On article on CNN talks about the danger of deflation with no mention of the inflation we should expect within the next 24 months:
http://money.cnn.com/2008/10/17/news/economy/deflation/index.htm?postversion=2008101705
With all the money they have printed electronically (that means so much faster than what the German government has done in the 1920s where they had to actually print it - see:
http://en.wikipedia.org/wiki/Inflation_in_the_Weimar_Republic)
What in reality is in the forecast is a some deflation followed by a lot of inflation. Depending on how long it takes the governments to realize that paper money in the 21st century is the same as paper money in
- The Weimar Republic of Germany in the 1920s
- John Law in France in the 18th century http://en.wikipedia.org/wiki/John_Law_(economist)
- In Persia in the 13th Century http://en.wikipedia.org/wiki/Gaykhatu
- Multiple times in the Chinese history
- Roman empire
- Greece
well, if they wait too long, we might hit the point of no returns where people rush to get rid of their dollars because they collectively realize those dollars are melting like a snowman would in Arizona in July. If that happens, the rush to purchase anything of tangible value will kick in hyperinflation.
When is the next flight to Planet Gold?
Sunday, October 19, 2008
Letter to Jason Hommel of Silver Stock Report
Hi Jason
Hope all is well for you. Glad your father listened to you. My mother is, so I'm happy too.
I was thinking regarding the constitution. You know, we have all those big debates about abortion (Roe vs Wade) and gun control (city of Washington recently) that went all the way to the Supreme court. Obviously, one that has much much more bigger impact on every body's life is the gold standard (well, the lack of).
How come nobody is forcing the issue to go all the way to the supreme court?
I mean, say I start a new bank that store's people gold and silver and allow people to pay using those - as if they were 2 other new currencies (gold and silver) with the respective exchange rate between themselves and between all the currencies in the world.
I'm sure, in no time, the govt will come up and file a lawsuit or something... which goes all the way to the supreme court...
I mean, this is the same kind of strategy that some folks did with the Monkey trial (John Scopes) in the 20s. They forced a lawsuit. http://en.wikipedia.org/wiki/Scopes_Trial
I know we are pretty late and would have been much better for the country if such action had been done in the 1970s or early 80s, but today, we will certainly have more people behind such cause.
Thanks
Regards
Phil
Hope all is well for you. Glad your father listened to you. My mother is, so I'm happy too.
I was thinking regarding the constitution. You know, we have all those big debates about abortion (Roe vs Wade) and gun control (city of Washington recently) that went all the way to the Supreme court. Obviously, one that has much much more bigger impact on every body's life is the gold standard (well, the lack of).
How come nobody is forcing the issue to go all the way to the supreme court?
I mean, say I start a new bank that store's people gold and silver and allow people to pay using those - as if they were 2 other new currencies (gold and silver) with the respective exchange rate between themselves and between all the currencies in the world.
I'm sure, in no time, the govt will come up and file a lawsuit or something... which goes all the way to the supreme court...
I mean, this is the same kind of strategy that some folks did with the Monkey trial (John Scopes) in the 20s. They forced a lawsuit. http://en.wikipedia.org/wiki/Scopes_Trial
I know we are pretty late and would have been much better for the country if such action had been done in the 1970s or early 80s, but today, we will certainly have more people behind such cause.
Thanks
Regards
Phil
Friday, October 17, 2008
Letter to Mr. Obama
Hi Mr. Obama et al.
I would like to congratulate you on your campaign.
I'd like to bring up a concern and suggest and action when you will be president. The amount of money that has been "printed" by the Fed+Treasury is quite enormous and will generate an inflation spike in the next 24 months. If the American people is not warned about some side effect (I suspect you will not be incline into saying we will have inflation to avert more problem) from all the bailouts, they will blame your administration about it. If they are warned in advance, right next February, they will more easily register that this was a result of what has been done some months earlier.
Another thing, the way the trade and budget deficit are going, the dollar will get hit. There is the serious danger that when the Asian economies get back on track before we do, they will realize they can survive without this huge consumer nation for their exports and will no longer be thirsty for US dollars and seek an alternative. Perhaps a return to the Gold standard they will do.
