Entries Tagged 'Markets' ↓

There is always some reason that they will try to convince you not to believe what you feel in your gut. They will try to bamboozle you
– Barack Obama

I admit I was swept up in the national euphoria of President Obama’s election. I really believed that something would be done about the economic crisis, our unjust “War on Terror”, and the creeping fascism these wars have engendered. But by now it should be clear that President Obama has no plans to change anything. Continue reading →

The US economy as we know it has collapsed. This has happened before, twice, and history is repeating itself again. This is the Third Depression the United States has suffered, and it will be the worst. FULL ARTICLE

As we learned in “The Significance of Gold Backwardation Explained”, backwardation is a sign of a very tight market, and a market that will be tight for sometime into the future either 1) current supply is very tight, 2) future supply is projected to be very tight, or 3) there is a severe distrust in counterparties that the short positions can deliver the goods on time per the contract, or vice versa that the long positions will not have the cash. FULL ARTICLE

In my humble opinion, physical gold at today’s price is dirt cheap financial insurance and physical silver is super dirt cheap. One word of caution though: please do not expect to get rich by saving gold or silver. However, in the long run these silly feeble-brained Keynesians are barely able to think ahead more than a week these days, try thinking 5, 10 years gold and silver will protect your purchasing power. The paper Dollar, the paper Euro, the paper Whatever will not.  FULL ARTICLE

John Maynard Keynes believed that an economy could become a self-reinforcing economic depression because the general public saved too much money. He believed that the key to economic growth is not productivity, but rather spending. He did not believe that the price system is a reliable system of resource allocation. For example, he did not believe that the interest rate is a price that allocates investments and savings. He believed that it is possible that many people in the economy can save money by hoarding currency – not depositing it in a bank, where it is immediately lent. This, he said, undermined the interest rate’s role in equating savings and investments.  FULL ARTICLE

As the recession deepens, it will become apparent to all that the Fed has no will to fight inflation. Worse still, it will likely be seen that the U.S. Administration is diverting its vast resources away from restructuring and infrastructure spending towards the potentially inflationary, socialist-style prevention of restructuring through the subsidization of clinically dead companies, like the U.S. auto industry.  FULL ARTICLE

Backwardation is the sign of a very tight market, and a market that will be tight for sometime into the future – either 1) current supply is very tight, 2) future supply is projected to be very tight, or 3) there is a severe distrust in counterparties – that the short positions can deliver the goods on time per the contract, or vice versa that the long positions will not have the cash. FULL ARTICLE

Modern financial derivatives all started with commodities, namely rice and grain. The earliest recorded financial derivative market I know of came in the early 1700s in imperial Japan at the Dojima Rice Exchange. Although the realm did use coins, they also used rice as another major form of indirect exchange. (This article explained why using rice was a horrible idea.) The samurai stole (or to be more polite, taxed) rice from their serfs, but due to a set of bad harvests and market manipulations by traders, they found their purchasing power to be very adversely effected. A funny way to think of it is that new armor & swords, and lovely geishas were too expensive in terms of rice. Our poor samurai were left scratching their helmets on what to do. FULL ARTICLE