Postage Stamp Chat Board & Stamp Bulletin Board Forum
 

Peter s. So I see. The exporters here are having their usual whing about the high $. In fact I've just unset a friend of mine by telling him to p*** off to Europe if he wants a worthless currency.

Of course I had regrets as soon as I said it and quickly apologised. He exports mainly to Italy France and Spain, so he has enough problems already. Two of them seem set to tumble.

I wait with interest now to see what lemming type panic will begin to spread when the US and the Euro markets open.

huanga.

A$ was lower at the start of the day, but has recovered about 0.025c during the morning. Still below Friday night (New York) close. Gold (up US$29.20) and silver (up US$1.84) have soared this morning, so looks like traders are looking for alternatives.

Normally such big increases would bring about a rise in the A$ as well, being a major producer of both. Not happening, so risk appetite is low and I would expect US Treasuries to be keenly sought tonight.

As a major exporting nation, Australia has been fairly badly hit by the rise in the A$. Manufacturing is dying anyway and this will just hasten it's demise. Inbound tourism is also badly impacted, as is the education sector with far fewer foreign students coming here.

On the other hand, demand for iron ore and coal is such that the trade balance is in very positive territory. Very much a 2 speed economy, with consumers banking their money and not spending. Household bank deposits are at $496 billion (as at 30 June), up 7.4% in the last year and 78% since June 2006. Very tough climate for retailers.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

The A$ has fallen a full cent since my last post, down to US$1.033. Points to a bad day for the EURO and a strong US$.

Gold and silver have continued to climb, with gold currently only 70c below the US$1,700 level. The Australian Share market fell heavily at the open, then clawed most of it back but is now on the downward again. Currently down 1.89%

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I notice that Rio Tinto and Mitsubishi have gobbled up the rest of your Coal & Allied Industries, Ltd., that they didn't already own.

Had I known that some entity already owned 85% of a major Australian natural resources company, I guarantee you I would have bought in, previously, in anticipation of this no-brainer highly-predictable buyout.

Which is not as bad as the Asian markets falls. This seems to be unsettling more people than usual, and not only investors and speculators. That prediction of gold at $2000 by Christmas, may be not far of the mark.

Huanga.

Carnage on the European and US markets overnight, with the A$ down another full cent. As I have said previously, there will be money going into gold but there just isn't enough of it to go round. The alternative, whether you agree with it or not, is US Treasuries and that is where money is flooding to right now.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

The Australian market is down nearly 5% (was 5.5% a little while ago but has recovered marginally) and the A$ continues to fall, at US$1.0094 at 11:30am. Gold is still surging and so are US Treasuries, pretty much all anyone wants to buy.

All looks grim but I think the market has been seriously oversold, here in Australia at least. Time to start getting some bargains. For example, Australian banks are amongst the strongest in the world and are paying dividends which (at current prices) equates to around 10% fully franked (i.e. the 30% company tax paid passes as a credit to retail holders). The dividend return is quite a bit higher than the mortgage rate and 3% to 4% better than you can get on term deposits (which have no franking credits, so you pay tax on the total amount of interest earned).

As long as you are happy to ignore the short term volatility there really are some great opportunities in today's market.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I'm watching peter, and your were right in the beginning. Apart from metal there is nothing except US treasuries. The banks now appear to over full with money, so I don't expect a crash anytime soon.

When the prices in Europe reach down to an acceptable level. I can wander off overseas with confidence. To me, an acceptable level it half of what UK and European hotels and car rentals want at the moment. It might take a year to get down, but down they will have to go?

Huanga.

I encourage any overseas traveler to check the websites of those hotels, car rentals, etc., and look for unbelievable coupons. Few think to do this in the U.S., and they leave a lot of money on the table.

At one time I used to do that Doug, but of late I'm never sure where I want to go. Last year I made my main base in Fosnavag and Alesund in Western Norway. The fact that I have my sons house in one place, and a friends apartment in the other makes it fairly easy.

I flew into England a few times, but I'm always mindful of fish and visitors!! So seldom stay long. Perhaps about half my time away is spent in hotels, that and the fact I'm never sure where I want to go makes it difficult to plan.

The only confirmed planning I do is to make sure I'm home for the fishing season, and as I mentioned earlier on this post. My only concern is that the greed and studidity of bankers and politicians, do not put me in a position that I may have to barter my way home!

