Economy, the Fed, Gold Rush..

Interesting read, a voice from the past:

The transcript of the last FED-meeting before the gold suppression
began, expresses the wish to "hold the price of gold"

..Before the meeting, FED Governer Wayne Angell mentioned the letter of a saver fearing inflation. Then Angell continued talking about gold and (at the end of our excerpt) about "holding" its price (page 40 / PDF-file page 43 www.federalreserve.gov/.../930706Meeting.PDF ):


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http://www.gold-eagle.com/editorials_03/speck020303.html

Spot Gold at 382 now and closing in that zone. Will it break trhough?

http://www.kitco.com/charts/livegold.html

Josh
 
...In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

Alan Greenspan
[written in 1966]

http://www.321gold.com/fed/greenspan/1966.html

Also posted earlier by Babak on another thread.


Josh
 
OK, here's one statistic I have yet to understand - consumer debt as a percentage of "disposable income".

Who has income they can just throw away? :D

Seriously though, what is disposable? Are car payments on that swell Rolls Royce SUV disposable? How about if it's the fourth one you buy? And why would you want to measure debt against this anyway? Wouldn't it be better to measure debt to net worth, or gross income or something?

Man, everytime I see one of these "The world is about to end" stories, I toss and turn all night worrying about my short positions. :( My wife is gonna make me stop reading the web before bedtime.
 
US 2000 Fiscal Debt Issue - under 10B
US 2001 Fiscal Debt Issue- 400+B
US 2002 Fiscal Debt Issue - 600B est.

(Without a war in Iraq calculated in.)

Total Debt - 6.2T

So total debt increases by 10% in 24 mo.'s & the market hasn't budged to price in an increased supply.

Greenspan's 1966 writings must have been wrong. Inflation hasn't been created and there is no need to support a currency with gold.:D
 
>increase money supply and create wealth

A stupidity !!! Oh god we are in 21Th century and still people believe in such hoax it's crazy really !!!

When they increase money they increase the debt don't you know that each dollar created burdens interest through bonds ?! And who owns the bonds ? The same that emits these bonds, the same that give credits themselves to buy these bonds, to inflate them when they want to sell, and to deflate them when they want to buy and at the end the population globally is poorer and poorer. 1$ of 1962 is worth only 0.12 cent according to Barrons Magazine !!! Now how much is 1$ of 1962 today huh ? And how will it be worth with INFINITE INTEREST TO PAY: HOW MANY GENERATIONS OF CHILDREN WILL HAVE TO PAY FOR THE NAIVETY OF THIS GENERATION ? DON'T YOU HAVE CHILDREN ?!!!

IT IS WITH YOUR TAXES AND TAXES OF YOUR CHILDREN THAT YOU WILL HAVE TO PAY !
 
Adam Hamilton
February 7, 2003

...With the upcoming Iraq war uncertainty abounds in gold, so we examine its current technical picture as well as gold buy signals to use after a pullback.

While dazzling visions of a future gold bubble and unimaginably massive profits dance through contrarians’ heads, those euphoric gold-bubble days are still most likely a few years or more into the future. The pressing matter at hand today is gold’s near-term behavior, especially with the probability of Washington, DC’s attempted annexation of Iraq approaching certainty...


some interesting comments and graphs

Full article: http://www.zealllc.com/2003/goldbuy.htm


Their previous comments of DOW NAS and SPx from the archives had some good takes on what came to pass.

Lies, Damn Lies, and CPI and Gold Shorts DOOMED
from back in mid 2000
http://www.zealllc.com/commentary/damnlies.htm


Josh
 
Yes, But The Case for Gold...

James Grant, 02.17.03, 12:00 AM ET


....Walk through a metal detector into the Florentine splendor of the Federal Reserve Bank of New York. Bear left. Enter the American Numismatic Society's exhibit of rare coins, rare bills and not-so-rare credit cards. Take another left. Walk west 40 paces. Behold 751 shiny Byzantine gold coins spilling out of a toppled pot.

This is the Bet She'an hoard, 7½ pounds of gold discovered in 1998 under the floor of an ancient residence in the Jordan Valley in northern Israel. It was buried around A.D. 680, probably to avoid confiscation, Israeli archeologists say

he weren't so very dead, the unnamed owner of this treasure would be desolated, and his heirs would be inconsolable. For 13 centuries the coins in the pot earned no interest. What is the foregone interest on 7½ pounds of gold uninvested since the time of the fifth Umayyad caliph, Abd al-Malik?

Say the gold price in A.D. 680 was $350, or its equivalent. Say the value of that gold, $38,300, was invested at 3%, compounded continuously from that time to this. Then the foregone interest income would be no less than $6.4 sextillion...

....Ben S. Bernanke, one of Alan Greenspan's new hires at the Federal Reserve Board, reminded a Washington audience in November that the Fed has a marvelous invention for fighting deflation. This device is called a "printing press," said Bernanke, one of America's foremost monetary economists. With it the government can "produce as many U.S. dollars as it wishes, at essentially no cost."

On Jan. 9 an auction of ten-year Japanese government bonds was 18.6 times oversubscribed, although their coupon was only 0.9%. For perspective, Haruhiko Kuroda, one of the top contenders to take over the governorship of the Bank of Japan when the job becomes vacant in March, has pledged to print enough yen to push his nation's inflation rate to 3%. And nobody believes him...

full article: http://www.forbes.com/markets/free_forbes/2003/0217/128.html?321gold



Josh
 
don't forget the plain old technicals. Look at the charts of XAU, HUI, and just about any gold stock with any substance. Bull Market, Bull Market, Bull Market. That's what really matters.

Anybody fondly remember how easy it was to make money in 1999 ? Yes, in fact it was easier, don't believe the BS about how it makes no difference if your long or short, the truth is its easier to make money by being long in bull market. Shorting has limited upside, going long in a bull does not. A single 2 or 3 bagger internet stock made up for a lot of bad trading in 1999. Some people have made 300-400% in the past year by just staying long some gold stocks that have already taken off. People that skillfully swing traded could have made more.

All you prop traders out there "doing size", how much would you have made with the same buying power by just buying a basket of gold stocks and going to play golf for 6 months ? Don't think about it too long it will make you vomit. Better to just jump on the next upswing and look to the future.
 
Freedom's Just Another Word For Nothing Left To Lose - Fed Chairman Greenspan's February 11th Senate Testimony
February 13, 2003


...The Fed chairman's primary responsibility is to manage the country's supply of money and credit. Fiscal policy is not part of his portfolio. Now, of course, the Fed chairman can not dictate the questions senators or congressmen might ask him after his prepared testimony. If they choose to ask him about fiscal policy, so be it. But why would a Fed chairman devote 54% of his prepared testimony to fiscal policy issues in a semiannual monetary policy report to Congress? I think Chairman Greenspan is now trying to restore his reputation as a fiscal hawk after having had that reputation besmirched in his tacit endorsement of the Bush administration's 2001 tax cut...

Full Economic Commentary: http://www.northerntrust.com/library/econ_research/daily/us/030213.html


Josh
 
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