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Tyler Durden - Founder
Marla Singer - Foil
Travis - Author
Cornelius - Author
Sacrilege - Senior Researcher
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on Thu, 11/19/2009 - 09:17
#135657
gold, CAD, AUD, NOK,silver, oil ...
on Thu, 11/19/2009 - 09:37
#135668
Well said.
Tangible is better, but any hard assets will do.
on Thu, 11/19/2009 - 09:38
#135669
CB: Why?
on Thu, 11/19/2009 - 09:59
#135691
Why not?
on Thu, 11/19/2009 - 10:19
#135705
Because you want to own "real stuff" and the currencies of the countries that produce and own reserves of the "real stuff".
When all the paper begins to collapse (after all, owning currency paper is faith in every sense of the word) people will want to own things they can hold in their hand and which retain their value not in any currency but in their need and use in the world.
I don't care how many pieces of green paper I need to purchase a barrel of oil if I already own the barrel of oil. That problem is no longer mine but someone else to deal with. This is also why real estate that is owned out right is good because I own the land and improvements regardless of the declining value of the paper needed to buy or sell it.
Back to barter at it's simplest forms. That's how paper currency began, to make barter easier and more convertible. We lost our way decades ago and with the help of financial engineering, we've been able to hold off a collapse longer than most expected. But it will come eventually. Own real stuff.
on Thu, 11/19/2009 - 10:48
#135748
Yes, but ultimately holding the currencies from those producing countries is predicated on their ability to be fiscally prudent. If you have actions like Obama is pushing in any of those sovereigns, you'll have debasement like USD (because debt will be incurred, probabilistically leading to QE or some form of issuance to deal- classic Keynesian).
I don't like the idea of Govt Bonds in the early days - maybe later when we have a better idea of who will/will not default. Then, as Trading Places so eloquently pegged it, you can get 15-20% on your money and retire on a beach somewhere. Bonds are soooo not the investment yet, that's unless you like buying into a bubble.
on Thu, 11/19/2009 - 11:26
#135806
I agree that a producing country's currency is dependent of the management of said country. But, the value of any one currency is based upon it's relative value compared to other currencies. We can't know anything for certain at this point so looking at the way the cards are showing on the table now, the higher odds go to producing country currency appreciation and stability.
on Thu, 11/19/2009 - 11:32
#135819
Thank you for keeping the short and long term play in mind, hence the reason I say ultimately. I'm all about they're much better odds on appreciation and at least we know what to look for when those nations start resembling the US, Japan, Banana Republics, etc.
on Thu, 11/19/2009 - 16:17
#136310
Agreed. I suspect there will be some "resource" wars down the line in some surprising directions.
Not let's see, how can we get pissed off at Australia? :>)
on Thu, 11/19/2009 - 10:53
#135762
100%
real things matter...fictions like debt and paper do not.
if you erased all the math concepts like debt and compound interest, who makes and has the real things?
money is supposed to be backstopped by something real; in the case of fiat and debtmoney, it was backstopped by THE FUTURE. this is the most important concept people need to grasp. The interest component of lending represents a claim on real things that the future holds above and beyond the things of the present.
Fiat debtmoney worked so long as the future appeared to hold MORE things than the present, iow, so long as growth could be sustained. With the peak in energy supply and continued decline of EROI, it's become clear that the future may not hold more things in it that can satisfy the NPV of the interest claims made by the existence of debtmoney. To put simply, growth has reached an epoch.
Thus, the synthetic economy, intended to fudge GDP and present the illusion of growth. Money was making money in the FIRE economy, the interest was satisfied by more debt, but not more real things. This is always why debt-to-GDP and not overall debt was what mattered, because the issue was whether you could grow production of things to satisfy the future interest claims levied by today's debt. Lending is a growth mandate.
The jig is up now thought, so expect confidence in all things paper to begin to wane and eventually collapse. This is INEVITABLY what happens in fractional reserve and 0 reserve kiting schemes. It's happened dozens of times, hundreds, throughout history.
We must return to Real Bills Doctrine; this is the only way. That system was conceptualized to represent real production of real things and facilitate commercial paper. But it made bankers no massive profits, so they have always tried to kill it in favor of debtponzis.
Bankers WANT to use their capital to acquire all of your shit; it's as simple as that.
on Thu, 11/19/2009 - 12:17
#135869
The only problem with RE is...
It's NOT PORTABLE.
...Sorry!
on Thu, 11/19/2009 - 16:19
#136314
Good point.
I was thinking more along the lines of real estate already held rather than dumping money into it now. But you're very correct, RE is planted by mother nature where it is and if "things" happen, you could soon be relocated without your RE.
on Thu, 11/19/2009 - 20:10
#136705
Wondering if anyone has any thoughts on this. Looks like someone's betting big on jan2011.
http://pragcap.com/traders-bet-on-a-60-rise-in-silver
on Thu, 11/19/2009 - 20:55
#136776
I expect Silver to rise at a greater percent or multiple than Gold for various reasons. I own a lot of physical Silver.
on Thu, 11/19/2009 - 10:21
#135706
Haven't seen you around for a few days CB. Hope all is well with you.
on Thu, 11/19/2009 - 10:36
#135725
Me too. CB's acerbic wit is sorely needed at times.
on Thu, 11/19/2009 - 11:29
#135817
4Gs first, then speculative investments afterwards. If you aren't squared away on the front end, it won't matter one bit how much paper wealth you have on the back end if the system actually collapses.
