are the corporate tax brackets that favor corporations with taxable income of $10mil or more. Small business is at the bottom with the higher tax brackets being forced on the smaller income brackets. NO INCENTIVES!

Contrast that to Panama and Ghana where small business is given a 10 year tax free period to get started with other government assistance thrown in. It is obvious that those two countries are seeking jobs in the short term in hopes of expanding tax revenues in the long run.

Obama Stimulus
Shovel ready = union

So far I have never seen a union create a single job.

Where are the incentives to start a business here in America? So long as no incentives exist then no jobs will either. Taxing the wealthy solves nothing and creates no jobs.

At the current rate of debt creation whereby each $1USD of tax revenue leverages $6 of marketable US Treasury debt it makes no sense to collect income tax any more. Now if you measure the total US Debt which includes the IOUs of the "non-marketable" debt Government Account Series then the tax revenues get leveraged up 30 times. For what purpose are income taxes compared to massive government spending and debt? If the US government does not cut spending and debt then taxes are useless. Serious cuts ... not the tiny $20BIL that Obama proposed in his State of the Union speech.

Prior to the US FED in 1913 income tax was only used to collect funds to repay war debt. Income tax was never meant to be permanent. Income tax was made permanent the same year the US FED was created. Not by chance I would say ...]]> Thu, 11 Feb 2010 14:52:44 -0500
I am a member of the NFIB ...

Last year when Obama had his Jobs Summit he invited top Fortune 500 CEOs and union bosses but did not invite small business or anyone from the NFIB. I got a letter from the NFIB stating that fact.

My brother-in-law works for a San Diego bank that issues SBA loans and one of the requirements is that you put up your home as collateral for the loan. I can vouch for that as I considered filing for a SBA loan back in 1990 and essentially the requirements were so stringent that you literally had to show the SBA that you did not need a loan to get one. Perhaps that has some influence over reasons why business owners prefer not get a loan. Too bad we never had a SubSBA instead of SubPrime. I would rather see millions of Americans getting easy loans to start businesses and create jobs rather than McMansion flipping..

Next hurdle for small business in America are the corporate tax brackets that favor corporations with taxable income of $10mil or more. Small business is at the bottom with the higher tax brackets being forced on the smaller income brackets. NO INCENTIVES!

Contrast that to Panama and Ghana where small business is given a 10 year tax free period to get started with other government assistance thrown in. It is obvious that those two countries are seeking jobs in the short term in hopes of expanding tax revenues in the long run.

Obama Stimulus
Shovel ready = union

So far I have never seen a union create a single job.

Where are the incentives to start a business here in America? So long as no incentives exist then no jobs will either. Taxing the wealthy solves nothing and creates no jobs.

At the current rate of debt creation whereby each $1USD of tax revenue leverages $6 of marketable US Treasury debt it makes no sense to collect income tax any more. Now if you measure the total US Debt which includes the IOUs of the "non-marketable" debt Government Account Series then the tax revenues get leveraged up 30 times. For what purpose are income taxes compared to massive government spending and debt? If the US government does not cut spending and debt then taxes are useless. Serious cuts ... not the tiny $20BIL that Obama proposed in his State of the Union speech.

Prior to the US FED in 1913 income tax was only used to collect funds to repay war debt. Income tax was never meant to be permanent. Income tax was made permanent the same year the US FED was created. Not by chance I would say ...]]> http://seekingalpha.com/article/186928/comments?source=feed#comment-885350 885350
I am continually amazed when I see people speak about bailing out governments. The US government has been "bailing" itself out for decades now. What else has this huge issuance of debt been about?

If you look at the latest US Treasury statement for Feb 4 you will see that the Obama regime already has FY 2010 outlays of $3.9TRIL USD in four months time. That's nearly $1TRIL per month spending. Forget about the measly $3.8TRIL Budget, you better look at spending. It does no good to raise taxes without significant cuts in government spending. Add in the debt issuance over the past four months to the equation and we're looking at 30:1 leverage. $30USD of debt issues for every $1USD of tax revenues. That means the USD is mainly a debt derivative. Yet what country's currency in the World is not a debt derivative? Global governments always live beyond their means. Not even the Swiss are immune any more

The real world does need PM ...

Why is now a great time to move into mining stocks? I moved into these stocks in the midst of the bank crisis at the end of 2008. Are you saying there are no more bank crisis ahead? No more sovereign defaults? If so you discount much about history and banking! The USA has defaulted twice, once in 1933 and another time in 1971. Then there is the entire Asia monetary collapse in 1997. Here is a link to refresh your memory.

Link: en.wikipedia.org/wiki/...

Of course also Mexico, Argentina, Iceland ... Why are EU countries immune? I don't think they are.

Then recall the LTCM also in the 1990s. Here's a link.

Link: en.wikipedia.org/wiki/...

US Banks are always getting bailed out ...

I have to doubt your assertion that defaults are done. Not for sovereigns and certainly not for banks. As long as I have been alive the defaults keep coming and they seem to get bigger as time goes by. I would classify the next bubble as a LIABILITY BUBBLE, simply because that is all I see that is growing on Balance Sheets of sovereigns. Certainly the US Balance Sheet and that of the US FED is growing liabilities at rapid rates.

Perhaps gold and silver mining companies should be on your list.
The one ASX listed gold miner SLR I bought back in Q4 2008 is up over 500% even with the correction. Then if you add in the AUD/USD currency arbitrage that existed then add another 30%. I would not discount monetary metals so easily especially in such a liability ridden World.]]> Sat, 06 Feb 2010 09:30:52 -0500
I am continually amazed when I see people speak about bailing out governments. The US government has been "bailing" itself out for decades now. What else has this huge issuance of debt been about?

If you look at the latest US Treasury statement for Feb 4 you will see that the Obama regime already has FY 2010 outlays of $3.9TRIL USD in four months time. That's nearly $1TRIL per month spending. Forget about the measly $3.8TRIL Budget, you better look at spending. It does no good to raise taxes without significant cuts in government spending. Add in the debt issuance over the past four months to the equation and we're looking at 30:1 leverage. $30USD of debt issues for every $1USD of tax revenues. That means the USD is mainly a debt derivative. Yet what country's currency in the World is not a debt derivative? Global governments always live beyond their means. Not even the Swiss are immune any more

The real world does need PM ...

Why is now a great time to move into mining stocks? I moved into these stocks in the midst of the bank crisis at the end of 2008. Are you saying there are no more bank crisis ahead? No more sovereign defaults? If so you discount much about history and banking! The USA has defaulted twice, once in 1933 and another time in 1971. Then there is the entire Asia monetary collapse in 1997. Here is a link to refresh your memory.

Link: en.wikipedia.org/wiki/...

Of course also Mexico, Argentina, Iceland ... Why are EU countries immune? I don't think they are.

Then recall the LTCM also in the 1990s. Here's a link.

Link: en.wikipedia.org/wiki/...

US Banks are always getting bailed out ...

I have to doubt your assertion that defaults are done. Not for sovereigns and certainly not for banks. As long as I have been alive the defaults keep coming and they seem to get bigger as time goes by. I would classify the next bubble as a LIABILITY BUBBLE, simply because that is all I see that is growing on Balance Sheets of sovereigns. Certainly the US Balance Sheet and that of the US FED is growing liabilities at rapid rates.

Perhaps gold and silver mining companies should be on your list.
The one ASX listed gold miner SLR I bought back in Q4 2008 is up over 500% even with the correction. Then if you add in the AUD/USD currency arbitrage that existed then add another 30%. I would not discount monetary metals so easily especially in such a liability ridden World.]]> http://seekingalpha.com/article/183573/comments?source=feed#comment-863433 863433
The failure originated in 1913 when our politicians at the time allowed the central bank system to be created. Any time you allow a "monopoly" to exist you disallow competition and free markets.

I see no difference in the central bank(US FED)operating in a complete vaccuum just like the Seven Sister oil companies operated the oil monopoly 100 years ago. The US FED has monopoly over interest rates and monetay policy all the while usurping banking regulation to suit the desires of the US FED bank cartel. None of this is Constituional and none of this can be lawfully backstopped by the US Constituion. The US FED over the past 97 years has put in an abysmal performance based purely on the basis of monetary value(purchasing power).

I disagree with both Denninger and Mish. Instead of debating 90 year old regulations just abolish the "monopoly". Its an anti-trust issue.. Monopolies cannot ultimately be regulated.

Let the GAO run America's monetary policy. It is the only transparent and reputable agency left in Washington DC.]]> Fri, 22 Jan 2010 13:13:08 -0500
The failure originated in 1913 when our politicians at the time allowed the central bank system to be created. Any time you allow a "monopoly" to exist you disallow competition and free markets.

I see no difference in the central bank(US FED)operating in a complete vaccuum just like the Seven Sister oil companies operated the oil monopoly 100 years ago. The US FED has monopoly over interest rates and monetay policy all the while usurping banking regulation to suit the desires of the US FED bank cartel. None of this is Constituional and none of this can be lawfully backstopped by the US Constituion. The US FED over the past 97 years has put in an abysmal performance based purely on the basis of monetary value(purchasing power).

I disagree with both Denninger and Mish. Instead of debating 90 year old regulations just abolish the "monopoly". Its an anti-trust issue.. Monopolies cannot ultimately be regulated.

Let the GAO run America's monetary policy. It is the only transparent and reputable agency left in Washington DC.]]> http://seekingalpha.com/article/180963/comments?source=feed#comment-837149 837149
The trouble with CHINA? Imagine what America would look like without a China?

First off who'd buy our debt? Which in my view is similar to a "promissory note" that's honored by the issuance of more promissory notes not trade.

Second off how much higher would WalMart prices be without a cheap, non-union labor force that isn't hamstrung by endless taxation, regulations, intervention and class action? Would China even exist if their factory workers were getting paid the same average pay of $71,000USD that union government employees and unions get paid?

On the debt side of the equation no country on Earth surpasses our expertise at "exporting debt". The US Treasury for the first three months of FY 2010 has created $2.1TRIL USD worth of marketable US Treasury debt issuances. That's a TARP every month! It makes Hank Paulson look like a miser ... Then the non-marketable US Treasury Government Account Series is even worse. The US Treasury owes China next to nothing compared to what is owed US Trust Funds and US citizens.

The idea that all our troubles started with Bush 43 is ludicrous. It takes "two political parties" to spend money. Spend they have, but the genie was let out of the bottle back in 1913 and prior with the passing of the Federal Reserve Act. JFK put us in Vietnam and LBJ accelerated and the gas pedal has been "to the metal" ever since! Even Obama is outspending Bush 43 on Defense.

Two monopolies run America, the two party political one and the money one. That hasn't changed since 1913, 97 years ago.

I find it interesting that there are so many comments from China ... They seem to be more educated on capitalism than the average American. If they were US citizens from the sounds of them they would vote for RON PAUL.

- Eliminate the US FED
- Eliminate income tax

The US FED is an obvious matter as it clearly is not allowed under the US Constitution, but even more so under US "Anti-Trust" laws. The Seven Sisters(oil company monopoly) were broken up using US Anti-Trust laws, so I see no difference between an oil monopoly and a money monopoly.

On the US income tax side I agree it should be eliminated, but not for the same reasons stated. Originally US Income Tax was never permanent. It was only used after wars in order to pay the debt down, but in the same year that the US FED was created in 1913, US Income Tax became "permanent". Call it a coincidence if you will, but I doubt it. I think the US FED needed a "guarantee" ... hence the "bailout" was born.

