Central Banks To Add To Gold Reserves russia is loading up

Lol, The government defaulting us out of credit ratings and the world standard currency... is an American disaster. People will die. I don't want that at all.

This is crazy conspiracy line of thinking, lol. "People will die". Hahahaha, because our credit rating and world standard currency?

Got mad problems bro.

 

whats embarrassing is your missing a perfect time to buy low and you might want to check that dollar in your pocket its starting to evaporate, and start thinking to go long on gold
http://www.marketwatch.com/story/fallling-dollar-means-go-long-precious-metals-2013-08-05

 

Dude, I don't know what's going on in this country!! Every other week I get some weird numbers in my bank account and then surprisingly I just swipe some piece of plastic and people give me things. I don't know about you, but I'm going to milk these fools as long as I can! Do they not realize hyperinflation is right around the corner and they should only accept gold?

 

did you put that student loan on that card too..?
http://www.politico.com/story/2013/08/student-loan-debt-95213.html?hp=r2
so the deficit is really 18 trillion now you know

 

That's the next bubble. I would short student loan derivatives if I were you!

 

While I dislike your incessant predilection for calling everyone with whom you disagree a "nut case", I have to agree with most of what you've posted here because it is factually true.

But, to balance your observations, remember two key points:

1. The U.S. Dollar hasn't crashed -- especially during the last recession, and afterward, precisely because central banks (starring the Fed) propped it up by creating trillions of additional of special dollars ("base-money"/"bank-money"). This is the famous "money printing" observation that you dubbed me a nut case about years ago. If there was ever a Voodoo Economics, this is it! You and your Fed-defender colleagues would be quick to respond that this was necessary to keep the economy from plunging into a new Dark Ages of economic ruin, societal catastrophe, etc., and you might even be right. Whether or not that's true is not the subject of this thread -- the point is that a variation of "money printing" is what propped up the U. S. Dollar....

2. The correlative reaction to this bank rescue intervention/manipulation by the central banks had the effect of suppressing the convertible value of precious metals! Gold almost reached $2K/oz., and silver did go over $40/oz. -- but -- Bernanke of the Fed continued and then increased his bond-buying "rescue" interactions. The price of precious metals has been in a tailspin ever since... right on cue....

Surely you could not disagree with these observations, jac. Oh, you might nibble around the edges of these two points, and manage to declare me a "nut case" once again, but this is essentially what has happened.

The important question, I feel, is where does it go from here? Chaos, anarchy, economic devastation? No -- and here's where I definitely agree with you! It is not in the interest of any nation or faction of nations to have something like that develop. Still, if central banks continue to make bank-money/base-money pop out of thin air by the trillions, and the U. S. Dollar lose its "reserve currency" status (replaced by the "basket of currencies" concept), what does that do the economy of the United States specifically? I cannot see that this would do us any good....

 

The documents are evidence that he could do what he could do.

Except you're the one who is dismissing the evidence because it doesn't fit your worldview. So embarrassing.

 

You have it backwards. The Fed kept the dollar from soaring upwards in value and propped up the economy by flooding the money supply. Had the Fed not done that, we would have had massive deflation (effectively an appreciation of the dollar) and the mortgage crises and recession would have been far worse.

What "propped up" the dollar against this flood of new money was decreased money velocity and decreased lending activity by the banks, which decreased the money supply and would have led to deflation but for the Fed's counter-measures.

Remember our discussion of the money multiplier and how even a relatively small reduction in lending by the banks can have a large impact on the effective money supply.

Again, just the opposite. Gold/commodity prices were not suppressed but increased because of the Fed actions. Without this expansion to counteract the retraction of bank lending, all prices, including gold, would have dropped.

Gold prices dropped from $1900/oz because it was a bubble and because the market anticipated that the Fed would slow or trim its "quantitative easing" program.

Just the opposite, as pointed out above!

Quantitative easing is justified so long as bank lending remains suppressed and we don't have an inflation issue. When activity picks up and wen start seeing real signs of above target inflation, then the Fed will need to reverse course, stop creating money, and start destroying it.

 

what do you think the fed does for a living?

 

Hi, Iriemon, long time no talk! Yeah, the mechanics of this central bank Kabuki dance still evades me, I know, but at least I'm making progress. Even dujac has agreed with me (albeit with customary semi-snottiness) that propping up the economy by "printing" money (whether "base", "bank", with multipliers, etc.) is what central banks do. No disagreement from me. I was simply reminding the thread that this is, indeed, exactly what central banks do, and nobody disagrees with me on that.

But about gold and silver. You point out that the Fed was actually the most "stimulating" force in the increase of gold and silver prices, but if that is so, then why is it that although Bernanke and the Fed go right ahead with their head-long "bond" purchases to the tune of $85 BILLION dollars each and every month, the price of gold and silver have been in a downward spiral since about August 2011. You see my point, surely. The "rescue" of banks and gung-ho support of the stock market by the Federal Reserve System has never stopped, not since August 2007, and in that time gold and silver has been up and down, but definitely DOWN for two years now.

