Perspectives on the global economic meltdown- (Nov 28 2010)

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Neshant
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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 06 Oct 2011 20:31

You attribute words and statements to others, which are purely your myopic interpretation of the what others are saying. You need to broaden your horizons.


Are you denying now there is no recovery or green shoots? Or that not a single new productive industry has emerged since 2000 that generates well paying jobs on a large scale?

You were talking green shoots and recovery just a few months ago.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 06 Oct 2011 20:54

Vinit wrote:Many types of businesses in the service sector do not invent or manufacture anything themselves, including my travel agent and our neighborhood grocery-wallah.


The difference is they offer a useful service - one that the market demands or else they would not be in business. They sell vacation packages that help hotels and airlines and fulfill a demand from consumers looking for some place to vacation.

The utility aspect of banks is marginal by comparison and on net detrimental to society. For the marginal service they offer as transaction facilities, the scamming aspect of it is totally out of proportion cost wise to society.

Most exist as parasites on the rest of productive society extracting wealth as useless middlemen by shuffling around paper. The entire reason the Federal Reserve came into existance is to perpetuate the monopoly of these banks. The reason they like to promote fiat (intrinsically worthless paper) money and inflation (money counterfeiting) via the Federal Reserve is because they get first access to the counterfeited money from the Fed to invest before it gets devalued through inflation down the pyramid scheme. They also have a terribly corrupting influence on govt which they pack with the ex-employees even while politicians are bribed to offload their losses onto society.

There is a ton I can say on the useless middleman sector which offers no benefit whatsoever and is in fact a tapeworm siphoning off the productive energies of society. Society does not need banks that get freely counterfeited money as "loans" and then turn around to buy bonds from the govt earning a profit on that spread for doing zero work. Its just a scam plain & simple.

I'm going to post my favourite video educating people about this soon so stay tuned.

Can you dwell on the implications of removing all banking completely?


The utility aspect of banks is marginal at best. Most of what is called banking & financing is just a scam of gambling with the money of the productive economy and offloading gambling losses onto suckers (productive society). If that's the case, why don't I open up a bank too. The implications of removing any useless middleman from an equation is always positive. The technology already exists to link buyer to seller electronically anyway.

Neshant wrote:The profit came from two things (a) selling the shares that were acquired as part of the recapitalization of banks - the govt sold them at a higher price than it purchased them (b)


I'm afraid you got caught up in the financing & high rolling jargon.

All the Federal Reserve did was rip off savers & creditors, present & future wage earners by watering down the currency and handing out free money to these worthless institutions. Its nothing more than money counterfeiited out of thin air that was used to drive up their share price (along with offloading their liabilities onto the backs of suckers aka taxpayers) and selling it for a "profit".

They invent nothing, develop nothing, manufacture nothing and market nothing (except scams), where do you think their profit can come from? A travel agent offers a useful service that society demands (a useful middleman). This is a USELESS middleman that offers nothing other than gambling at society's expanse and allocating to themselves huge bonuses.

But, saying banks don't do anything worthwhile etc. doesn't bear scrutiny.


Can you identify what useful role money counterfeiting has to productive society? If money counterfeiting has a productive role, shouldn't we all be doing it (i.e printing up $100 bills on our printers and running out to casinos to make leveraged bets).

Theo_Fidel

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Theo_Fidel » 06 Oct 2011 21:56

Neshant wrote:Are you denying now there is no recovery or green shoots? Or that not a single new productive industry has emerged since 2000 that generates well paying jobs on a large scale?


Neshant,

You have repeatedly used this statement which does not make any sense. An economy does not function this way.

I assume you mean the IT/Internet bubble when you mention 2000. The truth is for every IT/Internet job created 5 jobs were destroyed elsewhere. Entire swaths of the economy were eliminated to create those high paying IT jobs. The IT sectors has now pushed efficiency on itself and is slowly eliminating IT positions as well.

This unfortunately how efficiency functions.

New industries come and go all the time. It does not help the economy one way or another. Jobs are created when money is directed to creating additional services , goods and products for people. Jobs are destroyed when people are unable to afford the goods, products and services being created for them. With out improving the earning capacity of people, economy is going no where. This latest attack on union jobs and government jobs was particularly senseless. Destroying the very people who can support the economy. A $10 Billion sitting in a billionaires bank account is deadly to job creation. The more wealth concentrates the fewer jobs that are created. Through history from the Roman Bread & Circuses to the Oligarchies of South America this has been the lesson.

Right now in the USA the top 2% takes home 45% of wages and holds 60% of wealth. As long as this continues/increases jobs will continue being destroyed.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby VikramS » 07 Oct 2011 00:47

Neshant wrote:
You attribute words and statements to others, which are purely your myopic interpretation of the what others are saying. You need to broaden your horizons.


Are you denying now there is no recovery or green shoots? Or that not a single new productive industry has emerged since 2000 that generates well paying jobs on a large scale?

You were talking green shoots and recovery just a few months ago.


Your statement above actually proves what I was trying to say in the first post.

You have a myopic black and white view and unable to see the shades of gray, forget about color.

It is not my problem that you interpretation is very different from what most would understand.
=====

Theo:

Asset prices has numerous moving parts and you need to make a mosaic.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ramana » 07 Oct 2011 02:05

VikramS, Didn't know you were in Bay area. I thought you were in Noo York.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ramana » 07 Oct 2011 02:38

Interesting vignette of the US society in last four years 2007 thru 2010

What the Recession has done

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 06:33

Theo_Fidel wrote:I assume you mean the IT/Internet bubble when you mention 2000. The truth is for every IT/Internet job created 5 jobs were destroyed elsewhere. This unfortunately how efficiency functions.


