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

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

Postby disha » 18 Jun 2013 07:59

Theo_Fidel wrote:What does stree dhan mean?

Again the majority of gold in India is bought as jewellery and given as dowry. The data is unequivocal on this.
This is the effect of social pressure today or do you want to blame this one as well on Mahmud of Ghazni.
And no amount of spinning is going to hide just how bad dowry is for society and the economy.


Here is something for you to chew on:

1. Stree dhan means "Women's wealth".

2. Banking has not penetrated deep into India's interior even now. Also proper transfer of land rights, business rights, farm land rights or in general wealth rights has not happened. Even now. That is if your father has left you something in the will, and if your elder or younger brother cheats you of that., the recourse to law is slow and painful and not necessary fructuitous.

3. Now dial back say 50 years., when a woman is married., she goes and lives with her husband. Wherever her husband is., sometimes the husband is in the same village, same town, nearby village, nearby town, further away. As the distance increases so also means of communications becomes slower.

4. So how do parents ensure that the share in the wealth of the family (land, business, agriculture, surplus etc) is passed down to the daughter appropriately? Particularly if the daughter has additional siblings?

Only gold is the mobile, liquid asset that can hold value and can be easily transported (is dense)., best is to wear it in jewellery, is useful asset. Just like people owning harley davidson.

And further, it is women's wealth., so when she feels like it - she will use it to educate her kids or buy a home for her husband or help him start a business.

So what is wrong with "dowry"., and again that was a victorian concept - right - Bombay was given as dowry from the portugeese to the english!

Of course, as with any asset., it can be misused. For ego purposes - a groom may want a bigger dowry than others in his social circle to feel better., just like lot of puny americans drive around in hummer to feel bigger and bolder or lot of americans going under nip/tuck to look better! Oh they are all humans after all.

And why are you bringing up Ghazni in the debate? It is like you saying that racism is a problem in US because of those congis., I mean vietcongis.

TSJones, is it a hallmark of americans to climb a totem pole and give lecture to the world without knowing the inherent culture, issues, infrastructure, prejudices, biases, strengths, weakness, history etc?

Yes, gold is bought as jewellery and given as dowry. Nothing wrong in it. Or are you feeling sad that you did not marry an Indian and did not get a dowry and at a age where you are back in diapers and hence no chance?

What is wrong with dowry (or with all marriages) is where unnecessary demands are placed on the bride (or groom., but because of less women empowerment in India, mostly brides) to satisfy egos of the groom and his family.

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

Postby disha » 18 Jun 2013 08:03

Theo_Fidel wrote:Dowry is dowry. Pretending it is not dowry does not make it go away.
Any way it is OT here.


No., it is pertinent and important to know how transfer of wealth during life changing events can affect global economy.

And what is so wrong about "dowry" as you understand it. Please care to explain?

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

Postby Neshant » 18 Jun 2013 08:44

DhruvP wrote:They have started diluting the dollar already, by increasing the money supply,


So are you saying savers, wage earners and pensioners should be cheated?

Just trying to find out exactly who you propose should be cheated to "solve" the problem as you put it.

he long term investor is a rare individual who buys during these dips and sees record gains.


Buys what on dips? Ultimately playing the stock market is nothing more than gambling. It sure looked good to Japanese investors looking for the dip when the NIKKEI fell by 25% in the early 90s from almost 40,000 to 30000. Except that dip just kept on dipping for decades. Trying to force people to into the stock market assumes you are some all-knowing oracle that knows when the bottom has arrived. By the way, when that capital is destroyed through bad investment decisions, its gone. It does not magically re-appear unless its being stolen from another segment of society.

My point is that the market should decide when the bottom has arrived and invest - only if it wishes to and not because some guy got the bright idea that he knew where everyone should put their money.

Gold is destroying India's economy more than it is helping.


Are you proclaiming yourself the all-knowing oracle of what people should invest in?

It is the right of people who earned the money through hard work to decide what is appropriate for them to invest their wealth in. Any attempt to "manage" other peoples' wealth or investment decisions without their consent is fraud & theft. You seem to have a hard time understanding this.

we all know that is wrong but you need to understand the fundamental principal that gold is not a growth driver)


Gold is neither a driver nor a non-driver any more than gambling on the stock market is a driver or non-driver. Putting money in stocks does NOT equal economic development. In the case of Bernanke pumping the real estate & paper leverage bubble circa 2008, it equaled just the opposite - economic destruction.

For the Indian economy, however, the gold obsession is worse than a poor investment. Unlike buying stocks or bonds, parking money in gold slows, rather than stimulates, economic growth


Total nonsense.

Meanwhile, a growing trade deficit forces the country to devalue its currency


Other way around. Devaluation leads to more gold purchases as people realise the paper currency is being made worthless for the benefit of speculators.

Innovation needs capital investment in the form of loans that needs to be borrowed. If everybody stashes gold in their basement, money is locked.


If it needs to be borrowed whether domestically or from abroad at a high interest rate, it means the investment does not yield a high enough return or the risks of capital loss are too high. If people are not willing to part with their gold (or other investments) to lend their money for such ventures, what economic theory says its in their best interest to be forced to do so?