Look at Richard Rainwater, billionaire, for an example. Remote farm, gardens, weapons, the works and then he focuses on his investments. Rainwater knows that the entire system can blow up and what's a dollar good for then?
If you have enough cash to be investing in this casino, then you have enough cash to do the front end preps properly too. Failure to do those preps means you are really betting the Fed and Bernanke won't manage to totally crater the economy.
Are you really feeling that lucky? Do you really believe Ben is that good?
on Fri, 11/20/2009 - 03:15
#137062
The thing is, economy is already screwed, only there is no perception of the fact by most people. They prefer not to think about it. Julius Caesar said something like "Nothing easier than making the people believe in something they want to believe."
So a likely scenario is a 'soft landing' into a feudal society, where people will just accept their role without daring to think they could fight for something better. Can't help but to see it already happening: people working from dawn til sunset at my city.
on Thu, 11/19/2009 - 09:19
#135659
You guys are the best!
:-)
on Thu, 11/19/2009 - 09:25
#135660
Government bonds??
on Thu, 11/19/2009 - 09:36
#135665
Governments have to pay higher interest... Spread as you push time-line. Not my choice, but..
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajFHnGFuSkXY&pos=6
on Thu, 11/19/2009 - 09:39
#135670
Same reaction here. What good is a government bond that has a high probability of defaulting. Seems to me that bonds are a faith based investment. I don't have any of that.
on Thu, 11/19/2009 - 09:51
#135685
The idea of selling bonds in this country has gone wacko!! In the old days we used to sell bonds to build factories,,today we sell bonds to buy granite counter tops...Our main export is inflation./ promises to pay nothing.... That'll work :)))))))))
on Thu, 11/19/2009 - 10:46
#135738
Agreed. Very few in the MSM seem willing to discuss what currency and government bonds issued in currency paper denominations really are.
Acts of faith.
The only reason I accept that green well printed piece of paper from you for my units of labor (work) is because I believe (faith, remember?) I can exchange it for the things I need from someone else. Faith in the system and the government is all that supports the currency of that government.
Paper currency is a confidence game in the strictest sense of the word. As long as I have confidence in the system I will accept the coin of the realm. To even question the basis for the system by the MSM would start to destroy the confidence in the system.
What isn't talked about much with regard to Gold is the tremendous amount of labor (machine labor and/or human labor) needed to extract the Gold. That is it's intrinsic value, as a store for the large amount of labor required to extract it. It's scarcity requires a huge investment in the only thing we have to offer each other, our physical and intellectual labor.
That's why Gold has retained it's value for 1000's of years. Gold will always require huge amounts of labor to extract. Paper does not and will not. Gold relies upon the labor, not faith, of others to mine. Paper relies on faith, not labor.
on Thu, 11/19/2009 - 11:06
#135781
You're wrong, the US Federal Reserve note is actually backed by the future tax collections of the work of the US citizenry.
In fact, if our corrupted government leaders would get off their asses, they could simply increase the tax rate substantially on the top 5% of income earners, or, better yet, cap an income level, the US debt would decrease incredibly quickly. But we can't expect that from our fully-owned millionaire congressmen who are 100% beholden to that same wealth class.
We have the ability to get out of this mess, but it would hurt the rich a lot, and that is something even our 'hope'-less Barry seems unwilling to do.
Warren Buffett said something on Charlie Rose last week that was very telling: when the top tax rate was 70%, it didn't stop investment, and it didn't stop profitability. In fact, from his opinion, he never heard any of his clients crying the way they do today if you threaten to go back to a fair tax code.
TAX THE RICH, and save the US Dollar. It really is that simple.
Increase interest rates, increase tax rates HUGE on the top 1-5%, and create government jobs with new stimulus truly aimed at improving the future, and we would have a healing and growing economy. But the propagandized ignoramuses in this Fox-bred nation are too stupid to realize that it really is that simple. But it really is.
on Thu, 11/19/2009 - 12:10
#135861
++++1,0000%!!
on Thu, 11/19/2009 - 12:56
#135934
Soak the rich and using Uncle Warren as your example is LOL funny. Just last week, the Treasury department denied Warren Buffet's attempt to purchase tax liabilities from LICHC of Fannie and Freddie to shield his gains. Hypocrite in the extreme. Wonder why a 70% tax rate did not stop investment? Probably structured their income so that it was not taxed at 70% rate.
I have a better idea. How bout Warren, Soros and the gang cut a personal check to the U.S. Treasury with "debt reduction" on the memo line.
on Thu, 11/19/2009 - 14:19
#136098
I notice you left all the GOP inheritance silverspoons of the list.
Apparently another pseudo-intellectual GOP apologist masquerading as a populist on the zerohedge site, I see.
Why leave any billionaire behind? I wouldn't.
Soak 'em all. Why should that corrupt Walton family be our BS royalty. I piss on 'em. And I hate their stores. They are the largest benefactor of our selling our entire economy to the Chinese. What about that Scaife joke? Or Sensenbrenner? Those pathetic inheritance frat boys couldn't earn a dime on their own, cause their soft-skinned pansies.
Why did you choose to leave them out?
Billionaires be damned, this is an all-out fight to save our entire civil society. There shouldn't be 1 single billionaire in the entire world.
on Thu, 11/19/2009 - 14:58
#136179
http://www.kctalk.com/forums/showthread.php?t=694
"The Board of Curators at the University of Missouri has voted to change the name of the new basketball fieldhouse from the Paige Sports Arena to Mizzou Sports Arena. The name change came up after allegations that the previous namesake, Paige Laurie - an heir to the Wal-Mart fortune - had cheated her way through the University of Southern California. Her parents, Bill and Nancy Laurie, had donated $25-Million to build the new arena but relinquished the naming rights after the scandal came up."
