Stocks, Gold, Silver, and the printing press.

[pudly]

Oh. It is even worse than that. If you watch through the series, you will find out why it will be impossible to honor the debts they have spent the U.S. into. Trust has nothing to do with it. The system is designed to make it impossible.

 

[pudly]

The next episode of the Hidden Secrets of Money talking about the corruption of currencies:

[video=youtube_share;OQWMd_NPSBA]http://youtu.be/OQWMd_NPSBA[/video]

 

[pudly]

Ultra-low interest rates, set by dictate rather than the free market, results in a net gain by debtors and a net loss by savers. Guess who the biggest debtor is. Don't worry about all those people with savings account or who buy govt securities to provide safety in their retirement. They didn't need the money anyway. source

 

[smokingman]

DOW up 39% this year,Federal Reserve balance sheet also up 39% this year.The US 10 year Treasury note interest rate has double to 3.98% from a year ago.Retail gasoline sales have dropped by 47% year over year(*source U.S. Total Gasoline Retail Sales by Refiners (Thousand Gallons per Day)). The US work force is now back down to 1978 levels,while the population has increased by over 100,000,000 million since then(*Population Data | Negative Population Growth and Bureau of Labor Statistics Data).

2013 Summed Up In Just One Chart | Zero Hedge

Have a good start to your new year.Prep.

 

[smokingman]

If you do not understand many of the things happening,or are trying to understand what it means for yourself and our country.I read one of the best articles today that I have seen in a long time.It talks about several topics and includes interesting facts about demographics,retail sales,and to some degree the easy money from the Federal Reserve.It may help fill in gaps in your understanding of the current and future situation we are all facing.

As always.Prep.

The Retail Death Rattle | Zero Hedge

 

[Rocket]

Nice article, Thanks for the post. I have seen it. The only reason I have had any car repair business lately is that people can no longer swing a car payment. And they can no longer wait on the repairs they have been holding off on. But another trend I have seen end is, people like me that have a spare car just in case no longer do. They cant afford the maintenance or insurance on them. In the short run this will help me, the mobile mechanic. But long term it means less cars to work on.

 

[Hohn]

If you do not understand many of the things happening,or are trying to understand what it means for yourself and our country.I read one of the best articles today that I have seen in a long time.It talks about several topics and includes interesting facts about demographics,retail sales,and to some degree the easy money from the Federal Reserve.It may help fill in gaps in your understanding of the current and future situation we are all facing.

As always.Prep.

The Retail Death Rattle | Zero Hedge

If you throw out the foilhatness of it, it's a solid article. The charts tell the story.

Retail is getting hammered, and will likely continue to be so. It will get much worse for them--and us-- before it gets better.

 

[AtTheMurph]

Ultra-low interest rates, set by dictate rather than the free market, results in a net gain by debtors and a net loss by savers. Guess who the biggest debtor is. Don't worry about all those people with savings account or who buy govt securities to provide safety in their retirement. They didn't need the money anyway. source

Centrally Panned interest rates have two effects. One is to allow government to finance it's largess with little in the way of current consequences. Bureaucrats love it because their power lies largely in the ability to spend other peoples money.

And it benefits investors at the expense of savers. With centrally planned low rates money flows out of fixed instruments seeking return. The big money wins as they own most risk assets and those prices rise as demand for them increases above the true market for such things. The ultra-wealthy get wealthier. The middle class gets squeezed between the low rates and ultimate inflation and the poor are still just poor. Their plight doesn't change.

 

[AtTheMurph]

If you throw out the foilhatness of it, it's a solid article. The charts tell the story.

Retail is getting hammered, and will likely continue to be so. It will get much worse for them--and us-- before it gets better.

Retail isn't getting hammered as that article lays out. It only charts "foot traffic". It does not add in internet traffic. Until you know what that number is then you don't know how retail is actually doing. I suspect not great but it isn't terrible.

 

[smokingman]

https://research.stlouisfed.org/fred2/series/BASE/

 

[Stickfight]

Where is all that blue line money?

 

[pudly]

Short answer: Counterfeit.

Longer answer: That is the "base money supply". The steep curve beginning in 2008 is "Quantitative Easing" or printing of money that has been Fed policy the last few years. It is the primary reason that the stock market has been inflating the last few years back to bubble status (remember the Dot-Com bubble of 2000 that led to a major market correction?), housing has again reached bubble status (remember how the bursting of the housing bubble in 2008 triggered the bank bailouts and QE?), too-big-to-fail banks are now bigger than they were in 2008, inflation in food and energy prices are accelerating and our children will be in debt for decades to pay down the Federal debt. When they talk about "tapering QE" that means slowing down the rate of money printing. See much of a change in the curve the last few months now that they've tapered three times?

 

[rhino]

The Fed plays with fire to make things look good to the unassuming public, then we're the ones who get burned in the end.

 

[Hohn]

Short answer: Counterfeit.

Longer answer: That is the "base money supply". The steep curve beginning in 2008 is "Quantitative Easing" or printing of money that has been Fed policy the last few years. It is the primary reason that the stock market has been inflating the last few years back to bubble status (remember the Dot-Com bubble of 2000 that led to a major market correction?), housing has again reached bubble status (remember how the bursting of the housing bubble in 2008 triggered the bank bailouts and QE?), too-big-to-fail banks are now bigger than they were in 2008, inflation in food and energy prices are accelerating and our children will be in debt for decades to pay down the Federal debt. When they talk about "tapering QE" that means slowing down the rate of money printing. See much of a change in the curve the last few months now that they've tapered three times?