You got it backwards. Sticking to inefficiency for the sake of preserving jobs guarantees one thing - bankruptcy and joblessness.

Increased efficiency creates/saves jobs not destroys it. Moreover the jobs that are created are sustainable. The reason for this is because effiency allows for outcompeting international competitors and maximizing profitability - without which the company would be out of business with ZERO jobs. No company survives by reducing efficiency - unless of course its a public sector union or useless middleman sector living off the productive (private sector) economy.

Jobs are created when money is directed to creating additional services , goods and products for people.


Sustainable jobs are only created when these services and goods turn a profit in the free market, not merely when goods are created and not when govt subsidizes the production or consumption of those goods & services.

Banks leeching off the productive energies of society for instance does not create any productive jobs but rather destroys it. People who are being productive have their savings & investments looted from them through money printing & taxation to support a bunch of thieves doing nothing productive (more like destructive).

With out improving the earning capacity of people, economy is going no where. This latest attack on union jobs and government jobs was particularly senseless. Destroying the very people who can support the economy.


Public sector unions do not support the economy but rather exist as a result of it.

Where do you think the money to sustain govt union jobs is coming from?

For every dollar a public sector union worker makes, a dollar (more like a dollar + administrative costs) has to be CONFISCATED from the private sector (read : productive economy). The private sector is the main pillar holding up the entire economy without which there would be no public sector union jobs nor government for that matter.

Private sector businesses are put that much closer to bankruptcy (read : productive jobs destroyed) with every dollar that is taken from them to finance govt bloat. The optimal use of the private sector profits is towards expanding/improving their own businesses, not supporting a big govt beaurocracy & public sector unions, the useless middleman industry or other dead weight.

Simply put, the reason the economy is going down hill is because the scamming sector (banking & financing) has grown so large and so destructive along with the ever expanding size of government that the cost & expense of those NON-PRODUCTIVE sectors is destroying the private sector.

Right now in the USA the top 2% takes home 45% of wages and holds 60% of wealth.


Here I separate out the people who created wealth through doing productive work in the private sector (e.g. Bill Gates, Steve Jobs..etc) and the useless middleman sector that makes its money through fraud (e.g. Goldman Sachs). The former deserve to keep & spend their wealth as they please for they have earned it and the economy is better off as a result of their inventions & ingenuity. The latter derived their wealth by stealing it from the productive private sector (destroying the economy) through scams and are not entitled to that money in the first place.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 06:43

VikramS wrote:Your statement above actually proves what I was trying to say in the first post.


Are you saying now there is a recovery or there isn't? No back peddling now 8)

I'm consistent in what I've said - the recovery is bogus. Its based on nothing more than money printing (which is to say ripping off savers & creditors), stock market rigging and running up more unpayable debts. Not a single new productive industry has emerged since 2000.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Vinit » 07 Oct 2011 07:32

Neshant,

As VikramS says, your arguments are one-sided and I'm sorry to say, lack even a basic understanding of economics, or how banks and central banks function.

I frankly don't wish to get into a protracted argument with you if your understanding is truly as you post, but just to mention one point: if banks are "useless middlemen and parasites" as you say, can you explain why they have been around for the past several centuries? What would you use to replace this system? Perhaps barter, or a selfless moneyless society (shades of Marx)?

You're even confusing the issue of currency (which is not as easy as "just printing money" and is subject to massive constraints) with counterfeiting, which is completely different.

Btw, if you want to read arguments on the lines you are making, but presented in a much more logical fashion and grounded in reality (and not in a baseless hatred of the financial system), please read Graeme Maxton's "The End of Progress".

Theo_Fidel

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Theo_Fidel » 07 Oct 2011 08:03

Neshant,

Correct me but I don't think you disagreed with a single thing I said.

Without a fair public economy there is no private economy. Period. Public economy holds up civilization. No civilization no economy. Don't fall for the empty headed Tea Party BS. The public sector in the USA is the weakest it has ever been. Main reason for this Great Depression like crash. No one is watching the wolves.

But you still havn't addressed how new 'sectors' need to be created to create jobs. Presumably similar to the Internet. Ignore everything else. That was my main disagreement.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby skumar » 07 Oct 2011 08:22

Vinit wrote:<snip> if banks are "useless middlemen and parasites" as you say, can you explain why they have been around for the past several centuries? What would you use to replace this system? Perhaps barter, or a selfless moneyless society (shades of Marx)?

You're even confusing the issue of currency (which is not as easy as "just printing money" and is subject to massive constraints) with counterfeiting, which is completely different.
<snip>

The banking system is definitely here to stay but it has become this run-away monster.

Do we want this banking system where private banks hold the controlling stake in a federal bank printing the "world's reserve currency"? Where efforts at economic recovery are mostly aimed at printing and giving huge amounts of money to private banks which generously distribute bonuses to its employees who have caused a crisis? An uncontrolled financial system where institutions can take leveraged bets on positions far in excess of the world's GDP knowing that they cannot be paid but they are too big to fail? Where there is an incestous mix between the regulators and the regulated? Do we want a financial system where the strength of the "world's reserve currency" is maintained through gun boat diplomacy?

This financial system is a joke because no one takes any one seriously. After S&P downgraded US debt, the interest rates to be paid by GOTUS on its new 10-year bonds fell to record lows and the stock market and other bonds even in other Western countries fell. That was the (manipulated) response. Off course, you could argue that it was the same set of jokers who assigned AAA+ ratings to junk bonds whereas a sovereign country like India, which has never defaulted, gets rated BBB-.

