Butterfield 8 Posted May 12, 2004 Report Share Posted May 12, 2004 yobob - If your assessment is correct, then the dollar could indeed rise and gold plummet. at least initially Link to comment Share on other sites More sharing options...
Guest Posted May 12, 2004 Report Share Posted May 12, 2004 After reading around the "smart" bear writers, I'm once again taken aback at how narrowly focused and adamant any and all are over their staked out positions without regard for the gaping holes in their arguments. I refer mostly to the inflation/deflation debate, what to expect because of the said environmentt, and how to protect yourself or indeed profit from the outcome. As to gold/silver, stocks and bonds, put out any outcome and there is a writer that has demonstrated with great amounts of TA and rationale just how that outcome is going to be achieved. Spin the wheel and throw a dart, one of them is bound to be right at some point. Like all gamblers they boast about their winnings, but neglect to include the losses. Case in point is Puplava's recent Storm Watch update. Now I have to admit I have a certain amount of respect for Puplava and indeed he was one of the writers that inspired me to start really digging into things years ago. In this issue he puts forth some powerful arguments regarding price inflation and where you want to be because of it, but once again there's an open manhole on the path to Nirvana. While economists and central bankers and the financial markets fret over deflation, Average Joes worry about how they are going to cover rising living costs. Do they have to borrow more money from their credit cards, extract more equity out of their homes, or downsize the family SUV? Inflation expectations are starting to rise. In due course, these expectations could generate additional inflation, especially if the "buy now, because tomorrow it will cost more" mentality begins to set in. Once that sets in, higher wages and much higher prices come next. As long as asset prices keep inflating, most people simply shrug and bear the higher costs. If their home values or their 401(k) plan inflate, everybody is happy. When they decline, they worry?translation: loss of confidence Puplava has negelected to address that in fact real wages continue to fall and the "Average Joes" have no slack in their budgets to pay higher prices. In addition given where their current debt levels are and the ludicrously easy credit standards employed to raise the debt levels to where they are, there's very little left in the way of additional debt available to most. Yes they are forced to pay higher prices for certain things, but in order to do so they are cutting spending elsewhere. I seriously doubt Joe is going to stock up on milk because he thinks it will be higher next week. Nor is Joe going to stock up on houses or cars because he's been blindly doing just that over the last several years. Indeed, now that the refi and tax surges are past, there is no new additional conusmer spending stimulus in the pipe. On balance then the price increase in essentials is leading to reduced volumes on non-essentials while simultaneously the higher priced essentials will lead to reduced volumes in those as well. If you tell me that consumers will burn just as much fuel at $2 a gallon as they will at $1 a gallon, you will be wrong. No it won't be a 50% drop, but there will be a marginal per capita decline. If you tell me that consumers will consume just as much milk at $4 versus $2 a gallon, you'll be wrong. I can tell you from an anecdotal standpoint, I'm beginning to see the decline in non-essential purchases. The auto industry overall is in big trouble. Sales of the profitable vehicles (trucks & SUVs) seem to be falling off a cliff. High gas prices are fueling that. It also appears that this is not fueling a significant surge in most fuel efficient vehicles. Sure hybrids are selling, but their percentage of the market is insignificant. I'm also seeing fewer people in diners. One of my frequented lunch spots just shaved 18% off their daily lunch special price in search of volume. What this is leading to is the dreaded volume decline in both goods and services. Initially price increases can disguise that, but the dirty little secret is that fixed costs become an increasing percentage of each unit as volumes decline. And that my friends is where the rubber meets the road. In our current economic situation with the money spigots running wide open, the deadliest component of fixed cost has soared to parabolic, blow off levels. That my friends is debt and it is exactly why the entire planet is headed towards the worst deflation humanity has ever experienced. Oh sure we're seeing price inflation for now, but it can't and won't last. "Eventually the Fed's choice will be either to continue onto Weimar, or attempt to slow the speed of credit expansion so as to avoid collapse of the currency. But if the Fed engineers do attempt to slow monetary growth, then just the slowing itself will induce the prices of various sectors to DEFLATE. Thus serious price deflations are coming to our economy in the upcoming years even though the Fed will be pushing credit/debt expansion and outright monetization to ever-higher levels." "This is what I mean when I talk of deflation visiting us in tandem with inflation. I mean that prices will be seriously deflating in various sectors, not the actual supply of money throughout the economy. The two most crucial sectors susceptible to price deflation will be the asset classes of equities and bonds." The Cassandras and the Optimists Link to comment Share on other sites More sharing options...
brian4 Posted May 12, 2004 Report Share Posted May 12, 2004 Good morning Crew-Lots of news this morning-the U.S. has passed massive sanctions on Syria-now since that is liable to piss them off do you really think they will tighten their Borders with Iraq-I don't. Then in banning all trade, direct flights etc with Syria there was one interesting piece of the Bill that exempted American Oil Companies from investment in Syrian Oil-so again its we hate you but give us the Oil. Cnn -is running pictures of UFO's (good ones) taken by the Mexican Airforce-interesting story-have a read. The Canadian and European papers have the same main story which is the "Beheading" and the same theme that things are out of control, which of course they are. Watch 1097.64 in the cash Spoo's if they break up thru that number the rally continues if they do not its curtains. Window at the Bell for 35 minutes-Helmets on, Buckle up! Link to comment Share on other sites More sharing options...
