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Marc Faber And Peter Schiff Take On The Bond Bulls; The Rosenberg-Faber Gentlemen's Bet
The debate over whether bonds are in a bubble is very much the topic du jour, and while some deflationists like David Rosenberg believe that not only is there no bubble, but the 10 year will soon slide inside of its all time tights at under 2.1%, others believe the 30 years bull run in Treasuries is the dumbest thing since the dot com bubble, and that if anyone is hoping to make money, it should be on the countertrend. Two such Treasury bears are Marc Faber and Peter Schiff, both of whom were on CNBC tonight, and both were dissecting what in their view is the fallacy of the long-UST trade. As for the Faber-Schiff view, no surprise: Peter encapsulates it best: "the bond market is the mother of all bubbles right now, and when it bursts the losses will dwarf the combined losses of the stock market bubble and the real estate bubble. There is no way for the government to pay this money back." And echoing a topic Zero Hedge has been warning on extensively, namely the maturity of trillions in short-term debt that rolls every month, Schiff notes: "I am afraid is that when people realize we can't pay this money back, we aren't going to be able to roll over all this short-term debt. And so it's not just paying the interest, we are going to have to retire the principal." Peter Schiff is correct that inflating our way out of this debt bubble is a lose-lose proposition. Schiff also notes the stupidity of crowds, by highlighting that 10 years ago everyone was chasing risk, by piling into stock market funds, followed by everyone knows what. The outcome for bond investors is clear: "this decade is going to be the worst decade for bonds in US history. Bond holders are going to get wiped out. Either the government is going to default, or it is going to inflate, but either way the people holding the bonds, are holding the bag."
Faber then joins in: "there isn't much upside in treasuries unless it is for the short term. When I look ten years ahead I don't want to have my money in USTs." His main concern is that due to high budget deficits, there is a good chance that these will go even higher, and as a result the interest payments on government debt will become unbearable. As for the foreign bid, Faber also points out their prior folly: "In 1999/2000 foreigners also wanted to buy the NASDAQ and what happened afterwards is a major collapse. I would not look at foreign buying as a very intelligent leading indicator." In other words Faber just called the Chinese, UK and Japanese permabid in UST moronic. Faber is also not a big fan of a 30 year bond market (since 1981). "I would rather buy an asset class that has been in a bear market." Faber would buy farm land, agricultural commodities, and that gold belongs in a portfolio.
Probably the best argument of the debate is Schiff's observation that the government is not expanding the economy with the newly printed money: no money is being invested in productive capacity, it is not expanding the tax base, and as a result the economy is getting weaker.
Faber, is laconic, in saying that the UST market bottomed out in 1981 when yields went over 15% on the 10 Y, and topped in December 2008, at 2.1%, which was "the peak of the bubble."
Lastly, we learn that Faber and Rosenberg have a bet that bonds will not penetrate the tights seen in December 2008. We believe that even if they do, it is irrelevant. The short-term gyrations of the bond market are now merely all the investors winding and unwinding a plethora of wrong curve trades. The end result, as we have long pointed out, whether it be by way of hyperinflation or hyperdeflation is essentially the same. And the world would be a much more coherent place if the deflationists and inflationists realized that their arguments are two sides of the same coin. What is certain is that the Fed, in its central planning attempt to hold core inflation at 2-3% in perpetuity, will fail. How nobody understands this simple truth is beyond us.
And going back to the Faber-Rosenberg bet: who wins if either of them is correct: in both cases nothing good, and frankly everything bad, awaits the US economy on very short notice.
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I am surprised Schiff doesn't get more coverage here. Great to see him again.
Schiff Bitchez
Bond bubble nothing, at least in the short-intermediate term:
http://seekingalpha.com/article/220467-u-s-dollar-and-long-bonds-gotta-o...
Yes, but Ayles neglects to reconcile in his analysis that most of Japans bonds are held internally vs 50% us the USA's held abroad - this increases volatility substantially & with no other model for comps, negates his analysis IMO
One could argue that Japan ONLY has internal savings - the US has the savings of the entire planet.
A bit more diversified......
Schiff is always brilliant. He's just not kewl without a pony tail, so get lets coverage. He really needs a gimmick or something, like a pink shirt or black swan. Any ideas for Peter?
Lets have peter chew gum, blow bubbles while explaining the mess we are in. With a hat, while tap dancing,.... then maybe he can get on american idol...its the only way to inform the public
Any of the Austin Powers ticks would do: Pinky to corner of mouth, or the mwaa-ha-ha-ha sort of chuckle, and of course the classic Powers voice stress pattern when saying "ONE TRILLION DOLLARS"
A fake tan perhaps.
Yes, he is brilliant... which is why he still has his clients in the euro and euro stocks and asian stocks. His clients got CRASHED. PERIOD.