What pathetic rich we've created. I don't think a university of higher education should be beholden to some pathetic rich family. It shouldn't be dependent on some pathetic rich family. It shouldn't waste time and money on some pathetic extracurricular activity that detracts from the purpose of higher education.
That's why a University of Spoiled Children degree doesn't carry much clout. Too many of the graduates didn't even earn their own degrees.
SOAK 'EM ALL!!!!
on Thu, 11/19/2009 - 13:03
#135955
In other words, put the Ponzi scheme into turbo mode. Backed by future taxes indeed.
I'm nowhere near rich, but I think a 70% rate is silly, and if I were up in that stratum and that kind of number came around, I would be packing it in for my own private island somewhere. Warren Buffett is proving himself to be a two-faced populist. Although I suppose with enough government backstopping, any exhorbitant tax rate can be mitigated. (Hint: it's called corporatism.)
Funny how you don't mention slashing the size of government.
Also funny how you don't mention that the Federal Reserve's printing press is what allowed the government to get so big in the first place.
Balancing the budget and raising interest rates are actions that address symptoms, not causes. Re-integrate the economy with real money and market forces, disable moral hazard, and those actions will indeed take place as market and political realities are allowed to set in.
Getting out of this mess is going to hurt everybody, not just the rich.
on Thu, 11/19/2009 - 14:25
#136111
Private Island????
Good God, how dumb a reply can you give. And, uh, who would defend you? What would you use as currency, gold? Which you would defend how? Go, we'll see if any legitimate functioning society will help you.
At this time, I don't believe any will.
PLEASE, PLEASE, PLEASE, YOU STUPID RICH, GET THE HELL OUT NOW. LEAVE AMERICA TODAY!! WE DONT NEED YOU. REPEAT: WE DON'T NEED YOU!!!!!
Go find those stooges that are going to be willing to continue to protect you.
If that is the best argument a GOP apologist can give up here, you guys better realize how desperate you've become. You no longer make any sense at all.
on Thu, 11/19/2009 - 15:54
#136274
So, if you don't need the rich, then you should have no problem with not taxing them. At all. Think about what you say before you hit the CAPS key.
Listen, the problem here is not taxes. The problem is massive government-sponsored distortion of our economy for the past 100 years. Yes, the rich and powerful were instrumental in creating the Federal Reserve and in buying influence in government. You don't get rid of that by taxing the rich, or capping incomes, or any other bizarre artificial economic policy.
You get rid of it by:
And for the record, these are not GOP talking points. I don't know what the GOP platform is, but it's not what I just listed.
I suggest you get your partisan head out of the sand.
on Thu, 11/19/2009 - 17:01
#136379
Damn fb, speak it!...you rock! +10000 :)
on Fri, 11/20/2009 - 18:20
#137945
Faustian Bargain, , Anonymous is just pulling everyone's chain. Do not feed the troll it will go away.
on Fri, 11/20/2009 - 18:33
#137954
lol, already forgotten. Man what kind of crack was I smoking yesterday.
on Sat, 11/21/2009 - 12:11
#138203
The good stuff obviously.
on Sun, 11/22/2009 - 16:29
#138814
No chain pulling at all, just exposing the shallow-minded greedy pseudo-intellectuals that live on the zerohedge site.
It's too bad you have no influence, isn't it? That's why you live writing comments to fellow shallow-minded greedy fools here. If you had any actual power, you'd be more self-serving and damaging than any of the worst Goldman scum.
I can honestly say that I'm very glad Ben Bernanke is where he is, and you and your other pea-brained ilk are nowhere near any real power. As bad a job as he can sometimes do, I see completely how much worse it would be if your kind ever had a hand near any lever.
Your soul is starved.
on Mon, 11/23/2009 - 14:29
#139640
Drama queen? On an emotional roller coaster? Take a deep breath, relax, enjoy some sunshine, and smile.
on Thu, 11/19/2009 - 15:36
#136232
Here here! Fix the real problems instead of piling bandaids on top of bandaids.
on Thu, 11/19/2009 - 13:45
#136056
Taxing the rich won't solve the problems the West is facing, it will only further wreck the economy.
The idea that the rich don't pay enough taxes is silly. The richest 5% already pay 60.6% of all income taxes, how much more do you want them to pay?
http://www.zerohedge.com/article/5-us-taxpayers-account-606-all-tax-reve...
on Thu, 11/19/2009 - 14:13
#136087
Considering that they are getting 95+% of the income, I believe they should be paying, oh, uh, let's say 95+% of the taxes.
Another pseudo-argument from a GOP apologist.
on Thu, 11/19/2009 - 19:02
#136599
First, they are not "getting" xx% of the income. They earn it.
Second, taxes are presumably paid because some service is rendered by the taxing authority. Just because you make a certain income doesn't mean you use more services.
Third, I don't know why I'm bothering to explain this to someone who has made such an inane comment, because the likelihood of you "getting it" with your high school equivalency intellect is slim.