Huanga.

The Australian market has staged a rally this afternoon, now down only 0.5% for the day. As I predicted the 'good' stocks are all being bought up. All the big (and some of the smaller) banks are in positive territory now, having been heavily down and unloved in the mad panic this morning.

You gotta love watching the market, sheep everywhere. Baa, baa, baa.

The A$ has recovered almost a full cent this afternoon, gold is of it's highs and risk is in favour once again (tentatively, for now). Of course, it could all just be a dead cat bounce and New York could have another bad day. But I think, finally, that fundamentals are being looked at once again.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

The Aussie dollar dropped below parity a couple of hours ago!

It fell a full 4c in under 20 hours.

It has fallen from a high of $1.10 to the USD and it hit 0.99c but has rebounded to 1.01 as I type this....

It appears that the only currency bucking the trend is the Yen....

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The greatest obstacle to discovery is not ignorance -- it is the illusion of knowledge........

Well, just as suddenly as it went down yesterday, the A$ is recovering this morning. It has risen sharply (nearly 3c against the US$ in the last hour to US$1.0366) after being as low as US$0.995 overnight.

Risk is back, for now, and we will probably see a good day on the share market here.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

A few nights ago I think it was Mr Greenspan or could have been another US money Guru mentioned the fact US cant go broke , we will just print more money.

Can some one tell me is there a record kept and made public when money is printed ? , or do we just find out much later when bread is $100 per loaf as occured in Zimbabwe some years back.

The money supply is a complicated beast, with actual physical cash only a small component of it. The Reserve Bank of Australia reports weekly on all notes and coins in circulation and I would be surprised if you didn't find a similar report on the Federal Reserve website. There will also be details of the actual money supply situation as well (including records of Federal reserve sales and buybacks of bonds and the like).

Remember that, with a few keystrokes, the Federal Reserve could 'create' more money and distribute it. However, as you imply, this is inflationary. They have already done it twice in recent times (Quantitative easing I and II) and there is speculation they will do so again. They simply offer to buy assets from banks and transfer the funds to their accounts. Voila! You have another $500b in the money supply.

None of this can be done in secret, not in democracies anyway.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Good explanation. Coins and paper money are a tiny fraction of the money supply. The fractional reserve system in place for a century requires banks to have somewhere around 8% of their deposits available to pay out as cash, I forget the exact number.

China and Hong Kong have increased this percentage (for their banks, that is) recently, a conservative strategy to help control inflation.

Besides, all our $100 bills are in Mexico at the druglords' haciendas:

On 3rd August there was just over A$50 billion in cash on issue in Australia (for an economy of some A$1.5 trillion in size). This represents around 5% of the total cash deposits at just the major banks. Of course, only a small fraction of that physical cash is actually held by the banks themselves, so the ratio of cash to deposits would be much smaller still.

In the event of a run on a bank (exceptionally unlikely in Australia) the Reserve Bank could issue cash held in reserve (although it only held $3m in 'issued' currency on 3rd. August), but it is likely that measures to stem the need to issue cash would be implemented by the regulators quite early.

The actual cash on issue also fluctuates quite a bit, there is more put into circulation around Christmas and other major holiday periods, for example, to meet demand.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

If the US as stated has already printed more twice , what is the constraint to do it again and again , this also may well apply to other countries as its Fiat Money anyway , tied to bugger all.

Do the US just rely on the fact they are still percieved to be solid and can get away with it .

Do they just bluff it out or is there checks and balances in place other than , we best cool it awhile the world is noticing it, we should wait a month or two.

Hopefully its not like this , can some explain it please.

They did no more than the Australian Gov't did, spend money they didn't have to stimulate the economy. There is a limit to haw much money a country can have swilling around in it's economy without stimulating inflation. It is a balancing act between too much and too readily available money and a credit drought that limits the ability of companies to raise money (either capital or borrowings) to invest in production and create jobs in the process.

I don't know why people still bang on about it being all fiat money. Money is just a convenient medium of exchange, an easily transferable item to allow for the efficient exchange of goods and services. Even in Rome in the First century BC a common practice was to send a parchment with a an authority to draw so many denarii from a local bank in, say, Asia Minor, guaranteed by a bank in Rome. The coin rarely ever made the trip, with teh note simply circulating at the equivalent 'face value'. It was the equivalent of a modern bank bill.

