The Conservative Cave
Current Events => Economics => Topic started by: 5412 on January 30, 2010, 08:50:29 PM
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Hi,
I subscribe to Ed Steer's Gold and Silver Report Daily, it is part of the Casey Research group. Below is a couple of paragraphs from today's report.
Fundamentally what is happening is every time gold and silver stage a rally, a few firms, predominatley JP Morgan intercede and continue to short the rally in an attempt to keep the prices down. The CFTC is supposed to oversee the market and repeated (I mean thousands) of letters, phone calls, emails etc. to get them to do their job has so far been ignored by the government. I have also seen estimates that if the price were to be allowed to float in a free market that the price of gold and silver would double or more. Right now the short positions held by "8 or fewer" banks is in excess of one year's production for each metal.
When the lid comes off this one look for metals to shoot up and inflation to go through the roof, with oil not far behind.
regards,
5412
The Commitment of Traders Report [for positions held at the close of trading on Tuesday, January 26th] was a sight to behold, as the bullion banks reduced their net short position in silver by a very large 6,979 contracts. The did this by covering 4,692 short positions and by adding 2,287 contracts to their long position... which I knew they were doing to cover their tracks. [Add to that the 2,438 contract decline from Thursday... and silver's o.i. dropped quite a bit this week.] Not including Thursday's o.i. decline, the net short position in silver is down to 54,711 contracts... 273.6 million ounces.
To give you an idea of how concentrated the positions of the '4 or less' or '8 or less' bullion banks are in silver... the '4 or less' bullion banks are short 294.1 million ounces and the '8 or less' bullion banks are short 340.3 million ounces of silver. These amounts represent 107.5% and 124.4% of the net short position. What this means in plain English is that if the '4 or less' and '8 or less' bullion banks weren't there as the shorts of last resort... and what I call 'not-for-profit sellers'... the price of silver would explode to the outer edges of the known universe.
In gold [for the week that was] the bullion banks decreased their net short position by a respectable 25,029 contracts. This they did by covering 22,734 shorts and buying 2,295 longs. [Plus they've improved their net short position another 29,000 contracts on Wednesday and Thursday as well!] Not including Wednesday and Thursday, the gold net short position is down to 248,618 contracts... or 24.9 million ounces of gold. [And is down to 22.0 million ounces if you take out Wednesday's and Thursday's o.i. decline.]
Using the actual COT numbers, the '4 or less' and '8 or less' bullion banks in gold are short 20.4 and 25.1 million ounces of gold respectively. With the net short position being 24.9 million ounces... the '8 or less' bullion banks are basically short a bit more than the entire net short position. If they weren't there, the Commercial category of the COT report would be market neutral.
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5412:
Thanks for the information. While I lack the background in Economics to fully appreciate what you reveal, the power of monopolists (shorts of last resort) to manipulate "free markets" seems pretty hard to miss.
With regard to manipulation of markets by elite players, government and private, I would like to know your thoughts on the Federal Reserve as an "Island of Central Planning" in our free market economy?
If it's true in normal times the Fed and not the market decides what the short-term interest rate is and this rate is perhaps the key price in our economy in the sense it's the price we trade wealth in the present for wealth in the future, does that mean the short-term interest rate is a centrally planned and administered price?
See: "Republic of the Central Bank" by J. Bradford Delong @American Prospect 10/27/08
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Hi,
I subscribe to Ed Steer's Gold and Silver Report Daily, it is part of the Casey Research group. Below is a couple of paragraphs from today's report.
Fundamentally what is happening is every time gold and silver stage a rally, a few firms, predominatley JP Morgan intercede and continue to short the rally in an attempt to keep the prices down. The CFTC is supposed to oversee the market and repeated (I mean thousands) of letters, phone calls, emails etc. to get them to do their job has so far been ignored by the government. I have also seen estimates that if the price were to be allowed to float in a free market that the price of gold and silver would double or more. Right now the short positions held by "8 or fewer" banks is in excess of one year's production for each metal.
When the lid comes off this one look for metals to shoot up and inflation to go through the roof, with oil not far behind.
regards,
5412
I have been watching this as well. One of the major issues at the moment is the manipulation that is taking place within markets when the government was never meant to be a "player" in the market. The crazy thing is that they actually believe they can get away with it. Things like this never end well and its quite scary to think of what the end outcome will be.
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While I lack the background in Economics to fully appreciate what you reveal
And yet that doesn't seem to stop you from wasting bandwidth in other threads.
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Thanks for the info. Reminds me of the Hunt's manipulating the silver market many years ago. I guess it's ok as long as a government sponsored bank is doing it. :censored: I still think gold, silver, other metals and commodities will increase in value in the long run. Sure beats a 1.4% M.M. account.
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NH Sparky:
Do you believe the Fed manipulates America's free market?
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NH Sparky:
Do you believe the Fed manipulates America's free market?
I believe they have influence, but that the ultimate manipulation rests with those who react to what the Fed says rather than does. Certainly government spending has some influence, but not nearly as much as socialist-leaning economies such as those in the EU.
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NH Sparky,
The working assumption at the Fed and Treasury Dept seems to be that the American economy can not recover without enriching Wall Street by increasing the level of debt nation-wide.
An alternative view is the economy needs to recover from the "cure" of the mushrooming debt overhead that both Bush and Obama have been pushing.
