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The Investor
Mysteries of Economics
There’s gold in them thar hills.
Herewith a few mysteries of modern economics and modern economics journalism.
Gold: Gold is extremely high compared with where it was ten years ago. It is still comically low compared with inflation and where it was thirty-one years ago. Adjusted for inflation, it is barely half of what is was in 1979. But still, it has climbed like a madman in the last couple of years. Supposedly it has risen because “investors” (read “speculators”) fear inflation and a disarray in government finance that will leave investors without a safe investing tool, except for the barbarous metal.
But, in fact, what economists often say they are fearing is disinflation, a steady fall in prices. This is all over the Wall Street Journal and other financial publications. If we are fearing disinflation, then why are we buying a metal that pays no interest, whose industrial uses account for a fraction of its price, and is basically a commodity — which means it moves down as we get disinflation? Why do we think that we need to hold gold, mainly an inflation hedge, in an era of declining or very modestly rising prices?
If the answer is that we need to hold gold because we fear the collapse of U.S. Treasury finance, then why are U.S. Treasury bonds the most sought after instrument on earth? In a time of fear of a federal government fiscal meltdown, “investors” would normally shun Treasuries. Instead, they are being bought as if they were sliced bread. This brings us to the question of …
Government finance: If the combined effect of President Bush 43’s tax cut deficits and President Barack Obama’s spending mania deficits is to degrade confidence in the dollar and the treasury, why has the dollar rallied strongly in the summer and why are Treasuries wildly high? These are pieces of a puzzle that do not hold together. Obviously, investors and speculators still have plenty of confidence in the finances of the U.S. government. This leads us to the next mystery, which is…
Tax cuts: in that case, especially since the Obama regime obviously believes (rightly or wrongly, probably rightly) in deficit spending as a much needed economic stimulus, why is the Obama regime demanding an end to the Bush 43 tax cuts? They add to the deficit and presumably strengthen the economy thereby. Why end them when we are in the shallowest of recoveries? That is, if the world’s confidence in the treasury is still strong, and if deficits stimulate the economy (as many smart people believe), why raise taxes and lower the deficit right now? If it is a matter of “equity” for less well off citizens, then has the President considered that less well off people pay no taxes on income in any event? Doesn’t that make up for some of the lack of “equity” in well-heeled people getting tax cuts? Perhaps this is a matter better addressed when unemployment is 5 percent, not nearly 10 percent.
It all comes down to a quote my dear father was fond of repeating, “Observe, my son, with what little wisdom the world is run.” This was from Baron von Oxenstiern, and may have reflected how little wisdom was needed to run the world or maybe how little wisdom was employed in any event.
I add my pitiful addendum. Follow the money and the power. Any trader and any politician can always find some theory, phony or valid, on which to hang his self-interest. It is up to us, the public, to find where the truth is situated.
Having said that, it now up to us to take a nap and then go out on the lake.
About the Author
Ben Stein is a writer, actor, economist, and lawyer living in Beverly Hills and Malibu. He writes “Ben Stein’s Diary” for every issue of The American Spectator.
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Shamus| 8.6.10 @ 7:16AM
It may be crooked, but it's the only game in town.
Markets are willing to accept the interventions of the Fed because they have little choice. Holding interest rates at zero distorts the economic system and prevents normal business activity from taking place. It also frightens market participants, who react by holding cash, mostly in the form of treasury securities, but in small part as holdings of gold. If confidence is restored, then interest rates will rise and gold will pull back.
Obama's increases in tax rates are a political statement more than an economic one. Those on the left dislike business and want to discourage economic activity, as business competes with government for social import. This is why the left insists on implementing policy which damages the economy and renders the public as wards of the state. Ultimately this is self defeating, as the country will fall into extreme poverty, but you can't reason with the left. They stopped thinking while Marx was still alive.
sasob| 8.6.10 @ 10:03AM
Ultimately this is self defeating, as the country will fall into extreme poverty, but you can't reason with the left.
The left does not care. No matter how poverty-stricken the country becomes, the ruling elite and even its taxpayer-supported lower eschelons always continue to live well. The left intends to be part of that.
bobmontgomery| 8.6.10 @ 6:16PM
Does 'the left' include Buffet and Gates and their 'billionaire challenge'? If the 'bills', instead of frittering their fortunes away on charities, were to invest in business, they could probably save ten or twelve states all by themselves.
sasob| 8.7.10 @ 5:14AM
I don't know whether 'the left' should include them or not, but certainly 'the elite' does. I agree with you - they could do much more "good" by investing in businesses or starting new ones. However, it is their money, so I suppose they can do as they please with it.
Eric Cartman| 8.8.10 @ 9:39AM
You have it all wrong, Bob. That was the "old" way. Investing in commerce to create profit to sink back into other commerce to hire people to run the entities and exploit resources to improve society is so Adam Smith! Wise up!
Billionaires should give to charities so they can hire a handful of staff to help identify poor single mothers to give grocery money to so she can buy Ho Hos, Mac & Cheese and Double Stuffed Orio Ice Cream for her obese kids by separate daddies (Dishawn, Cody and Jose Jr. - or whatever) so the charity can identify the obese kids and create a "Healthy Lunch Program" in partnership with the First Lady. THAT'S how we do it these days! Get with the program, bobmontgomery!
Jim O'Brien| 8.6.10 @ 8:50AM
Well yeah, economics is both dismal and mysterious. As the financial condition of the U.S. worsens, with $trillion deficits and $13.3 trillion in national debt, Treasury buyers will demand higher yields. All bond prices including Treasury prices will go down. The federal government's interest expense will balloon, as will the cost of borrowing for companies and consumers. This combined with the Demo-Socialists' higher taxes and the heavy hand of regulation will ensure slow or zero economic growth. But economies outside the U.S. will do much better, particularly those which realize that free markets attract capital. Park your money in large cap multi-national monsters such as Coke, Intel, GE , Toyota , Exxon Mobil. (Just a guess :)- )
Mr. LeMans| 8.6.10 @ 4:31PM
My favorite Econ professor, Dr. Robin Lindstromberg, once told me:
Son, if you laid every economist every born end-to-end, they still wouldn't reach a conclusion....
Mr. LeMans| 8.6.10 @ 4:33PM
uh, that's "ever" born...
Bill Hussein O'Stalin| 8.6.10 @ 9:21AM
Here is an essay from Ron Paul about why governments hate gold. There have been variations on this essay over the centuries but the theory holds true:
http://ronbosoldier.blogspot.c.....-gold.html
This past week several emerging and ongoing crises took attention away from the ongoing sovereign debt problems in Greece. The bailouts are merely kicking the can down the road and making things worse for taxpaying citizens, here and abroad. Greece is unfortunately not unique in its irresponsible spending habits. Greek-style debt explosions are quickly spreading to other nations one by one, and yes, the United States is one of the dominoes on down the line.
