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Dollar Heads for Worst Quarter Versus Euro in More Than 2 Years
- Thread starter teknobucks
- Start date
The_Technician
Active member
imported post
I would guess having any dialog with Quips would probably mean that Quips has a need to find out who you are and has malicious intent ...so I guess I don't have to tell anybody to be wary of this member....and by the way Quips.... the exposure is mine ....
:dude:
I would guess having any dialog with Quips would probably mean that Quips has a need to find out who you are and has malicious intent ...so I guess I don't have to tell anybody to be wary of this member....and by the way Quips.... the exposure is mine ....
:dude:
The_Technician
Active member
imported post
Hey..... aint you MT??? No No u DMA???.....No No you the big pumpkin......
:l
Hey..... aint you MT??? No No u DMA???.....No No you the big pumpkin......
:l
imported post
Lobo wrote:
Lobo wrote:
Scary. I was able to read that with out missing a beatWell, not to change the "subject"....but, just to change the subject, I submit this:
I wish I could read the Stock Market even half as well as I can read this:
Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it
deosn't mttaer in waht oredr the ltteers in a wrod
are, the olny iprmoetnt tihng is taht the frist and
lsat ltteer be at the rghit pclae. The rset can be a
total mses and you can sitll raed it wouthit porbelm.
Tihs is bcuseae the huamn mnid deos not raed ervey
lteter by istlef, but the wrod as a wlohe
We should dance, play music and smile more....it's more entertainingthan arguing....and almost as much fun as trying to OUT GUESS THIS DANG MARKET!! :shock::shock:
Lobo :^
Birchtree
Well-known member
imported post
Some of us enjoy a stronger dollar. European vacations are getting cheaper than they have been in years. With the dollar gaining 14.6% on the euro and 12.1% on the British pound over the past 12 months, large numbers of U.S. tourists are already booking vacations to Europe for the coming year.
The stronger dollar means prices on everything from French hotel rooms to Italian wine are falling for U.S. travelers. Airline fares, too, are easing, as more trans-Atlantic flights are scheduled and fuel costs start to come down. Bookings to Europe are up 116% over last year, Italy's booking are up 236%, England's are 79% higher and Spain's have climbed 170%. Wish I could find the time to go to Holland.
Dennis
Some of us enjoy a stronger dollar. European vacations are getting cheaper than they have been in years. With the dollar gaining 14.6% on the euro and 12.1% on the British pound over the past 12 months, large numbers of U.S. tourists are already booking vacations to Europe for the coming year.
The stronger dollar means prices on everything from French hotel rooms to Italian wine are falling for U.S. travelers. Airline fares, too, are easing, as more trans-Atlantic flights are scheduled and fuel costs start to come down. Bookings to Europe are up 116% over last year, Italy's booking are up 236%, England's are 79% higher and Spain's have climbed 170%. Wish I could find the time to go to Holland.
Dennis
Wimpy
Member
imported post
[align=center]Gold and Guillotines
[/align]
[align=center]by Bill Bonner[/align]
Not much happened in yesterday's markets. Of course, not much has happened for a long time. This leaves most people thinking that not much will ever happen. The Dow will be over 10,000 forever. The dollar seems stable at 1.18 versus the euro. And why would you ever have to pay more than 6% for a mortgage loan?
But two things happened yesterday that might be significant. First, oil seemed to end its correction with a move back towards $60 a barrel. Second, the price of gold went up again to over $512 per ounce (Feb. contracts).
These things are significant because in the happy picture of America's finances and the world economy, they shouldn't be there. It would be like a man with a turban on his head saying Mass at Notre Dame, or a sour smell from a bowl of yogurt. Something is rotten, they tell us.
http://www.lewrockwell.com/bonner/bonner175.html
----
This article deserves a close read to fully enjoy the meaning of the little blip at the bottom of the article regarding the length of time a decapitated person remains conscious.
[align=center]Gold and Guillotines
[/align]
[align=center]by Bill Bonner[/align]
Not much happened in yesterday's markets. Of course, not much has happened for a long time. This leaves most people thinking that not much will ever happen. The Dow will be over 10,000 forever. The dollar seems stable at 1.18 versus the euro. And why would you ever have to pay more than 6% for a mortgage loan?
But two things happened yesterday that might be significant. First, oil seemed to end its correction with a move back towards $60 a barrel. Second, the price of gold went up again to over $512 per ounce (Feb. contracts).