Not more credit, but a write-down on the debts banks have imposed on American families, businesses, states, localities, real estate, and the federal government itself.
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NH Sparky,
The working assumption at the Fed and Treasury Dept seems to be that the American economy can not recover without enriching Wall Street by increasing the level of debt nation-wide.
An alternative view is the economy needs to recover from the "cure" of the mushrooming debt overhead that both Bush and Obama have been pushing.
Not more credit, but a write-down on the debts banks have imposed on American families, businesses, states, localities, real estate, and the federal government itself.
I have read some of your posts. I mean no offense. But I see a lot of inexperience showing through. I have already walked the path and I have made my living from investing. I have two homes overseas and my home in the USA. I am by no means an amateur though once you have spent some time in the markets you realize that tomorrow morning can make you look like one despite how much you know.
I really do not think you understand the "write-down" process. It reminds me of a guy I once knew that believed once something was written off then it no longer existed and was of no concern. Trouble was he was dirt poor and couldnt even finance a used car so he had no idea of what a write down was.
I understand that you want to look forward and thats fine we all must make our decisions. Yet I have closed out my international trading accounts, my US based platform and consolidated into physical gold/silver and other physical assets that are non metal based. I have friends that have been doing this for a lot longer than I have and herald from the day Warren Buffet got started. When I see them flinch, it scares the hell out of me. There is a very real reason to be afraid because this whole mess is being help up with nothing but hope.
My point here is educate yourself and beware. Diversify into something physical, dont let yourself get caught with your pants down. When this thing does come down, its game over. Estimated time line I have been hearing is 12 to 24 months and the depicted problems we will face could usher in a new Dark Age.
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I understand that you want to look forward and thats fine we all must make our decisions. Yet I have closed out my international trading accounts, my US based platform and consolidated into physical gold/silver and other physical assets that are non metal based. I have friends that have been doing this for a lot longer than I have and herald from the day Warren Buffet got started. When I see them flinch, it scares the hell out of me. There is a very real reason to be afraid because this whole mess is being help up with nothing but hope.
My point here is educate yourself and beware. Diversify into something physical, dont let yourself get caught with your pants down. When this thing does come down, its game over. Estimated time line I have been hearing is 12 to 24 months and the depicted problems we will face could usher in a new Dark Age.
I hate to say it but I think you are right on target. Soros just recently purchases several hundred million in gold. So he thinks it is going up. I am not going to put my eggs all in one basket though. I have around 10% in gold and siver. Diversification in this market is also dangerous. For example, the wise investor in the past would allocate between classes. That will not help in a 1000 point crash which I think is on the horizon.
Real estate in depressed areas such as south FL and the Carribean look like a good bet. With the ARM's re-setting, the housing market will get worse. Later in the year will be the time to buy. Cash is king right now.
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Javelin:
Thanks for your candor and no offense taken. I am inexperienced, at least, when it comes to the workings of Finance, Insurance, and Real Estate.
Do you believe it's accurate to say that American manufacturing of goods and services has been out-sourced over the last 30 years to such an extent that today, the miracle of compound interest can produce debt more efficiently than America can produce jobs?
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Javelin:
Thanks for your candor and no offense taken. I am inexperienced, at least, when it comes to the workings of Finance, Insurance, and Real Estate.
Do you believe it's accurate to say that American manufacturing of goods and services has been out-sourced over the last 30 years to such an extent that today, the miracle of compound interest can produce debt more efficiently than America can produce jobs?
The USA is still the largest manufacturer of goods in the world as of 2008 by a wide margin.
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Javelin:
Thanks for your candor and no offense taken. I am inexperienced, at least, when it comes to the workings of Finance, Insurance, and Real Estate.
Do you believe it's accurate to say that American manufacturing of goods and services has been out-sourced over the last 30 years to such an extent that today, the miracle of compound interest can produce debt more efficiently than America can produce jobs?
No doubt that American jobs of all kinds, especially manufacturing, have been outsourced to the point that it has caused irreversible damage. Before you can look at the issue of compound interest, and in part your question is partially a trick question, you have to look at another factor.
Productivity is the key, not the production of jobs. Productivity can be measured in different forms. In the past two decades the key focus of productivity is Gross/Net in vs outgo. Its become a numbers game rather than the true measure of asset verses liability. People looked at owning a home as being an asset, when in truth unless it is used for investment purposes, it is a liability. A home does not produce any real productive capacity despite the numbers until the economic fallout showing that it produced "productivity".
So to answer your question, there is no longer any real productive capacity within the United States in that we are no longer producing assets nor acquiring assets but instead have a very long balance sheet of liabilities. As an example, compare us to China where the are acquiring every asset they can get their hands on: oil fields, diamond mines, gold/silver mines, iron mines and now they have the production ability through manufacturing that we built for them via our outsourcing and loan back to us the dollars we financed them with.
We cannot produce the jobs in order to pay the balance sheet, period. In order to produce those jobs and assets we now need to compete with a man in China that can work at a wage of 3 dollars per hour or day and those companies there have no compensation plans to worry about. We cannot outproduce them and we cannot do it at that price. I am sorry but business is not patriotism and made in the USA while I love it, those companies will either be forced to outsource like briggs and stratton has or they will go out of business.
