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[Leslie <cayadopi AT yahoo.com>]

Why am I so interested in what?  The economy in general?  Or a specific?  
 
I think in part, I've just become addicted to figuring out how it works. The 
internet is wonderful - a library to the whole world right at my 
fingertips...  Been following this stuff for many years.  It all started 
w/Rand, and then Howard Ruff, who you've probably heard, of some 30 years 
ago.... and then in the O.R. when the docs used to try to bring me out of my 
shell (I rarely spoke, imagine that) and started teaching me world economic 
stuff and asking my opinion on if I would go long or short the S&Ps...  I 
made them money somehow,,, (seriously picked numbers out of my ass.... as I 
had no clue what they were talking about.... buy 5, sell 3, buy 10, sell them 
all, short 6 --- wild wild guesses, and I didn't know what kind of money they 
were plunking down then....) and got a great bonus....
 
Actually, Ruff proposed something back then that I thought was excellent 
advice - I was probably all of 21 years old back then.  He promoted having 1 
year supplies on hand for emergencies (loss of job, illness, natural 
disaster, etc), plus 1 year of gold/silver, especially used silver bags of 
coins, which are still lender tender.  His advise on 1 year of supplies 
(food, etc) actually got me thru H. Andrew.  We were buildilng a home, and 
had used up the last of our savings when that thing hit.  Our businesses were 
destroyed too.  Those food and other supplies,,, what a life saver.  I've 
never forgotten the importance of being prepared that way.
 
Anyway, I already knew about backwardation in the futures markets, but not in 
the context of gold, not in the larger sense that is implied with gold.  I 
already knew about the physical shortages, the black market prices, etc.  And 
just never thought about the implications in the futures market..... hence my 
first immediate thought about fiat asset (futures) vs real asset 
(physical),,,,, it is the fiat asset that is being destroyed, not the 
physical.... the paper "tree forest" is burning,,, not the yellowstone 
ground.... LOL.
 
Oh,,,,,,,,,,, the next monkey wrench for Mr. Bernanke.... is 
oil............... if the Fed PPT started the rollover in July and triggered 
the snowball down,,,, there is one thing they can not likely control much... 
and that is the oil companies yanking their straws out of the ground if they 
can not make a profit.  So that needs to be stuck back into the inflation 
equation.  Can you imagine oil in permanent backwardation?
 
 
 
Ok, well on the balance of injecting liquidity / Friedman.  I doubt Friedman 
would like that hockey stick look on M1.  So is that line of thinking more 
along the lines of Keynes?
 
I haven't read much of Keynes, but I did grasp a few things, as reading that 
stuff is slow going for me, as I have to figure out the terms as I go along.  
Maybe that will be my new years resolution this year, to finally finish the 
book.
 
 
Market bottom... yes it could be, isn't there an article in the WSJ today 
along those lines?  I don't think so yet.... I'd watch 3 mo. Treasury yields. 
 Besides Tim Woods cycle stuff, which is really decent.... I watch a weekly 
chart for some other markers, as I find it hard to believe we'd end in a V 
bottom.  I just seriously doubt that the banks or big boys are just going to 
wake up and tell everyone the bottom is in, and buy buy buy.  I suspect they 
will nibble in slowly and not chase up - in the event and rallies are just 
another bear market rally.  Actually there are a number of things I would 
watch on a chart to give clues that big money is sneaking back in "low", even 
if shorter term,,, and then other things after for "the" low.  
 
 
Cramer - what a character.  I think he should be banned from the air 
personally.  However, from time to time, he does tell some things about how 
wall street work, how wall street uses the media (so I would include him) to 
put out agendas and rumors that benefit their "buds".  The day he did the 
rant and rave thing, I happened to see it live... and thought his acting was 
a bit over the top...  I laughed pretty hard at that....
 
Absolutely, Fed is private, not gov't, a sub-contractors so to speak to 
handle some things for the gov't and report to Congress on occassion.  Tied 
to the families tied to the BOE. They are NOT concerned with the citizens, 
only with the viability of the banking system itself, only in avoiding 
systemic risk...  And the idiots in congress long ago gave them the power to 
directly tax the people without Congress's persmissioin - contrary to the 
constitution.
 
It's really hard to not be angry 24/7.................
 
 
Yes truly ominous....   You mentioned Zimbabwe the other day.  Gold can't be 
bought at any price there,,, in zimbabwe currency.  That could very well 
happen here, until the cleansing.  Not until the governments come up with 
some type of currency that people can have CONfidence in.   That is what 
makes the G-20 rumors interesting.
 
Oh, if you read the F*E*M*A stuff, I see those black helicopters flying 
overhead here from time to time.  Can't say that makes me feel comfortable.
 
 
 


--- On Sun, 12/7/08, bob ford <bobford79 AT yahoo.com> wrote:

From: bob ford <bobford79 AT yahoo.com>
Subject: Re: [Homestead] Depression first?
To: homestead AT lists.ibiblio.org
Date: Sunday, December 7, 2008, 8:13 PM

Leslie; you are smart and a quick study.  Why are you so interested?  I am
curious.

A few notes, I have interjected blow, within your post.  You can differentiate
my comments by the fact that they start with asteriks
------------------------------------------------------------------------


--- On Sun, 12/7/08, Leslie <cayadopi AT yahoo.com> wrote:


> Yesterday, basically you posted along the lines that if the Fed prints the
same amount of money as asset destruction,there is no inflation, no 
deflation. 
At least that was my simplified interpretation, so correct me if I got that
wrong.  It was something I was wondering about a few months
> back.



