Free Republic

We're In The Money

...So why the run on the CoinStar machines? Answer: Those piggy banks (or coffee cans or cookie tins or whatever) are no longer just fun little ways of saving back a few bucks. They’re grocery money, or school supplies, or maybe the electric bill. People are being weighed down with bills they can’t pay and the load is getting heavier. I took my big $22.68 and bought food. It was either that or draw money against my next paycheck. It doesn’t take a rocket scientist to figure out this is a bad sign. People are running out of money. And...

Velocity Of U.S. Money Supply Is Finally Edging Up Prieur du Plessis November 20, 2009 Despite ballooning Fed reserves to bail out banks, money supply as measured by the growth in money supply with a zero maturity (notes and coins, check accounts, savings deposits and money-market accounts collectively) continues to slow. The slowing growth is contra to what normally happens when the Fed lowers the Federal funds rate. In real terms, the growth rate is also slowing.[snip]

The national debt is now at 12,031,299,186,290.07. That is not chump change. We are in hock big time and even if we were to pawn off all our national parks and pimp out every member of congress, it would be a long, long time for us to pay it off. Suffice to say, we will never live to see a huge chunk out of the debt paid off, nor will our children or their children or their children's children or their children's children's children. In fact, we would have to open a big book of biblical begats before the debt...

Zinc Dimes, Counterfeit Tungsten Gold And Lost Interest Commodities / Gold & Silver 2009 Nov 18, 2009 - 11:40 AM By: Jim_Willie_CB In 1964 the USGovt introduced the zinc dimes clad with silver. They at least admitted the debauchery publicly. Now pre-1964 silver coins are all considered different, and valued differently too, higher. Rome committed the same coinage fraud 1900 years ago. Their Empire went bust as the city burned almost concurrently. Ayn Rand is a guiding light for Alan Greenspan, the enabling destroyer of the US banking system, destroyer of the US household archipelago, and dispatcher of the US...

The Effectiveness Of Fiscal And Monetary Stimulus In Depressions Miguel Almunia Agustín S. Bénétrix Barry Eichengreen Kevin H. O’Rourke Gisela Rua 18 November 2009 There is one important source of information on the effectiveness of monetary and fiscal stimulus in an environment of near-zero interest rates, dysfunctional banking systems and heightened risk aversion that has not been fully exploited: the 1930s. This column gathers data on growth, budgets and central bank policy rates for 27 countries covering the period 1925-39 and shows that where fiscal policy was tried, it was effective. The debate over the effectiveness of stimulus rages on...

China Currency Manipulation About To Trigger Protectionism Crisis Currencies / China Currency Yuan Nov 15, 2009 - 06:38 AM By: Bryan_Rich I’ve written several times here in Money and Markets about the geopolitical time bomb surrounding China’s currency manipulation. The most recent was in my October 31 column. I expect this issue to grow in intensity and become a major point of contention for the global economy in the coming year. In recent days the chatter about China and its artificially weak yuan has been picking up. The Europeans have become more vocal about the problems a weak yuan is...

China Quashes Talk Of Letting Yuan Strengthen The Chinese government has sought to distance itself from speculation surrounding a central bank statement earlier this week that was interpreted as a shift in currency policy towards a stronger yuan. By Garry White Published: 9:14PM GMT 14 Nov 2009 The Chinese yuan: friends take a photo in front of a sculpture of a one-hundred yuan banknote in Beijing According to an analysis from Morgan Stanley, the authorities are now seeking to recalibrate the message. In its third-quarter monetary policy report on Thursday, the People's Bank of China left out a standard phrase...

Authorities have been examining whether Fort Hood massacre suspect Nidal Malik Hasan wired money to Pakistan in recent months, an action that one senior lawmaker said would raise serious questions about Hasan's possible connections to militant Islamic groups. Rep. Pete Hoekstra, R-Mich., said sources "outside of the [intelligence] community" learned about Hasan's possible connections to the Asian country, which faces a massive Islamist insurgency and is widely believed to be Osama bin Laden's hiding place. Hoekstra, the ranking Republican on the House Intelligence Committee, would not identify the sources. But he said "they are trying to follow up on it...

China's Economic Miracle Is A Fragile OneEdmund Conway says that the country's leaders risk creating the same type of asset bubble that floored Japan. By Edmund Conway Published: 6:29PM GMT 11 Nov 2009 Chinese vendor counts money at open market in Beijing. Photo: Reuters Every economist has a favourite fact about the Chinese economy. Mine is this: every month the country generates so much surplus cash from trade that it could afford to go out and buy three of Britain's biggest companies – say, British Telecom, Rolls Royce and J Sainsbury. Every single month. The £9.8 billion that Kraft proposed...

