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

Neshant · Post by **Neshant** » 11 Apr 2013 09:45

A guy who survived through the Argentina economic collapse (debt default) in 2002

He's written a book on it.

If I were living in a PIGS type country, I'd be preparing asap. Stocking up and stuff.

svinayak · Post by **svinayak** » 11 Apr 2013 20:00

It is inevitable

Prem · Post by **Prem** » 12 Apr 2013 01:48

RoyG wrote:
Jhujar wrote:http://seekingalpha.com/article/1319461 ... silver-now
Sell Your Gold And Silver Now
Yeah yeah... ...Meanwhile....
[youtube]Ilh5iUQIb4s&feature=youtu.be
Japani learning from Hindustanis

( And these Buggers were recommending devaluation of INR. Pee Ke Indus Ka yeh Paani, Gold Buying Yeh Japani)

Japanese Rush to Sell Gold as Price in Yen Jumps
The weak yen has triggered a gold rush, literally, among Japanese households, reflecting how bold new economic policies are shaking up long-entrenched deflationary attitudes, freeing up dormant assets, and sparking new economic activity.While gold prices have softened globally, the declining value of the yen against the dollar makes the precious metal worth a lot more in Japan. Japanese families are now scrambling to dig out gold objects from closets and jewelry boxes, and selling it to metals dealers, converting their passive assets into cash that some say they plan to put to work on everything from vacations to children's allowances.ong lines have formed this week outside jewelers from Tokyo to Osaka, with the price of gold in Japan jumping 4.8% this week as the dollar came close to hitting ¥100, up from about ¥80 late last year.I learned about the rising price of gold on television and came to sell for the first time," said 61-year-old Masako Yoshida, as she waited for about an hour on Tuesday to sell a collection of gold rings she received from her mother about three decades ago. She said she planned to use the money to eat good food and buy souvenirs when she travels to Kyushu in southern Japan in May.

Christopher Sidor · Post by **Christopher Sidor** » 12 Apr 2013 17:42

India’s influence wanes on world stage -- The Hindu Dated 10-April-2013
From the above article the a memorable quote

BRICS would be better served if India is replaced by Indonesia, where economic management is prudent and sound.

More than 4 years after great recession hit, we have sleep walked ourselves into this mess. With a budget deficit exceeding 6.7% a growth which will be around 6%, plus or minus 1%, and an inflation running at 10%. We will probably be the first country to be awarded junk status, where we will be kept company with Greece, Cyprus, etc.
So bad is the situation, that we have two rules, one for Indian investors and the other for foreign investors. The Indian investor has to go through baptism by fire, get KYC done, pay taxes on every nook and turn. While the Foreign investors make a hue and cry if they buy Indian assets, especially if they are more than a 11 billion USD worth and are taxed. And oh and I forgot to mention that they off course do not have to go through any KYC, they can remain anonymous. So no way of making sure whether D-company or other unsavory characters are not playing with Indian markets.

shyam · Post by **shyam** » 13 Apr 2013 12:30

Breakable, Barterable Bullion: The Gold Bar You Can Carry In Your Wallet And...

Sri · Post by **Sri** » 13 Apr 2013 13:09

Any of you guys involved in the Bitcoin thing? Interesting concept mathematically and technically, but some quarters are swearing by it.

http://en.wikipedia.org/wiki/Bitcoin

shyam · Post by **shyam** » 13 Apr 2013 13:39

Even though it is a novel and interesting idea, I see many risks with bitcoin.

1. It is virtual currency, nothing backs it other than trust
2. Since it is a digital currency, it is vulnerable to all kinds of internet hacking, even though pundits promise complex encryption based security. It depends only on the novelty of the hacker.
3. If governments / central banks don't like it, they can simply outlaw it and block bitcoin packets over internet.
4. They can even make it criminal calling it money laundering scheme.
5. Others also can simply start other forms of bitcoin, say bytecoin. There is no limit how many such currencies are possible, making bitcoin irrelevant.

These don't mean that bitcoin won't have any parabolic rise. But in the end it can create a lot of suckers, and is certainly not a saving for the long term. If you happen to make a lot of money in bitcoin, you should have bought super lotto. Gold is still the safe bet for ordinary folks.

Singha · Post by **Singha** » 13 Apr 2013 13:49

I have posted my spider feel on bitcoin in the gizmo thread yesterday. suffice it to say I feel the tingling of many flies about to get stuck in the silken threads on my grid. and then the big bad spider will eat them all.

