All times are U.S. Mountain Time
(Yesterday's Discussion.)
Paper Avalanche (07/03/04; 21:05:32MT - usagold.com msg#: 122740)
Spiderman
Went to see Spiderman this afternoon. The villan in the movie decided to steal money to finance his evil intentions. When he ripped off the vault door at an un-named New York bank to do so there was not a pile of FRN's but rather bags of physical gold. This was not a glimpse in the movie. Instead, the movie director had the bags of gold be a centerpiece of the fight scene between spidey and the bad guy. There were numerous, focused scenes of gold in the vault.
Indirectly, subliminally establishing the value of gold in the mind of Joe Sixpack? Could be.
However, for those newbies who have never read a post from me before, please head the following:
I may be wrong. I often am.
Paper Avalanche (coming your way soon!!!)
The Invisible Hand (07/03/04; 18:25:13MT - usagold.com msg#: 122739)
No comment
http://business.timesonline.co.uk/article/0,,8209-1163961,00.html
(article dates from Thursday July 01, sorry if this bas been posted before)
SNIP:
If history is any guide, politicians and voters will decide that inflation is the only way to spread the burden of these ever-growing social costs. If so, then the trend of interest rates and inflation will continue to point upwards for years, or even decades, to come.
Steve22 (07/03/04; 16:34:28MT - usagold.com msg#: 122738)
The end isn't near...or is it...
Sir Bizarro-Greenspan,
That is like saying, the system is not the system without the system. I agree that it could be a while, though. If a large holder like China decided to sell off the bulk of it's holdings in favor of Gold, that would be considered an act of war and most likely pursued as such. Tolerating massive inflation in places like China, while they debase ahead of the devaluing dollar in order to maintain support for as long as possible might be a good idea. Money is time. Let me know what you think?
Thanks
Steve22
Bizarro-Greenspan (07/03/04; 12:10:14MT - usagold.com msg#: 122736)
The "money" needed to sustain
UST's in a comfortable band is chump change.The market is not really all that big,once all the large official and commercial interests are removed.The inflation will take place on a world wide basis,the recognition of the event will take a long time,IMO.
Happy motoring.
"We got to this point because our money was gold in the beginning."
Goldless Heathen (07/03/04; 12:22:21MT - usagold.com msg#: 122737)
GAB- sorry I was so unclear.
Thanks for your time. I think I meant to say this;
Can the 'benefits of free gold' ever be fully realized without a larger number of indivivduals owning gold and fewer individuals owning very large amounts?
(my term 'Individuals' can also include groups, central banks and governments)
As soon as the Fedex guy gets here I will just be a Heathen :)
Have a great weekend, I'm off to fish the Konkapot.
Bizarro-Greenspan (07/03/04; 12:10:14MT - usagold.com msg#: 122736)
The "money" needed to sustain
UST's in a comfortable band is chump change.The market is not really all that big,once all the large official and commercial interests are removed.The inflation will take place on a world wide basis,the recognition of the event will take a long time,IMO.
Happy motoring.
"We got to this point because our money was gold in the beginning."
USAGOLD / Centennial Precious Metals, Inc. (07/03/04; 11:57:16MT - usagold.com msg#: 122735)
Starting from this auspicious holiday weekend, declare the independence of your savings!
http://www.usagold.com/buy-gold-coins.html
Bizarro-Greenspan (07/03/04; 11:49:41MT - usagold.com msg#: 122734)
The US taxpayer and population in general...
Will not bear the brunt of this equalization of accounts.The US will continue to run ever increasing deficits as both the fall-off in consumer demand,coupled with rising external debt service costs and other factors(free lunch)send said deficits through the roof.
So,we all know the debt based money system must continually expand,furthermore,we all know there's an admitted 45 Trillion dollar funding shortfall to be faced by the US government in the next 20-25 years.
This debt will all be inflated away,this will happen based on the social needs of the majority,as FOA has so pointedly written.The other alternative will not do,for a variety of reasons'some of them quite frightening.
The bagholders here are the UST buyers,inevitably this will also include the Federal Reserve,as they are forced to monetize US interest rates down to keep the game going.
