The only real money.
Posted on 10/23/2008 8:30:57 PM PDT by Tejava
The USDollar rally in the last several weeks has been remarkable. At closer examination, it highly resembles a spurt prior to death. Imagine an old man who just had a heart attack, lost feeling in certain body parts, his mind not working right, plenty of nonsense gibberish coming from his mouth, and now he is dancing hard on some last gasps. The vast liquidation movement is akin to the old man going through an embalming process while dancing atop the tables at the funeral parlor, as bidding proceeds for his cadaver. Are Americans last to realize the financial structure destruction means the USEconomy does not enter a recession, but rather a bizarre unprecedented disintegration? It seems so. The liquidation of speculative positions, the massive de-leveraging, the payouts of defaulted bonds, these events are the opposite of developments toward revival or resuscitation, like business investment!! Liquidation is the exact opposite of investment, and precedes job cuts, not job creation.
(Excerpt) Read more at financialsense.com ...
I thought the dollar being up was a good thing?
Wow. I’m in pretty good health today. Guess I’d better call an undertaker.
Only a fool bets against the US. We’re going to have deflation - then inflation then the market will start to come back and we’ll be fine.
Silicone implants. Financial Viagra. Either way I think we are going to be ok in a while.
Smart people go bullish when everyone else is close to suicide and bearish when the exuberance is at its peak.
We’re DOOOOOMED, BUY GOLD! 8 YEARS OF FAILED BUSH POLICIES OF DEREGULATION! MOBIE WILL SAVE US!
Wow. How much better can things be?
Your money has no value now so we are going to give you e-credits that can be stored on a chip that is implanted under your skin.
Don't think it could happen? Well, they already have it for your health. Just check it out here...http://www.digitalangel.com/biosensor.aspx
I have already read articles (years ago already) that said the technology used for Digital Angel will be able to keep every vital record about you on a little implantable chip that just needs scanning!
What strange days we live in. Strange days indeed.....
Buy gold!!
yitbos
17 month high versus the Euro. I’m wondering if I should go back and read the article, or just laugh.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
-~~Ludwig Von Mises
“Several brokerage houses tumbled; blue-sky investment companies formed during the happy bull market days went to smash, disclosing miserable tales of rascality; over a thousand banks caved in during 1930, as a result of marking down both of real estate and of securities; and in December occurred the largest bank failure in American financial history, the fall of the ill-named Bank of the United States in New York.”
~~"Only Yesterday: An Informal History of the 1920’s" by Fredrick Lewis Allen
"The logic of the conspiracy theorists in this regard is, of course, impeccable: Goldman alumnus Josh Bolten runs the White House, while his former boss, Hank Paulson, runs the Treasury. They both speak regularly to former Treasury Secretary Bob Rubin, now over at Citigroup, who ran Goldman before Paulson and who keeps Paulson and Bolton dangling like puppets on a string. They all supposedly touch base with the heads of the Italian and Canadian central banks—both Goldman alumni—and with Robert Zoellick, head of the World Bank, ex Goldman. What's more Paulson is now getting his advice on how to handle the crisis from Ken Wilson, the recently retired Goldman partner and financial-institutions M&A banker, who Paulson just recruited to Washington to help him out. Already at Treasury were Goldman alumni Dan Jester, Anthony Ryan, David Nason and Bob Hoyt, the department's general counsel. And—the conspiracy crowd can't help but point out—Neel Kashkari, 35, a former vice-president at Goldman who Paulson recruited as assistant secretary of international affairs in 2006, has just been appointed—by Paulson—to run, on an interim basis, the new $700 billion bailout fund."
~~William Cohan, "Does Goldman Sachs Really Rule the World?" October 2008
“Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.”
~~President Andrew Jackson, on the 2nd National Bank
"The crisis of the abuses of banking is arrived. The banks have pronounced their own sentence of death. Between two and three hundred millions of dollars of their promissory notes are in the hands of the people, for solid produce and property sold, and they formally declare they will not pay them. This is an act of bankruptcy, of course, and will be so pronounced by any court before which it shall be brought. But cui bono? The laws can only uncover their insolvency, by opening to its suitors their empty vaults. Thus by the dupery of our citizens, and tame acquiescence of our legislators, the nation is plundered of two or three hundred millions of dollars, treble the amount of debt contracted in the Revolutionary war, and which, instead of redeeming our liberty, has been expended on sumptuous houses, carriages, and dinners. A fearful tax! if equalized on all; but overwhelming and convulsive by its partial fall. Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper, as we were formerly by the old Continental paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burthen all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs. Prudent men must be on their guard in this game of Robin's alive, and take care that the spark does not extinguish in their hands. I am an enemy to all banks discounting bills or notes for anything but coin. But our whole country is so fascinated by this Jack-lantern wealth, that they will not stop short of its total and fatal explosion."
~~Thomas Jefferson to Dr. Thomas Cooper, 1814
"If recession should threaten serious consequences for business (as is not indicated at present) there is little doubt that the Federal Reserve System would take steps to ease the money market, and so check the movement."
~~Harvard Economic Society, October 19, 1929
"Business will turn for the better this month or next, recovering vigorously in the third quarter and end the year substantially above normal."
~~Harvard Economic Society, May 17, 1930
The dollar is up because foreigners wanting and needing to sell assets are buying the safety of dollars and U.S. government backed bonds - that last Treasury auction on one set of bonds sold with a yield of less than 1% - meaning the cost to the treasury - interest on it - will only be less than 1%. Somehow the world media mantra that everyone “hates the U.S.” hasn’t sunk in on companies and country treasurers seeking “safety” in troubled financial times.
You are correct.
Financial pundits issue what they hope will be self-fulfilling prophesies while secreting their own positions.
For every share of stock sold, and every financial instrument cashed in, someone, somewhere now holds that same equity.
Interesting article. Thanks for posting.
“Buy gold!!”
Lead is far more valuable.
> 17 month high versus the Euro. I’m wondering if I should go back and read the article, or just laugh.
It’s all relative. The dollar may tank, but if every other currency tanks worse, we may still end up on top. I agree with one poster’s sentiment not to bet against America. When push comes to shove, we are still the best place to invest money, maybe moreso in troubled times.
The only real money.
That’s the thing . . . everyone’s plowing their money into the boat that’s sinking the slowest.
I disagree. I think a strong dollar is what could save the economy. With oil falling, a lot of trading money will go to currency(cash), the dollar being the most attractive. Europe is in the same financial boat we are, except they have no confidence in their currency. This is another reason the dollar is doing well. We should utilize that strength to help the credit markets. We need a tight money policy to make this happen. The Fed needs to raise interest rates and soon. I know the stock market won’t like this, but it doesn’t seem to like much lately. Cheap money is what got us into this mess. Banks will have to charge higher interest rates; making it harder for people who can’t afford credit to get it. Removal of this risk could instill confidence in banks to start lending money again. Banks would pay higher interest rates on savings and CD’s instilling that ancient principle known as the “propensity to saveâ€. Increased savings is capital for the bank, and another shot of confidence as trust between banks and the public is restored. But if the Fed doesn’t tighten the money policy....I agree with the author’s bleak assessment. The iron will be hot only for so long, and the Fed’s opportunity to do this will only last so long.
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