Quite clearly US Income Tax revenues cannot keep up with US DEBT issuance and outlays. This can be seen over at the US Treasury Daily Statement every day. As an example on December 31st, the last day of the calendar year and the end of the first FY 2010 quarter the US Treasury recorded total US DEBT issuance of $525BIL USD, both marketable and non-marketable. Total "net" tax revenues for that day was only $9.1BIL USD. That means that for every $1 of tax revenues the US Treasury is issuing $58 in debt.

Further, on that same day the three enttitlements, Social Security, Medicare and Medicaid had outlays over $27BIL USD. The line items for GSE(agency debt) ... think Fannie Mae and Freddie ... totaled over $30BIL for the week. US Defense and military outlays for that day were almost $9BIL. All outlays(spending) for December 31st totaled $168BIL USD, with US net tax revenues at a paltry $9.1BIL that's over 18:1 leverage. Add in the debt issuance and the leverage jumps over 63:1. At that pace the US Treasury resembles AIG derivative leverage. When it comes down to it what is a US Dollar other than a "debt derivative"? Money is suppose to be a "store of value" but instead it is now a "store of debt".

The Trouble with China is we can't pay them! All the US Treasury has ever done is pay the "minimum due" on the credit card. Principle? Why else are the Fed Funds rates so low?

For all those Chinese out there ... "Government is essentially the negation of Liberty" How's that you may ask? Well, here in America the average American pays around 54% in various taxes to all levels of government(fed, state, local). How much "Freedom and Liberty" can you have when you're working for over half your life just to pay the government? Americans have been conned into believing that the US government in Washington DC can manage our own money better than we can. The US Treasury does not "manage" it "leverages"! We send $1 in taxes to DC and we get back 15 cents in goods and services paid for with $18 of debt! Who said you can't spend your way to prosperity?

CHANGE?

Americans suffer from Stockholm Syndrome when it comes to voting. We are always loyal to our captors.]]> Thu, 07 Jan 2010 04:11:08 -0500
The trouble with CHINA? Imagine what America would look like without a China?

First off who'd buy our debt? Which in my view is similar to a "promissory note" that's honored by the issuance of more promissory notes not trade.

Second off how much higher would WalMart prices be without a cheap, non-union labor force that isn't hamstrung by endless taxation, regulations, intervention and class action? Would China even exist if their factory workers were getting paid the same average pay of $71,000USD that union government employees and unions get paid?

On the debt side of the equation no country on Earth surpasses our expertise at "exporting debt". The US Treasury for the first three months of FY 2010 has created $2.1TRIL USD worth of marketable US Treasury debt issuances. That's a TARP every month! It makes Hank Paulson look like a miser ... Then the non-marketable US Treasury Government Account Series is even worse. The US Treasury owes China next to nothing compared to what is owed US Trust Funds and US citizens.

The idea that all our troubles started with Bush 43 is ludicrous. It takes "two political parties" to spend money. Spend they have, but the genie was let out of the bottle back in 1913 and prior with the passing of the Federal Reserve Act. JFK put us in Vietnam and LBJ accelerated and the gas pedal has been "to the metal" ever since! Even Obama is outspending Bush 43 on Defense.

Two monopolies run America, the two party political one and the money one. That hasn't changed since 1913, 97 years ago.

I find it interesting that there are so many comments from China ... They seem to be more educated on capitalism than the average American. If they were US citizens from the sounds of them they would vote for RON PAUL.

- Eliminate the US FED
- Eliminate income tax

The US FED is an obvious matter as it clearly is not allowed under the US Constitution, but even more so under US "Anti-Trust" laws. The Seven Sisters(oil company monopoly) were broken up using US Anti-Trust laws, so I see no difference between an oil monopoly and a money monopoly.

On the US income tax side I agree it should be eliminated, but not for the same reasons stated. Originally US Income Tax was never permanent. It was only used after wars in order to pay the debt down, but in the same year that the US FED was created in 1913, US Income Tax became "permanent". Call it a coincidence if you will, but I doubt it. I think the US FED needed a "guarantee" ... hence the "bailout" was born.

Quite clearly US Income Tax revenues cannot keep up with US DEBT issuance and outlays. This can be seen over at the US Treasury Daily Statement every day. As an example on December 31st, the last day of the calendar year and the end of the first FY 2010 quarter the US Treasury recorded total US DEBT issuance of $525BIL USD, both marketable and non-marketable. Total "net" tax revenues for that day was only $9.1BIL USD. That means that for every $1 of tax revenues the US Treasury is issuing $58 in debt.

Further, on that same day the three enttitlements, Social Security, Medicare and Medicaid had outlays over $27BIL USD. The line items for GSE(agency debt) ... think Fannie Mae and Freddie ... totaled over $30BIL for the week. US Defense and military outlays for that day were almost $9BIL. All outlays(spending) for December 31st totaled $168BIL USD, with US net tax revenues at a paltry $9.1BIL that's over 18:1 leverage. Add in the debt issuance and the leverage jumps over 63:1. At that pace the US Treasury resembles AIG derivative leverage. When it comes down to it what is a US Dollar other than a "debt derivative"? Money is suppose to be a "store of value" but instead it is now a "store of debt".

The Trouble with China is we can't pay them! All the US Treasury has ever done is pay the "minimum due" on the credit card. Principle? Why else are the Fed Funds rates so low?

For all those Chinese out there ... "Government is essentially the negation of Liberty" How's that you may ask? Well, here in America the average American pays around 54% in various taxes to all levels of government(fed, state, local). How much "Freedom and Liberty" can you have when you're working for over half your life just to pay the government? Americans have been conned into believing that the US government in Washington DC can manage our own money better than we can. The US Treasury does not "manage" it "leverages"! We send $1 in taxes to DC and we get back 15 cents in goods and services paid for with $18 of debt! Who said you can't spend your way to prosperity?

CHANGE?

Americans suffer from Stockholm Syndrome when it comes to voting. We are always loyal to our captors.]]> http://seekingalpha.com/article/180560/comments?source=feed#comment-830422 830422
Here is a different angle on Warren Buffet and BRK that does get much air play.

Yes, I agree Buffet is a great CEO, if you have to have a CEO.

I have run the BRK % change numbers you list and I can't get them to add up to 76%, I only get 73.9%. Maybe my math is wrong. Could you double check it please.

Math aside ...

Let me show you the ten year performance of another company that not only beat BRK, but also the S&P.

YEAR %CHNG
2009 - 23.9%
2008 - 5.8%
2007 - 31.4%
2006 - 22.8%
2005 - 18.2%
2004 - 5.2%
2003 - 19.6%
2002 - 24.7%
2001 - 2.5%
2000 - .03%

Average annual return = 15.4%

Average annual return for BRK = 7.6%

I know that back in 2005 Warren Buffet owned this company's former subsidiary that he picked up in a "spin off" IPO but was forced to sell when he got into trouble on the General RE SEC probe.

The company I list above that has no CEO is "gold". The "spin off" IPO I speak of is "silver" which returned an average annual return over the past ten years of 14.5%, which also beat BRK and the S&P. Warren Buffet once owned 2.3mil ounces of silver. Interesting that when he sold off his silver holdings the SEC probe on General RE ended. Then lets not forget Buffet's failed attempt at shorting the USD, when all of a sudden Goldman Sachs "reweighted" its GSCI forcing a sell off in oil that rallied the USD back in the Bush days. Now Warren Buffet is an ardent supporter of Goldman Sachs and a major shareholder. Lets face it Warren Buffet has always been a high profile guru. Sometimes it is a big disadvantage to being the guru. A couple major spankings like that and now he's onboard towing the US FED and US Treasury line.

Still I do admire Warren Buffet and always have, but in my opinion he is not the same "maverick" he once was when he owned silver and shorted the USD. Had he held onto his silver and even added gold his ten year performance would have improved.

My point? It pays to diversify!

Disclosure: I own a minor holding in BRK B and I do own gold and silver.]]> Sun, 03 Jan 2010 10:32:34 -0500
Here is a different angle on Warren Buffet and BRK that does get much air play.

Yes, I agree Buffet is a great CEO, if you have to have a CEO.

I have run the BRK % change numbers you list and I can't get them to add up to 76%, I only get 73.9%. Maybe my math is wrong. Could you double check it please.

Math aside ...

Let me show you the ten year performance of another company that not only beat BRK, but also the S&P.

YEAR %CHNG
2009 - 23.9%
2008 - 5.8%
2007 - 31.4%
2006 - 22.8%
2005 - 18.2%
2004 - 5.2%
2003 - 19.6%
2002 - 24.7%
2001 - 2.5%
2000 - .03%

Average annual return = 15.4%

Average annual return for BRK = 7.6%

I know that back in 2005 Warren Buffet owned this company's former subsidiary that he picked up in a "spin off" IPO but was forced to sell when he got into trouble on the General RE SEC probe.

The company I list above that has no CEO is "gold". The "spin off" IPO I speak of is "silver" which returned an average annual return over the past ten years of 14.5%, which also beat BRK and the S&P. Warren Buffet once owned 2.3mil ounces of silver. Interesting that when he sold off his silver holdings the SEC probe on General RE ended. Then lets not forget Buffet's failed attempt at shorting the USD, when all of a sudden Goldman Sachs "reweighted" its GSCI forcing a sell off in oil that rallied the USD back in the Bush days. Now Warren Buffet is an ardent supporter of Goldman Sachs and a major shareholder. Lets face it Warren Buffet has always been a high profile guru. Sometimes it is a big disadvantage to being the guru. A couple major spankings like that and now he's onboard towing the US FED and US Treasury line.

Still I do admire Warren Buffet and always have, but in my opinion he is not the same "maverick" he once was when he owned silver and shorted the USD. Had he held onto his silver and even added gold his ten year performance would have improved.

My point? It pays to diversify!

Disclosure: I own a minor holding in BRK B and I do own gold and silver.]]> http://seekingalpha.com/article/180466/comments?source=feed#comment-828922 828922
From the American Dream side of the equation we have this PRICE FIXING engaged by the US Treasury.

GSE OBLIGATIONS
And the US BANK BAILOUTS continue ... Now Congress need not vote or ask permission from WE THE PEOPLE in order to hand huge bailouts to insolvent banks with back doors at Fannie Mae and Freddie.

We have a "new" line item on the US TREASURY DAILY STATEMENT, entitled "GSE OBLIGATIONS/HFA INITIATIVE" that debuted on Dec 28th and I see on Dec 30th that new line item, only two days old, has grown another $8.25BIL on Dec 30th, Wednesday. Now the two day total is $15.8BIL USD.

Note the word "OBLIGATIONS" right after GSE ...

In two days that line item has exceeded three months worth of US Treasury outlays(spending) for each of the following US Treasury line items.

- Energy Dept
- Federal Employee Insurance Payments
- Federal Highway Admin
- Food Stamps
- GSA
- Justice Dept
- Labor Dept
- NASA
- Temp Assistance for Needy
- Transport Security
- Veterans Affairs
- Deposit Insurance Fund
- Export/Import Bank
- FAA
- Federal Railroad Admin
- Federal Transit Admin
- Minerals Management Service
- National Highway Traffic Safety
- SBA
- TARP

TREASURY GONE WILD!

How can any significant urban or climate of defense issues be solved or even considered when the US Treasury is engaged in diverting public funds to socialize bank losses?

If you are not a bank in America then you are low priority!

Its THE LONG EMERGENCY!]]> Fri, 01 Jan 2010 11:02:19 -0500
From the American Dream side of the equation we have this PRICE FIXING engaged by the US Treasury.

GSE OBLIGATIONS
And the US BANK BAILOUTS continue ... Now Congress need not vote or ask permission from WE THE PEOPLE in order to hand huge bailouts to insolvent banks with back doors at Fannie Mae and Freddie.