Time and again it has been proven that the Keynesian system of big government and fiat paper money are abject failures in the long run. However, the nature of government is to ignore reality when there is an avenue that allows growth in power and control. Thus, most politicians and economists will ignore the long-term damage of Keynesianism in the early stage of a bubble when there is the illusion of prosperity, suggesting that the basic laws of economics had been repealed. In fact, one way to tell if a bubble is about to burst is if economists start talking about how the government and the Central Bank have repealed the business cycle.
The truth is the laws of economics are constant and real, no matter how inconvenient they might be to politicians and bankers. This reality is setting in and the bills are coming due. In the mean time, countries that have no money have bailed out other countries that have no money, except for the phony money created by politicians, bureaucrats, and their partners-in-crime at the central banks. This may be preventing big well-connected banks from having to take on massive losses, but it is all at the expense of the taxpaying citizen.
As governments and central banks continue the cycle of spending and inflating, the purchasing power of their currencies is constantly being degraded. These currencies are what the people are working for and saving. This inflation guts the savings and earnings of the people, who have very limited options for protecting themselves against these ravages. One option is to convert their fiat currency into something out of reach of central banks and government spending, such as gold or silver.
It is fairly typical in the midst of economic crises like these for gold to come under attack from Keynesians economists and their amen corner in the media. The arguments against gold are usually straw men, based on a fundamental misunderstanding of the purpose of buying gold. Gold is not a typical investment. It is a defense against the predictable behavior of governments to debase a fiat currency under its absolute control. The people who run the printing presses have trouble shutting them off. In order to limit one's exposure to this reckless behavior, it is wise to exchange unsound assets for sound ones.
As the foundation of their power, their fiat currency, is rejected or avoided, government power is compromised. Fiat currencies trade the people's freedom and security for the government's freedom to squander the wealth of the nation on wasteful pet programs, wars, and corruption. This is why the freedom of the people is so intertwined with a sound monetary unit. This is also why the founders liked gold and silver, and supporters of big government hate them.
Ryan| 8.6.10 @ 9:36AM
I'm no Keynesian, but I partially disagree with most sorts of gold standards. Several reasons:
1. Growth is hard. Gold standards overly restrict money supplies - money needed to grow businesses.
2. Precious metals are still valued by fiat or the market.
3. Precious metals aren't all that useful. Gold in particular has limited uses outside of looking pretty. There are a few electronic uses, but not much otherwise. Its value is purely in its rarity.
4. In the current market, the only people making money with gold are those selling it; and they sell it based on fear.
Before we ever attempt to get back on a gold standard, we need to clean up the government books, lower taxes, and shrink government. The gold standard is NOT a cure-all - we still went through the Great Depression with one. We also had some good, prosperous periods WITHOUT one.
I always view the modern gold sellers with a hint of suspicion - they're either trying to sell it (like the guys on the radio) or trying to push up the value of what they already have.
Bill Hussein O'Stalin| 8.6.10 @ 9:46AM
One of the first things Roosevelt tried to do during the Depression was to seize all gold and forbid it's ownership. In fact, your reasoning, which is weak, was exactly the type used to restrict personal freedom. In fact, you sound like Tim Geithner. Read on:
http://www.gold-eagle.com/gold.....61308.html
The day after Roosevelt took the presidential oath of office, he issued a proclamation calling Congress into special session. He also declared a national bank holiday, the very same action that he had refused to agree with during Hoover’s last few days in office. Such actions were a stunning turn of events.
On March 9, 1933, President Franklin Delano Roosevelt signed executive orders 6073, 6102, 6111, and 6260, starting what was quickly to become an avalanche of draconian measures, forced upon an unsuspecting and supposedly free people.
By using the above executive orders, the new President declared a national emergency that made it unlawful for any citizen of the United
States to own gold; the very same gold that was the hard money currency of the Constitution, as well as the circulating currency of the time. This was a sad day in our country’s history, as a basic right of the Constitution, the right to private property, had been confiscated without just compensation and due process.
Such action cannot be lawfully done without a constitutional amendment, and one has not even been mentioned, let alone passed. The Supreme Law of the Land states that any law not in pursuance of the Constitution is null and void, as if it never occurred. It has no legally binding authority.
Not only had this act been perpetrated without a constitutional amendment, it was actually diametrically opposed to the Constitution, trampling the people’s unalienable rights into the ground. It arguably amounted to a declaration of National Bankruptc
Ryan| 8.6.10 @ 9:59AM
Strawman argument. I'm not advocating for gold confiscation.
Bill Hussein O'Stalin| 8.6.10 @ 10:53AM
That is not a straw man argument. I didn't say you were advocating for it. But your statement is simply another variation on it. Your comment that people are making money on the sale of gold is ludicrous. If they weren't making money then why would they sell it? And you also state that the sales are based on fear. is that why people buy houses? Cars? If anyone is engaging in a straw man argument it's you.
People invest in gold because they can make money at and that's a source of personal freedom.
Leroy| 8.6.10 @ 11:24AM
"It is a defense against the predictable behavior of governments to debase a fiat currency under its absolute control. The people who run the printing presses have trouble shutting them off. In order to limit one's exposure to this reckless behavior, it is wise to exchange unsound assets for sound ones. "
This scenario certainly smacks of fear.
Ryan| 8.6.10 @ 11:31AM
It's not that the gold sellers are selling it, it's the WAY they're selling it.
Have you been listening to the radio ads? They're partially about buying gold as a hedge - which means fear. We're also seeing some issues come to light with some of the large gold sellers vastly overpricing their coins, in particular.
Gold sellers are also trying to push gold as a good investment. Historically, it's always been just a short-term play. Since removal of the gold standard, it's been a poor long-term investment choice.
The individual gold buyer is NOT going to make much money on gold, particularly if the economy settles out. If anything is at a historical high, it's almost always a bad investment.
3/4 of your post was about gold confiscation. I therefore assumed that's what you believed I was talking about. If you didn't think I was talking about it, why post so much on it?
Doug| 8.6.10 @ 11:58AM
Ryan, Bill, please do continue. This is an interesting discussion.
Ryan, (side note) one thing I have noted regarding advertising is that almost ALL of it is fear based. Take underarm deoderant for example. *s* If you don't use 'Brand X' you will stink and have sweat marks and drive people away. Ergo, use our product to avoid social exclusion. Fear. The same for almost any sales ad can be made. New car = beautiful girl or handsome guy. No car means loss of the same.
It strikes me that what underlys all of the discussion is the issue of TRUST, which either the good faith of the government or gold appear to provide.