Ultimately when people opt to keep their gold, stocks, real estate or whatever, they do it in their own perceived best interest. If the price of gold were to hit $100,000/oz tomorrow, India will literally become a net exporter of gold as people rushed to trade it in for other goods.

Gresham’s Law states that the "good" money always vanishes into vaults & lockers. The "bad" money always ends up in circulation. Its never difficult then to figure out what society perceives as the good money at any given moment.

In India, because there is a lack of risk-takers, US enterprises are setting up shop and gobbling up small businesses.


How do you know they're not gobbling up proverbial dot com bombs or nortels or enrons? Should these companies or the global economy take a dive tomorrow, they would have traded their proverbial gold for proverbial glass beads. This whole perception you have that putting money into stocks, buying up businesses automatically means its good is a sign of a mind brainwashed. Any attempt to stop people from making their own financial decisions and hijacking their hard earned wealth to "manage" it is tyranny.

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

Postby Neshant » 18 Jun 2013 08:47

DhruvP wrote:I can see multiple industries powering the economy that are on the horizon. Medical equipment industry has only recently started trusting technology and its a multi-billion dollar market waiting to be tapped in. 3D printing while in its infancy has great potential in the future to disrupt manufacturing. Wearable computing is going to eliminate the bricks called cellphones we carry around as the form factor becomes smaller than 5 nm in 2019. Medicine is going to be more and more efficient as more and more genes are linked to a particular disease, improving detection and even prevention. I have many more that I'm going to file provisional patents on that I'm not going to even list here. All these technologies are promising but they need investment.


Then why aren't you investing all your money in it?

i.e every single penny

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

Postby TSJones » 18 Jun 2013 08:57

"TSJones, is it a hallmark of americans to climb a totem pole and give lecture to the world without knowing the inherent culture, issues, infrastructure, prejudices, biases, strengths, weakness, history etc?"

I could say the same thing about some Indians when they remark about US culture, etc.

Fact is, the US developed a lot of, although certainly not all, of the modern financial systems that works with success for billions of people way beyond the capabilties of an imposed gold standard. it ensures that even the lowest economically disadvantage can participate. When the US was on the gold standard, people could not get loans or even access to money and had to barter. The gold was confined to financial centers on the east and west coast. Check out William Jennings Bryan and the Grange and the Cross of Gold speach.

Finally, the title of thread does have the word "Global" in it. Global entitles me to post about global topics which I have done. You will notice that I have not posted in the India economic thread? I can't help it if a lot of India can't have a checking account or an ATM card. But I will note that many years ago it was remarked that India had a middle class as large as the entire nation of France. And that was when times were worse than now. Allah only knows how large India's middle class is now. And that means access of some sort to modern financial systems. End of story.

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

Postby disha » 18 Jun 2013 11:05

TSJones wrote:"TSJones, is it a hallmark of americans to climb a totem pole and give lecture to the world without knowing the inherent culture, issues, infrastructure, prejudices, biases, strengths, weakness, history etc?"

I could say the same thing about some Indians when they remark about US culture, etc.


I will leave you with a tale - A professor from US was visiting a part of city in India which was called "old city"., he noticed it was bustling but was choking with traffic. He particularly noticed that the streets were only 40 ft. wide and complained about the civic sense of the government on not expanding the street.

When it was pointed out that the street was 400 years old and for that age 40 ft. wide was like grand avenue., the professor was incredulous.

So when Indians not just remark but lecture uppity US about culture., just shut up and listen., maybe you can partake in a 5000 year civilization., the search of which led to US's founding.

Yes, Indians will look at Americans and take some good and some bad from it., but do not feel bad if they lecture you - it is just big brother chiding the little brother in a good patronizing way.

Fact is, the US developed a lot of, although certainly not all, of the modern financial systems that works with success for billions of people way beyond the capabilties of an imposed gold standard. it ensures that even the lowest economically disadvantage can participate.


Big deal. And India created the first maritime empire. So? A gentle suggestion to get off your high horse.

When the US was on the gold standard, people could not get loans or even access to money and had to barter. The gold was confined to financial centers on the east and west coast. Check out William Jennings Bryan and the Grange and the Cross of Gold speach.


You took it upon yourself to think that *I* support gold standard and as a typical american got into shock and awe.

Finally, the title of thread does have the word "Global" in it. Global entitles me to post about global topics which I have done. You will notice that I have not posted in the India economic thread? I can't help it if a lot of India can't have a checking account or an ATM card. But I will note that many years ago it was remarked that India had a middle class as large as the entire nation of France. And that was when times were worse than now. Allah only knows how large India's middle class is now. And that means access of some sort to modern financial systems. End of story.


Wow, some more gas'sing - another american trait here? No nuances?

Yes Indians need to be cured of their gold bug and see how popular gold rush show became in US and watch it.

Point is lot of Indians do not have access to capital markets like Americans., so for them the next best investment is a liquid inflation hedge in an inflationary environment. Reminds me of the access to capital markets for large swaths of americans in the 70s and 80s.

