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Weekly Event Summary And A Look At Europe's Upcoming "Lehman Moment"
From Rodrigo Serrano of Rational Capitalist Speculator
Weekly Bull Bear Recap: August 29 - September 2
Bull
+ Factory orders surprise to the upside and is further confirmation that a double-dip is only wishful thinking for the bears. Moreover, contrary to dismal regional manufacturing surveys, the national ISM number posted a surprise expansion reading, well above gloomy estimates. The US economy has withstood yet another exogenous shock and slams home the message that the economy is stronger than many give it credit for.
+ A soft-landing for China is forthcoming. China’s manufacturing PMI is straddling the 50 mark which is exactly what you want for a soft-landing scenario. Furthermore, it is more than likely that inflation has peaked, hence the worst of the tightening is over. A soft-landing in China would buoy global growth and would confirm that we’ve actually been in the midst of a secular bull market that started in March 2009. There’s a large wall of worry for risk-markets to climb, that’s for sure.
+ Yet another data point that screams “no recession”. Consumer spending surges by 0.8% (versus expectations of a 0.4% gain) and is a welcome rebound by the consumer. Consumption adjusted for inflation rose at its quickest clip in 1 and 1/2 years. Personal income also popped a healthy 0.3%, while the all-important “salaries and wages” metric increased 0.4%. Furthermore, car sales are making a comeback. These are data points that do not signal a recession being imminent.
+ The German recovery continues. Retail Sales held steady after a surge the prior month. Private consumption will keep one of the world’s largest economies supported. Meanwhile, the unemployment rate is the lowest since the reunification roughly 20 years ago. The number of unemployed fell for a 26th straight month. The German economy has a lot of momentum behind it. As long as the engine of the Eurozone keeps expanding, the region will have fundamental support.
+ Bank lending is increasing and may explode soon if Bernanke decides to lower the interest rate on reserves that the banks have with the Fed. Increased lending means increased risk-appetite on the part of small/medium sized businesses. That means that they see demand slowly coming back. While the increase is small, it does signal an underlying trend of economic healing.
+ Additional QE may be on the way as soon as September 20-21. Fed Doves have been out in full force this week with Lockhart and Evans both signal additional accommodation should economic data come in sub-par. Today’s employment report may be the final straw that prompts the Fed into action as dissent melts away. Risk markets will benefit and a renewed wealth effect will keep the economy on a forward path until fiscal stimulus comes at the end of the year.
Bear
- The jobs picture is deteriorating. The ADP Employment report showed a rise of 91,000 which was less than the 110,000 expected by economists. Jobless claims remain stubbornly above the 400,000 mark. And finally, the granddaddy of all economic reports, the BLS Employment Situation, just turned in a giant goose egg. I had a bad feeling about this month.
- The global economy is slowing faster than many expect. Let us count the ways. Japan’s July industrial production disappoints, rising only 0.6% vs. expectations of 1.5%. Brazil unexpectedly cuts rates by 50 basis points citing deterioration in the global economic backdrop. Note that this rate-cut interrupts a tightening cycle and was sudden, which further accentuates the velocity of the slowdown. What was that about Decoupling? Eurozone PMI was revised downward from 49.7 to 49.0 and throws more fuel on a seriously developing fire in that area. France and Italy showed contraction for the first time since July and September 2009, respectively. Same for the UK.
- The Restaurant Performance Index, a measure of discretionary spending and consumer confidence, just hit its lowest level in 11 months. If superimposed with economic performance over the past 4 years, one can see that this index was a harbinger of future economic activity, signaling the impending downturn in 2007 and upturn in early 2009.
- It’s time to pull out everyone’s favorite indicator to ignore if they’re wrong. This time it’s on the bear’s side. (Source dshort.com)
- Confidence among lowest income households just hit an all-time low according to the Bloomberg Consumer Confidence Index. Is the “Bernanke-Evans QE3 extravaganza” really coming, potentially unleashing another inflationary surge? Sure guys, let’s systematically destroy our country from the bottom up. The Conference Board’s index of consumer confidence plunges to the lowest since the dark days of 2009.