You know, if we were on the Gold standard, there is no way this huge trade deficit could have happened simply because, once the US runs out of gold, they can only export to get it back. It would have been the best trade "balancer" (and it was).
Finally, I know this sounds Ron Paul (but I agree with him, I'm a Ron Paul democrat :-) -- although between you and McCain, I much prefer you win. How about abolishing also the Federal Reserve. Because of fractional reserve banking, this inflate the amount of money supply which contracts when the economy re-balance itself. When there was no Federal Reserve, these were small reversed pyramids, one for each bank. Now, with the Federal Reserve, we are talking about a huge reverse pyramid. With Bretton Woods on top of it and with the fact we do not have the gold standard, this makes it possible to have the kind of mess we got it.
Best of luck
Phil
Note: I'm afraid that the republican will more likely get into a war if issues starts to pop up against the USA.
I would like to congratulate you on your campaign.
I'd like to bring up a concern and suggest and action when you will be president. The amount of money that has been "printed" by the Fed+Treasury is quite enormous and will generate an inflation spike in the next 24 months. If the American people is not warned about some side effect (I suspect you will not be incline into saying we will have inflation to avert more problem) from all the bailouts, they will blame your administration about it. If they are warned in advance, right next February, they will more easily register that this was a result of what has been done some months earlier.
Another thing, the way the trade and budget deficit are going, the dollar will get hit. There is the serious danger that when the Asian economies get back on track before we do, they will realize they can survive without this huge consumer nation for their exports and will no longer be thirsty for US dollars and seek an alternative. Perhaps a return to the Gold standard they will do.
You know, if we were on the Gold standard, there is no way this huge trade deficit could have happened simply because, once the US runs out of gold, they can only export to get it back. It would have been the best trade "balancer" (and it was).
Finally, I know this sounds Ron Paul (but I agree with him, I'm a Ron Paul democrat :-) -- although between you and McCain, I much prefer you win. How about abolishing also the Federal Reserve. Because of fractional reserve banking, this inflate the amount of money supply which contracts when the economy re-balance itself. When there was no Federal Reserve, these were small reversed pyramids, one for each bank. Now, with the Federal Reserve, we are talking about a huge reverse pyramid. With Bretton Woods on top of it and with the fact we do not have the gold standard, this makes it possible to have the kind of mess we got it.
Best of luck
Phil
Note: I'm afraid that the republican will more likely get into a war if issues starts to pop up against the USA.
Sunday, October 12, 2008
Letter to Mr. Greenspan
Dear Mr. Greenspan
Before blaming the bad banks for giving easy loans and inflating the real estate bubble, let's look at the origin of all this. Well, the origin of course goes back to December 1913 but that is for another article. Let's focus on the most recent event, in 2002 when interest rate started going down all the way to 1%.
For others reading this and that don't know how the government "adjust" this interest rate, well, it is the same as how would you "adjust" the monthly rents for houses in a given city to a lower value? Simple: you build more houses that you put up for rent. The more houses for rent, the lower the rent. So, the more dollars printed, the lower the rent (in this case the interest rate)
If the interest rate have not been lowered, yes we would have faced a recession. Yes, that crazy bin laden would have been happy. And yes, Bush might have not been reelected.
So, the goal of lowering the interest rate was to kick start the economy by re-activating its consumer spending side. Indeed, it could not have been by re-activating the manufacturing side because that is moving abroad - again another problem of money printing, and another later discussion. So, the goal was to kick start this consumer driven economy. If consumers are not making more money, we need to facilitate them going into debt so they can spend. And that was done at the national level. Everyone could afford bigger houses, meaning new loans, meaning new money out of those loans to buy more stuff at Home Depot and to feed the Realtors etc.
That led to banks easing lending.... which led to where we are now.
