Monday, September 28, 2009

Monday Snippets

I am a bit under the weather this evening and will take the night off from a full post. I am armed with second generation antibiotics, so I hope to make some progress against my sinus infection.

Over 100 Articles on Seeking Alpha
Over the weekend my Seeking Alpha article count reached past the 100 mark. I am happy to have material posted over there, and the readership of that site is a pretty savvy crew. A personal milestone.

Mr. Practical Article
You know things must be crazy because Mr. Practical is posting more than usual. In today's missive on Minyanville, Mr. Practical again covers deflation in response to a pointed reader email he received. Well worth a look:
Money Can Indeed Perform Vanishing Acts
The title is misleading, I know full well money can vanish; it is what happens to most of my investments!

Job Creation Reality Check
I had this post up in the comments section last night, but in case you missed it it is very important. Clusterstock covers the math of John Mauldin about jobs, namely we will need to create over 250,000 a month to return to 5% unemployment in 5 years. As a reference the average 30 year monthly job creation number is 50,000. Even during the go go tech boom (1991-2000) job creation ran at 150,000 jobs a month. This seems like it may be a problem, but I am the alarmist sort.
Another Reason We Won't Have A V-Shaped Recovery: Jobs

Gold Manipulation in History
Zero Hedge had this leading headline on this morning:
Exclusive Smoking Gun: The Fed On Gold Manipulation
Naturally I was very excited.

The post covers in detail that the US FED, along with the Treasury, and strangely enough, the CIA, were indeed engaged in plenty of gymnastics in regards to gold prices and allocation. The only problem is this information is from the mid 1970's! While the content was clear and provocative, it is also seriously outdated. Sadly, we will have to wait another 20-30 years to find out what is going on behind the scenes today. Where's the Flux Capacitor when you need it most? Where is my Leonora Christine?

I am of the firm opinion that world central banks care very much about the price of gold. I am also of the firm opinion that gold over $1000 an ounce is not desired for the most part because of what that means in regards to fiat currencies. I think it is beyond question that gold plays a large role in top level government banking policy. And yes, my lead lined tin foil hat is on straight.

Have a good night.

4 comments:

Dave in Denver said...

Dude, I got your number on 10/11 - The Hoodie comes to Denver to get a butt-kicking from his former disciple LOL.

getyourselfconnected said...

Dave,
The Patriots have had a terrible record vs. Denver at mile high, even after Bellicheck and Brady came to town. We shall see!

Stagflationary Mark said...

"I am of the firm opinion that world central banks care very much about the price of gold. I am also of the firm opinion that gold over $1000 an ounce is not desired for the most part because of what that means in regards to fiat currencies. I think it is beyond question that gold plays a large role in top level government banking policy. And yes, my lead lined tin foil hat is on straight."

I don't think you need a lead lined tin foil hat to think those things. If the Fed didn't care about gold, gold wouldn't keep coming up.

http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm

"Unlike the gold standard before World War I, however, the gold standard as reconstituted in the 1920s proved to be both unstable and destabilizing. Economic historians have identified a number of reasons why the reconstituted gold standard was so much less successful than its prewar counterpart. First, the war had left behind enormous economic destruction and dislocation. Major financial problems also remained, including both large government debts from the war and banking systems whose solvency had been deeply compromised by the war and by the periods of hyperinflation that followed in a number of countries. These underlying problems created stresses for the gold standard that had not existed to the same degree before the war." - Ben Bernanke, March 2, 2004

*sarcasm on*

Fortunately, we don't have ANY of those problems now. There's been no enormous economic destruction and dislocation. There are no major financial problems that still remain. There's no large government debts from the war(s). The solvency of our banking system is beyond question. Oil didn't spike to $140+ convincing many that hyperinflation may indeed be upon us. There have been no underlying problems creating stress for anyone or anything.

*sarcasm off*

I do enjoy sarcasm!

http://www.bloomberg.com/apps/news?pid=20601083&sid=acrGvxBXPDfk

" Sept. 9 (Bloomberg) -- Gold prices that jumped above $1,000 an ounce this week are signaling that investors are buying metals to hedge against declines in currencies, former Federal Reserve Chairman Alan Greenspan said.

The gains are “strictly a monetary phenomenon,” Greenspan said today at an investment conference in New York. Rising prices of precious metals and other commodities are “an indication of a very early stage of an endeavor to move away from paper currencies,” he said."

I bet Bernanke would love to kick Greenspan where it would hurt the most. Just a hunch. Hahaha!

Here's the risk of course. Don't make a central banker nervous. He's likely to do something dangerous. I'm reasonably confident that few central bankers will put up with "an endeavor to move away from paper currencies" for long, any more than the Chinese Government would tolerate an open and honest public protest about human rights for very long. Just another hunch.

Anonymous said...

Mark,

"I bet Bernanke would love to kick Greenspan where it would hurt the most. Just a hunch. Hahaha!"

Hell if Bernanke is worried about deflation he should embrace gold taking a moon launch just to confirm in his own mind that his re-inflation attempt is working. No?
LOL
Kevin