Austin · Post by **Austin** » 13 Apr 2013 20:29

Documentary on Debt : OVERDRAFT

Neshant · Post by **Neshant** » 14 Apr 2013 01:54

If you notice, the good money is almost always locked up in vaults for the most part (gold). It disappears from circulation. Even things like silver quarters & dimes.

The bad money (paper currency) meanwhile goes into circulation and stays in circulation.

If bit coins are indeed good money, then we should see a tendency towards people keeping them as savings and using them rather sparingly to buy stuff.

I would not trust it personally.

akashganga · Post by **akashganga** » 14 Apr 2013 06:36

Neshant wrote:If you notice, the good money is almost always locked up in vaults for the most part (gold). It disappears from circulation. Even things like silver quarters & dimes.

The bad money (paper currency) meanwhile goes into circulation and stays in circulation.

If bit coins are indeed good money, then we should see a tendency towards people keeping them as savings and using them rather sparingly to buy stuff.

I would not trust it personally.

Gold and dollar have had interesting relationship. In 1971 before nixon removed gold standard one oz of gold was $35. Once nixon removed gold standard for dollar, gold shot up to $850/- per oz. Then from 1981 to 2002 gold declined to about $300/- plus per oz. Then it started rising again and is not around $1600/- per oz. It is a question of which is more trusted dollar or gold. The gold camp says gold will cross $5000/- per oz and the other camp says gold price will plummet . Whatever happens to value of gold in dollar terms gold will still be trusted by world longer after all paper fiat currencies are gone. Gold was valued thousands of years before paper currencies appeared and gold will be trusted long after all fiat currencies disappear.

pentaiah · Post by **pentaiah** » 14 Apr 2013 08:03

When gold touched $285 per ounce in1998
Russia under Yeltsin started selling gold to augment dollar reserves also Iraq was pumping oil like crazy
And at one time barrel of oil was between 18 and 28 dollars
Following Russia PRC, SA Australia and even Canada started dumping gold plus US had surplus budgets
Thanks to GW and his war frenzy he screwed up big time by his stupid war in Iraq and the rest is all too well known

Altair · Post by **Altair** » 14 Apr 2013 08:58

Its marriage season in South (Lot of marriages in May). Estimates put South India(AP,Karnataka,Tamilnadu,Kerala) will buy atleast 500~700 Tonnes of precious metal in the next 40 days. Chidu will have his chaddi in knots!!

abhishek_sharma · Post by **abhishek_sharma** » 14 Apr 2013 09:09

My Time at Lehman

RoyG · Post by **RoyG** » 14 Apr 2013 18:37

Altair wrote:Its marriage season in South (Lot of marriages in May). Estimates put South India(AP,Karnataka,Tamilnadu,Kerala) will buy atleast 500~700 Tonnes of precious metal in the next 40 days. Chidu will have his chaddi in knots!!

The problem is GoI put a self imposed moratorium on gold purchase. We should have have already constructed 2-3 secure facilities to store the metal. Moreover, all the gold that we presently own which is sitting outside of India (mostly with IMF) should be brought to India. It isn't ours unless we have physical ownership.

akashganga · Post by **akashganga** » 15 Apr 2013 01:40

RoyG wrote: The problem is GoI put a self imposed moratorium on gold purchase. We should have have already constructed 2-3 secure facilities to store the metal. Moreover, all the gold that we presently own which is sitting outside of India (mostly with IMF) should be brought to India. It isn't ours unless we have physical ownership.

Do you trust GOI officials and politicians to guard gold. Are you kidding.

RoyG · Post by **RoyG** » 15 Apr 2013 02:57

We need to take the chance. CAG should be given responsibility for audit.