Testing Time For The USD And Aging Stock Market Rally Stock-Markets / Financial Markets 2009 Nov 11, 2009 - 12:31 PM By: Garry_Abeshouse No one alive has probably experienced a time when so much highly geared money has been controlled by so few large corporations, who with their accumulated power, have governments all over the world running scared. This power has been magnified with the continued availability of government handouts and cheap funding from the USD Carry Trade. This has created an "Open Sesame" to a monetary wish list that has no limits for those involved. It makes for a...

Can you imagine how many people have physically handled your money? Do you know who has previously touched it? Did they have a flu virus or some other communicable disease that is transmitted by physical contact with an infected object? Physical paper currency is often dirty - not so much to the sight, but it is a good home for dangerous microbes. It is often kept warm by our body heat and even absorbs some body moisture - a perfect breeding ground for bad stuff. It has been well-known for decades that paper currency is a major source of disease...

U.S. Dollar Meltdown Currencies / US Dollar Nov 10, 2009 - 12:42 AM By: Mike_Shedlock I had the pleasure of reading a final finished copy of The Dollar Meltdown by Charles Goyette this past week. Congressman Ron Paul offers an opinion on the front cover to which I certainly concur: "Goyette does a great job explaining why America faces a looming financial crisis and outlines commonsense strategies for individuals to protect themselves and their families. This book truly is a must read." Before publication, I read a preliminary copy which explains this quote on the back jacket "The Dollar Meltdown...

Soros: The World Is Facing Another Stark Choice By Rocky Vega 11/09/09 Stockholm, Sweden – George Soros, Chairman of Soros Fund Management, has written a piece that examines the “stark choice” between “international capitalism,” which he sees as the flagging US model, and “state capitalism,” represented by a rising China. To him neither of these two options is ideal, and he looks instead towards the development a new multilateral system. His editorial is strongly supportive of the expanded usage of IMF Special Drawing Rights (SDRs), and the vigor of his enthusiasm seems bearish for the dollar. He recommends international cooperation...

When the Borrowers Stop Borrowing By Bill Bonner 11/09/09 Beunos Aires, Argentina – The Dow moved up 17 points on Friday, leaving it above the 10,000 mark. Gold rose too – it is at a new record high, only $5 below $1,100.(The DJIA closed today up 203 points) According to the news reports, the US economy is ‘growing’ again. Yes, that’s the official storyline. But wait, what kind of growth is this? David Rosenberg: “All we can say is that if the overwhelming consensus is correct that the recession is behind us, then what we have on our hands is...

Don't Do It! (Cashing Out 401ks)Monday, November 9. 2009 Posted by Karl Denninger in Consumer at 08:44 Grrrrr.... As the last of his severance pay dwindled away in March, Brad Cleghorn of northwest suburban Marengo cashed out his 401(k) plan in order to pay his mortgage and feed his family. Cleghorn is not alone. A Hewitt Associates study shows that 46 percent of workers with 401(k) plans who lost or switched jobs cashed the plans in, a trend that could lead to serious problems when younger generations of people working today reach retirement. That's not the real problem folks. Let...

The Problems With “Printing Your Way Out Of Debt” By Bill Bonner 11/07/09 Beunos Aires, Argentina – Governments are running breathtaking deficits…and accumulating alarming debts. Japan has a national debt of nearly 200% of its GDP. Where did that debt come from? It came from 20 years of trying to buy its way out of a slump with borrowed money. Of course, it didn’t work. But now, Britain and America are following the Japanese lead…and the Japanese are still at it! At the present rate, Japan’s government debt will grow to 300% of GDP in 10 years. America’s debt could...

More Extortion By The BanksThe Market TickerSaturday, November 7. 2009 Posted by Karl Denninger in Corruption at 13:14 Yeah, that's a strong word. In my opinion it is also the only word that's appropriate for the circumstances: The Fed has been informed by dealers that they would be willing to enter into very sizable amounts of reverse repos with the Fed, if asked to do so, provided they could get some relief from Tier I capital constraints, MNI also understands. Ah, the old "let us lever up and we'll do it, but if it blows up, we'll then be back...

BACHELORS always seemed to have it made. With only themselves to support, they could flash their cash and trick out their apartments in such a way that James Bond himself would feel at home shaking himself a martini in their ultra-cool, chick-magnet pads.