If, however, you want to go back to the gold standard then good luck to you! Gold would have to be re-regulated and drastically reduced in value. Even then there would be a totally inadequate money supply to keep the world's economy operating. We would be back to a barter economy before we knew it and modern society would collapse.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

If I have understood you correctly the limit is initiating inflation.

Then if thats the only check or balance , we need to strap on our seatbelts for the ride.

Does China do this too?

I am just attempting to understand what probably financially savvy people know , for myself this thread has all been an eye openner.

Perhaps the rush to Gold which I always thought was just speculating is in fact a rush to money that cant be printed at will, is that it.

Yes, that's it. Gold is the money that doesn't have to apologize. And they can't print "more" of it...

Gold, and US Dollars, are safe havens when the world economy is in trouble. It is all about risk. The US$ is seen as a low return (official interest rates are near zero), low risk investment (as is gold, no dividend payments and so on).

The reason a Government pumps money into an economy, like the USA, is to stimulate growth and make the means of exchange (i.e. money) more readily available to promote economic growth. The theory holds that, by pumping money into the banks (by buying some of their illiquid assets, such as mortgages) the Federal Reserve will increase the pool of money available to lend to companies and consumers, thereby stimulating the economy and increasing employment.

The trouble is, it is an imprecise tool at best. The Federal Reserve cannot mandate what the banks will do with the money they get. They might just sit on it, or invest it offshore or in higher return areas and the money doesn't reach the intended target areas. It is what is known as Quantatative Easing, creating 'new' money in the economy. It is inflationary simply because easy money will need to find a home and, unless supply rises to meet demand, prices rise. The problem in the US, at the moment, is that demand is not meeting supply and so supply will fall. People lose their jobs and factories close. Interest rates are already at zero, so the monetary policy bullets are exhausted.

In australia, things are quite different. If the Reserve Bank wants to directly stimulate the economy (if they fear a recession was coming on) they have a 4.75% interest rate to play with. In other words, they can cut interest rates and stimulate economic activity that way. They won't do it, though, unless they are satisfied any inflationary impact will be short lived. Inflation is already a problem here and, but for the world economic situation, last week would have raised interest rates again, not cut them. We have huge amounts of money rolling in from China every day, a huge trade surplus (although still a balance of payments deficit) on the best terms of trade in our history. but don't tell the retailers that!

China has also primed the pump, as needed. However, they are a centrally controlled economy. The Government can simply order banks to stop lending money for construction, or order them to lend to exporters. Not quite that simple, but near enough. That simply cannot happen in a democracy like Australia or teh United States.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

But they do keep digging it up, hundreds of tonnes per annum's worth.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

BTW, gold isn't money. You actually have to convert it to money to make any use of it. It is simply a store of wealth and a haven in times of chaos.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Yes you have to convert gold to money to buy some things , but it seems to me if you do it you may do it for as less as one day , convert , buy something and then sit back with the rest of your gold till next time you need something.

It seems as life today is no more than a game of Poker , its all about perceptions , we cannot return to money tied to gold we owe or have to much , I was once told that while I earnt and spent as I went with no holding of savings I was in fact getting full value for my money , this is now truer than ever.

As for putting money aside for retirement or old age , we may have to revert to the old method still used in 90% of the world , breed Sons to feed you when you are old as it was and still is done.

Who are America's creditors? Be surprised:

"The US national debt is $14.33 trillion - almost 70% of that debt is owned by Americans. The $4.5 trillion foreign-owned component of the US national debt is mostly owned by Asian economies.

America's largest creditors:

Social security trust fund: $2.67 trillion, 19%
The Federal Reserve: $1.63 trillion, 11.3%
China: $1.16 trillion, 8%
US households: $959.4 billion, 6.6%
Japan: $912.4 billion, 6.4%
State and local governments: $506.1 billion, 3.5%
Private pension funds: $504.7 billion, 3.5%
United Kingdom: $346.5 billion, 2.4%
Money market mutual funds: $337.7 billion, 2.4%
State, local and federal retirement funds: $320.9 billion, 2.2%
Commercial banks: $301.8 billion, 2.1%
Mutual funds: $300.5 billion, 2%
Oil exporting countries: $229.8 billion, 1.6%

Asians are buying US Treasuries to stem gains in their currencies against the dollar; they need a strong dollar versus their currency to keep Americans buying their exports. This will not change, at least not on China's part, until that country's economy is supported by internal consumption rather than relying on exports.

