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Red Steele
Veteran Advisor

Lots of good stuff in the comments

as usual.

 

TeeJaw

01/18/2013 11:29 PM

 

What comes after a trillion?  We’ll soon be talking about U.S. debt in that term, we need to find out what it is.  It’s can’t be quadrillion, that's four of something.  The next term is a thousand of something.  A thousand trillion... yikes.  I’d hate to be a holder of U.S. debt and get paid back the face amount of my bond with dollars worth about 10% of the dollars I bought it with.  That must be why our politicians feel no need to control their deficit spending.  

Don’t stop the carnival!

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    The US of A has 17000 tons of 'Gold", France is in 2d spot with 7000 tons of the metal.........UK sold 1/2 of there holdings under PM Brown.......

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     THREE world currencies? As if.. there is no China?

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  • HamletsGhost

    01/18/2013 10:03 PM

     

    AEP has it wrong. The Fed didn't tighten too much in 1928, it loosened too much in 1925. It didn't go beserk in 1930, it was trying to rein in the beserkitude that it had unleashed earlier which led to the speculative bubble that popped in 1929.

    This is the basic argument for the gold standard. A shiny yellow brick is a better guarantor of economic stability and growth than a bunch of Ivy league PhDs. Bernanke really is thicker than a brick.

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    The Fed didn't tighten too much in 1928, it loosened too much in 1925. 
    It doesn’t matter if you gave the horse too much rein and he becomes a runaway.  Jerking the reins to stop him still gets you thrown off.

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     Wasn't the US on the gold standard in the 20's?

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  • HamletsGhost

    01/19/2013 07:13 AM

     

    Yes it was. It also had (and has) a fractional reserve banking system that allowed many more dollars to be lent out than could be backed by gold deposits. This is what caused financial panics up to that time. There were't enough musical chairs when the music stopped.

    FDR's solution was to seize privately held gold and then arbitrarily raise its price to enable him to print more money to inflate his way out of the Depression. He threw out the golden baby and kept the fractional reserve bath water.

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    The Germans probably need their gold to float a new currency if the Euro collapses.  The Italians also own a lot of gold.  Why don't they use it?

    Is there enough gold in the world?  Of course there is.  The central banks could arbitrarily agree to set the value of gold at $10.000 per ounce if need be.  Just as well I live in Canada.  We dig new gold out of the ground every day.

 

Something is definately going on with money . Makes $12,000 per acre ground look pretty reasonable when you stop and think about it. Germans are bright people , by and large, and I can see why they want gold instead of paper. Just won't be enough of that shiny stuff to go around when the run comes on it.

 

Interesting times that we live in. Hang on to your hats, comrades.