as long as we have fiat money and politicians thinking about short term gain, we will have increased money supply and monetary inflation. Its a fact of life.
Economy, the Fed, Gold Rush..
- Thread starter Josh_B
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updating link: http://www.sharelynx.net/Charts/Dow-Gold-Ratio.gif
If the cycle repeats, sub 10 possible?
Josh
Greenspan warns of disaster and the need for Gold to be part of the system!
By Julian D. W. Phillips
Feb 26 2003
...We were troubled by the possibility that he may have changed his views since then, until we heard the statement he made to the Economic Club of New York on 19th December 2002:
"Although the gold standard could hardly be portrayed as having produced a period of price tranquillity, it was the case that the price level in 1929 was not much different, on net, from what it had been in 1800. But, in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, has allowed a persistent over issuance of money. As recently as a decade ago, central bankers, having witnessed more than a half-century of chronic inflation, appeared to confirm that a fiat currency was inherently subject to excess."...
..."Gold and Economic Freedom" states:
"â¦â¦â¦. if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bondsâ¦."
"â¦â¦..A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. 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."
"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. "....
..We have no doubt, that Greenspan sees the spectre of Japanâs situation creeping ever nearer to the States...
http://www.kitco.com/ind/misc/feb262003.html
It also has some interesting respective later in the commentary, on the 1929 crash and events before/after
Josh
By Julian D. W. Phillips
Feb 26 2003
...We were troubled by the possibility that he may have changed his views since then, until we heard the statement he made to the Economic Club of New York on 19th December 2002:
"Although the gold standard could hardly be portrayed as having produced a period of price tranquillity, it was the case that the price level in 1929 was not much different, on net, from what it had been in 1800. But, in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, has allowed a persistent over issuance of money. As recently as a decade ago, central bankers, having witnessed more than a half-century of chronic inflation, appeared to confirm that a fiat currency was inherently subject to excess."...
..."Gold and Economic Freedom" states:
"â¦â¦â¦. if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bondsâ¦."
"â¦â¦..A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. 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."
"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. "....
..We have no doubt, that Greenspan sees the spectre of Japanâs situation creeping ever nearer to the States...
http://www.kitco.com/ind/misc/feb262003.html
It also has some interesting respective later in the commentary, on the 1929 crash and events before/after
Josh
...Just about every analyst and "expert" on Wall Street willing to mention any of this has been quick to explain that the increase in the price of gold is due to impending war with Iraq. But hard-money analysts are arguing that should the United States go to war it will be of very little consequence to the price of gold -- a momentary blip -- because gold is a commodity and its price a matter of supply and demand
The "lunatic fringe" long has argued that the price of gold was being manipulated by a "gold cartel" involving J.P. Morgan Chase, Citigroup, Deutsche Bank, Goldman Sachs, the Bank for International Settlements (BIS), the U.S. Treasury and the Federal Reserve, but that the manipulation had been sufficiently exposed to require that it be abandoned, producing the steady upward increase in the price of the shiny, yellow metal.
In fact the "gold bugs," as they're known, are so sure of their research that not only do they believe the price of gold will continue to climb, but many are expecting to see prices of $800 to $1,000 an ounce. Until recently, most in the gold and financial worlds scoffed at such a prediction, but last month the Bank of Portugal made an announcement that shocked those who credit official gold-reserve data and added fuel to the contention of the gold bugs that the "gold-cartel" manipulation is in meltdown.
What the Bank of Portugal revealed in its 2001 annual report is that 433 tonnes [metric tons] of gold -- some 70 percent of its gold reserve -- either have been lent or swapped into the market. According to Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA), a nonprofit organization that researches and studies the gold market and reports its findings at "This gold is gone -- and it lends support to our years of research that the central banks do not have the 32,000 tonnes of gold in reserve that they claim. The big question is: How many other central banks are in the same predicament as the Portuguese?"
According to Murphy, "The cartel has been able to get away with lying about the amount of gold in reserve because the International Monetary Fund [IMF] is the Arthur Andersen of the gold world." He has provided to Insight documents from central banks confirming that the IMF instructed them to count both lent and swapped gold as a reserve. "In other words, the IMF told the central banks to deceive the investment and gold world....
... GATA is willing to have a public debate but the gold world won't debate. I think there is a tacit admission of anyone who has an IQ above that of a grapefruit that Veneroso and Howe have a pretty good point. I'm an analyst who has looked at both sides of the issue and I bet my money on GATA. So far they've been right."...
full article: http://www.insightmag.com/news/370641.html
Josh
The "lunatic fringe" long has argued that the price of gold was being manipulated by a "gold cartel" involving J.P. Morgan Chase, Citigroup, Deutsche Bank, Goldman Sachs, the Bank for International Settlements (BIS), the U.S. Treasury and the Federal Reserve, but that the manipulation had been sufficiently exposed to require that it be abandoned, producing the steady upward increase in the price of the shiny, yellow metal.
