GOLD

[peat]

Monetize This!: Resolving a Spiraling Public Debt Crisis
How Obama could take a Page from the Fed's Playbook
by Ellen Brown
http://www.globalresearch.ca/index.p...t=va&aid=12394

Kind Regards

I didnt find it there , but here :
http://www.globalresearch.ca/index.p...rticleId=12394

so this article says money can be created from nothing! .... ??

[Dr_Who]

Does anyone have a graph between inflation and gold price?

I bought some SBM today.

[Aussie]

Aussie: read this again very carefully . . .

ananda77, I just read it again and I still think I disagree but I would be happy to be challenged because it's a complex issue and I think some of the misunderstanding about it is due to a misconception of terms related to monetary inflation/deflation v's price inflation/deflation.

I don't think the debate has to be either or, inflation and deflation can happen simultaneously in different parts of the economy at the same time.

It seems to me that if this woman's theory of funding government via the printing press (or quantitative easing) was correct, then Zimbabwe would be one of the wealthiest nations on earth. I think patsy is on the right track. My understanding is that wealth destruction via asset deflation is entirely different to actual monetary deflation - which by definition is a CONTRACTION of the money supply - just as inflation is an EXPANSION of the money supply. Price reaction in either direction is a RESULT not a CAUSE. After PRICE INFLATION comes WAGE INFLATION as wages can never keep up once inflation takes root.

For example, I have some stock in my portfolio that has declined in value, so has the value of my home. However, no real money has been extinguished (deflated) during this period because it's not until an asset is sold that it's actual value becomes realized - until then any notion of real value is illusionary. And if I did decide to sell, since I did not borrow to fund these assets, nothing has to be re-paid so no loans (money) are extinguished and no deflation occurs . . . because I used my own SAVED CAPITAL as opposed to DEBT CREATED CAPITAL that MUST be re-paid to someone. This latter type is what governments are creating and using to shore up the financial system. There is a huge difference . . .

This may be a bit simplistic, but imagine that we are at patsy's house playing a game of monopoly that I brought over . . . after several rounds of the board, we have bought up all the properties. Suddenly, ananda77 looks over at a shelf and sees that patsy has a game of monopoly too. "Why not take all the money from patsy's game and add it to ours by divvying it up amongst us and see what happens." We still have the same number of properties, the same number of houses and hotels for sale, but since we are all cashed up, what do you think is going to happen to the prices of those houses and hotels as we all compete to buy them for our properties? And as the houses get scarcer and scarcer, the prices will go higher and higher.

So the actual amount of new money being created globally is increasing out all proportion and there is much, much more to come. As Mr. Bernanke has famously said "There is literally no limit to the amount of liquidity that the Federal Reserve is willing to create in order to reflate the financial system." eventually this money that is currently being held in insolvent banks and sloshing it's way back into the Fed as interest bearing deposits will become the capital that these banks use to start lending again on a 10:1 ratio and in a fractional reserve banking system, once it's out there the Fed HAS NO CONTROL of how many times it is multiplied and how many $Trillions more is created.

Once the world economy starts to revive as it hopefully will, the velocity of money will increase greatly as business and consumers compete for less goods and services since so many factories, industries and workers are no longer producing. The Fed claims it stands ready to drain the excess liquidity by raising interest rates etc but most commentators doubt that they have the skill or will know the timing to get it right and will leave the plug in too long . . . plus their track record in this area is horrible. This is probably the best case scenario.

Worst case is as you say, the entire global banking system crashes.

if the US had not injected $trillions in liquidity over the 12 months, US and UK banks would have closed twice. Our financial markets would be at fraction of their present value, and world bond markets collapsed. Effectively everyone . . . institutions, individuals, businesses would have tried to pull their money out of every possible account simultaneously. Needless to say, that is what forces bank closures – to stem it. When bank closures happen, a general financial emergency is declared, and governments freeze international money transfers to prevent a run on the currency.

In that case the entire world economy would stop, businesses could not ship, food would be unable to be shipped as no one can transact. Everything stops, probably even the petrol pumps. The world supply chain is roughly 3 days supply of everything.

I'm hoping for inflation and I think the politicians are too . . .