Brilliant... hahahaha. He believes the stupid decoupling lie, oh yes Europe is decoupling and failing into the Med.
Here is another douche bag that thinks all of his clients bought stocks in the highs of 07 and sold in the lows of 08.What about the clients that joined his firm in Dec. of 08 ?
His 09 rebound was better then anyones, ask me. Check the prices of Crecent Point Energy and RedBack mining.
His book was called CRASH PROOF you moron... you got CRASHED... you are a wacko.
The reason your rebound was higher was because the fall was higher for you... are you that big a moron. You are underwater. You don't even know how to read your quarterly statement.
Delusional.
Always, huh?
How's that China call going for him?
(since we're on gigantic bubbles and whatnot)
There's a difference between being brilliant and infallible. Schiff knows what's wrong with the US, but he's blind to the faults of other economies like the EU and China. Also, he doesn't seem to take peak oil into account, which has a global effect.
He has no idea how the global credit system operates and why it is failing. I guess he could be worse... he could have landed his clients in jail like his father did.
Is Pete out of PM ETFs yet?
Nah...the pink shirt won't work; he'd just look like any other dweeb in Fairfield County - I think there's more pink polos there, per capita, than any other place in the world.
Rosenberg is far too unassuming to ever say this, so I'll say it for him.
You shouldn't even be putting him in the same class as these other two.
bonds are a bubble. duh. hedge that shit accordingly.
Hedge it like you're storing dynamite, carefully dispose of it when its old.
one fine day as a youth in Idaho, my friends and I found a wooden box in an old shed. Lo and behold, inside were sticks of dynamite. The least intelligent of us three decided to pluck sticks from the box, break them in half, and throw them...just to see what would happen. Fortunately, this stuff was so old the nitro had seeped out.
Playing with that dynamite was safer than going long equities and long bonds.
I remember the time when I was arround 16 or 17 years old and I discovered the internet. Does anybody remember: "Handbook of a terrorist"?
In those days, you could download that on every peer site.
And it was loaded with formula's to make kick ass explosives.
For about 2 months, me and my friends tried to buy some of the ingredients needed to make such a bomb. We usually tried to order it in a pharmacy. The easy stuff such as sulfor, ammonium nitrate, ... was easy to buy (I bet you won't be able to do so these days :) )
I made a mix, and the first test was in a cola can which we put on the street in the middle of nowhere. We had a small fuse and lit it and made it explode. It made a small crater of about 5 inches, but it was also hot enough to put the asphalt on fire and melt. It was nothing much but it motivated us to pump up production with all the money we had.
We also realized we needed also a better container.
So: We made about 500 pounds of that stuff, we took a oil drum, reinforced it with duct tape till the casing was about 1 inch thick (we had to much free time) and put it in a abandoned office building in a old factory and lit it.
THE BUILDING WAS FLAT! GONE! It was a kick ass explosion you wouldn't believe. One of the coolest things we did as kids. It even made the news! We still have the clippings :)
There is no moral, it's just a good story me and my friends talk about from time to time when we have to many beers :)
Is your last name McVeigh?!
McVeigh couldn't make a workable pipe bomb. OKC bomb was the handiwork of a Iraqi Army cell that collaborated with our two geniuses. A reporter at OKC's NBC News Channel 4 investigated and wrote the book on it. The FBI refuses to refute her conclusions.
Iraqi, eh?
Search for "Andreas Strassmeier" (German national, weapons and tactics trainer at "Elohim City". Fled the country without trouble. CIA asset?) and "Carol Howe" (ATF informant inside wacko "Identity Christian" group, whose warnings were ignored).
More likely a patsy (McVeigh) backed by agents of governments, probably not Iraq's, certainly ours -- or factions within governments. Ever see "The Long Kiss Goodnight"?
- m2p
Interesting confession that was just logged by how many agencies? You should receive some recruitment solicitations at the very least. I'd say go with one because as a chess player protecting your personal secrets in a world-wide open forum you have much to learn.
Yes. Sometimes we must fight the urge to share. A lot of us have bragged about owning a little gold and silver metal. I wonder if even that is not too smart. Can't a decent hacker get past these avatar names? Forget the Obama Blue Shirts coming around with their purchase lists from dealers. Some bad ass criminals may appear in your living room one day and convince you to go under the freeway bridge and dig it up.
Uh, I sold all mine already. Also gave away all my guns 'n' stuff.
(Looks nervously over shoulder.)
Everybody has some experience with explosives or something that can be explosives. It's as common as can be.
I had a girlfriend who had friends who did stunts. They did the exploding coffin trick which is filling a painted styrophome coffin up with 3 or 4 huge balloons full of hydrogen. Lighting them and it rips the styrofoam to bits but mimics a harsher explosion using stronger materials. The person inside is completely unprotected but the stryofoam can only generate a few psi before it starts flying apart. All the protection you need is a motorcycle helmet jeans socks, shoes, maybe a leather jacket. But they kept tryign to get her to do the coffin in a bikini.