Certainly not apologizing for the GOP. That would take all day.
on Fri, 11/20/2009 - 00:25
#136985
top 5% got 95% of income?? That means thepeople in the top 5% are making a few millions on average. That don't sound right...
on Fri, 11/20/2009 - 00:30
#136988
Top 5% got 95% of the income? That means top5% have income in the millions, on average. That don't sound right to me. I'm in the top 5%. My income is not in the millions. Not even close.
on Thu, 11/19/2009 - 14:23
#136106
Increased investment ideas:
1) Drop the Capital Gains rate to 5%.
2) Have the US Central Government back a new special state infrastructure muni in case of default. These of course would be issued tax free.
Mark Beck
on Thu, 11/19/2009 - 14:41
#136141
1) Yes, let's give everything that isn't yet theirs to the people with investable money.
You have achieved a new level of stupidity from the zerohedge comments section.
Let me guess, you're another top 5% GOP apologist. Too bad that you still are fighting for the losing team.
We'll see who Time proves right.
on Thu, 11/19/2009 - 15:05
#136188
Anonymous. Right now, there is a child in East St. Louis who has two failed kidneys. He's dying, Anonymous. It's not fair that you have two kidneys, and he has none. In the interests of fairness, we'll be dropping by your house this afternoon to grab one or both of yours--as soon as we figure out who you are.
on Thu, 11/19/2009 - 16:17
#136307
And that has to do with capital vs. labor how?
God damn, you parasites are getting dumber by the minutes.
on Thu, 11/19/2009 - 20:56
#136336
"You're wrong, the US Federal Reserve note is actually backed by the future tax collections of the work of the US citizenry."
I agree the FRN and US Gvt Bonds are backed by future revenue/labor as all loans are. But that is still an act of faith because it's a future source of wealth/labor, not a current or past source. The Gvt must maintain credibility with it's citizens and the rest of the world in order to maintain that faith. No one will pay taxes to an illegitimate government (at least they won't pay in PM's or other real assets) and most certainly will not take their paper currency unless they can dump it quickly.
How many times have we seen a country that has lost control of it's currency also lose control of it's ability to collect taxes. Levy all the taxes you want, the problem is collecting. Look to Mexico in the 70's, Russia in the 80's and early 90's, Argentina how many times etc.
But I wasn't talking about real assets and PM being backed by a future income/labor/revenue as much as I was talking about them being a store of past wealth and value. You can't store your future labor, you can only borrow against it's future production. When the currency is out of control, it no longer is an effective store of past or future value.
I do understand you're point of view. But PM and other real assets are essentially a store of labor already expended, not of future labor that might be expended and then collected.
I suspect there will be a tax revolt sometime down the line.
on Fri, 11/20/2009 - 13:01
#137518
Thank you for the respectful reply, CD. I do see your point of view, too.
I am not a fan of 'fiat', but simply stating a fact. The Euro is a joke as far as fiat goes. The ECB has no taxing authority to back it. I also don't see gold as way to maintain the functioning of our over-populated modern world. The desire to go back to gold is a desire to go back to the middle ages, complete with new royalty, city states and overwhelming poverty. Doesn't sound like a step forward in any way. With the latest questions about tungsten bars [see cryptogon.com] and the modern world's ability to create an unbelievable volume of false 'gold', is every transaction supposed to end with an Underdog biting of the coin to verify that it is truly gold? What about larger transactions?
And with our modern world of medical interference, the extension of poverty is a black box that will spit out some of the worst resistant viruses and bacteria the world would ever see. Even the stupid greedy elites would find out their new 'paradise' is fraught with a disease no one could ever stop.
It seems to me that a larger share of government control, especially in a country like the US where the intention is to have significant checks and balances on power to avoid waste and corruption, is necessary in the modern times for a civil and just society.
You do seem to understand much more than the peabrains who champion proven-failed laissez faire capitalism and no taxation on so-called 'earned' money, whatever the hell that's really supposed to mean. [You mean John Paulson, who made billions, 'earned' all that money? Good God, what was productive about it? He 'earned' it by what productivity? What did he produce, oh Paulson-envious stooges? What did he PRODUCE?]
I also can't show any respect to the idiot who can't figure out that the top 5% includes the top 1% who stole much more of the national income than the other 4%, which skews the statistic. Too many of these self-declared 'geniuses' are total idiots. If that fool is in the top 5%, that exposes another fallacy of how the 'smart' get to the top.
Amazing how many brain-dead greedy extremists are attracted to zero hedge.
on Thu, 11/19/2009 - 17:37
#136452
Are you serious? "TAX THE RICH"?
In all CAPS too!!! Wow.
Yeah. That's what we need. More "government jobs". Great freaking idea numbnuts.
Let's just examine your logic:
We need money.
That guy has money.
Let's steal his money by threatening to kill him if he doesn't hand it over.
Problem Solved.
Now, why don't you go grab your clove cigarettes, put on your patchouli oil, don your Che T-shirt, and head on out to the quad to play hackeysack instead of wasting our time with your nonsense. People that actually work for a living are trying to have a conversation.
on Thu, 11/19/2009 - 11:19
#135800
I agree and would be grateful for an explanation from SocGen of how, with rates at all time lows, capital will be preserved in the medium term as rates inevitably increase.
I al sure I was told at school that fixed income stocks/bonds' prices move inversely to rate movements. So you pile into Government debt at a coupon of 2% and then rates go to 4% and your capital halves. Am I right or missing something?
on Thu, 11/19/2009 - 11:46
#135834
How about a Swiss government bond? I hear it's backed by gold.
I am trying to think, think outside the box here as we are all searching for the magic investment for safety. Notice, not looking for profit, but safety. WOW, scary times we are in.
on Thu, 11/19/2009 - 13:04
#135961
You know what else is backed by gold? Gold.
on Thu, 11/19/2009 - 17:42
#136460
Kick-ass.