Thoughts?
Ryan| 8.6.10 @ 12:40PM
True enough about the "fear factor," I suppose - just about all investment has it to some level.
For gold, though, it appears to be either against some pretty bad stuff that hasn't happened - hyperinflation or some other factor.
I think there is a lot of false trust that can be placed in gold - if everything does fall apart, you can't eat it, and who is going to want it if it gets very expensive? I just think that's it's a market that gets overrated.
Doug| 8.6.10 @ 2:02PM
Well, you are correct that you can't eat gold. *s* And, if a REAL catastrophe happend, even if you had guns, along with your food storage, the mobs would still do what they wanted I suppose.
With respect to the hype, I don't see it as being much more than asking the question, "What's hot right now?". If pink flamingos were hot we'd see the pitchmen on TV telling us that we'd better get ours before the price went up. *s*
Personally, I think that the real proper response is to have one's core values be those that are larger than life - and death. As a Christian i think it's VERY good to be as prudent as reasonably possible. My 401 (k) has a specific gold-based component. I also believe that the streets of heaven will some day be paved with the stuff. So, while I think it's prudent to have some I also need to remember I'm investing in roadbase. *g*
kel| 8.7.10 @ 10:50PM
You said:
> If anything is at a historical high, it's almost always a bad investment.
And gold is no where near a historical high.
As Ben said:
> It is still comically low compared with inflation and where it was thirty-one years ago. Adjusted for inflation, it is barely half of what is was in 1979.
Yes, gold is a lousy investment. But in the short term, it can be an excellent speculation.
Gold EASILY still has plenty of up-side. Up-side, in these times, EASILY is the odds-on play. Sure it could be a losing bet. But I would be MUCH more surprised if it were to fall, rather than the much more likely rise.
It is still comically low compared with inflation and where it was thirty-one years ago. Adjusted for inflation, it is barely half of what is was in 1979.
Paul Nelson| 8.8.10 @ 5:46PM
1979 is not the proper base year to compare the price of gold to. The last proper year would be 1913, and better would be an average of say 50 years before that, or 500 years for that matter. Gold sold for roughly 20 dollars per ounce in 1913 and currently sells for roughly $1200/oz. That immediately brings the problem of measuring "inflatuion." Inflation is a measure of the increase of the money supply, not a change in price level. However, if you assume that the quantity of goods and services sold, and the velocity of circulation of money remain constant, then the price level is a proxy for quantity of money. Using these heroic assumptions, is it true that prices have increased by a factor of 60 since 1913? You could buy a pretty nice house for a thousand dollars in 1913, you could buy a loaf of bread for a penny, when Ben Franklin went to Philadelphia, you could hire a skilled worker for a couple weeks for an ounce of gold when Julius Ceasar was Emperor of Rome. In my humble opinion, gold seems to be in the right order of magnitude of price in terms of dollars today, and if anything is perhaps a smidge undervalued. But then, people do not buy gold to gain in the short term, they buy it because gold will probably have roughly the same real value in a thousand years as it has now, and no fiat currency has held a stable value for even a hundred years. The battle is not always to the strong nor the race to the swift--but that's the way to bet.
Clinton nee Publius | 8.6.10 @ 12:27PM
Sounds nice, but your prescriptions fail the test of reality as history demonstrates to us that fiscal spending in a democracy is an unlimited activity that always results in the destruction of the economy and the demise of the government. I applaud the goals, but the prescription is no different than offering a life jacket to the man who has become entangled in the anchor chain - he's going to drown, just a wee bit slower.
Bill Hussein O'Stalin| 8.6.10 @ 3:17PM
Do what you want and believe what you want. I purchased gold in 2003 and made a fortune. I didn't know the sellers and I didn't know the buyers. All I know is that it works. And it works well when fiat currencies cause the public to lose confidence.
Mr. Stein wonders why the dollar is so strong. Perhaps that's only temporary also.
If you want to see fear just look at the history of the DOW.
Perhaps those who invest with fear or ignorance deserve what they get.
As far as stability I trust in the value of gold and many others do also. It can't be explained anymore then you can explain why you trust in the dollar. I don't trust the dollar because our country is run by differing groups of phony politicians.
Example: Hillary and Bill Clinton are worth 100 million dollars. Hillary Clinton is trying to get citizens to donate to the Pakistan Flood Relief Fund. Hillary Clinton donated $10. That's right $10. Sheeeeeesh!
Leroy| 8.7.10 @ 3:43AM
Good for you for making money, making money is wonderful. But gold prices had been flat or declining for nearly 2 decades before they spiked upward. Gold is hardly a magic investment.
Bill Hussein O'Stalin| 8.7.10 @ 7:00AM
What do you invest in? I never said gold was a magic investment. As far as gold prices being flat for decades so were housing prices.
As the government interfered in the housing market with central economic planning hosing prices spiked up and now are collapsing.
If you will note, gold prices are not collapsing because the government will not give away gold.
Those who invest in the stocks of the DOW are going to be further disappointed. There is a trend amongst individuual investors to get out of the stock market. Some people view that as a contrarian signal and normally I would agree with them.
This time around though, I think the public has it right. The DOW has been flat for about 12 years. Corporations and companies are squeezing profits by cutting costs.
If there is anything you should fear it's the stock market. Those who held steady for the last 11 years have lost 25% of their investments.
Ryan| 8.9.10 @ 8:47AM
You practically did the same thing that is going on in the stock market - which I'm up in, btw.
Gold is still essentially a form of fiat currency, with the market determining value rather than the government.
Onehalf Keynes| 8.9.10 @ 2:05PM
I love your name; where do the O'Stalins hale from, the left half of Ireland?
The problem with the practice of Keynes' theory, at least as it is practiced by our paragons of just government in Washington and elsewhere, is that they do not really practice it. I am not defending Keynes, mind you, but he did put forth that government may use public spending, even public debt to stimulate the economy in hard times, and then pay it back in the good. Unfortunately, the ruling class is only too eager to pass out patronage .. er, I mean stimulous money to buy votes for their party, but they are not so eager to pay it back during good times. As for gold, in the long term, the buyer of gold will be rewarded, but in the medium term, there's a saying that the market can be wrong far longer than you can remain solvent, so one shouldn't overdo it. Most assets that have value will appreciate as the price of money goes down.
R Martin| 8.6.10 @ 9:28AM
"...and if deficits stimulate the economy (as many smart people believe)..."
"It all comes down to a quote my dear father was fond of repeating, 'Observe, my son, with what little wisdom the world is run.' "
Some articles are also written with little wisdom. Deficits shift the responsibility of paying for current government spending to future generations. Tax cuts (and a strong dollar) enable the current generation to invest, produce and profit and, thus, pay their own way.