When you look at the debt interest if your productivity cannot outproduce the debt, it is not a measure of numbers on a balance sheet or theoretical potential. It comes down to the competitive ability of a people vs people in different nations. In theory would it be possible to pay off the debt? Sure. In reality will it happen, no. Its quite impossible just as us expecting Obama to resign tomorrow morning and decide to shut down the Federal Government and return all rights back to the States. Could it happen in theory, sure. Will it happen, no. Couple this issue with the fact that our governments (State and Federal) refuse to curtail spending due to "programs" deemed too important and then the desired programs they wish to impliment, there will be no trend change and continued spending. Through 2010 there will be more damage and 2009 was enough alone to sink us. Even with the elections this year in congress there will not be enough change to save us. 2012 will come too late and the needed policies to save us should have been enacted years ago. Too little, too late.
I always look to the most likely outcome based upon current trends to determine future trends. A friend of mine in the Philippines is a CEO of a major corporation there. He mentioned to me that they are finding the American influence weakening so dramatically in their sectors that they have been forced to do business with China. We can no longer compete. The fallout in the USA is affecting nations around the world. In the Philippines a major Nike plant has laid off a huge percentage of its workforce and the only jobs coming into the country are in support of countries like Singapore, Malaysia, China and supporting roles such as IT and call centers. There is a demand for Manderin speaking people emerging over English speaking.
The trends speak for themselves and we can only measure where we are going by where we are and the capacity we hold on a competitive level. In short, we dont have it.
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The USA is still the largest manufacturer of goods in the world as of 2008 by a wide margin.
This is not necessarily true. What I mean is, when an American company sports a made in China tag it still counts as a manufactured good for us. The truth is, where does the money go? Furthermore, we finance the production ability of China, they retain the plants and manufacturing ability despite whatever happens. Then they also copy and modify our products and trade them with their partners.
Its not a true apples to apples comparison when you look at the numbers. We spend, they benefit, not a good scenario.
The next problem with this thinking is that your speaking of production of goods when we should be looking at the production of assets or acquisition of assets. Goods equals the need for spending which deals with wealth depletion. Assets lead to wealth building. In order for us to maintain we need to produce more goods and right now people are not buying as they used to. Not only are they not buying, they cannot buy. We can produce goods until surpluses build and fund it with more Federal money if we wish. Yet until real asset creation comes into the picture to build wealth, even if only by a simple savings account for the common individual, there will be no recovery whatsoever.
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This is not necessarily true. What I mean is, when an American company sports a made in China tag it still counts as a manufactured good for us. The truth is, where does the money go? Furthermore, we finance the production ability of China, they retain the plants and manufacturing ability despite whatever happens. Then they also copy and modify our products and trade them with their partners.
Its not a true apples to apples comparison when you look at the numbers. We spend, they benefit, not a good scenario.
I just googled it and came up with that info. However, would not the same thing be true if foreign companies invest in the USA. I understand it is not happening to that extent with China but Japan has invested a great deal in this country.
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I just googled it and came up with that info. However, would not the same thing be true if foreign companies invest in the USA. I understand it is not happening to that extent with China but Japan has invested a great deal in this country.
Yes it is true if you reverse the concept and companies from overseas. The majority of business I believe, have not confirmed, comes from Europe more so than Asia. But that is not what is so important as the ratio at which it happens. To use an example lets take the SouthEast of the USA. A major industry pre 1990 was textiles. Now try to find a job in that industry in the SouthEast, you cannot. A major problem is that various sectors have been practically eliminated via outsourcing. Its a vast difference from what is coming into the USA.
Again though, it must be measured by assets to liabilities. Its not enough to just have a job producing an income that in turn produces spending into our economy. That is what got us here to begin with. Its about as insane to expect that to work as creating government jobs and expecting that to fix the problems as Obama is attempting at this very moment.
Another major blow is the banks. They (depending on which one) either cannot lend based on their money situation or the fact they have to follow more stringent rules or they refuse to because they can make so much more money by lending to the Federal government. By comparison to any other recession we have had, including the great depression, this is the worst yet and its a killer. In the Great Depression we has surpluses and the American people were not in debt to the tune of nearly 14 trillion dollars. Credit Cards did not exist then and people lived a much simpler life on a pay as you go basis. We also had a manufacturing capacity that we no longer have. Why we do not feel the damage yet is due to the printed money that has been poured into the banks to prop us up. When and if the government forces these banks to lend all of this money instead of hold it, that money then gains what is called velocity. Once it is within the marketplace rather than on a balance sheet that will be added inflation on top of the fact that the government has now suppressed the markets (asset side ie: gold, silver) and floated other sectors. When the piper comes to be paid, and he will do not doubt it, we cannot cover the difference.
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Another major blow is the banks. They (depending on which one) either cannot lend based on their money situation or the fact they have to follow more stringent rules or they refuse to because they can make so much more money by lending to the Federal government. By comparison to any other recession we have had, including the great depression, this is the worst yet and its a killer. In the Great Depression we has surpluses and the American people were not in debt to the tune of nearly 14 trillion dollars. Credit Cards did not exist then and people lived a much simpler life on a pay as you go basis. We also had a manufacturing capacity that we no longer have. Why we do not feel the damage yet is due to the printed money that has been poured into the banks to prop us up. When and if the government forces these banks to lend all of this money instead of hold it, that money then gains what is called velocity. Once it is within the marketplace rather than on a balance sheet that will be added inflation on top of the fact that the government has now suppressed the markets (asset side ie: gold, silver) and floated other sectors. When the piper comes to be paid, and he will do not doubt it, we cannot cover the difference.