It does not require too much knowledge of economics / financial systems to see some of the things that are wrong with it.
Last edited by skumar on 07 Oct 2011 09:00, edited 1 time in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 08:49

Vinit,

Heres a chance to educate yourself on the issue. Its my favourite video. It explains why the Federal Reserve & fiat (paper) money and by extension the useless middleman industry which subsists off of it all is a scam. Watch the entire series. If by the end of it you are still unconvinced, we can discuss it. I've debated WAY too many people only to find they were clueless about the foundation upon which this entire scam is built - and yes it is a scam.

Its the BEST explaination i have ever found on the subject and it opened my eyes.

Last edited by Neshant on 07 Oct 2011 08:58, edited 2 times in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Vinit » 07 Oct 2011 08:51

skumar wrote:The banking system is definitely here to stay but it has become this run-away monster.

Do we want this banking system where private banks hold the controlling stake in a federal bank printing the "world's reserve currency"? Where efforts at economic recovery are mostly aimed at printing and giving huge amounts of money to private banks which generously distribute bonuses to its employees who have caused a crisis? An uncontrolled financial system where institutions can take leveraged bets on positions far in excess of the world's GDP knowing that they cannot be paid but they are too big to fail? Where there is an incestous mix of the regulators and the regulated? Do we want a financial system where the strength of the "world's reserve currency" is maintained through gun boat diplomacy?

It does not require too much knowledge of economics / financial systems to see some of the things that are wrong with it.


SKumar, I do not disagree that there are serious faults with the banks. If I can quote my earlier post, I had listed some of these faults, which are on the lines that you have also mentioned:

(a) encouraging reckless borrowing by consumers, including mis-selling loans
(b) creating complex credit instruments and again, mis-selling them
(c) creating a moral hazard trap (the regulators and govt too take the blame here)
(d) creating a foolhardy risk-taking culture in their staff
(e) mis-managing their own liquidity and risk

However, the solution is to fix these specific faults by specific actions. Blanket and wild accusations about banks being useless parasites do not make a solution (and this isn't directed at you, btw).

The discussion can be about what those solutions could be. As Theo said, one is the split of retail and investment banking. Others could include, weaning consumers off the debt-fuelled culture, additional regulation on banks, higher capital and risk-reserve requirements, and so on.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby skumar » 07 Oct 2011 09:34

Vinit wrote:<snip>
However, the solution is to fix these specific faults by specific actions.<snip>
The discussion can be about what those solutions could be. As Theo said, one is the split of retail and investment banking. Others could include, weaning consumers off the debt-fuelled culture, additional regulation on banks, higher capital and risk-reserve requirements, and so on.

The crux of the disagreement lies here. You are suggesting that medicine may work, I feel that even surgery may not be able to cure this now.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Vinit » 07 Oct 2011 11:15

skumar wrote:
The crux of the disagreement lies here. You are suggesting that medicine may work, I feel that even surgery may not be able to cure this now.


Maybe. Hopefully not. When one has a serious disease, an attempt at treatment/surgery (even if the cure probability is less than 100%) is better than throwing up one's hands and saying "its uncurable".

I'm very confident that a financial system will survive. Though what shape it will take, I can't say. The absence of a financial system would mean the absence of civilization as we know it.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 12:31

I'm very confident that a financial system will survive.


...by offloading their gambling losses onto the productive society.

Though what shape it will take, I can't say.


the same shape its always taken - as a parasite.

The absence of a financial system would mean the absence of civilization as we know it.


nobody is falling for that one.

The path to recovery starts with the useless middleman sector getting plouged under. The longer this thievery goes on, the worse the collapse will be. Its time these con artists got real jobs instead of defrauding others.

I predict a return to honest money (gold & silver) within 5 years and the end of worthless paper money. I also predict Ben Bernanke will be the last chairman of the Federal Reserve. That's because within 3 to 5 years, the federal reserve will be shut down after the collapse. Thereafter there won't be any money counterfeiting going on and 90% of the useless middleman sector will vanish. Money printing, fractional reserve banking, leveraging and other schemes & scams of offloading gambling risks & losses onto savers & earners will be outlawed. Either you put up your savings as 100% collateral if you want to gamble or you don't gamble.

All the fancy terminology, financing & high rolling will go out the window. It will be harder to con people out of the fruits of their labor.

What awaits us is a cleansing process which though painful will be necessary. Hopefully we don't emerge out the other end with these parasites still attached to our skins.
Last edited by Neshant on 07 Oct 2011 13:06, edited 1 time in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Christopher Sidor » 07 Oct 2011 13:06

In Europe, Signs of 2nd Recession With Wide Reach -- New York Times Dated 4-Oct-2011

It does seem that by insisting on Austerity, and not growth, the EURO-ZONE chief countries have shot them selves in the foot
In the last few weeks, even prosperous Germany and France, the Continent’s powerhouses, have started to be dragged down, hurt by the ebbing of business orders from indebted countries in the rest of Europe.
....
....
A growing chorus of analysts now predict that Europe is heading for an outright recession. “The sovereign debt crisis is like a fungus on the economy,” said Jörg Krämer, the chief economist at Commerzbank. “I thought it would be just a slowdown,” he said. “But I have changed my mind.”

Goldman Sachs predicted Tuesday that both Germany and France would slip into recession, although other forecasts are less grim.
....
Already, the euro zone economy has slowed to essentially zero growth. It could stay in a slump, many economists say, at least through next spring (i.e. 2 quarters, Q4-2011 and Q1-2012).
....
Jens Weidmann, who runs Germany’s central bank and serves on the executive board of the European Central Bank, predicted last week that the nation would hit “a soft patch” but escape recession.

Commerzbank predicts German growth will slow almost to zero in the fourth quarter of 2011, but not decline. At best, though, it expects Germany to grow by no more than 1 percent in 2012.

The International Monetary Fund is a little more optimistic, predicting growth of 1.3 percent next year in Germany after a healthy 2.7 percent this year.