First chuckle today.
T.Y.
on Thu, 11/19/2009 - 17:02
#136384
There will never be a default of government bonds. We can print as much money as we want to pay the interest. Countries only fail on debt that is in a currency that is their own.
on Thu, 11/19/2009 - 12:01
#135851
I'm with you, Tom.
What. The. Hell.
A PriceWaterhouseCoopers recruiting event for soft, young college grads is more interesting than this - not to mention the sales pitch for .gov bonds. They left out their opinions of the intrinisically corrupt financial system where the ultra-rich get richer with every bailout.
This whole report has nothing new, tries to predict the weather 20 days out, uses small, socially homogenous countries as examples - this is for idiots.
But thanks, Tyler! I did want to see it!
on Thu, 11/19/2009 - 13:09
#135976
I'm less interested in the contents and recommendations of this report, and more in the simple fact that here is a huge financial institution actually pointing to the 'worst-case scenario' as a real possibility/probability, in public.
on Thu, 11/19/2009 - 09:35
#135666
What have these people done with Albert? Haven't seen anything from him in a few weeks.
“Investors effectively get much higher returns in long bonds than in money markets . . . . In EUR too, riding along the yield curve generates unprecedented carry
We would expect Treasuries, and to a lesser extent Gilts, to outperform Bunds (and JGBs) over that period.”
Great. Short-term liabilites and long assets. Great carry till you get carried out.
on Thu, 11/19/2009 - 10:40
#135712
Albert is currently resting at a "facility" in the countryside. I hear he particularly enjoys the fingerpainting classes.
The team that produced this analysis are his clones, left behind at Soc Gen to carry on with the mission until he returns.
on Thu, 11/19/2009 - 09:36
#135667
The graph on page 6 looks exactly like the point that Market Ticker guy is trying to get through everyones thick skulls. Even though above is receipts and denninger is referring to GDP. The arguement is the same.
http://www.youtube.com/watch?v=m1VbGcaVvFM
on Thu, 11/19/2009 - 09:40
#135672
Is that other note by SocGen's Dylan Grice Gold 6K+ knocking around ?
on Thu, 11/19/2009 - 09:49
#135680
"Popular Delusions - A Minskian roadmap to the next gold mania (6p)"
Somehow the title got lopped off when it was posted here. Guess we wouldn't want to rile the bugs.
on Thu, 11/19/2009 - 09:58
#135683
Is that the best SocGen can do on a worst case? My fear is Eastern Europe starting a crisis similar to Asia 1997-98, that would lead to the second leg down. Latvia and Ukraine are the weakest points.
on Thu, 11/19/2009 - 12:24
#135879
+1
on Thu, 11/19/2009 - 09:52
#135686
computer problems with the FAA, many flight delays,
Do not panic "were with the government, were here to help"
on Thu, 11/19/2009 - 10:07
#135697
It was the SocGen strong buy for gold in 2005 that got me into a very nice defensive position from my very vanilla equities stance.
Agricultural commodities eh? I've been thinking about this but was more thinking of buying farmland that they seem to be giving away these days. I'm afraid to get into grain futures and stuff like that as it seems like you really really need to know that sector to play.
Comments from people here in that game?
on Thu, 11/19/2009 - 10:51
#135758
My studies reveal that during the Great Depression I, agricultural farmland was a great investment. Just like gold and oil, they aren't making any more of it, plus you can eat the stuff you grow on it.
I've spent a lifetime buying timberland and oil/gas mineral rights. I have never, and probably will never, sell a single piece of dirt I own. The real problem with land is that it's not portable, which could be a real problem in the future.
I'm almost hoping for a GD II, so that I can load up on more cheap land. I know many people who have gone into debt for recreational land. They bid up the price to unreasonable levels, and will soon be losing their land to foreclosure.
But if you can't grow crops or timber to pay for the land, you're better off looking at the various ETFs related to agriculture.
on Thu, 11/19/2009 - 11:00
#135773
This isn't the GD.
During GD1 we were sitting on top of 90% of the world's greatest oil reserves. That is not the case now.
There is no great growth coming now until a revolutionary new growable energy source is developed.
Literally we need the equivalent of coal to oil or wood to coal, a quantum leap.
You cannot grow your way out of an inability to grow. Farmland is great, but you won't see a big payout in your lifetime.
I am becoming more convinced that GD1 was merely a more minor retracement of the Industrial Revolution which was driven by oil supply growth. That growth has ended, thus this retracement should be of larger and more enduring scope.
I would not be surprised to see every paper currency collapse, bonds, markets, and world war. I don't think holding land against what could end up being a Bolshevist revolution is a good idea. I counsel people to be as agile as possible because this is bigger than GD1. Hopefully, we slide slowly down the peak curve and go quietly into the long goodnight, that the "Grand Supercycle" retracement wave is merely long in duration but not terrifically steep. If it's steep, luck will be your best ally.
on Thu, 11/19/2009 - 11:18
#135799
Agreed, which is why I said the biggest problem with land is it's lack of portability. In a Bolshevic style revolution, property rights will be the first thing lost.
I do know a few people who have mortgaged their properties for this exact reason. With interest rates so low, the interest paid is merely a hedge against the future loss of their property rights.