These things are significant because in the happy picture of America's finances and the world economy, they shouldn't be there. It would be like a man with a turban on his head saying Mass at Notre Dame, or a sour smell from a bowl of yogurt. Something is rotten, they tell us.
http://www.lewrockwell.com/bonner/bonner175.html
----
This article deserves a close read to fully enjoy the meaning of the little blip at the bottom of the article regarding the length of time a decapitated person remains conscious.
The_Technician
Active member
imported post
Dollar looks to be weak at the moment...I have seen some data that suggest it should be getting stronger again soon....which means the I fund drops.....along with the C and S funds....all at the same time...........now how do they do that.....
:dude:
Dollar looks to be weak at the moment...I have seen some data that suggest it should be getting stronger again soon....which means the I fund drops.....along with the C and S funds....all at the same time...........now how do they do that.....
:dude:
Wimpy
Member
DOW 30,000; You Heard it Here First!
Bush's Con Jobs
Will the US Need an IMF Bail Out?
By PAUL CRAIG ROBERTS
01/11/06 -- -- President George W. Bush has destroyed America's economy along with America's reputation as a truthful, compassionate, peace-loving nation that values civil liberties and human rights.
Nobel prize-winning economist Joseph Stiglitz and Harvard University budget expert Linda Bilmes have calculated the cost to Americans of Bush's Iraq war to be between one and two trillion dollars. This figure is 5 to 10 times higher than the $200 billion that Bush's economic adviser, Larry Lindsey, estimated. Lindsey was fired by Bush, because Lindsey's estimate was three times higher than the $70 billion figure that the Bush administration used to mislead Congress and the American voters about the burden of the war. You can't work in the Bush administration unless you are willing to lie for dub-ya.
Americans need to ask themselves if the White House is in competent hands when a $70 billion war becomes a $2 trillion war. Bush sold his war by understating its cost by a factor of 28.57. Any financial officer any where in the world whose project was 2,857 percent over budget would instantly be fired for utter incompetence.
http://www.informationclearinghouse.info/article11533.htm
-------------------
Yes, so goes GM…so goes the country. A bankrupt automotive industry, a bankrupt airline industry, a bankrupt national treasury, a bankrupt social security system, a bankrupt consumer with a negative savings rate, corporate scandal after corporate scandal, $64 plus for crude oil with $100 a barrel seen on the horizon, a long gone manufacturing sector, an economy pedaling faster but getting nowhere, a housing bubble looking to impale itself on a sharp object (higher interest rates), declining real wages, fraudulent CPI numbers, a spread-to-thin military, a commander-in-chief with an imperialistic view of the world, numerous unaccounted for suitcase nukes and thousands upon thousands of unaccounted for shoulder fired missiles, declining tax revenues, an out of control budget, trade, and current account deficit, and Iran switching out of petrodollars to petroeuros in March along with the FED discontinuing the publishing of M3. Yep, all of the above is the fuel that will take the DJIA to 30,000.
Bush's Con Jobs
Will the US Need an IMF Bail Out?
By PAUL CRAIG ROBERTS
01/11/06 -- -- President George W. Bush has destroyed America's economy along with America's reputation as a truthful, compassionate, peace-loving nation that values civil liberties and human rights.
Nobel prize-winning economist Joseph Stiglitz and Harvard University budget expert Linda Bilmes have calculated the cost to Americans of Bush's Iraq war to be between one and two trillion dollars. This figure is 5 to 10 times higher than the $200 billion that Bush's economic adviser, Larry Lindsey, estimated. Lindsey was fired by Bush, because Lindsey's estimate was three times higher than the $70 billion figure that the Bush administration used to mislead Congress and the American voters about the burden of the war. You can't work in the Bush administration unless you are willing to lie for dub-ya.
