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Ordinary Average Guy

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  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    CoinsK, Thanks for your input.
    Crade, I addressed the 1907 panic which was caused by the SF earthquake and Hepburn Act of 1906. The crash/recovery was not the fault of gold or a gold standard. We can review the prior (8) bank panics that occured mostly in the 19th century, but like the 1907 panic, I am not prepared to conclude that gold/silver are to blame for these panics.

    I don't believe that fiat systems controlled by an untouchable third party is the answer to prevent bank panics. Here are Lenin's comments via Keynes:

    ""Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

    Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.""

    Lenin pegged the FED system pretty accurately. Nothing better that to have a crook see through the shortcomings of a crooked system.
    Oct 21 10:39 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    Crade: Do you want to go back to the Breton Woods international banking system...

    OAG: My preference would be to go back to pre-1913, and abolish both the Federal Reserve, and the 16th amendment/Revenue Act of 1913. Back to the constitution so to speak. Unfortunately the horse is out of the barn on that one, and this horse is the ancestor of several generations of horse'. We can't get all of them back in that barn.

    These two moves by the Federal government fundamentally changed the US. From that point forward, eventually, the Federal Government/FED, controlled most of the wealth of the nation. Prior to that they were a group of elected officials serving the people of the nation.
    Oct 21 01:45 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    Crade, Toilet paper money did not end in 1913-14, it was just temporarily suspended by creating the FED, which was an organized pool of large private funds, or the wealthy bankers of the world taking over the control of a currency of the US. Although I do not endorse the existence of the FED to have control of our currency, this large pool of funds was backed by gold. There was some discipline within the initial system to maintain value of this currency.

    You mention a series of bank panics, and take a look at the latter, 1907. http://bit.ly/1tIMxhH The SF earthquake of 1906 & the Hepburn of 1906, caused this panic. Gold did not cause these panics, but the cost of war, WWI, perhaps did. Fiat does not give nations a green light to get involved in expensive wars without any economic consequences too. Wars are expensive and come at a great cost and casualty to our society. It would seem that the Fiat system provides simple solutions, just print. Fiat lacks any discipline and thus is always fails. It is simply to easy to spend away our future using fiat. Gold/silver provides discipline to not allow this.

    Yes, we have seen a resurgence of bank failures since 1971. Perhaps the US is somewhat immune to much of this since through the FED, we have control of the world currency. If we are in trouble we can print, raise rates, and release any other schemes from the FED bag of tricks to avoid most bank problems in the US. Question is, will the rest of the world simply go along with this system? Or will there be a revolt by a stronger opposition to move toward a system that may favor them and possibly not the US?

    This blog quotes Keynes, who stated, prophetically, in The Economic Consequences of the Peace, chapter 6 (1919). http://bit.ly/1tIMxhJ
    If you scroll down to the lower part of this page, indented portion, Keynes quotes Lenin, with regard to decay of the monetary system within a capitalistic society. Lenin sure did not offer/impose a fair solution, but he sure nails it with his comments regarding inflation & confiscation as a result of controlling a nations currency.
    Oct 21 01:12 PM | Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    OW, With regard to inflation following the end of the gold standard, here was my prior comment:

    OAG: "Ironically, after the gold standard was ended by decree of a US President, the US experienced some of its greatest periods of inflation in the decade following, compared to that of the recently aborted Bretton Woods era of that time."

    This was merely an observation that we had high inflation post gold standard, not a statement that leaving the gold standard caused high inflation.

    I agree with you that the inflation was caused by sharply rising oil prices during Oil War-I. OW-I was the culmination of failed US policy to "manage" big oil.
    http://bit.ly/1tIzoFf
    Price controls and regulations have consequences. But, although the exit of the gold standard did not cause this inflation, the FED and the Fiat system was unable to control this inflation.

    Not sure what areas of failure in trickle-down you are referring to, but the economic success that we experienced following the tax cuts in the early 80's, did bring about the end to the cold war and a robust US economy for several years.

    You raise an even bigger and very important issue with government spending. This is an area that we have failed and continue to fail with. I'll use your example, the NIH. This is an area that most all of us would like to see an agency to be successful in their mission and also an agency that we can all hope is utilizing the funds assigned to them to address that mission. Unfortunately, it is typical for government agencies to waste 60-70% (I've seen studies that claim this percentage is typically worse) of the funds allocated for them, and not directly apply these funds toward their mission.

    I would love to see the NIH privatized and would also wish to see them adopt accounting disciplines like this organization http://bit.ly/1tIzoFh (see paragraph-6).

    And not restricted to the NIH, wouldn't it be nice to see all of our other currently government run agencies privatized, and then allowed to compete with the 10's or thousands of private agencies that currently exist? Then all of the tax-payers could select from a group of well-run organizations, pledge monies to them, and in turn, these monies would be going to work for all of us.

    The people of the US are the most generous people of the world and would make this successful. And, post privatization, if private contributions are only 30-40% of the current tax/spend gov't system, these agencies would become over 100% fully funded compared to the current system funding.

    The remaining 60-70% of taxpayer savings will successfully trickle-down in the private economy contributing to a robust economy.
    Oct 21 11:44 AM | Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    Crade, I have read about the past bank panics and supporters of the FED using this excuse to support having a privately run banking monopoly ala the FED. This still strikes me as the wrong medicine to address this problem/symptoms.