That way the bank gets left holding a worthless asset, which seems to be their speciality at the moment.
on Thu, 11/19/2009 - 16:17
#136309
viva la revelucion! power to the people!
on Thu, 11/19/2009 - 12:22
#135876
Trav777:
Agreed. I have thought for a long time now that Obama would not be able to get the USA out of this crisis. It's fairly obvious when you compare FDR and BHO starting points:
1929: USA are the industrial powerhouse of the world.
2007: Cheap, badly made "Made in China" products are everywhere.
1929: USA are the creditor nation of the world. Lended money to UK, France during WWI and to Germany as well after WWI was won.
2007: Trillion US$ deficits.
1929: USA are an oil-producing powerhouse.
2007: Saudi Arabia and friends rule the world.
Etc... etc... i could go on, but you get my drift.
on Thu, 11/19/2009 - 21:30
#136822
Yes, the local community/state/feds will take every last dime from you in property taxes. They will bleed you dry, and then when you cannot pay, they will take your property.
Like that scenario, do you?
on Thu, 11/19/2009 - 11:25
#135809
Well if we really are talking a worst-case scenario I would most definitely recommend agriculture.
That is: You, there. In the countryside. Garden, chickens, and a shotgun. Tangible agriculture. Not silos somewhere else. Use the internet to continue trading and making U$D and converting it into precious metals - but get thee to the farm and don't forget to invest in life-sustaining commodities.
Why?
People think comparisons to the Great Depression of the 30's are relevant to our current situation. What a mistake!
Folk in rural areas didn't have luxury, but they had all they needed to sustain life (generally speaking). Urban centers then were not as dense as they are now. Now it's pump food in - pump waste out. Will everything magically stay put together in a major crisis? What about the crack addicts you're standing next to in the breadline? Ya think they're gonna be happy about the situation? Good luck! They might preserve your life for an hour with one of your loved ones. In the city it's going to be 'prison rules'. And that's without the 'help' of Big Brother - think they are going to suddenly turn into the paragons of virtue? And if you live in the suburbs you better have a good bicycle with spare parts - or you're going to be walking. A lot.
Want a glimpse of urban reality in a collapse? Check out the FerFal blog (http://ferfal.blogspot.com/) - Argentina 2001: rolling blackouts, home invasions, food shortages, and bulletproof vests. And that's with the rest of the world chugging away - same thing with the collapse of the USSR - they recovered relatively quickly because global infrastructure was still intact! Here is a website that details why Russia could survive a collapse and Amerika won't - at least not anything resembling its current form (http://www.energybulletin.net/node/23259).
A trustworthy community, consisting of make-do, can-do, damn-the-torpedoes rural or quasi-rural citizens, willing to share losses and gains together, is your only hope. Chaos will not last forever - society will always rebuild - but giving no thought as to how you intend to protect and preserve your life, no matter what, is, well, silly.
What happens when the survivalists are right? Too late!
on Thu, 11/19/2009 - 11:58
#135848
All depressingly true.
Plan for the worst and pray for the best.
on Thu, 11/19/2009 - 17:16
#136408
Waterwings:
I have a 100 acre plot (central Illinois) that has been kept because it has been in the same same family since around 1843. (It had been recently acquired from the Indians by the US government).
The family that farms it is prepared. A few hogs, feeder cattle, garden plot and barter with folks in the local area for services if worse comes to worse.
They didn't enjoy the good times or the 90's nearly as much as most but they aren't worried about the current financial storm. Of course they must be able to pay the support services, electrical, fuel ect. but no problems delevereging.
The auctioneers are doing well also.
on Fri, 11/20/2009 - 12:53
#137503
They lived like the tortoise instead of the hare. Hopefully you can join 'em when the LarrySchumer hits the fan.
So maybe a lot of people aren't paying the taxes on their swaths of territory out in the boonies? I'm not surprised it's moving fast. Buyers should check water rights almost before anything else!
on Thu, 11/19/2009 - 10:26
#135709
Why not just trade all crap paper money for physical gold? Its so much easier.
GOT GOLD SUCKAS!
on Thu, 11/19/2009 - 10:37
#135726
Danton
In 1790 the assignats were the new republic bonds.in 1791
they were forced to be national currency.
on Thu, 11/19/2009 - 10:46
#135744
@Maximilien: Right, Denninger says basically the same thing on that.
@Tyler: link to .pdf points to corrupt file. Please pretty please no more Scribd.
on Thu, 11/19/2009 - 10:47
#135745
Bonds NO GEWD - you know they will DEFAULT.
on Thu, 11/19/2009 - 11:10
#135789
I don't understand why to buy bonds either. Only thing is that it will take a while until default. During that time you could make a few bucks in interest payments, but you'll probably be left chasing the price of gold later.
on Thu, 11/19/2009 - 13:03
#135957
The primary trend remains down and we will take out the March lows.
Long term charts remain bearish.
http://www.zerohedge.com/forum/market-outlook-0
on Thu, 11/19/2009 - 13:40
#136042
ec let me ask two simple questions:
How does inflation infiltrate the economy. For example: I produce a widget but I have to raise my price becuase my supplier raised his price or because food and fuel is more expensive. So the higher up the food chain you go, you find some vilain who raised the price. Why?
Second question: The Total Western economy is basedf on looting Africa and Asia. Is this sustainable without war?
Best regrads to Marla and company
Pro Anti
France
on Thu, 11/19/2009 - 16:05
#136289
One way inflation becomes endemic is due to easy money offered by the banks, who get it from the Fed. The extra cash per capita pumped into the system translates into less of a demand for dollars, which lowers their worth relative to stuff. Say an industry gets a bunch of easy cash for building new factories...well then there's a big demand for factory construction, prices go up due to the demand, and voila. More expensive widgets.
