The Good The Bad and The Ugly

Friday, November 12, 2010

The Daily Reckoning is to be Reckon With!

Darkbird18 have been following the Daily Reckoning for 4 years because back in 2004 after Pres. Bush won the second election for the president of the USA, they wrote a article about what will happen after this event and my God it happen!

So read and keep reading what they have to say because the Major News media will not touch it!
Amplify’d from dailyreckoning.com
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Sterilizing Money at the QE Corral


By The Mogambo Guru


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11/12/10 Tampa, Florida – There are a lot of intricacies in the Federal Reserve’s evil ways, especially as concerns creating $900 billion in the next six months in another round of quantitative easing, and one of them is explained by Daniel R. Amerman of DanielAmerman.com. He says, “There is something else essential for investors and savers to understand about the process which the Federal Reserve has just outlined. The Federal Reserve is not directly purchasing treasury bonds from the US government. Instead, US banks are purchasing the bonds from the US Treasury to fund the deficit, and then selling an equal amount of other bonds (likely at a nice profit) to the Federal Reserve.”


If you are a normal person, then you are positively terrified by the prospect of inflation, which means that you are terrified of the Federal Reserve creating so much, so incredibly much, so staggeringly much, so unbelievably much money – which is to be almost $900 billion in the first six months of 2011 – because a lot less monetary insanity than this gigantic clot of extra money caused ruinous inflations in stocks, inflations in bonds, inflation in consumer prices, inflation in housing, inflation in the sheer suffocating size of government and severe, bankrupting macroeconomic distortions and mal-investments.


Obviously, then, I am on to something when I say that “Inflation is the worst thing that can happen, other than the Earth being invaded by creatures from outer space to make us their slaves, forcing us to mine di-lithium crystals on some barren planet in the faint, farthest reaches of the…Read more…


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Bernanke Equally Handy With Paintbrush, Printing Press

All the while, President Obama played his expected role, blaming China for manipulating the yuan as most other nations were more inclined to level criticism against the US’ own monetary shenanigans. The US was the proverbial pot calling the kettle black, and in the unilateral fashion that seems reminiscent of a previous presidency, the US once again goes it alone.
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Junk Science

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“When I started my economics studies at 16,” wrote Paul A. Samuelson not long before he died last year at aged 93, “Carlyle was right to call economics a ‘dismal science.’ Thanks to modern science and better economic knowledge, this Malthusian curse has been vanquished. Good modern economics make economics the Hopeful Science. At last!”
Lucky professor Samuelson! Like an aparatchik who joined the shades before 1989, he went to his reward with his delusions intact.
This week, the scientists began to have doubts. Like the pope wondering about the resurrection, or the Mormons questioning the veracity of the angel Moroni, the head of the World Bank, Robert Zoellick, shocked the learned world. It’s time to start discussing a gold-backed currency, he said. Maybe the crown of creation of modern economics – its centrally managed money – was not such a good idea after all.
Like Christianity, the dollar only has value as long as people have faith in it. But that is true of almost every trick up the modern economist’s sleeve. If people stop believing, the spell is broken and they’re worthless.
Two years ago, when the financial world was melting down, we were told that the volcano needed to be appeased. Without immediate injection of funds, the whole system would blow up, they said. Where was the science behind that? The financial system melted down countless times in the past. No central bank came to its aid before the 1930s.
Or how about the corollary article of faith: that the…Read more…
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Inflation Hedges

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It could get very ugly, so you need to understand exactly what’s about to happen and how to prepare for it.
Of course, as far as the Fed is concerned, inflation is firmly under control. After all, the core consumer price index — which excludes volatile things like food and energy costs — is very low. So low, in fact, that many investors believe we’re on the verge of a great deflation.
Trouble is, central bankers don’t seem to understand what inflation really is. Rising prices themselves aren't inflation — they’re merely one of many potential outcomes of inflation.
True inflation is an increase in the supply of money in an economy. As Milton Friedman once said, “Inflation is always and everywhere a monetary phenomenon.”
So by that classical definition, the Fed injecting $600 billion into the economy fosters inflation. The message is, since we can’t grow our way out of this recession, the Fed will have to try to inflate our way out.
But don’t expect see its affect on prices for awhile. The Fed can control the amount of money in the system. But it can’t control what happens to that cash next.
That is, it can’t force banks to lend it out. It can’t force consumers or corporations to spend it. Without their cooperation, the velocity of money slows down…Read more…
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