In fact the "gold bugs," as they're known, are so sure of their research that not only do they believe the price of gold will continue to climb, but many are expecting to see prices of $800 to $1,000 an ounce. Until recently, most in the gold and financial worlds scoffed at such a prediction, but last month the Bank of Portugal made an announcement that shocked those who credit official gold-reserve data and added fuel to the contention of the gold bugs that the "gold-cartel" manipulation is in meltdown.
What the Bank of Portugal revealed in its 2001 annual report is that 433 tonnes [metric tons] of gold -- some 70 percent of its gold reserve -- either have been lent or swapped into the market. According to Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA), a nonprofit organization that researches and studies the gold market and reports its findings at "This gold is gone -- and it lends support to our years of research that the central banks do not have the 32,000 tonnes of gold in reserve that they claim. The big question is: How many other central banks are in the same predicament as the Portuguese?"
According to Murphy, "The cartel has been able to get away with lying about the amount of gold in reserve because the International Monetary Fund [IMF] is the Arthur Andersen of the gold world." He has provided to Insight documents from central banks confirming that the IMF instructed them to count both lent and swapped gold as a reserve. "In other words, the IMF told the central banks to deceive the investment and gold world
... GATA is willing to have a public debate but the gold world won't debate. I think there is a tacit admission of anyone who has an IQ above that of a grapefruit that Veneroso and Howe have a pretty good point. I'm an analyst who has looked at both sides of the issue and I bet my money on GATA. So far they've been right."...
full article: http://www.insightmag.com/news/370641.html
Josh
....One might assume the 2003 spending increases are largely the result of September 11th and homeland security concerns, but actually itâs the standard types of federal pork that drive the overall spending surge. Virtually all federal agencies and federal programs, including those that have nothing to do with defense or terrorism, have enjoyed budget increases of more than 20% over the last two years.
Meanwhile, Federal Reserve Chairman Greenspan recently suggested before a congressional committee that billions could be saved if the Treasury used lower inflation estimates. In other words, if we say inflation is lower than the Consumer Price Index and other barometers indicate, Congress wonât have to spend as much on cost-of-living adjustments for programs like Social Security. This amounts to lying to the American people about our monetary policies, by hiding the true rate of inflation caused by printing too many dollars and keeping interest rates artificially low.
full article: http://www.house.gov/paul/tst/tst2003/tst030303.htm
Josh
Meanwhile, Federal Reserve Chairman Greenspan recently suggested before a congressional committee that billions could be saved if the Treasury used lower inflation estimates. In other words, if we say inflation is lower than the Consumer Price Index and other barometers indicate, Congress wonât have to spend as much on cost-of-living adjustments for programs like Social Security. This amounts to lying to the American people about our monetary policies, by hiding the true rate of inflation caused by printing too many dollars and keeping interest rates artificially low.
full article: http://www.house.gov/paul/tst/tst2003/tst030303.htm
Josh
Worst credit climate since the depression, says Moody's. Plus: look who's cozying up to analysts.
...We'll slip in the good news first.
Turns out that fewer corporate issuers defaulted on rated bonds in 2002, according to Moody's Investors Service's annual study of global defaults and ratings performance. All things considered -- a neat trick -- that would seem like a sign that corporate health is on the improve.
But ominously, Moody's says the total dollar volume of defaulted debt last year soared to over $163 billion. That's a 60 percent jump from the $106 billion in the dollar volume of defaults in 2001....
full article: http://www.cfo.com/article/1,5309,8894,00.html
Josh
...We'll slip in the good news first.
Turns out that fewer corporate issuers defaulted on rated bonds in 2002, according to Moody's Investors Service's annual study of global defaults and ratings performance. All things considered -- a neat trick -- that would seem like a sign that corporate health is on the improve.
But ominously, Moody's says the total dollar volume of defaulted debt last year soared to over $163 billion. That's a 60 percent jump from the $106 billion in the dollar volume of defaults in 2001....
full article: http://www.cfo.com/article/1,5309,8894,00.html
Josh
I am looking for around $335 on gold short term and then its back to the $380's sometime later this year. The long term trend is not threatened at all by this retracement and the fundamentals haven't changed.
We have general commodity inflation regardless of what the CPI says. Look at the CRB index, it can't be monkeyed with so easily.
Do we have deflation? No, there is absolutely no evidence of that.
Do we currently have general inflation? No. Manufacturers are becoming much leaner and forced to compete on price on a global scale against the likes of China.
Do we have commodity inflation? Definitely. Just look at the monthly charts to get some perspective.
Do we have deflation? No, there is absolutely no evidence of that.
Do we currently have general inflation? No. Manufacturers are becoming much leaner and forced to compete on price on a global scale against the likes of China.
Do we have commodity inflation? Definitely. Just look at the monthly charts to get some perspective.