They got the bright idea of putting plastic resealable freezer bags of gasoline taped to the top of the coffin to make more fire and a bigger explosion. I tried to explain to them that plastics melt when you put gasoline in them and it would either disolve and get on their head or hair and act like a gooey napalm or it would simply blow to droplets and cause a fire hazard.
They did the trick but they put 2 of the balloons in the head of the coffin where they taped the plasic bag of gas. It melted like I said but the gasoline popped the balloons and they were the really thick really heavy rubber kind which I DID NOT EXPECT and with only one balloon at the feet of the coffin it barely made enough pressure to half hearted fall apart. It was a fairly bad failure and they almost didnt get paid for the stunt. Which was bad because after their last stunt broke one of the guys legs he got hooked on oxycontin and "fell down the stairs" and rebroke it again to get more prescription. But all healed now they needed money to buy it illegally.
Which is why I said I hate druggies. I hate drug dealers. All my childhood friends grew up to be pot heads and annoyed the fuck out of me.
So really fuck your agencies and fuck anyone who would try recruit me. I don't click on shit on my email unless I know before clicking exactly who it is and exactly what it's about. And you can hardly call this explosives story reaching out in any way. It's just a dude telling a story about explosives. I blew the garage door off the house when I was 12 years old. Anyone who thinks that's me saying hey look look I can blow up garages!!! Just doesn't get it.
The people in charge have an all or nothing reality. They make all or nothing games. They try desperately to make the game so that no other reality can co-exist than the all or nothing reality where they win because they cheat. I don't think this is going to be fixed by blowing a bunch of things up and perpetuating the all or nothing reality. I think it will be fixed by the big fat nothing. By quitting so fucking hard it's like a billion emo's whining about something all at once causing a depression field so vast nothing can escape it. Where hope dies screaming in a relentless sobbing. And it turns out there is no prize in the end anyway.
Yeah, great, GS will sell puts to C, and C will sell puts to GS. Problem solved.
You're assuming the Fed will quit monetizing. I wouldn't gamble on that one. Unless you're hedging with gold, it's not worth the risk.
best way to short treasurys...
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=14583:bullion-as-an-alternative-to-shorting-part-ii&catid=48:gold-commentary&Itemid=131
physical gold and silver.
The Government is already so deep into the hole, that it may never climb out. Couple that with the complete inability of Colombian University ivy leagers who are running the Fed to even comprehend the full scope and nature of the problem in the first place.
Im telling you now, that the Giant Star of Ponzi finance is rapidly collapsing and will soon exceed the Chandrasekhar limit, somewhat sooner than anticipated here.
I don't think anyone on the Fed board went to Columbia...Yale, Harvard, Princeton yes.
Youre right, I stand corrected. I had this article on my mind:
http://www.zerohedge.com/article/watch-former-fed-governor-fred-napoleon...
I play it from time to time just to get a laugh!
ps: no offense to Columbian university grads :-)
My wonderful step daughter has a masters in journalism from Columbia. However, they failed to teach her the difference between assumptions and facts. Gotta admit, they have pretty buildings.
Indeed. The 'appearance' of intelligence is more important/valuable than the actually commodity. The real thing is kinda being used as a carry trade right now..
Not sure if you live in the USA. But, if you do and you pay income and payroll taxes, the Government is not in a hole, you are.
This idea of separate national and personal debt is a lie in terms of who will pay. The government is not a source of revenue, it is a cost center. Much worse than this, it is a very inefficient conduit for growth. So much so, a fundemental reduction in government will probably increase growth through more efficient use of capital.
Here is a funny example of the success in the idea of Federal generated revenue.
http://www.youtube.com/watch?v=GHF5HfNldpw&feature=related
The debts are backed by the power to tax. The government is indebted on your behalf. The obligations are that of the people. The government will climb out, it is just a matter of how much you will pay. We all will pay. Through lost benefits, devalue of savings, destruction of growth, higher taxes, higher unemployment and debasement of the currency.
Mark Beck
Mark, you are profoundly correct.
My ass is getting busted under these taxes with more to come. Fees have increased for water and power, as the municipalities seek more revenue. Im looking to move to a place away from the center of town, in case things should go pear shaped.
Two items that I found interesting this week regarding increased fees and taxes;
1: The town of Mission Kansas (a suburb of Kansas City) apparently passed a local tax on anyplace that you can park a car within city limits. Including your own personal driveway ($72 per year tax for a driveway). Also taxes on businesses that have any offstreet parking ($12k for a fast food restaurant, $65k for the local Target store). Link following:
http://americanmajority.org/grassroots-organizing/how-to-prolong-a-reces...