Of course,that's fine,because they run their money off on a printing press.It's really quite a reasonable proposition.
"Why chop off a hand,when we can all lose our wealth one finger at a time."
Arcticfox (07/03/04; 10:10:51MT - usagold.com msg#: 122733)
From Richard Russell site..
The e-mail below received Friday is extremely intelligent and important. All I can say is -- Do I have smart subscribers or what?!
Richard,
Expanding fiscal policy in order stimulate growth during a "Balance Sheet Recession" is predicated upon the capacity to do so. It is doubtful that the government of a country, such as the U.S., which runs large external deficits on account of negligible domestic savings will have the capacity, particularly given the large nominal size of the U.S. economy and external deficits relative to the rest of the world, to bring forward future demand to the present through public borrowings. The large external deficits and fiscal deficits are reflective of previous stimulative efforts by the fiscal and monetary authorities to keep consumption high in past periods. We have, in essence, already borrowed heavily against future consumption.
The current accounting of the problem, of course, does not include "off balance sheet" liabilities such as pension deficits in the private sector or entitlement deficits in the public sector which when added up suggest the country as a whole is technically insolvent. The government for decades has, in effect, been using fiscal policy to boost present growth by accelerating to the present future consumption through inter-generational transfer schemes that leave parents borrowing (stealing) from their children's future income.
With the currently high debt ratios across all sectors of the U.S. economy, it is difficult to comprehend how expanding borrowings can solve the problem. Consideration of expanding fiscal policy as a solution, however, does highlight the trap we have entered. We have already spent our ammunition. The transition from a debt-fuelled growth regime to a more sustainable savings-fuelled growth regime is likely to be painful since it is difficult to see how incomes and asset values are not at least temporarily depressed in the process.
Japan's situation is very different since it remained a net external creditor on account of relatively high domestic savings. The "balance sheet" causing the problem in Japan was/is primarily that of the corporate sector. It's currency does not serve as the world's reserve currency. As such, a large expansion of fiscal policy to stimulate growth is largely a domestic affair. In essence, the expansion of fiscal policy to fill the gap created by corporate savings ultimately liquefies highly damaged banking balance sheets since in lieu of corporate lending the banks buy government bonds to fund deposits. This probably works, in time, for Japan (until retirees realize that their cost of living far outstretches the benefits provided by the government – tomorrow's story). It is not clear that this will work for the U.S. given its absolutely and relatively large net external borrowings facilitated by the dollar's role as the world's reserve currency.
Mr. Koo's assessment of the causes of the "Balance Sheet Recession" may apply to the U.S. but the conditions in the U.S. are sufficiently different than those in Japan to invalidate his assessment of the proper solution. There is no such easy way out of the U.S. balance sheet problem since it exists across all sectors of the economy and is further exacerbated by the mammoth size of "off balance sheet" liabilities we fail to acknowledge today. In fact, maybe we will end up calling any U.S. recession an "Off Balance Sheet Recession" as pension deficits and escalating entitlement deficits limit expedient solutions to what has been a problem long-time coming.
Best Regards,
JF
Russell Comment -- It's possible that the sheer amount of monetary and fiscal stimulation needed to hold off recession and deflation in the US would literally sink the dollar. The dollar continues to be one of the main "Achilles Heels" of the US. Friday the dollar closed very weak. I'll be watching the dollar very carefully in coming days.
Of course, if the dollar becomes "too weak," it's going to frighten our foreign holders of US bonds (and their holdings are massive). At some point, a falling dollar will force foreigners to "save what they can" and dump their US bonds. That would drive interest rates through the roof. God help us if it comes to that.
Of course, the Fed could buy all the bonds that are dumped on the US. But that would require the Fed to create mountains of new money in order to buy the bonds, causing massive monetary inflation. That would cause the dollar to cave in and gold to go through the roof.
You see, one way or the other you have to own gold.
Great Albino Bat (7/3/04; 04:17:01MT - usagold.com msg#: 122732)
Goldless Heathen: your worries are justified.
Yes, owning gold has its problems. Problems that are "built in" to the metal, and you can't get away from them, no matter how you slice it.
