The End Of Fractional Reserve Gold Is Nigh [View article]
"two young men in the Financial Sector and they were telling me that interest rates were going to go up."
Did they say why? I hope their reason wasn't, "well because they always have".
There are two reasons interest rates go up.
1. There are more economic opportunities than available capital. That means a vibrant growing economy. People are finding work left and right, and business after business is getting started and bringing here-to-fore unknown products to market.
2. Credit risk. This is an issue of alternatives. So even though there might be lousy choices, one of the choices is always better, and even sometimes head and shoulders so. One thing that would really sink the US in terms of credit risk right now, is some other economy went full bore free market that would rival the size of the US's steadily socializing economy that issued notes in a comparable volume.
So, of the two reasons for interest rates to go up, do you see a vibrant, growing economy for the US where people are getting jobs to the tune of 500k+ in NFP each month? Or do you see another economy out there going full bore free markets that will make our paper less attractive in relation to theirs?
The macro picture is very low rates for a lot longer than people are prepared to realize. Ten more years or even longer is not unreasonable. Wait till Obamacare and Dodd Frank get going full tilt. Unemployment is really going to start feeling pressure, and that will keep inflation low and thus interest rates low.
GE seems to have a bit of a history with this sort of thing going way back. I think Steinmetz at one point called for world socialism with GE running it. Here's a little blurb about Steinmetz.
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
I'm just wondering if you agree with gage or not? Do you know who he is? You're supposed to be the enlightened intellectual on this thread, so I want to see what you know.
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
Wait a second, Abegaz. Are you not the same guys that said that without a central bank, collapses such as that experienced in 1893 would be repeated?
Well,they're still happening.
"Without such a central bank, he declared in alarm, "individual banks stand isolated and apart, separated units, with no tie of mutuality between them." Unless a central bank established such ties, Gage warned, the panic of 1893 would be repeated."
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
"The idea of defending the Fed is now catching on."
What do you mean "now"?
Its been a coercive policy favored for a long time by those wishing to cartelize the system, and getting cover for that by getting suckers to preach the benefits of cartelization much the same way Bossuet would say, "Absolutism is now catching on."
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
"The real cause of bubbles is human greed and corruption."
I would say its coercion. Greed is just want. Want is just instinct. Want propels you to survive. There are only two options for survival. You can either produce or steal. The problem with stealing is that precludes production. When production declines, so to does the standard of living. A declining standard of living is not desired by anybody, so to allow it to occur requires one person to use coercion against another. That's where the corruption comes in. Its just another world for stealing.
This is where human reason comes into play. We figure out that if we can get rid of coercion, then stealing is not possible. Everyone has to produce, and then they can trade. Productivity goes up, and consumption goes up, which is an improved standard of living.
Coercion causes the bubbles, because it facilitates wealth transfer. One person inflates and another deflates. Coercion is the inflationary force.
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
"Carrying the Fed's water because bubbles existed before central banking is one of the simply laziest intellectual arguments I've read here at SA. "
A great example is LM Shaw in 1905. He basically used the US Treas to mimic QE. What followed was the panic in 1907. Another example is John Law and the Mississippi bubble. In fact it was France allowing Law to monopolize bank notes that created such an inflationary period that the word "millionaire" was first coined. What followed was yet another crash.
All through history what has caused the booms and busts has been the intervention of gov coercion causing wealth transfers. In a free market there would be no business cycle. You might have short lived bubbles in specific sectors, but you would not have a system wide collapse that brought down an entire country, or in today's world, the entire globe, into a recessionary/depressio... period.
The "blame the free market" is a classic regulator deflection. Politicians and their regulators interject their coercion into the system, resulting in wealth transfer, this results in asset inflation (CPI assets are assets) that current technology cannot create the income to sustain, eventually nature reveals that the PV of future cash flows does not justify the asset prices, then you get a mass exodus, and asset values reset to what their natural price should be. Book wealth is destroyed (the balance sheet gross up), people become afraid, and attempt to save. Keynes hated this so much because it revealed his fraud that he would call it "hoarding".
The Fed is just another manifestation of this coercion (price fixing). So whether you use fiscal policy to transfer wealth or monetary policy, either way, they are both consumption subsidies. When you look at the bubbles of the past, you will see these consumption subsidies causing the bubbles and busts. Then in true Randian fashion, the cowardly politicians and regulators start the, "its not my fault, its not my fault" blather, and their saving grace is a gov schooled populace that have been trained to be suckers.
Don't Get Caught Up In Panic Selling And Capitulation In Precious Metals [View article]
"And then what benefit is having a hard currency, if the government can still devalue it? "
Well, that's the main argument for having money private. The devaluing (aka inflation) is a stealth tax. Its a nontransparent way for a gov to impose a consumption tax that most of the populace won't see or catch on to, at least not for a very long time. Then politicians can set about buying votes to get rich and make other people poor. That's why they love fiat so much, and have to use frauds like, "fiat will make us all richer" or "don't crucify us on a golden cross".