- Despite claims of rising home prices leading to stabilization on bubblevision, an informed market observer knows that housing prices are seasonal. Therefore, instead of looking at MoM gains, we need to look at YoY numbers. This stat shows that home values declined 4.5% from June 2010. The consumer’s largest asset remains under intense downward pricing pressure and will serve as an anchor to continued spending growth. Let’s look ahead now. Pending Home Sales show a housing sector that remains void of demand. MBA Purchase Applications show tepid demand as well. Large supply with low demand = falling prices. Obviously this cocktail is likely to further exacerbate an already delicate legal battle brewing between the FHFA and the banks.
As for what's coming up...
Make no mistake, next week will have plenty of fireworks.
In what will be the event of the week in my view, Germany's Constitutional Court is set to rule on the legality of the seemingly endless bailout pledges made by Merkel. I have no idea what the result will be, but if they rule against the bailouts, that would be Europe's version of a Lehman moment. Next on the docket you have Italy which has recently been softening its austerity program. Berlusconi needs to show increased leadership by solidifying his pledge towards consummate austerity in an effort to improve his country's finances. Financial markets have recently taken notice of these negative developments. Investors knew that the jobs report wouldn't be pretty, however, yesterday's large selloff was actually due to renewed euro zone jitters imho.
In the US, one cannot ignore how disappointing the jobs report was. It explicitly shows that the US economy has stalled and makes Obama's speech next week all the more important. I would venture to say that if next week produces a negative surprise on the Eurozone front, the US economy will be contracting by October. While we did have good news in the form of consumer spending and factory orders, these were data points taken before the most recent round of financial turbulence. September may yield even more disappointing economic metrics as the exogenous shock of a global financial sell-off is reflected in the data. The disappointing jobs number also brought renewed speculation on QE3. I remain of the view that quantitative easing will only be used as a measure of last resort given that inflation remains too high. I don't think the program will be initiated in late September or even November if the Eurozone doesn't blow up, but perhaps in December. If the Eurozone does blowup, all bets are off. I'll be focusing on Bernanke's speech on Thursday.
Despite the gloomy week, I actually did see some significant good news, which came in the form of China's PMI number. So far, their economy seems to have withstood tightening measures. A soft landing in the communist nation would catch many, including myself, off-guard and would be a huge positive for global risk markets. The internals of the report though are cause for concern. The export subcomponent is in contraction and we all know how important exports are to the Chinese economy. Continued weakness in exports would no doubt provide a significant headway in for further growth (once again if the Eurozone blows up, it would result in a negative chain reaction across the entire global economy). Furthermore, inflation still seems to be the primary danger in the eyes of officials. Whether this means another rate increase remains in question. The Yuan has been appreciating at an accelerating rate and is sure to continue after Wen's comments.
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They wouldn't dare, would they? Let's mix and match some metaphors - the house of cards they've built is so precarious that any attempt not to kick the can would blow up the whole world with remarkable immediacy.
better make it snappy. i have otm spy puts that expire on the 17th. lol
I gave up and rolled mine to Oct. Good luck!
i was thinking about doing the same. perhaps i'll sell them into strength (assuming a down market) on tuesday and/or wednesday and push the proceeds out one month. thanks for the reinforcement.
no, this is not true. zerohedge is just kidding. indignados are just kidding. spain, greece, israel, italy, eu, we're just kidding. light a candle.
Screw a candle, light a fuze.
With TPTB's usual finesse, I expect them to "kick the can" right into the "house of cards"...
@Jonas Parker
Well played.
Agreed
Bank lending "may explode" soon? PUHLEEEZE!!!
With less than half the US population employed, 1 in 7 Americans on foodstamps, and 1/3 of employees now concerned about losing their jobs, who's going to be borrowing???
Citibank offering $25K on new purchases, no interest for 21 months, looks like they want to lend. On the borrowing side? Not me, debt free in all aspects.
Smart.
+ 1
What about taking that $25k and buying gold with it?
Forget about the German Consitutional Court rejecting the bail-outs. They will rule that no law has been broken.
Kick.the.can.down.the.road
Yup
But they might place legal precedent on any future participation.
Such as it must be approved in advance of the Chancellor agreeing anything.
Or that Germany cannot agree to further lending without a clear repayment schedule.
"clear repayment schedule"
what does that even mean?
That there is a plan to repay the loans at some future date. Either through surplus or refinancing.
They will certainly not Veto the Bailout, at best they will put some soft restrictions on it(so not too look too bought out)
I agree they won't veto it. But they may go further than soft restrictions.
I am not familiar with German judicial culture but I have a felling, no more, that when it comes to the Constitution they may have more respect for it than the USA or the UK.