I hope you have not put your IRA on gold., I know of a smooth american salesman (must have jewish ancestory from India) who can convert your rollover IRA into gold - want to get in touch with him? I do not recommend it, but several Americans have been attracted to do just that.

And as you said, of course, the shift is now towards platinum. So your point is?

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

Postby Neshant » 18 Jun 2013 11:08

China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned.

The Telegraph
Ambrose Evans-Pritchard

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

"The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation," said Charlene Chu, the agency's senior director in Beijing.

"There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signalling," she told The Daily Telegraph.

While the non-performing loan rate of the banks may look benign at just 1pc, this has become irrelevant as trusts, wealth-management funds, offshore vehicles and other forms of irregular lending make up over half of all new credit. "It means nothing if you can off-load any bad asset you want. A lot of the banking exposure to property is not booked as property," she said.

Concerns are rising after a string of upsets in Quingdao, Ordos, Jilin and elsewhere, in so-called trust products, a $1.4 trillion (£0.9 trillion) segment of the shadow banking system.


The latest twist is sudden stress in the overnight lending markets. "We believe the series of policy tightening measures in the past three months have reached critical mass, such that deleveraging in the banking sector is happening. Liquidity tightening can be very damaging to a highly leveraged economy," said Zhiwei Zhang from Nomura.


The journal said foreign withdrawals from Chinese equity funds were the highest since early 2008 in the week up to June 5, and withdrawals from Hong Kong funds were the most in a decade.


http://www.telegraph.co.uk/finance/chin ... story.html

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

Postby paramu » 18 Jun 2013 12:29

Dont worry. People are already seeing good things after doom and gloom
All is not bad
Nobody will worry about gold and dollar also

Nice cover too
Image

The End Is Near and It's Going to Be Awesome: How Going Broke Will Leave America Richer, Happier, and More Secure
Kevin D. Williamson (Author)

Page Numbers Source ISBN: 0062220683
Publisher: Broadside e-books (May 7, 2013)
Sold by: HarperCollins Publishers

The United States is rapidly approaching the point at which current spending levels on entitlements and other social programs by the federal government will no longer be sustainable. This country will have to make big adjustments in the years and decades to come, and author Kevin Williamson provides a look at what the future might hold in "The End Is Near and It's Going To Be Awesome."

Many think that the State best provides many goods and services, but Williamson points out why goods such as technological products made in the private sector grow better and more advanced over time, but services provided by or heavily subsidized by government, such as education and health care, do not. The author asserts that the difference is that the general public has what economists call the "right of exit" in regard to products produced by the private sector--they can refuse to purchase certain products that are inferior (as when consumers shunned 1970s American cars in favor of Japanese automobiles), forcing firms either to make gradual, evolutionary improvements to their products or face a reduced market share and ultimately bankruptcy.

The book hits on both sides of the equation. Our system of entitlements, in the United States and most of the developed world, is unsustainable. However it works out - other authors are more articulate - governments will simply have to default on promises they have made for retirement and health benefits. There will be something of a collapse, and somehow institutions will persist after the collapse. The title suggests that the author will lead the reader from A to B. That does not happen. There is no discussion of the nature of the impending collapse, or a suggestion of the mechanics by which healthier institutions will reemerge.

He does talk about healthier institutions. Williamson talks about the coercive nature of government and legal systems. He notes that human societies have developed a number of alternatives to formal governments and formal courts of law. Informal negotiation, arbitration, and community norms would be three of them.

He talks about the problems of writing legislation that will actually improve things. There are several strikes against this happening in the first place. First, the electorate is not well enough informed to recognize its own interest. Secondly, the interests of the legislators are not aligned with those of the voters. A legislator wants to get reelected and wants to get rich, most case.... Read more ›


The author states that politics is a monopoly. It is averse to change, because it is not subject to evolutionary pressures. It does not grow more efficient over time; it grows less so. Under politics, gross misallocation of material resources can continue indefinitely-- right up until the moment that the material resources run out, in fact. Democratic procedures are insufficient. He quotes James Bovard , saying, `"Elections are vastly overrated as a means for restraining government abuses." Abuses are the least of it-- politics paradoxically does more harm when it is performing as intended than when it is distorted by lawlessness or corruption.'

He provocatively claims that government is violence. Government likes to pretend it has a monopoly on violence. It is by nature coercive. The author draws comparisons between mafias and legitimately constituted governments, historical parallels between the rise of market groups, the Taliban, and English kings. The use of force is always the same. The consent of the government is a matter of choosing the lesser of evils.

Making his case for voluntary associations, the author makes the point that reputation is important. Many fracking operations operate with environmentally protective measures for an excess of what the law requires. They do this as a matter of professional solidarity with one another and the result is that when a company does accidentally despoil the environment, if they have been conscientious they will get lighter treatment.