Prem · Post by **Prem** » 15 Apr 2013 08:48

http://www.forbes.com/sites/realspin/20 ... a-company/
Bailouts Were The Norm Long Before TARP: A Retrospective On The East India Company
( Accarya San , Take note)

The East India Company is Room 101 for everyone’s economic anxieties. It was the omnipotent multinational corporation that liberals fear, amoral profit driven machine that conservatives scorn, and crony capitalist creation that libertarians bemoan.It was equal parts business, war machine, monopoly, and colonizer. The company traded and taxed, persuaded and extorted, enriched and looted. How it survived a quarter millennium (1600-1858) to become, in Edmund Burke’s immortal words, “a state in the disguise of a merchant” says much about bad economics and government policy.This government created monopoly grew out of a faulty economic theory, mercantilism. This idea had two foundational premises: economic activity is zero-sum and wealth equates to how much bullion a country possesses. Accordingly, European governments enacted trade restrictions and controls to achieve positive balances of trade by completely dominating domestic and colonial markets. Tariffs, corporate favoritism, and autarky are all mercantilist policies.But its biggest legacy is bloodshed. Belief in economic gain as occurring at someone’s expense encouraged the annihilation of competitors. France and Britain, assisted by their joint-stock companies, regularly fought for economic supremacy abroad throughout the 18th Century. The assumption of wealth as fixed incentivized the proactive use of force, whether against other Europeans or natives, to obtain riches.But graft, prize money, and loot did not cover military expenditures, as wars grew larger and costlier. So the company took the next logical step, tax. At the barrel of a gun, both prince and peasant filled company coffers with tax revenues. Taxation slowed the export of bullion abroad, a major plus in mercantilist thought, and kept the balance sheets in the black. This money also lubricated a lobbying effort to protect the company’s monopoly. A mid-century loan of £1 million to finance British debt was worth paying to keep competitors out the subcontinent.
But success through belligerence is a shaky proposition. And after the Seven Years War (1756-1763), a series of inconclusive conflicts drained the coffers. The 1770 famine in Bengal (Eastern India), which killed ten million people, made financial problems dire. The stock price cratered as investors pulled their money out, and by 1772 the company was insolvent, facing dissolution, and begging Parliament for relief.The famine brought public anxieties about corruption and despotism in India beneath Britain’s flag to a boil. Lord Rockingham, leader of the opposition Whig Party, lit into the company for its “rapine and oppression” in Bengal. Indeed, the decision to raise taxes during the famine reeked of tyranny. Moreover, earlier mandates to plant certain crops and regulations against hoarding turned a crisis into a catastrophe.Company lobbyists responded with an imperialist version of too big to fail. Bankruptcy meant terminating hard won British preeminence in the subcontinent. Despite the difficulty of France overcoming the Royal Navy’s dominance at sea to reclaim Indian possessions, the argument stuck. The Regulating Act of 1773 provided a £1.5 million loan and capped dividends. It also banned employees from accepting bribes and kickbacks, and appointed a Governor General of Bengal to enforce the regulations.The problem was Parliament chose a compromise, regulating rather than liquidating the company or leaving it alone, which proved unenforceable. How could politicians in London, let alone one man in Calcutta, compel a vast corporate machine to comply with government regulations?Fifteen more years of corruption and war answered that question. After passing additional legislation in 1784, Parliament lost its patience and took serious action. It impeached Warren Hastings, the appointed Governor General from 1773. And none other than the father of conservatism, Edmund Burke, served as chief prosecutor. His grandstanding on February 13, 1788 would make any Congressmen blush, and is worth quoting at some length.Continued wars in the19th Century, namely the conquest of the Northwest Territories and Punjab, again strained finances and setup further intervention from Parliament. In 1813 the company lost its monopoly over everything except tea and trade with China, and ceased all commercial function 1833. Only the administrative machinery, the foundation of crown rule, saved it from dissolution until the Mutiny of 1857. A century after Clive’s triumph at the Battle of Plassey inaugurated British ascendance, the East India Company fell and mercantilism passed away.Observers of the TARP theatrics will notice parallels. Wall Street banks, like the East India Company, nearly paid for their mistakes with bankruptcy. But thanks to a powerful lobbying effort, each wrangled a bailout by prophesizing doom: the collapse of the world economy or the end of British dominance in India.
Both the East India Company and TARP were flagrant examples of corporate collusion with government. Concerned persons rightly fear such behavior. However, the best prevention is greater economic freedom rather than state control. The government cannot create wealth anymore than business can, or should, rule. Central planners and social engineers cannot, and will never, create more prosperity than free individuals.