As to the second point...the total western economy is rather based on printing money until they run out of ink. So, no, not sustainable.
on Thu, 11/19/2009 - 16:17
#136305
I'll take a crack at this:
Q1) Supply and Demand. With a geometrically expanding monetary base (as is implied in any fractional reserve system) the amount of dollars chasing goods expands much faster than the supply of said goods and thus prices rise. It doesn't really matter where the money enters the system-just that it has-because the net effect in an economy is to increase demand for all goods which results in prices rising to a new equilibrium.
Q2) I think the more valid question is "is this sustainable period". The ability to print money at whim coupled with the collusion of governments in exporting nations is what allows this continued looting of Africa and Asia. The Western World has been financing (over)consumption with paper money and we just print more when we run low. Even if governments weren't actively trying to prevent their economies from adjusting to the balance of trade they still might not be able to keep up seeing as they're forced to bid on resources like oil that are denominated in dollars and have nominal prices that are continually rising because of inflation.
The only way war could change this situation would be to enforce central planning. "Markets" and "Economies" will cease to exist in everything but name and we'll wind up with something closer to National Socialism. Either way, I'm not really sure war is feasible right now because the ability to finance it hinges on the ability of fiat money to actually buy things. If the writers ZH is right that ability is in the process of disappearing.
**Edit: Faust finished writing before I did. And was more succinct to boot.
on Thu, 11/19/2009 - 16:38
#136335
Anon #135781
You're wrong, the US Federal Reserve note is actually backed by the future tax collections of the work of the US citizenry.
You're wrong, the US Federal Reserve is actually backed by the barrel of a gun and every ounce of property ever produced by its sheeple citizens.
In fact, if our corrupted government leaders would get off their asses, they could simply increase the tax rate substantially on the top 5% of income earners, or, better yet, cap an income level, the US debt would decrease incredibly quickly. But we can't expect that from our fully-owned millionaire congressmen who are 100% beholden to that same wealth class.
In fact, if our government taxed the top 5% at 100% of income for ten generations we could not begin to pay off our national indebtedness.
We have the ability to get out of this mess, but it would hurt the rich a lot, and that is something even our 'hope'-less Barry seems unwilling to do.
We have the ability to get out of this mess, REDUCE THE SIZE OF THE FEDERAL GOVERNMENT TO <5% OF GDP, ELIMINATE THE FEDERAL RESERVE, RETURN TO SOUND MONEY BACKED BY SOMETHING DEFINABLE, MEASURABLE AND REAL AND GET THE DAMNED HITLER ENVIRONMENTAL MAFIA OUT OF THE DAMNED WAY SO WE PRODUCE OUR OWN DAMNED ENERGY WITH OUR OWN RESERVES!
Warren Buffett said something on Charlie Rose last week that was very telling: when the top tax rate was 70%, it didn't stop investment, and it didn't stop profitability. In fact, from his opinion, he never heard any of his clients crying the way they do today if you threaten to go back to a fair tax code.
Warren Buffett procures his wealth from corrupt facsist payouts to his crony empires from politicians which he bought-and-paid for along with Goldman Sachs. What do you consider fair? Does fair give you the right to feast on my flesh, to enyoke my mind and to drain my blood until your hunger has been satisfied. By what right do you stake your claim to me? Under what tyrannical banner am I beholden to deliver myself up as a sacrifice to your exalted altars? Since when did the Founders legalize Cannabalism? What despotic altruist religion requires you to destroy man's desire?
TAX THE RICH, and save the US Dollar. It really is that simple.
TAX THE RICH TO THE ENDS OF HELL AND BACK AND YOUR FAMED DEVIL FIAT DOLLAR WILL ALWAYS PERISH. ALWAYS HAS. ALWAYS WILL. IT IS REALLY THAT SIMPLE.
Increase interest rates, increase tax rates HUGE on the top 1-5%, and create government jobs with new stimulus truly aimed at improving the future, and we would have a healing and growing economy. But the propagandized ignoramuses in this Fox-bred nation are too stupid to realize that it really is that simple. But it really is.
And whose future does your stimulus claim the victory? The producers? The consumers? The employers? The Looters? The Moochers? Whose mind had to create the wealth for you to have something to steal? If I gave you every dollar which has ever passed through my hands and called for a reckoning in one year, there would not be one farthing left in the stockyards. Why? Because everything comes with a cost! Everything comes at a price no matter who gets stuck paying the damn bill! In order for something to have value it MUST have a cost. If you give a man an education it has no VALUE to him. If you GIVE a man healthcare for free it has no VALUE to him. If you GIVE a man a meal it has no VALUE to him. Jesus Christ said it best. You can GIVE a man a fish a feed him for a day or you can TEACH a man to fish and feed him for eternity. The most craven depravity and evil ever conceived of man is that altar of death and sacrifice which teaches him he need not learn to fish but rather stick out his hand and beg. America has already had her full of socialism and a full accounting of her grotesque failures. Read the history of the Jamestown settlements of 1620. Its just that simple. Really its just that simple.
on Thu, 11/19/2009 - 17:26
#136432
whoa....I am blown away...+100000...Thank You. Damn, there are some seriously smart, articulate people here...thanks all!
on Thu, 11/19/2009 - 17:48
#136464
Bingo.
