Monday, December 21, 2009

Quiet Slow Week

Every year at Christmas I buy scratch tickets for my co-workers and hope someone will win big. After 3 years I think the most anyone had won was $20. Well last Thursday I dispensed cards and wouldn't you know it, a co-worker hit for $1000!! Now that is how you start off the holiday season right.

Gold and Silver Pep Talk
Just like everyone said it be, gold and silver are getting slammed while the dollar climbs ever higher. Of course stocks are going higher as well (as predicted here; my reason was "because") and all are happy about the new normal.

Well, I thought I would throw out some kind of metals item so precious metal fans do not get too down this holiday season!

In what could serve as a model on how to investigate a problem and make known the results, the Royal Canadian Mint has figured out where their missing gold went:
Canadian Mint Reveals How It Miscounted Its Gold And Lost Millions
We are not talking huge numbers here (about 20 Million) but at least they got to the bottom of things and came clean.

A strange little bill was passed in the State of Georgia that seems a little weird:
Georgia General Assembly House Bill 430
By: Representative Franklin of the 43rd

To amend Title 7 of the Official Code of Georgia Annotated, relating to banking and finance, so as provide a short title; to provide legislative findings; to define certain terms; to require any bank or lending institution serving as a depository for the state or any department or agency of the state to offer and to accept gold and silver coin for deposit; to amend Title 50 of the Official Code of Georgia Annotated, relating to state government, so as to provide legislative findings; to define certain terms; to require the exclusive use of gold and silver coin as tender in payment of debts by or to the state; to provide for related matters; to provide an effective date; to repeal conflicting laws; and for other purposes.
My take on this bill is that Georgia has ended the policy of only assigning face value to gold and silver coinage (including junk silver) and will require fair settlement by spot price of the metals as it relates to bullion coins. Interesting.

Are States Too Big to Fail?
Loyal reader Watchtower wanted some input on whether states/cities/counties could go bankrupt and noted this Robert Prechter article in regards to that line of thought.

My take is that the States will not be allowed to "fail". Consider the ginormous amount of assistance states have had in two forms already:
-Stimulus money meant for "shovel ready" jobs and projects was instead used as revenue for state budgets across the country. There is no telling how many jobs were "saved" due to this huge money pile.
-The Federal super-ultra-mega extended unemployment benefits program has really bailed out the states in terms of easing jobless claims benefits by state as well as keeping demand up which helps tax revenue.

Taken together these two items are major support structures. Neither seems likely to end soon.

Of course individual counties may go the bankruptcy route, and several have (Mish always covers these stories):
Vallejo County CA Used BK to Break Union Contracts
Jefferson County Alabama Looks at BK
Detroit in Bad Shape

I do not believe a state will be allowed to go bankrupt. Why panic about Citi and not about California? The Federal government will drag us all down with any state that needs help.

Also consider a new funding angle: Bribes for Health Care Votes
It seems the states will have money coming in to help!

Too Much Money
The Automatic Earth sums up what ails the United States and permeates the political landscape:
If a politician can be elected only when (s)he has enough money (i.e. millions of dollars, and for a president hundreds of millions) to run a campaign, then the resulting policies will be dictated by those who donate that money. And since one dollar equals one vote, the grandma who ate mac and cheese for a week to donate $10 to Obama has no say, while a financial institution that gave $10 million does.
Read the whole thing.

Kissing Cousins
If the events of the last 2 years have taught us anything it is that the same people that run banks into the ground are the same people (not the same type, the exact same people!) tasked with bailing them out. Inbreeding at it's finest. Why there are no laws against such things (at least you cannot marry your cousin!) is beyond me but I am rational thinker. How Neil Kashcari goes from doling out TARP funds to big honcho over at PIMCO without missing a beat is appalling.

Anyways, from the department of "No Kidding":
Study Finds That Of All Factors Determining The "Bailoutability" Of Crappy Banks, Ties To The Federal Reserve Are Most Critical
Shocking isn't it? Oh, you are not shocked? Me neither.

Have a good night.


getyourselfconnected said...