America's real problem isn't foreign-held debt, although the US does owe almost a third of overall debt to foreign states. China and Japan (the US's third and fifth largest creditors) together hold only 14.4% of US debt - American's debt to themselves, approaching ten trillion dollars, is over eight times the amount owed China.

China, at $1.16 trillion, is actually the third largest individual creditor to the U.S., behind the Social Security Trust Fund and the $2.67 trillion the government owes it - in second place is the $1.63 trillion the Federal Reserve has recently purchased..." (more)

from an article by Richard Mills on http://www.24hgold.com

Doug, an excellent point regarding who actually owns the debt! Being mostly internal doesn't lessen the problem of the overall debt but it does put it more into perspective. For example, the interest being paid will be taxable for US holders, thereby lessening the actual budget impact.

Australia used to have a large national unrealised debt figure hanging over it, the unfunded Commonwealth Superannuation liability. The former Government largely solved that problem by plowing surpluses and some assets (notably, the residual holding in the former telecommunications monopoly, Telstra) into a soverign wealth fund, the Future Fund. This fund now has tens of billions in assets and will fully fund Commonwealth Superannuation payments into the future (assuming politicians leave it alone and don't tap it by taking out 'loans').

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

It is interesting to note that, despite the credit rating downgrade (by one agency, more a political statement than anything else), the interest rate on US Treasury Bonds has fallen, to 0.4% (that's right, less than half a percent) for 2 year bonds and 2.1% for 10 year bonds. This reflects the fact that prices have risen (everybody wanted US Treasuries last week), not teh nominal interest rate being paid on the bonds.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Yes, for the time being, we are still the Safe Haven; even Glen grits his teeth and takes US DOLLARS.

Doug, until an alternative comes along (a long way off) the US$ will remain the safe haven in times of economic trouble. It is still the reserve currency and the US economy is still the world's largest. That won't change for a long time yet.

China will not be floating it's currency, too much dislocation in the domestic market would be the result. China is very sensitive to the risk of upsetting the population and an undervalued currency that allows it's exports to be cheaper is crucial to stability.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Yes but on the same exchange rate as Mexican pesos I stress here.

Hmm?? US Dollars or Mexican Pesos. which to choose, which to choose!

Actually, the Mexican drug lords prefer Dollars and I would never argue with a Mexican drug lord.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

It is strange finally seeing the evening news talk about 'Fiat' currency, and they are freaking out about it... Didn't they realise that it is an empty promise?

I said long, long ago Gold, Silver and other safe havens are the ONLY choice (unless you fancy the Swiss Franc).

GOLD IS MONEY, anything else is just credit and debt.

The system is broken, why has short selling( and naked shorts) just been made illegal in Belgium, Italy, Spain etc? The answer is simple, profit at the expense of stocks demise, led the system to be crashed by traders who made gains on their shorts.

That is why they are frantically TRYING to change it, but it is too little, too late.... The worst thing that could happen to Lehman, JP Morgan, Goldman and Sachs et al is people start pulling all their investments and savings out of the market and buying physical gold or silver BEFORE these evil companies have changed all of their stock.

Lehman have changed well over 60% of their paper stock into wheat,sugar,coffee plantations as well as water companies, penal systems, power companies etc and they have ALL been doing this for 3-4 years now as they know the investment market is going to suffer a huge and potentially fatal crash...

Anyone you know in the market...GET THEM OUT OF IT! My mother took some convincing but the silver she bought last November has already made more than her stocks had in 12 years... (Stocks purchased at around £5,500 in 1998, realised last year for £4,700, changed to silver coins at £20 a piece, now going for £45 each... more than doubling her money!)

And consider this snippet from Ron Paul and Bernanke in front of congress...

Paul: Do you think gold is money?

Bernanke: (pause) ... No.

Paul: Even if it's been used as money for 6,000 years ... somebody reversed that? Eliminated that economic law?

Bernanke: Well, it's an asset. Would you say treasury bills are money? I don't think they're money either.

Paul: Why do central banks hold it? Why don't they hold diamonds?

Bernanke: Well it's tradition. Long term tradition.

