ehnyah
08-22-2005, 11:15 AM
http://goldmoney.com/en/images/commentary-images/commentary-charts/alert_2005-08-03.gif
Texas Straight Talk
by Ron Paul
Few Americans truly understand how our Federal Reserve system enables Congress to spend far beyond its means, but the cycle of spending and printing money affects all of us. Simply put, the more money our Treasury prints, the less every dollar is worth. Our pure fiat money system, in place since the last vestiges of a gold standard were eliminated in the early 1970s, has reduced the value of your savings by 80%. Disregard the government's Consumer Price Index, which substantially underreports price inflation. Monetary inflation is true inflation, and we only need to look at the cost of homes, cars, energy, and medical care to recognize that a dollar buys far less today than ever.
Economist Mark Thornton of the Ludwig von Mises Institute lays out a sobering case against the long-term health of the U.S. dollar. He identifies several facts and trends that bode ill for millions of Americans counting on dollar-denominated assets to fund their retirements.
First, federal debt continues to grow exponentially and shows no sign of abating. Americans were shocked at the notion of a $1 trillion federal debt in 1980; just 25 years later the total approaches $8 trillion. The Bush administration and the current Congress have increased spending at rates unseen since the New Deal and Great Society eras, and single-year deficits now exceed $500 billion. There is zero political will in Washington to curb spending, as evidenced by the shameful transportation bill recently passed by Congress.
Second, federal entitlement programs like Social Security and Medicare will not be "fixed" by politicians who are unwilling to made hard choices and admit mistakes. Demographic trends will force tax increases and greater deficit spending to maintain benefits for millions of older Americans who are dependent on the federal government. Faced with uncomfortable financial realities, Congress will seek to avoid the day of reckoning by the most expedient means available-- and the Federal Reserve undoubtedly will accommodate Washington by printing more dollars to pay the bills.
Third, future administrations are unlikely to challenge a foreign policy orthodoxy that views America as the world's savior. We are hemorrhaging billions of dollars every month in Iraq, and we waste billions more every year through foreign aid and overseas meddling. A foreign policy based on nation-building and the imposition of "democracy" abroad, in direct contravention of our founders? admonitions, is not economically sustainable. In Korea alone, U.S. taxpayers have spent nearly one trillion in today's dollars over 55 years. A permanent military presence in Iraq and the wider Middle East will cost enormous amounts of money.
Finally, we face a reordering of the entire world economy. China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever. Foreign central banks are increasingly reluctant to hold more U.S. dollars, understanding that American leaders do not have the discipline to maintain a stable currency. When the rest of the world finally abandons the dollar as the global reserve currency, both Congress and American consumers will find borrowing money a more expensive proposition.
All of these factors make it likely that the U.S. dollar will continue to decline in value, perhaps precipitously, in the coming decade. Will it take an economic depression before the American public finally holds the political class accountable for its reckless borrowing, spending, and counterfeiting?
The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars.
http://www.house.gov/paul/tst/tst2005/tst082205.htm
Related:
Dollar Drops to a 6-Week Low
James Turk
As we can see on the above chart, the bear market rally has taken the form of a 'rising-wedge' formation. The Dollar Index is now resting on the uptrend line that marks its advance since early this year. If the dollar breaks below this uptrend line, the probabilities will then suggest that the dollar's bear market rally has ended.
It is logical that the dollar's bear market rally will end sooner, rather than later. After all, nothing has been done to correct the unsustainable imbalances that prevail ? the huge federal government budget deficits, the huge trade deficits, runaway government spending, the growing mountain of debt, etc. All of these problems are relentlessly eroding the purchasing power of the dollar.
Link (http://goldmoney.com/en/commentary.php#current)
Words of wisdom not to be found in the US media.
Recently, the London Financial Times ran a story titled "Derivatives cannot take the strain" which discussed the short squeeze delivery problem in the 10 year US Treasury, listed future (first derivative):
"The real problem is that the US economy is just too leveraged. Starting with the housing industry, the country is too dependent on derivative markets to create the illusion that interest rate risk can be conjured away. The technical problems of the 10-year are just another early warning sign of this fundamental weakness."
Jim Sinclair's Commentary:
Authoritarian Free Enterprise is good business for the elite authoritarians. About that there can be no argument. When you control spending (demand) and supply, profit simply emotes to your coffers.
Now is there anyone that would deny the authoritarian character of Russia with its appointed Dumas made up of former KGB officers, appointed majors and governors of the same ilk? The gargantuan powers that have been drawn into the office of the Russian presidency rival that of the Lincoln administration during the Civil War.
Yet Western banks are falling over themselves in competition to provide $7.3 billion in loans to Federal Russia. The competition is rivaling a "Lending Tree" advertisement of international bankers throwing money at Federal Russia for the takeover of Gazprom.
What these bankers are doing is lending money to the Kremlin in order to gain state control of what will be, in time, the entire Russian gas and oil wealth. By the purchase or confiscation for supposed tax evasion, the central Russian government, with the help of international bankers, is in the process of centralizing control of the energy industry unto itself.
Now this is what Authoritarian Free Enterprise is all about. It matters little if it is the state or state makers who own it all as long as those that create authority - kings and presidents - also hold the major assets or means of production.
In Russia ,the new KGB is no longer in the dirty tricks business based on an ideology or with a prerogative to acquire new states. Now it is all about the acquisition of immense personal fortunes. Clearly, spy payday has arrived.
There is no more important development in this segment of world history than the birth of and undeniable success of Authoritarian Free Enterprise.