TSJones · Post by **TSJones** » 15 Apr 2013 20:50

Gold's down to $1378. Better buy some before it becomes the world currecncy.

akashganga · Post by **akashganga** » 15 Apr 2013 23:03

Overdose- The Next Financial Crisis. Watch this. Mother of all bubbles is brewing. Nobody knows how it will end:
https://www.youtube.com/watch?v=Lrzg-FCwvII

Christopher Sidor · Post by **Christopher Sidor** » 15 Apr 2013 23:42

EU Affirms Debt-Cut Strategy in Face of ‘Fragile’ Outlook --- Bloomberg Dated 13-April-2013

Basically two paths have been followed by countries to emerge out of the financial crisis of 2008. The first path is that which has been taken by US currently by Japan, to a large extent by PRC and India. In one word it is stimulus and more government/sovereign debt. The second path is the one taken by the Europeans. Even non-euro countries took it, for example UK.

Just as there are numerous ways to skin a cat, there are different ways to come out of the mess that the planet finds itself in. In America it was the private sector which had unsustainable debt. So while american private sector retrenched and repaired its balance sheet, the US government picked up the slack and we see the debt of US sovereign rising. If US government would not have picked up the slack then we would have seen US GDP fall drastically. And this would have been bad, very bad for the world. Also US is the owner of the worlds fiat currency, the US Dollar. So it basically had a big leash to do what it wanted.

Europeans, specifically the Euro-zone countries were in a different boat. They had adopted a mutant form of gold standard, i.e. the Euro. They could not stimulate their way out of the crisis, because in southern Europe the state/public sector had basically overshadowed the private sector. Their problem was too much of sovereign debt. They depended on world's financial markets for financing and not on their own financial market. For example in India, RBI mandates that banks have to invest part of their liabilities, i.e. money deposited by SB Account holders in sovereign bonds of India. Recently IRDA also came out with a circular which stated that Insurance companies will have to put part of their money in government bonds. Now in time of need RBI can buy these bonds from the Banks and give them rupees instead. But in case of Euro-zone, if a Greek bank bought Greek government bonds, then ECB would not buy it from the Greek banks as Greeks sovereign ratings was basically junk. Ditto for Cyprus. Hence Euro-zone took the path of austerity. So that Greek bonds became investment grade which then ECB could purchase from the Greek banks.

Europeans think that this is the path that the Americans/japan should follow. The Americans on the other hand say that the Europeans should focus on growth rather than austerity. Their claim is that Debt ratio is Debt divided by GDP. In case of austerity GDP reduces and hence the ratio increases. This puts a vicious cycle in progress and does nothing to reduce the Debt Ratio. Rather to reduce the Debt ratio Debt will have to be reduced, i.e. default/forgiven/waived off/restructured and GDP has to increase.

In Euro-zone this might not be possible. For cases like Cyprus, Iceland, etc this is not possible as there is no way these countries can grow. Their liabilities are too big. In case of Cyprus just as in case of Iceland their financial market had become many times the GDP of their countries. Hence austerity was the only way out.

Both of these entities are making fair points but are wrong to impose their view points on the other as they might not apply.

TSJones · Post by **TSJones** » 16 Apr 2013 00:23

Gold's at $1351.00 for a $150 drop.

I think there will be a small bounce back up tomorrow due to a possible over correction today. Oh well, one never really knows does one?

My problem in this, I don't think there was a gold "bubble". I think speculators have grabbed the market and are moving it because China didn't hit its GDP targets. Oil is taking the same hit because of this speculation. It's down to $88. China has also stockpiled cotton and owns 60% of the world's supply. The cotton farmers in the US, the world's most efficient, are going nuts not knowing whether to plant or not. This whole speculative market thing based on China's business climate is not doing the world any good right now.

pentaiah · Post by **pentaiah** » 16 Apr 2013 01:46

No amount of gratitude is enough to express for " I am not a crook" president and his war criminal secretary of state for the communist China rise. Of course thanks to Jack welsh and others who milked PRC labor to make billions and generate the downfall of middle class in USA

Karma is a biatch

Neshant · Post by **Neshant** » 16 Apr 2013 05:23

Gold is taking a hammering today. I've bought a little.

Mainstream media is having a field day pumping the theory that the gold bull is over & done with.