But the I.M.F. recently acknowledged that it, too, had overestimated the rate of Europe’s recovery. It now forecasts that growth in the euro zone will slide to 1.1 percent in 2012, after a 1.6 percent gain this year.
.....
The worldwide dimension of the financial crisis, Mr. Figueiredo added, made the outcome even more uncertain. “We’re now in the middle of a crisis that started in American real estate and then crossed over to Europe, and it seems really nobody has any idea where this will go next and for how long.”
.....
But if it does not happen, and Europe’s banks become further ensnared in the crisis — he shuddered at the thought. “We can pay for Greece, but not for all of Europe,” he said. If the crisis swells, he added, “we won’t have the means to pay for all of this.”

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby skumar » 07 Oct 2011 13:17

Vinit wrote:Maybe. Hopefully not. When one has a serious disease, an attempt at treatment/surgery (even if the cure probability is less than 100%) is better than throwing up one's hands and saying "its uncurable".

I'm very confident that a financial system will survive. Though what shape it will take, I can't say. The absence of a financial system would mean the absence of civilization as we know it.

Nope, not suggesting for a moment that we give up. But we were discussing quack medicine, not surgery - splitting of retail and investment banking (the least that should have been done ages ago), weaning consumers off the debt-fuelled culture (the average citizen is afflicted with the frog in the boiling water syndrome), additional regulation on banks (when the banks/FIs are the biggest donors in elections and have managed to privatize profits and socialize debts?), higher capital and risk-reserve requirements (would a few points here or there make a difference?), and so on. Most of the things you mentioned are specific to the US.

The only thing I can say without doubt is that the world needs to abolish the USD as the "reserve" currency. Not sufficiently qualified to support an alternative and lots of alternatives have been suggested but anyone can see that what we have now is robbery, the RoW is exporting tangible goods and services to the US for anything they choose to print on paper. I think the US needs this cataclysm more than the rest of the world. That may effectively fix the other issues as well.

Within the US itself, I am sure that the powers-that-be are so well entrenched as to effectively veto any radical measures until it is too late.
Last edited by skumar on 07 Oct 2011 13:25, edited 1 time in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Vinit » 07 Oct 2011 13:22

Neshant wrote:
I predict a return to honest money (gold & silver) within 5 years and the end of worthless paper money. I also predict... <snip>


Just to show why I tend to disregard your views: The value of the world's gold inventories is currently $2.7 trillion, silver inventories is $23.68 billion. As against that, world GDP is approx. $63 trillion.

So you're saying the currency to GDP ratio is going to be 1:23 - and this is assuming that every bit of gold in the world is used as money. Wow.

Predictions are easy; factual analysis less so.

Could you give me the link to the video you were referring to please - I don't think it was in your earlier post.
Last edited by Vinit on 07 Oct 2011 13:40, edited 1 time in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Singha » 07 Oct 2011 13:34

UK financial firms downgraded by Moody's rating agency

Moody's has downgraded the credit rating of 12 UK financial firms including Lloyds TSB, RBS, Nationwide and Santander UK.

Moody's said it now believed the UK government was less likely to support some firms if they got into trouble.

However, the firm emphasised that the downgrades did not "reflect a deterioration in the financial strength of the banking system".

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 13:45

Just to show why I don't regard your views worthy of any consideration: The value of the world's gold inventories is currently $2.7 trillion, silver inventories is $23.68 billion. As against that, world GDP is approx. $63 trillion. So you're saying the currency to GDP ratio is going to be 1:23 - and this is assuming that every bit of gold in the world is used as money. Wow


All that says is how worthless paper money is relative to gold at the moment. For that matter there are trillionaires running around in Zimbabwe after the country hyper inflated its currency.

Clue in, you can't be that ignorant. Anything can be measured against GDP. If you measure toilet paper against it, you need lots of it and if you measure gold against it you need less of it.

That gold is scarce is good thing. Its what gives its value. Its the only thing I can think of that has survived the test of time (5000 years) as money.

And FYI, its perhaps 10X more than 63 trillion once all the (mostly unpayable) derivative junk is totalled up. We're on the verge of seeing all this debt go boom. A whole lot of what is paper debt masquerading as wealth is about to go up in smoke.
Last edited by Neshant on 07 Oct 2011 13:50, edited 1 time in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby skumar » 07 Oct 2011 13:49

Vinit wrote:
Neshant wrote:
I predict a return to honest money (gold & silver) within 5 years and the end of worthless paper money. I also predict... <snip>


Just to show why I don't regard your views worthy of consideration: The value of the world's gold inventories is currently $2.7 trillion, silver inventories is $23.68 billion. As against that, world GDP is approx. $63 trillion.

So you're saying the currency to GDP ratio is going to be 1:23 - and this is assuming that every bit of gold in the world is used as money. Wow.

Its easy to make predictions based on feeling and with no regard to fact.

No doubt about the difficulties of moving to a gold-based system. Also, it would make SA and China the richest countries in the world :). BTW, 180,000 tons of gold has been mined so far - that puts it @ ~ $9T. Probably you are discounting the individual holdings. India should be rooting for gold - India has 13% of the gold, would erase centuries of history :).

The other options that have been considered is a basket of major currencies akin to the NIFTY50.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby vishvak » 07 Oct 2011 13:51

Singha wrote:UK financial firms downgraded by Moody's rating agency

Moody's has downgraded the credit rating of 12 UK financial firms including Lloyds TSB, RBS, Nationwide and Santander UK.

Moody's said it now believed the UK government was less likely to support some firms if they got into trouble.

However, the firm emphasised that the downgrades did not "reflect a deterioration in the financial strength of the banking system".