Link (http://jsmineset.com/)
Texas Straight Talk
by Ron Paul
Few Americans truly understand how our Federal Reserve system enables Congress to spend far beyond its means, but the cycle of spending and printing money affects all of us. Simply put, the more money our Treasury prints, the less every dollar is worth. Our pure fiat money system, in place since the last vestiges of a gold standard were eliminated in the early 1970s, has reduced the value of your savings by 80%. Disregard the government's Consumer Price Index, which substantially underreports price inflation. Monetary inflation is true inflation, and we only need to look at the cost of homes, cars, energy, and medical care to recognize that a dollar buys far less today than ever.
Economist Mark Thornton of the Ludwig von Mises Institute lays out a sobering case against the long-term health of the U.S. dollar. He identifies several facts and trends that bode ill for millions of Americans counting on dollar-denominated assets to fund their retirements.
First, federal debt continues to grow exponentially and shows no sign of abating. Americans were shocked at the notion of a $1 trillion federal debt in 1980; just 25 years later the total approaches $8 trillion. The Bush administration and the current Congress have increased spending at rates unseen since the New Deal and Great Society eras, and single-year deficits now exceed $500 billion. There is zero political will in Washington to curb spending, as evidenced by the shameful transportation bill recently passed by Congress.
Second, federal entitlement programs like Social Security and Medicare will not be "fixed" by politicians who are unwilling to made hard choices and admit mistakes. Demographic trends will force tax increases and greater deficit spending to maintain benefits for millions of older Americans who are dependent on the federal government. Faced with uncomfortable financial realities, Congress will seek to avoid the day of reckoning by the most expedient means available-- and the Federal Reserve undoubtedly will accommodate Washington by printing more dollars to pay the bills.
Third, future administrations are unlikely to challenge a foreign policy orthodoxy that views America as the world's savior. We are hemorrhaging billions of dollars every month in Iraq, and we waste billions more every year through foreign aid and overseas meddling. A foreign policy based on nation-building and the imposition of "democracy" abroad, in direct contravention of our founders? admonitions, is not economically sustainable. In Korea alone, U.S. taxpayers have spent nearly one trillion in today's dollars over 55 years. A permanent military presence in Iraq and the wider Middle East will cost enormous amounts of money.
Finally, we face a reordering of the entire world economy. China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever. Foreign central banks are increasingly reluctant to hold more U.S. dollars, understanding that American leaders do not have the discipline to maintain a stable currency. When the rest of the world finally abandons the dollar as the global reserve currency, both Congress and American consumers will find borrowing money a more expensive proposition.
All of these factors make it likely that the U.S. dollar will continue to decline in value, perhaps precipitously, in the coming decade. Will it take an economic depression before the American public finally holds the political class accountable for its reckless borrowing, spending, and counterfeiting?
The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars.
http://www.house.gov/paul/tst/tst2005/tst082205.htm
Related:
Dollar Drops to a 6-Week Low
James Turk
As we can see on the above chart, the bear market rally has taken the form of a 'rising-wedge' formation. The Dollar Index is now resting on the uptrend line that marks its advance since early this year. If the dollar breaks below this uptrend line, the probabilities will then suggest that the dollar's bear market rally has ended.
It is logical that the dollar's bear market rally will end sooner, rather than later. After all, nothing has been done to correct the unsustainable imbalances that prevail ? the huge federal government budget deficits, the huge trade deficits, runaway government spending, the growing mountain of debt, etc. All of these problems are relentlessly eroding the purchasing power of the dollar.
Link (http://goldmoney.com/en/commentary.php#current)
Words of wisdom not to be found in the US media.
Recently, the London Financial Times ran a story titled "Derivatives cannot take the strain" which discussed the short squeeze delivery problem in the 10 year US Treasury, listed future (first derivative):
"The real problem is that the US economy is just too leveraged. Starting with the housing industry, the country is too dependent on derivative markets to create the illusion that interest rate risk can be conjured away. The technical problems of the 10-year are just another early warning sign of this fundamental weakness."
Jim Sinclair's Commentary:
Authoritarian Free Enterprise is good business for the elite authoritarians. About that there can be no argument. When you control spending (demand) and supply, profit simply emotes to your coffers.
Now is there anyone that would deny the authoritarian character of Russia with its appointed Dumas made up of former KGB officers, appointed majors and governors of the same ilk? The gargantuan powers that have been drawn into the office of the Russian presidency rival that of the Lincoln administration during the Civil War.
Yet Western banks are falling over themselves in competition to provide $7.3 billion in loans to Federal Russia. The competition is rivaling a "Lending Tree" advertisement of international bankers throwing money at Federal Russia for the takeover of Gazprom.
What these bankers are doing is lending money to the Kremlin in order to gain state control of what will be, in time, the entire Russian gas and oil wealth. By the purchase or confiscation for supposed tax evasion, the central Russian government, with the help of international bankers, is in the process of centralizing control of the energy industry unto itself.
Now this is what Authoritarian Free Enterprise is all about. It matters little if it is the state or state makers who own it all as long as those that create authority - kings and presidents - also hold the major assets or means of production.
In Russia ,the new KGB is no longer in the dirty tricks business based on an ideology or with a prerogative to acquire new states. Now it is all about the acquisition of immense personal fortunes. Clearly, spy payday has arrived.
There is no more important development in this segment of world history than the birth of and undeniable success of Authoritarian Free Enterprise.
Link (http://jsmineset.com/)