I would be interested in your thoughts.

Cheers

[outspoken]

They can print money all they like but if the velocity of money doesn't change then you wont have inflation in any asset classes

[ananda77]

...massive credit inflation to 2007 (asset to debt ratios: 1:30,40,50 = massive leverage); since 2007, credit disappearing big time >debt implosion = (USD disappearing); USD has lost substantial value in the past (gold up) but surviving stock of USD will buy more as long as debt implosion continues; may be the reason why investors, despite low treasury yields are still piling into treasuries;

...in terms of debt implosion >default on debts: what's next after the subprime US500 billion loss wave:

-CDS Market >notion value of contracts 30 trillion still in need to be 'neutralized'/deflated; increasing corporate defaults

-Alt-A Mortgages (notional 1trillion) currently downgraded from AAA (70cents/USD)? to CCC (7cents/USD)?

-CMBS >300Billion of securities = 50% of all outstanding CMBS most likely to be downgraded to junk -based on further decline of property values expected for next 12 to 24 months

-Option ARM's (750 Billion market) begin resetting as US economy sheds 600 000 – 700 000 jobs/month >extreme danger of exploding delinquencies/foreclosure/repossessions to 50% from now 28%

-Possibility of a large country defaulting on it's bond >maybe the gold driver at present; however if the US defaults on it's bonds >what world do we live in then???

-Insurance companies >lots of toxic garbage in their portfolios

-Money Market Funds

-Municipal Funds >high exposure to derivatives and pension fund obligations >again danger of default of counties (New York 1970's >bankruptcy loomed)

-Junk Bonds >15 to 17 % default rate most likely rising

-Credit card debt >delinquencies on the rise and asset backed securities tied to receivables at risk

-Heloc's (Home equity LOC) >problems ahead

-Doha Trade Talks collapse >high risk, door on open markets closes >protectionism

source: http://www.atlanticadvisors.com/uplo...ree-fallin.pdf

...when will it all turn???

eventually, the value of credit will contract to the point where it can be sustained by new production. At that point, the USD may indeed collapse as gold soars under the weight of the Fed's bailout machinations. BUT DEFLATION MUST RUN ITS COURSE FIRST. In our opinion, it has a long way to go as stocks are not even through Primary Wave 1...

source: The Elliot Wave Financial Forecast 30 January 2009

Kind Regards

[Dr_Who]

If this market continues to deteriorate, we can see gold go over $1000 and onwards. Investors out there have lost confidences in the market and the govt, so gold is seen as a safe heaven.

I use gold and shorts as a hedge. Kind of like an insurance for my portfolio of investments.

[arco]

This site measures the current pure metal value or melt values of circulating coinage - gold and silver. Updated daily.

Plus other interesting articles

http://www.coinflation.com/

[arco]

By Carli Lourens
Feb. 23 (Bloomberg) -- Rand Refinery Ltd., the world’s largest gold refinery, increased coin output to the highest in about 23 years as demand for South African Krugerrands rose.



Article

[arco]

Proof of the penny is in price market will bear

• John Elder
• February 21, 2009

Rare coin dealer Belinda Downie is offering this Proof 1930 Penny for at least $2 million. Photo: Craig Sillitoe

IN 1930, a loaf of bread cost seven pennies. Today, a single 1930 penny could buy a house in Brighton, or 10 cheap flats in Frankston.
That's the hope of an anonymous rare coin collector who this week put on the market his Proof 1930 Penny — one of only three in private hands. Caulfield-based dealer Belinda Downie says the man is asking $2 million-plus, a record price if he gets it.


Full article from Fairfax Digital

[peat]

This site measures the current pure metal value or melt values of circulating coinage - gold and silver. Updated daily.

Plus other interesting articles

http://www.coinflation.com/

I've got a spreadsheet for NZ and Aus silver coins....
tho theres only a few worth buying for melt value

NZ 1949 Crown 0.4546 $12.99
Florin (1933-1946) 0.1818 $5.20
1/2 Crown (1933-1946) 0.2273 $6.50



and I have now finished cataloging the collection was surprised to find its 27.5 oz's so far. not that much but only been buying them when I can get a bargain.