They won't want to bring the house down but they may want to clarify the parameters of future action.
The German Consitutional Court will in my opinion decide that YES some rules were seriously bent/broken, however as usual for such big decisions, it will come with a long list of BUTs in terms of verdict harshness and timeframe for correction.
Meaning it will be hurtful to the offenders like thrown marshmellows and the timeframe will be 5 years or so for the politicians to implement correction measures. Which will effectively change nothing in the immediate to intermediate time range.
Having spent some time in Germany, I would bet this court says FU to the rest of the PIIGS and lets take care of our own country. Just my guess.
The German Consitutional Court has never made such a harsh verdict, so it is extremely unlikely they will do now.
I disagree. At some point someone, somewhere is going to say "enough". This looks like it's it.
Slightly OT question about gold investing. Lately I have heard many different stats and opinions about the growing trend of average folks investing in gold. On ZH I have heard people argue that the average investor doesn't even have 5% of their portfolio in gold, and I've also heard that everyone is invested in gold, which means it's in a bubble. Recently, I saw this poll, which indicates that Americans think gold is the best long term investment. ://www.gallup.com/poll/149195/Americans-Choose-Gold-Best-Long-Term-Investme...
Whether they are putting their money where their mouths are is, of course, a different question.
From what I can tell based on anecdotal evidence (talking to as many people as I can), most people seem to have no money in gold, no idea why gold is going up, and, in fact, have an aversion to gold because it is so often advertised on Fox News, and they would never buy anything if Fox is pushing it. Even many people who have some sense of what is going on with Europe, and currency debasement don't make the connection with gold's rise.
So, can anyone point me to actual statistics about what percent of people are invested in gold, and what percent of their portfolios are invested in gold?
Or if, not, I'd love to hear other people's anecdotal evidence. Do regular folks at your job, at your school, at your church, or in your family own gold or understand why it is going up and why it will continue to go up?
Full disclosure, as someone who thinks diversification is BS, I am pretty much all-in in gold (and silver) through PHYS and coins.
Although a few people I work with seem to understand the concept of gold as a 'value holder', the only interest expressed by my co-workers is when to sell - meaning at what price point should they cash in the old jewelery and coins that they may have. I have heard zero interest in actually purchasing PMs of any kind. Most have been devastated by 401K paper losses. I have purchases some PMs from co-workers, not a huge amount.
Thanks. Yeah, know plenty of 401 k people who are getting rocked, who still won't invest in gold. Got a few of them into bonds in June, at least, so they didn't get hammered in august.
The numbers I see most often re people holding physical gold (non-jewelry) are between 1% - 3%.
I know just TWO people with more than, say, $2000 in PMs.
"Whether they are putting their money where their mouths are is, of course, a different question."
IMHO, after watching the sheeple for 40 odd years,they talk a GOOD story.
I KNOW NONE of my personal friends that are invested in anything excepts stocks, and annuities, 401k's, and IRA's.
ZERO GOLD, to them it's an anathema. ( The answers I get, is I DO not invest in Commodities.)
Yaeh, my sense is that the poll results are probably not indicative of what people are actually doing with their money, and that if the time comes when average folks actually are putting money into gold in large amounts, that's when we would see the parabolic rise to $____ (insert large number here).
Shit, new scam alert, MSM pretending like gold investments have gone mainstream to get smart money to think that top has been reached?
Fortunately, the reason it is called 'smart money' is because it does not do what the MSM wants it to do.
No one I know owns it, invests in it, or would even know how to go about acquiring it. On the other hand, local bullion dealer told me business has been brisk. Don't know if that's people buying or selling. Me, I've been buying silver and adding to gold position incrementally. Really bullish on silver, gold too.
Thanks. Last time I was at the coin shop it was packed. I had to wait through 8 customers, all SELLING, mostly jewelry. So, that was interesting.
I don't know a single person, other than online, buying coins.
On the other hand, local bullion dealer told me business has been brisk
I would venture a dare to say,likely repeat customer, as fiat comes in, so do they.
+ green
When I go to the coin shop, I see it going both ways. Some scrap sellers and Eagle buyers like me.
They guy I talked to in Alaska (my recent vacation) said business for real bullion is very good. Movin' product!