Colombian drug lord Pablo Escobar burnt more than £1million to keep his daughter warm during a single night on the run, it has emerged. The infamous cocaine baron lit a bonfire using wads of U.S. dollars at a mountain hideout while he was being hunted by authorities, his son has claimed. Sebastian Marroqumn, who has changed his name from Juan Pablo Escobar, said his father burnt the notes when he realized daughter Manuela was suffering from hypothermia...

The Government Will Default On Its Debts Economics / Great Depression II Nov 02, 2009 - 08:01 AM By: Gary_North The governments of every major nation are going to default on their debts. There are two relevant questions: (1) How? (2) When?Establishments around the world all deny this. They have gained power and wealth by means of the expansion of government. They have justified their success by insisting that the government-business alliance is the only way to establish economic growth and economic security for the masses. This claim rests on a more fundamental claim, namely, that an unhampered free market...

No one saw the truck drive off, it left the alley between the bank and another business. You could pick up the cash and no one would see you. What should you do?

Bank Of England Called On To Increase QEThe Bank of England has been urged to increase its quantitative easing (QE) programme to a total of £225bn – more than the gross domestic product of Greece. By Edmund Conway, Economics Editor Published: 8:56PM GMT 31 Oct 2009 The Bank's Monetary Policy Committee, which is meeting this week, will be pushed by economists to raise the amount of bonds and gilts it plans to buy by a further £50bn, following the recent news that unlike almost any other major economy Britain remains mired in recession. The increase would mean the Bank would...

High-dollar fundraisers have been promised access to senior officials and use of White House facilities in exchange for thousands of dollars in donations, documents reveal. During his first nine months in office, President Obama has quietly rewarded scores of top Democratic donors with VIP access to the White House, private briefings with administration advisers and invitations to important speeches and town-hall meetings. High-dollar fundraisers have been promised access to senior White House officials in exchange for pledges to donate $30,400 personally or to bundle $300,000 in contributions ahead of the 2010 midterm elections, according to internal Democratic National Committee documents...

Gold Gives A Precious Insight Into Economy What a strange and fascinating commodity gold is – a store of value that is no one's liability, which cannot be printed or debauched by governments but which, with no income stream, has no objective value. A simultaneous hedge against both deflationary slump and inflationary spiral, it is little wonder gold should be the investment of choice for the Armageddon crowd. By Tom Stevenson Published: 6:26PM BST 24 Oct 2009 Gold attracts conspiracy theories like no other asset. Google "Yamashita's Gold" and enter into a half-plausible thriller of Japanese wartime loot and abandoned...

A tip from an Albuquerque aircraft charter company led Moriarty Police to an airplane with an unusual cargo— suitcases full of more than $1 million in cash. Moriarty Police Chief Bobby Garcia said the two currency-filled suitcases seized from an airplane at the city's airport on Nov. 27 weighed more than 300 pounds. They contained $1,169,896, Garcia said Wednesday. No arrests have been made in the ongoing investigation. The events that led to the cash seizure began when a private plane requested an emergency landing at the Moriarty Municipal Airport due to engine problems around noon on Thanksgiving. Garcia said...

King Dollar Forced To Abdicate Currencies / US Dollar Oct 23, 2009 - 04:12 PM By: Peter_Schiff For the most part, the value of the dollar is given cursory attention by the financial media. Typically, its movements are assigned an importance on par with much less determinative metrics such as natural gas futures and construction permits. It's only when major milestones are reached that anyone really takes notice of the dollar. We are living through one of those times. The great dollar rally of 2008-2009 has come full circle. When the financial crisis exploded in its full ugliness in mid-2008,...

Possible Credit Dislocation: Be WarnedFriday, October 23. 2009 Posted by Karl Denninger in Musings I have reason to suspect that the "monetary transmission mechanism" is full of rocks (again), and we are about to have another instance of what could colloquially be called "fun." (Yes, that's sarcasm.) Here's what we know and what I can deduce from it: * JP Morgan's "cash position" was analyzed by a writer who published on SCRIBD, which showed that actual cash held has deteriorated radically. By more than half in the last year. The deterioration is continuing, not slowing. * I am hearing repeated...

And So It Begins (Dollar Warnings)Friday, October 23. 2009 Posted by Karl Denninger in Monetary at 08:47 I have been on a potential dollar dislocation - or collapse - for more than two years. Indeed, back in the fall of 2007, it was one of the themes of petitions to Congress and letters I sent under personal cover to all 535 members. The debt liquidation cycle of 2008/early-09 appeared to stop the deterioration. Unfortunately that cycle was interrupted - intentionally - by enabling a continuing pattern of lies and fraud within our government. This has reversed all of the gains...

