Archive - Oct 2013 - Blog entry

... Traffic Jams, Used Car Salesmen, Genghis Khan, Communism, North Korea, BP during the Gulf Oil Spill, Nixon During Watergate or King George During the American Revolution

Remember, every single Treasury and T-bill out there is utilized as collateral for millions of Dollars worth of trades. So if the big financial institutions begin to refuse to accept some US debt as collateral based on the perceived risk of a deb ceiling debacle there could quickly be capital call in the market similar to what happened when Lehman failed.

So are you going to be among the few, the proud, the surprised Sell Side analysts?

Or did I mean Plumper Woman?

It is worth remembering that Goldman, to much fanfare and media attention, “told clients” in November 2007, to sell gold. On November 29, 2007, Goldman recommended that investors sell gold in 2008 and it named the strategy as one of its ‘Top 10 Tips’ for the year.

Resolution of current fiscal "crisis" unlikely to matter to markets.

Ready! Set! [bank]Run!

China's predominant foreign policy has been cutting business deals, while the US policy has been one of military deployment followed by pressuring trade deals. Reception to the latter, not surprisingly, is increasingly being viewed as one-sided and not a win-win.

Pay no attention to that Keynesian moron behind the curtain!

Overview of Abenomics. 

Isn’t it wonderful how the US believes (whether that be the citizens or the politicians) that the state will never default on its debt repayments?

A year or two from now the insurance companies will be getting big increases. Whatever you think of Obamacare today, wait two years, you will come to hate it.

The appalling fiscal and monetary situation in the U.S. will lead to further dollar weakness in the coming  months. This weakness will be most manifest versus gold as other fiat currencies have their own risks. 

The euro system has many peculiarities as we have shown extensively on our blog. To a large extent the system can be analyzed as a “tragedy of the commons” problem. As is well known in economics, when a shared resource can be exploited in full by individuals with no exclusive property right, the resource will be overexploited.

The euro is a shared resource. Every national central bank can exploit it to the fullest while the cost will be shared by every member state.

The incentive in such a system is obviously rigged to its disfavor and it will eventually break down.

The Bible and Nobel Prize Winning Economists Agree: “When The Sentence For A Crime Is Not Quickly Carried Out, People’s Hearts Are Filled With Schemes To Do Wrong”