We have a "new" line item on the US TREASURY DAILY STATEMENT, entitled "GSE OBLIGATIONS/HFA INITIATIVE" that debuted on Dec 28th and I see on Dec 30th that new line item, only two days old, has grown another $8.25BIL on Dec 30th, Wednesday. Now the two day total is $15.8BIL USD.

Note the word "OBLIGATIONS" right after GSE ...

In two days that line item has exceeded three months worth of US Treasury outlays(spending) for each of the following US Treasury line items.

- Energy Dept
- Federal Employee Insurance Payments
- Federal Highway Admin
- Food Stamps
- GSA
- Justice Dept
- Labor Dept
- NASA
- Temp Assistance for Needy
- Transport Security
- Veterans Affairs
- Deposit Insurance Fund
- Export/Import Bank
- FAA
- Federal Railroad Admin
- Federal Transit Admin
- Minerals Management Service
- National Highway Traffic Safety
- SBA
- TARP

TREASURY GONE WILD!

How can any significant urban or climate of defense issues be solved or even considered when the US Treasury is engaged in diverting public funds to socialize bank losses?

If you are not a bank in America then you are low priority!

Its THE LONG EMERGENCY!]]> http://seekingalpha.com/article/180156/comments?source=feed#comment-826658 826658
Bank lending ... yes, now that is what I call a safe harbor of risk!

SBA-Small Business Administration lends, but you have to put your house up for collateral. Back in 1990 I started a business and my partner and I decided we'd try to get a SBA loan. After meeting with the loan officer we concluded that in order to get an SBA loan we had to prove we did not need an SBA loan! That is why we had no SBA SUBPRIME.

A lot has been said about what the US Treasury owes to China but if you look close at the US Treasury statements then you will see China is a drop in the bucket compared to what the US Treasury owes Americans.

The US Treasury has two types of DEBT, not just US Treasuries. On the US Treasury Daily Statement these two debts are broken down into two categories. One is the "marketable" US DEBT, which is all the US Treasuries(Bills, Notes & Bonds) that China buys and the other is the "non-marketable" debt that only Americans and American Trust Funds are allowed to "participate" in. As I read the US Treasury statement for December 28th I see the "marketable" US DEBT is now at $1.855TRIL USD. Now that is only the debt issued for three months, so the US Treasury is going into debt at a rate of $618.3BIL per month.. Meanwhile the "non marketable" debt is at $11.071TRIL USD issued in the same three month time period, so that equates to $3.6TRIL per month. Obviously it is easy to see that what the US Treasury owes China is tiny compared to what the US Treasury owes its own citizens ... Now you see why David Walker resigned from the GAO and did a CYA on 60Minutes, which went over like a boat anchor in DC. I equate the David Walker resignation from the GAO as the same as Jeffrey Skilling's sudden resignation from Enron.

The US Dollar when viewed through the prism of the US Treasury is quite clearly a "debt derivative" much like a MBS, paper backed by overrated AAa debt. Is debt a liability or an asset on a Balance Sheet? So if debt is a "liability" then so is a US Dollar. Who are the counterparties on the USD trade? China and the rest of the World, but Americans are the biggest counterparties. In reality money is supposed to be a "store of value", but in modern days money has become a "store of debt", the idea of value is gone.

The question becomes where does one go to escape these gargantuan "counterparty risks" associated with overrated AAa gargantuan debt? Do you up your counterparty exposure by buying US Treasuries or stay in cash? Do you buy real estate? Do you grab oil futures? Do you buy GOOG?

The S&P rates Sovereign Credit of each country by its "two debts". One rating is for internal debt(non-marketable securities like Government Account Series) and the other is external debt(marketable US Treasuries that China owns) taking into account trade balances. A renege on Medicare or Social Security or any of the entitlements would mean a credit rating downgrade on US internal debt. A default on the debt that China holds like what is mentioned in the article means a downgrade on US external debt.

Which direction would those brave and honorable politicians now sitting in CONGRESS chose? Would they chose default on either external debt or internal debt, thereby setting off riots in major US cities while angering China or would they just prolong things and pump the money supply to keep themselves in power for another term long enough to do what Jeffrey Skilling did? After all isn't the US Dollar backed by these very same people in Congress along with those unelected and unbiased moneticians over at the US FED? When it comes right down to it isn't the US Dollar really backed by the human condition and the myriad of egos in DC and NYC? What exactly could we use as "money" that removes the human condition from the "store of debt" equation?

MORE DEBT = WEAK DOLLAR POLICY

How much debt and how many counterparties does gold have on its Balance Sheet? How many times has gold defaulted? How many 400oz gold bars can Bernanke print using his mouse?

What is risk free anyway? Is it less liabilities or more liabilities? I guess that comes down to what the definition of "is" ... is ...]]> Wed, 30 Dec 2009 13:24:22 -0500
Bank lending ... yes, now that is what I call a safe harbor of risk!

SBA-Small Business Administration lends, but you have to put your house up for collateral. Back in 1990 I started a business and my partner and I decided we'd try to get a SBA loan. After meeting with the loan officer we concluded that in order to get an SBA loan we had to prove we did not need an SBA loan! That is why we had no SBA SUBPRIME.

A lot has been said about what the US Treasury owes to China but if you look close at the US Treasury statements then you will see China is a drop in the bucket compared to what the US Treasury owes Americans.

The US Treasury has two types of DEBT, not just US Treasuries. On the US Treasury Daily Statement these two debts are broken down into two categories. One is the "marketable" US DEBT, which is all the US Treasuries(Bills, Notes & Bonds) that China buys and the other is the "non-marketable" debt that only Americans and American Trust Funds are allowed to "participate" in. As I read the US Treasury statement for December 28th I see the "marketable" US DEBT is now at $1.855TRIL USD. Now that is only the debt issued for three months, so the US Treasury is going into debt at a rate of $618.3BIL per month.. Meanwhile the "non marketable" debt is at $11.071TRIL USD issued in the same three month time period, so that equates to $3.6TRIL per month. Obviously it is easy to see that what the US Treasury owes China is tiny compared to what the US Treasury owes its own citizens ... Now you see why David Walker resigned from the GAO and did a CYA on 60Minutes, which went over like a boat anchor in DC. I equate the David Walker resignation from the GAO as the same as Jeffrey Skilling's sudden resignation from Enron.

The US Dollar when viewed through the prism of the US Treasury is quite clearly a "debt derivative" much like a MBS, paper backed by overrated AAa debt. Is debt a liability or an asset on a Balance Sheet? So if debt is a "liability" then so is a US Dollar. Who are the counterparties on the USD trade? China and the rest of the World, but Americans are the biggest counterparties. In reality money is supposed to be a "store of value", but in modern days money has become a "store of debt", the idea of value is gone.

The question becomes where does one go to escape these gargantuan "counterparty risks" associated with overrated AAa gargantuan debt? Do you up your counterparty exposure by buying US Treasuries or stay in cash? Do you buy real estate? Do you grab oil futures? Do you buy GOOG?

The S&P rates Sovereign Credit of each country by its "two debts". One rating is for internal debt(non-marketable securities like Government Account Series) and the other is external debt(marketable US Treasuries that China owns) taking into account trade balances. A renege on Medicare or Social Security or any of the entitlements would mean a credit rating downgrade on US internal debt. A default on the debt that China holds like what is mentioned in the article means a downgrade on US external debt.

Which direction would those brave and honorable politicians now sitting in CONGRESS chose? Would they chose default on either external debt or internal debt, thereby setting off riots in major US cities while angering China or would they just prolong things and pump the money supply to keep themselves in power for another term long enough to do what Jeffrey Skilling did? After all isn't the US Dollar backed by these very same people in Congress along with those unelected and unbiased moneticians over at the US FED? When it comes right down to it isn't the US Dollar really backed by the human condition and the myriad of egos in DC and NYC? What exactly could we use as "money" that removes the human condition from the "store of debt" equation?

MORE DEBT = WEAK DOLLAR POLICY

How much debt and how many counterparties does gold have on its Balance Sheet? How many times has gold defaulted? How many 400oz gold bars can Bernanke print using his mouse?

What is risk free anyway? Is it less liabilities or more liabilities? I guess that comes down to what the definition of "is" ... is ...]]> http://seekingalpha.com/article/178744/comments?source=feed#comment-812357 812357
Quite simply put ... If you stopped all US Treasury bailouts and government contracts the FORTUNE 500 would turn into the FORTUNE 5!]]> Fri, 18 Dec 2009 12:08:08 -0500
Quite simply put ... If you stopped all US Treasury bailouts and government contracts the FORTUNE 500 would turn into the FORTUNE 5!]]> http://seekingalpha.com/article/178252/comments?source=feed#comment-811601 811601
Velocity of money in circulation is only a small part of the "velocity" pie. When you consider US Treasury debt, which is money being printed to pay for outlays and to recycle past debt obligations, debt service, then the velocity is staggering.

Perhaps if you looked into the US Treasury to see that since FY 2010 started two and a half months ago the US Treasury has printed ome $4.8TRIL USD per month in terms of TOTAL DEBT, both "marketable" and "non-marketable".

I can never understand why economist will only count money in circulation M1 as the only basis for velocity. W hen the US Treasury issues $15BIL USD per week for Social Security and Medicare benefits what is that? Is that nothing? Or is it newly printed money changing hands? When the US Treasury issues $5BIL USD per week in Unemployment Benefits in th eofrm of checks going to unemployed Americans what is that? I mean how many Americans are just holding onto their Unemployment checks and not spending them? My guess is that those checks are spent even before they are received! I can go on and on. What about the $10BIL per week handed over to the Defense Vendors? Education? Veterans? Federal Employees? Food Stamps? State Dept? Civil Workers? Employee Insurances? Its a huge list of outlays and in fact so many that the US Treasury has to have one line item entitled "UNCLASSIFIED" because there are so many outlays that cannot be listed. Last FY 2009 that one line item "UNCLASSIFIED" went over $500BIL USD, yet not one mention of this staggering number that rivals Defense, Social Security, Medicare and TARP outlays. Not even my own Senator, D Akaka(D:Hawaii) can tell me what those funds are for and where they went As I type this the UNCLASSIFIED line item went over $100BIL USD, running about $40BIL per month or $2BIL per operational day.

The money you and I exchange is quite minuscule compared to what our own US Treasury exchanges on a daily basis. Why wouldn't you want to count ALL money and not just what is in your wallet or your pay check. Big Government spends ... That is an understatement.

I will say this again from my own experience. If you stopped all government contracts the FORTUNE 500 would become the FORTUNE 5!]]> Fri, 18 Dec 2009 00:22:19 -0500
Velocity of money in circulation is only a small part of the "velocity" pie. When you consider US Treasury debt, which is money being printed to pay for outlays and to recycle past debt obligations, debt service, then the velocity is staggering.

Perhaps if you looked into the US Treasury to see that since FY 2010 started two and a half months ago the US Treasury has printed ome $4.8TRIL USD per month in terms of TOTAL DEBT, both "marketable" and "non-marketable".

I can never understand why economist will only count money in circulation M1 as the only basis for velocity. W hen the US Treasury issues $15BIL USD per week for Social Security and Medicare benefits what is that? Is that nothing? Or is it newly printed money changing hands? When the US Treasury issues $5BIL USD per week in Unemployment Benefits in th eofrm of checks going to unemployed Americans what is that? I mean how many Americans are just holding onto their Unemployment checks and not spending them? My guess is that those checks are spent even before they are received! I can go on and on. What about the $10BIL per week handed over to the Defense Vendors? Education? Veterans? Federal Employees? Food Stamps? State Dept? Civil Workers? Employee Insurances? Its a huge list of outlays and in fact so many that the US Treasury has to have one line item entitled "UNCLASSIFIED" because there are so many outlays that cannot be listed. Last FY 2009 that one line item "UNCLASSIFIED" went over $500BIL USD, yet not one mention of this staggering number that rivals Defense, Social Security, Medicare and TARP outlays. Not even my own Senator, D Akaka(D:Hawaii) can tell me what those funds are for and where they went As I type this the UNCLASSIFIED line item went over $100BIL USD, running about $40BIL per month or $2BIL per operational day.