So who's at fault Mr Greenspan for creating this monster? If all the protection was in place to prevent a buildup in real estate bubble, the economy would have not kept growing and we would have gone into a recession. Since interest rate were lowered to 1%, I can only assume that if that didn't work, they would have been lowered all the way towards 0% until they did kick start the spending. I mean, if avoiding a recession was the goal of lowering the rates, and that this recession was only avoided by this consumer driven economy to keep going...
So, please don't write books to try to go in history as an agent of peace who is blaming the lenders and all the others for this mess. You took care of the egg that brought up this monster.
Phil who wish was on Planet Gold.
Before blaming the bad banks for giving easy loans and inflating the real estate bubble, let's look at the origin of all this. Well, the origin of course goes back to December 1913 but that is for another article. Let's focus on the most recent event, in 2002 when interest rate started going down all the way to 1%.
For others reading this and that don't know how the government "adjust" this interest rate, well, it is the same as how would you "adjust" the monthly rents for houses in a given city to a lower value? Simple: you build more houses that you put up for rent. The more houses for rent, the lower the rent. So, the more dollars printed, the lower the rent (in this case the interest rate)
If the interest rate have not been lowered, yes we would have faced a recession. Yes, that crazy bin laden would have been happy. And yes, Bush might have not been reelected.
So, the goal of lowering the interest rate was to kick start the economy by re-activating its consumer spending side. Indeed, it could not have been by re-activating the manufacturing side because that is moving abroad - again another problem of money printing, and another later discussion. So, the goal was to kick start this consumer driven economy. If consumers are not making more money, we need to facilitate them going into debt so they can spend. And that was done at the national level. Everyone could afford bigger houses, meaning new loans, meaning new money out of those loans to buy more stuff at Home Depot and to feed the Realtors etc.
That led to banks easing lending.... which led to where we are now.
So who's at fault Mr Greenspan for creating this monster? If all the protection was in place to prevent a buildup in real estate bubble, the economy would have not kept growing and we would have gone into a recession. Since interest rate were lowered to 1%, I can only assume that if that didn't work, they would have been lowered all the way towards 0% until they did kick start the spending. I mean, if avoiding a recession was the goal of lowering the rates, and that this recession was only avoided by this consumer driven economy to keep going...
So, please don't write books to try to go in history as an agent of peace who is blaming the lenders and all the others for this mess. You took care of the egg that brought up this monster.
Phil who wish was on Planet Gold.
Monday, October 6, 2008
Gold and Silver manipulation of futures...
Ted Butler and Gata.org has some serious information that shows some manipulation by government of the metal. Good for late comers!
Now, the questions are:
1) How long will this last? Could it be forever?
2) If not forever, how will it end?
Regarding question [1], my take is, it won't be forever, and that's even if they change the rule of the futures market like - well you can only get cash settlement only, no more precious metal delivered. If they do that, the price will probably be totally dysfunctional with the "black market" and also, likely another market will evolve around it. Either another futures exchange in Dubai will take over with more appropriate rules. Ooops, now they shot themselves in the foot, they (futures exchange in the USA) are loosing their standing in the world as the financial center for futures et al. Ebay and probably new website that will provide some equivalent bidding to ebay will be the place to go to buy and sell your silver at the real price.
So, for those reasons, I don't expect them to go that far and if they do, hello Dubai.
Regarding [2], probably with a bang!
http://news.silverseek.com/TedButler/1223353403.php
Now, the questions are:
1) How long will this last? Could it be forever?
2) If not forever, how will it end?
Regarding question [1], my take is, it won't be forever, and that's even if they change the rule of the futures market like - well you can only get cash settlement only, no more precious metal delivered. If they do that, the price will probably be totally dysfunctional with the "black market" and also, likely another market will evolve around it. Either another futures exchange in Dubai will take over with more appropriate rules. Ooops, now they shot themselves in the foot, they (futures exchange in the USA) are loosing their standing in the world as the financial center for futures et al. Ebay and probably new website that will provide some equivalent bidding to ebay will be the place to go to buy and sell your silver at the real price.
So, for those reasons, I don't expect them to go that far and if they do, hello Dubai.
Regarding [2], probably with a bang!
http://news.silverseek.com/TedButler/1223353403.php
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