Jump to content

aliveandkicking

Members
  • Posts

    2,613
  • Joined

  • Last visited

Everything posted by aliveandkicking

  1. And the nature of your work is what exactly? You seem to me to have an amazing ability to live in a world of total denial. Do you produce anything? Do you not suck from the productive economy? Most of us here on this board are somewhat like parasites. In our defense i repair the houses i am hoping to get some profit from and you do some community organising, but the nature of our way of life is to be sponges on the backs of people who actually produce things. No doubt you can ban me again for mentioning this while others talk about the social good provided by speculation. Why do the poor have to live in shit holes so we can do what we do?? Stop kidding yourself man!
  2. Copper can also be found as the metal. The following piece of almost pure copper weighed 17 tons Other metals can also be rarely found http://en.wikipedia.org/wiki/Native_metal Interestingly from that link there was an ancient civilisation mining copper around lake superior where that copper in the photo was found.
  3. taxes for rich foreigners and exchange controls will hammer the hell out of london property however.
  4. In the scenario you outlined money doubled in price relative to house prices, and you claimed this would collapse the banking system. You are outlining a hugely deflationary period
  5. I dont think you can be serious. The government cannot be short of money to lend to nationalised banks in a deflationary crisis. 2008 was a bank run. There cannot be a shortage of government cheques to satisfy all depositors.
  6. The nationalised banks would be recapitalised according to tried and tested principals Banks were bailed out because nobody other than the government would lend to them. The BOE is lender of last resort to enable banks to trade out of difficulty or enable orderly transition of ownership
  7. Why will the banking system collapse? It would just involve a transfer of ownership to the tax payers
  8. A few days ago you showed that MZM was just barely rising above the 2007 levels? The fed bought agency mortgages and in many cases people then refinanced due to the lower rates and the feds got the money back. Rather than reducing the QE amount they bought treasuries to keep the QE amount the same. Google to find agency mortgages are being put back to the banks where fraud was found. As for monetary base it is still not clear to me the exact situation about regulations applying to Reserves. It appears that under bank rules this is money that can not be used by them for private purposes other than the amount that is part of their capital. If there are rules, then since this money is always in fed accounts on behalf of the banks it can be easily scrutinized. On the money sucking, as you know the banks are being required to get more capital - which is a trend against greater loan creation.
  9. You are mixing things up. 1:50 leverage is a sign of a massive deflation pressures until banks with this kind of leverage have sucked money from the economy or become state owned and recapitalised. The example being Japans zombie banks which were kept alive rather than being killed off and recapitalised. As you must be aware the Fed is not creating a large number of FRN's. MBS bought by the Feds was not of terrible quality other than that which has to be bought back by the banks via the discount window. the purchase involves a haircut. MBS found to be fraudulent and not meeting requirements is going back to the banks. QE included 1.25 T of agency mortgage purchases. A chunk of that has already gone due to refinancing and the receipts are being used to buy treasuries.
  10. I mentioned this kind of thing before and talked it over with Ziknik on his blog since nobody was interested here. It is true that if you are a bond holder with a million pound bond then you are wealthy and you have spending power. And if these bonds trade in a cash like manner (as they do) they are like money but they are not money. Even so before this crisis there was an amount of wealth in the world and the total amount of wealth in the world must influence the amount of price pressure that creates the bubble that all prices exist in our current money system. Once the crisis began many of these money like things began to revert to more traditional 'things' where for example an auction rate security simply became a bond that might pay you back in 30 years time rather than a 'cash like instrument'. So huge wealth, or a wall of liquidity that was existing in the world before 2007 was an illusion created by the perception of absense of risk or the perception a person could move to safety before the music stopped. A return to risk is itself a massively deflationary event. QE has replaced a small amount of the evaporated wealth. Credit appears to be still rising. QE swaps the wealth of the bond holder for an amount of similar wealth while the central bank holds the previously existing circulating wealth. If you argue the bonds are worthless then you arguing for an event that is deflationary creating because at the very least the perception of wealth that existed has been destroyed, and now all that has happened is the destroyed deflationary creating wealth has been replaced by a new deposit which you might argue is not worthless today. If you argue a deposit is worthless today then that is just more deflationary. You can always argue they will produce yet more and more money to prevent deflation, but so far the amount produced is not so large in the context of so much wealth distruction.
  11. Anybody want to give me some odds on XAUGBP not going below 780?
  12. And then on to the rest of the area. Oil spikes up, agricultural costs spike up. People begin starving. The west invades to keep oil flowing. Russia moves South. China moves west. My family heads back to NZ. Definately a possibility even for somebody as conservative as me.
  13. How about you allow me to see this chart a second time before you begin making claims like that.
  14. What i am saying is that gold will not keep going up at the rate it is going up if the Feds demonstrate they are going to pay some attention to inflation - Long term gold is always going to be going up since devaluation of our money is built into the system over time
  15. I admit i have had my eye on your bottom and it has been pretty impressive so far. It might be gone by the morning however. As for the Feds cards interest rates rises are not so very far away.
  16. Is there any major support for over a hundred dollars once this support fails?
  17. USA QE could be in run off mode by early next year with maturing bonds having to be balanced by a lesser amount of QE so that QE eventually fades and rates rise. If QE2 had not been announced then maturities from the MBS alone would have reduced QE by 200B over just 2010? For 2011 and onwards, treasury maturies will reduce QE annually by about another 100-200B?, that would create a massive drag on the economy so a new amount of QE seems likely to reduce the impact of the run offs while even so QE is reduced and rates rise. One alternative possibility is that China india and Brazil have hard landings and mean the west has to keep an easier policy for longer - but this is not particularly inflationary if the other economies crash because most people are living there. I have no idea of the real silver story but you can see also other things happening which do seem real which may account for market moves today. And call me a cynic but i suspect there there is an entire industry of creative writing out there designed to ensure people want to buy metal they have no purpose for whatsoever.