The discussions about how to save Social Security are rather fanciful. The analysis of what's wrong with the program, that there are unsustainable benefits are that is absolutely on the money. The idea of how wealthy might pay more on behalf of the poor is not as well conceived. It is true that the scheme could be transferred either income or wealth to the poor. Or rather, to the trust to be dispensed on behalf of the poor.

However, he doesn't go into the problem of free ridership. If the money is there, certainly people will queue up to take it. It is worth more to them than the people from whom it is extracted. More than that, the impecunious would use the small income to have more children, while the more responsible, higher earning people would feel constrained about having children. There would be a constant slide downhill.

Williamson says that the rich might be willing to give five percent. It's not that they are selfish, but the money given to politics is used by politics. You cannot trust politicians to efficiently administer give away programs. In that he is absolutely right, although the five percent taken from a family making $150,000 per year would represent a significant bite. It is not easy to raise children even on $150,000 year in the big city. After taxes you have maybe 100,000, And given the state of the schools, after a couple of private school tuitions you're down to half that. The money does not go nearly as far as he would anticipate.
Williamson does not even mention race and ethnicity. He talks about our altruistic, charitable impulses. These stem from our distant ancestry, and they are certainly stronger toward members of our own kind, that is only to members of the family and tribe, then to strangers. While we certainly celebrate and support genius in any race, the idea of money being transferred from our average children to average or even somewhat above average children of other groups slows down in a hurry. We are a tribal species, we support our own. Williamson uses the word "blackmail" quite appropriately to describe how society currently buys peace by transferring money from one group to another. He should not deceive himself that it is willingly given.

Williamson has a relatively short but good riff on homeschooling. He darkly suggests that the authorities resented and resist it. Whereas this was the case perhaps 20 years ago, homeschoolers are relatively unmolested in the United States. Germany and Sweden are the places where the government strongly enforces its monopoly.


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

Postby panduranghari » 18 Jun 2013 15:09

DhruvP wrote:Panduji, you're on my ignore list. Good luck with your gold. Its clear you have no understanding of economics and I am not going to waste my valuable time arguing with you.


I am sorry if you felt so. Not my intent I reassure you.

This bit writen by Atri ji drives home my point well on de racination from the aspect of Artha.

The structure of this thread which is my mind is somewhat like this -

First I will study dharma and Moksha (which we are doing now). Then after a while turn my attention to Artha and Kaama (and their deracination) after summarizing Dharma and Moksha. In Artha-Deracination series, there will be elaborate treatment with political fall-outs of "Individualistic Bauddha-mat" and its effect on suzerainty of Indian kingdoms. It is totally different arena where the drawbacks of "Aastika system" in terms of "Moksha" starts becoming strong-points. The advantage offered by "Aastika system" in terms of "Artha" (wealth and polity) are immense when they are required. Of course with time, every system grows corrupt and requires a change. Will carry forward this discussion then.. Excellent introduction, this passage of your's will make to the "Aarthik Deracination" series.


viewtopic.php?p=962794&sid=b72e737b8abec88f7b56e6801479d5b6#p962794

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

Postby vishvak » 18 Jun 2013 21:52

To the post by paramu ji, what will remain post economic global meltdown is dowry system within Europe.

Reminds of how Europeans came over to India with judgmental lens from Europe of 17th century then started judging Indians about dowry and what not. Perhaps within Europe women still can't have wealth. Like how the Portuguese gave dowry of colonial Mumbai ports to ever-greedy English groom to the eternal shame of Europeans, dowry is European concept of offering European grooms some monies lest he misbehaves and uncivilized to his European wife because of lack of dowry. This is what dowry is all about - a European concept to the benefit of greedy European grooms. This is one way to explain dowry.

When greedy Europeans came to India during barbaric colonial times, all wealth in India during wedding must have been seen by greedy Europeans as dowry, especially gold.

Gold belonging to women is not called dowry. It is called stree-dhan all over India. What has dowry got to do with gold of women? In fact the concept of stree-dhan is absent in barbaric societies to even see it as appropriate. To understand stree-dhan and appreciate it is out of question.

Anyone from any side in marriage can gift gold to bride. In India, there can not be any laws that disallow anyone to gift gold to bride. There can not be such a law.

Barbarians can not loot stree-dhan even if they do not recognize it.

Stree-dhan and gifts given to the groom are part of same marriage celebrations and can not be separated excuse of some barbaric greedy people elsewhere. Meaning that dowry in Europe is not the same as dowry in India, in fact dowry word is European to begin with.

Indians don't even know what is label given to gifts that are given to the groom during marriage, other than European terms like dowry that are labels for gifts given to greedy European grooms.

So lets not confuse any discussion and bring unrelated labels such as dowry - sought by greedy European grooms - into discussion without reason.

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

Postby TSJones » 20 Jun 2013 06:28

Fed is goiing to cut back on QE this year. Dow drops 200 and Gold drops 30 dollars.

http://finance.yahoo.com/news/fed-seen- ... 38249.html

Cramer says shorts are gonna rule for a while, the shorts haven't been making money recently and now is their time to move.

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

Postby svinayak » 20 Jun 2013 06:38




http://www.youtube.com/user/KBGlobalGold


What if every deposit made through your account was backed by 24kt 999.9 gold bullion?