From what I have read is that the banks are willing to lend. There are just not that many takers and that in the last 8 months business bank loans have dropped every month. Without expansion, the economy is going to sink back into another recession in my opinion. Companies are so gun shy because they don't know what the government is going to do them in the form of increased taxes from health care, energy and new regulations. This moron in the WH thinks that gov. is the answer. God help us.
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Tell me if the following quote from Noam Chomsky makes sense to you:
"The war against working people should be understood to be a real war...Specifically in the US, which happens to have a highly class-conscious business class...And they have long seen themselves as fighting a bitter class war, except they don't want anybody else to know about it."
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Sorry dude but as far as I am concerned if Noam Chomsky says the sun will rise in the east I would get the second opinion of an intelligent person before I believed it.
Having said that why don`t you research Chomsky a bit...you will find the great icon of the left is nothing but a complete hypocrite.
His statement is an idiocy and attempts to instill a bitter envy in folks by ascribing it to others.
In essence.."See,you should hate them because I say they hate you.
Follow me and give me power and I will lead you to victory".
The same ole same ole propaganda.
Only a fool or weak mind falls for it.
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Sorry dude but as far as I am concerned if Noam Chomsky says the sun will rise in the east I would get the second opinion of an intelligent person before I believed it.
Having said that why don`t you research Chomsky a bit...you will find the great icon of the left is nothing but a complete hypocrite.
His statement is an idiocy and attempts to instill a bitter envy in folks by ascribing it to others.
In essence.."See,you should hate them because I say they hate you.
Follow me and give me power and I will lead you to victory".
The same ole same ole propaganda.
Only a fool or weak mind falls for it.
I am interested in seeing this, it should be required for any conservative. http://www.generationzeromovie.com/
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Javelin:
Paul Craig Roberts is a former editor of the Wall Street Journal and assistant secretary of the US Treasury under Reagan. Roberts has a piece at CounterPunch (subscription edition) titled "How the Economy was Lost" (sorry, I'm not yet capable of inserting hyperlinks...I am working on it.)
Paul starts with a quote from The Collapse of British Power by Correlli Barnett: "The fundamental factor in the total strategy of a nation lies in industrial and commercial performance, for it is this which determines power and wealth alike."
He then connects the British circumstance at the end of WWII with ours today: "Britain's influence died with its economy, and a former superpower became an American dependency."
"Whose dependents will Americans become?" (My emphasis)
We're told the US can have a superpower's economy even after " millions of good jobs that were the backbone of the middle-class are instead given to foreigners." Augmented by the collapse of world socialism and high-speed Internet, the "new economy" of the 1990s produced a steady increase of job losses until today one in five Americans is unemployed and "(t)here are no jobs for the unemployed."
"We pay for the import of our own companies' goods and services by transferring ownership to foreigners of American companies, real estate, bonds, and even toll-road revenues."
Roberts finishes with a thought Chomsky would approve of:
"In America nothing is important except profits. People don't count. Jobs for people don't count."
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Javelin:
Paul Craig Roberts is a former editor of the Wall Street Journal and assistant secretary of the US Treasury under Reagan. Roberts has a piece at CounterPunch (subscription edition) titled "How the Economy was Lost" (sorry, I'm not yet capable of inserting hyperlinks...I am working on it.)
Paul starts with a quote from The Collapse of British Power by Correlli Barnett: "The fundamental factor in the total strategy of a nation lies in industrial and commercial performance, for it is this which determines power and wealth alike."
He then connects the British circumstance at the end of WWII with ours today: "Britain's influence died with its economy, and a former superpower became an American dependency."
"Whose dependents will Americans become?" (My emphasis)
We're told the US can have a superpower's economy even after " millions of good jobs that were the backbone of the middle-class are instead given to foreigners." Augmented by the collapse of world socialism and high-speed Internet, the "new economy" of the 1990s produced a steady increase of job losses until today one in five Americans is unemployed and "(t)here are no jobs for the unemployed."
"We pay for the import of our own companies' goods and services by transferring ownership to foreigners of American companies, real estate, bonds, and even toll-road revenues."
Roberts finishes with a thought Chomsky would approve of:
"In America nothing is important except profits. People don't count. Jobs for people don't count."
Very powerful statement and I agree with all of it 100 percent.
One other factor that not many people talk about that concerns me and it plays into the question where you added emphasis as to whos dependents will Americans become. That is a difficult question to ponder, the first initial knee jerk reaction would be a response of China. Yet things are much different now verses the WW2 era. Globalization has changed everything. If we consider that since the 1990's more so than any other decade was the birth of this globalization. The internet and its abilities has allowed for the economies of the world to be tied together in a way that no one has ever imagined in history. Why is this so important?
Remember the collapse of the housing sector? The ripple effect was felt around the world and the bailouts were poured into the global economy from China to Europe and the USA. The blow that it dealt to Europe can be seen now as many economies are on the brink of total collapse namely: Greece, France, Portugal, Spain, the UK. The economies of the world are now so interdependent that if one fails, all follow in suit. France depends on Greece, and Germany on France, Spain and Portugal on Germany, the UK on Germany, the USA depends on the UK for so much of our debt and China depends on the USA for consumers. The very probability that any single collapse, especially when budgets around the globe are so strapped, can cause a systematic collapse that brings the next down is a real threat. If any two or three in the EU zone go down the whole EU will sink. If the USA goes much further down the rabbit hole China and the EU sink.