  18. I am also the dunce at the back of the class. But if you avoid complexity the simplest explanation for a fall in prices is that the countries that matter for the gold and silver trade like china india korea and i suspect Brazil and so forth are raising interest rates because they have inflation problems. If their inflation rises higher than western inflation and they dont deal with it then it is going to impact their competitiveness. The west meanwhile is pretty economically weak overall and likely to remain there for a while to come. You can argue our inflation will moderate if these other countries inflation moderates India today raised the repo rate - not much change. Base rates held steady at 6%. China is 5.81% after two rises in two months with the last christmas day with more to come and with reserve ratios at 19%. Brazil raised by .5% a few days ago to 11.25% Korea is at 2.75% and just raised .5% a few days ago. The Brits will be raising before the end of the year? The USA before mid 2012? One year Euribor is suggesting a .25% raise as far as i can see from the way it is fairly rapidly going up. On top of all of this China is being seen to very publicly support the USA and Europe which sends a big signal the west is going to come thru this one way or another, where the reason for holding gold and silver for many is as a hedge in uncertain times. Meanwhile if you have a big silver position to unwind you need people to buy and spreading stories about default is as good a story as any. What for example would be todays prices of a selection of silver dealers if you phone them up and you say you have 1000 oz to sell and you can deliver today? would you get 24USD per oz?
  19. It appears to have happened last year. Silver in backardation only means that if i want to do some silver soldiering today i will have to pay higher prices for silver than the market says i will have to pay in one years time. So who today is buying silver because they require it even though prices are expected to be lower? Industrials? Speculators who cannot believe silver will be lower in a years time? The market might for example be expecting that China will slow down in the future while demand today remains strong and the higher export quotas for silver that china has set will actually mean more silver on the market rather than less as it was for 2010. I would guess that industrial demand for silver swamps whatever demand there would be from what appears to be a small investor community viewing silver as money. All the information that i can find suggests to me that food inflation is being caused by rapidly expanding developing economies rather than by greater money supply. If that is correct then silver could easily be showing that it has come too far too fast and now buyers in the future are less enthusiastic for it.
  20. I admit given the improving situation in the US economy that it did not occur to me that the Fed was altering the fed funds futures for their purposes. i am sure though that the fed will want definate indications that the recovery is not going to fade away before it begins attempting to persuade people rates are going to rise if nobody thinks they are as you are suggesting with manipulation of the futures. Either way I cannot be the only person in the world who thinks that the fed funds rate is going to be higher next year. You asked earlier why an improving house market meant a firmer self sustaining recovery. It means that people with cash doing nothing or people saving for worse times are more likely to spend money on the usual things that increase economic activity. The US has exceptionally low rates and it is pretty clear they will not be held exceptionally low for very much longer even if they continue to be low for many years. But it is easy to talk, how about i bet you 100 pounds that the USD will not be repudiated by July 2012?
  21. If the government could alter the long term interest rate structure why did all those millions who lost their homes have to pay 4.5% interest? Obviously the future is going to have higher inflation in it than the last few years of near economic death. With higher inflation comes higher interest rates. Even so, like International rockstar, you can be confidant that interest rates will not be raised sufficiently to prevent inflation.
  22. The Fed funds rate is a calculated rate produced when the banks lend to each overnight between each others Reserve Account at the Fed where each bank with spare reserves attempts to lend them profitabily to the banks short of reserves. The Fed can attempt to lower that rate by buying assets from the banks at whatever price it wants so that the banks have more reserves. But in that case and when inflation is very high the banks who already have plenty of reserves will lend at a rate that makes their loans profitable in an inflationary environment and the fed will be powerless to get the fed funds rate lower unless it deals with inflation. In a similar manner once inflation rises the fed has no power to reduce yields on US treasuries, other than by acting to reduce inflation, since the yield is what the buyer receives annually after he buys the treasuries at the price he thinks is reasonable with his set of inflation expectations. If fed fund futures are showing higher rates and higher rates dont come then the fed loses credibility and banks expect more inflation and rates rise more anyway.
  23. Fed fund futures are showing expectations of a quarter point rise by april 2012 and almost 1.25 by end of 2012. http://www.cmegroup.com/trading/interest-r...deral-fund.html Obviously rates can go higher than the current 0.15% typical daily rate. Even Citi bank is making a profit. Today Brazil lifts rate 0.5% to 11.25%, meeting expectations.
  24. You are now mixing apples with pears. Earlier you were saying that property lending reduces lending for other projects. The reduction in lending is very small as i explained. Now you are talking about how purchases with cash or even with debt can push up prices. Which really is an issue related to velocity of money as much as anything else. Clearly if there is easy credit or large amounts of 'cash' then the velocity of money is likely to be increased. But in deflation there can be vast amounts of cash and no velocity. But back to the earlier point money cannot go into gold or any purchase. The seller of gold does not get their money out of gold but rather from the purchasor of gold. They may however say 'i took my money out of gold' Also when you say people have 'money in savings' you are saying that these people are bank creditors. These people are investing in a bank to take advantage of the banks money making activities and doing so in a speculative manner. If these 'cash buyers' buy property somebody else becomes the bank creditor or investor.
×
×
  • Create New...