Gold is liquid, gold is ultimate liquidity. That is an economic term or a financial term. But also, gold is as liquid as water, as far as possession goes. Can you keep water in your hands, poured out from a pitcher? Water will run through your fingers, and in a manner of speaking, so will gold. It is hard to hang on to it, very easy to lose it.
If your gold gets tangled up in a legal problem, Poof! That's the last you will see of it. Where is it? Who has it?
Some people - a lot of people, in fact - don't want these problems that come with owning gold. So, they do not accumulate gold, and so they get into much, much worse problems. Sure, they keep their numbers quite securely in the bank, they know to the penny how big the number is of their dollars, or pesos, or pounds, or euros. But, their big problem coming at them is, How much will those numbers buy later on? Even Greenspan cannot tell us what a Dollar IS.
Life presents problems. You can only choose, up to a point, what sort of problem you prefer to deal with.
There is no such thing as perfect security. Whatever you do, you are at risk of losing your gold, if you have any. You have to choose the lowest risk alternative, and live with it: Bury it, put it in a safe, in a security box, in a private vault, in an allocated bank deposit - everything carries a risk.
Americans seem to have been culturally formed to avoid risk at all costs. Insurance for everything under the sun. They appear to be afraid of everything, afraid of the natural risks of living. They won't eat bananas with black spots, though these are the sweetest and tastiest: "Might be wormy!"
Gold will serve you well, but you must be big enough to own it.
The GAB
mamoose (7/3/04; 04:12:24MT - usagold.com msg#: 122731)
End of cheap oil contest
I have been assigned to watch the results of the contest while mamoose is at the cottage, completely out of touch, living the simple life she expects to come. Therefore, she will not be able to enter 'the opinion' phase of the contest. Sorry.
I do know the supply of oil has been a concern to her since the early 70's, the last oil crisis.
Black Blade (7/3/04; 01:42:57MT - usagold.com msg#: 122730)
Heating bills expected to burn more money - Unless supply issues solved, outlook bad
http://www.freep.com/money/business/energy-bar12e_20040702.htm
Snippit:
WASHINGTON -- As if steep gasoline prices this summer weren't enough to make consumers grumpy, the energy crunch also could lead to higher home heating costs next winter. While weather is a major determinant of winter heating costs, analysts said homeowners in the Northeast and Midwest may get hit harder than usual even if temperatures are in their normal range. "I would be shocked if we don't see soaring natural gas and heating oil prices next winter," said Tom Kloza, director of Oil Price Information Service, a Lakewood, N.J., provider of industry data.
Crude prices are more than 25 percent higher than a year ago. Another concern is that refiners, who are focused on maximizing production of high-priced gasoline and diesel fuel, could fall behind in making next winter's heating oil supply. Nationwide inventories of distillate fuel, which includes diesel and heating oil, are 7.7 million barrels below the 5-year average for this time of year at 110.9 million barrels, according to Energy Department statistics. "Whichever way you look at it," the agency said in a recent report, "distillate fuel stocks will need to build at a faster rate in order for there to be enough supplies on hand this upcoming winter."
The unusually expensive heating oil at this time of year presents yet another problem, according to Peter Beutel of Cameron Hanover in New Canaan, Conn. "What these high pries have done is to have forced most heating oil distributors to put their buying plans on hold for next winter," Beutel said. "Inherent in that is a risk. And the risk is that prices won't come down."
The other main fuel used to heat homes, natural gas, has stayed expensive this year due to strong demand -- from the electric power and manufacturing sectors -- and the run-up in oil prices. The price of natural gas has been significantly higher in recent years because domestic production has not kept pace with demand.
Black Blade: Not a surprise at all. Refining is running flat out and like a hamster on a treadmill we are not gaining any ground. Thankfully it is not inflationary according to our government leaders. Gotta love that "core rate" BS. Ah well, we shall see what fun develops now that we are in mid-summer and some US refiners are closing up shop. "Interesting Times" indeed.