General "Custer" Bernanke is being credited for having headed off the Indian (gold) raiding party at the pass.

svinayak · Post by **svinayak** » 16 Apr 2013 05:27

It is inevitable

A bubble is a bubble is a bubble! Just because gold prices make a correction doesn't mean that somehow the economy is magically better!

monetary policy is headed in the wrong direction and must change, or else world is headed down the same road as Japan!

svinayak · Post by **svinayak** » 16 Apr 2013 05:31

http://www.zerohedge.com/news/2013-01-0 ... oans-india

One of the Fed Chairman's most memorable lines in recent history is that "gold is not money... it is tradition." Perhaps he was merely listening to the Fed's computers, Ferbus, Edo and Sigma, which we now know form the backbone of US central planning and whose DSGE model output is usually spot on until it happens to be catastrophically wrong, on the issue. Or perhaps that is merely what one is taught (and teaches) in the Princeton economics department. Whatever the reason for Bernanke's belief, don't show him this chart from a just released "Report of the Working Group to Study the Issues Related to Gold Imports and Gold Loans by NBFCs" in India, part of a coordinated campaign to minimize Indian gold demand and imports whose direct substitution to "(un)sound money" in the country is one of the reason being attributed for the nation's high current account deficit (as reported earlier) and why the finance minister said "demand for gold must be moderated." The chart shows the staggering eightfold increase in India's gold loans "which monetize the idle gold in the country", in just four short years. In short it proves that in India, gold is the only real money, and is the only fallback option in a country where inflation is still rampant, and where even simple peasants prefer to keep their wealth not in the local paper currency, which has been losing its value aggressively in recent years, but in the shiny metal. Must be "tradition."

Here are some of the salient points from the report on the relentless surge of gold's popularity in India where it is now effectively, a parallel currency, and is accepted as money good (and in many cases, better) collateral for those who need short-term liquidity and funding:

svinayak · Post by **svinayak** » 16 Apr 2013 05:33

Comment:

India as a nation of self-empowered individuals cracked an Empire's back by weaving its own garments, drying its own salt, and drinking its own tea.

Now it chooses to bank its own wealth.

God Bless The Indian People.

svinayak · Post by **svinayak** » 16 Apr 2013 05:39

Why is India so significant to gold? As you can see below, from 2000 through 2011, the rising incomes in both China and India have been strongly correlated to the price of gold.

Investors now have two strong reasons to invest in gold: the Fear Trade, driven by an expanding monetary base, and the Love Trade, driven by rising gold demand in Chindia.

While there are some conflicting reports regarding the total quantity imported in 2011, Prithviraj Kothari, said that India imported 878 metric tons of gold in 2011, down from 958 metric tons in 2010. Other reports suggest that the figure was around 969 tons which was an increase over 2010.

According to Prithviraj Kothari, president of the Bombay Bullion Association, India's gold imports will drop as much as 59% to about 125 tons in the three months through March of this year. However, demand is expected to pick up during the second quarter.

According to the World Gold Council (WGC) Indian gold demand has grown 25% despite a 400% rise of the rupee in the last decade. The World Gold Council research shows that by 2020 cumulative annual demand for gold in India will increase to excess of 1200 tons.

India's continued rapid growth which will have a significant impact on income and savings, will increase gold purchasing by almost 3% per annum over the next decade. Ajay Mitra, Managing Director, India and the Middle East, World Gold Council, said. "The rise of India as an economic power will continue to have gold at its heart. India already occupies a unique position in the world gold market and, as private wealth in India surges over the next ten years, so will Indian demand for gold."

"In parallel to growth, socio and demographic challenges will need to be addressed given its immense diversity. This also applies to the gold market. Nevertheless, gold purchasing will continue, underpinned by India's long-standing and deep cultural affinity for gold; a love affair which transcends generations and makes India unlike any other gold market."

Evidently, Indian households hold more than 18,000 tons, the largest stock of gold in the world, and there is no doubt in my mind that we will soon see a resurgence of demand from India which will underpin prices.

Prem · Post by **Prem** » 16 Apr 2013 07:00

JIM ROGERS: Like I Said, I Expect Gold To Go As Low As $1,200

http://www.businessinsider.com/jim-roge ... z2QaSAHm1o

Gold has been taking a battering all day. Gold is off 8.5% to $1,373.80 an ounce.
Commodities guru Jim Rogers isn't buying gold yet.He told Business Insider there were four key things driving the sell-off.India - The country hiked its gold import tax rate by 50% to 6% at the start of the year. This has curbed gold demand.
Chartists - Technical analysts that have warned that gold prices will continue to fall.
Cyprus - "Ms. Merkel is seeking re-election so she has told Cyprus and others that they should sell some of their gold to pay their debts. The Germans are tired of bailing people out and she needs to be tough."
Bitcoins - "The collapse of Bitcoin since most of them also own gold."
Rogers said he hasn't hedged his positions at the moment.
"I have repeatedly babbled about $1200-1300, but that is just because that would be a 30-35% correction which is normal in markets," he told Business Insider. "But I am a hopeless market timer/trader."Rogers said he expects gold prices to fall further for the "foreseeable future" but expects "gold to eventually go higher over the decade."

