madness, total fiscal madness

[fishpoopoo]

it's hard to get really outraged about something that most people don't understand.

but all americans should pay attention to what the federal reserve is doing right now to completely destroy the value of the u.s. dollar.

1) much of our current economic problems can be rightly blamed on the creation of too much paper money. loose money creates asset bubbles. the dot-com stock bubble at the turn of the century and the recent real estate bubble were created by too much money chasing questionable investments. the spike in commodity prices (oil, gasoline, food!) can also be partly attributable to the same phenomenon. FIFTY DOLLAR PLUGS HAPPENS WHEN THERE IS TOO MUCH MONEY FLOATING AROUND.

2) when the economy slows (as it does in cycles), the fed often cuts interest rates (that is, create more paper money) to stimulate the economy.

3) looks like we're headed into a recession or recession-like phase next year. the housing market is already in a deep depression.

4) the fed signaled in the last few days that it will cut interest rates (creat more money) to appease the stock market. spineless tools!

are you getting this? rampant money creation helped get us into the mess we're in right now. bernanke wants to "fix" it ... with even more money creation. it's like throwing gasoline on a fire.

no wonder many smart people are moving their butts and their money out of the country right now. i'm not kidding. this is going to blow up at some point.

the stock market will likely rally through the end of the year.

frankly, i think i'm going to use this opportunity to sell everything and park it into gold (again) when spot gold corrects to $750/oz.

Bernanke Says Fed to Judge Market `Turbulence' Impact (Update2)

By Craig Torres and Vivien Lou Chen


Nov. 30 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said `renewed turbulence'' in markets may have shifted the risks between growth and inflation, cementing speculation the central bank will lower interest rates as soon as next month.

``Uncertainty surrounding the outlook'' is ``even greater than usual,'' requiring the Fed to be ``exceptionally alert and flexible,'' Bernanke said in a speech in Charlotte, North Carolina, late yesterday. Officials must ``judge whether the outlook for the economy or the balance of risks has shifted materially.''

Bernanke joined Vice Chairman Donald Kohn in acknowledging the threat to spending from reduced access to credit, a shift from their October assessment that growth and inflation risks were ``roughly'' balanced. Kohn's remarks stoked investors' expectations for the Fed to lower interest rates again Dec. 11. Global stocks rose today after Bernanke's remarks.

``Bernanke walked through the door that Kohn opened and it increasingly appears that the Fed is on track for another ease in December,'' said Michael Feroli, an economist at JPMorgan Chase & Co. in New York who used to work at the Fed.

The MSCI World Index of global stocks rose 0.3 percent to 1606.63 as of 9:45 a.m. in London, trimming the biggest monthly decline in almost five years. The index has dropped 4.5 percent since the start of November. Futures on the Standard & Poor's 500 Index advanced 0.5 percent.

Mounting Losses

Borrowing costs on loans between banks have climbed this month as mounting losses on assets linked to subprime mortgages spurred lenders to conserve cash. Treasuries have climbed, sending three-month bill yields below 3 percent for the first time since August, as investors flocked to the relative safety of U.S. government debt.

The outlook has been ``importantly affected over the past month by renewed turbulence in financial markets,'' Bernanke said in remarks at an annual meeting of the Charlotte Chamber of Commerce. The Fed is paying ``particular attention to the question of how strains in financial markets might affect the broader economy.''

Federal funds futures show traders see a 100 percent chance of a reduction in the benchmark rate next month, with a 30 percent probability of a half-point move. After the 0.75 percentage point of cuts in the past two meetings, that would be the deepest reduction in borrowing costs during a three-month period since the last recession in 2001.

Rally in Stocks

Economic reports yesterday indicated growth may falter after accelerating in the third quarter. New-home prices dropped the most since 1970 and jobless claims rose to a nine-month high. Government figures Nov. 28 showed durable-goods orders fell for a third month, the longest slump in 3 1/2 years.

``The combination of higher gas prices, the weak housing market, tighter credit conditions, and declines in stock prices seem likely to create some headwinds for the consumer in the months ahead,'' said Bernanke.