***** No you were correct in your understanding.  But, that is one school of
economic thought.  Milton Friedman, and others would disagree





 
 There's no arguing we've had asset deflation, and there is more to
come.  For example, statistically undcyclically theory etc. after a decent
bounce up in the stock market, we should see another 45% down in that class of
asset.  Which would be quite similar to the 1929-1932 drop of some 90%.


*******The general equities market could drop another fifty percent, as you
think; or it could be at its bottom , now.  KNowing the answer to that could
make a person rich.  Everyone is guessing, some in more educated ways than
others.  Don't assume the past will always guide the future.



 
> Last year, I think in August (possibly October) Cramer did



"****** Cramer" is idiotic pablum for the masses.  Yes he made a lot
of money once in commodities and hedge funds, noe, he plays his television
version of Captain Kangaroo for adults




 how the Fed has been injection all this money into the banks ............ 
  .............It isn't working because the banks
> are hoarding that cash....



****** The fed is a private holding company of private bankers making up our
central bank.  The Feds concern for the health of the banking system and vice
-versa, is quite healthy



how can we be sure they will not overestimate the number of monetized
> debt dollars to inject without triggering a hyper-inflation?



***** No one is "sure" of anything
 



>  
> Again, that gold backwardation in the futures market tells
> a big story about people who are smarter than I am for
> sure.  



****** Gold backwardation is the most ominous economic event that I believe 
has
occurred in my lifetime



Technically, gold is not and has not yet been in a
> bubble.  Price would have to rise some 1800% - 2400% before...


***** That is a matter of opinion, gold would need to go to $6800.00 US, to
reach its intra-day high from 1980 , if you factor in inflation
> 





      
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>From cayadopi AT yahoo.com  Sun Dec  7 21:42:15 2008
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"Well, actually it could, but anyone holding the note could not sue the bank 
to force the bank to make good on it so why would anyone hold them?"

 
James, in this context, I understand the point.  That interesting, because 
there are online gold back accounts outside of the US.  And no easy way to 
find out if one could make them make good on delivering gold if you wanted 
gold instead of the pick of your choice fiat currency.
 
 

 
 



>From Clansgian AT wmconnect.com  Sun Dec  7 21:44:02 2008
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>It's staggeringly naieve to claim gold has no intrinsic value. It has many
commercial applications.

Yes.  It makes a fine fishing sinker and a passable rifle ball.  If gold were
only used industrially where it is the best metal for the job and did not
have any of its hype value, gold would be incredibly cheap.  There is enough 
gold
in the world to satsify all its industrial demands, all its artisitic
demands, and still have tons and tons left over for monetary purposes.  As an
industrial commodity, it isn't all that rare.  It is staggeringly naive (and 
even
naieve) to think that gold's hyped value has anything whatever to do with its
industrial applications

>
> >It is the only money that has been acceptable for all of recorded history.
> Claiming this is an "irrational belief" is just silly. Please point out one
> other belief system that has survived that time frame. Gold was money before
> Jesus was born.

No it hasn't.  There have been times in history when gold was valued as less
than silver, less even than aluminum.  There have been other times when it was
nearly valueless.   Rome was engaged in the Second Punic War and in 211 BCE
Hannibal defeated theRomans at the Battle of Lake Transimene. The following
year he defeated the Romans again at Cannae and then plundered the agrarian 
area
of Campania upon which Rome depended for grain. Other areas hitherto under the
control of Rome began to revolt. People lost confidence in the civil
government and it's power and influenced waned. Without the strong control of 
a
central government to enforce the currency the entire monetary system 
collapsed.
With grain being scarce the relative value of gold fell to nearly nothing. It 
was
seven years before the civil. government felt confident enough to enforce a
monetary system and when it did, it did away with all of the former coinage 
and
reissued coins under the standard unit of the denarius (hence theSpanish
"dinero"). In order to enforce the value of the coinage, individuals and other
political entities could not mint gold or silver into coins and the exchange 
of
metals was closely regulated. Those of that time who reasoned that they could
hoard gold and silver coins and some day the coins would again have value had 
a
long wait even if they managed to survive the wartime famine and loss of
livestock. And when the coinage was reestablished they found that all they 
could
legally dowith the old coins was to surrender them to the government mint in
exchange for the new coins at a disadvantage.

This cycle has played out many, many times in history including in this
country in the 1930's.  It points out that the gold never had an intrinsic 
value,
but rather depened on the hope that the government would reestablish and
enforce a monetary policy giving the gold a value.


>
> >Gold is divisible and its value to weight ratio is extremely high. You can
> have ten grand of gold in your pocket and not even notice it is there.

Yes indeed, and under the right conditions of inflation that ten grand will
get you a cup of coffee.


>> . This has in fact happened over and over through history. Gold was the
> difference between Auschwitz and three meals a day in the Warsaw ghetto -
> probably the most extreme example of societal break down in the last 
> century.


And this has always happened because of the anticipation that a monetary
system would be reestablished and there would be free markets in which to 
make use
of the gold.

>
> >Attaching value to a series of zeros and ones in a banks computer is more
> irrational than believing in mankinds only long term store of value. Gold 
> has
> been accepted by every ethnic, language, political or religious force the
> world has ever seen.

And it has been deemed of little or no value by every ethnic, langauge,
political an religious force ever seen at one time or another.

Sorry, Bob, but your disputant does not understand the meaning of the world
'intrinsic', in and of itself and not relying on the opinion or indoctrination
of someone else.  For the gold to have worth, someone else has to agree that
it has worth.  For a cow to have worth, no one has to agree to anything.

A noted alchemist of old was convinced of the mystical properties of gold and
so managed to make solution of gold in suspension.  He drank it and
subsequently died of heavy metal poisoning.  Your modern goldniks are of this 
ilk.
Their view of history, economics, and even reality is seen through gold 
colored
glasses.


James