Dollar Hegemony For Another Century By Ambrose Evans-Pritchard October 21st, 2009 Let me stick my neck out. The dollar will still be the world’s dominant reserve currency in 2030, sharing a degree of leadership in uneasy condominium with the Chinese yuan. It will then regain much of its hegemonic status as the 21st century unfolds. It may indeed end the century even stronger than it was at the start. The aging crisis in Asia — and indeed the outright demographic implosion in Japan and China, not to mention China’s water crisis — will soon be obvious to everybody. Talk of...

Niall Ferguson: The Dollar Is Finished And The Chinese Are Dumping It Joe WeisenthalOct. 20, 2009, 2:50 PM Economic historian Niall Ferguson warns that China's love affair with the dollar is fading faster than anyone realizes. TechTicker: "The idea they don't have anywhere else to go or would shoot themselves in the foot if there were a steep decline in the dollar or appreciation of their currency reassures many people in Washington ‘we can relax'," he says. "An appreciation of the renminbi may reduce value of their international reserves but increases the value of every other asset the Chinese own,"...

Why the Dollar Will Likely Rally in the Next Crash by: Washington October 20, 2009 As I have previously noted, HSBC currency chief David Bloom doesn't think that the dollar will rally when the stock market next tanks: The dollar rallied last year because we had a global liquidity crisis, but we think the rules have changed and that it will be very different this time [if there is another market sell-off]. Is he right? I have argued that the new dollar carry trade could very well unwind during the next crash, which could create an enormous need for dollars....

The Giant Pool of Money What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money I have wanted to hear this or read the transcript every since I first heard portions of it on my car radio. I was driving to Pennsylvania on Interstate 81 with a destination of McConnellsburg to join some friends for a week-end of camping and shooting skeet. I...

This is the latest Hal Lindsey Report. Lindsey talks about what's happening to the American dollar by way of the Federal Reserve and the Obama Administration.

President Obama is going coast to coast to help raise money for fellow Democrats.

Market Street Saloon scammed out of $510 in latest, boldest counterfeit case It was dark, the alcohol was flowing and dozens of Alexander Hamiltons and Andrew Jacksons were making their way into a downtown bar's cash register Friday night. It wasn't until the next day that a manager at the Market Street Saloon realized that someone scammed the business out of $510 by passing bogus $10 and $20 bills. Charleston police said the incident is the most brazen of several counterfeit cases to hit the city recently. In the last two weeks, eight businesses from West Ashley, James Island and...

Understanding A Systemic Banking Crisis Harald Uhlig 15 October 2009 The recent crisis was like a bank run, but it didn’t quite fit. This column describes six features that a model of the recent crisis ought to capture and describes a new theory with which we might analyse the crisis and policy responses. Bryant (1980) and Diamond and Dybvig (1983) have provided us with the classic benchmark model for a bank run. The financial crisis of 2007 and 2008 is reminiscent of a bank run, but not quite (Brunnermeier 2008; Gorton 2009). The following six features summarise the prevalent view...

San Franciscans love us some President Barack Obama. But the question is, does he love us back? "After eight long years of being ignored like a problem only-child in a first marriage gone afoul, it feels almost unnatural for the President of the United States to pay San Francisco a visit," SFist laments. When he was in town campaigning for Senator back in 2004, he even refused to appear in public with San Francisco Mayor Gavin Newsom, worried conservative Illinois voters would take that as tacit support for marriage equality. He'll only be appearing at a Democratic Party fundraiser at...

The Most Hated Stock Market Rally In Wall Street History Stock-Markets / Financial Markets 2009 Oct 10, 2009 - 05:06 AM By: Anthony_Cherniawski The rebound in U.S. consumer spending, driven by government stimulus, will wane as the unemployment rate surpasses 10 percent, a survey of economists showed. “You just can’t see a lot of strength on the consumer side given how battered income is from job losses and weak hourly wage growth,” said David Greenlaw, chief fixed-income economist at Morgan Stanley & Co. in New York. “We’ve got a gradual recovery in the overall economy, but it’s not vigorous enough...

Bank Earnings: Reality Check Ahead Michael Panzner October 11, 2009 Whether you call it a reality check... ...a wake-up call... ...or a splash of cold water reality,... ...based on the following MarketWatch report, "October Surprise from Bank Earnings?" it appears that lots of people are going to be caught out when banks announce their earnings in the weeks and months ahead (I guess they've been listening to the gang that couldn't rate straight): Some experts worry results may be much more negative than investors expect.[snip]

'Benign Currency Neglect' Could Spell Real Danger For US EconomyWhat's happening to the dollar? That's the question dominating the world's financial markets. Last week the US currency fell, on a trade-weighted basis, to a fresh 14-month low. The dollar's decline is now gaining momentum. By Liam Halligan Published: 7:22PM BST 10 Oct 2009 Many American economists say the greenback is falling because the global economy is recovering – so investors no longer need the dollar as a "safe haven". That's nonsense. The reality is that "safe haven" status has shifted away from the dollar and towards tangible assets that the...