Prem · Post by **Prem** » 16 Apr 2013 08:17

http://www.forbes.com/sites/dalearcher/ ... gy-lesson/
Why Are Small Investors Still Buying Gold? A Psychology Lesson

The Disconnect Between the Physical and Paper Gold Market

Last week saw the most precipitous fall in gold prices in almost two years. On Friday, on the Multi-Commodity Exchange of India gold suffered its biggest daily loss ever, and gold futures for June delivery plunged $63.50, or 4.1%, to settle just above $1,500 an ounce on the Comex in New York, the weakest closing since July, 2011. Holdings in GLD the SPDR Gold trust ETF and the biggest exchange fund backed by gold bullion, hit 1,181.4 metric tons, the lowest in nearly three years. Today at the time of this writing gold is off nearly another 4%, trading around $1420 an ounce, more than a 20% decline from its all time high of 1923.70.The experts agree this is because there have seen steady, sustained improvements in financial markets around the world, coupled with news of Cyprus consideration to sell its gold bullion reserves to pay down debt. This sparked fears of a massive sell off of gold reserves by other southern Eurozone countries. The price drop became something of a self-fulfilling prophesy when Goldman Sachs Group Inc. and Deutsche Bank AG cut their gold forecasts for 2014 and 2013 respectively.A massive price decline in gold is not news in and of itself, the precious metal markets are notoriously fickle. What is news, however is the large disconnect between precious metal paper prices, and the continuing boom in the buying of physical gold and silver in the form of bullion and coins. The futures price free fall notwithstanding, small to medium-sized investors still want to own. Just as gold and silver prices were hammered,

So why this massive discrepancy between physical and paper? It could be that the physical market is lagging, and will eventually sell off as well. But there is much evidence that this is not the case. When Malcom Self, owner of Southland Coins, pulled his monthly records since 2008, he found that his precious metal sales have risen eightfold in five years. This week, as banks and other big investors were panic selling, his customers were taking advantage of the price dip to buy more. Physical gold is still available, but physical silver in particular, which appeals to smaller investors because it is more accessibly priced and has industrial uses as well as precious metal value can take a month or more to reach the hands of buyers.Tand homes were taken away. They simply don’t trust the recovery. Banks around the world are continuing to flood the global economy with money and, although all the metrics of inflation have been quihe reason for the demand, according to Malcolm, is that, “People don’t trust the government; they want to own physical stuff because they are not convinced that anything on paper is going to be of value. Besides gold and silver, there aren’t many things you can hold onto that will store value over time”.Clearly, people are afraid. Since the turn of the century they have seen the dot com market collapse, followed eight years later by the worst market crash and recession in living memory, where even cars et, how could this not be an inflationary environment?

svinayak · Post by **svinayak** » 16 Apr 2013 08:27

It is inevitable

akashganga · Post by **akashganga** » 17 Apr 2013 01:25

Billionaires Selling Consumer Stocks: Red Flag or Profit Taking?
http://www.financialsense.com/contribut ... mer-stocks

The following is an excerpt from Richard Russell's Dow Theory Letters

What do billionaires Warren Buffet, John Paulson, and George Soros know that you and I don't know? I don't have the answer, but I do know what these billionaires are DOING. They, all three, are selling consumer-oriented stocks. Buffett has been a cheerleader for US stocks all along. But in the latest filing, Buffett has been drastically cutting back on his exposure to consumer stocks. Berkshire sold roughly 19 million shares of Johnson and Johnson. Berkshire has reduced his overall stake in consumer product stocks by 21%, including Kraft and Procter and Gamble. He has also cleared out his entire position in Intel. He has sold 10,000 shares of GM and 597,000 shares of IBM.

svinayak · Post by **svinayak** » 17 Apr 2013 07:53

http://online.wsj.com/article/SB1000142 ... 04642.html

Seminal Economic Paper Draws Fire
Harvard Professors' Study on Government Debt Challenged as Faulty

A graduate student and his two professors—in a paper that began as a homework assignment and only gradually transformed to a critique—ignited a digital firestorm among academics Tuesday by challenging a scholarly study seen by many as a bedrock of post-crisis economic thought.