Black Blade (7/3/04; 01:27:50MT - usagold.com msg#: 122729)
U.S. May Spending Rises 1%; Inflation Accelerates
http://quote.bloomberg.com/apps/news?pid=email_us&refer=home&sid=avA8y.Zx1ZEk
Snippit:
June 28 (Bloomberg) -- U.S. personal spending rose 1 percent last month, the biggest rise since October 2001, and a gauge of inflation matched the largest gain in almost 14 years as the economy and job market improved. ``The underlying inflation rate has moved up significantly over a relatively short period,'' said David Greenlaw, chief U.S. fixed income economist at Morgan Stanley in New York.
The increase in purchases followed a 0.2 percent rise in April and reflected more spending on automobiles and other durable goods, the Commerce Department said in Washington. The report's price index rose 0.5 percent, in part because of fuel prices, and hasn't been higher since September 1990. ``The obvious risk is that there is no let-up on the inflation front and the Fed is forced to abandon the `measured' approach to tightening,'' Greenlaw said.
``A surprising portion of the strength in U.S. income growth through the first and second quarters has been absorbed by price increases,'' said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado. ``Consumption has been impressive throughout 2004, but the inflation bite was hammered home in May.'' Englund lowered his second-quarter growth forecast to 4.5 percent from 5 percent. Economists at Morgan Stanley reduced their growth estimate to 3.5 percent from 4.2 percent.
The personal consumption expenditures price index has not risen more than 0.5 percent since September 1990. The gauge rose 2.5 percent from May 2003. Excluding volatile food and energy prices, a gauge tracked by Federal Reserve Chairman Alan Greenspan and other policy makers, the prices index rose 0.2 percent for a third month and is up 1.6 percent since May 2003.
The increase in the personal consumption expenditures price index reflected a jump in gasoline costs. The average price of a gallon of gasoline at the pump rose to a record $2.10 in the week ended May 24 compared with an April average of $1.84 a gallon, according to the latest figures from the Department of Energy.
Black Blade: Quite a change in sentiment from these clowns but even as they admit inflation is back they are typical economists - always in a positive move in spite of the evidence of much higher "real" inflation rates with more to come. They are as sheep believing anything they are told or lying and keeping up a brave front. Economists (especially at large investment houses are generally wrong - they are more like mathimatically challenged astrologers, palm readers, etc. than those who dig into the data and read the fine print). It will get very ugly even though oil is still rather "cheap" as demand rises. Inflation adjusted it should be selling around $60/bbl.
Goldless Heathen (7/3/04; 00:52:17MT - usagold.com msg#: 122728)
Independent Gold?
I am posting this late because it is somewhat a rambling waste of time-my apologies.
If you have a lot of gold and you store it in a vault and they give you a key or card or code they essentially give you a receipt. I'm not so lucky but I am guessing in many cases it is a paper or digital receipt. Is this also like owning paper gold?
I realize it could just as well be your antique furniture in the vault and the isuues are not, on the surface, about 'free gold' but simply about security and private property rights. Vault or storage unit owner goes belly up you cannot get to stored valuables in some way.
I know this is a poorly formed thought but it has been nagging me nonetheless. Is there some analogy between "vaulted gold', as above, and gold still in a mine that you buy rights to, or even paper gold?
Initially it seems the comparison fails because, as I said, it could be antiques and not gold in the vault, but not the mine and the risks are about security not scarcity or market forces/tricks.
But the 'vaulted gold' in some ways seems no more in the owner's possesion than the gold 'belonging' to the owner of a mining or paper gold note.
If fiat currencies fail and there is not enough gold to pay the
paper( I hope I have this somewhere near right) are other circumstances sufficiently unstable to leave 'vaulted gold' at risk? Or could they follow, or MUST they, for gold to be really free gold unfettered by artificial forces?
So going beyond this apocalyptic scenario can this apply to free gold. Can free gold( again I really am rambling and confused, my apologies) 'ascertain' when it is owned in very large quantities. Such ownership has a cost of security and seems to beg for 'lending from it' and so on . . . For gold to do it's thing must more people own it and in fewer large concentrations?
Could that concentration level be as low as what one might feel personally capable of providing security for? Is the cost of ownership(security costs) an incentive to lend and so begins anew another mess?
By nature or default or Providence will gold only be independent when it is distributed more widely and proportionately?
ViewYesterday's Discussion.