I disagree. Economic historians will tell you that the failure to print more money during the great Depression was one of the main reasons the Depression went on so long, and both Keynesians and Friedmanites (like me) agree on this point.

Printing money is a very important way to offset the deflationary death-spiral-inducing ways to get out of a major debt crisis. When an entire economy "de-leverages" all the primary ways of doing that are deflationary. If you simply try to pay off debts without printing more money, the debt burdens actually get WORSE because your debts go down slower than your purchasing income does.

Watch this video for a great economic understanding:
[video=youtube_share;PHe0bXAIuk0]http://youtu.be/PHe0bXAIuk0[/video]


As for the Housing "bubble" I think you are mistaken. Most evidence indicates that the housing "recovery' never really happened.

http://finance.yahoo.com/blogs/dail...a-sham--guardian-s-heidi-moore-191918931.html

 

[ATOMonkey]

I disagree. Economic historians will tell you that the failure to print more money during the great Depression was one of the main reasons the Depression went on so long, and both Keynesians and Friedmanites (like me) agree on this point.

Printing money is a very important way to offset the deflationary death-spiral-inducing ways to get out of a major debt crisis. When an entire economy "de-leverages" all the primary ways of doing that are deflationary. If you simply try to pay off debts without printing more money, the debt burdens actually get WORSE because your debts go down slower than your purchasing income does.

Watch this video for a great economic understanding:
[video=youtube_share;PHe0bXAIuk0]http://youtu.be/PHe0bXAIuk0[/video]


As for the Housing "bubble" I think you are mistaken. Most evidence indicates that the housing "recovery' never really happened.

http://finance.yahoo.com/blogs/dail...a-sham--guardian-s-heidi-moore-191918931.html

Disagree. The government doubling down on bad economic policy is what lead to such a sharp and long lasting drop in the markets.

Printing more money would have just pushed the problem down the road, as it has done this time.

Also, you can't repay debt with debt, and ever get anywhere either.

 

[Hohn]

Here's the thing, though. Every Debt is someone else's asset. You wipe out debt, you destroy assets, too.

Indeed you cannot repay debt with debt. I'm not sure how that's relevant to your other comment.


A the video (did you even watch it?) explains, paying down debt is in the long run a good thing, but in the short run it is a negative thing. When you pay down debts, the short term effect is for the debt burden to get worse (macro level), not better. The long run effect is everything getting better, which we want.

But if you don't deal with the short term harm, you never get to the long term benefit.

It took Japan 20 years of essentially ZERO economic growth to learn this lesson the hard way. Only under Shinzo Abe and his "Abenomics" regime-- which involved printing a lot of money, among other things-- has the Japanese economy found a way out of the deflationary hostage crisis it has been in for over two decades.


Milton Friedman article: Reviving Japan | Hoover Institution

 

[ATOMonkey]

What is fiat currency? Fiat Currency is debt.

If you borrow $5,000, and you have no money to pay back this debt, and you "print" $5,000 you have borrowed $5,000 from yourself, or in the case of the US government, you sell bonds to the Federal Reserve. You pay off one creditor, but now you owe another.

You've paid off debt with debt. Now, I will grant you that this can work, so long as you don't borrow more than you grow, and you never have an economic downturn. It also works out if you never have to exchange your currency.

Wealth is not currency, and currency is not wealth. You can't borrow yourself into prosperity. No matter how you view history, these are immutable economic laws.

 

[Hohn]

What is fiat currency? Fiat Currency is debt.

If you borrow $5,000, and you have no money to pay back this debt, and you "print" $5,000 you have borrowed $5,000 from yourself, or in the case of the US government, you sell bonds to the Federal Reserve. You pay off one creditor, but now you owe another.

You've paid off debt with debt. Now, I will grant you that this can work, so long as you don't borrow more than you grow, and you never have an economic downturn. It also works out if you never have to exchange your currency.

Wealth is not currency, and currency is not wealth. You can't borrow yourself into prosperity. No matter how you view history, these are immutable economic laws.

I'm not sure I follow your reasoning.

Fiat currency is not debt. Fiat currency can be as asset because it can be traded for something else of value. Debt also is an asset-- to someone-- because it, too can be traded for something else. Ever hear of a mortgage being sold to another lender or to Fannie/Freddie?

If you borrow $5000 and have no money to pay it back, your collateral will be surrendered, unless you had an unsecured loan.

If you "print" $5000 to pay it back, you've not borrowed the money from yourself, because you didn't originally have the $5k. You've just created money from thin air, and inflated the quantity of money. You temporarily "double" the money supply because the $5k now exists in two places-- your printing press outlet bin, and the balance sheet of the bank you borrowed the money from.

When you take your printed $5k to the bank and settle up, the $5k on their balance sheet is destroyed, leaving only the $5k you printed.

Thus, if you start with no money and $5k in debt and settle this by printing money, you finish with $5k in money and no debt-- which is right back where you started, with a total of $5k in the "monetary base."

 

[PistolBob]

Now is the time to pay off debt, stop borrowing, stop refinancing...just get rid of it. At least the secured debt. Unsecured debt is a sucker game anyway.

 

[ATOMonkey]

Now is the time to pay off debt, stop borrowing, stop refinancing...just get rid of it. At least the secured debt. Unsecured debt is a sucker game anyway.

And this is why planned economics don't work. The whole point of the government borrowing money, putting more debt into the market, is to encourage you to borrow more money. In fact, it has the opposite effect, because people are so scared of losing their jobs, they're willing to lose wealth over the long term by paying down debt faster, and saving more, in an inflationary economy.

Ah well... As long as someone is still blowing the "we can borrow our way to success!" trumpet, people will believe it I suppose.