Sleeping and boating by those of us who read this magazine only permit the in your face loudmouths to carry the argument.
Clinton nee Publius | 8.6.10 @ 9:37AM
All gold is fool's gold. The "pitch" is that it is an inflation hedge, but it maintains purchasing power no more than anything else, so the argument appears to be specious.
The issue of government financing is of critical import - especially to our bleak future. There is nothing wrong with deficit spending other than the facts that it doesn't work and it is never to be repaid under our current system. But what if there was a way to finance the costs of government using defeasance where an equity-expansion scheme was used to create currency and the resulting investments were pledged as the means of paying off the loans thereby made? Then the deficits would all be defeased on a current basis and no long-term (naked) deficit spending would occur and the national debt would be paid off as if by magic. This is what is at the core of Lovellian economics and the idea we can fundamentally change the way we pay for government in a positive way and create permanent prosperity as the outcome. This isn't possible today, but could be our reality as soon as we reach out for it.
Ryan| 8.6.10 @ 10:02AM
You again?
Permanent prosperity is a pipe dream. ALL economic systems have flaws.
Does your system account for people trying to defraud it?
Clinton nee Publius | 8.6.10 @ 12:14PM
By creating the conditions precedent that prevent fraud from occurring. Fraud can only occur when a lack of disclosure is allowed to exist. If you don't want investment fraud, create a set of circumstances where financial reporting is provided as a structural outcome by a third-party fiduciary who has no stake in the endeavor and it will not exist.
Ryan| 8.6.10 @ 12:42PM
Again, wishful thinking. The ratings agencies currently didn't have much stake, and look at what happened there.
A system is never perfect. You believe yours to be.
Clinton nee Publius | 8.6.10 @ 4:03PM
From small minds come small thoughts. How small is your world?
Ryan| 8.9.10 @ 8:48AM
How am I wrong about the ratings agencies?
BackToBasics| 8.6.10 @ 11:02AM
Gold is being bought because many people fear hyperinflation. I do not own it but even if it does not hold its value in the future, if the dollar hyperinflates, it will hold more value on a percentage basis vs. the dollar even if selling much of it by the public brings down its price. However, if it gets to this point things will be so bad that having gold will not cushion owners of it as much as they are thinking. But people have a right to buy it and for certain, FDR was wrong to confiscate it.
Clinton nee Publius | 8.6.10 @ 12:17PM
Things of limited supply never work as a world of want is their only outcome. This is why the gold standard will never come back - there isn't enough gold in the world to support the value of the currency. This means that - one way or another - we will have to walk away from the liability-expansion method of currency inflation (creating currency) and move to the equity-expansion method whether Mr. Ryan and others would concur in this move or not.
JP| 8.6.10 @ 1:10PM
You hit the nail on the head. There is no going back to a Gold Standard. There just isn't enough gold to support our standards of living. For all of those wishing to get off the floating currency bandwagon, by prepared to go back to a standard of living your great grand parents enjoyed.
aware| 8.6.10 @ 2:31PM
Nonsense. How do you explain the history of this country up to 1933? How did those industrialists of the 19th and early 20th century create the greatest expansion in world history on a gold standard? Remember there was a lot less of it then too. And if paper notes are so superior then why did the Feds have to confiscate by force the inferior gold? Seems like folks would have rushed to get rid of it for paper if paper was better.
Our "living standards" are a debt induced mirage that you will spend the rest of your life paying off, if you are one of the lucky ones. It is created by debt NOT wealth. Look at the foreclosure section of your paper to see what happens when reality comes calling and someone discovers their"standard of living" is fake. Debt is how poor people pretend they are rich, for a while.
Ryan| 8.6.10 @ 3:05PM
We had the Great Depression on the gold standard as well.
aware| 8.6.10 @ 3:21PM
That was the result of credit expansion not the gold standard. This was caused by the newly created Federal Reserve. If it was the result of a gold standard then why were there no "Great" depressions before?
There where many causes for the Great Depression and the exacerbation of same, but the gold standard was not one of them. If it had to be simplified to one word it would be government. Just like now.
Ryan| 8.9.10 @ 8:49AM
I'm not saying it was the cause - I'm saying it just didn't prevent a depression.
aware| 8.9.10 @ 2:41PM
Unlike the Federal Reserve, it never promised it would. Inflation of the paper money supply and credit expansion in the '20s caused the Depression. And government actions to "meet the crisis" caused it to become Great.
When people began to demand gold for their paper, it exposed the fact that there was more paper than could ever be redeemed and would have led to the emptying of U S gold reserves. That is why the gold standard had to be abandoned, it exposed the government's theft of wealth through paper money.
If you are interested check out Rothbard's "America's Great Depression". Or Higgs' "Depression, War, Cold War".
Clinton nee Publius | 8.6.10 @ 4:05PM
Then it is time to end liability-expansion and use equity-expansion. One provides no real wealth as every new unit of currency represents an obligation and one creates real wealth as it is condition command upon output.
JP| 8.6.10 @ 1:16PM
On a historical note, the Kingdom of Spain cornered the gold market in the 14th and 15th centuries by confiscating Aztec treasures. Spain failed to learn the lessons of credit markets that the Italien Medici family created. The royal Spanish families went on a spending binge and leverged thier gold to the hilt. When Spain began to lose gold due to piracy, the game was over. And Spain never really did recover.
On the other sign of the coin, the UK early on began to seriously reform its credit markets, currency, and other financial instruments. And despite frequent wars, and the high cost of colonilaization, the UK always seemed to have enough money.
The UK thrived and Spain went into decline due to thier differing ideas concerning gold and credit markets.
aware| 8.6.10 @ 3:41PM
Spain under Philip II BORROWED from European bankers using the alleged FUTURE gold and silver it claimed it would have. Again proving that debt, not gold standards or even gold itself, is what sinks nations. 5000 years of history proves it over and over.
"The royal Spanish families went on a spending binge and leverged thier gold"....exactly what I'm saying in spite of spelling. They borrowed themselves into the second tier and eventually third. And the bankers ended up with their gold so who was better off in the end?
aware| 8.6.10 @ 2:14PM
"...but it maintains purchasing power no more than anything else..."
Huh? Sure, that's why you need 1200 dollars to buy the same ounce of gold you could have had for 25 dollars 100 years ago, or 200 dollars 10 years ago. So it not only "maintained" but in fact INCREASED its "purchasing power". And since every thing you buy is in dollars that would mean gold did this against EVERYTHING! Name just ONE other thing that has done this. Gold isn't "a commodity" it is money, real money.
And you're damn right there is a "fear factor". If you're not fearing now you're not paying anymore attention that Ben Stein, who got blindsided at the last knock down. Next one too, just watch.