Paul: Well, some people still think it's money.

If Ron gets in, the system WILL be changed,,plain and simple...the death of FIAT currency..everywhere.

(Ron has already specified that a pension of $500 a month should give you $180,000 on retirement, UNFORTUNATELY it has all been invested in the futures market so they have taken hits all across the board and one would be fortunate to end up with $120,000. IF pensions had been invested in commodities like gold or silver there WOULDN'T be a pension deficit at all, but a surplus!!!!)

The people need to wake up before it is too late.

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Looking for South Korea up to 1884-1951,North Korea 1st issue 1946-1957,China 1898-1912 and P.R.C 1963- 1980,Thailand 1883- 1918, Commonwealth QV Issues.

Sukhothai.
A debate between peter s and Ron Paul on the subject of.'Gold as money.' would be interesting. I don't doubt there is truth in what you say, but there is a lot of ifs! Before a final collapse occurs.

Anyway, we are approaching midnight here and that is a bit to late to digest all of what you say. Goodnight, and wake me if peter s gets a call from Ron Paul.

Huanga.

Here is an excerpt of the shameful treatment accorded Ron Paul after his 2nd-place finish in the [Ames] Iowa Straw Poll.

It's long, but worth reading. Courtesy of the National Inflation Association, public email Facts and Truth About U.S. Inflation, Debt, and Political Crisis of August 19, 2011:

"...By the time the 2012 Presidential election comes around, inflation will be the top concern on the minds of all Americans. Inflation will be an even bigger concern than unemployment, because nobody will want to have a job that pays them a salary in U.S. dollars. The only Presidential candidate who has the knowledge and courage necessary to preserve what little purchasing power the U.S. dollar still has left is Ron Paul. NIA supports Ron Paul to become the Republican nominee in the 2012 U.S. Presidential election. To become the Republican nominee, Ron Paul will need to win the Republican presidential primaries. Unlike the general election to be held on November 6th, 2012, the Republican primaries are a series of primary elections and caucuses that are spread out over five months beginning in February.

Iowa is always the first state to vote and will have their caucuses on February 6th, followed by New Hampshire on February 14th, Nevada on February 18th, and South Carolina on February 28th. The results of the first few primaries/caucuses usually influence how people will vote in the following primaries/caucuses. It is important for a candidate to build momentum early on. If a candidate doesn't have a strong showing in early primary states, they frequently drop out of the race before all of the primaries/caucuses are completed.

The way the primaries are structured gives voters in early primary states, especially voters in Iowa, a lot of power compared to voters in states like New York who very often don't vote until the nominee has already been determined. About six months before every Iowa Republican primary is the Ames Straw Poll, an unofficial Presidential straw poll that takes place in Ames, Iowa, of who Iowa voters are planning to support in their caucuses. The 2011 Ames Straw Poll just took place on August 13th with Michele Bachmann finishing first place with 4,823 votes and Ron Paul coming in second with 4,671 votes, only 152 votes behind Bachmann.

To attend the Ames Straw Poll and have the opportunity to vote in the poll, attendees were required to purchase a ticket priced at $30. Bachmann gave her supporters 6,000 free tickets at a cost to her campaign of $180,000. Only 80% of the people she gave free tickets to actually voted for her and that's assuming none of the people who bought tickets voted for her. Bachmann didn't just pay for the entrance of 6,000 people who she thought supported her, but she paid a small fortune to have Grammy Award winning country singer Randy Travis perform in a special air-conditioned tent. Bachmann even paid to transport forty bus loads of Randy Travis fans to the event, who were required to register at the Bachmann table and vote before seeing the entertainment.

With Bachmann spending a total of nearly $1 million on this event, she should have won the straw poll in a blow out. Click on the link below to see a shocking video we just posted to the NIA blog of the never ending line of Bachmann "supporters" registering at her table so that they could vote without paying the $30 fee. NIA believes that many of these people pretended to support her in order to get free tickets, but actually voted for Ron Paul: http://inflation.us/blog/2011/08/crazy- ... poll-line/

The morning after Bachmann's phony victory, she appeared on five different nationwide talk shows. Ron Paul wasn't allowed to appear on any, with both 'Meet the Press' and 'Fox News Sunday' canceling interviews they had scheduled with him. Meet the Press spent the morning talking about Bachmann's win and Tim Pawlenty dropping out of the race after finishing third with less than half of the votes of Bachmann and Ron Paul. They barely mentioned Ron Paul even when he finished in a statistical dead heat with Bachmann.

