The birth of a trillion dollar fund manager, Laurence Fink Moving Markets

Quote from Chagi:

I find the current state of the American debt-holders (specifically foreign holders of US government debt) to be very interesting. If they stop buying the debt (or sell a huge amount of it), it could mean serious problems for the other holders of the debt. I kind of wonder if at some point there is going to be a mad rush to the door to "get out first" from the US debt market. Conversely, maybe the current state of events will continue to hold (i.e. foreigners continuing to buy large amounts of US debt) because they are afraid of what would happen if they stop doing so.

Also, I've thought a bit about introduction of Euro-based oil exchange, and I'm not sure what it will really accomplish for the sellers of oil. I should say that I will freely admit that I'm not an expert on the Euro, but all I really see such a thing doing is hurting a country like the US. But the Euro isn't exactly some sort of perfect model currency, it will still likely depreciate in real terms over time, etc.
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Euro is fiat money just like $ with worse fundamentals. I've read somewhere that Germans have their DM notes ready (just in case). I think dollar dominance in the world is over no matter when and how it happens. And ,for a regular Joe in America, it's actually a good thing in a long run IMO.
I do not believe we will l ever get back to gold standard (read POWER OF GOLD by Bernstein). But I wonder wether independent Internet currency backed by anything is just a Utopia or it will ever come to pass.Personally I think Internet cannot be truly effectively controlled and it would imply Internet currency will happen but who knows.
Any opinions on the subject?
 
Yeah, I have an opinion: You're right.

All fiat currencies are an unreliable store of wealth. Gold has kept up with inflation since biblical times, but short term fluctuations can be brutal. For those who bought the 1980 top, gold would have to trade north of $2,000/oz in order for them to get back to their inflation adjusted breakeven point.

The ideal currency is a formulaically weighted basket, encompassing and backed by a diverse basket of commodities.



Quote from Cesko:

Euro is fiat money just like $ with worse fundamentals. I've read somewhere that Germans have their DM notes ready (just in case). I think dollar dominance in the world is over no matter when and how it happens. And ,for a regular Joe in America, it's actually a good thing in a long run IMO.
I do not believe we will l ever get back to gold standard (read POWER OF GOLD by Bernstein). But I wonder wether independent Internet currency backed by anything is just a Utopia or it will ever come to pass.Personally I think Internet cannot be truly effectively controlled and it would imply Internet currency will happen but who knows.
Any opinions on the subject?
More...
 
Quote from spooky tooth:

Seems to me they are shooting for
Currencies backed by......a Gun
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...now where have I seen that before?

"When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor--your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money...

Then you will see the rise of the men of the double standard--the men who live by force, yet count on those who live by trade to create the value of their looted money--the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law--men who use force to seize the wealth of disarmed victims--then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

"Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. <b>Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, 'Account overdrawn.' "</b>

http://capmag.com/article.asp?ID=1826
 
Quote from Cesko:

Euro is fiat money just like $ with worse fundamentals. I've read somewhere that Germans have their DM notes ready (just in case). I think dollar dominance in the world is over no matter when and how it happens. And ,for a regular Joe in America, it's actually a good thing in a long run IMO.
I do not believe we will l ever get back to gold standard (read POWER OF GOLD by Bernstein). But I wonder wether independent Internet currency backed by anything is just a Utopia or it will ever come to pass.Personally I think Internet cannot be truly effectively controlled and it would imply Internet currency will happen but who knows.
Any opinions on the subject?
More...

Quote from mazotrade:

http://www.safehaven.com/showarticle.cfm?id=4331&pv=1

What's the Fed Up To With the Money Supply?
by Robert McHugh

Over the past two days, December 21st - when our first Hindenburg Omen (of whatever cluster is coming) - and Thursday December 22nd, the Federal Reserve has conducted one of the largest two-day Repo injections of money into the system since back in September 2001. On Wednesday they added $18.0 billion in reserves and on Thursday they added another $20.0 billion. Is this a coincidence, coming right as we get another Hindenburg Omen? Probably not. Is something high-risk going on behind the scenes here? Let's review some facts at the Fed. On November 10th, 2005, shortly after appointing Bernanke to replace Greenbackspan, the Fed mysteriously announced with little comment and no palatable justification that they will hide M-3 effective March 2006. M-3 has been the main staple of money supply measurement and transparent disclosure since the Fed was founded back in 1913. It is the key monetary aggregate that includes Fed Repo transactions, that mechanism whereby the Fed increases reserves. The date when M-3 will start being hidden also happens to be the exact month that Iran will declare economic war against the U.S. Dollar by trading its oil in Petro-Euros on its new bourse. But there is more. The Federal Reserve currently has three vacancies within the 19 top Regional Bank and Board of Governor spots. Why? Part of ongoing wholesale resignations.