There is far more at stake here than simply our economy. After I worked in military intelligence I came away with the realization as to how sensitive our fragile world is and how intertwined we all are. With the USA being the major food producer in the world, imagine a collapse where we can no longer produce like we have, or at all. Inside of this a power struggle would emerge, not just for the soul of the USA in liberal vs conservative, but who globally controls the food basket.
May God truly help us all, for we would be entering a modern Dark Age.
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Javelin:
What happens if Goldman Sachs goes the way of Enron?
Porter Stansberry writing on The Daily Crux>"This is one of the biggest Wall Street Frauds Ever..." Thursday February 25, 2010:
"About three years ago, I saw Goldman Sachs reporting quarter after quarter of unbelievable results when all the other investment banks were hurting. I spent a lot of time looking at its numbers which didn't make any sense. It reminded me on Enron. It kept reporting bigger and bigger profits, but lost more money every year in cash. And its debt balances kept growing."
If Goldman insured all its subprime exposure via AIG, allowing it to book huge profits on its subprime investments because the bonds were insured, and Goldman actually bought this insurance on special CDOs it had put together and sold to its own clients, does that mean jail time for Goldman execs and the end of the firm?
If Goldman dies like Enron died, what happens to the EU?
What happens to the USA?
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Javelin:
What happens if Goldman Sachs goes the way of Enron?
Porter Stansberry writing on The Daily Crux>"This is one of the biggest Wall Street Frauds Ever..." Thursday February 25, 2010:
"About three years ago, I saw Goldman Sachs reporting quarter after quarter of unbelievable results when all the other investment banks were hurting. I spent a lot of time looking at its numbers which didn't make any sense. It reminded me on Enron. It kept reporting bigger and bigger profits, but lost more money every year in cash. And its debt balances kept growing."
If Goldman insured all its subprime exposure via AIG, allowing it to book huge profits on its subprime investments because the bonds were insured, and Goldman actually bought this insurance on special CDOs it had put together and sold to its own clients, does that mean jail time for Goldman execs and the end of the firm?
If Goldman dies like Enron died, what happens to the EU?
What happens to the USA?
Imo, Goldman cannot go the way of Enron for one major reason, its the governments pet bank. Look at how many of their people go to the Fed or other economic facets of the government. They are essentially tied to the hip now. If we tried to call the White House the switchboard could probably forward you to the CEO of Goldman who may have an office at the capitol building lol.
But, in the concept and theory of how your considering the situation, which is the way it should be then the rug should have been pulled out from under them last year. If you remember Warren B. dumped a ton of his money into Goldman, and a few other names as well as the government. I think part of Warrens deal was that he would not put money into Goldman unless the government did. I do know for a fact that Goldman executives and the "owners" cannot sell past a certain percentage of shares without first notifying Warren and him giving approval or first right of action to sell before they do.
Back to your question... if things were actually run the way things should be, then the fall of Goldman would cause the EU to fail and the US along with parts or certain sectors within China. The real deal is that Goldman will fall when the Fed falls. Yet if things were as they should be, the fall would mean that smaller banks, especially regional banks, would once again become the backbone of American industry. This would not be a bad thing and it would in theory herald in a new age of independent American businessmen (this of course ignores the social, political, and geopolitical fallouts that would also be an obstacle to overcome). The truth is though more than 100 years ago the United States got into the business of empire building. So its sad to say that the CEO's past and present along with the execs that are on staff are well insulated from any criminal investigations. Old man Bernie Madoff saw more of a prison cell than any of these guys will despite the fact that they all should be buried under the jail.
Over the last two years we saw a "too big to fail" campaign absorb these various banks and insurance companies by the Federal Government which essentially wiped clean any paper trail that we could hope to find. There were a lot of shady things that took place and comments that came out from places like Bank of America when they did not want to be a part of any of this but were "threatened" to help bail out and then later were bailed out themselves. The laundry list one day will be long and extensive as to who should be prosecuted and face jail time if people dont take to the streets in riots and hang them first.
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Javelin:
What about replacing private investment banks with public institutions modeled on the State Bank of North Dakota or a commercial banking model like the Commonwealth Bank of Australia?
A Democratic contender for governor of Florida wants to create a Bank of the State of Florida (BSF) "...that would make loans to Floridians at much lower interest rates than they are getting now..."
"For $100 in deposits, a bank can create $900 in new money by making loans. So, the BSF can pay 6 percent for CDs, and make mortgage loans at 2 percent. For $6 per year in interest paid out, the BSF can earn $18 by lending $900 at 2 percent for mortgages."
Dr. Farid Khavari is also proposing 6 percent credit card rates.
Would it fly?
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Javelin:
What about replacing private investment banks with public institutions modeled on the State Bank of North Dakota or a commercial banking model like the Commonwealth Bank of Australia?
A Democratic contender for governor of Florida wants to create a Bank of the State of Florida (BSF) "...that would make loans to Floridians at much lower interest rates than they are getting now..."
"For $100 in deposits, a bank can create $900 in new money by making loans. So, the BSF can pay 6 percent for CDs, and make mortgage loans at 2 percent. For $6 per year in interest paid out, the BSF can earn $18 by lending $900 at 2 percent for mortgages."