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

Postby Suraj » 20 Jun 2013 07:10

TSJones wrote:Fed is goiing to cut back on QE this year. Dow drops 200 and Gold drops 30 dollars.

http://finance.yahoo.com/news/fed-seen- ... 38249.html

Cramer says shorts are gonna rule for a while, the shorts haven't been making money recently and now is their time to move.

Did Bernanke say that, despite what MSM news claims ? Mish suggests not.

Fed Keeps Low-Rate Policy Intact; Treasury Yields Spike Anyway; Hissy Fit Over Fluff

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

Postby RoyG » 20 Jun 2013 08:45

TSJones wrote:Fed is goiing to cut back on QE this year. Dow drops 200 and Gold drops 30 dollars.

http://finance.yahoo.com/news/fed-seen- ... 38249.html

Cramer says shorts are gonna rule for a while, the shorts haven't been making money recently and now is their time to move.




Cramer TSJones? Really? :lol:

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

Postby TSJones » 20 Jun 2013 12:05

Asian assets hammered on China fears

http://finance.yahoo.com/news/asian-sto ... 17640.html

Brasil ain't doing too good either. Massive protests over inequalities

The sky is falling, the sky is falling........ :D

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

Postby Patni » 20 Jun 2013 12:56

So the mere statement on intent to winding up of QE in a year makes market tumble in asia, indicating the "hot easy money" that propled stock booms in asia is going to leave a wreck behind as it pulls out. I think we are in for some rough ride for next 3-4 months with the possible massive financial stroam starting to take shape. IMHO there is going to be a market correction of about 8 to 10% in next few months for stocks and commodities in India. How ben manages to get off from the QE tiger is going to be intresting. From Indian praspective the finance minister will not be able to attract FII and CAD will get worse leading to more devaluation of INR and more imported inflation.

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

Postby panduranghari » 20 Jun 2013 13:39

This is a post on old Kitco forum from 1999. Very relevant in perspective. Forget the y2k scaremongering. The idea is still a solid speculation and well grounded supposition.

http://www.usagdfa.com/1999/08.html#10209

Hey FOA - thanks for your continued presence here. That was a wonderfully cogent explanation of the contrasting views of the dollar depending upon where you sit. Given your explanation, do you think that perceptions of possible problems surrounding the y2k issue might precipitate this
'closing' of the dollar door? I posted something earlier about the BOE and their apparent attempt to become very liquid come the end of the year. It is interesting that they intend to denominate this increase in liquidity in Euros, not pounds or dollars. Is this the first public shot across the bow of the US dollar?

ET,
Thank you for the compliment. I also enjoy all of the other presentations offered here, including yours. I'm always impressed to see everyone display their own perspectives in written form, and then hint at how they intend to put those thoughts to work. Some posters are into silver, others in mining stocks and others buy gold or options. For most of us, these pronouncements not only
openly display our view of the future but indicate our actions and how it will impact out wealth to a great extent.

I have often found that people will "bet" a great deal of their money to make a return. However, most never would "place" as much money in an effort to maintain their "wealth". This concept has grown right along with the current global expansion of the last 50 years or so. It's
easy to understand, because seldom does the world experience massive wealth destruction. Consequently, in those few times that this occurs, everyone is usually "betting" on a percentage return "on their wealth" not "a return of their wealth". They are caught in a once in a thousand year change, just as may befall the world from Y2K. If something is unseen over several lifetimes, it cannot happen, right? The constant successful repeat of an economic function creates a "common belief" among people groups that is hard to refuse.

If Another has not read the minds and actions of leaders correctly and I am completely wrong, I'm not going to increase my wealth very much. However, if the life cycle of our world monetary system is coming to an end, those that are expecting a repeat of the past will lose a great deal.
Even those that position themselves in expectation of similar "currency crisis" as in the past will lose. A line of thinking I have presented here recently.

Yet, for me to actually "lose" wealth, the entire history of human nature would have to be repealed. Gold would be pushed into the background as everyone made good on their debts. This is why I "place" my wealth in the "no return on investment" position. Gold rose 32% during the 1929 contraction, while most people lost "everything. Even though that gain was not a return from investment, it was an increase in value from the falling price of everything else.

There are truly many financial giants that currently walk this earth. Some "bet" on silver, some "bet" on gold, but most of them all position these "bets" to function within the framework of this present system. The giants I follow have "placed" a good portion of their wealth in a position for change.

Truly, there is so much more in life than loss or gain. We gather here to learn, to understand and share our perspectives in this changing world.

Yes, ET,
The BOE is sliding into the Euro arena as we speak. They cannot stand on both sides of the fence. Like it or not, the IMF/dollar and the london gold market that gives it value are failing. They sold their gold to back up a few survivor banks for entry into the EMU. The signal is loud and clear, England is NOT running to the Euro, they are running "FROM" the dollar! No wonder oil money is leaving London. I don't care what the odds are, the British pound is history and

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

Postby member_26147 » 20 Jun 2013 21:22

Neshant wrote:
DhruvP wrote:They have started diluting the dollar already, by increasing the money supply,


So are you saying savers, wage earners and pensioners should be cheated?