It's like no one paid any attention to that thing called the 2nd millenium that just went by.
on Thu, 11/19/2009 - 18:15
#136525
Did Jesus mention paying for the fishing lesson? Well, then it must be a worthless skill.
on Thu, 11/19/2009 - 20:43
#136530
Not wanting to speak for Anon but his/her intent may be misspoken. In a Native community, when a hunter takes ten moose for the winter (more than his needs) he is considered greedy, NOT successful. In essence he is taking food away from his neighbours. When economies become impersonal, it's easier to praise the benefits of capitalism while turning a blind eye from those less fortunate people who may be desperate to work if only it was available to them. I think the disparity between the few grossly rich and the growing poor is unacceptable and creates societal tensions. It's a matter of balance and fairness. A welfare mentality is certainly parasitic and not the answer. In short, leave some fish in the pond.
on Thu, 11/19/2009 - 23:08
#136932
Well, there is something to be said here...using the life of my father and grandfather (1940's on...) There was a different "feel" to capitalism. My grandfather, who came of age in the 1st Depression, emerged after WWII to build/rebuild Detroit via his civil engineering partnership. He made A LOT of money, but always was frugal, and was always community-minded, but maybe due to GD1 and the war effort, people were more naturally inclined to take care of their immediate community. He was, and my father is, always kind to all, never assuming he was/is something special...what's the word?....(not used much these days)...ahh...that's it..."humble".
Reminds me of old Joe Albertson (of Albertson's grocery stores). When he ran the company, he was concerned about the community, of his lowest of workers...when he died, and the company passed from the family to Larry Johnston (of GE, Jack W. fame), all that went to the crapper...the guy was so callous and egotistical, he had to have bullet-proof glass installed on his car and luxury condo (we still are fairly well armed here in Idaho). He was an ass who took the "best company in Boise" to work for into the toilet, made it cheap enough to be merged with SVU, and walked away with a 100 million$ golden parachute. He is probably at another firm, doing the same M.O....wash, rinse, repeat.
At the merger, in an all emplyee meeting, a c-level exec opined..."Well, the biggest problem my wife and I have is which of our 4 houses to relocated to...". That is what was said to employees facing redundancies and layoffs...a psycho/sociopathic ego to be sure.
That is the problem, having the wealth and power, and thinking you are something special, when, in reality, things could change and you would be the one digging the ditch, and someone else standing above you, watching the quality of your ditch digging. This arrogant, prideful, zero-sum attitude is what has changed since the 70's/80's, when the WWII generation started retiring and the boomers started taking the reins.
I am all about risk, success, failure, hard work...but I, personally, do not see the point in walking on, trashing others on the way to my success/failure. And, I realize that there are limits to everything, and that I am an imperfect entity...so I left fish in the pond...I was full and so was my family. In my business(es), the local community is at the front of our mission (no outsourcing/offshoring, keep the $$$ local).
Now that I am mostly gone Galt, I am usually full, so is my family...can I help you learn to fish if you dont know how?...I left some trout in the river...
on Thu, 11/19/2009 - 18:39
#136569
That put a lot of twisted logic back into the sandbox where it belongs...
Now it takes 70% of my productivity in taxes, to protect my productivity,,,that's government,,it's like giving yourself a blood transfusion and 70% of it falls on the ground.. You got it <5% size of government, or constitutional limits,,, but that document is now a dead letter...
this is nuts
on Thu, 11/19/2009 - 19:48
#136671
So now, way down at the end of the line, still no good ideas on where to hold value. Might try buying Iraqi dinars
on Thu, 12/10/2009 - 20:58
#136959
The Official Definition of Economic Recovery. Is there even a recovery at all?—based on all of the recent data that been released. It’s kind of funny how our leaders can even call us in a recovery at all.
on Fri, 11/20/2009 - 00:16
#136977
OK, smartypantses, riddle me this: Can I, Joe Retail investor, buy simple corporate bonds and hold them to maturity? Huh? Can I?
Because I don't think I can. Where do I buy a nice utility bond paying 5-8% for five years?
The goddamn bond funds we get in 401(k)s are like a sick joke. "oh we lost value because rates went up" what morons, except I think it is just a ruse for us rubes. A bond can stay and pay (if the company survives, and the vast majority do), but your bond fund is incredibly risky in a rate environment with so much upside potential. What a load of crap.
So, to hold value, go get a bunch of 'pretty good' corporate bonds, hold to maturity, roll, rinse and repeat.
But I bet you are not allowed to.
on Fri, 11/20/2009 - 12:55
#137478
Did Jesus mention paying for the fishing lesson? Well, then it must be a worthless skill.
Quite the contrary young man; it is the most valuable skill ever imparted to his creation. And yes he did mention how it was paid for but doesn't cost you a dime because He paid for it with his life. Because His sacrifice was paid in blood and He offers it to you for free. You can choose not to accept it if you wish, afterall that is why you were brought here. To accept or reject this gift which He gave for you freely. Choose wisely.
Come ye after me, and I will make you to become fishers of men. Mark 1:17
on Mon, 02/01/2010 - 02:38
#213024
The only way war could change this situation would be to enforce central planning. "Markets" and "Economies" will cease to exist in everything but name and we'll wind up with something closer to National Socialism. Either way, I'm not really sure war is feasible right now because the ability to finance it hinges on the ability of fiat money to actually buy things. If the writers ZH is right that ability is in the process of disappearing.Ed Hardy UGG Boots tiffany jewellery
on Mon, 02/22/2010 - 06:57
#240044
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