Americans need to ask themselves if the White House is in competent hands when a $70 billion war becomes a $2 trillion war. Bush sold his war by understating its cost by a factor of 28.57. Any financial officer any where in the world whose project was 2,857 percent over budget would instantly be fired for utter incompetence.
http://www.informationclearinghouse.info/article11533.htm
-------------------
Yes, so goes GM…so goes the country. A bankrupt automotive industry, a bankrupt airline industry, a bankrupt national treasury, a bankrupt social security system, a bankrupt consumer with a negative savings rate, corporate scandal after corporate scandal, $64 plus for crude oil with $100 a barrel seen on the horizon, a long gone manufacturing sector, an economy pedaling faster but getting nowhere, a housing bubble looking to impale itself on a sharp object (higher interest rates), declining real wages, fraudulent CPI numbers, a spread-to-thin military, a commander-in-chief with an imperialistic view of the world, numerous unaccounted for suitcase nukes and thousands upon thousands of unaccounted for shoulder fired missiles, declining tax revenues, an out of control budget, trade, and current account deficit, and Iran switching out of petrodollars to petroeuros in March along with the FED discontinuing the publishing of M3. Yep, all of the above is the fuel that will take the DJIA to 30,000.
Wimpy
Member
The dollar may fall this March
01/14/2006 16:41
Still, it is difficult to say how much damage the default will cause to the United States. Meanwhile, experts point out that America is definitely getting ready for default.
The thing is, a number of events are due take place in March. The events look very alarming to the world of the dollar.
First, Iran is to officially switch into the euro in its foreign trade operations including oil exports. Second, China is hinting at a potential increase of the euro share in its Central Bank basket of currencies. The dollar share currently holds 70% of the basket. The dollar will be severely affected should the two countries, an oil and gas producer and a manufacturer, take action in a simultaneous manner.
Besides, the U.S. Federal Reserve is going to stop publishing the so-called "M 3 aggregate" reports i.e. data on increase rates in money supply. Given the New Year's predictions by John Snow, the Fed's intentions look pretty suspicious. In other words, the international community will have no tool for measuring a real value of the dollar.
Russia has no reason to panic over the coming changes since it keeps its M 3 aggregate data in the dark too.
The Fed is going to pull the plug on the data in March this year. Several events should occur in different countries more or less at the same time and thus damage credibility of the U.S. securities. Risk-averse investors get rid of speculative securities e.g. the dollar securities under the circumstances.
http://english.pravda.ru/world/20/91/368/16741_dollar.html
---------------------
Anyone counting on a 10% rise in the DJIA in 2006 better not quit their day job…especially so, if they are long term buy and holders in that sector.
The I-Fund will represent the best hedge against inflation and a falling dollar in 2006 and beyond, as compared to the other TSP funds.
The G-Fund can only be considered safe if one is content with losing 15-20 % in purchasing power this year alone. So, if you have $100,000 in the G-Fund today and can live with the fact that $100,000 will only purchase $80,000-85,000 worth of goods and services by the end of 2006, go for it. The G-Fund, with its downside risk (inflation factor), is still a much better play than the C-Fund, in my opinion, when one compares the 2005 returns on investment between those two funds and the fundamental overvaluation of the C-Fund. The downside risk in the C-Fund is much greater than the downside risk to the G-Fund (inflation factor).
The C & S Funds will grind sideways to major down the rest of this decade and will lose a tremendous amount in purchasing power over the next 4 to 6 years due to inflation/devaluation. The smart money will be selling into strength on any bounces all the way down this slippery bear market slope.
As the article above implies, this dollar devaluation is purposeful versus being accidental and will be necessary to bring the triple deficits back under control. This necessary purging process should be completed around 2012 or thereabouts.
I’m looking for a 3,000 DJIA when all is said and done and this will represent some wonderful buying opportunities as everyone, and I mean EVERYONE, will think anyone buying general equities is deserving of a padded room at the Funny Farm.
01/14/2006 16:41
Still, it is difficult to say how much damage the default will cause to the United States. Meanwhile, experts point out that America is definitely getting ready for default.
The thing is, a number of events are due take place in March. The events look very alarming to the world of the dollar.
First, Iran is to officially switch into the euro in its foreign trade operations including oil exports. Second, China is hinting at a potential increase of the euro share in its Central Bank basket of currencies. The dollar share currently holds 70% of the basket. The dollar will be severely affected should the two countries, an oil and gas producer and a manufacturer, take action in a simultaneous manner.
Besides, the U.S. Federal Reserve is going to stop publishing the so-called "M 3 aggregate" reports i.e. data on increase rates in money supply. Given the New Year's predictions by John Snow, the Fed's intentions look pretty suspicious. In other words, the international community will have no tool for measuring a real value of the dollar.
Russia has no reason to panic over the coming changes since it keeps its M 3 aggregate data in the dark too.