    I did read your attachment and found this statement with regard to the graph shown.

    "The dramatic feature of this graph is the virtual absence of banking crises during the period of the Bretton Woods agreement, 1945 to 1971."

    Are you suggesting that perhaps we should consider returning to a gold standard, which was effective, in terms of virtually eliminating banking crises during the period?

    This does seem to make sense to me that having something stable like gold back our currency instead of Fiat printing running rampant without any discipline.
    Oct 21 11:01 AM | 2 Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    Two key areas that the FED changes monetary policy for are to guide the Unemployment U-3 & CPI to reach desirable levels for the health and wealth of our nation.

    When these levels start to run excessively in the wrong direction, they have been successful at making multiple changes to the definitions of U-3 & CPI to aid them in bringing these numbers closer to their stated goals.
    Oct 20 02:10 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    Ponzi scheme indeed. Here is a nice little history on fiat, and the article also describes the history of fiat in the US, actually dating back to the colonies experience with fiat starting in 1690. Fiat has proven that each system that is introduced and forced into usage has a finite time frame of existance and is eventually destined for failure. http://bit.ly/rIMymz

    I know that there are a significant number of people that support the current FED system, but none have been able to articulate why this current corrupt system of fiat is different than all of the other failed fiat attempts. Overall, why is this system beneficial to everyone on a whole? Ironically, after the gold standard was ended by decree of a US President, the US experienced some of its greatest periods of inflation in the decade following, compared to that of the recently aborted Bretton Woods era of that time.

    Sure US President, Richard Nixon one day in August, 1971 ended the gold standard for the world. I think we may see another non-US World leader enact a gold standard for the world possibly with as much notice as Mr. Nixon gave all of the world. But the $USD is the world reserve currency and that could never happen, right?

    Here is a brief history of the accomplishments of the FED since its inception: http://bit.ly/1ybwV4A

    To those who are strong supporters of the FED, and can share their own various success stories, understand that this is a privately held bank which holds a protected monopoly in the banking system. By design, the FED and its monopoly exercises its ability to force the usage of its money to move the worlds wealth at their discretion. The owners of the FED therefore have the ability to determine the fate of the worlds wealth based on however they choose to distribute this wealth. Gold/Silver seriously hampers this ability and thus is a much more honest system.

    But again, this time is different, right? The FED is graciously accepted by all the nations of the world. It has no enemies, right? Probably because it is such a fair system of banking and it is fair to everyone. Long live the FED.
    Oct 20 01:33 PM | 3 Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    Crade, If I were in a position of power or influence, I would move to cut taxes and reduce and eliminate excessive regulations that exist in such that they add to cost of doing business. I would also look to exit the FED Reserve system, and move back toward an honest system of currency based on something stable such as gold/silver that our original constitutional government had intended. I could go on and on here, but it may start to resemble a thesis.

    Capitalism, Fair trade, and the elimination of both private and particularly government monopolies have a proven track record of success. Statism and Elitism are a threat to the success and expansion of a thriving middle class and a successful market place which is necessary for a successful society to prosper within the global structure.
    Oct 19 09:34 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    Al, my apologies. I should know that you don't compete with IT, or anyone else here on the challenge. We are all a team here. Perhaps I came off a little too strong with my comments.

    There is no "I" in team. At least not until Apple starts using "team" to market their products.
    Oct 19 09:14 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! EBOLA ?? Part 4 !! [View instapost]
    Just a lot of "Riff Raff" from this "Problem Child".
    Oct 19 01:52 PM | 2 Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! EBOLA ?? Part 4 !! [View instapost]
    Ain't no fun waiting round to be a millionaire.
    Oct 19 01:30 PM | 2 Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    No. No PH.D for OAG. If I would have been more intelligent and driven, I would have to change my handle from OAG, to Unique Exceptional Guy. UEG just doesn't fit.

    I could never personally even dream of receiving Nobel prizes and Sveriges Riksbank Prize's, even if I went out and got my MBA, and then successfully pursued other academic heights from there. I possess one serious flaw that I make no effort to cover up. I openly reject statism, elitism, and totalitarianism. That alone offsets any academic achievements that I could ever excel in to qualify for such achievements.

    I appreciate Dr. Yellen's intellectual achievements. She is talented and has been blessed with a rare gift in that area. Hopefully she can use these talents for something positive and useful toward the advancement of mankind and the free world someday.
    Oct 19 01:27 PM | 3 Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    IT, must be almost time to sell-out your current positions and dump into PSEC. Or, are you waiting to ease into PSEC post market correction?
    Oct 19 12:12 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    If "old Yeller" announced firm opposition to statism and elitism, and then went on to support this new direction with the actions she were to practice and execute, she would immediately be forced to resign her post as FED Chairperson.

    I could overlook the fact that she is married to a Noble Peace Prize winner, but appreciate her as a very intelligent person that as for now rejects free markets and is aligned with the statists & the elitists.
    Oct 19 12:02 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 84....... [View instapost]
    Al. Great choice for a user name in the challenge! I will be watching this week and expect BrainLock to give IT a run for the money.
    Oct 19 11:49 AM | 1 Like Like |Link to Comment
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