Is oil up because gold is down?
I had a thought the other day… it could be crazy, but it also could just be crazy enough to ring true. Central bankers are up to their old gold manipulating tricks again; however, unlike in the past when oil supplies could be increased at will by domestic or foreign suppliers, their attempts to fake strength in the dollar by punishing gold has instead shifted wealth to oil and food. The Fed is powerless to prevent oil prices from rising as peak production arrives and the more they destroy gold as an alternative to dollars the more they inflate the price of oil and endanger the American economy. The Fed has no Cred
Of course I’m not referring to credit, the Fed has plenty of trees, but they are completely void of credibility. Bernanke didn’t see the subprime mess coming so why should I care how long he thinks it will continue to ravage the American economy? He’s not exactly an impartial observer. The subprime crisis is not a failure of market
I’m getting tired of hearing people like George Soros happily declare subprime proves “free market fundamentalism” will ruin the financial sector. How anybody can describe a system in which the price of money is fixed by a few secretive men in a marble palace “free” or “market” is beyond me. This crisis is not a failure of market, it’s a failure of government. Inflation is not caused by declining interest rates
Many on the street have accepted a common misconception that threatens to ruin your portfolio. They want you to believe a temporary end to Fed rate cuts will somehow indicate a shift to hawkishness with regards to inflation. That’s total nonsense. Interest rates do not need to be in continual decline to influence inflation, simply maintaining interest rates at a low level will do the trick. Inflation is not caused by the slope of rate changes, it is literally the new money pumped into the system. From an Austrian economics perspective
I came across this interesting post on reddit, enjoy: We have a farmer, a carpenter, a tailor, and a lumberjack. Each year, each person produces 40 units of production. The money supply is fixed at $100. Each person has $25 stuffed under the mattress. Twice a year, one worker will pay $5 to another worker for 5 units of the other workers production. In other words, each person has a yearly demand for 10 unites of clothes, food, furniture, and lumber at current prices. Each person owns a house, which , if sold on the open market, would command a price of $10. Would you trust a dictator with your wallet?
The Federal Reserve is printing dollars to stimulate consumption, but since most products Americans consume are produced abroad their dollars flood the world and foreign governments print their domestic currencies to take them off the market and stabilize the exchange rates. That is literally the inflation that is ravaging emerging markets, meanwhile foreign leaders persist in their vain attempt to maintain the status quo. The only possible reason they would follow such a stupid policy is a false belief that American demand is driving global economic growth. Are universities destroying the economy?
My degree is hanging on the wall, but every time it enters my field of vision I am reminded of a post-secondary education spent dreaming of building something real, something with my name on the cover. I have always hated school, but not for the reasons you might expect. A 10% correction in gold is a good thing
Everybody knows a parabolic rise leads to a parabolic decline, the occasional correction is welcome because it helps prevent unreasonable growth and often presents a valuable buying opportunity. The gold chart is replete with 5% and 10% corrections that are quickly erased a few weeks later. Bernanke steals $666 from every American
When money has no intrinsic value, its worth can only be measured in what people are willing to trade in exchange for the money. Therefore, the total value of all money in circulation can not increase unless the total supply of goods and services which define their value does as well. When the amount of money in circulation increases at a rate disproportionate to production and productivity gains, prices are slowly bid up by more dollars chasing fewer goods. The new dollars are able to buy existing goods, but they only have value because they steal a tiny bit of it from each dollar already in circulation. The consumer credit cancer
Those who have experienced or witnessed the ravages of excessive credit card debt already recognize the evils of consumer credit, but the gravity of this cancer is probably even worse than you know. |
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