The money you and I exchange is quite minuscule compared to what our own US Treasury exchanges on a daily basis. Why wouldn't you want to count ALL money and not just what is in your wallet or your pay check. Big Government spends ... That is an understatement.

I will say this again from my own experience. If you stopped all government contracts the FORTUNE 500 would become the FORTUNE 5!]]> http://seekingalpha.com/article/178111/comments?source=feed#comment-806799 806799
Quite simply you don't need some mythical GAAP, or even more bizarre NON-GAAP, computation to figure out TOTAL DEBT of the US government as it is published every day at the US TREASURY DAILY STATEMENT. Just go to the FINANCIAL MANAGEMENT SERVICE website, which is run by the US Treasury, and the US DEBT data is printed there daily. Like reading a quarterly corporate financial only it's daily!

The first thing you notice is that unlike a small business or a typical American household the US Treasury considers DEBT as an "asset" or "revenue". Look where they place it on their ledger. How many of us are allowed to make that statement? When has credit card debt ever been income. Ask the IRS that question.

So based on the December 11, 2009 statement I see that the TOTAL US DEBT, which includes both US Treasuries "marketable" and Government Account Series "non-marketable" is now approaching $11TRIL USD for FY 2010. FY 2010 is now only two and half months since it began October 1st. In other words the US Treasury is printing up US DEBT at a $45TRIL per month rate.

By the way, the US DEBT limit, the "gross" limit was crossed last week and in fact computed on a monthly basis is already sitting at $12.113TRIL USD, which is higher than $12.104TRIL.

There is one line item on the US TREASURY DAILY STATEMENT that I have even written my one of my Senators here in Hawaii about listed on the statement as UNCLASSIFIED. That line item will go over the $100BIL mark this week. After waiting three months he sent me a letter claiming it was "clearinghouse" mechanism. If so, it is the only "clearinghouse" in history that does not "clear", as this line item grows larger and larger daily and in fact at the end of FY 2009 it was over $500BIL USD. In fact, my own Senator does not know what that line item is or where those funds are going.

There is nothing "magical" or rocket science about any of this as it is stated in black and white for all to see right under our noses at the US TREASURY! This week marks my 30th week that I have been reporting on the US Treasury Daily Statement in my weekly article TAX REVENUE BREAKDOWN. It is published at a number of gold and trading websites, one of which is GATA, the Gold Anti Trust Assoc. Anti-trust is the perfect description of a MONEY MONOPOLY, which is exactly what the US FED is. We also have a TWO PARTY POLITICAL MONOPOLY that works hand-in-hand with the US FED in order to grow and retain government power.

What gold is and what few mention, even Roubini, is not a hedge against inflation or the US Dollar, but a hedge against the LIABILITY BUBBLE, which is in full swing at every global government and bank. Gold has no liabilities and last I looked I did not see one single CDS-Credit Default Swap contract written against it. In 5000 years gold has never filed for bankruptcy or defaulted. In the USA alone the US Dollar has defaulted to gold twice. Once in 1933 and the other time in 1971 by Nixon.

Part of the Roubini warning is that the "carry trade" will unwind and all those "risky assets" will implode. What is a "risky asset" Mr. Roubini? As I see it the only asset that CANNOT file BK or default is GOLD. What is less risky than that Mr. Roubini?

It is what it is ...]]> Tue, 15 Dec 2009 12:24:25 -0500
Quite simply you don't need some mythical GAAP, or even more bizarre NON-GAAP, computation to figure out TOTAL DEBT of the US government as it is published every day at the US TREASURY DAILY STATEMENT. Just go to the FINANCIAL MANAGEMENT SERVICE website, which is run by the US Treasury, and the US DEBT data is printed there daily. Like reading a quarterly corporate financial only it's daily!

The first thing you notice is that unlike a small business or a typical American household the US Treasury considers DEBT as an "asset" or "revenue". Look where they place it on their ledger. How many of us are allowed to make that statement? When has credit card debt ever been income. Ask the IRS that question.

So based on the December 11, 2009 statement I see that the TOTAL US DEBT, which includes both US Treasuries "marketable" and Government Account Series "non-marketable" is now approaching $11TRIL USD for FY 2010. FY 2010 is now only two and half months since it began October 1st. In other words the US Treasury is printing up US DEBT at a $45TRIL per month rate.

By the way, the US DEBT limit, the "gross" limit was crossed last week and in fact computed on a monthly basis is already sitting at $12.113TRIL USD, which is higher than $12.104TRIL.

There is one line item on the US TREASURY DAILY STATEMENT that I have even written my one of my Senators here in Hawaii about listed on the statement as UNCLASSIFIED. That line item will go over the $100BIL mark this week. After waiting three months he sent me a letter claiming it was "clearinghouse" mechanism. If so, it is the only "clearinghouse" in history that does not "clear", as this line item grows larger and larger daily and in fact at the end of FY 2009 it was over $500BIL USD. In fact, my own Senator does not know what that line item is or where those funds are going.

There is nothing "magical" or rocket science about any of this as it is stated in black and white for all to see right under our noses at the US TREASURY! This week marks my 30th week that I have been reporting on the US Treasury Daily Statement in my weekly article TAX REVENUE BREAKDOWN. It is published at a number of gold and trading websites, one of which is GATA, the Gold Anti Trust Assoc. Anti-trust is the perfect description of a MONEY MONOPOLY, which is exactly what the US FED is. We also have a TWO PARTY POLITICAL MONOPOLY that works hand-in-hand with the US FED in order to grow and retain government power.

What gold is and what few mention, even Roubini, is not a hedge against inflation or the US Dollar, but a hedge against the LIABILITY BUBBLE, which is in full swing at every global government and bank. Gold has no liabilities and last I looked I did not see one single CDS-Credit Default Swap contract written against it. In 5000 years gold has never filed for bankruptcy or defaulted. In the USA alone the US Dollar has defaulted to gold twice. Once in 1933 and the other time in 1971 by Nixon.

Part of the Roubini warning is that the "carry trade" will unwind and all those "risky assets" will implode. What is a "risky asset" Mr. Roubini? As I see it the only asset that CANNOT file BK or default is GOLD. What is less risky than that Mr. Roubini?

It is what it is ...]]> http://seekingalpha.com/article/177819/comments?source=feed#comment-802821 802821
"In contrast to the private sector, government debt growth is starting to accelerate."

Starting?

I call that PRICE FIXING, whereby government picks up the spending"outlay" slack for its citizens in order to keep the consumer GDP alive. Lets face it ... How much lower would home prices be and and how many more jobs would be lost if the US government did not pay out Social Security, Medicare and Unemployment and Food Stamps?

Lets take Unemployment Benefits. I know some Americans who get $1800 per month in just Unemployment Benefits and an extra $400 - $600 per month on Food Stamps! Within one year total US Treasury outlays for Unemployment Benefits have skyrocketed 250%.

You cannot analyze DEBT without at least peaking at "spending" when it comes to government, as well as households.

This nonsense that 31% of Americans own their homes "free and clear", part of the American Dream con job, needs to be restated. I have a house and a farm on five acres in Hawaii, oceanview, "free and clear" except if I miss one property tax payment! Or one association dues payment! Believe me when I say you can go to any State in the USA and buy a home at auction where the "owner" was booted for a tax default(be it property or income tax), even if they had no mortgage. You are always "paying" rent in America for as long as you live. There is no "free" and there is no "clear"! That is not a "technicality" it is "reality". The most vulnerable ones are those little old ladies who had their mortgage burning party years ago living on fixed incomes! Fixed incomes only work when government spending and debt is also "fixed". That hasn't happened since 1835.

Where do we Americans stand for FY2010? Well, according to the US Treasury on Dec 10th total US DEBT(both marketable and non-marketable)combined with total "outlays" crossed the $11.2TRIL USD mark. That's roughly $5.6TRIL per month! Where is that mentioned? Don't take my word for it go over to the US Treasury Daily Statement at the FMS website and click Dec 10, 2009.

If you stick to the usual 'debt propaganda" the mainstream and the US FED and BLS put out then you arrive at flawed conclusions and not reality. Why do you think the only politically unbiased auditor America had quit the GAO last year? He even went on 60Minutes only to hear the deafening silence of abject apathy that has been emanating from DC since 1913.

"Thus, this interest rate arbitrage is ultimately a net plus for the economy."

Perhaps the US FED and Barney do not really care about rates being the lowest in history now to help "homeowners" but instead to help US government debt grow at record levels. How long would this "spendy" government and GDP last with a Fed Funds Rate at 17% like the Volcker days?

A book comes to mind ... PLANNED CHAOS.

Gloom and doom? Please ... IT IS WHAT IT IS!.]]> Sat, 12 Dec 2009 10:09:09 -0500
"In contrast to the private sector, government debt growth is starting to accelerate."

Starting?

I call that PRICE FIXING, whereby government picks up the spending"outlay" slack for its citizens in order to keep the consumer GDP alive. Lets face it ... How much lower would home prices be and and how many more jobs would be lost if the US government did not pay out Social Security, Medicare and Unemployment and Food Stamps?

Lets take Unemployment Benefits. I know some Americans who get $1800 per month in just Unemployment Benefits and an extra $400 - $600 per month on Food Stamps! Within one year total US Treasury outlays for Unemployment Benefits have skyrocketed 250%.

You cannot analyze DEBT without at least peaking at "spending" when it comes to government, as well as households.

This nonsense that 31% of Americans own their homes "free and clear", part of the American Dream con job, needs to be restated. I have a house and a farm on five acres in Hawaii, oceanview, "free and clear" except if I miss one property tax payment! Or one association dues payment! Believe me when I say you can go to any State in the USA and buy a home at auction where the "owner" was booted for a tax default(be it property or income tax), even if they had no mortgage. You are always "paying" rent in America for as long as you live. There is no "free" and there is no "clear"! That is not a "technicality" it is "reality". The most vulnerable ones are those little old ladies who had their mortgage burning party years ago living on fixed incomes! Fixed incomes only work when government spending and debt is also "fixed". That hasn't happened since 1835.

Where do we Americans stand for FY2010? Well, according to the US Treasury on Dec 10th total US DEBT(both marketable and non-marketable)combined with total "outlays" crossed the $11.2TRIL USD mark. That's roughly $5.6TRIL per month! Where is that mentioned? Don't take my word for it go over to the US Treasury Daily Statement at the FMS website and click Dec 10, 2009.

If you stick to the usual 'debt propaganda" the mainstream and the US FED and BLS put out then you arrive at flawed conclusions and not reality. Why do you think the only politically unbiased auditor America had quit the GAO last year? He even went on 60Minutes only to hear the deafening silence of abject apathy that has been emanating from DC since 1913.

"Thus, this interest rate arbitrage is ultimately a net plus for the economy."

Perhaps the US FED and Barney do not really care about rates being the lowest in history now to help "homeowners" but instead to help US government debt grow at record levels. How long would this "spendy" government and GDP last with a Fed Funds Rate at 17% like the Volcker days?

A book comes to mind ... PLANNED CHAOS.