Hopefully Indian partners will see a need to have these 12 firms increase their share of risks as per the downgrades. The 'likely more/less support to some firms' by UKGovt could also be taken into consideration while 'sharing the risk'.
Last edited by vishvak on 07 Oct 2011 14:28, edited 2 times in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 14:04

the cynical side of me says these shills are angling for a too-big-to-fail bailout.


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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby skumar » 07 Oct 2011 14:05

Neshant wrote:<snip>All that says is how worthless paper money is relative to gold at the moment. For that matter there are trillionaires running around in Zimbabwe after the country hyper inflated its currency.

Clue in, you can't be that ignorant. Anything can be measured against GDP. If you measure toilet paper against it, you need lots of it and if you measure gold against it you need less of it.

That gold is scarce is good thing. Its what gives its value. Its the only thing I can think of that has survived the test of time (5000 years) as money.
<snip>

You are right. The value of gold is notional but more solid than the fiat money sloshing around the world. And no one is advocating abolishing fiat currencies but only that such currencies be backed up. Gold may suit well since it has been deemed to have value throughout history but has little practical use. However how do you deal with the fact that a few countries like SA and China produce the most gold? It would be similar to the US printing dollars.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Vinit » 07 Oct 2011 14:15

Neshant wrote:
Clue in, you can't be that ignorant. Anything can be measured against GDP. If you measure toilet paper against it, you need lots of it and if you measure gold against it you need less of it.



Now I've heard everything. There is a reason to link currency to GDP - this is basic economics (which you should probably study before asking me to clue in).

You then link toilet paper to GDP. Perhaps I shouldn't be surprised, given your previous baseless rhetoric.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 14:31

skumar wrote: However how do you deal with the fact that a few countries like SA and China produce the most gold? It would be similar to the US printing dollars.


This is a good point but I've already pondered it.

The solution isn't entirely a gold standard but a system of competing local currencies issued by private entities. You see the objective is to break the MONOPOLY the federal reserve banking cabal has on the issuance of money - THAT is the root of evil. Gold is merely a metal people are flocking to because they don't trust these con artists.

So how is trust re-established? It can only be by transferring the power of money back to those who EARNED it - not those who are printing (counterfeiting) it.

Competing local currencies is the only practical way to do this. It would of course exist alongside gold. But essentially the idea is that private entities would compete for you to use their currency. It would be upto YOU to decide which currency you want to hold - you could hold a basket of them, all of them or none of them.

You could hold a currency of a company that has a stake in oil fields, or in the retail industry or mining industry....etc. Now if you trusted none of this paper, you could choose to hold physical gold and trade it in one coin at a time for any currency of your choice at the prevailing exchange rate as needed.

None of these currencies would be backed by the govt. so your foolish decisions are not someone else's liabilities. It would be YOUR responsibility to ensure you were not invested in a Bernard Madoff dollars.

Basically you would decide what money you want to hold and you would be responsible for losses & gains on it - not the rest of society. There would be no FDIC although I'm sure there would be private insurers offering to insure your deposits in certain currencies if you paid them an insurance fee. YOUR choice.

The technology already exists to convert between currencies on the fly (e.g. when you buy an item priced in CAD with paypal, your USD is automatically converted to CAD for a small fee). Imagine many paypals offering you instant conversion for pennies. YOU choose who you want to convert your money when buying items priced in a currency you did not own.

Finally competition instead of monopoly on the issuance of currency is what will also transform the role of the useless middleman industry into a useful one. They will be competing to provide you the best value for the fruits of your labor and would have to survive on those efforts alone instead of surviving mainly by ripping people off with monopolistic fiat scams as is currently the case.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 14:37

Vinit wrote:Now I've heard everything. There is a reason to link currency to GDP - this is basic economics


As I said you are clueless about economics.

The unit of measure has ZERO relavance to real output. If all countries added a zero to their currencies tommorrow, it does not mean output has increased by 10 fold. If they remove one zero from their currency, it does not mean output has halved. Whether its 63 trillion of worthless paper or 6.3 trillion of worthless paper or 630 trillion in worthless paper is IRRELAVANT.

Currency can be in any metric and GDP can be measured by any metric.

You can measure you height in inches, in meters, in centimeters, in the number of Coke cans it takes to equal your height, in *anything* just like GDP can be measured in anything.

What part of this can you not understand?

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby skumar » 07 Oct 2011 14:44

Neshant wrote:the cynical side of me says these shills are angling for a too-big-to-fail bailout.

They are lining up. How many times will we hear this bs - recapitalize banks, political will, tightly interlinked world financial systems, apocalypse now.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 07 Oct 2011 21:27

"recapitalising banks" is just a fancy term for offloading gambling losses of banking crooks onto the public.

just like "quantitative easing" is a fancy term for money counterfeiting.

A lot of fancy jargon is created to hide what is really just theft to sustain the useless middleman sector.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Najunamar » 07 Oct 2011 21:50

Re. the reserve currency and alternatives to the USD, http://7economy.com/archives/17642 is a link to recent report by HSBC (unfortunately is subscription based hence can't post here).

The gist seems to suggest there are 3 pillars to any reserve currency - as a benchmark, a medium of exchange and as a store of value. Report claims 1st pillar is eroded already or is in process. Second will take years but the third (where reserves are held in $) even decades.

What I find interesting is not the contents of the report but the fact there is a report such as this! Is the decline so fast and furious that all the alternatives are being considered already (the report talks of 4 alternatives EUR, SDR, Gold and RMB).

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby vishvak » 08 Oct 2011 03:19

Some info on Swiss banks
Rudolf Elmer: The man who blew the whistle on Swiss banks

An insider account on credibility of 'Swiss Financial System', Swiss bankers and some on Swiss investigation agencies too.