NO one I know owns, invests or knows how to buy either. One of the most "financially savvy" people I know, said he *should* have been buying gold instead of equities this past decade. My LCS, busy, but from people SELLING their stuff. To my delight, have picked up some nice pieces very cheap the last couple of months.
One thing I have learned in life, most people are so full of shit. The reality of which they speak is much different than what they say.
Correction-now that I think about it, two of my clients have told me they buy G & S in the past. I have over 500 clients, so that's a pretty small percentage.
Hallelujah, a friend of mine finally bought 500oz of Ag. He is still way behind me. He still has not told his wife ;-).
Two weeks ago something weird happened: I helped 2 people buying their first physical gold. My girlfriend and, a few days later, a good friend of her. That was quite surprising for me, as I know nobody (else) who owns PMs, or has the slightest interest about it, and I have pretty much given up on talking to anybody about gold.
So now 3 people I know own gold, after I almost threatened my mother into buying some last year. However the amounts, in Dollars or in percentage of their net worth, are still between tiny and relatively small.
I do think diversification is an absolute must, so I am 35% into physical PMs and will not go any higher. The rest I hold in stocks and currencies, both being mostly foreign ones.
+ $1880 and green
I am at about 13% (hgiher than before mostly due to higher PM prices) and happy with that. As money comes in, that percentage will likely increment up.
I agree, 35% is plenty. If gold makes a huge run, you will become rich! If not, diversification is a wonderful friend.
Exactly, you should never neglect the "if not" case!
Screw that. Sure if you have plenty of money to buy 2000 oz of Ag and still be able to divirsify then fine.
However, if you only have enough savings to buy 2K to 3K of Ag, I suggest you go all in. When you are starting out without much wealth divirisification is a wealth inhibator. I tell anyone that goes into sivler to target 2K oz even if it means your in 90%. If you dont get enough Precious Metals to make a difference, then whats the point.
Because of overhead and unit sizes, it is self-evident that serious diversification is only possible above about $30,000 overall net worth.
But that doesn't make diversification a wrong approch.
Work for the investment section of a mid sized ins firm great west life. Nobody on the floor (excepting me) has metal. MBAs, CFAs all around, but most have been around so long that ingrained "wisdom" of investing doesn't include metal. Not a single other person in my social circle sees the light... Anecdotal, sure, but prob very representative of upper middle classers countrywide (them, not me)
My late Father and I have been stacking since the 70's. When he died two years ago his stack was split up among the females in the family....to date one sister has added to the stack and I am going to order my Mom to add about 5% into PM's now. She currently has about 10% in GLD and SLV. I will just tell her she is switching to phyzz.
Football bitchez!
Dog
I understand the German court is "political" so anything is possible I guess, since rule of law won't have a say.
Whatever the court's ruling, just look at this nice slap in the Eurozone's face http://bit.ly/oRzE28. What would this entail for the EFSF credit rating, guarantee and securitisation? What does it imply for the sustainability of that bad bank ECB? The S&P spokesman in fact says: "Leave me in peace with your constructs. I am only interested in the "N"Euro states' rating, perhaps also France."
In that case, I better stock up on Tuna fish. Hurricane Katia is coming
I wouldn't underestimate Germany's Basic Law. It's their gretest postwar accomplishmint has given the German people economic prosperity beyond their wildest dreams. What rule of law would they be substituting it for? I say Hitler law but we shall see.
ah yes, just like that beacon on the hill....law WAS their greatest asset...
"Despite the gloomy week, I actually did see some significant good news, which came in the form of China's PMI number."
Seriously, the writer believes numbers coming out of the Chinese gov't??
With that one comment you have negated more than half the article. Whom to believe?
I think everyone is lying incl banksters, politicians & the media.
My guess is the PMI is much worst in China. Their numberr crunchers are forbidden from telling the truth.
I agree. China will be a full on fail and we wouldn't know of it until after the event.
http://www.youtube.com/watch?v=sYIOwItLhB0
Inflationary depression-On the Edge with Max Keiser-09-02-2011
In this edition of the show Max interviews Paul Craig Roberts, Economist and author.
He talks about the current state of the US and World economies, the current illegal wars being supported by the Obama administration, the fraud of the US and world markets and how we are spiraling into an inflationary depression.
"Inflationary depression"
I'll explain how the indian economy will collapse:-
1) govt issues bonds for all fertilizers and petroleum bonds and inflation.