Just trying to find out exactly who you propose should be cheated to "solve" the problem as you put it.


Who do you propose get cheated? People who invest in promising technologies or people who try to park money to exact guaranteed returns? Do you really think the world will go back to the ages where having saved gold coins will quadruple money somehow with you becoming a gazillionare in some set time say 15 years? If so, you're acting like a fool.

Neshant wrote:
he long term investor is a rare individual who buys during these dips and sees record gains.


Buys what on dips? Ultimately playing the stock market is nothing more than gambling. It sure looked good to Japanese investors looking for the dip when the NIKKEI fell by 25% in the early 90s from almost 40,000 to 30000. Except that dip just kept on dipping for decades. Trying to force people to into the stock market assumes you are some all-knowing oracle that knows when the bottom has arrived. By the way, when that capital is destroyed through bad investment decisions, its gone. It does not magically re-appear unless its being stolen from another segment of society.

My point is that the market should decide when the bottom has arrived and invest - only if it wishes to and not because some guy got the bright idea that he knew where everyone should put their money.


Buying stocks on their valuation based on P/Es, return on shareholders equity, return on invested capital is all gambling. Trusting gold just because it shines and is rare is not. Is that your point? If so, I'm banging my head against the wall here.

Neshant wrote:
Gold is destroying India's economy more than it is helping.


Are you proclaiming yourself the all-knowing oracle of what people should invest in?

It is the right of people who earned the money through hard work to decide what is appropriate for them to invest their wealth in. Any attempt to "manage" other peoples' wealth or investment decisions without their consent is fraud & theft. You seem to have a hard time understanding this.


Ofcourse it is the right of people to buy whatever they choose. They (you) can choose to buy dirt if they wish. I can try to reason with them (you) but they will ultimately do things the way they (you) want. At the end of the day, I will have a diversified portfolio while you and Pandu will keep investing in gold. I will keep making my point that the stock market trades winners and losers because everyone has to borrow to create knowledge and wealth. You will keep making your point that buying gold in itself will conserve or increase your return just because it is rare and was used in the past for a long time. I will then make a counter-argument that you should buy slay bars and coins since they were used in Babylonian times. It is indeed as ridiculous as it sounds. To me, with all the data available at my fingertips, investing in stocks is better than putting your trust in gold or clay.

Neshant wrote:
we all know that is wrong but you need to understand the fundamental principal that gold is not a growth driver)


Gold is neither a driver nor a non-driver any more than gambling on the stock market is a driver or non-driver. Putting money in stocks does NOT equal economic development. In the case of Bernanke pumping the real estate & paper leverage bubble circa 2008, it equaled just the opposite - economic destruction.


Gold is a non-driver. Its passive wealth intended to hedge. It locks money. It retards development. Stock investment is not gambling. It gives a return on investment while creating wealth and improves technology. You can keep repeating the same thing over and over, it doesn't make it true! Your attempt to ridicule the entire stock market, corporations, knowledge based economy only shows that you're paranoid. That is another thing the market is good at, taking money from the paranoid people. Apparently then, they all run to gold. :lol:

Neshant wrote:
For the Indian economy, however, the gold obsession is worse than a poor investment. Unlike buying stocks or bonds, parking money in gold slows, rather than stimulates, economic growth

Total nonsense.


Nice counter argument. :lol: Which school did you go to?

Neshant wrote:
Meanwhile, a growing trade deficit forces the country to devalue its currency


Other way around. Devaluation leads to more gold purchases as people realise the paper currency is being made worthless for the benefit of speculators.


Its both ways. In India's situation, too much locking of money in gold is holding it back because (guess again) gold is a not a growth driver.

Neshant wrote:
Innovation needs capital investment in the form of loans that needs to be borrowed. If everybody stashes gold in their basement, money is locked.


If it needs to be borrowed whether domestically or from abroad at a high interest rate, it means the investment does not yield a high enough return or the risks of capital loss are too high. If people are not willing to part with their gold (or other investments) to lend their money for such ventures, what economic theory says its in their best interest to be forced to do so?

Ultimately when people opt to keep their gold, stocks, real estate or whatever, they do it in their own perceived best interest. If the price of gold were to hit $100,000/oz tomorrow, India will literally become a net exporter of gold as people rushed to trade it in for other goods.


Spoken like a true gold bug! Why would the price of gold go to $100K? What does anyone gain when they buy gold at their price? Gold speculation (and this is the real speculation, as opposed to investing in the stock market) is running rampant but this is over the top. I mean, all corporations will eventually go bankrupt because the Fed is borrowing money (which Indian government does too by the way from its own people and its debt-to-GDP is at 65%) and then the stock markets will implode, everyone will stay at home and become instant gazillionaires with their gold coins and gold bars. Yeah right buddy. This is over the top speculation that will put to shame real gamblers in Casinos. :rotfl:

Neshant wrote:Gresham’s Law states that the "good" money always vanishes into vaults & lockers. The "bad" money always ends up in circulation. Its never difficult then to figure out what society perceives as the good money at any given moment.