2: This morning on our local news (NYC) they announced that the MTA are increasing montly MetroCard fees from $85 to $130 beginning in January I believe. (sorry no link for that one)
these are both examples of how crazy things are getting on the municipal level. Taxing homeowners for having a driveway!? And, the people who buy monthly Metrocards are among those who can least afford a 53% increase in their commuting costs. We are so screwed.
Holy crap. I have 2 home driveways...
Everyone will pay and no one will pay finally. Meaning, when anarchy rises, we will all pay with suffering and destruction, but no one will have to pay anymore bills.
Didnt Schiff's poor clients lose their shirts shorting the dollar or some other such nonsense in the midst of a credit crisis? lol.
No actually, Schiff shorted housing and bought gold and "other such nonsense".
lol. He better have. He'd be flat broke otherwise, after calling for the dollar to go to zero and pumping commodities like oil at $150.
Gold bugs provide pure comedy for the rest of us. lol.
Gold been working for me: since 2000, gold +325%, nasdaq -50%. Nuff said.
lol. Love the not quite so arbitrary time period. What are the returns of gold since 1990? Since 1980? lol. While goldbugs were wasting an entire GENERATION sitting on the useless bars and coins, the average dumbass mom and pop investors were raking in 1000% returns on indexes, and multiples of that on individual names like Apple. lol.
Although i have never bought or shorted gold, i understand its use as a hedge and a trading/investment vehicle. But the folks that act like gold is their soulmate, that are emotionally WEDDED to it, always make me laugh.
If the shi* really hits the fan and we end up in a hyperinflationary death spiral or Mad Max, do you think anyone is going to give two tin shi*s about gold??? You think i'm going to trade you my potable water, food, fuel, medicine or ammo for a worthless trinket??? Hells no. lol. HARD ASSETS are going to be KINGS.
Pot -- Kettle? - 1970, 1960, 1950, 1940?
Er, you accuse Caveat Emptor of cherry picking, and then you do it yourself. For every investor in Apple, there was one in eToys, boo.com, JDS Uniphase, Inktomi, Rambus, or Qualcomm at its peak. The stock market is flat at best over the past 10 years, while Gold is up. if the timeline is 1990 to 2000, the picture looks different.
Anyway, yes, in the event we hit a hyperinflationary depression, people WILL care about Gold. They have historically. Argentina, 1989, an ounce of gold would provide for your family for a month. And why does hyperinflation always = "Mad Max"? It didn't cause "Mad Max" in Argentina, Hungary, Germany, Austria, Yugoslavia, ...
In fact, there were high inflation rates throughout South America during the 70'es. Regardless of that, still no sign of "Mad Max".
When they showed mad max eating dog food it was really refried beans. He was just too lazy to eat burritos.
The only time period that really matters is when you bought it, to the present.
Gold has been considered to be money for centuries, and it will continue to do so for centuries more. Of course piling everything into gold is stupid, but as a family heirloom or super-long term asset nothing beats gold.
The idea that the world will collapse into some Mad-Max like apocalyptic future because of hyperinflation is absurd. The only way that is going to happen is through a nuclear holocaust (not an entirely unlikely event mind-you) however in that case, no one will give a tin shi* about anything because everyone will be glowing in the dark.
Maybe not hyperinflation, but I wouldn't bet against a global ecological crash, that looks like Mad-Max.
@clinton
HARD ASSETS
Funny
Looks like you are writing in English but thinking in Chinese!!!!!!!
lol. Nothing "harder" than ammo baby.
Okay, Bubba. We will some how get by without your stuff. Bummer.
Gold has worked for me too, thank you.
Went all in the day the market reopened after 9/11.
I have one of my portfolios with him, it has done quite well. Real returns > peanut gallery
Is it funny that you lost money in the dollar,the nasdaq, the S&P and the DOW over the last ten years when gold was going up the whole time ?
is that really funny to you ?
No - Schiff Lost his ass.
http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wron...
Schiff advised people in his book to borrow money against their houses and invest in foreign equities.
Now how amazingly stupid is that.
Here is a guy that calls a housing bubble and tells people to lever up on that house! It is exactly where banks went wrong.
This thesis was the US dollar would plunge, we would have hyperinflation (when has housing prioces ever in history collapsed in hyperinflation?) and the safe play was to buy foreign equities.
The only thing he got right was gold (but even miners got hammered).
Mish
Schiff didn't lose anything because he didn't sell. What he got was a firesale and in 2009 he mopped the floor with his detractors.
http://money.cnn.com/2009/01/20/magazines/fortune/okeefe_schiff_sidebar....
That was published in January of 2009. ROI for 2009 on an equal weighting of those 5 stocks was 412%, not counting the double digit dividends denominated in currencies that appreciated considerably against the USD. How'd your portfolio do last year?