The Fed is going to pull the plug on the data in March this year. Several events should occur in different countries more or less at the same time and thus damage credibility of the U.S. securities. Risk-averse investors get rid of speculative securities e.g. the dollar securities under the circumstances.
http://english.pravda.ru/world/20/91/368/16741_dollar.html
---------------------
Anyone counting on a 10% rise in the DJIA in 2006 better not quit their day job…especially so, if they are long term buy and holders in that sector.
The I-Fund will represent the best hedge against inflation and a falling dollar in 2006 and beyond, as compared to the other TSP funds.
The G-Fund can only be considered safe if one is content with losing 15-20 % in purchasing power this year alone. So, if you have $100,000 in the G-Fund today and can live with the fact that $100,000 will only purchase $80,000-85,000 worth of goods and services by the end of 2006, go for it. The G-Fund, with its downside risk (inflation factor), is still a much better play than the C-Fund, in my opinion, when one compares the 2005 returns on investment between those two funds and the fundamental overvaluation of the C-Fund. The downside risk in the C-Fund is much greater than the downside risk to the G-Fund (inflation factor).
The C & S Funds will grind sideways to major down the rest of this decade and will lose a tremendous amount in purchasing power over the next 4 to 6 years due to inflation/devaluation. The smart money will be selling into strength on any bounces all the way down this slippery bear market slope.
As the article above implies, this dollar devaluation is purposeful versus being accidental and will be necessary to bring the triple deficits back under control. This necessary purging process should be completed around 2012 or thereabouts.
I’m looking for a 3,000 DJIA when all is said and done and this will represent some wonderful buying opportunities as everyone, and I mean EVERYONE, will think anyone buying general equities is deserving of a padded room at the Funny Farm.
Birchtree
Well-known member
Doesn't walk the talk
Wimpy,
What a great post! I just wish there were 36 more individuals spouting (micturating) the same projections. This is truly what makes a bull market go zoom.
I'll have to hold my day job until the Dow reaches 17,000 and I anticipate the C fund to provide a return of 32% this year.
Anyway, it's good to read your views - becareful not to set your shorts on fire though. Just kidding - we need more exchanges. I need to be aware of all the potential negatives and I appreciate your due diligence.
Dennis - permabull #2
Wimpy,
What a great post! I just wish there were 36 more individuals spouting (micturating) the same projections. This is truly what makes a bull market go zoom.
I'll have to hold my day job until the Dow reaches 17,000 and I anticipate the C fund to provide a return of 32% this year.
Anyway, it's good to read your views - becareful not to set your shorts on fire though. Just kidding - we need more exchanges. I need to be aware of all the potential negatives and I appreciate your due diligence.
Dennis - permabull #2
Wimpy
Member
Greenspan Quotations
Here are some Greenspan quotations worthy of a close read as they foretell what will transpire in the next 4-6 years. These gems were often buried in speeches where he seemingly was talking in tongues and in which his audience's eyes were all glazed over. No one will ever be able to pin the tail on this donkey because he can show everyone, after the calamity, that he gave fair warning in spite of the fact he contributed greatly to it. Afterall, he gave the debt slaves exactly what they begged for and that was more debt.
Although I have no respect for this man and his tenure as Fed Chairman, I wouldn't take an opposing bet with him. Would you?
Enjoy...