Gloom and doom? Please ... IT IS WHAT IT IS!.]]> http://seekingalpha.com/article/177396/comments?source=feed#comment-799852 799852
I think what Rogers is saying is that when it comes to investing you have two choices really. One is what I will call "real wealth", which is anything tangible, fixed assets and what you might find under PP&E on an Exxon(XOM)financial report and the other is "false wealth" or essentially "debt derivatives", which is a US Treasury, bonds, MBS, CDO, SIV ... all paper, which can be shuffled up an down into eternity with the click of a mouse. The "thin air" stuff!

You can have all the high tech and sophisticated trading platforms in the World and at the end of the day you are still a "human being" stuck in the "human condition" with all your basic needs and your own emotional roller coaster. Our monetary system is based in that. When I was at university in Perth, Western Australia back in the 1970s I was studying history and Australians get much more exposure to the history of Oceania for all the best reasons. While here in the USA what Captain Cook did was relegated to he discovered Hawaii. The rest is all George Washington and the Mayflower. What stuck with me as I read through Cook's journals was that he explored the entire World by sea, touching just about every continent on various expeditions and circumnavigations and in terms of sheer "paradise" nowhere in the World was more conducive to human existence with the least effort for food production than the South Pacific. He seemed to emphasize Tahiti and Hawaii most of all. After reading the book FATAL IMPACT by James Moorehead it stuck in my head that Hawaii had many advantages over many places in the World for obvious reasons. It boils down to this. If you want to get off the "grid" then Hawaii is where you do it. Get off the "grid" is not just going solar or wind to beat the electrical utilities, but it is more and in my mind is a means of "self sufficiency" where you are not tied to the 3 day supply chain that exists throughout America and most of the "civilized" World. If there was ever any one event that demonstrated that vulnerability in America it was KATRINA. I think Rogers had that partially right when he said buy a farm, but I would go the extra mile and say buy a farm where food production is year round not just spring and summer. In Hawaii it is year round. There is no dependence on heating and cooling. There are no hurricanes to contend with that blow through here every Summer like in Florida. When I bought this farm here in Hawaii in 1998 I also escaped the residential SubPrime catastrophe as "farmland" has not been hit by "liar loans". Bank America was once in Hawaii and found it could not compete so they left in 2000 and took all their toxic loans with them so perhaps that spared Hawaii from the CountryWides of the World as regional Hawaiian banks seem to be immune from SubPrime, but I have yet to see their exposure to CRE. So we live here off the land. That $3 papaya I used to buy at SafeWay in San Francisco falls off trees here along with many other fruits that require absolutely no effort to maintain. Plenty of fish in the sea two miles away. Growing any kind of vegetable is not hard. We have spinach, bell pepper, squash and we even have cactus and coffee and sugar cane growing wild. The local electrical utility(HELCO) here is geothermal, no fossil fuels, no OPEC. Some 200 years after Cook died here Hawaii is still "paradise". That is "real wealth" and something no Goldman Sachs derivative trader can ever duplicate.

Buy and hold ... Has worked quite well for me. I bought this farm in 1998 and paid cash and I am still holding. I bought gold and silver in 2000 and I am still holding. What I am not holding is California residential real estate(dumped San Francisco real estate in 2002) or US Treasuries(debt is false wealth). The extremely limited way in which Americans have been conned into viewing "buy and hold" strategies is amazing. Nobody wants to "buy and hold" and day trading is sexy, so it is cool to trash "buy and hold" now, yet these same people buy and hold DEBT forever! Whether it be a 30 year mortgage, a forever credit card, a six year car loan or US Treasuries. DEBT to me is the ugliest thing on Earth and probably the worst investment ever created yet what is the American Dream other than a DEBT derivative? Americans live their lives connected to debt like a heroin addict. That is all based on "false wealth". Maybe what Rogers is saying is that this plethora of expensive Ivy League MBAs got America into its current "false wealth" mindset. I won't leave out the "sell outs" at the CFA side either. What would our Founding Fathers say about NON-GAAP and MBS and the FOMC? Here in America if you own and worship "buy and hold" debt then perhaps a google of "Stockholm syndrome" would be in order.

IT IS WHAT IT IS ...]]> Thu, 10 Dec 2009 11:02:01 -0500
I think what Rogers is saying is that when it comes to investing you have two choices really. One is what I will call "real wealth", which is anything tangible, fixed assets and what you might find under PP&E on an Exxon(XOM)financial report and the other is "false wealth" or essentially "debt derivatives", which is a US Treasury, bonds, MBS, CDO, SIV ... all paper, which can be shuffled up an down into eternity with the click of a mouse. The "thin air" stuff!

You can have all the high tech and sophisticated trading platforms in the World and at the end of the day you are still a "human being" stuck in the "human condition" with all your basic needs and your own emotional roller coaster. Our monetary system is based in that. When I was at university in Perth, Western Australia back in the 1970s I was studying history and Australians get much more exposure to the history of Oceania for all the best reasons. While here in the USA what Captain Cook did was relegated to he discovered Hawaii. The rest is all George Washington and the Mayflower. What stuck with me as I read through Cook's journals was that he explored the entire World by sea, touching just about every continent on various expeditions and circumnavigations and in terms of sheer "paradise" nowhere in the World was more conducive to human existence with the least effort for food production than the South Pacific. He seemed to emphasize Tahiti and Hawaii most of all. After reading the book FATAL IMPACT by James Moorehead it stuck in my head that Hawaii had many advantages over many places in the World for obvious reasons. It boils down to this. If you want to get off the "grid" then Hawaii is where you do it. Get off the "grid" is not just going solar or wind to beat the electrical utilities, but it is more and in my mind is a means of "self sufficiency" where you are not tied to the 3 day supply chain that exists throughout America and most of the "civilized" World. If there was ever any one event that demonstrated that vulnerability in America it was KATRINA. I think Rogers had that partially right when he said buy a farm, but I would go the extra mile and say buy a farm where food production is year round not just spring and summer. In Hawaii it is year round. There is no dependence on heating and cooling. There are no hurricanes to contend with that blow through here every Summer like in Florida. When I bought this farm here in Hawaii in 1998 I also escaped the residential SubPrime catastrophe as "farmland" has not been hit by "liar loans". Bank America was once in Hawaii and found it could not compete so they left in 2000 and took all their toxic loans with them so perhaps that spared Hawaii from the CountryWides of the World as regional Hawaiian banks seem to be immune from SubPrime, but I have yet to see their exposure to CRE. So we live here off the land. That $3 papaya I used to buy at SafeWay in San Francisco falls off trees here along with many other fruits that require absolutely no effort to maintain. Plenty of fish in the sea two miles away. Growing any kind of vegetable is not hard. We have spinach, bell pepper, squash and we even have cactus and coffee and sugar cane growing wild. The local electrical utility(HELCO) here is geothermal, no fossil fuels, no OPEC. Some 200 years after Cook died here Hawaii is still "paradise". That is "real wealth" and something no Goldman Sachs derivative trader can ever duplicate.

Buy and hold ... Has worked quite well for me. I bought this farm in 1998 and paid cash and I am still holding. I bought gold and silver in 2000 and I am still holding. What I am not holding is California residential real estate(dumped San Francisco real estate in 2002) or US Treasuries(debt is false wealth). The extremely limited way in which Americans have been conned into viewing "buy and hold" strategies is amazing. Nobody wants to "buy and hold" and day trading is sexy, so it is cool to trash "buy and hold" now, yet these same people buy and hold DEBT forever! Whether it be a 30 year mortgage, a forever credit card, a six year car loan or US Treasuries. DEBT to me is the ugliest thing on Earth and probably the worst investment ever created yet what is the American Dream other than a DEBT derivative? Americans live their lives connected to debt like a heroin addict. That is all based on "false wealth". Maybe what Rogers is saying is that this plethora of expensive Ivy League MBAs got America into its current "false wealth" mindset. I won't leave out the "sell outs" at the CFA side either. What would our Founding Fathers say about NON-GAAP and MBS and the FOMC? Here in America if you own and worship "buy and hold" debt then perhaps a google of "Stockholm syndrome" would be in order.

IT IS WHAT IT IS ...]]> http://seekingalpha.com/article/176210/comments?source=feed#comment-788292 788292
The only "bubble" the Bank Of China official forgot to mention that is bigger than his gold bubble theory is the LIABILITY BUBBLE. China holds $2.3TRIL worth of paper currency reserves while the US Treasury reports that in barely two months of FY 2010 the LIABILITY BUBBLE is at $9TRIL of combined "marketable"(US Treasuries) and "non-marketable"(Gover... Account Series IOUs).

Meanwhile the US FED has accumulated a Balance Sheet of LIABILITIES known as MBS and AIG, meanwhile the US Treasury is PRICE FIXING real estate with its own Balance Sheet of FNM and FRE ... Now the only bubble that Mr. Xiollan should concern himself with is the LIABILITY BUBBLE, which is really the only true reason why he even bothers to mention gold.

So at a time when the US Treasury is issuing unprecedented US DEBT isn't it a "lucky" coincidence that the FED FUNDS rate is the lowest its ever been. But its only staying that low to help Americans stay in their homes ... or are interest rates really that low to help career politicians in DC and the US FED stay in their homes?

With the current Balance Sheets of the US Treasury and the US FED loaded to the gills with toxic assets for the benefit of keeping the derivatives laden US FED member banks solvent there is no prospect for a Volcker fix. With the US DEBT at record uncharted levels there is no prospect for a Volcker fix. With a massive mega trillion sized tangled web of derivatives there is no prospect for a Volcker fix. With record unemployment in the "real World" at Great Depression levels there is no prospect for a Volcker fix. We just do not live in a Volcker era. We have moved on to a currency backed by the likes of Geithner and Bernanke, not Volcker.

The US Dollar is just a "debt derivative" backed by the human condition exemplified by ex-Goldman Sachs employees and tenured ex-Princeton professors and Chicago career politicians. The human condition can best be explained by the two party POLITICAL MONOPOLY and the MONEY MONOPOLY. It all boils down to a two year old's ME FIRST view of the World. Not the best monetary system to base 306 million people's financial futures on ...]]> Thu, 03 Dec 2009 09:23:20 -0500
The only "bubble" the Bank Of China official forgot to mention that is bigger than his gold bubble theory is the LIABILITY BUBBLE. China holds $2.3TRIL worth of paper currency reserves while the US Treasury reports that in barely two months of FY 2010 the LIABILITY BUBBLE is at $9TRIL of combined "marketable"(US Treasuries) and "non-marketable"(Gover... Account Series IOUs).

Meanwhile the US FED has accumulated a Balance Sheet of LIABILITIES known as MBS and AIG, meanwhile the US Treasury is PRICE FIXING real estate with its own Balance Sheet of FNM and FRE ... Now the only bubble that Mr. Xiollan should concern himself with is the LIABILITY BUBBLE, which is really the only true reason why he even bothers to mention gold.

So at a time when the US Treasury is issuing unprecedented US DEBT isn't it a "lucky" coincidence that the FED FUNDS rate is the lowest its ever been. But its only staying that low to help Americans stay in their homes ... or are interest rates really that low to help career politicians in DC and the US FED stay in their homes?

With the current Balance Sheets of the US Treasury and the US FED loaded to the gills with toxic assets for the benefit of keeping the derivatives laden US FED member banks solvent there is no prospect for a Volcker fix. With the US DEBT at record uncharted levels there is no prospect for a Volcker fix. With a massive mega trillion sized tangled web of derivatives there is no prospect for a Volcker fix. With record unemployment in the "real World" at Great Depression levels there is no prospect for a Volcker fix. We just do not live in a Volcker era. We have moved on to a currency backed by the likes of Geithner and Bernanke, not Volcker.