Even more frustrating and disturbing, the Wall Street Journal published a long article Sunday morning about the race and it focused almost entirely on Bachmann's straw poll win and Rick Perry's entry into the race. The article only had one sentence about Ron Paul that read, "Libertarian Ron Paul, who has no chance to win the nomination, finished a close second." On Monday morning, Ron Paul was scheduled to appear on NBC's 'Today' show, but that interview was canceled as well with an NBC official saying it was due to "logistics and timing reasons with the news in Indiana and Somalia."

The mainstream media believes that if they repeat "Ron Paul has no chance of winning" enough times, it will be a self-fulfilling prophecy. The same applies to the media constantly referring to Mitt Romney as the front-runner. The media supports Romney because they like how he is a part of the Republican establishment and if elected would stick with the status quo in Washington.

Four years ago when Ron Paul was relatively unknown, Romney was the winner of the 2007 Ames Straw Poll. Rudy Giuliani and John McCain, who were both also seeking the 2008 Republican presidential nomination, chose not to participate in the 2007 Ames Straw Poll. Romney at the time in his own words called Giuliani and McCain cowards. Romney said, "I think if they thought they could have won, they would have been here," and "If you can't compete in the heartland, if you can't compete in Iowa in August, how are you going to compete in January when the caucuses are held, and how are you going to compete in November of '08?"

NIA believes that if Romney thought that he could have won the 2011 Ames Straw Poll, he would have been there. Romney knows that he lost all of his grassroots supporters when he spoke out in favor of the Federal Reserve's destructive monetary policies and said Fed Chairman Ben Bernanke was doing a good job. Romney showed his true colors when he said that the Federal Reserve is a non-issue and that he won't be discussing it during his campaign. He has now proven himself to be a hypocrite who was scared of looking bad by losing to Ron Paul in the straw poll and losing his "front-runner" status that was handed to him by the mainstream media. If Romney was afraid to compete in Iowa this month, NIA sees no chance of him winning in Iowa this February and no chance of him winning the Republican nomination.

With Iowa voters having a lot of power being in the first primary state, Iowa residents have spent more time researching the candidates than residents of most other states. Because Iowa voters are educated on the issues, especially issues affecting the economy, the media knew Ron Paul would have a strong showing in the Ames Straw Poll and for weeks leading up to it ran countless stories designed to downplay the poll and make it seem irrelevant. One Fox News reporter even went as far as saying that winning the straw poll is a negative and makes it nearly impossible to win the nomination. None of these things were said before the poll in 2007 because the media knew their darling Romney would win.

All educated Americans who understand the facts and truth about the U.S. economy and inflation are in strong support of Ron Paul because of his 24 year record in Congress of voting against increases in government spending and taxes, and voting for measures to strengthen our currency and reduce monetary inflation. Ron Paul stands for everything that NIA believes in such as liberty, freedom, and sound money. He has done more to protect the U.S. Constitution than any other person in Washington. Our founding fathers had the foresight 224 years ago to see the economic problems we have today. Even back then, rulers of nations had a history of coin clipping, replacing the silver in coins with base metals, and implementing other measures that stole from the purchasing power of ordinary citizens. Our founding fathers never would have imagined just how easy it has become to create inflation, where now the Federal Reserve with the click of a mouse can credit trillions of dollars to any banking institution worldwide.

For years, the media has dismissed Ron Paul's fight against the Federal Reserve and its destruction of the U.S. dollar. The media calls Ron Paul's ideas radical, but NIA believes Ron Paul is the most sane person in Washington. NIA believes balancing the budget, auditing the Federal Reserve, returning to a gold standard, and bringing our troops home from the Middle East, are all sane ideas that must be implemented if we want to have any hope of avoiding hyperinflation." [more]

Todays news here in Aussie ,Bachmann has magical powers as She will make US petrol under $2 a gallon if elected.

I can recall old US movies with Snake oil Salesmen in the old West selling a bottle of cure all , was one of them named Bachmann ?

Ask yourself seriously would anyone in China today swallow that story, perhaps they are the deserved new leaders , what utter rubbish to announce something so stupid, and how stupid for the media to involve themselves in it and back someone so utterly devoid of basic nouse to the top job , does a hairdresser and a perfect teeth smile make up for lack of IQ in todays USA.