October, 1998, pertaining to the Long Term Capital Management crisis:
"On occasion there will be mistakes made, as there were in LTCM and I will forecast without knowing who, what or where, that there will be many more. I would suspect there are potential disasters running into a very large number, in the hundreds." – Alan Greenspan
As to risks posed by Fannie Mae and Freddie Mac Greenspan warned in February 2004:
"The Federal Reserve is concerned about the growth and scale of the GSEs' mortgage portfolios, which concentrate interest rate and prepayment risks at these two institutions." – Alan Greenspan
Jackson Hole, Wyoming on August 26, 2005:
"This vast increase in the market value of asset claims [stocks, bonds, houses] is in part the indirect result of investors accepting lower compensation for risk. Such an increase in market value is too often viewed by market participants as structural and permanent… But what they perceive as newly abundant liquidity can readily disappear . . . history has not dealt kindly with the aftermath of protracted periods of low risk premiums." --Alan Greenspan
Jackson Hole on August 27, 2005:
"Nearer term, the housing boom will inevitably simmer down. As part of that process, house turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease. As a consequence, home equity extraction will ease and with it some of the strength in personal consumption expenditures." – Alan Greenspan
US House of Representatives, February 11, 2004:
"The imbalance in the federal budgetary situation, unless addressed soon, will pose serious longer-term fiscal difficulties. Our demographics--especially the retirement of the baby-boom generation beginning in just a few years--mean that the ratio of workers to retirees will fall substantially. Without corrective action, this development will put substantial pressure on our ability in coming years to provide even minimal government services while maintaining entitlement benefits at their current level, without debilitating increases in tax rates. The longer we wait before addressing these imbalances, the more wrenching the fiscal adjustment ultimately will be." -- Alan Greenspan
House Budget Committee, March 2005:
"When you begin to do the arithmetic of what the rising debt level implied by the deficits tells you and add interest costs to that ever-rising debt at ever-higher interest rates, the system becomes fiscally destabilizing. What you end up with is probably a stagnant economic system." – Alan Greenspan
Budget Committee, US Senate, April 21, 2005:
"I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver." -- Alan Greenspan
National Italian American Foundation, Washington, D.C., October 15, 2004:
" . . . the current situation reflects an increasing fear that existing reserves and productive crude oil capacity have become subject to potential geopolitical adversity. These anxieties patently are not frivolous given the stark realities evident in many areas of the world." – Alan Greenspan
Committee on Financial Services, US House of Representatives, July 20, 2005:
"Large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years. Unless that trend is reversed, at some point these deficits would cause the economy to stagnate or worse." – Alan Greenspan
Jackson Hole, August 27, 2005:
"Monetary policy, for example, cannot ignore the potential inflationary pressures inherent in our current fiscal outlook, especially those that could arise in meeting commitments to future retirees. However, I assume that these imbalances will be resolved before stark choices again confront us and that, if they are not, the Fed would resist any temptation to monetize future fiscal deficits. We had too much experience with the dangers of inflation in the 1970s to tolerate going through another bout of dispiriting stagflation. The consequences for both future workers and retirees could be daunting." -- Alan Greenspan
Banking conference in Germany, November 19, 2004:
"The fiscal issues that we face pose long-term challenges, but federal budget deficits could cause difficulties even in the relatively near term. Long-term interest rates reflect not only the balance between the current demand for, and current supply of, credit, they also incorporate markets' expectations of those balances in the future. As a consequence, should investors become significantly more doubtful that the Congress will take the necessary fiscal measures, an appreciable backup in long-term interest rates is possible as prospects for outsized federal demands on national saving become more apparent. Such a development could constrain investment and other interest-sensitive spending and thus undermine the private capital formation that is a key element in our economy's growth prospects." -- Alan Greenspan
Greenspan went on to say:
"Rising interest rates have been advertised for so long and in so many places that anyone who hasn't appropriately hedged his position by now is desirous of losing money." -- Alan Greenspan
Committee on Financial Services, US House of Representatives, February 11, 2004:
"To date, the US current account deficit has been financed with little difficulty. . . investors evidently continue to perceive the United States as an excellent place to invest. Moreover, some governments have accumulated large amounts of dollar-denominated debt as a byproduct of resisting upward exchange rate adjustment. Nonetheless, given the already-substantial accumulation of dollar-denominated debt, foreign investors, both private and official, may become less willing to absorb ever-growing claims on US residents." – Alan Greenspan
European Banking Congress 2004, Frankfurt, Germany, November 19, 2004:
"…net claims against residents of the United States cannot continue to increase forever in international portfolios at their recent pace. . .
Given the size of the US current account deficit, a diminished appetite for adding to dollar balances must occur at some point. The trade deficit cannot continue to increase forever at the recent pace." –Alan Greenspan
From a 1967 article entitled Gold and Economic Freedom:
"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." -- Alan Greenspan
December 19, 2002, Economic Club of New York in New York City:
"In the two decades following the abandonment of the gold standard in 1933, the Consumer Price Index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, had allowed a persistent over issuance of money. As recently as a decade ago, central bankers, having witnessed more than a half-century of chronic inflation, appeared to confirm that a fiat currency was inherently subject to excess." -- Alan Greenspan
In 1996…Greenspan’s most famous warning:
"But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?" – Alan Greenspan
-------------
Again, who wants to place a bet opposite of this man's forecasts?