Dr. Farid Khavari is also proposing 6 percent credit card rates.
Would it fly?
Your entire concept will be a complete failure. While it sounds great in concept, over time it will become a monster that consumes the wealth of those that produce it. Perhaps you should read more of Thomas Jefferson rather than Marx.
I understand your plight and your toting of North Dakota. Yet your fail to see the full construct, timing, implications and current trajectory of what is taking place. I would say much more but it would take a 100 page document to explain how the failure will even be greater than what we face now. Run away, at full speed! Socialist ideas may sound great but lack in all true application and history proves this statement right time and time again without error or refute.
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
-= Thomas Jefferson 3rd president of US (1743 - 1826), Letter to the Secretary of the Treasury Albert Gallatin (1802)
While Jeffersons dealing with private banks having too much power, even with them having competition, its too much power. How do you in your right mind believe that a total government bank would be any better whatsoever? Is that even logical? The mess will be a nightmare beyond comprehension.
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Javelin:
James Stivers, a Republican candidate for State Senate in Idaho, may be one of the first indications of a political shift among grassroots Republicans. He's calling for a State Bank to fill state coffers and protect the local economy.
Stivers: "An important part of sovereignty is monetary authority. Currently, banks are allowed to multiply many times over the tax receipts deposited in their institutions. This special privilege is partially responsible for the 'sucking sound' in our local economies, as regional banks send their assets to central banks that are playing the derivatives markets of the world."
Anything here you would agree with?
How about Stivers's thoughts on inflation?
"Inflation is caused by the secret tax of the banking industry in which lenders use the multiplier effect to the benefit of their cronies. This secret tax takes the form of a decline in the value of the dollar and results in higher prices. Wages never keep up with this process because its very purpose is to extract wealth from the wage earners to support the privileged classes (and their Useful Idiots) who curry the favor of lenders. A state bank would restore this privilege to the people in a public trust and give us the opportunity to back our deposits with the wealth from our public lands."
Marx saw Capitalism as clearly as anyone who has ever lived.
In particular, he saw what Capitalism becomes after it has successfully emasculated government.
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"multiplier effect"?
"extract wealth from the wage earners"
This is no Republican I know.
"A state bank would restore this privilege to the people in a public trust and give us the opportunity to back our deposits with the wealth from our public lands."
But you can't trust the government, they haven't done anything right yet.
Or
Who is going to run this "public trust" and what sort of elitist are we making?
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Javelin:
James Stivers, a Republican candidate for State Senate in Idaho, may be one of the first indications of a political shift among grassroots Republicans. He's calling for a State Bank to fill state coffers and protect the local economy.
Stivers: "An important part of sovereignty is monetary authority. Currently, banks are allowed to multiply many times over the tax receipts deposited in their institutions. This special privilege is partially responsible for the 'sucking sound' in our local economies, as regional banks send their assets to central banks that are playing the derivatives markets of the world."
Anything here you would agree with?
How about Stivers's thoughts on inflation?
"Inflation is caused by the secret tax of the banking industry in which lenders use the multiplier effect to the benefit of their cronies. This secret tax takes the form of a decline in the value of the dollar and results in higher prices. Wages never keep up with this process because its very purpose is to extract wealth from the wage earners to support the privileged classes (and their Useful Idiots) who curry the favor of lenders. A state bank would restore this privilege to the people in a public trust and give us the opportunity to back our deposits with the wealth from our public lands."
Marx saw Capitalism as clearly as anyone who has ever lived.
In particular, he saw what Capitalism becomes after it has successfully emasculated government.
Edit in: I am not a Republican just an fyi note. I am a Constitutionalist. You will never find anyone more right than me. In truth if you want to know more of my ideals I also am a Three Percenter. You may want to look that up so when you delve into the political ideas at least you know where I am at.
fHoly crap.... where to begin... First of all, no I do not agree with anything you have presented whatsoever.
Secondly, allow for me to offer you a non political book (they dis all parties and politicians and show the truth) its called "Empire of Debt" by Bill Bonner. Forget the socialist garbage that led to the downfall of so many people and the deaths of millions.
Your blending political theory with market fundamentals and it doesnt work period. Want proof? Try day trading on theory, for that matter even many fundamentals and see what happens, you will lose your shirt. You have a serious disparity in your thinking from moving from theory to application.
In truth the solution is simple. No government intervention.... get rid of it.
Back to fundamentals. Inflation is not caused in any way from how it was stated within your quote. Inflation can be influenced by many things but it is at its core derived by the value of a currency to what it can buy ie. assets or commodities. What causes inflation is piss poor monetary policy. What causes piss poor monetary policy? More government. I have heard all the democrat and republicans screaming about the crying babies in the cold that had no homes and then they build this idea that the American dream is to own a home so then they force banks into shady lending practices. THIS IS WHAT CAUSES PROBLEMS!!!
When the government becomes a player within a market rather than a buffer, all hell breaks loose.
Let me put it to you this way. Markets do not care what political color you are, but they will make you pay dearly for it. True economics cannot be controlled and anyone who has spent real time making money in the markets has seen how nasty a revolt can be.
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Javelin:
Thanks for the "Empire of Debt" tip.
I will check it out.
If you have time please look at Ellen Brown's Web of Debt Blog.
There appear to be many points of agreement regarding what some call "debt slavery" among left and right in this country.