Economic data have been ``mixed'' since last month's FOMC meeting, the Fed chairman said. He noted that officials will have further reports, including November payroll figures, when they gather Dec. 11. ``Continued good performance by the labor market is important for maintaining the economic expansion.''

Optimism the Fed will act to sustain the economic expansion, now entering its seventh year, has spurred stocks. The Standard & Poor's 500 Index rose 4.4 percent in the past three days, to 1,469.72 at yesterday's close in New York.

Lower Forecasts

President George W. Bush's economic advisers have followed Fed officials' move last week to lower their outlook for growth next year. Fed policy makers now expect U.S. gross domestic product to increase 1.8 percent to 2.5 percent in 2008, ``notably below'' the 2.5 percent to 2.75 percent they predicted in July.

Bernanke said inflation has remained ``moderate.'' Still, increases in the prices of food, imported goods and energy products may raise inflation and inflation expectations, he said.

``The effectiveness of monetary policy depends critically on maintaining the public's confidence that inflation will be well- controlled,'' Bernanke said. ``We are accordingly monitoring inflation developments closely.''

In financial markets, risk spreads have increased since the Federal Open Market Committee met Oct. 30-31, an index tracked by Citigroup Global Markets Inc shows. The measure rose to a high of 0.99 on Nov. 22 from 0.77 on Nov. 1, with 1 being the highest level of risk aversion. It was at 0.94 yesterday.

Citigroup Inc., Merrill Lynch & Co., Barclays Plc and others among the world's biggest banks have written down more than $50 billion on credit-related losses.

``We are in the midst of a credit squeeze, and for the Fed to ignore that, they'd lose some credibility with investors,'' said Gary Schlossberg, senior economist at Wells Fargo Capital Management in San Francisco, which oversees $200 billion.

To contact the reporter on this story: Craig Torres in Washington at 1220 or ctorres3@bloomberg.net ; or David Mildenberg in Charlotte, North Carolina at dmildenberg@bloomberg.net .

Last Updated: November 30, 2007 05:19 EST

[Slipknot]

they are heading us in the wrong direction it seems for sure
It's a shame Ross Perot had thin skin back then when the country still had a chance

Ben, gold? why buy now?

[eastendlu]

Originally Posted by Slipknot

they are heading us in the wrong direction it seems for sure
It's a shame Ross Perot had thin skin back then when the country still had a chance

Ben, gold? why buy now?

The rule of gold "The one with all the gold makes all the rules"

[fishpoopoo]

bruce,

the supply of gold is hard to increase. it has to be mined and is of limited quantity.

gold sticks around. gold doesn't corrode. it doesn't evaporate at room temperature or otherwise degrade. gold endures.

while the supply of funny paper money is theoretically endless.

buy gold when it settles back down to $750/oz (spot), which implies StreetTrack Gold Shares ETF (ticker: GLD) price of $75 or lower.

it's difficult to come up with a formula to value gold.

but, at the end of the day ..

more funny paper money means that gold goes UP.

the pundits are saying gold could hit $2,000/oz if this keeps up.

[Backbeach Jake]

Originally Posted by fishpoopoo

bruce,

the supply of gold is hard to increase. it has to be mined and is of limited quantity.

gold sticks around. gold doesn't corrode. it doesn't evaporate at room temperature or otherwise degrade. gold endures.

while the supply of funny paper money is theoretically endless.

buy gold when it settles back down to $750/oz (spot), which implies StreetTrack Gold Shares ETF (ticker: GLD) price of $75 or lower.

it's difficult to come up with a formula to value gold.

but, at the end of the day ..

more funny paper money means that gold goes UP.

the pundits are saying gold could hit $2,000/oz if this keeps up.

Which is pretty close to where it should be now. Gold IMHO has been undervalued since they deregulated at 34 bucks.

[Swimmer]

Thier was a show on the other day, might have been "how its made", that went from the mine to the ingot. It was facinating.