tag:blogger.com,1999:blog-502356674750161309.post864242737368270021..comments2009-08-12T23:32:08.048-07:00Eric deCarbonnelhttp://www.blogger.com/profile/08023745289801416061noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-502356674750161309.post-66791413247988176482009-08-12T23:32:08.048-07:002009-08-12T23:32:08.048-07:00Didn&#39;t China quickly change their tune about dropping the US Dollar after US paid off China with the rich Southern oil field of Iraq. <br /><br />Isn&#39;t it funny how China didn&#39;t said anything about the US Dollar in the last G7 meeting.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-15888060234281750072009-03-04T20:13:00.000-08:002009-03-04T20:13:00.000-08:00"The one thing that amazes me is the velocity of money at this current time, appears to be nearly zero...<BR/><BR/>Correct me if I'm wrong here."<BR/><BR/>If you realize that credit is just as much "money" as dollars are in our economy, you'll see that the velocity of money is moving very fast as you can see credit(money) loosing value everyday by looking at the stock market. In the same way people would be getting rid of Federal Reserve Notes they are getting rid of debt. The debt in the stock market is loosing value at high speeds. This is hyperinflation. Like I said soon the pace will pick up too fast for $100 bills to stop default and larger bills will have to be created or there will be defaults. This is hyperinflation. This is why larger bills are created. The govt. doesn't just decide to print larger bills for no reason, the larger bills are printed to stop default of enourmously large debt that occured because credit always(especially in the information age of computers where trillions of dollars can be created by the stroke of a key) credit always moves faster than the printing and movement of paper and especially things that are harder to produce like gold/silver. Debt is always at the base of hyperinflation.<BR/><BR/>But realize this, even if we default on the debt, because we are so dependent on debt to survive(with our poor manufacturing sector/trade deficit/lack of savings) prices will still rise high because without credit those things we need will be scarce. This is why when we defaulted on the debt during the great depression, even though the dollar strengthened so did gold. Today is allot worse than it was during the great depression as far as US manufacturing sector/trade deficit/lack of savings. The dollar has moved so far from gold that defaulting on the debt to try to strengthen the dollar will shoot gold to the stars.<BR/><BR/>This is why they are doing the bailouts because the bailouts are stalling this from happening. The beneficiaciries of this Fractional Reserve Banking System realize that their end is imminent and they are trying to do everything to make it last as long as it can.<BR/><BR/>I believe strongly that this year 2009 is the end of this system and they will default on the debt, not because they didn't try but because the debt is so large that the amount of printing needed will make the Zimbabwe dollar look like gold compared to the Federal Reserve Note after it's all said and done.<BR/><BR/>But all paper money has the same problem. So get gold and silver while it's cheap because it won't be by the end of this year.Numonicnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-36638296852099488062009-02-28T14:07:00.000-08:002009-02-28T14:07:00.000-08:00Great post numonic, you hit the nail on the head. It is hard to explain most of this stuff to individuals who are not as informed on the subject as others. <BR/><BR/>The one thing that amazes me is the velocity of money at this current time, appears to be nearly zero...<BR/><BR/>Correct me if I'm wrong here.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-11131731223524565762009-02-28T07:52:00.000-08:002009-02-28T07:52:00.000-08:00&quot;It is absolutely vital to understand just how deflationary all this is. The destruction of money and credit going on here is EPIC. While the Fed and Treasury are indeed bailing these institutions out repeatedly, these actions are not inflationary because they are not PRINTING money or MONETIZING debt. To date the trillions deployed have all been BORROWED. Most of these dollars have been borrowed via the issuance of government debt and the rest of them via complex &#39;cash for trash&#39; swap arrangements. All this does is suck capital out of other areas of the economy and directs it towards these miserable failures. (A complete waste of time and money.)