The US Dollar is just a "debt derivative" backed by the human condition exemplified by ex-Goldman Sachs employees and tenured ex-Princeton professors and Chicago career politicians. The human condition can best be explained by the two party POLITICAL MONOPOLY and the MONEY MONOPOLY. It all boils down to a two year old's ME FIRST view of the World. Not the best monetary system to base 306 million people's financial futures on ...]]> http://seekingalpha.com/article/175885/comments?source=feed#comment-786621 786621
Yet the poster boy for DEFLATION ... JAPAN in 2008 was the 8th most expensive place to live and in 2009 has moved up to 5th!

Here in Hawaii health care, gas, food, rent, utilities are at near record high prices, still very expensive. All the necessities of life. Yet jobs have vanished.

In real estate there are other factors lowering prices like oversupply in places like Miami and Southern California and Las Vegas, yet in areas like Dallas where oversupply was not such an issue housing prices have even gone up. Supply and demand always plays a function to price. I would not mix asset bubbles with money supply.

What I look at is DEBT. Plain and simple the US FED and the US TREASURY are engaged in massive "PRICE FIXING". These two institutions have picked up the slack where overextended debt ridden Americans and insolvent TOO BIG TO FAIL American banks have not. Total US DEBT issuances for both "marketable" and "non-marketable" debt have been skyrocketing and now with barely two months of FY 2010 under the belt sit at close to $9TRIL USD. The gross US PUBLIC DEBT went over the $12.104TRIL "limit" on Monday, 11/30 and now sits at $12.113TRIL. I won't even mention the toxic garbage that fills both the US Treasury and the US FEDs Balance Sheets.

The hallmark of both the Great Depression and the Weimar Republic was that none of those two countries citizens could afford anything. What good are low prices when you do not have a job? What good are high prices when you do not have a job?

DEBT always kills Empire and America is a true Empire of Debt.

Instead of the inflation vs deflation debate, which are both symptoms of a corrupt monetary system I would rather be concerned about the latest bubble few talk of ... the "LIABILITY BUBBLE"! What is a US Dollar other than a "debt derivative"? Liabilities abound in America and both the two party POLITICAL MONOPOLY and the MONEY MONOPOLY have worked hand-in-hand to make this a reality. Von Mises called it PLANNED CHAOS.]]> Wed, 02 Dec 2009 12:31:48 -0500
Yet the poster boy for DEFLATION ... JAPAN in 2008 was the 8th most expensive place to live and in 2009 has moved up to 5th!

Here in Hawaii health care, gas, food, rent, utilities are at near record high prices, still very expensive. All the necessities of life. Yet jobs have vanished.

In real estate there are other factors lowering prices like oversupply in places like Miami and Southern California and Las Vegas, yet in areas like Dallas where oversupply was not such an issue housing prices have even gone up. Supply and demand always plays a function to price. I would not mix asset bubbles with money supply.

What I look at is DEBT. Plain and simple the US FED and the US TREASURY are engaged in massive "PRICE FIXING". These two institutions have picked up the slack where overextended debt ridden Americans and insolvent TOO BIG TO FAIL American banks have not. Total US DEBT issuances for both "marketable" and "non-marketable" debt have been skyrocketing and now with barely two months of FY 2010 under the belt sit at close to $9TRIL USD. The gross US PUBLIC DEBT went over the $12.104TRIL "limit" on Monday, 11/30 and now sits at $12.113TRIL. I won't even mention the toxic garbage that fills both the US Treasury and the US FEDs Balance Sheets.

The hallmark of both the Great Depression and the Weimar Republic was that none of those two countries citizens could afford anything. What good are low prices when you do not have a job? What good are high prices when you do not have a job?

DEBT always kills Empire and America is a true Empire of Debt.

Instead of the inflation vs deflation debate, which are both symptoms of a corrupt monetary system I would rather be concerned about the latest bubble few talk of ... the "LIABILITY BUBBLE"! What is a US Dollar other than a "debt derivative"? Liabilities abound in America and both the two party POLITICAL MONOPOLY and the MONEY MONOPOLY have worked hand-in-hand to make this a reality. Von Mises called it PLANNED CHAOS.]]> http://seekingalpha.com/article/169579/comments?source=feed#comment-735531 735531
Simply put from a political perspective more Americans who vote with conviction have their futures tied to either the NYSE, NASDAQ or AMEX not the USDX and FX markets. It seems that a smart politically minded President who would like a second term would direct his energies to keep those 401k markets going and not the FX ones. Look at the PRICE FIXING that is going on in the real estate market(home buyers credit). All Americans with any kind of "means" depend on the US stock markets and the US real estate market to go up not down. Down is political suicide across the board, from retiring baby boomers to unions (think in terms of union member pension plans) and CEO bonuses. The Republicans certainly did not benefit from a crashing stock market in 2008. I think Obama understands this dynamic.

Certainly the US government did not get as BIG as it is by using "deflationary monetary policy"!! Not to mention US export markets benefit from a weaker US Dollar.

That leaves other export countries and their fiat currencies and USDX bulls sitting on the other side of the USDX trade. Hummmm??

A quote comes to mind back in 1971 attributed to the US Treasury Sec. John Connally. On taking the treasury post, Connally famously told a delegation of Europeans worried about exchange rate fluctuations that the American dollar "is our currency, but your problem." I believe America, the World Reserve Currency, still operates under that mantra! Certainly looking at a Denny's menu from 1960 would confirm that as fact ...]]> Thu, 29 Oct 2009 11:17:36 -0400
Simply put from a political perspective more Americans who vote with conviction have their futures tied to either the NYSE, NASDAQ or AMEX not the USDX and FX markets. It seems that a smart politically minded President who would like a second term would direct his energies to keep those 401k markets going and not the FX ones. Look at the PRICE FIXING that is going on in the real estate market(home buyers credit). All Americans with any kind of "means" depend on the US stock markets and the US real estate market to go up not down. Down is political suicide across the board, from retiring baby boomers to unions (think in terms of union member pension plans) and CEO bonuses. The Republicans certainly did not benefit from a crashing stock market in 2008. I think Obama understands this dynamic.

Certainly the US government did not get as BIG as it is by using "deflationary monetary policy"!! Not to mention US export markets benefit from a weaker US Dollar.

That leaves other export countries and their fiat currencies and USDX bulls sitting on the other side of the USDX trade. Hummmm??

A quote comes to mind back in 1971 attributed to the US Treasury Sec. John Connally. On taking the treasury post, Connally famously told a delegation of Europeans worried about exchange rate fluctuations that the American dollar "is our currency, but your problem." I believe America, the World Reserve Currency, still operates under that mantra! Certainly looking at a Denny's menu from 1960 would confirm that as fact ...]]> http://seekingalpha.com/article/168911/comments?source=feed#comment-732279 732279
When the S&P rates a currency, known as a sovereign currency rating, they use two components, one internal and the other external. The basis of that rating system is that a currency is a reflection of debt and the ability of that country to service its debt in a fiscally responsible manner, hence "external debt" and "internal debt". Every fiat currency has "debt" as its basis, so every currency in the World is a "debt derivative". By switching from one country's currency to another all you are doing is shifting debt service values. In other words, in this World of today, DEBT IS MONEY! Look what just happened ... banks failed why? Banks continue to fail why? Financial crisis is a permanent mainstay why? As Bill Clinton might say ... ITS THE MONEY STUPID!

The US TREASURY operates the largest DEBT STORE in the World, call it DEBT-MART. Most pundits through the aid of the mainstream media will get on shows like CNBC and talk incessantly about Treasuries and the US Treasury auctions known as the bond market. They will comment forever on the interest rates and what the US FED will do next, yet there is very little comment on the fact that any US Treasury security, be it a Bill, a Note or a Bond is like a coin. There are two sides. The US Treasury issues or sells them and the US Treasury buys or redeems them. The "redemption" is the other side of the coin. To me what the US FED and TV shows like CNBC are doing is "distracting" you. Its the oldest scam in the World where you create a "fire" or in this case a "crisis" to distract people from what is really going on behind the curtain, behind closed doors, which is looting whats left of every American's wealth.

America and the two party system is a POLITICAL MONOPOLY. All that happens is we run from one crisis to the other and if it happens that the DEMS are in power when a perceived crisis occurs then the US Voter will run to the REPS and visa versa, otherwise how else would Obama have been elected.? Sure he is a charismatic young guy, but if you lose your job and your 401k becomes a 201k when Bush and the REPS are in office then what is the likelihood you will vote REP? So its a big political game of ping-pong, where US Voters are the ping-pong ball, we have had the exact same result every decade no matter which political party is in power, which is MORE DEBT ... more CRISIS.

Right now the US Congress is up against the US Public Debt ceiling again. This is a game that was started 70 years ago in 1940 with the first "debt ceiling" set at $45BIL USD, to appease foreigners and to make it look like the US Dollar and the US government is fiscally responsible, so that the USA after WW2 would become the next foreign reserve currency. The new Empire ... Now it is 70 years later and the "debt ceiling" needs to be raised yet again as US Public Debt is approaching $12.1TRIL USD. This is part of the "internal debt", which is one half the equation of the US sovereign currency rating issued by the S&P and Moody's.

DEBT-MART, the US Treasury securities have much more debt issues than just the usual Bills(Regular Series), CMBs(Cash Management), Notes and Bonds that you hear discussed on CNBC every day. In fact the US Treasury breaks their debt issues into two categories. One category they classify as "marketable" debt, which is all the stuff that Bill Gross at PIMCO talks about when he is on CNBC, but then the US Treasury has this other category of debt they call "non-marketable". Anyone know the difference between a US Treasury "marketable" security and one that is "non-marketable"? It has something to do with the "internal" and "external" ratings of S&P and Moody's. As Americans we are all captive prisoners and we are forced to buy our groceries and our cars using only US Dollars and in actuality if you look at the money in your wallet they are not even US Dollars, they are Federal Reserve Notes. Look at a $1 or a $5 and above even where it says United States of America it says "Federal Reserve Note" at the very highest part. That kind of makes a statement just the way our money is printed as it shows you who is at the top. Foreigners have to have "marketable" securities due to the nature of cross border transactions, which gives the US DEBT-MART its value. US Treasuries have to compete with other foreign government debt. Over the past couple years we Americans and the global community have been given quite a show by our banks on what it means to have a viable "market", a financial instrument that is "marketable". For if there is no public market for debt securities then the security becomes nothing more than an IOU between two consenting parties.

The other half of the US DEBT-MART is the "non-marketable" securities, part of the other side of the US DEBT coin. You and I cannot buy one of those securities and neither can China. These securities are "non-marketable" because they are just IOUs between Public Trust Funds and the US Treasury. The S&P and Moody's base part of their rating criteria on a country's ability to service its debt through taxes. The US Treasury has some of the largest tax revenues of all the World, so it is therefore concluded that US Treasury securities are the safest and deserve one of the highest credit ratings possible. I have discovered that for FY 2009 the US Treasury ended up with around $1.9TRIL in net revenues and over $54TRIL in total DEBT issues. Most of that DEBT issued was IOUs to you and me, not China. In fact the $2TRIL USD China has in reserves pales in comparison to the $44TRIL our government owes us taxpayers. This information can be found in a US Treasury Daily Statement. But so long as we Americans are complacent and believe that our government will honor its IOUs then S&P and Moody's will continue to give the US Dollar its highest ratings.