Now just for the fun of it , Teeth , the rest of the world mostly have non uniform teeth , a bit as nature intended , US citizens mostly look upon us as ,Oh dear poor things , the rest of us in this big World just assume every US person has fake teeth as they are so good just like a Doll, so there you go , strange world Huh.

Fiat Money is a bit like the Star Wars episode where the Jedi looks the dealer in the Eye, waves his hand and says , International credits are good a few times, but unfortunatly the dealer is not human and is not bluffed so easily , he refuses the International credits.

I hope I got this somewhere near right any how you guys will get me on track.

Are the Asian and newer economy traders fast aproaching that dealers nouse on this subject ?

I will just reiterate what has actually happened, in teh real world, over teh last couple of weeks. Money has gone into gold (silver has largely stagnated) and US Treasuries. The volume into Treasuries will have been many times that going into gold.

Say what you will, scoff all you want. The simple fact is that the money prefers US Dollars to anything else when times are confused and risk appetite is low.

As for the suggestion that everybody should sell stocks and buy silver, I say "absolute bollocks"! A balanced investment (not just a single commodity, and I have been a silver bull for some time) portfolio is what is required. If you had bought silver during the run in the early 1980s then you would be far behind, after inflation. Quality shares purchased at the same time will be worth much more, in real terms, and you would have benefitted from dividends in the meantime.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

This summer, the other constraint on gold has been the difficulty of securing large quantities; I would guess a speculator could get 100 1-ounce bullion coins without much trouble, but large quantities for the mega-rich seem to be taking weeks to assemble, plus some sovereign funds are back in the market, buying on dips, and changes in margin requirements have forced speculators to add to their positions, or cash out.

If someone has the data, I'd be interested in knowing the percentage increase in the price of gold since June 1, in US dollars, Euros, and Australian dollars.

Doug, I have teh data at work. I will post tomorrow morning. Can't give you the EURO though, I don't track in anything other that USD and AUD.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I wouldn't regard peolple that have openened their eyes to a market that has already seen companies and investments fail as 'talking bollocks', I'm sure Eric Sprott and Ron Paul know a little more than 'bollocks' when it comes to finances.

Even the FED clearly admit in their 'Money mechanics' that the system has reached a paradym of sorts, but I guess that report is 'bollocks' too?

Silver is stagnant because of the future raids that have been happening over the last three months, and you don't get dividends from a crashing market, you get liabilities! If our pensions had been invested in Gold instead of the paper markets it would have seen a huge INCREASE in value, and not the black hole we have now.

Silver has been trading at 40-1 and will end up at between 14-1 and 16-1..you have to realise that Bear Sterns silver liabilities was taken onboard by Jp Morgan who backed by Lehman are trying to keep the market artificially low by trading massive amounts of silver futures between themselves.

Once silver passes beyond $50 U.S, Jp Morgan will not be able to cover the silver they have 'short sold' and it will go through the roof.

Shares or Physical? I would take physical delivery of ANY commodity instead of double the amount in shares..thats the problem with the futures market, the stock never really has to exist if both parties agree not to cash out.

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Looking for South Korea up to 1884-1951,North Korea 1st issue 1946-1957,China 1898-1912 and P.R.C 1963- 1980,Thailand 1883- 1918, Commonwealth QV Issues.

Physical delivery, absolutely -- and a 2% chance that the U.S. Government will eventually confiscate your gold and silver out of your bank's safety deposit box and compensate you with Treasury bonds.

It happened once, and it can happen again. Not easily, however, as U.S. Marshals will be ducking snipers' bullets all day long. I can live with a 2% chance; if I were in my 20s, facing the loss of Social Security and Medicare down the line, NO.

Not a chance IN THE WORLD that Obama will be re-elected, thank God. The populace is waking up, finally, after a l-o-n-g debilitating and disastrous snooze.

I see that 10 year US Treasury Bond yields are at their lowest level in over 60 years. The only reason for this is the massive inflow of cash into them over the last several weeks.