&quot;<BR/>What do you think ?&quot;<BR/><BR/>This guy like most deflationists don&#39;t get it. <BR/><BR/>Here is the simple equation:<BR/><BR/>Credit Contraction/Collapse + Huge Trade Deficit/poor manufacturing sector = Rising Prices.<BR/><BR/>The mention that the destruction of credit going on now is EPIC supports the fact that we are headed for EPIC rising prices. Not because the govt. will print dollars to the EPIC level of the debt but because BORROWING COSTS will rise to the EPIC level of the destruction of credit. <BR/><BR/>Another simple equation:<BR/><BR/>The worse the credit contraction gets, the higher prices will get.<BR/><BR/>Most deflationists don&#39;t understand this because they seem to ignore our huge trade deficit/dependence on borrowing to supply goods/poor manufacturing sector. So the more credit is contracting the worse those things get. The one thing the deflationists agree with the inflationists is that the destruction of credit is EPIC. The thing both the inflationists and deflationists get wrong is that we are not experiencing either as severely as we are experiencing hyperinflation. Hyperinflation is by definition the destruction of credit. And one thing both deflationists and inflationists need to understand is that in an economy that survives off of borrowing/credit, the destruction of credit means rising prices. As debt is loosing value(being destroyed), real things are gaining value as they will be harder to get without debt/credit.<BR/><BR/>Here&#39;s an article on Bloomberg about what I mean:<BR/><BR/>Low Mortgage Rates a Mirage as Fees Climb, Eligibility Tightens<BR/><BR/>http://www.bloomberg.com/apps/news?pid=20601213&amp;sid=a8ta_MEhUZ9E&amp;refer=home<BR/><BR/>Oh and I disagree that there is no Fed Notes being printed. The credit contraction is happening because there wasn&#39;t enough Fed Notes, if anything the printing of Fed Notes has accelerated since the beginning of this credit contraction. If it hadn&#39;t the credit market would have collapsed by now. The problem the Fed and Bankers have is that they can not print Fed Notes as fast as the credit is being destroyed, just as they couldn&#39;t create Fed Notes as fast as the credit grew which is what got us in to this problem of credit contracting. Credit always moves faster than the printing of money and that&#39;s the problem we have. It&#39;s going to come to a point where larger bills (i.e $100,000 and larger) will have to be created. This will happen after prices start rising after the Fed realizes that they can not print $100 bills fast enough to stop the credit contraction.<BR/><BR/>As far as when prices will start rising, you should look for the next big hit in the credit market, whether it be a big bank like Bank of America going under which some say will be within the next 60 days or a state taking a big financial hit. The next big hit in the credit market will send borrowing costs upward and the price of things up along with it as companies need to borrow to survive because of our huge trade deficit/poor manufacturing sector/lack of savings.Numonicnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-61498884062260115572009-02-25T07:40:00.000-08:002009-02-25T07:40:00.000-08:00You never have mentioned the Yen carry trade which is a very big part of the whole economic debacle facing the world today. You know, the cheap money from Japan used to fund the subprime which got everyone into this mess, why is that?criticalcontrariannoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-77366280538567327452009-02-25T05:29:00.000-08:002009-02-25T05:29:00.000-08:00In that case, PLEASE FRIGGIN HAVE A BIGGER BAILOUT SINCE ITS GONNA BE COST FREE AND IT BE GOOD FOR THE ECONOMY.<BR/><BR/>And if you agree with the above, well, mommy told me if you got nothin good to say, just keep your trap shut.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-85375017683712302992009-02-24T16:58:00.000-08:002009-02-24T16:58:00.000-08:00Hi man, i think you will find this quite interesting ! This is a excerpt from financial ninja:<BR/>Tuesday, February 24, 2009<BR/>Equities Sitting on Support<BR/><BR/>Equities are sitting on the November 2008 panic lows and are extremely oversold. This is major psychological support. Expect some kind of spirited attempt to hold the line here. A counter trend bounce is probable.