Since Nixon severed gold from the greenback in 1971, the dollar's comparative value has fallen 97%. Money printing today will only hasten the currency's destruction. I was recently thinking about what has transpired in this country in the past decade: first the equity bubble, then the real estate/credit bubble and the steady debasement of the dollar (where a trickle of trouble threatens to turn into a flood). I have been struck by how few people seem to understand how all these events are related -- in that, at the root, they each have the irresponsible printing of money as the...

Did Gold Traders Stage A Bear Raid On The US Dollar? Joe WeisenthalOct. 9, 2009, 1:24 PM This week's report in The Independent that the various oil-producing states were planning on dumping the US Dollar set the tone for a horrible rout of the greenback that only moderately with the help of some Asian intervention. There weren't many folks who took the details of the report too seriously -- it was very cloak & daggery, and the author Robert Fisk has a definite agenda -- but there was probablly something to the idea that countries like Saudi Arabia and China...

As we, in my opinion, march towards financial meltdown I have a few thoughts to throw out: We have been living in an economy where everyone wants their things NOW! The idea is to enjoy the “fruits of one’s labor” prior to performing the “fruits of one’s labor”. This, of course, is known as debt – and people are willing to pay usury (interest) in order to get that which they desire. Everyone in debt is a debt servant, but those that live the lifestyle of wanting things now and working for them later are what I refer to as...

The city of Detroit has turned away thousands of people who lined up Wednesday for a chance to receive stimulus money set aside for homeless and low-income residents. Wednesday at the Cobo Hall was the last day for Detroit residents to get an application for Homelessness Prevention and Rapid Re-Housing Program stimulus money. The city said an overwhelming 50,000 people came to the center seeking money that was promised to keep low-income residents from losing their homes and finding temporary housing for the homeless. The massive crowds created a fire and safety hazard and forced the Detroit Police Department to...

Having risen approximately 300% since the start of its bull run in 2001, Gold has far outpaced the investment gains in virtually every other investment class, including stocks, bonds, real estate and cash. Gold bugs feel certain that this time will be the ‘big one,' and that the precious metal will likely hit $2,000 - $3,000 an ounce, if not higher. Commodity experts like Jim Rogers also believe that Gold will continue to surge higher, right along with most energy, food and base metal commodities; in fact, some believe that the bull run in commodities still has another 5 -10...

China Defaults, Currency Basket Threatens Dollar TSF – October 6, 2009 By Janet Tavakoli Robert Fisk exposed revived discussions by the Gulf States, China, France, Japan, Brazil, and Russia to replace the dollar as the benchmark oil trading currency with a basket of currencies including gold within 10 years. This proposal is not new and discussions have been ongoing for decades. But other extraordinary moves in the capital markets suggest we should take this threat to the dollar’s position very seriously. For example, China has $2.3 trillion in currency reserves (about 70% in dollars), and China knows how to get...

DETROIT -- Detroit's homeless and low-income residents have another opportunity for a chance at millions of stimulus dollars. The money is available to help low-income residents from becoming homeless and homeless residents to find housing. Thousands of people lined up Tuesday. Some people in line falsely believed they were registering for $3,000 stimulus checks from the Obama Administration. City officials told Local 4 that Detroit was granted $15 million to help residents pay bills and their rent or find temporary housing for the homeless. Watch: Thousands Line Up For Stimulus Check Applications

Financial Armageddon In Sweden? By Rocky VegaTuesday, 6 October, 2009 10/06/09 Stockholm, Sweden – Personally having a Swedish bank account with SEB, and having recently visited the Latvian capital of Riga, this piece from Naked Capitalism hits home…literally. According to the article, worsening financial conditions in Latvia could lead to an economic crisis and collapse similar to Iceland’s recent devaluation and potentially a major default. The blowback would hit Sweden especially hard because its major banks have lent substantial funds to the Baltic nation. Latvian loans from Swedbank have totaled roughly 61 billion kroner, 40 billion kroner from SEB, and...

According to The Capital Times, the Madison Police Department has been trying to get assault rifles for its officers for years. The City Council has not granted funding for the rifles due to budgetary constraints. In a disputed effort to better equip the officers, the department has proposed that each officer buy his or her own assault rifle.