Lastly, I don't doubt for a minute that you're right about QE, which has already seen incarnations as Quantitative Easing I, Quantitative Easing II, and Quantitative Easing III. The Fed probably won't call it Quantitative Easing IV, but we'll continue to see more and more and more of this policy, even after Bernanke finally goes away at the end of January 2014. I'm sure you noticed what happened last month when Bernanke just hinted, gently, that the Fed would "taper" down the "stimulus". Great God in the Mountains! You'd have thought that an announcement had just been made telling us that an asteroid the size of Kansas was going to hit the Earth next year! The stock market gamblers all crapped their pants and the banks were terrified -- until Benny relented, and started saying soothing, reassuring things to them again. "Not to worry, dear bankers... the Fed will go on buying your worthless mortgage-backed securities by the dozens of billions every month! Don't panic!"

I know you and your Fed-supporters understand these processes better than I do. But I disagree that the course we've been on for the last five years is ever going to result in a situation where the Fed will, as you say, "reverse course, stop creating money, and start destroying it." I've read a lot of descriptions of Keynesian economics behavior, and none of them gives any examples like that. It would be like saying that once a heroin addict somehow "decides" that he doesn't want a drug buzz anymore that he just simply stops shooting heroin, and destroys his stash.

I'll believe that when I start hearing liberal Democrats saying things like -- "Hey, stop sending out welfare checks! Stop sending out food stamp credit cards! Stop treating people like worthless pet animals who don't even know how to feed themselves!"

 

wait a minute doesn't the fed do this anyway most of the time?
http://www.marketwatch.com/story/you-think-you-know-about-the-us-dollar-2013-08-05

 

Not even close. Not surprised you would think that though. You aren't really the most rational thinker out there.

There isn't any evidence that I have dismissed. Just calling out Snowden's blatant lies and the fact that clown like libertarians believe anything and everything that is a government conspiracy. It's embarrassing. It's amazing you haven't gotten any more intelligent in the past 3 years. I would think you'd become a little more moderate after being proven wrong with everything you say.

 

The only thing it would do is potentially make oil more expensive for us. Otherwise, not much. I don't get where you guys have gotten this theory about the reserve currency status being the reason why we do what we do, lol. We are world reserve currency because we are the most stable and robust economy in the world. And as much as you hate us, look at your options... the Euro?? Lol, they are in shambles and have no clue about their future, the Yen? lol, the Yuan? No one will ever trust the Chinese. They've been talking about this basket of goods for decades.

The thing you guys fail to talk about is real economic fundamentals and you focus on these crazy fear mongering talking points about hyperinflation or losing our reserve status, as if the country will just stop producing goods and services because other countries use a basket of goods to buy oil.

It's ridiculous. You seem like you want to learn these things, but you can't get past your conspiratorial thought process.

- - - Updated - - -

That's pretty funny, lol!

 

and a 17 trillion dollar deficit and growing.. fort knox gold reserve that hasn't been inspected since the 1974 and a audit in 1953

some trust and stability of our currency

http://www.numismaticnews.net/article/gold_all_there_when_ft_knox_opened_doors

 

After Bretton Woods the US had the world on a string, sitting on a rainbow. But those days are gone. Everybody trusts the Chinese to do what is good for the Chinese and that's all. As far as they are concerneed everybody else can go to to hell. And the Euro always was a joke because it was based on deeply endebted socialist countries that have competed and fought with each other for hundreds of years. But how much should any country trust the US when we print worthless money until the money presses are white hot? And we can't stop doing it now, but how long is the rest of the world going to go along with our US Ponzi scheme for running the world economy?

 

what's funny is that you don't seem to understand the constitution

no, you're confused, the federal reserve doesn't print any money, not even one dollar

here are the verified facts of the matter:


Currency

A common misconception is that the Fed prints money, but it's the Treasury Department's 'Bureau of Engraving and Printing' (BEP) that prints all U.S. currency.

http://www.bep.treas.gov/uscurrency/theproductionprocess.html


In 1877, the BEP became the sole producer of all United States currency.

http://www.bep.treas.gov/uscurrency/history.html

 

In what sense?

 

Disagree.

Troll response.

You just did.

You haven't proven that he lied, that's just your baseless opinion.

Troll response.

 

Regardless of how much the internet peons hate us, the United States is still the most stable and robust country in the world. We are the world reserve currency because of this. You guys call it "worthless money" yet it is the most demanded currency in the world, lol.

I think you guys just have very very minimal understanding of the real world. These are the types of statements I hear at the poker table with my uneducated oil field buddies.