So while there are endless debates, like this one, about whether China buys more US DEBT and the "convertability" of the Yuan and the US Dollar's global stature everyone misses the biggest scam going which is right under our noses and that is the "non-marketable" internal debt of the US Treasury whereby every dime that goes into "payroll taxes" is being looted and every dime that goes into government pensions are being looted and spent now, which is the complete polar opposite of such Trust Funds original intent. While we debate and mentally masturbate the China equation our financial stability is rotting from the inside out. Once again Jefferson had it right in terms of our biggest enemy. Our biggest enemy is our own government and its version of DEBT-MART. So do not worry about the poor Chinese and whether they are "safe" holding a US Treasury Bond for 30 years, worry more about yourself and whether you will be safe being a US citizen and whether you, like Californians are experiencing right now, will be handed a US government IOU when you retire. This country is built on IOUs. What else is fiat currency when there is no redeemability. This grandiose idea of "convertibility" is a game. What is it exactly that any currency is "convertible" to? DEBT ...

In 1971 Nixon gave the US FED what it was seeking ever since it was birthed in 1913. The US FED's true mandate was to end the gold standard. Something the US Congress wanted as well so they formed a partnership that has lasted some 96 years now. By former "empire standards" that is a very short time.

Look around you and tell me how well that "partnership" has worked for you? Do you feel secure and cared for? Is the "free lunch" everything you thought it would be? The real question and test in terms of your Freedom and Liberty is this question. Who owns you now? Who is it that you pay most of your hard-earned money to every year? Is it the utility company? Is it your mortgage company? Is it Blue Cross? Who gets close to 30% of your profits when you buy low and sell high? Who is your eternal partner in everything you do starting at birth and ending at death?

It is Uncle Sam who owns you ... the issuer of IOUs ... the CEO of DEBT-MART! Don't worry about China and their money for the Chinese have been around many more thousands of years than America and Americans have. Worry more about who you vote into the US Congress and who sits in the Oval Office. That has a lot more to do with your future retirement and what your money buys than a Yuan or a Euro does.]]> Tue, 27 Oct 2009 10:38:00 -0400
When the S&P rates a currency, known as a sovereign currency rating, they use two components, one internal and the other external. The basis of that rating system is that a currency is a reflection of debt and the ability of that country to service its debt in a fiscally responsible manner, hence "external debt" and "internal debt". Every fiat currency has "debt" as its basis, so every currency in the World is a "debt derivative". By switching from one country's currency to another all you are doing is shifting debt service values. In other words, in this World of today, DEBT IS MONEY! Look what just happened ... banks failed why? Banks continue to fail why? Financial crisis is a permanent mainstay why? As Bill Clinton might say ... ITS THE MONEY STUPID!

The US TREASURY operates the largest DEBT STORE in the World, call it DEBT-MART. Most pundits through the aid of the mainstream media will get on shows like CNBC and talk incessantly about Treasuries and the US Treasury auctions known as the bond market. They will comment forever on the interest rates and what the US FED will do next, yet there is very little comment on the fact that any US Treasury security, be it a Bill, a Note or a Bond is like a coin. There are two sides. The US Treasury issues or sells them and the US Treasury buys or redeems them. The "redemption" is the other side of the coin. To me what the US FED and TV shows like CNBC are doing is "distracting" you. Its the oldest scam in the World where you create a "fire" or in this case a "crisis" to distract people from what is really going on behind the curtain, behind closed doors, which is looting whats left of every American's wealth.

America and the two party system is a POLITICAL MONOPOLY. All that happens is we run from one crisis to the other and if it happens that the DEMS are in power when a perceived crisis occurs then the US Voter will run to the REPS and visa versa, otherwise how else would Obama have been elected.? Sure he is a charismatic young guy, but if you lose your job and your 401k becomes a 201k when Bush and the REPS are in office then what is the likelihood you will vote REP? So its a big political game of ping-pong, where US Voters are the ping-pong ball, we have had the exact same result every decade no matter which political party is in power, which is MORE DEBT ... more CRISIS.

Right now the US Congress is up against the US Public Debt ceiling again. This is a game that was started 70 years ago in 1940 with the first "debt ceiling" set at $45BIL USD, to appease foreigners and to make it look like the US Dollar and the US government is fiscally responsible, so that the USA after WW2 would become the next foreign reserve currency. The new Empire ... Now it is 70 years later and the "debt ceiling" needs to be raised yet again as US Public Debt is approaching $12.1TRIL USD. This is part of the "internal debt", which is one half the equation of the US sovereign currency rating issued by the S&P and Moody's.

DEBT-MART, the US Treasury securities have much more debt issues than just the usual Bills(Regular Series), CMBs(Cash Management), Notes and Bonds that you hear discussed on CNBC every day. In fact the US Treasury breaks their debt issues into two categories. One category they classify as "marketable" debt, which is all the stuff that Bill Gross at PIMCO talks about when he is on CNBC, but then the US Treasury has this other category of debt they call "non-marketable". Anyone know the difference between a US Treasury "marketable" security and one that is "non-marketable"? It has something to do with the "internal" and "external" ratings of S&P and Moody's. As Americans we are all captive prisoners and we are forced to buy our groceries and our cars using only US Dollars and in actuality if you look at the money in your wallet they are not even US Dollars, they are Federal Reserve Notes. Look at a $1 or a $5 and above even where it says United States of America it says "Federal Reserve Note" at the very highest part. That kind of makes a statement just the way our money is printed as it shows you who is at the top. Foreigners have to have "marketable" securities due to the nature of cross border transactions, which gives the US DEBT-MART its value. US Treasuries have to compete with other foreign government debt. Over the past couple years we Americans and the global community have been given quite a show by our banks on what it means to have a viable "market", a financial instrument that is "marketable". For if there is no public market for debt securities then the security becomes nothing more than an IOU between two consenting parties.

The other half of the US DEBT-MART is the "non-marketable" securities, part of the other side of the US DEBT coin. You and I cannot buy one of those securities and neither can China. These securities are "non-marketable" because they are just IOUs between Public Trust Funds and the US Treasury. The S&P and Moody's base part of their rating criteria on a country's ability to service its debt through taxes. The US Treasury has some of the largest tax revenues of all the World, so it is therefore concluded that US Treasury securities are the safest and deserve one of the highest credit ratings possible. I have discovered that for FY 2009 the US Treasury ended up with around $1.9TRIL in net revenues and over $54TRIL in total DEBT issues. Most of that DEBT issued was IOUs to you and me, not China. In fact the $2TRIL USD China has in reserves pales in comparison to the $44TRIL our government owes us taxpayers. This information can be found in a US Treasury Daily Statement. But so long as we Americans are complacent and believe that our government will honor its IOUs then S&P and Moody's will continue to give the US Dollar its highest ratings.

So while there are endless debates, like this one, about whether China buys more US DEBT and the "convertability" of the Yuan and the US Dollar's global stature everyone misses the biggest scam going which is right under our noses and that is the "non-marketable" internal debt of the US Treasury whereby every dime that goes into "payroll taxes" is being looted and every dime that goes into government pensions are being looted and spent now, which is the complete polar opposite of such Trust Funds original intent. While we debate and mentally masturbate the China equation our financial stability is rotting from the inside out. Once again Jefferson had it right in terms of our biggest enemy. Our biggest enemy is our own government and its version of DEBT-MART. So do not worry about the poor Chinese and whether they are "safe" holding a US Treasury Bond for 30 years, worry more about yourself and whether you will be safe being a US citizen and whether you, like Californians are experiencing right now, will be handed a US government IOU when you retire. This country is built on IOUs. What else is fiat currency when there is no redeemability. This grandiose idea of "convertibility" is a game. What is it exactly that any currency is "convertible" to? DEBT ...

In 1971 Nixon gave the US FED what it was seeking ever since it was birthed in 1913. The US FED's true mandate was to end the gold standard. Something the US Congress wanted as well so they formed a partnership that has lasted some 96 years now. By former "empire standards" that is a very short time.

Look around you and tell me how well that "partnership" has worked for you? Do you feel secure and cared for? Is the "free lunch" everything you thought it would be? The real question and test in terms of your Freedom and Liberty is this question. Who owns you now? Who is it that you pay most of your hard-earned money to every year? Is it the utility company? Is it your mortgage company? Is it Blue Cross? Who gets close to 30% of your profits when you buy low and sell high? Who is your eternal partner in everything you do starting at birth and ending at death?

It is Uncle Sam who owns you ... the issuer of IOUs ... the CEO of DEBT-MART! Don't worry about China and their money for the Chinese have been around many more thousands of years than America and Americans have. Worry more about who you vote into the US Congress and who sits in the Oval Office. That has a lot more to do with your future retirement and what your money buys than a Yuan or a Euro does.]]> http://seekingalpha.com/article/168632/comments?source=feed#comment-729252 729252
This was part of my weekly article published at place like GATA and The Trading Doctor entitled REVENUE BREAKDOWN. I also disagree with Roubini but for reasons that have nothing to do with the price of anything, but instead for pure "counterparty liability" issues. Of all the trades in the World "liabilities" are the most crowded.

READ ON:
Roubini is yet another one dimensional economist who misses the bigger picture of monetary risk. It has nothing to do with inflation/deflation, mere symptoms of the disease; it has a great deal more to do with debt "liabilities" and the C WORD of monetary risk.

I am amazed he has yet viewed a US TREASURY DAILY STATEMENT. When I first saw a US Treasury Daily Statement I said to myself ... "SELF, LOOK AT ALL THOSE STACKED LIABILITIES ... EVEN THE ASSETS ARE LIABILITIES"! The liability side is HUGE; the asset side is tiny, if you look past the combined "marketable" and "non-marketable" US DEBT, which boils down to income/payroll tax revenues and excise tax revenues. In actuality a true accountant would look at NET tax revenues, which is even a much smaller number than actual gross tax revenues. Gross tax revenues is all that is ever broadcast in the mainstream, but everyone always forgets that the US government has to issue something we US taxpayers are very fond of ... "tax refunds"!
Who among us when we do our budgets counts credit card "available credit" as "income"? The US Treasury does as they place DEBT ISSUES on the asset(receipts) side of the Balance Sheet ledger, which is what a US TREASURY DAILY STATEMENT is. The US Treasury commingles debt and tax revenues as one, as receipts ... as assets.

Let me just say that if the US Treasury were forced to live just on NET tax revenues we would have to cut Social Security checks and Medicare benefits by 70%(recall the US Treasury Daily Statement calculations I did for October 20th). In fact the entire US government would have to shrink 70% so we would have to quit policing the entire World by 70%! Close 70% of our foreign military bases and shrink our troop size by 70%. That is a hell of a lot of “shrinkage”. That is 7 out of every 10 Federal Employees and Military personnel jobless. Imagine what that would do to the unemployment rate.
Where Roubini’s stance on unending US DEBT? The US TOTAL DEBT is one huge liability that makes the AIG derivative counterparty liability look tiny. Last year (FY 2009) the US DEBT liability ended over $54TRIL USD. Right now the FY 2010 US DEBT liability is already over $3.3TRIL USD.
Further ... on THE DEBT CEILING ... It first started in 1940 with $45BIL. That was 70 years ago and now it is $12.1TRIL USD! Guess what? They need to raise the debt ceiling again and soon since US PUBLIC DEBT is at $11.9TRIL right now. What have we learned from 70 years of Congressional DEBT CEILINGS? Roubini?
So what is gold? In my view it is the only financial entity in the World without liabilities. Gold cannot file bankruptcy or default on its DEBT payments. Gold has no US TREASURY DAILY STATEMENT since gold, unlike the US Dollar is not a "debt derivative". Speak to that Roubini ... as Dan Akroyd of the old Saturday Night Live POINT/COUNTERPOINT used to say ... "ROUBINI YOU IGNORANT SLUT!" I believe Akroyd went on to include such other delectable "points" as "rapacious swamp sow" and "... when you're on you back Jane, the meter is running!" Who is paying Roubini to be one dimensional? Certainly his paying subscribers, which pay quite a bit for his wisdom, should be entitled to a multi-dimensional view of gold and monetary liabilities and not just the same old crud about inflation/deflation that is easily obtained anywhere on the WWW for free!
The missing link: Since our dollar (money) is based on DEBT(faith and credit) then a DEBT crisis is a "monetary crisis".]]> Sun, 25 Oct 2009 11:44:25 -0400
This was part of my weekly article published at place like GATA and The Trading Doctor entitled REVENUE BREAKDOWN. I also disagree with Roubini but for reasons that have nothing to do with the price of anything, but instead for pure "counterparty liability" issues. Of all the trades in the World "liabilities" are the most crowded.