The latest is from the Philly Fed. Fed President and Open Market Committee member Anthony Santomero has announced his resignation after only a brief year and a half tenure. Very unusual. Hey, Fed Presidents are treated like gods. They have enormous power, prestige, and presence. Why quit? He is far from alone. Over the past few years no less than six Federal Reserve Regional Bank Presidents have resigned. This is highly unusual.

An immediate impact is that we are about to have a largely inexperienced batch of individuals conducting monetary policy in the United States. So of course, the first thing they will do is hide the key money figures. Two positions for the Board of Governors (there are 7)have been open for quite a while. Plus six of the 12 Regional Head spots have turned over during the past few years.

If a substantial amount of oil transactions will suddenly be conducted in Euros instead of Dollars, this should put pressure on the Dollar as folks exchange Dollars for Euros, jeopardizing the Dollar's status as the world's reserve currency, making it more difficult to print all the dollars the Fed wants to without driving the Dollar into the ground. Iraq threatened to do what Iran has threatened to do just before we went in looking for weapons of mass disappearance. If the Dollar tanks, Treasuries might not be far behind. If Treasuries tank, kiss the Housing-driven boom goodbye. Could the Master Planners be hiding M-3 because they anticipate they may have to monetize the Federal debt, buy our own Treasury Bonds during the coming economic attack against the Dollar? That would require a ton of new fresh money creation - too much to disclose. Could it be some folks at the top of the Fed do not have the stomach to be part of what is about to go down?

M-3 has a direct but lagging impact on financial markets. Look at the chart at the top of the prior page. Whenever M-3 rises, the Dow Industrials rise. Whenever M-3 is flat or declines, the Dow Industrials decline. The Dow Industrials are a bellwether for the economy. If we can monitor M-3, we can better monitor the future path of equities and the economy. It is wrong for the Fed to stop its disclosure for this very reason. Investors need to know in a free market economy, because M-3 infusion is centrally planned intervention into a free market system. Investors need to know when the Master Planners have decided to intervene. Our buy/sell signals were designed to pick up the scent of Master Planner intervention by analyzing supply and demand forces underlying the markets. So with or without a fully disclosed M-3, we will be able to continue to identify coming multi-week trends.

So what about M-3 the past week? The latest figures show that on a seasonally adjusted basis, M-3 rose 27.3 billion last week, a 14.0 percent annualized clip, and is up $76 billion over the past month, a 9.8 percent growth rate. But those are the massaged numbers. For the raw figures, fasten your seat belt. Are you ready? M-3 was increased $58.7 billion last week (that does not include the huge Repo infusions noted above), a 30.0 percent annualized rate of growth. For the past two week, the Fed added $93.5 billion to the money supply, a 24.0 percent annual clip. Over the past 6 weeks it is up $192.9 billion, a 16.7 percent Banana Republic hyperinflationary pace. This is nuts, folks - unless there is an incredible risk out there we are not being told about. That is a lot of money for the Plunge Protection Team's arsenal to buy markets - stocks, bonds, currencies, whatever. This level of irresponsible money supply growth makes shorting markets hazardous, yet at the same time says markets are at huge risk of declining. Maybe M-3 growth doesn't stop the decline this time. Should be a fascinating storm in 2006.

The recent rise in Gold catalogued 74 points over about a month, a 16 percent rally from precisely the day the Fed announced it would hide M-3 from taxpayers and citizens of this great nation. That is no coincidence. Gold sees hyperinflation, monetization of debt, and intervention into free markets. Gold is telling us it expects Ben Bernanke to be an inflationist.
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Yeah the euro zone economies may have bad fundementals due to the socialists there but I doubt the ECB is printing euros at a double digit hyperinflationary pace. The ECB has a mandate to keep inflation within a targeted range but I don't know how much of their sucess is due to: statistical manipulation - something the US and China are masters at.
 
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