And as far as leveraging your house, you left out the most important part of the strategy - don't pay the money back.
http://www.signonsandiego.com/uniontrib/20081010/news_lz1e10schiff.html
Souverainiste
That is about the most idiotic thing I have ever heard. Next, the people that bought Nasdaq5000 didn't lose money because they haven't sold yet..... hahah
You are delusional, you are underwater further using his advice than if you just picked the major market averages.
His clients got CRASHED, end of story. Oh I guess you think the DOW 36,000 crowd is right as well.... hahahaha. The only thing Schiff was right about was calling the housing top... which he made ZERO 000000000 money on because he didn't short it.
There's a reason the chump wants to get into politics, the same one as the other toadies in congress, he's not much good at anything else with redeeming social value.
CRUSHED not CRASHED
His next book will be CRUSHED PROOF. :)
Unlike the Nasdaq, the stocks his clients held onto bounced back, and continue to produce dividends.
This is why people think you are stupid. You fixate on a man that you are sexually attracted to, and that confuses you, so you channel your feelings into non-reasoning hatred. You only look at those sample sets of data that confirm your initial beliefs.
You should change your name to Confirmation Bias.
Confused... he was down with everything else.... yeah some of his stuff bounced back because everything else had a dead cat bounce... he is still has his clients in the same position. They are underwater, this is a FACt. The euro trade was a loser and the asian trade is a loser.
You are in denial. Wait till you see what happens next, it's going to make you cry... then you will be telling me you haven't lost money because you haven't sold yet like that other wacko.
Cuckos nest, cuckos nest.
He wrote a book called crash proof and he crashed all his clients.
Spitzer
Wrong in his stupid book, he said NOT to short anything. I have personally seen him on TV saying he did not short housing.
He has his clients in Euro, euro stocks, asian stocks, and gold stocks with no exit strategy. His clients were down than the market averages in 2009 from what I have seen.
I know for a FACT that Peter Schiff shorted housing, he didn't talk about it much but I know he did.
Everyone else has already explained how fucking wrong you are and how Schiff walked away with 400% returns in 09/10 so I will not delve into it further
You are wacko, it's in his book dumbass. If he shorted housing, then please tell me how he did it and through what vehicle.
You are delusional wacko, you probably have to look at your quarterly statement upside down to make yourself feel better.
I love it you say it's a FACT but it's in his freaking book you retard.
Yeah he walked away with 400% return... hahaha, his clients were down 60-70%... you are the kind of the idiots. The only way he would be up 400% is if he were doing the opposite of what he is telling his clients to do.
Read page 112-113 of his stupid book CRASH PROOF, "Here’s why I would recommend against doing this." ... in reference to short selling.... hahaha.... he says borrow dollars and buy foreign assets.... hahahaha... like euro and asian companies... hahaha
YOU ARE A WACKO, you are so delusional you pulled one winner out of your losers to show everyone. I have seen his clients statements, they were much worse than the major indexes.
Cuckos nest, cuckos nest.
You heard me.
Yeah we all heard your wacko statements, He CRASHED his clients this my friend is a FACT. You are a wacko or Peter schiff himself trying to rewrite history. Sorry, we all know what he did to his clients.
Yeah it's a FACT he doesn't short, you just make shit up because you are a wacko and you think your negative returns are going to come back.... and the fruit cake has you all set up for round number 2. Oh I am going to enjoy watching fruit cakes like you get crashed again.
Mako I sometimes enjoy your doom and gloom-mongering even if you are one of those survivalist mentalist types but in this instance you are very wrong.
lots of people try hatchet jobs on Schiff using small subsets of data, everybody like you refuses to look at the whole picture.
of course they didn't, because you types dont want to hear that, you just want to believe whatever you want to believe.
don't be so blinkered dude, it doesnt suit you.
Here's the answer to how he shorted subprime mortgages and through what vehicle, from his legendary mortgage bankers speech in 2006.
http://www.youtube.com/watch?v=xNKs8lBnd2U#t=7m34s
"Let me tell you a little bit about the subprime market, which I'm actively involved in shorting right now."
can you let me in on that cattle futures racket there Clinton ?
clinton = junk
If I remember correctly he got zinged on the Asian equity markets thinking that they would not follow the U.S. decline in 2008-2009.
He got his ass handed to him in everything but gold and gold stocks... and even most of the gold stocks peaked out in 2007, juniors mostly peaked out in 2006.
He was long Euro stocks as well as Asian stocks.
How did Robert Prechter do over the same time frame and why didn't Mish use Bob's portfolio for comparison? That's a rhetorical question, Mish didn't have the balls, that's why.
"Little pig, little pig, let me come in!"
"Not by the hair on my chinny-chin-chin!"
