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Personally, I don't see $200 gold. I believe it's in the gov't's interest to continue to inflate the money supply so as to push people into higher tax brackets, reduce the value of gov't debt, & leave foreigners & retired people holding the bag. I expect commodities to increase in price while manufactured goods stay level or decrease in price. I would think gold would mirror the commodity price increase if this were to happen.

Absolutely correct.....but in order to do that, the money created has to find productive use in making stuff that people can and will purchase. Global overcapacity in almost every production area precludes the need or use of new money investment. And, the existing monstrous personal and business debt means that, regardless of the amount of new money the Fed pushes into the banking system, there are few places to loan it in to.

 

So, where does it go? It goes into paper assets like the SM and the bond market so you get 50 and 100 times earnings (or not) stock prices. When the Fed lets up on the money creation, it crashes. Thats where we are now!

 

Reflating is not so simple as just creating the money.

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Mostly lurk on this totally addictive forum but wouild like to say something about the dollar and gold.

With Snow coming in and all the stuff coming out of the fed about reflating and stopping deflation foreign money is takeing a long hard look at our markets and they are balking about sending it in our direction.I know the account deficit has been talked about for years but I think we have finally reached the point where it does matter simply because the money needed to keep the borrowing and cheap credit going in this country is no longer going to be coming from abroad.

If the account deficit is not sustained the dollar will fall and fall hard and gold will rise.I think this is partly what current rise in gold is all about.It is a miners canary about the health of financials in general.

Funny thing is, haveing said all of this I still think deflation is most likly way things are going to go but that is because of serious economic failure. But I do not think even this saves the dollar in respect to other currencies and this keeps the bid under gold.

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Thats what the forums are for, to hash things out and gain understanding. Where I think most writers err, is to assume the rest of the surrounding context stays static. For example, if relation really gets traction, interest rates have to rise which will destroy the refi boom which is the only thing keeping consumer spending afloat, which is, which is etc.

 

The some error is constantly made when the tax law is changed. That is, that people behave the same when the environment is changed. Someone once said, "there are winners and losers in every tax change. What isn't accounted for is that the losers jump quicker than winners." So when you treble the cigarette tax, NYC smokers go to Jersey to buy their smokes (or smuggle them in).

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TE, I thought you said you wouldn't bring Neely up again... Can't figure out why you keep trying to rehabilitate him here, the stoolies thoroughly thrashed him the other day in IDS...

 

Since you brought it up, I'll recap the bitches:

 

1) he uses X waves to explain the unexplainable.

 

2) he's flip flopped on gold a couple of times.

 

3) this is a bear board, as you so correctly pointed out, Neely is a long term bull, and if you don't believe it goto marketviews.tv and listen to his latest interview.

 

4) He is a bear on gold. looking long term for $200

 

So, I think it's only fair for folks to hear the other side of it...

 

By the way, those 4 points up there aren't all my observations, and, for the record I do find his interviews "entertaining"

 

Nite.

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Guest BEARDRECH
When does news like this finally collapse the matrix?

 

"SACRAMENTO -- Gov. Gray Davis strongly suggested Wednesday that he will propose tax increases to address the state's budget shortfall, which he said has soared to $34.8 billion ? nearly $14 billion more than was estimated four weeks ago."

 

http://www.latimes.com/news/local/la-me-bu...ome%2Dheadlines

 

The government of the 5th largest economy in the world is facing a budget short fall equal to 1/3 its previous year's budget.

 

Is this what Easy Al calls a soft spot?

yareyman

The reason one questions the applicability of this story to current economic madness;the story so obviusly telling us about the disaster about to befall us is that the occultated skeptic lacks a moral and intellectual compass suitable for traveling within this wasteland--i'm not reffering to TA ,a woderfully companionable instrumental for the lonely trader wandering this lunar landscape,the moonscape bereft of certain milestones.