The End Of Fractional Reserve Gold Is Nigh [View article]
Did they say why? I hope their reason wasn't, "well because they always have".
There are two reasons interest rates go up.
1. There are more economic opportunities than available capital. That means a vibrant growing economy. People are finding work left and right, and business after business is getting started and bringing here-to-fore unknown products to market.
2. Credit risk. This is an issue of alternatives. So even though there might be lousy choices, one of the choices is always better, and even sometimes head and shoulders so. One thing that would really sink the US in terms of credit risk right now, is some other economy went full bore free market that would rival the size of the US's steadily socializing economy that issued notes in a comparable volume.
So, of the two reasons for interest rates to go up, do you see a vibrant, growing economy for the US where people are getting jobs to the tune of 500k+ in NFP each month? Or do you see another economy out there going full bore free markets that will make our paper less attractive in relation to theirs?
The macro picture is very low rates for a lot longer than people are prepared to realize. Ten more years or even longer is not unreasonable. Wait till Obamacare and Dodd Frank get going full tilt. Unemployment is really going to start feeling pressure, and that will keep inflation low and thus interest rates low.
QC #256, April 12, 2013 [View instapost]
It's people!!
QC #256, April 12, 2013 [View instapost]
QC #256, April 12, 2013 [View instapost]
http://bit.ly/13xfPyz
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
Do you even know who Lyman J Gage is?
'Obama Is Dead' Tweet Makes For Flash Crash [View article]
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
Well,they're still happening.
"Without such a central bank, he declared in alarm, "individual banks stand isolated and apart, separated units, with no tie of mutuality between them." Unless a central bank established such ties, Gage warned, the panic of 1893 would be repeated."
Lyman J. Gage
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
What do you mean "now"?
Its been a coercive policy favored for a long time by those wishing to cartelize the system, and getting cover for that by getting suckers to preach the benefits of cartelization much the same way Bossuet would say, "Absolutism is now catching on."
http://bit.ly/10wyZbc
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
I would say its coercion. Greed is just want. Want is just instinct. Want propels you to survive. There are only two options for survival. You can either produce or steal. The problem with stealing is that precludes production. When production declines, so to does the standard of living. A declining standard of living is not desired by anybody, so to allow it to occur requires one person to use coercion against another. That's where the corruption comes in. Its just another world for stealing.
This is where human reason comes into play. We figure out that if we can get rid of coercion, then stealing is not possible. Everyone has to produce, and then they can trade. Productivity goes up, and consumption goes up, which is an improved standard of living.
Coercion causes the bubbles, because it facilitates wealth transfer. One person inflates and another deflates. Coercion is the inflationary force.
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
A great example is LM Shaw in 1905. He basically used the US Treas to mimic QE. What followed was the panic in 1907. Another example is John Law and the Mississippi bubble. In fact it was France allowing Law to monopolize bank notes that created such an inflationary period that the word "millionaire" was first coined. What followed was yet another crash.
All through history what has caused the booms and busts has been the intervention of gov coercion causing wealth transfers. In a free market there would be no business cycle. You might have short lived bubbles in specific sectors, but you would not have a system wide collapse that brought down an entire country, or in today's world, the entire globe, into a recessionary/depressio... period.
The "blame the free market" is a classic regulator deflection. Politicians and their regulators interject their coercion into the system, resulting in wealth transfer, this results in asset inflation (CPI assets are assets) that current technology cannot create the income to sustain, eventually nature reveals that the PV of future cash flows does not justify the asset prices, then you get a mass exodus, and asset values reset to what their natural price should be. Book wealth is destroyed (the balance sheet gross up), people become afraid, and attempt to save. Keynes hated this so much because it revealed his fraud that he would call it "hoarding".
The Fed is just another manifestation of this coercion (price fixing). So whether you use fiscal policy to transfer wealth or monetary policy, either way, they are both consumption subsidies. When you look at the bubbles of the past, you will see these consumption subsidies causing the bubbles and busts. Then in true Randian fashion, the cowardly politicians and regulators start the, "its not my fault, its not my fault" blather, and their saving grace is a gov schooled populace that have been trained to be suckers.
Gold: Where Are We Now? [View article]
http://bit.ly/14BhQ1s
Gold: Where Are We Now? [View article]
http://bloom.bg/17rGZHC
QC #256, April 12, 2013 [View instapost]
http://bit.ly/YxgDAf
Another interesting story along these lines.
http://bit.ly/Zu2VkY
Don't Get Caught Up In Panic Selling And Capitulation In Precious Metals [View article]
Well, that's the main argument for having money private. The devaluing (aka inflation) is a stealth tax. Its a nontransparent way for a gov to impose a consumption tax that most of the populace won't see or catch on to, at least not for a very long time. Then politicians can set about buying votes to get rich and make other people poor. That's why they love fiat so much, and have to use frauds like, "fiat will make us all richer" or "don't crucify us on a golden cross".