And your idea for financing government is just another shadowy paper asset scheme that would as easily spin out of citizen or market control as the current fiat note system. What would stop the State from manipulating equities in favor of itself? Just as it does with paper money, the end result would be increasing spending in order to increase the State. Make 'em go back to living on tariffs alone and see real change we can believe in.
This is the essence of why gold is ridiculed by fools and knaves as "unrealistic" as money or a monetary system, it forces honesty in government. They can't just "order" the supply to double. Or "borrow" what does not exist. Limited government is impossible with unlimited "money".
A barter economy is likely our future after the "elastic" paper dollar burns. Who knows. But if this happens, what do you think will rise as money first, gold or paper?
Clinton nee Publius | 8.6.10 @ 4:08PM
And yet your argument is specious as the economy would always be limited by the amount of gold that would support the circulation of the currency, thus always leading to more fiat currency. The problem with affixing the value of the currency to a material object is that it has a limitation on its own intrinsic value due to the quantities that can be produced. This has always lead to problems and failures the proponents cannot obviate.
On the other hand, if the currency were tied to equity investments in companies that were intentionally structured to pay out all surplus cash as this cash was generated, then they would automatically adjust for inflation and purchasing power parity would always be sustained. This is th real elasticity argument you cannot deny as equity investing is not inherently inflationary, but would result in a money supply that would not have either the fluctuation issues we see with fiat currency policies or the limitations on growth that precious metals fixing would create.
Doug| 8.6.10 @ 4:27PM
Why wouldn't the value of each ounce rise and fall as it does now? And, if individuals held real gold wouldn't their real wealth do the same?
Seems to me that the real 'rub' here are those individuals who, absent much if any moral compass, manipulate the value of the paper, or the 'real deal' (by forcing its surrender to the fed gov't) that artificially cause value to rise and fall.
Given that we currently do not live in the Kingodm of God where all of this is a moot point, and that there will always be liars, cheats and frauds, even in governments (gasp!! *g*) isn't there some 'currency' (pun intended *g*) to aware's point that having a financial system helps enforce honesty?
Doug| 8.6.10 @ 4:43PM
whoops.. A financial system *based upon gold*.
aware| 8.6.10 @ 7:02PM
"as the economy would always be limited by the amount of gold that would support the circulation of the currency,".....
The value of the unit would be arrived at by market exchange which is precisely why it is out side the political class and their stinking bankers ability to manipulate. The amount of currency is completely meaningless, it is the VALUE of the currency that matters.
It has nothing to do "with quantities produced" but rather the value placed on the "money" by the users of that money. Divisions of value can assigned to denote fractions of overall value even there is only 1 ounce of gold in the world. Or 2 feathers. As long as the value is arrived at by free exchange and mutual agreement. Instead of secret meetings by banking cartels that "create" money for "government" at interest.
"... if the currency were tied to equity investments in companies that were intentionally structured ..."
Just who do you mean when you say "intentionally"? Are these private enterprises than happen to be money makers or do you mean by government design or coercion? And if "private" then doesn't that put government in a vested interest with businesses it makes laws for? Do you think this will give you honest government? I'm sure the expert counterfeiters at Headquarters would find a bonanza of other ways to "tilt the table" in favor of their cronies.
I hope I don't have to point out the down side if you mean "government" intentioned.
The major flaw in your very well intentioned scheme is that government will control equities just as sure as it can the current system, through the law. In fact the major inroads already exist. But it can never pass a law that brings gold into being.
The role the State plays in the market IS the problem, everything else just follows.
sasob| 8.7.10 @ 5:53AM
... that's why you need 1200 dollars to buy the same ounce of gold you could have had for 25 dollars 100 years ago,
I suppose it is rather beside the very excellent points you make, but one hundred years ago the official price of gold was 20 dollars per troy ounce. It remained there until after FDR's boys had confiscated all gold bullion and coins and made private ownership and dealing in it illegal (except for jewelers and dentists etc.,) at which time the official price was raised to 35 dollars per ounce. It remained at that price until the Nixon administration.
aware| 8.7.10 @ 8:20AM
You are correct in what you say. I was only painting in broad strokes.
The increasingly obvious fantasy price of gold set by government fiat finally became untenable by Nixon's time. Paper had inflated while gold had not, so exchanges of one for the other was killing the gold supply and it was plain to see that we would have not nearly enough gold to cover the paper promises. Similar to my point about Philip II's Spain.
No Keynes| 8.9.10 @ 3:21PM
It would be useful hert to say that the currency had been inflated, -not to say counterfeited- by the government to pay Vietnam war debts and the coste of Lyndon Johnson's Great Society programs. The Eurapean Lenders caught on to this and began to demand gold in exchange for their now inflated gold certificates. Nixon closed the gold window and this was a colossal blunder and a grossly unconstitutional act. -But what else have we come to expect from the scoundrels we elect.
Jack Olson| 8.6.10 @ 9:49AM
Remember that there is lag time between an economic cause and effect. When a government gooses the economy with printed money, the good effects happen first. Economic activity blooms and markets turn bullish, as in the French Mississippi Bubble and the British South Sea Bubble. The costs appear later, as credit collapses and the deflationary hangover succeeds the inflationary binge. The inflationary chickens eventually come home to roost but it's hard to estimate their time of arrival.
L Blanchard| 8.6.10 @ 10:34AM
Ben, I enjoy your commentary. But we will never spend our way to prosperity. Obama is only postponing and worsening the ultimate crash. In particular because of WHAT he is spending that money on: That which provides little or no return on investment- as in hordes of new inept bureaucrats to impede, befuddle, and defy true growth. Better to spend it on infrastructure which is sorely needed....yet even this would not justify it. Best to use it to leverage new true growth (such as with a corporate tax cut and incentives for new development) . Instead, the floodgates of cash are gushing to form punitive regulation, further burden the private sector with a larger public sector to pay for, and to temporarily prop up the green dream.
Gill O’Teen ✝✡$| 8.6.10 @ 10:52AM
The U.S. Dollar is still the international medium of exchange. Because if Nation X wishes to purchase something from Country B, it must buy dollars which the seller then converts back to its currency for domestic use. Thus there is an artificial demand for OUR dollar which in no way reflects its true worth. The fact is that until the Euro which was worth $1.51199 last December 3 collapsed to $1.19419 this June 8. This collapse in the Euro led to a corresponding move of the Dollar Index from 74.7 to 88.24. Maybe the Euro’s demise and the role of the Dollar in international exchange had more to do with Mister Stein’s rosy scenario than did actual international trust in the dollar. Last night the DI was 80.783. Interesting, don’t you think? If Mr. Stein is correct the DI should be pushing 90 not 80. As far as confidence in Treasuries. Puh-leeze. Helicopter benny has been buying these and stocks with just the push of a button - printing money is so old fashioned ya know. So Mister Stein, please go back to the park bench and feed the squirrels. leftienomics is so unbecoming.