Right. Gresham existed in 1500s.

Neshant wrote:
In India, because there is a lack of risk-takers, US enterprises are setting up shop and gobbling up small businesses.


How do you know they're not gobbling up proverbial dot com bombs or nortels or enrons? Should these companies or the global economy take a dive tomorrow, they would have traded their proverbial gold for proverbial glass beads. This whole perception you have that putting money into stocks, buying up businesses automatically means its good is a sign of a mind brainwashed. Any attempt to stop people from making their own financial decisions and hijacking their hard earned wealth to "manage" it is tyranny.


How do you know they are not gobbling up Google or Apple? Should these companies or the global economy recover tomorrow, they would have traded their chunk change for a bargain price. This whole perception you have that putting money into gold, keeping it locked in a bunker gives automatic great returns is a sign of a mind brain-exploded. Any attempt to brand a verbal argument as a tyranny is cuckoo.

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

Postby Christopher Sidor » 21 Jun 2013 00:08

Neshant wrote:China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned.

The Telegraph
Ambrose Evans-Pritchard

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

"The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation," said Charlene Chu, the agency's senior director in Beijing.

"There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signalling," she told The Daily Telegraph.


http://www.telegraph.co.uk/finance/chin ... story.html



One quick question, since they do not know who the borrowers are or who the lenders are or the quality of the assets, how can they say "the scale of credit was so extreme" ?

It is like saying that out of the 4 variables in the equation, i.e. identity of the borrower, identity of the lender, quality of assets, we do not know the value of 3 variables and the 4th variable, i.e. the quantum of the loans, we are assuming. But the equation value is huge, massive.

Yes Credit to GDP growth has been huge. Recall how PRC mandarins panicked and gave the biggest stimulus as a percentage of the GDP on this planet, excluding US, immediately after the Lehman crisis of 2008. But whether it will play out the way these guys say is a big question mark. And I hope that it does not. I do not wish to see the Chinese effort of the past 35 years go to waste.

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

Postby TSJones » 21 Jun 2013 00:13

Dow down 350 and gold down 92. The shorts are having a quite a fun time.
Last edited by TSJones on 21 Jun 2013 00:23, edited 1 time in total.

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

Postby svinayak » 21 Jun 2013 00:21

Marc Faber's Gloomy Forecast: Summer Crash Concerns


Theo_Fidel

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

Postby Theo_Fidel » 21 Jun 2013 00:58

gold below $1300. I make that a 7% drop in one session! Guess we now know what was holding that price up.

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

Postby Atri » 21 Jun 2013 01:32

Acharya ji, bliss to chk jour ekhat..

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

Postby devesh » 21 Jun 2013 02:11

Acharya wrote:

http://www.youtube.com/user/KBGlobalGold


What if every deposit made through your account was backed by 24kt 999.9 gold bullion?


Depression guaranteed for at least 10 years.

there has been so much paper printing going on, any such gold backing now will surgically incise the legs of the global economy.

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

Postby panduranghari » 21 Jun 2013 02:27

Christopher Sidor wrote:

One quick question, since they do not know who the borrowers are or who the lenders are or the quality of the assets, how can they say "the scale of credit was so extreme" ?

It is like saying that out of the 4 variables in the equation, i.e. identity of the borrower, identity of the lender, quality of assets, we do not know the value of 3 variables and the 4th variable, i.e. the quantum of the loans, we are assuming. But the equation value is huge, massive.

Yes Credit to GDP growth has been huge. Recall how PRC mandarins panicked and gave the biggest stimulus as a percentage of the GDP on this planet, excluding US, immediately after the Lehman crisis of 2008. But whether it will play out the way these guys say is a big question mark. And I hope that it does not. I do not wish to see the Chinese effort of the past 35 years go to waste.


Ambrose Evans Pritchard used to be a big advocate of Austrian school of economics. He wrote extensively on the problems of the current economic system. Until 2011 his commentary appearing in the Telegraph- a right wing Tory supporting newspaper- was incisive and scathing to say the least.

When the Tories started in office, there is a CT making rounds on UK financial boards that he was told implicitly to back the chancellor and castigate everyone including labour, Europe, Us and Far East.

And he did.

His commentary now is so far removed from the honest reporting prior to 2011, that its like he now a different person. I used to read his eagerly but now his posting is borderline moronic.

Best not waste time in deducing what Torygraph reporters write.

BTW OT- the onlee newsrag which has complete blackout of IPL is Telegraph.

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

Postby svinayak » 21 Jun 2013 02:46

-
Last edited by svinayak on 21 Jun 2013 05:09, edited 2 times in total.

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

Postby Atri » 21 Jun 2013 03:37

Acharya wrote:
Atri wrote:Acharya ji, bliss to chk jour ekhat..

Can you explain



Explain???

I have sent you an email on lacharya@gmail(dot)com

Please have a look at it.