"Then I'll huff, and I'll puff, and I'll blow your house in"
Had to laugh, I just today got a letter from my 401K fund announcing that they are very pleased to introduce a new fund. Wouldn't you know it is the Pimco Bond fund, Geez, talk about being late to the party. All the sheeple in my company can pile into Bonds now with there 401K, give me a break.
2 heads are better than one, and with Faber and Schiff together on this one essentially stating the same circumstances of this leading to a bubble, well then, it must be a fakn bubble. I am happy to hear the simple truth with no Bernankee/Geithner coating to go with it. Thanks to ZeroHedge and the simple truth reporting. God Bless you people. You give me what I need to hear and I come back daily to get more of your sugar, cuz I love it. Keep it coming, System Failure...
It's good to see Schiff back to what he does best - rattle the CNBC cage a bit.
Macro bitchez
The USG could easily repay its debt if it really wanted to. I agree our current broken government will not allow that, but to say it is impossible is idiotic. We spend nearly half our budget right now on play-wars and funding an unnecessary defense industry. We have much lower tax rates than during our strongest economic times. We waste tons of money on all sorts of other stupid shit, mostly payola for senators.
Oh thank God, I thought we were fucked.
You're delusional, we're taxed more ways than we ever have been. Most of these methods are deliberately hidden, assumably so people like yourself don't realize you're being taxed. It's amazing how well it works, no wonder the politicians keep getting away with it.
Redpill,
Before you post more drivel about "we're taxed more ways than we ever have been", perhaps you should go study economic and tax history, starting with Tax Rates back in the late 1950's and early 1960's.
The top individual marginal tax rate under President Dwight Eisenhower in the 1950s was 91 percent and under President John Kennedy, it was 76 percent.Not to be picky, but he said "more ways", no just "more". You picked income taxes as your focus, whereas, I think he meant all the hidden ways that we are taxed in the form of "fees" and other mis-labeled ways.
That's like saying we could easily have world peace if we all just stopped fighting.
That sounds like one of those comments on the Guardian's website. "The UK deficit isn't all that bad", and yet, they're the first ones to cry murder when the inevitable cuts happen. "The cuts are too severe, they don't need to be that bad", despite the cuts & tax rises so far only address 25% of the issue.
"easily repay it's debt" - no way. In the UK, that would take cuts in the public sector pension schemes (everyone in the public sector on strike), cuts in university budgets (watch those tuition fees skyrocket), schools closing and pupils per classroom increasing, welfare spending slashed (imagine the uprising of 500,000 welfare dependent chavs), and military spending cut (more unemployment, less control).
If the US pulled out of the Middle East, that sweet, sweet crude we're all so dependent on would be a lot harder to come by.
the u.s. presence in the middle east doesn't really affect the availability of oil, just who owns it.
It certainly stabilises its flow:
- No presence in Iraq - civil war, oil production collapses, supply/demand crosses over, prices skyrocket.
- No presence in Saudi Arabia - kingdom toppled, oil exports will be one of the first targets.
We've settled what you are, now we're just haggling for price.
(where did the civil war in Iraq come from? hint: rhymes with tush)
Who liked to hold the prince's hand like a good little sycophant?
(hint: same answer as the first question)
Sometimes the puppets you own, own you.
Huh? Did I say I agree with what's happening down there? No, I didn't. Stop jumping to conclusions.
Great game!
Oh, right. Things are so stable in the Middle East (and all over the world) because of our blessed presence.
you mean ' what currency you use to pay for it'.
@escapekey
Hahahahaaaa
Total gov debt in UK is 2500 billion pounds[or 2.5 trillion]
They 'plan' to reduce the deficit this year by 14 billion pounds
But.. doesn't that mean that they are still - 150 billion pounds this year with such"severe" cuts
Repay the ddebt, ohhhhohohhohoh thanks for that!!!!!!!
Marc Faber is an ex-pat living in Thailand. I was laid-off and after I sell my house, I will be in Thailand too.
I recall the talk he gives where he essentially says he stayed in Thailand because Pattaya is the "capital of sin". That man must really love Thai whores.
As a young man 30 years ago that may have been the case. I think he might have other tastes as well by this time.
Beyond that he is certainly a voice of reason wrt monetary matters.
Think tiny yellow pencils; "...but the queen's we have would not excite you" - One Night in Bangkok
Probably a step up from our own whores. I hear you can have intelligent conversations with them, for a price.
We have entered the dead cycle:
Deficit spendings>Issue more debts>Need stronger dollars>
Need more 'fly to safety' events>weaker economic>more stimuli>go back to begining.
This time entire world is soaked with Dollars&T-bills, how many dead cycles can you still spin? If we want to get out from this depression, we have to enter this cycle:
Savings and invests in productions and innovations>Pay off debts>Need weaker dollars>Reduced .gov and .mil sizes>stronger economic>dollars getting stronger>Foreign invests come back>go back to begining.