2) they need to keep (always) rupee above 45 vs USD to sustain export industry and the inflation. Here in india as soon as the rupee strengths prominent business men like narayana murthy (infosys) will come and complain "RBI is not helping us". This is ridiculus.
poor people in india are paying price for this "creamy layer" and they think that this person narayana murthy and team are great intellectuals and great minds.
3) rbi can't handle the 12% inflation and REPO RATE is already 8.5% (highest in the world)
4) all the govt bonds will increate more inflation.
INFLATION WILL KILL INDIA.
the only thing which will revive india is our gold and silver.
I work for a call center in bangalore and I see every month more and more US companies are increasing their numbers here. I feel pity for US people.
Their direct loss is our direct gain (for now). Our call center and software collegues are almost following US baby boomers life style now. You should see it for your self. The Indian economy (esp bangalore) is running from spill-over effect of the (dollar denominated) jobs.
This'll all end badly and major export dependant cities like bangalore, and other cities will crumble like DETROIT.
I'm planning to buy agriculture land and prepare for the worst.
On another thread last evening, ZH-er Crazy Cooter (who is very bright) said that we have reached the end of the CS / EE bonanza (at least for the USA). There ARE good jobs in tech-land, but it is no longer like it was...
Strange comment on JSMineset,
I do not know if Jim is saying citizens will not be able to OWN, or?.
Translations pls..............if any.
From
www.jsmineset.com
Jim Sinclair’s Commentary
Yes, gold is going to become part of the monetary system, most likely by 2016.
Few people understand how. It is not going to be convertible. It will be tied to a Western World type M3. It will be part of a virtual reserve currency that you cannot buy or sell.
Gold Standard Comeback Enjoys Support
Published: Thursday, 1 Sep 2011 | 12:32 PM ET
By: Jessica Naziri
It is this artificial "currency" that you can not buy or sell.
BTW, Once gold get its open monetary status back prohibition would just increase its price on the "black", or rather, free market.
Of course, you have to be more careful. But wouldn't you be, even with the dollar?
There will be lots of boating accidents!
DosZap, Steroid,
Big gold fan Bearing thinks that if they try a Gold Standard it waill fail (as it always has).
Bearing also thinks that if they try to confiscate a la FDR, not much will come in, and there will be LOTS of boating accidents. Damn! When will I ever learn? I should NOT take my PMs on fishing trips, especially in deep water without my GPS!
There are a great many Germans who don't want anything to do with endless bail-outs. So the question is which way is the REAL political wind blowing in Germany? There undeniable advantages to the EU, and EMU especially for Germany. But if Germany is truly going to pay for all the misguided nonsense of member states, that balance shifts in favor of leaving the EU, and letting those morons fail on their own, again.
The legal issue here is pretty simple: the EMU and ECB are WAY outside their legal framework, and are acting illegally. However, courts are uncomfortable making decisions that might cripple the government's ability to solve an economic crisis, even when they are patently illegal. However, if the consensus in Germany is that economic crisis is being made worse by the actions of the EMU and the ECB, the court may get a green light to make the obvious legal judgements, and declare these bailouts illegal.
The fact that Germany is totally uncomfortable funding less productive states, that is the actual reason the EMU will never work. If Germany could functionally CONTROL all these less productive societies, and impose strict German standards on all of them, then Germany could go along with it. But that's not the EU, that's a Fourth Reich. Those are the same old instincts that has caused Germany to try and 'fix' Europe for the last 1000 years starting with Charlemagne in 800AD. If it hasn't worked for 1000 years, maybe you should just give up.
Thanks for the insights, dd. I have seen some of your good stuff over the past day or two and will keep watching for more.
ddtuttle@ 12:36,
<There are a great many Germans who don't want anything to do with endless bail-outs. >
Guess what, the US feels the same way, guess what again?,your Government, is doing the SAME thing ours is,has done, and we the people continue to put up with it.
While it's too late for us, it's not for Germany..........GET RID of their asses, even if you have to drag them from their offices.
Do not let them destroy ONE of the few remaining IN the Black capable economies left on planet earth.
Your WILL be sucked into the destruction Vortex, unless your people GET MERKEL,and all like her out of the Govt.
Period.
YA Know......Charlemagne was FRENCH, not German. He led the French against the Moors(Muslims) and beat them badly in the Battle of Tours, 732AD. Without that win, Europe might have become Muslim.
Actually, you're thinking of Charles Martel, the grandfather of Charlemagne.