What i'm reffering to is the absence of something like the Copernican revolution in astronomy or rather the misbegottenen suppression of such revolutionary thoughts by such institutions,similar to the mediaval church,such as the economics departments of most major universities,whose thelogy is totally devoted to Lord Keynes--and who have very interesting methods for excommunicating heretics who stand opposed to the swinish adulation of economic flat-earthers--

and this is where the heresy of the AUSTRIAN SCHOOL COMES IN--so simple so sublime in its explanatory power--

By the way lest you think me an idolator of a newer cultistic belief i recognize that this too will be superseded by a more elegant and refined theory of human economic conduct--but for now it is the only thesis propounded that makes any sense of the califonian economic Vesuvius--

It tells us that for the first time in many years the FUNNYMENTALS have caught up with the late markets gangsterish behaviour and is about to strangle it---and the keynesian priesthood is in a panic--and will reinstitute an intellectual auto-de-fe before surrendering its authority

A hyperbolical metaphor stretching towrds the border of incredulity is warranted here--- al greennut is the fiduciary eqivalent to saddam hussein who would rather ruin that which he cannot control

You want a compass heading??? Go west young man go west

beardrech :cry: :cry:

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With Snow coming in and all the stuff coming out of the fed about reflating and stopping deflation foreign money is takeing a long hard look at our markets and they are balking about sending it in our direction.

guest host on crapeuro just made the same point in pretty stark terms. they say things here on a daily basis you'd have to wait a fairly long time to see in the states.

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Late night rant

 

46 of 50 states are running deficits so you cut right? That adds to debt deflation

 

Or raise taxes? Adds to debt deflation. Next year this will ?happen? Unemployment will really take off but not be reported and Home equity will be wiped out with just a 10% hit to house prices. All this adds to debt deflation? Bankruptcies will start to rocket and a war in Iraq to take over burning oil fields and blown up pipelines will add still more debt deflation. At some point in the next 18 months the ?psychology? will go poof and then banks will start going under and Hyperdeflation will take hold. Gold will start shooting to the moon as hording of wealth becomes the thing to do.

 

Debt deflation will cause the money supply to shrink and since the money supply is fiat then the theoretical end point is 0 that?s right zero.

 

Every fiat system that the human race has started has ended in collapse of the civilization. Rome is a prime example?

 

But things are different now? Yes we have computers this collapse will happen at the speed of light this time...

 

Talk of ?watching your money? is bullshit? The upper crust will never declare bankruptcy, that responsibility has been downloaded on to the ones beneath?

 

Those ?bums? you see on the street are victims of fractional reserve banking plain and simple?

 

Don?t believe me? Well then how are the ?BABYBOOMERS? going to live off of compound interest in retirement if there is no way on Earth to pay the compound interest?

 

Buy and Hold would work if companies paid dividends you could live off of?

 

But they don?t, the only way to survive is to ?save? wealth, that?s it, SAVE

 

Inflation (growth) is over, it?s done, finished?

 

Just wait until the truth that the whole world is just a smelly shit pile and human beings are nothing but selfish animals comes to light once the inflationary illusion is dispelled?

 

Look around you, look out your window, That is the illusion which inflation has created.

 

The illusion is unsustainable, it?s over.

 

If the upper crust is not taken out then they will take us out, plain and simple, that?s their plan. The final solution. They will never take responsibility for their actions unless they are forced to.

 

Just sickening, there aren?t enough lamp posts in the world to hang them all from or a pit of burning diesel big enough to herd them into?

 

A couple of 100 patsies in handcuffs will not do?

 

Now I feel a little bit better...

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All is well. Al thinks things are fine. He also gives himself an A for bubble handling. Good on you Al.

W is happy. Looks like he gets his war soon. Already got the Star (ultra pork) Wars thing going. We are looking for a few good wars. Good on you W.

Stocks? No idea. Most still expect an up thrust soon. Like tomorrow. Like up the short sellers ?.

Trouble with Al predicting the ball will land on red # 9 is that he is the one tilting the damn table.

In the good old days, when it was found that the house was cheating, the customers would often burn the casino to the ground. So far no ones even lit a match. Too many well-played distractions each time cheating is smelled. Nothing has changed yet.

Many stocks at or near their yearly tops still. Long, long way to go yet.

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Contrary thought: Throughout the 90's the US stood like a colossus while most of the rest of the world wallowed in recession and malaise...we kept the corrupt dictatorships afloat with a binge of self-centered greed and indulgence unprecedented in human history...and this is the thanks we get, repatriation and hatred...nothing new and not a surprise--to paraphrase "Casablanca": "My enemies have critisised me? I'm shocked, Rick, shocked and amazed!"...As I noted earlier, the Feed is making a concerted effort to control BOTH ends of the curve, and gold has NO INTRINSIC VALUE aside from electrical conductivity and other relatively minor uses...plus, the Brotherhood controls far more than most suspect...look for the US to have several aces up its sleeve--the market is another matter...still a party in some 16 class action suits...lotta scum out there who may just reap what they have sown...as Hyper knows, the control is not human, and the work, of ages...

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