Here are some Greenspan quotations worthy of a close read as they foretell what will transpire in the next 4-6 years. These gems were often buried in speeches where he seemingly was talking in tongues and in which his audience's eyes were all glazed over. No one will ever be able to pin the tail on this donkey because he can show everyone, after the calamity, that he gave fair warning in spite of the fact he contributed greatly to it. Afterall, he gave the debt slaves exactly what they begged for and that was more debt.
Although I have no respect for this man and his tenure as Fed Chairman, I wouldn't take an opposing bet with him. Would you?
Enjoy...
October, 1998, pertaining to the Long Term Capital Management crisis:
"On occasion there will be mistakes made, as there were in LTCM and I will forecast without knowing who, what or where, that there will be many more. I would suspect there are potential disasters running into a very large number, in the hundreds." – Alan Greenspan
As to risks posed by Fannie Mae and Freddie Mac Greenspan warned in February 2004:
"The Federal Reserve is concerned about the growth and scale of the GSEs' mortgage portfolios, which concentrate interest rate and prepayment risks at these two institutions." – Alan Greenspan
Jackson Hole, Wyoming on August 26, 2005:
"This vast increase in the market value of asset claims [stocks, bonds, houses] is in part the indirect result of investors accepting lower compensation for risk. Such an increase in market value is too often viewed by market participants as structural and permanent… But what they perceive as newly abundant liquidity can readily disappear . . . history has not dealt kindly with the aftermath of protracted periods of low risk premiums." --Alan Greenspan
Jackson Hole on August 27, 2005:
"Nearer term, the housing boom will inevitably simmer down. As part of that process, house turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease. As a consequence, home equity extraction will ease and with it some of the strength in personal consumption expenditures." – Alan Greenspan
US House of Representatives, February 11, 2004:
"The imbalance in the federal budgetary situation, unless addressed soon, will pose serious longer-term fiscal difficulties. Our demographics--especially the retirement of the baby-boom generation beginning in just a few years--mean that the ratio of workers to retirees will fall substantially. Without corrective action, this development will put substantial pressure on our ability in coming years to provide even minimal government services while maintaining entitlement benefits at their current level, without debilitating increases in tax rates. The longer we wait before addressing these imbalances, the more wrenching the fiscal adjustment ultimately will be." -- Alan Greenspan
House Budget Committee, March 2005:
"When you begin to do the arithmetic of what the rising debt level implied by the deficits tells you and add interest costs to that ever-rising debt at ever-higher interest rates, the system becomes fiscally destabilizing. What you end up with is probably a stagnant economic system." – Alan Greenspan
Budget Committee, US Senate, April 21, 2005:
"I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver." -- Alan Greenspan
National Italian American Foundation, Washington, D.C., October 15, 2004:
" . . . the current situation reflects an increasing fear that existing reserves and productive crude oil capacity have become subject to potential geopolitical adversity. These anxieties patently are not frivolous given the stark realities evident in many areas of the world." – Alan Greenspan
Committee on Financial Services, US House of Representatives, July 20, 2005:
"Large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years. Unless that trend is reversed, at some point these deficits would cause the economy to stagnate or worse." – Alan Greenspan
Jackson Hole, August 27, 2005:
"Monetary policy, for example, cannot ignore the potential inflationary pressures inherent in our current fiscal outlook, especially those that could arise in meeting commitments to future retirees. However, I assume that these imbalances will be resolved before stark choices again confront us and that, if they are not, the Fed would resist any temptation to monetize future fiscal deficits. We had too much experience with the dangers of inflation in the 1970s to tolerate going through another bout of dispiriting stagflation. The consequences for both future workers and retirees could be daunting." -- Alan Greenspan
Banking conference in Germany, November 19, 2004:
"The fiscal issues that we face pose long-term challenges, but federal budget deficits could cause difficulties even in the relatively near term. Long-term interest rates reflect not only the balance between the current demand for, and current supply of, credit, they also incorporate markets' expectations of those balances in the future. As a consequence, should investors become significantly more doubtful that the Congress will take the necessary fiscal measures, an appreciable backup in long-term interest rates is possible as prospects for outsized federal demands on national saving become more apparent. Such a development could constrain investment and other interest-sensitive spending and thus undermine the private capital formation that is a key element in our economy's growth prospects." -- Alan Greenspan
Greenspan went on to say:
"Rising interest rates have been advertised for so long and in so many places that anyone who hasn't appropriately hedged his position by now is desirous of losing money." -- Alan Greenspan
Committee on Financial Services, US House of Representatives, February 11, 2004:
"To date, the US current account deficit has been financed with little difficulty. . . investors evidently continue to perceive the United States as an excellent place to invest. Moreover, some governments have accumulated large amounts of dollar-denominated debt as a byproduct of resisting upward exchange rate adjustment. Nonetheless, given the already-substantial accumulation of dollar-denominated debt, foreign investors, both private and official, may become less willing to absorb ever-growing claims on US residents." – Alan Greenspan
European Banking Congress 2004, Frankfurt, Germany, November 19, 2004:
"…net claims against residents of the United States cannot continue to increase forever in international portfolios at their recent pace. . .