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

Postby svinayak » 21 Jun 2013 04:00

-
Last edited by svinayak on 21 Jun 2013 05:08, edited 1 time in total.

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

Postby svinayak » 21 Jun 2013 04:01

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Last edited by svinayak on 21 Jun 2013 05:08, edited 1 time in total.

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

Postby Atri » 21 Jun 2013 04:34

Oops sorry saar. Sending again. Mea culpa. :-)

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

Postby Austin » 21 Jun 2013 10:07

Russia’s Shadow Economy Accounts for 15-20% of GDP – Minister

ST. PETERSBURG, June 20 (RIA Novosti) – Russia’s shadow economy accounts for some 15-20 percent of the country’s gross domestic product, the finance minister said Thursday.

With a GDP of about 60 trillion rubles ($1.8 trillion), that means at least 9 trillion rubles ($250 billion) is generated by opaque transactions, Finance Minister Anton Siluanov said in comments aired on Ekho Moskvy (Echo of Moscow) radio.

Based on an aggregate tax burden of 35 percent, the shadow economy accounts for at least $90 billion in unpaid taxes every year, he said.

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

Postby Christopher Sidor » 21 Jun 2013 13:19

Theo_Fidel wrote:gold below $1300. I make that a 7% drop in one session! Guess we now know what was holding that price up.


There are people in India who have taken personal loans, @13-15%, to buy physical gold in the anticipation of it rising further and making a neat profit. I personally know of 2 such cases. If this fall continues then they would be screwed. They might hold on to the gold, due to sentimental reason but the returns will not be as much as expected. Add to the fact that they actually paid a higher price, on account of their taking a loan, to buy the gold.

Greed is truly one sin which is universal.

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

Postby vishvak » 21 Jun 2013 21:37

(What has gold got to do with this? Gold holding of all countries would have devalued too!)

Any idea how dollar being a global currency USA is exporting inflation?

How would it affect debt of other countries?

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

Postby Suraj » 22 Jun 2013 01:34

Meanwhile, the S&P and Moody's email revelations tickle mainstream media after appearing in the Rolling Stone:
The Last Mystery of the Financial Crisis
Original Rolling Stone article in full:
link
In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.

"Lord help our ****** scam . . . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more.

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

Postby kmkraoind » 22 Jun 2013 18:02

RBI had purchased 200 tonnes of gold at $1,054 per ounce, now gold is nearing $1300 mark. When RBI purchased gold in Nov 2009, USD-INR was at @46-47, now hovering at 59-60@. It means at rupee terms. Any further fall in gold prices means, RBI is at paper losses.

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

Postby RoyG » 23 Jun 2013 20:40

UK and China in £21bn currency swap deal

The Bank of England and its Chinese counterpart have signed a deal likely to boost trade between the UK and China in the yuan.

The Bank and the People's Bank of China have signed a three-year currency swap arrangement worth 200bn yuan (£21bn, $33bn), the UK central bank confirmed.

The UK is looking to become a centre for the Chinese currency, also known as the renminbi.

British banks hold 35bn yuan worth of deposits in the Chinese currency.

Currency-swap agreements allow central banks to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China's currency is not fully convertible to other currencies.

The prospective deal was first announced in February by BoE Governor Sir Mervyn King.

"In the unlikely event that a generalised shortage of offshore renminbi liquidity emerges, the Bank will have the capability to facilitate renminbi liquidity to eligible institutions in the UK," Sir Mervyn said on Saturday.

Last year, the UK Treasury announced plans to make London - the world's largest currency trading hub - the leading international centre for trading the yuan outside mainland China and Hong Kong.

China has been gradually relaxing strict controls on the value of its currency and on flows of capital.

Beijing has been using these pacts as part of its push for a more global role for the yuan.

It has a swap agreement with Brazil worth $30bn and has also signed similar agreements with other trading partners such as Japan, Australia and Hong Kong.

http://www.bbc.co.uk/news/business-23020718


Slowly the world is moving away from the dollar. Like a hot roti being nibbled from the edges.

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

Postby Austin » 23 Jun 2013 22:27

The extraction and production of gold in Russia is increasing the 6th year in a row

Image

At the end of April 2013 the Bank of Russia owned 31.8 million ounces (993.75 m) (1 ton = 32,000 ounces) of physical gold. By just published statistics, the Bank of Russia bought in April, about 200,000 troy ounces. Schedule of Sharelynx and Ed Steer shows the dynamics of growth of reserves since 2006. For less than 7 years the Russian gold reserves increased almost threefold. New Gold added to the growing pace in 2009 and 2010, after which the growth rate stabilized.

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

Postby TSJones » 25 Jun 2013 08:14

BRICS do a policy reversal in contemplation of a tighter US dollar.

http://finance.yahoo.com/news/brics-see ... 28912.html

...you just can't please some people.... :)

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

Postby svinayak » 25 Jun 2013 10:26


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

Postby Austin » 25 Jun 2013 15:54

Seems like Moody has downgraded 8 major HK bank over Snowden ?

http://21stcenturywire.com/2013/06/24/m ... arm-of-us/


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