Unfortunately, I cannot raise my voice without taking the risk to be jailed again
...
assets are not only in bank accounts in Switzerland but also in bank safes (gold coins) and properties.

Then you also have chattels (paintings, sculptures, etc) .. therefore represent untaxed assets. I would give a rating of 2 in terms of Indian clients.(?)
...
All others, including India, have not taken effective action to tighten tax collection ... the name of beneficial owner remains hidden ...
...
It is clear that many of the latest tax information agreements, according to Tax Justice Network, is that they have taken the weakest form possible, in effect requiring tax authorities to know what they are looking for before ... Switzerland still hides the beneficial owner and is quite relaxed if it comes down to provide information about tax evaders to other countries.
...
if an employee violates Swiss Bank Secrecy the penalty is up to 3 years imprisonment and a fine of about $300,000... as a banker coming across criminal conduct within the bank you are not allowed to file a complaint with the prosecution office or Swiss tax authorities without taking the risk violating Swiss Bank Secrecy.

You have to report the matter to a central office in Switzerland and then there may or may not be an investigation.

As a matter of fact I was found guilty in Court providing information about tax evaders and other criminals to the Swiss local and Swiss Federal Tax authorities.

It would have been in the favour of the Swiss government to collect additional taxes but the decision was taken to put me in jail and not to investigate tax evaders and criminal clients
...
The pressure on my family since 2003 has been unbearable. A damaging record about my character (insane, criminal, etc) was build by bank and published in the media.

My family was threatened and isolated. Even family members were working for the police. I lost my job three times and we had to leave Switzerland in 2006 ... My career has been destroyed and I am blacklisted in the financial industry worldwide. ... I was in jail for 30 days in October 2005 but the court trial was scheduled for January 2011.

The verdict was surprisingly mild: a penalty of $7,000 and no imprisonment. There were no pressure from Indian quarters
...
It is simply naive to believe that any Amnesty Plan related to tax matters will work in this world.

An Amnesty Plan is a farce to show governments have made a move in the right direction
...
I discovered the financial industry helps people hide assets and cheat the taxation system.

The Swiss tax authorities and the Prosecution Office were not willing to investigate criminal clients (drug and weapon deals, defrauders and tax evaders). .. There was no witness protection programme. The bank and the criminals were not even investigated even though I believed I did the right thing... I feel it is not a Swiss attitude to cheat people or other countries.
...
There are ultra-high net worth individuals, financial institutions and multinational conglomerates from all over the world. There are Indians also.
...
For instance if you do not see the entire transaction (why the payment is made, to whom, why a cash withdraws, etc) which is rarely the case in banking there is no way you can discover terrorist funds.
...
You will find film stars, artists, politicians, cricket players and lawyers
...
According to Swiss law, the banks have to perform Know Your Client (KYC) tests and check the source of funds... However, it is known that the source of funds is extremely difficult or even impossible to check... Do not trust a banker in this respect
...
It might even take a global breakdown of the financial system before the society learns tax havens and the missing global financial transparency have been one of the main causes of the last financial crisis.
...
I am a positive that I will win the court trial in Switzerland. There is a good chance of a victory at the European Court of Human Rights. This would be a big success for the society.


Do Swiss really give a damn about this? I mean even if they lose whatever is left of their reputation, would they care at all?

Can the banks be termed as aiding terrorism, besides of course the usual money-launderers/corrupt/weapon-merchants, because of such lose lax banking system? How about the first world country Swiss where such ad-hoc banks are legitimized with laws and whistle-blowers punished?

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby VikramS » 08 Oct 2011 14:30

Neshant wrote:
VikramS wrote:Your statement above actually proves what I was trying to say in the first post.


Are you saying now there is a recovery or there isn't? No back peddling now 8)

I'm consistent in what I've said - the recovery is bogus. Its based on nothing more than money printing (which is to say ripping off savers & creditors), stock market rigging and running up more unpayable debts. Not a single new productive industry has emerged since 2000.



Neshant:

Such grand statements like the "recovery is bogus" do not serve any purpose because they are very subjective, and lack a metric to quantify against.

My focus on this board, apart from big picture macro, has been on asset prices; specifically what factors influence them in the short term and the long term.

The markets are NEVER free of influence. A human created entity can never be made free of influence by different stake-holders. What varies over time is the degree of influence; and that rises and falls in cycles. So what you call rigging, money printing, bogus etc is always present; what varies is the degree to which it is present.

As investors are job is to focus on how it will affect asset prices and align ourselves with that. It is even more important now than ever, since government action (rigging/money printing etc in your world) is becoming the dominant factor affecting asset price movements.

BTW, you will not find a single post justifying the recovery. You will find posts which show how economic data, more specifically corporate profits, had justified the rise in equity prices. And the same way, the fears of a new contagion has led to another rout which I had alluded to in early May after the Silver crash.

The problem is that you try to over simplify everything and fit it into some view you have. While your longer term view is grounded in historical precedence, the path taken to reach the end, will have a lot of twists and turns. And investors can get wiped out during that tango, even though if their original hypothesis turns out to be correct at the end.

The price action of silver this year is a wonderful example. Even if silver goes on to make a new high in the next few years, it would still have left behind a lot of bag holders who did not get out before two crashes, became paralyzed with fear on the way down, only to capitulate and sell near the lows. I do not want to be one of them.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 09 Oct 2011 01:15

^^^ So to cut to the chase, you're now saying there IS recovery or NO recovery?

Yours is typical of the way the financial sector guys give their sales pitch. They start off weaving a tale of recovery, green shoots...etc. When it starts to become apparent to everyone there isn't a single productive thing happening in the economy (especially when them offloading their gambling losses onto society!), they start weaving another long tale of ambiguity. Finally when the collapse arrives, they claim they predicted it all along ... and their investors (who by now have lost their life savings) should be in it "for the long term"! Hopefully long enough for them to retire.