Europe and United States are going to hold the interest rates at zero as long as they can. This is the opposite what they did in the great depression, 10 years of depression and then world wars(that kicked started the economy - war machines always do that - factories run faster with blood then money and gold)
In the great depression, rates were sky high, no one interfered, and the rich got richer, the middle class went poor, and the poor - they just dissapeared. If you want to see a replicate of the great depression, visit India - OH NO THE INDIA STORY! GREAT INVESTMENT! - BULLSHIT, I live in Mumbai and in Toronto, Ontario, CANADA.
1.4 billion people in India, 30million registered tax payers, 12% inflation, 16% interest rates if you want to buy a house, 25% interest rates if you want to buy a car. Parents have to pull their kids out of school, to make them work because food is too expensive.
You talk about gloom and doom, everyone knows Europe, USA, Canada, Australia, Japan will do everything in their power to not let the world economies sink into complete destruction. If that was true then you should sell your house, sell all your assets and build a log home in northern canada, like North west terrorities of nunavut. - Its gonna be like 'The Road' on DVD
Bricks and Mortars make rich people, not gold, not stocks, not bonds, not derivatives.
Europe and United States are going to hold the interest rates at zero as long as they can. This is the opposite what they did in the great depression, 10 years of depression and then world wars(that kicked started the economy - war machines always do that - factories run faster with blood then money and gold)
In the great depression, rates were sky high, no one interfered, and the rich got richer, the middle class went poor, and the poor - they just dissapeared. If you want to see a replicate of the great depression, visit India - OH NO THE INDIA STORY! GREAT INVESTMENT! - BULLSHIT, I live in Mumbai and in Toronto, Ontario, CANADA.
1.4 billion people in India, 30million registered tax payers, 12% inflation, 16% interest rates if you want to buy a house, 25% interest rates if you want to buy a car. Parents have to pull their kids out of school, to make them work because food is too expensive.
You talk about gloom and doom, everyone knows Europe, USA, Canada, Australia, Japan will do everything in their power to not let the world economies sink into complete destruction. If that was true then you should sell your house, sell all your assets and build a log home in northern canada, like North west terrorities of nunavut. - Its gonna be like 'The Road' on DVD
Bricks and Mortars make rich people, not gold, not stocks, not bonds, not derivatives.
Serious question, in the event of a BAC common equity wipeout, how would I go about cashing in on my puts? Would I be able to?
Dont worry, BAC will be bailed out.
Yes.
Don't know whether to like this comment (for accuracy) or dislike it (I hate that it's right).
Serious answer: you win if the stock goes to zero, as long as there is no legal ruling that all trading (stocks and options) has been halted forever.
.....By the way, I'll be over here printing money if any of you need me.
A Swiss private banker friend of mine, working for one of the country's most conservative banks (not CS/UBS.... lol), says there are currently advising 5-7pc gold of their discretionnary portfolios......... Should be a good indication of the conservative HNW crowd holdings...........
Conservative?
A Conservative view is as follows..
50% metals.
35% Cash
15% (='s high risk) stocks, bonds, debt.
in the old days.. high risk would have been 9% - 15% of a portfolio depending on the exposure of the lines of revenue.
It is not about making money for everyone, some people are trying to protect income already earned.. going forward you have risk EVERY! WHERE!!
So where can you park money? how can you retain the earnings in a way that they will have value later.. in any and ALL circumstances.
A basket of metals is the best tangible that I can think of that will retain its natural liquidity.
I am happy to listen to other ideas and as always I am happy to be wrong and be educated in a better form!
http://www.youtube.com/watch?v=YK5u3fmGbg4&feature=
I should ad that most everyone I know who has money out in the markets has taken lines of credit out to use..
why would anyone risk anything, fuck it! let the banks eat it if shit goes away.
I don't think you have to all the way to 50% PMs. I am at 13% and happy..., for now.
Clearly the old mainstream financial consultants saying you could have up to 5% in gold are now clearly wrong.
+ $1880 re risk everywhere. Damn right.
If we get the FOFOA like numbers (that I think are very possible), 50% in metals will make you RICH, RICH, RICH, even in real inflated-adjusted terms.
---
I would then have to ask where you live (if you have property that is) so that we could have a gold old shootfest with our guns, celebrating our getting RICH! Ha ha ha!