Gill O’Teen ✝✡$
Don’t Tread on Me.
gill.Oteen07041776@gmail.com
“Over the past year, I have watched some unknown forces manipulate the markets. Whenever stocks have fallen significantly, huge sums of cash have entered the markets right at the end of the trading day, and bought countless long-dated call options on a few well-chosen stocks. (You buy long-dated call options when you believe markets will rise, so it tends to push stocks up.) According to my friends who work at the large brokerages, no bank in the world has enough cash to pump up the markets like that. So it must be coming from the (gum’mint) or the food ole PPT (Reagan’s Plunge Protection Team). They’re pouring cash in the market to prop markets up and give investors a reason to buy.” - Chuck Butler in ‘Currency Capitalist’ Vol. 3 No. 6 a World Currency Watch publication of which Mr. Butler is Editor.
Only 898 days to go
Sam Vuaghn| 8.6.10 @ 12:04PM
It's taken a long time. I once found it impossible to believe that the Democrat party (and some spineless RINO's) would come to power with worldview filters of hate. They hate "average" Americans who they perceive swilling Budweiser and eating brats instead of Chardonnay and arugula. They hate "average" Americans optimism, why should we be happy when the rest of the world sucks. More than anything they think there are too many of us and the population needs to be controlled, cultivated, bent to their superior will. They are no longer our representatives but "members" of the ruling class for which no one who graduates from a state university will be granted entry. In a word the Democrat party and their northeast Republican cohorts are in alliance and "flyover" country is the target. They are traitors in that they hide behind their true opinions and pretend to care when in reality they just want us to disappear.
They are no better than smug bullies in the school-yard, they will get knocked down and thrown out. So three cheers to the average American who gets up everyday goes to work and tries to do the right thing.
Sam Vaughn| 8.6.10 @ 12:16PM
With people like that in power the economy not only just ignored or mistreated it is a target for manipulation and control. In their minds who cares if "average" Americans are ruined and die in poverty. That is I believe their "dirty little secret". So while they peddle their snake oil they are poisoning our economic well of prosperity,,, delibverately.
Against that backdrop gold makes sense.... it buys the same loaf of bread today as it did in Roman times,,,,
Gill O’Teen ✝✡$| 8.6.10 @ 12:35PM
Mr. Vaughn, I certainly hope not “the same loaf of bread”. Though considering how gum’mint through cheerleaders like Mr. Stein attempts to manipulate us into surrendering it our treasure, before all is said and done even a stale bit of crust from the centuries old bin at bargain bread will be appreciated.
Gill O’Teen ✝✡$
Don’t Tread on Me.
gill.Oteen07041776@gmail.com
“I went to a restaurant that serves 'breakfast at any time'. So I ordered French Toast during the Renaissance.” - Steven Wright
Only 898 days to go.
JP| 8.6.10 @ 1:05PM
The dollar's recovery this summer is due mainly to the weakness of the Euro. Add in the inverted yeild curve banks are enjoying, and one can easily see why Treasurie are hot items (hint: negative Fed Rates, plus 4% returns on long term debt. Four percent is awfully high for Treasuries, and reflect the dollar's weakness). Banks borrow a billion from the Fed at 0%, buy $1 billion of T-Bills that pay out 4%, and viola -instant profits. No muss, no fuss.
Ben probably should have waited a bit longer to post his thoughts. Inflation is out there, alright. Look at the price of oil. Demand for oil worldwide remains low compared to pre-recession years. And oil hit $40 a barrel low in Dec 2008 (down from $150 a barrel in June 2008). But once the Fed began its long term QE, commodities began to rise. Oil now is at double the price of Dec 2008, depsite weak demand. Why? Inflation brought about by a weak dollar.
All Bernecke and Geithner have been able to do is to create a new round of speculation through massive injections of liquidity (Coup de Whiskey is what Benjamen Strong would have called it), and dangerously low interest rates. Stocks recovered from thier 2009 lows of 6000, and oil, wheat, and metals are all up. It's called the velocity of money. People are taking thier cash and just as quickly trading cash for commodities.
And all the while, real estate ominously continues to delfate, and jobs continue to be scarce. These 2 areas were the reasons for all of this stimulus and QE in the first place. The only organizations benefitting are banks and of course government.
What will happen once Bernecke is forced to raise interest rates (could be sometime in 2011)?
Gill O’Teen ✝✡$| 8.6.10 @ 2:03PM
JP, you keep on doing your research and posting thoughts such as these and before long Mr. Stein’s squirrels will be tossing him peanuts.
Gill O’Teen ✝✡$
Don’t Tread on Me.
gill.Oteen07041776@gmail.com
Bullwinkle, “Hey Rocky, watch me pull a rabbit out of my hat.”
Rocky, “Again?”
Bullwinkle, “Presto!”
Lion, “ROAR!!!”
Bullwinkle, “Oops, wrong hat.”
Only 898 days to go.
aware| 8.6.10 @ 2:34PM
LOL!
aware| 8.6.10 @ 2:37PM
Look at wheat and really worry. Good analysis.
Gill O’Teen ✝✡$| 8.6.10 @ 6:33PM
Saw a story about wheat on Drudge earlier today. If I recall correctly, the price surge is due to a drought in Russia which is the third largest wheat exporter. Their benevolent dictator has issued the Russian equivalent of an executive order prohibiting selling ‘his’ wheat abroad. Possible I misunderstood. As I’ve been pointing out all week I am ingesting large doses of pain killers. Check for yourself. Here’s the link. http://news.yahoo.com/s/afp/20.....0805162243
Gill O’Teen ✝✡$
Don’t Tread on Me.
gill.Oteen07041776@gmail.com
“Whoever does not miss the Soviet Union has no heart. Whoever wants it back has no brain.” - Vladimir Putin
Only 898 days to go.
aware| 8.6.10 @ 7:11PM
Was already rising even before the Russian "drought" moves.
You could ride a bike if no gas or walk, but what do you substitute for eating?
Its just a question of when.....
No Keynes| 8.9.10 @ 3:38PM
We could always eat the rich. I understand this is the favored solution in Washington.
Paul Milenkovic| 8.6.10 @ 3:16PM
If inflation is the fear, are TIPS (inflation-index Treasury bonds) a good hedge?
And if the fear is that the U.S. Government will default on Treasuries, is gold really the best investment or should one be following the example of the Latter Day Saints and others and putting up long-term food stores?