The new paper, by University of Massachusetts Amherst economics doctoral student Thomas Herndon and professors Michael Ash and Robert Pollin, says Harvard University scholars Carmen Reinhart and Kenneth Rogoff were wrong in concluding in their 2010 study that a high level of public debt dooms an economy to protracted slow growth.

The Reinhart-Rogoff paper, "Growth in a Time of Debt," found that countries with ratios of public debt to gross domestic product above 90% tend to see their economies not grow but rather contract about 0.1% annually. The finding was a sobering one for many governments still attempting to find their footing after the financial crisis, many by taking on more debt. The U.S.'s current debt-to-GDP ratio is estimated at slightly over 100%.

Messrs. Herndon, Ash and Pollin, in re-creating the Rogoff-Reinhart calculations, concluded instead that countries with debt-to-GDP ratios above 90% saw GDP growth of 2.2%, a percentage point lower than the growth rate seen in countries with lower debt-to-GDP ratios.

Virupaksha · Post by **Virupaksha** » 17 Apr 2013 12:50

akashganga wrote:
RoyG wrote: The problem is GoI put a self imposed moratorium on gold purchase. We should have have already constructed 2-3 secure facilities to store the metal. Moreover, all the gold that we presently own which is sitting outside of India (mostly with IMF) should be brought to India. It isn't ours unless we have physical ownership.
Do you trust GOI officials and politicians to guard gold. Are you kidding.

I trust them more than the blood suckers and tyrants who now have possession of our gold.

vishvak · Post by **vishvak** » 18 Apr 2013 00:21

Acharya wrote:Comment:

India as a nation of self-empowered individuals cracked an Empire's back by weaving its own garments, drying its own salt, and drinking its own tea.

Now it chooses to bank its own wealth.

God Bless The Indian People.

Before giving credit to Hindoos for colonization, financial crisis and so on, please also note information in following
(As credible as website) from daily bail
on hiding debt and not sticking to credit limits aided by financial institutions
http://dailybail.com/home/corrupt-acros ... e-hid.html

About no prosecutions - read 5 points from middle till the end
http://dailybail.com/home/how-obama-sur ... ng-ca.html

A trillion pound bailout in just one country UK
http://dailybail.com/home/daniel-hannan ... crime.html

There is much more discussion already on this thread in detail.

Neshant · Post by **Neshant** » 21 Apr 2013 17:56

Whenever you have the banking & financing "industry" (its more a scam than an industry) involved in anything, you just know its going to end up getting ripped off. They drain money out of the pension funds through fees, bonuses, outright fraud.

Inevitably, the only solution they can come up with to plug the hole of their incompetency and insolvency of the pension fund is cutting. You could have a monkey selecting stocks, losing money and imposing cuts and you wouldn't know the difference from a pension fund manager.

------------------
Pension-law proposal would hit some retirees
http://www.marketwatch.com/story/pensio ... MW_popular

Neshant · Post by **Neshant** » 22 Apr 2013 02:13

Neshant · Post by **Neshant** » 24 Apr 2013 09:09

Irish savers/pensioners will be the next to get Cyprus'd.

You'd have to be as dumb as a box of rocks to keep your money in a bank in Ireland or any European country except Germany.

--------
As if on cue, a day after my expose on Anglo Irish Bank and its shenanigans, The Irish Business Post announces senior bond holders will get wiped out.

http://silverdoctors.com/irish-savers-p ... n-cyprusd/

Theo_Fidel · Post by **Theo_Fidel** » 24 Apr 2013 19:39

Neshant,

Please go back and read the posts that discredited your claim that SS is a Ponzi scheme.

SS is a tax, all taxes are paid by some to benefit all or specific groups/areas. SS is no different even if the program spending is determined by age.
You can argue that a rising tax burden will affect the economy but not that a confidence crisis will cause the scheme to collapse like in a Ponzi scheme.