(I did read your comment a few days ago about how big you are, so you would have no worries about a scrawny Bearing showing up and trying to rob you... LOL)
DoChen@15:40,
Bro, I do not ( matter of fact would bet coin on it) before we IF FOFOA's #'s are even close, believe we will be able to hold an ounce in the USA.
IF it get's anywhere close to $5k,the Feds will be all over PM holders.I mean, they are going to get the 401k's, and IRA's even before we can reach $3k,IMHO, so unless YOU/WE have a way to get it out of CONUS prior to that, we will be either unable to sell, or have a black market, and would not surprise me, if they went so far as the death penalty for those caught engaging in it's trade/sales.
Based on FOFOA's predictions, I cannot see them allowing REGULAR people to profit so massively.........only the elite are so allowed.
DosZap...
Yes, the elite will win big. No matter what happens they will win big.
But, the elite is too small to effectively get all of us shrimps. Will they get YOUR gold? I doubt it. Will they get all of mine? No. Some is overseas...
We (gold holders) will be OK. I also buy into FOFOA's point that the USA will eventually NEED private capital, coming from the gold holders at $55,000 to invest. .gov alone will not be able to do it all (eg, rebuild the toll roads). Wealth will matter then. And we shrimps can be part of the action.
And if FOFOA is wrong on that point (.gov inviting gold holders to invest their wealth to rebuild America)? Well, that's what our friendly black markets are for. "I'll give you some of this for some of that..."
Take my guns and PM? Come on and try.
There are two key points you need to flesh out:
1.) What kind of "gold" does your friend mean, owning physical, or paper like futures/ETFs/other?
2.) Why only 5-7% gold? I'd say for a truly conservative portfolio 15% is minimum, and 35% is still reasonable.
DosZap regarding your query dig thru enough Internet alternative bloggers and it starts fleshing out.
A dual monetary system, countries retain their familiar internal currency but internationaly use the new SDR-like basket for settling accounts. Likely this SDR mix will be composed of Gold as well as present currencies.
Regular people won't have access or even use this SDR currency. As for Gold and the regular person, that's difficult to say as it depends on governments attempts to squelch its possession/use.
One of the interesting aspects I've come across is speculation that fractional reserve lending will be eliminated for the internal country currency (i.e. the one that everyone uses daily).
Of course the shift over to this system would be earth-shaking, and no doubt, it will be skewed to retain the PTB control of all important elements. Anyway, before this happens the world needs to be brough to its knees such that it can be sold to the public as their salvation.
"Increased lending means increased risk-appetite on the part of small/medium sized businesses."
Wait, you just said that the increase in lending was because of a drop on intrest rates for money on reserve at the fed a sentance prior. What kind of circular Keyensian logic is this? Convincing more buisness to hold more debt is an indicatator of economic strengthening? If you make borrowing cheap enough, anyone will borrow, and isn't this how this whole mess got so bad? What am I missing?
MORE DEBT IS THE ANSWER!!! YEA KEYENES!!!!
Germany has europe in total checkmate.
The stories of mythical German banking superiority are rubbish. So why are they making out they have nothing to do with the cause of Euro crisis?
Because they want financial control of the Eurozone members. This has been the plan of German Bankers since Friedrich List in the 1840s!
It doesnt really matter what the court will decide. either way Germany benefits. It just depends how far Germany is willing to push the other nations over the edge before they beg Germany to take their sovereignty.
http://germanywatch.blogspot.com/2011/08/german-casino-behaviour-fiscal.html
Death penalty for whom? The agent trying to confiscate my gold or me? I wouldn't bet too much on that outcome if I were you.
If you're a tinfoil hat-wearing, black heliocopter-chasing kind of person, you should recognize the "asking for trouble" aspect of declaring through a public channel that you hold enough physical to make it worth the effort for someone to try to take it...
I'm just saying...
It's like the double-edged sword aspect of convincing your friends to try to buy gold for their protection in the future because you did... there will be possibly one among them that didn't heed your advice at the time, but now knows where to get some after the sh1t has hit the fan.
It's getting near time people started to remember how to move quietly through society, rather than trying to flaunt.
Stealth Wealth is your friend.
Be safe out there.
Couldn't agree more. Never talk finances (unless you're on an anonymous forum). I had a friend in 2007 that used to talk about how much money he was making on AIG, somewhat embarrassing for him in retrospect.
Here is what nobody is reporting:
Germany.