Lets take a trip down memory lane where you claimed recovery has occured but a few messages ago :

"These days supply chains are more integrated and availability of reliable real-time data makes businesses a lot more efficient. One reason the collapse in 2008 was so sharp was this real-time availability of data. Everyone saw what was happening and rapidly cut down; information that would have normally taken months to trickle down happened in weeks. However, the same knowledge sowed the seeds of recovery. US corporations were able to maintain their profitability even during the doldrums. They exited the recession cash rich, and with very lean operations which results in significant bottom-line leverage to even modest top-line growth."

If this recovery is not bogus & profits are real and its not just money printing, running up unpayable debt, offloading of liabilities onto taxpayers, stock market rigging & scamming as I have claimed..etc. things should be an upswing. The productive economy (as opposed to govt bloat and/or the useless middleman sector) should be expanding, correct? There is no need for $450 billion "jobs bills" and other so called stimulus that's just putting the country further in debt.

I'm trying to pin down your exact claims because I already find you are shifting the goal post. Recovery has occured, that's what you've said.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ranjbe » 09 Oct 2011 04:42

As a rebuttal to the G & D view about Western economies, and the rise of the emerging economies, a prespective on how much richer the West still is:
The US has 10 times more affluent households than China or India, research shows, undermining arguments the global economy can be sustained by consumption in emerging markets.
A survey of affluent households around the world — defined as having wealth of more than $100,000 — by research firm TNS found 80 per cent of such people live in Western countries.
While the number of affluent households in China and India is 3 million each, the US has more than 31 million, the survey shows

The number of households with more than $100,000 in liquid assets stands at 2.9 million in the UK, 2.5 million in Germany and 2.7 million in France, the survey of 12,000 people in 24 countries found.
The study also highlights the tiny proportion of overall population taken up by the affluent middle classes in China and India compared with developed countries.
The incidence of affluence in the US is 27 per cent, the study shows, 20 per cent in Canada and 11 per cent in the UK, while the proportion in China is 0.75 per cent. India’s affluent make up 1.25 percent of the country’s population.


http://www.indianexpress.com/news/us-affluent-classes-dwarf-asian-nations-study/857502/0

Theo_Fidel

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Theo_Fidel » 09 Oct 2011 06:07

This is not my fight but It is useful to remember that that the US economy in absolute numbers is actually higher now than 2007! Inflation has remained low and can be neglected. Companies are making cash hand over fist. The real problem is jobs as companies are squeezing more and more work out of the same workers. I can see this in my life and in those around me. I'm being worked to the bone. It is an odd situation where those employed work ever longer hours a week, 60+ in many many cases, to earn what they did 5 years ago. At the same time those unemployed stay unemployed.

In comparison during the Great depression GDP dropped some 30% by some estimates. By that measure the US 2007 GDP of $14 Trillion should have dropped to about $9 Trillion. This has clearly not happened. The real problem is jobs. The economy is deeply deeply unfair to middle class type people right now and some manner of revolution is coming.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Singha » 09 Oct 2011 08:14

certain US cos also claim to be weak and layoff lots of people there and then going on hiring sprees in developing country locations. they can no longer meet the wall street numbers with a big and expensive US workforce. neither will the US middle class accept steep pay cuts and work for less - once the income comes people buy up and lock themselves in situations which need that income...everyone wants the purchasing power to buy just about 2 of what they need - and that too asap. the consumer machinery keeps them locked in short buying cycles. millions of iphone4 users are already placing orders for iphone4S though surely if used properly their current phones will be a excellent phone for 3-4 more years.

take the 'back to school' thing - in our days all of us must have used school dress, bags, shoes and stationary items across multiple years. pencils were used until they were 1" long, pens until their nibs cracked and bata naughty boy shoes until the leather had worn off and turned a dusty brown. nobody does that anymore (even in india).

however one is told the US economy depends on consumer and business spending , so if consumers cut back and start longer buy cycles, the US economy will be deeply hurt.

how is this any different than the US-China 'embrace' cum monkey trap? the US needs to keep buying for the chinese to keep producing and staying afloat.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby VikramS » 09 Oct 2011 09:36

Neshant wrote:^^^ So to cut to the chase, you're now saying there IS recovery or NO recovery?

Yours is typical of the way the financial sector guys give their sales pitch. They start off weaving a tale of recovery, green shoots...etc. When it starts to become apparent to everyone there isn't a single productive thing happening in the economy (especially when them offloading their gambling losses onto society!), they start weaving another long tale of ambiguity. Finally when the collapse arrives, they claim they predicted it all along ... and their investors (who by now have lost their life savings) should be in it "for the long term"! Hopefully long enough for them to retire.

Lets take a trip down memory lane where you claimed recovery has occured but a few messages ago :

"These days supply chains are more integrated and availability of reliable real-time data makes businesses a lot more efficient. One reason the collapse in 2008 was so sharp was this real-time availability of data. Everyone saw what was happening and rapidly cut down; information that would have normally taken months to trickle down happened in weeks. However, the same knowledge sowed the seeds of recovery. US corporations were able to maintain their profitability even during the doldrums. They exited the recession cash rich, and with very lean operations which results in significant bottom-line leverage to even modest top-line growth."

If this recovery is not bogus & profits are real and its not just money printing, running up unpayable debt, offloading of liabilities onto taxpayers, stock market rigging & scamming as I have claimed..etc. things should be an upswing. The productive economy (as opposed to govt bloat and/or the useless middleman sector) should be expanding, correct? There is no need for $450 billion "jobs bills" and other so called stimulus that's just putting the country further in debt.