Doug| 8.6.10 @ 4:38PM
Paul, I live among the LDS folks (am not a member of their church) and I think that (culturally) they have a lot to offer in terms of being prudent and prepared and so forth. The things is though is that they, like all others, are human and along with that comes this human nature thing. It's pretty ugly when pushed. Proof? Next time you're the first car at a light, when it turns green, just sit there and see how long before the horns go off. A major catastrophe, such as -could- happen with a collapse of the economy won't help. Neither will gold. Having food storage will only do you some good as far as it goes. Water will become *paramount* in my opinion, and when others find out you have it and they don't you WILL end up giving it to them, one way or another.
Still, I think it's a great idea to be prepared for smaller emergencies, like an earthquike, that can take you 'offline' for a few days. In that sense the LDS folks are smart to be prepared and a good example to follow.
Pat| 8.6.10 @ 3:58PM
Among the most mathematically gifted of social scientists, economists are constantly telling us what the future holds and why the past was the way it was. Since you can count on them to predict all possible outcomes - the economy will get better, no it will get worse, nonsense, it will stay the same – it’s sometimes hard to know which prediction to rely on. But we need experts to tell us how things are because, as Americans, we’re basically clueless – we need doctors to tell us not to eat 3 Big Macs at one meal and anything from Taco Bell, we need investment advisors to tell us to dump GM, buy GE and so forth.
And like the old time shamans cutting open sheep, predicting the future by poking among their blue and greasy entrails, the economists can make consistently wrong predictions but still we listen to them. Remember Spring, 2009? Every economist, except for that weird guy in North Dakota, predicted things would improve quickly by the next quarter, GDP would climb, the recession would definitely be over and employers would start hiring. They predicted this same good news quarter after quarter and we consistently pretended to believe them. But, at the same time, we stuffed money under our mattresses, stayed away from the malls and shopped for clothes at Walmart instead of Macy’s. So now the savings rate has climbed from 2% to over 6% and credit card debt is an archaic term: we believe in our economic high priests but it doesn’t hurt to play it safe.
Many of the terms economists use confuse us – the “official” unemployment rate is 9.7% based on the standard bad news about jobs released just today. But we know not how “official” is calculated since we don’t count many of the unemployed within this “official’ rate for some reason – the unemployed are like illegal immigrants, there are a lot of them around but nobody actually knows how many. So, we simply guess the unemployment rate is hovering somewhere between “horrible” and “OMG”. Still, the economists tell us not to worry – so don’t be foolish and rush to buy gold, our economists tell us hoarding gold isn’t necessary, everything will be fine – and when have they ever been wrong?
Gill O’Teen ✝✡$| 8.6.10 @ 9:03PM
I do not trust any number hyped by this regime. They all seem a bit too conveniently contrived to support whatever laxative they’re trying to get us to swallow. I quit worrying about their Unemployment Rate which is based on the number of people who actually file for unemployment in a given week. Then this is magically seasonally adjusted using an enchanted sorcerer’s invocation known only to helicopter beanie and tax-cheat timmy. Instead I use a simply derived number I call Our Employment Rate which is determined daily by dividing the number of people the U.S. Debt Clock [http://www.usdebtclock.org/] says are in the U.S. Work Force by the number in the U.S. Population. This number was abnormally low last Christmas Eve when it tanked at 35.346%, possibly because all the mall Santas got pink slipped. It recovered to a more normal rate almost immediately and ended the first year of obummer at 45.005%. It peaked June 4 at 45.458%. Since then it has declined every day to 44.670% this afternoon.
Gill O’Teen ✝✡$
Don’t Tread on Me.
gill.Oteen07041776@gmail.com
“An ‘acceptable’ level of unemployment means that the government economist to whom it is acceptable still has a job.” - Author Unknown
Only 898 days to go.
jstwndring| 8.6.10 @ 4:03PM
Power and control. Those are the reasons Obama is pursuing what appears a suicidal economic policy. He is here on assignment. That assignment: make the U.S. "heal" to the command of our would-be European "masters". I know, too conspiratorial, but, it's obvious to me that the powers that be in Europe and the U.N. want to impose control on everyone. And they can't do that without the U.S.'s submission. They want to have the world court decide legal cases everywhere, including the U.S.. They want to impose new draconion "climate taxes" on everyone, including the U.S.. They want to impose a new collective religious philosophy on everyone. It goes on and on, but, the fact is that they will never be able to accomplish this with the U.S.A. remaining free and prosperous and a haven for anyone else in the world. So, Soros and Co. have, through McCain/Feingold, placed their puppet in office to break our will. Much to their dismay, we have yet to submit and are, in fact, threating revolt against the political class by throwing them out on their collective asses. They never saw the TeaParty comin', did they. Neither did I.
Bill Sundling| 8.7.10 @ 12:23AM
The government is printing vast amounts of money with nothing to back it up. It's only a matter of time before high inflation hits the economy. If I had the money I'd invest in gold too.
Gill O’Teen ✝✡$| 8.7.10 @ 10:06AM
Mr. Sundling, Actually printing money is quite old fashioned and beneath the vast technological skills of the hippest most savvy gum’mint since the Big Bang. I don’t recall the man’s name, but last year Glenn Beck frequently had a guest on his show who was expert in the shady dealings of helicopter beanie’s Federal Reserve. If I understood this concerned African American’s lesson, The Fed helps fund all the gum’mint overspending by selling various products such as bonds. The problem for the Fed occurs whenever no foreign gum’mint is gullible enough to risk billions of its own citizens treasure to appease the voracious appetite of kon-grrs. The solution is really quite simple. Just establish a dummy corporation and wire it the money needed to purchase the bonds. Just wire them the money. Nothing is printed, but once that deposit is posted to the dummy’s account the cash is just as real as the fancy engraved picture of Washington in your pocket. Much more efficient, don’t you think. More green as well, since no trees are cut down to make the paper an equivalent amount of bills would require, and no electricity is wasted running those old noisy machines.
Gill O’Teen ✝✡$
Don’t Tread on Me.
gill.Oteen07041776@gmail.com
"The bank hath benefit of interest on all moneys which it creates out of nothing." - William Patterson
Only 897 days to go.
Gill O’Teen ✝✡$| 8.7.10 @ 11:55AM
Mr. Sundling, Unless you are totally broke, there are ways to get into precious metals for less money than by buying 1 ounce gold coins. Fortunately for the less wealthy of us, coins made out of silver or copper have enduring value. The biggest game in town right now is collectable gold coins. This demand is driven by the mistaken belief that if obummer reissues rosie-velts gold confiscation executive order, which exempted collectables, such coins will be safe from new gum’mint theft. There is no reason to believe that if beavisbud takes such an action, he will not simply decree a full confiscation. Besides the premium between the price of a collectable coin and the equivalent amount of bullion is even more driven by popularity than is the metal itself. If the economy collapses, not so many folks will care that the engraving on the obverse (head) side is of a Chinese panda or a profiled bust of President Paul Kruger, the last president of the Republic of South Africa.