Now, as to the change in the gold price since 1 June 2011. On 1 June the price was US$1534 (A$1437). On teh close in NY last Friday it was US$1853 (A$1781). This represents a 21% increase in US$ terms and 24% in A$ terms. The A$ increase is skewed by the fall (from around US$1.10 to US$1.04) in the last couple of weeks. At 1 June the exchange rate was US$1.0672. at the close on Friday it was US$1.0406.

The share market in Australia has been hit, just as it has everywhere. However, the companies are still making profits and still paying dividends. I bought some shares in the last 2 weeks, as prices slumped, giving me yields of 9% plus (fully franked, which means there is a 30% tax credit attached). The best I could do at a bank is around 6% for a lengthy term deposit. I haven't bought the shares with a view to a quick sale, they are a longer term investment.

And I stress, the underlying companies are highly profitable and will continue to be so well into the foreseeable future!

For the period May 2001 to end April 2011 the annual return on the Australian Stock Exchange (excluding dividends) was 8.3%. That assumes continuous holding and includes the massive losses of the GFC. If, however, people had panicked and sold when their investment value fell, then the return would have been around 2%, or even less.

The share market is not a place to be in if you worry about the day to day fluctuation of valuations. The gold market is not a place to be in unless you are very knowledgeable and can read the trends properly. Gold is as likely to fall 5% in a day as it is to rise, depending solely on sentiment and the appetite for risk.

The rule is, never have all your eggs in one basket. Spread your investments and treat them as investments. I would hate to be a day trader in gold or shares, too risky and too much strain on the heart!

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Oh, another thought for you regarding gold. On 1 August the price was US$1614 (A$1465). At that point the increase was 5% in US$ terms and 2% in A$ terms. That was a lower rate of return than you could have got from the share market in either the USA or Australia.
3 weeks has accounted for 80% of the gain in the gold price since 1 June.

The lesson is, volatility is high when looking at short periods. I remember gold being over $800 in around 1980 (and silver over $50). If you had bought then, and held onto it, then you would be far behind in adjusted for inflation terms, let alone the opportunity cost of having that money tied up in a non-income producing asset.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Very good, thank you.

As you know, one of the key differences between our two economies -- interest rates. My money-market fund earns 0.2% annually, which is why I have bought a good many coins and stamps in the past 3 years. The items I've bought are highly liquid.

Actually, 0.2% is a negative rate of return.

I did sell silver too early, to be sure, but even so, it boosted my net return nicely.

Peter. It would seem the whole of the Middle East is on the point of destabilising. That would indicate uncertainty in the oil market, and could lead to a significant disruption in global trade.

If that were to happen, there would likely be a military intervention by the US and Europe to protect both oil and trade. Do you think such a scenerio would see a quick $US recovery?

Huanga.

The main suppliers of oil to the US and Europe are the Gulf States and Saudi Arabia. No sign of destabilisation there. In Libya it looks like a rebel victory is imminent. If that occurs then Libyan oil would likely begin to flow again sooner rather than later.

I think the liklihood of a major disruption to the oil supply to be very low.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I would agree about oil; besides, the non-Middle East members of OPEC are dying for a good excuse to ramp up production and collect a few more worthless Yankee $$$.

OPEC members are a bit like peter. The're optimists. [I mean that in the nicest way Peter.]They can promise to make up shortfalls if other producers fail to achive there allocated output. The reality is, when it comes to do so. Few can maintain increased production for any great length of time, without the risk of damage to their own fields.

Doug, as far back as the 1960s various oil producers have been pushing for increased returns for their oil. Perhaps I take a cynical approach when I suggest there is likely to be a significant disruption in the supply of oil from the Arab or Gulf States. The stability we like to hope is there.....is not!

When this thread began my question was the future security of the $US and the Euro, and how a potential demise of either would effect me. Peter has done a fine job in answering for the $US. Reading back over his posts I figure the $US can only grow in strength again.

The only ?...............duck in the woodpile is this risk of a crisis in Middle East. Na....duck has not got the same ring about it. Christ this political correctivness has 'disrupted the normal English expressions!!

Huanga.

With the exception of Libya and Iraq, both of which have been out of the mass production business for some time (although Iraq has been shipping and production is expanding again), name an oil producer in the Middle East that is currently undergoing disruption??

The fact that the oil price has fallen US$20 in the last couple of months might tell you something? Production capacity exceeds demand at teh moment. Production is below normal and there is plenty of unused capacity to increase supply, should demand require it.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.