Henny Penny Posted May 12, 2004 Report Share Posted May 12, 2004 yobob1: Your scenario is plausible if you assume that all the debt outstanding will be paid back. That the system will protect creditors and work for the rights of creditors. I can quite easily see the reverse, particularly since the creditors are foreign devils - Asians no less. It would be easy to demonize the evil foreigners nailing hardworking American workers to a cross of debt ( Shades of Roosevelt). The gross external obligations of the US are about $ 8 trillion. If a goodly portion of that can be wiped out - and trust me there are geniouses on Wall Street who will do this in a manner that can gut the creditors and they won't even know they have been gutted. The few who raise their objections can be relegated to the "evildoer" category - God help them. Link to comment Share on other sites More sharing options...
Guest Posted May 12, 2004 Report Share Posted May 12, 2004 Dots Connected: Remember how within the last 48 hours, both the Saudi and Kuwaiti oil ministers both said they would be recommending oil production increases at the next OPEC meeting? We own those relationships, and it was our government that caused that to occur. The result of cheaper oil would be a heated up US economy with increased hiring. Then something really telling occurred. Yesterday morning on Crapvision, Mark Haynes announced that the Iraqi Oil Minister had just declare that he would not go along with increasing oil production, and would block the efforts of the other two US client states at the OPEC meeting. WHAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAT?????????? Mark Almost fell out of his chair. He had no words to explain the complete lack of logic...and practically said "Don't we control Iraq...doesn't that guy work for us?" The obvious answer is Yes, he does work for us. My take: Greenspan needs to control the ten-year yield so badly that he forced the White House to reverse course. Believe it or not, this economy cannot afford lower oil prices. The plan was then put together to spin the news as being likely to cause weaker jobs data. Link to comment Share on other sites More sharing options...
NWD Posted May 12, 2004 Report Share Posted May 12, 2004 Yobob1 wrote: "Oh sure we're seeing price inflation for now, but it can't and won't last." I'm thinking that, on the contrary, it could and it might. I don't have the book in front of me, but in von Mises' "Theory of Money and Credit," he wrote that in any country with an irredeemable currency and a central bank, the unit exchange value of the currency can always be reduced to a point at which the market value of its currency notes as scrap paper equals their face value. All that's needed, he said, is to hold the market rate of interest below the equilibrium rate that would obtain in the absence of the central bank intervention. Who, you ask, is going to take out new loans, at any rate of interest whatsoever, when everybody else is tapped out? You know who. A certain high roller with a big appetite for planes, choppers, ships, bombs, vote-buying "transfer payments," etc., etc., etc. Link to comment Share on other sites More sharing options...
yellowfish Posted May 12, 2004 Report Share Posted May 12, 2004 I'm Curious - Who here beleives aleins/UFOs are real and and on earth? CNN Mexican UFO story Link to comment Share on other sites More sharing options...
PeakOil Posted May 12, 2004 Report Share Posted May 12, 2004 Interesting take Plunger. Link to comment Share on other sites More sharing options...
NWD Posted May 12, 2004 Report Share Posted May 12, 2004 Dots Connected: Remember how within the last 48 hours, both the Saudi and Kuwaiti oil ministers both said they would be recommending oil production increases at the next OPEC meeting? We own those relationships, and it was our government that caused that to occur. The result of cheaper oil would be a heated up US economy with increased hiring. Then something really telling occurred. Yesterday morning on Crapvision, Mark Haynes announced that the Iraqi Oil Minister had just declare that he would not go along with increasing oil production, and would block the efforts of the other two US client states at the OPEC meeting. WHAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAT?????????? Mark Almost fell out of his chair. He had no words to explain the complete lack of logic...and practically said "Don't we control Iraq...doesn't that guy work for us?" The obvious answer is Yes, he does work for us. My take: Greenspan needs to control the ten-year yield so badly that he forced the White House to reverse course. Believe it or not, this economy cannot afford lower oil prices. The plan was then put together to spin the news as being likely to cause weaker jobs data. This is so perverse and illogical that it might just be true. Better hope that he does not start to reflect on how one might increase the amount of unutilized capacity by having the Strategic Air Command bomb Pittsburgh. Link to comment Share on other sites More sharing options...
brian4 Posted May 12, 2004 Report Share Posted May 12, 2004 Launch the Anvil Sottie-Aye Capt-Anvil away-Blast Shield up! Link to comment Share on other sites More sharing options...
chiefywiefy Posted May 12, 2004 Report Share Posted May 12, 2004 I'm Curious - Who here beleives aleins/UFOs are real and and on earth? CNN Mexican UFO story I do. He's running the Fed Link to comment Share on other sites More sharing options...
zensmoke Posted May 12, 2004 Report Share Posted May 12, 2004 SOX stocks----ALTR KLAC MXIM TER AMAT LLTC NSM TSM AMD LSI NVLS TXN BRCM MOT STM XLNX INTC MU Only MOT is green all others are RED Link to comment Share on other sites More sharing options...
Bearman Posted May 12, 2004 Report Share Posted May 12, 2004 I'm Curious - Who here beleives aleins/UFOs are real and and on earth? CNN Mexican UFO story those light were the drug lords Link to comment Share on other sites More sharing options...
brian4 Posted May 12, 2004 Report Share Posted May 12, 2004 THUNNNNNNNK-thunk, thunk- splat! Link to comment Share on other sites More sharing options...
zensmoke Posted May 12, 2004 Report Share Posted May 12, 2004 New LOD on SMH Link to comment Share on other sites More sharing options...
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