I have read an interesting document from EUROSTAT, the EU Statistics Office run by the EU. Strangely, this information never hits the press, maybe because Walter Rademacher, a German, is the Director General ?????????????
Read the document. Focus on German Quarterly (Govt) Debt 2011, over 2 trillion for Q1, far more than France or Italy. Largest in the entire EU. Lied about daily, hidden from the press, nobody wants to talk about it. Makes France & Italy look like the poster children for fiscal responsibility.
So tell me, why has everyone got the gag order on Germany? Why aren't they getting dragged through the dirt?
Well guess what, I spoke to several people about it, and now it's getting alot of attention.
George Soros knows, he came out and said exactly what I told WSJ a week ago. Wait until those results come out.
This is the news in the EU, quit drinking that German kool-aid that makes you blame France. The Germans are failing. I've seen the results this morning and they aren't good. Let's see what kind of creative mist they (Germany) come up with this time to avoid the truth.
Germany is # 19 in the world in Public Debt, compared to the US at # 36. Germany's public debt in 2010 was the largest debt increase in absolute terms in any year since the introduction of the statistics in 1950, the statistical office said, and accounted for 83 percent of the country’s gross domestic product GDP and burden of around 24,450 euro ($33,318) per inhabitant in the country.They are 23% over the allowable limit according to Maastricht Treaty rules, and should be punished as others have been in the past. The largest German company, SIEMENS just reported a Quarterly loss of 65% from Q2 to Q3, and a loss of 98% in the Medical Solutions segment. Mysteriously, 1 day before the financial announcement, CEO Peter Löscher's contract was extended for (5) five years, even though they had the financial report 3 weeks prior, it was silenced. I personally called the SEC, not interested. Their stock is down 28 Euros since 1 July, from 97 Euros to 69 Euros,a staggering 25% loss!! No mention or worry about this in the world press, whatsoever. All we hear is how wonderful the German economy is with no signs of trouble. Nothing, could be further from the truth .The complexity of the situation, and S&P's inaction to these events, gives one pause. When Germany falls, and they will, the EU goes down like a string of dominoes. Remember where you heard this, this is THE news in the EU right now. The short on all things German is being organized as we speak, soon they will be in freefall. Maybe that's why they are trying to put a ban in place against shorts........? Our strategy is to burn them, whatever it takes. One thing this industry can do with less of and that is pathological liars, that's why they top our hit list of countries to bet against. So then, 2 Trillion Euros in Govt Debt (Q1, we haven't added Q2 & Q3 yet), 83 % Debt/GDP Public Debt, SIEMENS (largest German company) down 65%, and Commerzbank (largest holder of Greek Debt) just took a 1.1 Billion Euro write down on the Greek Debt, which will kill any hopes of a dividend and cuts their Q2 Result of 2.1 Billion Euros in half, Deutsche Bank down from 47 euros to 26 Euros, also leaving them unable to meet their mandatory Tier 1 Capital requirement according to Basel III Agreement.
Sounds to me like they are in HUGE trouble.
And as far as Germany contributing to anything in the EU, we all know how that works, Germany borrows the money from the ECB (only as long as they can before Draghi takes over) and take the write down passing the cost of the loans onto the EU 27. Germany tried so hard to get Axel Weber in the ECB as Chief so they could keep bleeding the ECB dry, using it as their own personal cash register. Now that Draghi is taking over, watch Italy turn around, it will be their turn at the vein.
Germany's strongest bank, Duetsche Bank was lowered to "C+" by Moody's in July, before this recent market turbulence. Their stock is down from 47 Euros to 26 Euros as of close of trade on Friday. Tell me they aren't screwed. I called Deutsche Bank in Frankfurt and asked if they still had their Tier 1 Capital requirements covered acording to the report they gave as a result of the Basel III Stress Test 2011 that just ended weeks ago, they claimed to have over 14% coverage. When I asked him, he laughed and said "no bank in Germany can cover those Tier 1 Capital ammounts at this time, in a contagion like this, we have to have liquidity."
That's why Germany wants to see Italy go down now, before they can be saved by Draghi, timing is everything. It adds credibility to Germany's phony success story.
The only success they have had since the war ended, is the fact that the US rebuilt their country and economy for them, if anything, it's an American success story.
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Have a hard time believeing any finacial news from China on the PMI. That country's honesty is one notch below the US, I know hard to believe.
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