And the...retire > downsize > reduce tax contrib > suck up Medicare > increase govt cost cycle?
'Savings and invests' is a silly starting point in a debt deflation spiral...if they had savings (or jobs), we wouldn't be in this mess would we?
And if we downsize the mil, UE goes up, up, up (our number one makework program).
One key piece of the puzzle that Faber and Schiff ignore is the near global flight from risk. And that's not just deflation risk. It's perceived risks over sovereign stability, it's mistrust of banks, it's rejection of equities, real estate, VCap, PE, hedge funds and derivatives. It's like being born again. But more importantly, large investors need large liquid pools and they just can't get that these days in equities, real estate or other areas that were heavily invested in pre-crisis.
The first one who stops pretending that treasuries are gold profits the most.
Nothing else matters.
Or that bad money can drive out good. By pretending to be cut in on the bad profits which are sucked off instantly with inflation and taxes anyway. How fucking long can you pretend to win when you're getting your ass handed to you.
I think they both wanted to avoid arguing about what investors have been doing because there's always the contrarian card. But, yes, the shift away has already begun.
Empty
I believe he lives in Chiang Mai, Thailand. A nice place.
when they're aren't riots... that's a red shirt stronghold
columbia u here -- grad and undergrad....and these are no peeps of mine.
What's the difference between Bonds and Shares again?
Id start with the similarities... Theyre both paper..
Umm... did no one notice how the 2 skirts have no idea what the hell they're chirping about?! I barely made it through the clip, and only out of respect for Schiff and Farber.
Patong Beach is a nice place as well as the beaches at Rawai, Kamala, Kata, and Karon.
Pattaya is actually turning into a decent place. A couple huge new shopping centres, lots of golf courses, lots of high end condos for sale.
They spent too much time in libraries, may not know real world is not one way street.
What happens to TIPS during hyperinflation? and if some zeroes get trimmed?
The CPI basket is most certainly to be rigged, and the end game of hyperinflation is ultimately default and restructuring.
TIPS is mark-to-market so you have to pay income taxes on the "gains" at year end. Whether you sell or hold makes no difference. What happens is that you lose it all, very quickly under hyperinflation. TIPS is a scam.
Excuse me, capital gains, not income taxes. Nevertheless, you will have to liquidate your TIPS bonds to pay the taxes. By the time you get your check in the mail from your brokerage account, the several million dollars or so in inflated dollars will probably buy you a pizza.
To a first approximation, a 1% change in interest rates for T-bonds is minus 30% change in price. When rates go up 25 bps, the T-bond begins the first of many steps down in price of about 7.5% per step.
Another way to look at it is that after selling short, one doubles their original investment required for margin every raise of 25 bps which historicaly has been once per month for 18 months after rates begin to rise. Who would have thought that the T-bond price would go up with interest rates at zero for almost two years?
Have you ever seen someone put a condom on their head, and blow it up through their nose?
Yes, quite a sight. But he'll only do it when he's drunk. :-)
Howie Mandel
http://www.youtube.com/watch?v=GGmjj8U-rgM
Japanese bonds could be the spark to set off the fire:
When Japan's debt bubble bursts – watch outJapan's course of stimulus and low interest rates will end badly. America must not follow it.
"Consequences for AmericaThe consequences of what is slowly but surely unraveling in Japan is important to US investors, as it will not stay in Japan but will spill into the US and rest of the world.
Along with China, Japan is the one of the largest holders of US government debt, and its demand for our fine paper will decline. Most likely, Japan will start selling Treasuries. And to make things worse, Japan will start competing with the US, not just in cars and electronics, but for buyers of sovereign government debt. Japan will export inflation, inflation will rise globally, and so will interest rates."
http://www.csmonitor.com/Commentary/Opinion/2010/0812/When-Japan-s-debt-...
anybody remember last year when 2 japanese nationals were found to be in possession of some billions of us treasury notes hidden inside a briefcase crossing the border from italy into switzerland. the italians talked of a windfall 20 or 30% in penalties for not declaring.
haven't heard much about it since. within months though, toyotas all over the us were speeding up and they had that very expansive recall.
Bonds are a liquidity trap
http://walshphotography.net/images/large/Lobster_Trap_Tree_DSC_0082_w.jpg
As my favourite bond bubblist, Doug Noland says: "A bubble can inflate past all reasonable bounds & then double."
Whilst I generally agree with Schiff, I wouldn't be calling a top in the government bond market.
After all, what's the collective stupidity of the human race?
Tech stocks were a bubble way before 2000. Smart people were calling them a bubble in 96, 97, 98. And yet it tooks years for them to top out.
Who says bonds have to top out tomorrow? Why can't this mania go on for a couple of years, frustrating the bond bears?