<BR/><BR/>NOTE: The really scary rinses tend to happen from deeply oversold levels. So it really is do or die time.<BR/><BR/>Digg This! • Share on Facebook • Email this • Email the author • Technorati Links • Save to del.icio.us • Stumble It! • Add to Mixx!<BR/><BR/>Posted by Ben Bittrolff at 8:00 AM 4 comments <BR/><BR/>Extremely Oversold<BR/><BR/>Time to take some fat profits on those short positions and tighten up on those trailing stops. While there may still be that final rinse, this leg down is getting tired. A counter trend bounce is in the cards.<BR/><BR/>Digg This! • Share on Facebook • Email this • Email the author • Technorati Links • Save to del.icio.us • Stumble It! • Add to Mixx!<BR/><BR/>Posted by Ben Bittrolff at 7:10 AM 3 comments <BR/><BR/>Monday, February 23, 2009<BR/>Short: Gold and Silver<BR/><BR/><BR/>I shorted both Gold and Silver into the close today. Yup. You read that correctly. SHORTED.<BR/><BR/>I know I know... the world is gonna end and gold must go straight to a kaballion... Oh and silver will go up even more because the gold silver ratio is at ridiculous levels. Money is worthless and there will be super hyper inflation and then we're all gonna die.<BR/><BR/>Alright, with that out of the way let's move on to more serious business.<BR/><BR/>The broader equity markets absolutely collapsed today. There was plenty of bad news, that included Citigroup and AIG both pleading for more money. It is absolutely amazing what kind of black holes the world's financial institutions have become.<BR/><BR/>AIG May Seek to Convert Preferred Shares to Common (Update1): "AIG may need to increase its cushion against losses as the U.S. recession forces down the value of fixed income securities. North American insurers have posted more than $140 billion in losses and writedowns since the beginning of 2007, with AIG representing about 40 percent of the total. The company may post a $60 billion loss, CNBC said today, citing a source it didn’t identify.<BR/><BR/>The U.S. previously expanded the AIG bailout package to about $150 billion in November, when the insurer posted a third- quarter loss of $24.5 billion. The initial $85 billion federal credit line, provided in September when AIG agreed to turn over an 80 percent stake to the U.S., wasn’t enough to rescue the insurer."<BR/><BR/>It is absolutely vital to understand just how deflationary all this is. The destruction of money and credit going on here is EPIC. While the Fed and Treasury are indeed bailing these institutions out repeatedly, these actions are not inflationary because they are not PRINTING money or MONETIZING debt. To date the trillions deployed have all been BORROWED. Most of these dollars have been borrowed via the issuance of government debt and the rest of them via complex 'cash for trash' swap arrangements. All this does is suck capital out of other areas of the economy and directs it towards these miserable failures. (A complete waste of time and money.)"<BR/>What do you think ?Matheushttp://www.blogger.com/profile/05764200963739640199noreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-10069115468797360592009-02-24T16:54:00.000-08:002009-02-24T16:54:00.000-08:00Anonymous said... <BR/><I>I've noticed you are putting stars "*" in the title. More stars means more important topic ??</I><BR/><BR/>Yeah, pretty much. When I sending emails, I started putting between 3 and 50 starts around subject depending on importance (It made it easy to see and sort financial emails).<BR/><BR/>Anyway, the reason this story deserved seven stars is that China has been the last big foreign buyer of US debt. Since it has announced its decision to deversify away from the dollar, there is now no one to absorb the trillions of treasuries set to be sold this year. This means treasuries likely to crash or be monetized by the fed, which in turn means a much weaker dollar.<BR/><BR/>-----<BR/><BR/>Anonymous said... <BR/><I>Some five years ago the Chinese paid a visit to Latin America (Brazil, Argentina and others). Billions of dollars in Chinese investments were announced, but they didn't happen. I guess they were preparing the ground for their shopping spree.</I><BR/><BR/>I don't know what happened five years ago, but China's current European shopping spree is guaranteed to happen because:<BR/><BR/>1) It has been well publicized and China would lose face if it backs down.