 

I have to defend much of what you and Iriemon have said, and some of what dujac says, too, if only because I have come to understand (sort of) the role of the Fed vis-a-vis moderation of economic processes. Thus, it creates "bank money/base money", with "multipliers", in order to keep the course of economic movements within safe bounds. Dujac loves to point out, accurately, that the Fed does not "print" money, and he's right. Iriemon, however, freely reveals that the Fed pulls new money completely out of thin air -- but, now I understand that this is not real "MONEY-money", it's that "bank money/base money" that you and he have quarreled about. Anyway, one of my biggest fears was that this reckless money creation was adding to the National Debt, which stands at a staggering, and dangerous, $16.9 TRILLION dollars. But, if I understand correctly, even with all this Quantitative Easing III "bond-buying" -- which is little more than the Fed buying unwanted bank mortgage-backed security junk paper -- nothing is added to the National Debt because of it.

I'll be honest enough to say that I'm still unable to understand how the Fed can just make $85 BILLION dollars magically appear every month, and spend every dime of it on these junk bonds, and for that not to have any detrimental effect on anything, or incur any debt on any balance sheet anywhere. That's why, to me, and MANY Americans, the whole thing is smoke, mirrors, and a big round of Kabuki dances in a theater full of bull****. But, this is the way it's been for exactly 100 years, so, if that's the way it must be, then we'd better try to at least understand the dance moves.

What I really would like to know is this: WHEN DOES THIS LATEST KABUKI DANCE END? And what kind of situation is the United States going to be in when it does...?

 

in the sense that i meant that for pollycy

 

Ahh, ok. That makes sense.

 

You simply have to drop everything you think you know about monetary systems and start from scratch looking at it from a mathematical and operational angle. If you do it this way, these large numbers start being less scary. Like when you say "staggering and dangerous" $16.9 TRILLION dollars. It's not really staggering or dangerous. And the national debt will continue to grow forever. When the lightbulb goes off it starts making all the sense in the world and you can really grasp how a system this large works.

Here's a fun little tool. It's complicated if you don't really know what you are looking at but it at least shows you how the various entities react to different transactions within the system.

http://econviz.org/macroeconomic-balance-sheet-visualizer/

The first thing you have to let go of is this idea that the private sector funds the government. And in all my years of studying this I know the one thing people hate more than anything is to learn that they are dependent on the government for money. But in reality, the government/banks fund us before we can ever "fund" the government. So think of it like, before you can pay your taxes or purchase government debt, that money has to be created first.

And the reason why we issue our money via debt is interest rates. Interest rates are the trigger to how they control the economy. The Fed is nothing more than a balancing act. All they are trying to do is pull these levers to adjust the spending, saving, investing, borrowing dynamic. So if people are spending too much, they adjust the levers to encourage saving. If people aren't spending enough they adjust the levers to encourage borrowing and spending.

This stuff is very complicated, but to simplify things. Understand what the main objective is for the Fed. It's economic growth. They do this by measuring GDP. If you think of the quantity theory of money. GDP = Qty * Velocity. Aka think of it as our growth is how much money is in the economy times how many times that money was spent.

What happens in a recession is the velocity of money decreases. So just simple math will tell you that if people are spending less money we are going to have less growth UNLESS, we have more money.

Just to show you I'm not just pulling crap out of thin air...



So when you see these large numbers being thrown out there, like trillion dollar deficits, $85 billion from the Fed a month, etc, etc. Just take things in to context. If there is $10 trillion in the economy and velocity drops just .1 that is $1 trillion less transactions. So in our case we have dropped .6. So based on the quantity theory of money we are creating this HUGE gap that if left undone would literally mathematically put us in to a depression.

So the way they combat that is to increase the quantity of money. The way they do this is through deficit spending (which Iriemon doesn't agree with but he is wrong) and bank lending. The rest of the system is handled by giant banks and the Fed just moving bank money around to adjust these levers to target our growth rates. So if you think of the situation in the fact that the Treasury is pumping out billions of dollars of new debt a month, those are savings instruments. The Fed does not want people to save right now, so that is why they have to suck up all these Treasury's to maintain their low interest rates and keep money flowing in to the economy rather than out.

It's much more complex than this but this is a good baseline just to get the brain moving and thinking. When you realize that the national debt is an asset to you and I and a liability to the government, things start making more sense.

 

I don't "understand the Constitution"? Which, by juxtaposition, infers that you do...? Odd. As often as you and I disagree (which is just about always), I don't recall our having had a spat about one of us not understanding the Constitution. But, if it makes you happier to think that I don't, then by all means, please indulge yourself in the certainty that it is true. I cannot help but have pity in my heart for any poor soul who ever had to live in a place like Lubbock....

 

More backwards "economics" from the self-appointed expert on all things monetary and fiscal. The FACT (not your delusional opinion) is that without the cooperation of the private sector, the government has nothing to spend. If tomorrow we rejected dollars and paid no income taxes, the federal government would become instantly insolvent. That is because as anyone with half a brain knows the state is utterly dependent upon the market for its existence. You have to be a raging socialist ninny to think otherwise...