When you say "No government intervention...get rid of it." some might interpret that as a call to privatize the US Treasury Department or even the entire Executive Branch. I share your distrust of monopolies whether of commodities or stocks or violence, but I don't see how replacing "one person:one vote" with "one share:one vote makes us any "freer."
Regarding the relations between inflation and monetary policy, hasn't the Federal Reserve managed monetary policy since 1913? One of those points of agreement I mentioned earlier is that the US Dollar has lost 95% of its value during that time.
Is the Fed part of the US Government? Or Wall Street?
This goes to a first principle of markets.
Are markets natural forces like gravity?
Or social constructs like government?
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Ranger Rick:
There are a lot of devils hiding in the details of "...expanding the role of Idaho's Bond Bank authority into a full-fledged state bank."
No doubt new elites will be created and some of them will seek to expand their influence and wealth.
All I'm trying to say is that as long as private property exists (which has always sounded like a good idea to me) some form of government will be required.
The current version is bad enough. Particularly over the last thirty years, Republicans AND Democrats have taken turns shafting 90+% of Americans.
I believe there's something far worse hiding in the weeds and that is the corporations that have grown up around the private banks who have assumed control of American monetary policy.
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Javelin:
Thanks for the "Empire of Debt" tip.
I will check it out.
If you have time please look at Ellen Brown's Web of Debt Blog.
There appear to be many points of agreement regarding what some call "debt slavery" among left and right in this country.
When you say "No government intervention...get rid of it." some might interpret that as a call to privatize the US Treasury Department or even the entire Executive Branch. I share your distrust of monopolies whether of commodities or stocks or violence, but I don't see how replacing "one person:one vote" with "one share:one vote makes us any "freer."
Regarding the relations between inflation and monetary policy, hasn't the Federal Reserve managed monetary policy since 1913? One of those points of agreement I mentioned earlier is that the US Dollar has lost 95% of its value during that time.
Is the Fed part of the US Government? Or Wall Street?
This goes to a first principle of markets.
Are markets natural forces like gravity?
Or social constructs like government?
I am going to move backwards in responses to your post:
Markets are more like natural forces similar to if you will "gravity". This is why they cannot be controlled, period. Control in other forms also fail and it has been proven within this collapse. Here we have a combination of government control/intervention which forced the hands of banks to co-operate with additional control/intervention especially in the finance and housing markets. Furthermore we see where greed kicked in from the markets (stocks,futures,banks and such) all the way down to the consumer utilizing liar loans. Add in shady practices of inflating home values to create additional money for 2nd mortgages to create alternative financing options for individuals and the manipulation as you can see escalated out of control.
Essentially, if the markets were a free market this would have never been allowed to perpetuate itself. You would argue that we have existed under a free market system. I argue that the moment the government entered into the marketplace as a player rather than a buffer the natural forces of the markets have been thrown out of balance.
Within a free market with no government interference a market will correct itself rather quickly and at times violently. Yet even with a sudden crash the correction would often be rather fast allowing for a very short recession, much shorter than what we have experienced over the past decades.
If you will look back at the year 1919 and 1920. The government in those years realized the problems they caused, backed out and allowed natural forces to occur. When they did they immediately turned a market around that posted numbers equally as significant as the great depression at its worst in the early 1930's. The proof is within history.
Yes the Fed Reserve has managed monetary policy since 1913 and if you look at history this is not the first time. It was also done in the early 1800's until the president Andrew Jackson came along and abolished the concept doing away with national banks. Within those times they also suffered from government interference via a governmental control of the market systems of that time.
The Fed should not even exist period yet due to our present condition this would be virtually impossible to abolish as Andrew Jackson did in his day. We are too deep in the doo doo if you will to even think about it. The best that we could do at this point is to step by step strip away the power of the Fed and remove the Federal governments ability to manipulate the Fed. In essence allow it to become more privatized over time until it can be removed completely. In real terms you and I both know this will never happen unless a real revolution were to take place.
The system is far too gone and used up for any kind of recovery. It will literally crash and burn within a currency crisis and I am afraid a more sinister and evil monster will emerge. I understand that you are more socialistic in your thinking and beliefs. Yet when one looks at history you must look at where that road has consistently led to. How are we any more special, different or unique that we cannot meet that same fate? Despite your socialistic beliefs, I seriously doubt you would vote for tyranny and oppression.
I do understand your ideas of trying to make the world better, yet when it comes into real world practice, there is a reason why our founding fathers instituted what they did. They themselves saw first hand what communism or socialism was like for in their time it was watered down into what was called a monarchy.
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"The system is too far gone and used up for any kind of recovery. It will literally crash and burn within a currency crisis and I am afraid a sinister and more evil monster will evolve."
Me, too.
Professor Carroll Quigley, Bill Clinton's mentor at Georgetown and an insider once groomed by international bankers, wrote in his book Tragedy and Hope in 1966 about "(T)he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.
"This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences."
If that was the plan since at least 1966, do you see any hope for America that doesn't require elected legislators taking back the power to create money from a private banking elite?
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Professor Carroll Quigley, Bill Clinton's mentor at Georgetown and an insider once groomed by international bankers, wrote in his book Tragedy and Hope in 1966 about "(T)he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.
"This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences."
If that was the plan since at least 1966, do you see any hope for America that doesn't require elected legislators taking back the power to create money from a private banking elite?