Monex Precious Metals [http://www.monex.com/liveprices], as I type is offering gold bullion for $1,205 an ounce. Gold Krugerrands are $1,255.10 each, a $50.10 collectable premium. if those are out of your price range, you might consider something like the French Rooster which has a gold content of 0.1867 ounces. Currently, these are available at The Gold Coin Store [http://www.thegoldcoinstore.com/WorldGold/French_Gold_20_Franc_Roosters.php] for $267.38 each. Then there is silver. Monex is presently selling that bullion for $18.46 per ounce, and a 1 ounce Silver Euro Philharmonic for $20.33, a $1.87 collectable premium. But you can buy silver coins for much less. I bought most of my state quarters as silver proofs, for example. Older American coins such as the Peace Dollar with its obverse image of Lady Liberty is 90% silver and 10% copper are a tad cheaper. Based on yesterday’s closing value of silver and copper, these coins have a ‘melt’ value of a bit more than $14.26 [http://www.coinflation.com/coins/1921-1935-Silver-Peace-Dollar-Value.html]. However, since they are collectables, expect to pay a collectable premium which can vary as the chart at [http://statequarters.20m.com/d4.html] illustrates. I was lucky enough the other day to discover a 1968 Kennedy Half Dollar which contains 0.36169 ounces of silver per coin and 40% silver and 60% copper. Based on yesterday’s closing value of silver and copper, these coins have a ‘melt’ value of a bit more than $2.77 [http://www.coinflation.com/coins/1965-1970-Silver-Kennedy-Half-Dollar-Value.html]. However, since they are collectables, expect to pay a collectable premium as above. From 1962 through 1982, with the exception of 1943 steel coins and a 1974 aluminum experiment, the lowly penny contained 95% copper and 5% zinc. Based on yesterday’s closing value of those metals these coins have a melt value just slightly more than 2¢ - double the face value. Over the years pennies have contained differing amounts and types of metals as can be seen at [http://en.wikipedia.org/wiki/Penny_(United_States_coin)]. Also be aware that it is currently against the law to melt coins or export them for melting. Also don’t neglect developing a skill or product which will have barter value if the greenies succeed in destroying the world economy. Gardening is good. I also recommend investing in encased lead and a means by which that wealth can be shared. Forever Stamps appear to be a safe investment unless the gum’mint closes the post office.
Gill O’Teen ✝✡$
Don’t Tread on Me.
gill.Oteen07041776@gmail.com
“A penny is a lot of money, if you have not got a penny.” - Yiddish Proverb
Only 897 days to go.
Rich Rostrom| 8.7.10 @ 1:51AM
There is enormous uncertainty in the world economy right now. Things seem to be holding together, but the enormous deficits and bailouts are unsustainable. In late 2008, the Fed doubled the "monetary base" as part of its maneuvering to avert a catastrophic liquidity crunch.
So far, US government securities seem to be relatively secure, enabling the US to finance its deficits; and there has been no inflationary effect from the Fed's actions. But these are the sort of circumstances that historically have led to hyperinflationary storms.
The gold market is small compared to the overall money market. There are enough people buying gold as a hedge against hyperinflation to drive the price up somewhat; but the big money pools are buying US T-bills and such because there really is no other place to put their immense holdings.
The entire world supply of gold is only about 5 billion ounces, while China, for instance, holds about a trillion US$.
Gerald Stephens| 8.7.10 @ 3:05PM
FLASH…KAGAN CHALLENGED for PERJURY
Larry Klayman, constitutional scholar, attorney, and author of WHORES: Why and How I Came to Fight the Establishment acted in the matter of Elena Kagan by filing a complaint before the U.S. Supreme Court.
July 28, 2010
Clerk of the Court
U.S. Supreme Court
1 First Street, N.E.
Washington, D.C. 20543
R: COMPLAINT TO DISBAR ELENA KAGAN FROM PRACTICE BEFORE THE U.S. SUPREME COURT AND FOR REFERRAL TO THE U.S. JUSTICE DEPARTMENT FOR CRIMINAL INVESTIGATION AND FOR OBSTRUCTION OF JUSTICE.
The full complaint is found at www FreedomWatchUSA.org If ever there was an apple cart overturned, this is the BIG ONE!
Gill O’Teen ✝✡$| 8.7.10 @ 4:06PM
As I noted in a reply posted at 3:48 PM for the column “Obama Cripples Ford's Funding, Then Subsidizes It” by John Berlau & Andrew Kwiatkowski in this edition of American Spectator Online, I could not get the above link “www FreedomWatchUSA.org” to work using the Mozilla Firefox browser. So I googled ‘freedom watch usa’ and was taken to this link: http://www.freedomwatchusa.org/ where I found this direct link to the story: http://www.declarationalliance.org/kagan.php. I guess caps matter in Firefox Mozilla land.
Gill O’Teen ✝✡$
Don’t Tread on Me.
gill.Oteen07041776@gmail.com
“I just became one with my browser software.” - Bill Griffith
Only 897 days to go.
Bob| 8.8.10 @ 1:30AM
The proposed Obama tax increases are the result of his Marxist ideology. He wants to redistribute other peoples' incomes on a grand scale. Something considered previously alien to America.
fundamentalist| 8.9.10 @ 12:59PM
The problem of high gold and dollar with low treasury rates is not too difficult to understand. People don't buy gold just as a hedge against inflation. They also buy it out of fear of disaster. Historically, gold is not a short-term hedge against inflation; it may take decades for gold to catch up to price inflation. The current high price of gold is nothing but its catching up for its neglect of inflation during the 1990's. It doesn't reflect concern about future inflation. Commodity prices (other than gold) are a much better measure of inflation expectations.
Treasury yields are low because few people expect inflation. Those who do expect inflation any moment take the quantity theory of money too seriously. It doesn't work mechanically. In depression, monetary pumping has little effect because of excess capacity. Monetary pumping by the Fed will eventually have its predicted effect, but not before excess capacity falls. Past inflation rates determine inflation expectations, not monetary policy. Inflation expectations will rise when inflation starts. Commodities (other than gold) are the canary. Then yields on treasuries will climb. And mainstream economists will be stunned once again, as they are about every two years.
MC | 6.15.11 @ 8:10AM
The “little wisdom” rules the world and it’s time to be aware to the economy dangerous. In my perspective Gold is protection, insurance against inflation and the instability of the economic markets and even a good way to make money. So in mid term I’m sure "the bubble" will keep going.