Through the worst of the recent depression SS taxes were paid and old folks were taken care off, congress even raided the surplus to pay for other things taking the account now into negative. But it is easily fixed. Breitel calculated that raising taxes by 0.7% of GDP, 20 years from now, would be enough to make SS solvent for the next 80 years. Less if done sooner. Roughly 6 months of economic growth anywhere in the next 20 years or so, will do it. Even if we do nothing SS will pay out 80%+ of what was promised for the next 80 years. It right wing nutcases who try to demagogue this debate into a makers and takers nonsense.

SS is also a transfer from the strong to the weak. Ponzi's are usually first in first out, meaning transfer of money from the most gullible to the most rapacious. This is what causes collapse.

SS is not a huge burden at all and completely unlike a Ponzi scheme which quickly turns into a physically unviable model exceeding GDP.

Still this is OT here, if you want to continue we can take it to another thread....

Neshant · Post by **Neshant** » 25 Apr 2013 09:23

SS is a tax, all taxes are paid by some to benefit all or specific groups/areas. SS is no different even if the program spending is determined by age.

Its definately not to the benefit of all or even most of society. Neither is it determined by age for when it comes time to collect for the people who are paying in now, they will get substantially less if anything at all. They'll be old and on their own. SS meets the classic definition of a ponzi scheme :

"A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation."

Read it and tell me honestly, does it not EXACTLY define what SS is.

If SS was a company, nobody would be investing in such a scam. But since it is a ponzi scheme being forced upon productive society, it will end only when the people paying in refuse to do so by casting a vote against it. Either that or it will end abruptly Greek style.

But it is easily fixed. Breitel calculated that raising taxes by 0.7% of GDP, 20 years from now, would be enough to make SS solvent for the next 80 years.

These are all lies meant to keep suckers vested in the ponzi scheme paying in more and getting less.

But lets assume its true. 0.7% of a 14 trillion GDP is 0.098 trillion or 98 billion. There are 70 million retirees most of which will be waiting on the SS ponzi 20 years from now. That works out to $116 per person per month - and that's assuming no inflation. Its pure ponzi mathematics. You'd need to add a couple more zeros being 98 for it to make sense.

42 cents out of every dollar currently being spent is spent in deficit and what's being spent in deficit is 1.5 trillion every year.

Thus old folks today are being taken care of at the expense of many more older folks coming down the line - a classic ponzi trait. A deficit is a future claim against some working suckers paycheck. More and more claims are being made from banking crooks to SS ponzi programs to govt employee gold plated pensions..etc. Its destroying the productive economy and will do so at an even more rapid pace as these claims begin to gallop.

To a large extent, the so called surplus was spent on the same folks looking to collect today. They got the benefit of the debt being run up, now they want the benefit of not having to pay for it.

As with the classic Bernie Madoff ponzi scheme, the only fix is to close it down. Keeping it running by piling up more debt and pledging even more of the paychecks of future generations is cruel. Young people should be let off the hook from this ponzi scheme - they had no part in this fraud unlike the fools looking to collect who keep voting in the 2 "mainstream" banker controlled parties again & again.

do nothing SS will pay out 80%+ of what was promised for the next 80 years.

You are making up fancy numbers. Can you tell me where is this money coming from? Currently 1.5 trillion dollars are being spent in deficit every year. That's not even counting the wealth destruction from money printing. The labor force participation has dropped to its lowest in something like 30 years or more. The job opportunities are fast shrinking except in government, banking and these other non-productive sectors. The birth rate is also falling except for the gang bangers in the Bronx who are going to be more so on the debit than credit side of the ledger.

There is no SS "trust fund" with money in it as most people mistakenly believe. All the SS trust fund has in it are govt IOUs and these are not even Treasury bills (for a specific reason). The reason they are not Treasury bills is because the govt hopes to default on them someday.

SS is also a transfer from the strong to the weak.

This is another false statement. The working class today facing increasingly bleak prospects are being made to pay for benefits being collected by an earlier generation. What happens when the working class today has to retire - being even poorer and with far less savings than the earlier generation collecting SS on their backs?

Its is thus a transfer from the weak to the strong.

SS will have to be scaled down to a "means tested" program only available to the poorest people of society. In other words it will have to be scaled down into a charity program as there are far too many people expecting it. Only a small percentage of the population can only ever qualify as being chairty cases - not the entire population! This is what is coming. The rest will have to save for themselves - hopefully with the money saved not being enrolled in the SS ponzi scheme anymore.

We can discuss this in some other thread - just pick one.