Do you know why the design in the early cold war era was to tie all economies together? I actually learned this from Glenn Becks show and did my own homework on it and hes right lol. Its not too often I learn something new from Beck but he has a few really good nuggets once in a while. The purpose for bringing the world economies together was to prevent nuclear and or large scale wars. If another Hitler came along or some nut in the Soviet Union tried to launch a nuke the chaos that ensued economically would destroy the would be destroyer of the world. Brilliant right? Well until it bites us in the butt in the current crisis we are in.
Anyway to answer your question about the elected legislators taking back power to create money..... I prefer to look at it differently than you do as in I do not consider there to be a private banking elite within a true free economy. The elite are created when they buy politicians (both R and D) and then we have the elite that we have ended up with today. But to answer you directly, no I so not see how its possible at this point.
If we could erase the debt, well at least get close, we could go back to a backed currency where at least the money could not be printed like toilet paper. That would at least constrain the USA from being stupid. Yet with the current structure of the international markets it really makes that whole idea impossible. Our hands are in the back pockets of Asia and Europe just as their hands are in our back pockets. People look at the national debt as the only thing we have to cover. Nope, sorry theres a lot more. If we begin to decline there are multi billions in Euro and Yuan that are invested into the USA. If they pull their money or demand reimbursement and perhaps for us to pay down some of our debt we couldnt even do that much less cover the whole difference by trying to back that much money by gold. A sheer impossibility.
The current trajectory is currency crisis. As much as I hate to admit it, the only real solution would be similar to Germany back in the day. Back the currency by land under a new currency, or worse, we could end up in a multi national currency. That is the truth behind where we are headed that both parties cannot see or even begin to realize. That is assuming we get that far without slipping into a chaos like civil war.
This is NOT a normal recession. This is beyond depression. This is Rome all over again.
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Javelin:
From Tuesday, March 9, 2010 "Washington's Blog">6 Theories on Why the Stock Marker has Rallied.
1. Dumb Money, i.e., the Jim Cramer legions.
2. Temporary Juice: quantitative easing, low interest rates, "Wall of Money" proponents.
3. The Situation is Inflation: stocks tend to perform well during periods of serious inflation.
The final three possibilities explored by this post appear to me to suggest serious fraud among public and private elites.
4. Machines Run Amok: "Tyler Durden explains that all the stock market gains have occurred after hours when mystery buyers purchase stock futures in low volume environments." Another strategist for Trim Tabs Investment Research said last month: "We've never seen this before-such a huge rally, and the little guy is out." Are momentum chasing algorithms doing the buying?
5. Fed Futures? Is the "government" directly fueling the market.
6. Fraud Central (my favorite) Karl Denninger's belief that the market has rallied "due to the systematic fraudulent overvaluation of assets."
I think what's coming will make Rome look progressive.
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Javelin:
From Tuesday, March 9, 2010 "Washington's Blog">6 Theories on Why the Stock Marker has Rallied.
1. Dumb Money, i.e., the Jim Cramer legions.
2. Temporary Juice: quantitative easing, low interest rates, "Wall of Money" proponents.
3. The Situation is Inflation: stocks tend to perform well during periods of serious inflation.
The final three possibilities explored by this post appear to me to suggest serious fraud among public and private elites.
4. Machines Run Amok: "Tyler Durden explains that all the stock market gains have occurred after hours when mystery buyers purchase stock futures in low volume environments." Another strategist for Trim Tabs Investment Research said last month: "We've never seen this before-such a huge rally, and the little guy is out." Are momentum chasing algorithms doing the buying?
5. Fed Futures? Is the "government" directly fueling the market.
6. Fraud Central (my favorite) Karl Denninger's belief that the market has rallied "due to the systematic fraudulent overvaluation of assets."
I think what's coming will make Rome look progressive.
My bet is on numbers 1-3 and then also number 5. Number 6 also has some validity in that it is an influence from the past and will be part of the fallout later but it does not have any direct impact on the markets current upswing.
Yep, whats coming will make Rome look like a pop-sickle stand on a summer day. One of the major reasons is not just the manipulation that has taken place but on our local levels, we are not the same people we used to be. How many people have gardens? A garden is not even enough to sustain oneself considering you need about an acre of crops for say a family of four and two of the four would have to be small children. We do not know how to operate inside of loss of communication and especially if we lose electricity. Even if we have power who could afford it? How many people still have wood burning fireplaces or wood burning stoves in their homes? How many people have more than 3 to 5 days supply of food at home? Not many.
I remember my great grandmother telling me stories about the great depression before she died. I was a kid then but I remember the stories well. We dont have what it takes to live like that again. We have forgotten or failed to learn the knowledge they had then due to modern implements making life too easy for us. For example, how many people under the age of 40 know how to can food? Lol... and all I am talking about so far is just simply living and existing on a lesser level than now. That speaks nothing of the political implications or numerous other factors that can influence us. It will be hell to live through.
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Javelin:
I'm over 60, and I couldn't can food if my life depended on it. Literally.
I too heard stories like those your great-grandmother told; however, it was from my parents that I was first introduced to the Great Depression.
As a child, my dad migrated with his family from Oklahoma during the worst of the Dust Bowl days. Many nights dinner depended on dad or one of his brothers shooting a rabbit big enough for everyone to share.
This time..I don't think there will be enough rabbits to go around.