I'm trying to pin down your exact claims because I already find you are shifting the goal post. Recovery has occured, that's what you've said.



If you read the post above, the focus was on profitability of US corporations, which is one of the primary arbiters of equity prices. Whatever metrics are used to justify equity prices (junk or not) were pointing up. Hence the term "recovery" used in the context of profitability of US corporations. Further in other posts, I had also pointed out that with almost half of S&P500 revenues coming from outside the US, megacaps should not be evaluated against the state of the US economy only.

Now that you were so diligent in going into the archives, you could have also looked up the posts in early May where I suggested that equities were going to be in trouble.

The problem with you, is that you not only have a very narrow, but also a very rigid world view and try to fit every one else's view in that. That is when you end up putting words in other people's mouths or when you can not find anything start talking of "shifting goal-posts". You can not pin it, because I never said anything which you attributed to me. But because your classification scheme is fairly gross, in your mind you attribute those thoughts to me. The world is not as black and white as you make it out to be. Try to start seeing the shades of gray

BTW, The world & markets, are always shifting; and one of the best swing trader news-letter writer I know, actually shifts his view overnight (he is up close to 20% this year with just end of day trades rarely using more than 50% of his capital). And unlike you who bought puts when gold peaked and probably shorted miners (GDX @ 65 only to cover @50) his trades are posted every night, not after the fact.

As I wrote in the earlier post, asset prices movement is affected by a lot of factors and you can ignore them at your own peril. Like the bag-holders who need silver to go up 50% just to break even, a lot of investors get hurt because of poor timing, even if they got the big picture right.
http://stockcharts.com/h-sc/ui?s=$SILVE ... 6454384845

If it was as black and white as you make it out to be, you would be looking at opening Swiss bank accounts, not butting your head here on BR.

======================

ramana:

I was in New York for a brief period towards the end of the debt bubble. Have been a valley guy most of my life. Now I am independent work from home types.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby skumar » 09 Oct 2011 10:22

Theo_Fidel wrote:This is not my fight but It is useful to remember that that the US economy in absolute numbers is actually higher now than 2007! Inflation has remained low and can be neglected. Companies are making cash hand over fist. The real problem is jobs as companies are squeezing more and more work out of the same workers. I can see this in my life and in those around me. I'm being worked to the bone. It is an odd situation where those employed work ever longer hours a week, 60+ in many many cases, to earn what they did 5 years ago. At the same time those unemployed stay unemployed.

In comparison during the Great depression GDP dropped some 30% by some estimates. By that measure the US 2007 GDP of $14 Trillion should have dropped to about $9 Trillion. This has clearly not happened. The real problem is jobs. The economy is deeply deeply unfair to middle class type people right now and some manner of revolution is coming.

Most of the current US growth is based on debt. The economic output net debt would be very low if not negative. The real problem is that no country can maintain an abnormally high standard of living in this porous interlinked world through fair means, certainly not a country that promotes democracy and the free market. What we are seeing is the partial leveling of standards of living that would be more in line with the rest of the world. The US has advantages - higher per capita natural resources, a lead in many fields where it can continue to profit, a benign (?) hegemony maintained through its 100s of military bases in distant lands. But other than its natural resources, the rest are not permanent advantages. The US is also rapidly losing the post WW2 goodwill capital and this will have economic consequences.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 09 Oct 2011 11:31

VikramS wrote:If you read the post above, the focus was on profitability of US corporations, which is one of the primary arbiters of equity prices. Whatever metrics are used to justify equity prices (junk or not) were pointing up. Hence the term "recovery" used in the context of profitability of US corporations.


Come on, you were talking cloud computing & other largely irrelavant technological issues as the reason for recovery in the beginning when I asked what was powering the economic recovery if not money printing & debt. When I pointed out cloud computing was just a marketing buzzword devoid of anything but hype, you jumped to foreign markets being the reason for the recovery.

When I pointed out revenues on the S&P from foreign markets were only 2 trillion and profits but a ***fraction*** of that and asked how does that even compare to the 2 trillion in debt being run up in ONE year, i reached a dead end in the conversation.

The fact of the matter is there isn't anything you have been able to hang your hat on while claiming a recovery is taking place.

I have not changed my tune because I'm consistent. How about doing the same?

So now the question : Is there or is there not a recovery? I predict I won't get a straight answer but instead an ambiguous "gray area" tale which will shift like a moving goal post the more wrong it turns out to be! Prove me wrong with a yes or no answer!

I've said the so called recovery is bogus. There has not been a single new productive industry since 2000. All that's been going on is running up massive debt, stock market rigging and looting savers & creditors through money counterfeiting. That's not a recovery but just the opposite of a recovery and it will come apart within the next 2 years. Within the next 3 to 5 years the Federal Reserve itself will be shut down and that will be after one lame attempt to introduce an IMF SDR or some international currency which will quickly prove equally as worthless as local fiat. My views are stated clearly and I don't need to shift goal posts. Can you do the same?

Now that you were so diligent in going into the archives, you could have also looked up the posts in early May where I suggested that equities were going to be in trouble.


You've been claiming everything under the sun and usually after the fact. There is recovery, there is no recovery, there are technological breakthroughs powering the recovery, there are no technological breakthroughs powering the recovery as its not needed... etc Its all pointless double speak. You can't even identify what is powering the so called recovery you claim is occuring.

If it was as black and white as you make it out to be, you would be looking at opening Swiss bank accounts, not butting your head here on BR.


Why would I be placing my wealth in the hands of con artists from the useless middleman industry in a corruption center like Switzerland? As for silver even at its current prices, the dollar has been devalued over 300% against it since its March 2009 price. I'm invested in gold however, not silver but I do believe sound money is needed to put an end to the con games of the useless middleman sector.


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