From prior post;
Gawians said:
"If the Cowboys continue to play like they did, they can beat anybody in the league. But that's a big IF, since they haven't done it for several years now. And they still haven't clinched a playoff berth."

Man, you just can't enjoy a big win can you!

And yes I talk to myself all the time, I am very interesting.

getyourselfconnected said...

The next comment is for adults only and not for those easily offended!!

I recently found the pure joy that is the Yahoo Answers board. No where else will you find a collection of comedy gold like that place! Case in point; can a dentist tell if a lady has done certain things as of late?:

I am still laughing on those responses.

GawainsGhost said...

Oh, I can enjoy a big win, for one day. Then I start thinking about the next opponent. Don't think for a second that the Redskins are going to lay down for these Cowboys. And if Washington beats New York tonight, then they'll be even more motivated to beat Dallas at home on Sunday. They're playing the role of spoiler, and playing pretty well I might add. Their defense is really very good.

So the Cowboys are simply going to have to maintain the level of passion and intensity they played with Saturday night in order to enjoy any success in these last two games and in the playoffs, assuming they earn a berth. And don't think the Eagles are going to be an easy game for them.

I've seen Dallas go on runs and win it all. I've seen them totally collapse and lose it all. I've seen them win tight games and suffer tough losses. I've seen them at their best and at their worst. Hell, I've only been watching the Cowboys play football since before the Ice Bowl, when I was a child.

And all I can say is this. They don't call them the Cardiac Cowboys for nothing. You never know which team is going to show up. They'll either play like men and impress the world, or embarrass themselves and all real men everywhere. That's just the way it is, and it's always been that way.

All I'm saying is, we don't know which team will show up on Sunday. Until these Cowboys prove themselves, nothing is for certain. And they haven't proven anything yet. One victory, no matter how impressive it is, does not a season make.

Go Redskins (tonight only).

Dave in Denver said...

Hey gyc. Was that Georgia bill actually passed, or has it been written and needs to be voted on?

My quick reading of it is that it still needs to be voted on, but that it essentially makes gold and silver legal tender as per the Constitution.

There have been legislative movements in other States to restore gold and silver as the standard of legal tender, including Colorado, but I don't think any of the States have actually passed the Bills.

getyourselfconnected said...

Redskins are getting shellacked so maybe they will be motivated next week. You are a tough fan.

I think it still needs to be passed, but I am sure it will be. What a starnge bill indeed.

watchtower said...

This is along the line of yesterday's thoughts on states, counties and cities being bailed out:

Study: Schools face shortfalls after stimulus ends

"ALBANY, N.Y. – Using federal stimulus money to avoid layoffs at schools is going to create a shortfall even more difficult for states and schools to contend with when that money runs out, according to a first-of-its-kind study released Monday."

"New York alone will see a $2 billion shortfall after stimulus money ends in 2011-12, and that could drive up some of the nation's highest local property taxes another 8 percent"

"The post-stimulus era is often called "the cliff."

"There may be massive teacher layoffs,"

It will be interesting to see how this all plays out.
It's hard to get my mind around the idea that the government would let this happen after their past actions, I'm almost at the point of wanting to buy into this PM correction (at least that is what I think it is).
Maybe I'm thinking of this wrong though, because even if all 50 states are as bad off as New York (and supposedly they are not), then that would only be 100 billion.
100 billion looks kind of meager in the grand scheme of things.

Anonymous said...

Actually, in a number of states, you CAN marry your cousin.

The Topiary Cow said...

"...3,500 ounces unwittingly sold off in slag..."

This was hilarious! Which is funnier, that there is no check/balance on outgo, or that the slag dealer didn't notice they'd been given pure gold?

As for bailing out the schools, right, we keep subsidizing breeding, and subsidizing unlimited immigration to fill our schools with even more kids than people are (wic, tax breaks, etc.)already paid to have, now everybody has to bail out schools while there are still no limits on how many children can be foisted on the taxpayer? Argh.

(Realizing this is an emotional and poorly reasoned outburst onto your blog and attribute it to too much eggnog, sorry!)

Holiday moo!

Paul said...

wonderful gold and silver blog