READ ON:
Roubini is yet another one dimensional economist who misses the bigger picture of monetary risk. It has nothing to do with inflation/deflation, mere symptoms of the disease; it has a great deal more to do with debt "liabilities" and the C WORD of monetary risk.

I am amazed he has yet viewed a US TREASURY DAILY STATEMENT. When I first saw a US Treasury Daily Statement I said to myself ... "SELF, LOOK AT ALL THOSE STACKED LIABILITIES ... EVEN THE ASSETS ARE LIABILITIES"! The liability side is HUGE; the asset side is tiny, if you look past the combined "marketable" and "non-marketable" US DEBT, which boils down to income/payroll tax revenues and excise tax revenues. In actuality a true accountant would look at NET tax revenues, which is even a much smaller number than actual gross tax revenues. Gross tax revenues is all that is ever broadcast in the mainstream, but everyone always forgets that the US government has to issue something we US taxpayers are very fond of ... "tax refunds"!
Who among us when we do our budgets counts credit card "available credit" as "income"? The US Treasury does as they place DEBT ISSUES on the asset(receipts) side of the Balance Sheet ledger, which is what a US TREASURY DAILY STATEMENT is. The US Treasury commingles debt and tax revenues as one, as receipts ... as assets.

Let me just say that if the US Treasury were forced to live just on NET tax revenues we would have to cut Social Security checks and Medicare benefits by 70%(recall the US Treasury Daily Statement calculations I did for October 20th). In fact the entire US government would have to shrink 70% so we would have to quit policing the entire World by 70%! Close 70% of our foreign military bases and shrink our troop size by 70%. That is a hell of a lot of “shrinkage”. That is 7 out of every 10 Federal Employees and Military personnel jobless. Imagine what that would do to the unemployment rate.
Where Roubini’s stance on unending US DEBT? The US TOTAL DEBT is one huge liability that makes the AIG derivative counterparty liability look tiny. Last year (FY 2009) the US DEBT liability ended over $54TRIL USD. Right now the FY 2010 US DEBT liability is already over $3.3TRIL USD.
Further ... on THE DEBT CEILING ... It first started in 1940 with $45BIL. That was 70 years ago and now it is $12.1TRIL USD! Guess what? They need to raise the debt ceiling again and soon since US PUBLIC DEBT is at $11.9TRIL right now. What have we learned from 70 years of Congressional DEBT CEILINGS? Roubini?
So what is gold? In my view it is the only financial entity in the World without liabilities. Gold cannot file bankruptcy or default on its DEBT payments. Gold has no US TREASURY DAILY STATEMENT since gold, unlike the US Dollar is not a "debt derivative". Speak to that Roubini ... as Dan Akroyd of the old Saturday Night Live POINT/COUNTERPOINT used to say ... "ROUBINI YOU IGNORANT SLUT!" I believe Akroyd went on to include such other delectable "points" as "rapacious swamp sow" and "... when you're on you back Jane, the meter is running!" Who is paying Roubini to be one dimensional? Certainly his paying subscribers, which pay quite a bit for his wisdom, should be entitled to a multi-dimensional view of gold and monetary liabilities and not just the same old crud about inflation/deflation that is easily obtained anywhere on the WWW for free!
The missing link: Since our dollar (money) is based on DEBT(faith and credit) then a DEBT crisis is a "monetary crisis".]]> http://seekingalpha.com/article/154270/comments?source=feed#comment-620623 620623
No that's not the American Dream, this is ...

This was the original definition of the AMERICAN DREAM that the bankers did not like, since it had nothing to do with DEBT. This is from the book THE EPIC OF AMERICA by James Addams (1931)...

"It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.” END

Sounds more like a repeat of the Declaration of Independence ...

Having the US government change our nappies every time we have a bank crisis brought on by high risk managers is not something I aspire to and nor do I want my tax dollars rewarding such behavior, yet reward we do, time after time!

But ... IT IS WHAT IT IS!

For my Spanish speaking amigos ... ES QUE LO ES!

Going to the beach bruddah!


On Aug 07 05:53 PM Ricard wrote:

> The American Dream was built on risk. Pioneers who settled in the
> Wild West braved many dangers and took on many risks without a social
> safety net. These people were not playing Russian roulette - they
> were people who wanted better lives for themselves and their children.
> If this play comes to pass, Citicorp (not Citigroup) will become
> free of the government (as free as one can expect...in the end, the
> government owns everything - doomsayers are simply stating the obvious
> thinking it is some sort of revelation), and will have its shot again
> building the American Dream. In fact, Citicorp as it stands (if
> you trust the latest earnings release) is already doing just that.
> ]]> Fri, 07 Aug 2009 19:10:11 -0400
No that's not the American Dream, this is ...

This was the original definition of the AMERICAN DREAM that the bankers did not like, since it had nothing to do with DEBT. This is from the book THE EPIC OF AMERICA by James Addams (1931)...

"It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.” END

Sounds more like a repeat of the Declaration of Independence ...

Having the US government change our nappies every time we have a bank crisis brought on by high risk managers is not something I aspire to and nor do I want my tax dollars rewarding such behavior, yet reward we do, time after time!

But ... IT IS WHAT IT IS!

For my Spanish speaking amigos ... ES QUE LO ES!

Going to the beach bruddah!


On Aug 07 05:53 PM Ricard wrote:

> The American Dream was built on risk. Pioneers who settled in the
> Wild West braved many dangers and took on many risks without a social
> safety net. These people were not playing Russian roulette - they
> were people who wanted better lives for themselves and their children.
> If this play comes to pass, Citicorp (not Citigroup) will become
> free of the government (as free as one can expect...in the end, the
> government owns everything - doomsayers are simply stating the obvious
> thinking it is some sort of revelation), and will have its shot again
> building the American Dream. In fact, Citicorp as it stands (if
> you trust the latest earnings release) is already doing just that.
> ]]> http://seekingalpha.com/article/154270/comments?source=feed#comment-620595 620595
Ricard - No I equated YOUR trades to Russian Roulette! I prefer to avoid "very wild rides"(your words not mine) ...

I understand your reasoning about how the government(taxpayers)get the toxic losses while CitiCorp gets Smith Barney. You are asking me, a guy who lives in Hawaii on a five acre ocean view farm, who has no inside connections to Geithner or Ben or even Pandit to accept that the toxic assets will be SPUN off by the US government in the "foreseeable future", as you put it.

By insider trading disclosures the guy(Dick Parsons)you say who will bring C into the World of huge profits and who will be making all the key "crucial decisions" is actually loading up on Time Warner(TWX) stock instead of C. In fact one of his last "pure" acquisitions Mr. Parsons only bought 292 shares of C for a total investment value of $382, compared to 155,000 shares of TWX options he exercised. Does he not have any C options to exercise? My questions is why isn't your key insider loading up now if this is such a great trade? Or is he just there for the "freebies"?

You want a risky trade to work and you are begging your readers to buy into it on our dime! Will you inform us all when to sell your "very wild ride" or perhaps which option straddles you may employ later down the line?

My strategy is to trade less risky companies with long term track records of low risk and backed by management that understands risk and seeks to avoid it, not embrace it! C does not cut the mustard in that regard ...

I do wish you good luck in all honesty ... I would much rather see the readers here at SA profit rather than lose.

Maybe you can offer a "C Update" in a few months so the readers can post whether they made money or not.

Good luck ...


On Aug 07 05:07 PM Ricard wrote:

> I originally labeled you emotional because your post had nothing
> to do with the company highlighted in this article. Not because
> you had anything against 'trading', not because someone is handing
> you a loaded gun. Although, if you equate speculation to Russian
> roulette, I suggest you don't do it, for your own emotional well-being.
>
>
> I believe this speculative 'trade' has sound fundamental foundations
> if you discount Citi Holdings as already being this 'government bailed
> out institution' that you seem to equate to 'day trading' and 'moral
> decay'. I am not buying this portion of the company, and if you
> have read my article and understand my reasoning, I hope you can
> at least recognize this part of my argument. I do not think C deserves
> to have a large part in anyone's portfolio, but I am now repeating
> myself.
>
> I am not sure what your agenda is, but if you have a problem with
> the trade, I suggest you keep your arguments at that level. To think
> that I should be writing financial regulatory reform packages is
> not a reasonable expectation.
>
> On Aug 07 03:29 PM KAIMU BIZ wrote:]]> Fri, 07 Aug 2009 18:59:56 -0400
Ricard - No I equated YOUR trades to Russian Roulette! I prefer to avoid "very wild rides"(your words not mine) ...

I understand your reasoning about how the government(taxpayers)get the toxic losses while CitiCorp gets Smith Barney. You are asking me, a guy who lives in Hawaii on a five acre ocean view farm, who has no inside connections to Geithner or Ben or even Pandit to accept that the toxic assets will be SPUN off by the US government in the "foreseeable future", as you put it.

By insider trading disclosures the guy(Dick Parsons)you say who will bring C into the World of huge profits and who will be making all the key "crucial decisions" is actually loading up on Time Warner(TWX) stock instead of C. In fact one of his last "pure" acquisitions Mr. Parsons only bought 292 shares of C for a total investment value of $382, compared to 155,000 shares of TWX options he exercised. Does he not have any C options to exercise? My questions is why isn't your key insider loading up now if this is such a great trade? Or is he just there for the "freebies"?

You want a risky trade to work and you are begging your readers to buy into it on our dime! Will you inform us all when to sell your "very wild ride" or perhaps which option straddles you may employ later down the line?

My strategy is to trade less risky companies with long term track records of low risk and backed by management that understands risk and seeks to avoid it, not embrace it! C does not cut the mustard in that regard ...

I do wish you good luck in all honesty ... I would much rather see the readers here at SA profit rather than lose.

Maybe you can offer a "C Update" in a few months so the readers can post whether they made money or not.

Good luck ...


On Aug 07 05:07 PM Ricard wrote:

> I originally labeled you emotional because your post had nothing
> to do with the company highlighted in this article. Not because
> you had anything against 'trading', not because someone is handing
> you a loaded gun. Although, if you equate speculation to Russian
> roulette, I suggest you don't do it, for your own emotional well-being.
>
>
> I believe this speculative 'trade' has sound fundamental foundations
> if you discount Citi Holdings as already being this 'government bailed
> out institution' that you seem to equate to 'day trading' and 'moral
> decay'. I am not buying this portion of the company, and if you
> have read my article and understand my reasoning, I hope you can
> at least recognize this part of my argument. I do not think C deserves
> to have a large part in anyone's portfolio, but I am now repeating
> myself.
>
> I am not sure what your agenda is, but if you have a problem with
> the trade, I suggest you keep your arguments at that level. To think
> that I should be writing financial regulatory reform packages is
> not a reasonable expectation.
>
> On Aug 07 03:29 PM KAIMU BIZ wrote:]]>