I agree bonds will not be a great investment compared to equities say over the next 20 years. But I am not so sure on the relative performance say for the next 36 months, bonds may well outperform and that's all that matters to a trader.
Peter Schiff has a personal Youtube channel with weekly updates, for everyone's info. :)
Hi, I am afraid that your mindsets are alighned with the idea that debt has to be paid out of some sense of honour, morality or duty. So well indoctrinated are you about this concept that none of you seem to question wether the US is under any real obligation to pay anybody anything.
Like a mafia don, you pay your dues and are under the expectation/illusion that the don will keep up his side of the bargain..and he might if things are going his way. Alas, you forget that your moral compass is not the same as his and he may choose simply not to pay and there is no action you can really take, since he has all the power...which you incidently gave him.
If you take the time to study history, you will witness that it is a litteny of treachery and double crossings and we learn that there is no such thing as an honest government.
Also..
Consider that, assuming that your children feel obligated to pay, if a foreigner buys a 30-50 year bond today, what they are in effect doing is buying into your children's future capacity to earn and therefore capacity to achieve "the american dream". I would argue that they are stealing the very bread from under their lips and weakening the American meme and Americans are standing by and meeckly letting it happen.
Consider also the irony of buying a bond as an american. Unless you have a way of offsetting the tax or evade it, you or your children will invariably be paying for the bond, its interest and the tax administration required to collect the money, how much sense does that make??!
Like shipwrecked mariners, you are drinking your own urine....and as we know, that leads to madness.
+10
I wonder what the Faber-Rosenberg bet is priced in, US treasuries, federal reserve notes, farmland, gold or shotgun cartridges?
David Rosenberg is not the only bond bull. Lacy Hunt at Hoisington has been right as rain on the economy and interest rates. We must remember the old saw that "In the Land of the Blind the one eyed man is king". Show me a liquid currency with better fundamentals than the US dollar, if you can. Bond bubble-ists don't fully appreciate the power of the world wide deflation that is in its early phases. It has not hit China,yet, but it will eventually with world wide consequences.
Hoisington's long treasury fund
(WHOSX) is up 25% YTD. Hoisngton and
Hunt see no reason we will not become
Japan.
Sorry Schiffy there's currently too much total bad debt still existing in the world for there to be hyperinflation in the US anytime soon. Until that situation changes there'll be no hyperinflation and people will continue to seek out bonds and treasuries as a safe haven. Yes the US is a fiscal mess but there's so many other countries such as Japan, Spain, Italy, Greece etc that are in worse shape that it will be at least a decade before the chickens come home to roost on the US and I agree they will eventually.
10 years from now the 10 year may be a very decent investment over the next decade if you hold to maturity. I've read several of Schiff's books and you would not have done well investing with him through the crisis. People comparing the dot com bubble to the treasury bubble have no idea what they are talking about. I prefer tax free munis in the stronger states than treasuries though. Wouldn't buy them now though.
how is that freddie/fanny stock doing for you ?
why is it that when it gets interesting, on CNBC they always say: "...well, we're gonna leave it there?" ????? why????
That's easy. Because they are the furthest thing from "Best in Business News Worldwide" they claim to be. They suck, and over time, suck worse. They are now we-writing the "How to suck" book.
Nothing but paid liar's for the corporate pimps they work for. Pathetic, yet people listen to them. Shut them off, or at least the sound. They are good for nothing but breaking news (and they don't do that very good either) and at times a pissed off Santelli, who they have muffled most of the time.
And guess what, your trading will also benefit.
They have to move on since they have calculated the length of time it takes the ADHD to kick in.
Schiff - "If I knew when the bond bubble would bust I would be on a yacht in the Caribbean". Yeah right, so all those that played the curve steepener have been crushed and pulverised, and bankrupted. So picking the top of the bond bubble is dangerous to health and may result in fiscal death.
Buy wheat.
I'm surprised Faber said that his bet was with Rosie...I e-mailed Rosie a couple of months ago and he confirmed that Faber's bet was with Gary Shilling, which was the UST long bond rate hitting 3% at the recent get together with a wealthy family in New Hampshire.
longbets.org
ZeroHedge. Why not put a bet out there and see if Goldman et. al take you up on it?
The government will print, which may not inflate if 600 trillion dollars worth of derivatives are being deleveraged at the same time.
Faber then joins in: "there isn't much upside in treasuries unless it is for the short term. When I look ten years ahead I don't want to have my money in USTs."
Yep. However, a near term horizion of 2-3 years should work nicely.
Some of Schiff's clients lost their shirts in 2009 because of stupid bets against the dollar. The guy is a fraud. Mish kicks this guy'S ass.
no Mish got killed in 09 while Peter Schiff was loading up on cheap stocks in 08.