<BR/>2) It is already being organized<BR/>3) China really wants to aquire European technology<BR/>4) China needs a lot of European equipment for all its new infrastructure projects.<BR/>5) China wants to puts its reserves to use.<BR/><BR/>-----<BR/><BR/>kenneth said... <BR/><I>the supplies of critical natural resources are declining, china is buying access to those, the us can hardly afford today's commodity prices. what happens when the prices soar?</I><BR/><BR/>A lot of short term pain (next 2-3 years) and then the revival of US manufacturing.<BR/><BR/>-----<BR/><BR/>Anonymous said... <BR/><I>All empires end.</I><BR/><BR/>True.<BR/><BR/>-----<BR/><BR/>Anonymous said... <BR/><I>I like this blog but for people like me the conclusion makes no sense, buy gold lol, most of us in this world live hand to mouth what are we meant to buy gold with?<BR/><BR/>What should the layman do Eric?</I><BR/><BR/>Stock up on supplies (food, cooking oil, etc...) and buy a small amount of silver.Eric deCarbonnelhttp://www.blogger.com/profile/08023745289801416061noreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-26741840914194773692009-02-24T16:07:00.000-08:002009-02-24T16:07:00.000-08:00Helou,<BR/><BR/>I've question regarding gold/silver futures contracts and possible manipulations. I suppose someone is capable to explain.<BR/><BR/>Today is Feb 25 which is a day of future contract, eg. GCG9. Coincidentally gold fall several percents the same day.<BR/><BR/>Does it mean the final owner of future contract has to decide if he is going a) to request delivery or b) to cash the difference? Does it mean once he decides to cash that profit, he obtains money then, and no redemption is allowed afterwards?<BR/><BR/>So does it have some sense manipulation of the price in the Day (and several days after) is made in prospect to discourage investors from delivery? Or my assumptions are wrong?stibotnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-6341097522835838382009-02-24T12:57:00.000-08:002009-02-24T12:57:00.000-08:00Buy silver eagles. They're 1oz. of pure silver, legal US tender, and you can pick em up for about 18 bucks. They'll never go to zero, paper can.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-85502784791237035312009-02-24T12:42:00.000-08:002009-02-24T12:42:00.000-08:00If you are in the UK, definitely go buy canned goods, water purifier/tablets, guns, and contact your loved ones. Of course gold and silver would be nice if you can afford it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-8317091443092036882009-02-24T11:12:00.000-08:002009-02-24T11:12:00.000-08:00I like this blog but for people like me the conclusion makes no sense, buy gold lol, most of us in this world live hand to mouth what are we meant to buy gold with?<BR/><BR/>What should the layman do Eric?<BR/><BR/>Btw im in the UK if that makes any difference.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-66707906381976740552009-02-24T10:52:00.000-08:002009-02-24T10:52:00.000-08:00Dear Kenneth,<BR/><BR/>All empires end.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-88165452369117214092009-02-24T09:18:00.000-08:002009-02-24T09:18:00.000-08:00there was a time when the united states could intimidate others, now we are reduced to sending hill-billary on her knees to china, trying to convince them we both need each other. obviously paulson and geithner telling china how to manage it's currency and affairs didn't work. sadly the us will be unable to maintain any semblance of it's standard of living that many enjoyed, the supplies of critical natural resources are declining, china is buying access to those, the us can hardly afford today's commodity prices. what happens when the prices soar?kennethnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-12552920022334161732009-02-24T08:04:00.000-08:002009-02-24T08:04:00.000-08:00Some five years ago the Chinese paid a visit to Latin America (Brazil, Argentina and others). Billions of dollars in Chinese investments were announced, but they didn't happen. I guess they were preparing the ground for their shopping spree.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-502356674750161309.post-33981272292908869162009-02-24T06:10:00.000-08:002009-02-24T06:10:00.000-08:00I've noticed you are putting stars "*" in the title. More stars means more important topic ??Anonymousnoreply@blogger.com