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  • Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
    James, how do you factor in the money multiplier? M0 and M3 can differ greatly based on sentiment and deposit/loan creation. Huge stores of speculative wealth can evaporate (or explode) without a concomitant decline elsewhere.
    Feb 16, 2013. 09:36 PM | 2 Likes Like |Link to Comment
  • A Portfolio For The Next Market Crash [View article]
    It happens like this. Our idiotic Federal legislators pass a hair-brained law with millions of unintended consequences, the bankers take advantage of the law and unfairly profit, then when the bubble busts we, the US taxpayer, are left with the bill.
    It reminds me of watching Gary Gensler testify about the dangers of Fannie and Freddie on Capital hill back in March of 2000. The idiots in the Clinton admin looked at him with blank stares on their faces when they heard words like "moral hazard" and "price discovery".
    The market WILL crash again because it is being fed by our central bank (no pun intended) and promoted by politicians that have little idea of the consequences of their policies.
    Feb 16, 2013. 08:52 PM | 5 Likes Like |Link to Comment
  • G20 Sparks Gold's Ugly Sell-Off [View article]
    You are exactly right. Japan is the perfect example of what the US will look like in just a few years. If a central bank never allows creative destruction and asset reallocation by allowing the deflationary side of the Austrian business cycle to run its course, then you will have stagflation.
    Also, total Japanese government revenue will soon be exceeded by the interest on servicing their debt (currently above 50%). I am confounded by the doggedly persistent bond buying of the Japanese, something that is not likely to happen in the US as investors have a more independent attitude. It will be very interesting, I think when Japan has a currency crisis it will spread like wildfire to the EU and US via CB liquidity swaps. In other words, if any of the ships sink, we'll all go down together!
    Feb 16, 2013. 07:33 PM | 3 Likes Like |Link to Comment
  • Is A Big Correction For Gold And Silver In The Offing? [View article]
    Strong recovery = money multiplier effect and increased velocity of money = inflation.
    Stagflation = inflation (see the second half of the word Stagflation)
    Deflation = CBs won't let it happen.

    So it comes down to this question, will CBs allow their sovereign currencies to depreciate or not. The answer is pretty obvious.
    Feb 15, 2013. 09:41 PM | 3 Likes Like |Link to Comment
  • Will The Price Of Gold And Silver Keep Falling? [View article]
    RS, I think you and the Guardian believe the same thing but over different timeframes. For instance if sequestration is allowed to happen this would lead to a contraction in the economy due to less govt spending = deflation and US dollar to raise in relative value. BUt your point is well take, the Fed won't let this happen, they will try to print their way out of the deflation so in the long term you are right- to tighten fiscal policy would eventually, by following loose monetary policy, cause inflation.
    Feb 15, 2013. 11:32 AM | Likes Like |Link to Comment
  • Will The Price Of Gold And Silver Keep Falling? [View article]
    Good point Guardian. I agree, many investors are waiting for the sequestration picture to fully crystalize before jumping back into PMs. The closer you look (Currency devaluation, Euro crisis, sequestration, etc.) the harder it is to see the forrest for the trees, which is that currencies are headed down and commodities are headed up over the long term, as the author described so well.
    Feb 15, 2013. 11:01 AM | 1 Like Like |Link to Comment
  • We Are All Contrarians Now [View article]
    The Fed will not unwind, it will monetize.
    Feb 1, 2013. 11:52 AM | Likes Like |Link to Comment
  • The ECB Worries About Competition From Bitcoins [View article]
    Very interesting. It would be great for the people to take control of the currency again! The free market always finds a way!

    People should not be dependent on the government to spend fiat currency notes into existence, rather the government should be dependent on gathering what it can of it's citizens production by consent through legitimate taxation.
    Jan 30, 2013. 07:10 PM | 2 Likes Like |Link to Comment
  • Politically Favored Hospital Stocks [View article]
    why did you put that DRG comment in where you did under Life Point?
    Jan 26, 2013. 10:00 PM | Likes Like |Link to Comment
  • Politically Favored Hospital Stocks [View article]
    excellent article! I agree 100% and have written similarly on this subject.
    Jan 26, 2013. 09:55 PM | Likes Like |Link to Comment
  • Market Rally: Why You Should Be Worried [View article]
    Read about Metalism vs Chartalism. The founders knew what they were doing (article 1 section 8). Also, too much stimulus in a contracting economy (as opposed to allowing graduated deflation) causes malinvestment and suppresses creative destruction. The price signals and price discovery mechanisms for good vs bad capital good vs bad investment become distorted. Federal debt spending also robs the people's productive capacity either now (taxes) or in the future (inflation). Unfortunately we live in fiat times and all currencies are being over-printed, so we have to print to keep up or we'll be unable to export.
    Jan 26, 2013. 08:11 PM | 6 Likes Like |Link to Comment
  • No Margin For Error: Margin Debt, Quantitative Easing, And Future S&P 500 Returns [View article]
    The Fed purchased, I believe 61% of US treasuries in 2011 and less in 2012. Was the decline in 2012 because the Primary Dealers are holding treasuries on their balance sheets in excess for reserve requirements + the ability to leverage for repo? Thanks for the article.
    Jan 22, 2013. 09:31 PM | Likes Like |Link to Comment
  • Inflationary Targets Will Fail - World Stuck In Deflationary Super-Cycle [View article]
    "ultimately we will still be in a contraction phase because the contraction pressures are greater than the central banks can devalue the currencies over the long haul."

    Don't underestimate a central bank's ability to print. Core CPI is only rising 2% yoy despite massive QE and negative real interest rates due to the 2 trillion dollar credit contraction in shadow banks (Singh & Stella 2012). We will have more printing; and stagflation until the central banks cause hyperinflation.
    Jan 22, 2013. 09:16 PM | 1 Like Like |Link to Comment
  • If Bond Prices Collapse, Will Gold Takeoff? [View article]
    Post Bretton-Woods the dollar has been linked to oil. The dollar is the world's reserve currency only because of the petrodollar and our military's ability to defend OPEC at all costs. This era is coming to an end. Japan and China no longer buying our debt, and for good reason. Fed bought 61% of US securities in 2011. In 2012 the Primary Dealers have been scooping up treasuries and leveraging them in the repo markets, propping up equities with the govt's approval, and a tacit tax-payer guarantee. When treasuries are auctioned the Primary Dealers will bid, because they have to, and because they can use the securities for collateral. In the end our debt is intrinsically tied to the health of the S&P and bank's balance sheets. If the ship sinks, we all go down together.
    Jan 22, 2013. 09:08 PM | 1 Like Like |Link to Comment
  • The Treasury Run [View article]
    "At some point, the Federal Government will not be there as the buyer of last resort, artificially driving up Treasury prices and driving down yields."

    They will monetize before they unwind. Look at Japan, they can't even think about unwinding.
    Jan 22, 2013. 08:54 PM | Likes Like |Link to Comment