Given the size of the US current account deficit, a diminished appetite for adding to dollar balances must occur at some point. The trade deficit cannot continue to increase forever at the recent pace." –Alan Greenspan
From a 1967 article entitled Gold and Economic Freedom:
"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." -- Alan Greenspan
December 19, 2002, Economic Club of New York in New York City:
"In the two decades following the abandonment of the gold standard in 1933, the Consumer Price Index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, had allowed a persistent over issuance of money. As recently as a decade ago, central bankers, having witnessed more than a half-century of chronic inflation, appeared to confirm that a fiat currency was inherently subject to excess." -- Alan Greenspan
In 1996…Greenspan’s most famous warning:
"But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?" – Alan Greenspan
-------------
Again, who wants to place a bet opposite of this man's forecasts?
Wimpy
Member
Reality Therapy
The Illusion of a Rising Dow
Peter Schiff
This week, Wall Street strategists cheered as the Dow Jones closed above 11,000 for the first time in four and a half years. As a result, many are now predicting a new all-time high, which would see the index finally exceeding its 11,750 peak first reached back in January of 2000. Do not succumb to the hype.
11,750 hardly has the same purchasing power today as it did in January of 2000. The significant inflation of the last six years (bogus CPI numbers not withstanding) has rendered any direct dollar comparisons meaningless. To get a more accurate assessment, try measuring the index in terms of something other than depreciating dollars. Historically, the best comparison is relative to gold. Back in January of 2000, with the Dow Jones at 11,750 and gold at $280 per ounce, the Dow was worth about 42 ounces of gold. Today, with the Dow at 11,000 and gold over $550 per ounce, the Dow is only worth less then 20 ounces of gold. In other words, measured in terms of gold, the Dow has actually declined in value by over 50%. To make a real new high, given the current price of gold, the Dow would have to rise above 23,000.
http://www.gold-eagle.com/editorials_05/schiff011306.html
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So, if the DOW desires to run with the big dogs it is first going to have to get off the porch, or better yet, out from under the porch. A 13,000 DOW is a dead dog, a money loser, in terms of real purchasing power relative to the purchase of that asset class in 2000. In all asset classes it is important to determine whether the perceived rise (numerical) is based on a price crisis (inflation) or supply and demand. Any asset class can go up (numerically) on either score or a combination of the two. An inflation inspired rise is strictly an illusion as the asset class is not gaining in real value but imaginary value because the measuring stick (the dollar) is not constant. If the dollar goes down 20%, there is an automatic corresponding numerical gain of 20% in the asset class being measured. The numerical gain, in this instance is not a REAL gain, but only an illusion of gain. In essence, and absent any supply and demand pressure, the 20% gain was simply a break even computation. For example, if the G-Fund gains 5.00% in 2006 and the real inflation rate (not based on phoney CPI figures that exclude food, housing, and fuel) is 8%, the G-Fund loses 3% of its purchasing power. In honest weights and measures, the numbers and markings on the measurement device never change. When it comes to a fiat currency, there are no honest weights and measures other than gold. Gold is currently telling the story of a great fraud being perpetrated on those ignorant of what real money is and isn't. Few are listening. Gold will hit $750 or higher before the end of this year. Most of the gold gain to $600 will be related to price crisis rather than supply and demand. The run from $600 to $3,000, between now and 2012, will be more greatly influenced by supply and demand and therefore will represent REAL gains versus the illusionary gains associated with a falling dollar.
The Illusion of a Rising Dow
Peter Schiff
This week, Wall Street strategists cheered as the Dow Jones closed above 11,000 for the first time in four and a half years. As a result, many are now predicting a new all-time high, which would see the index finally exceeding its 11,750 peak first reached back in January of 2000. Do not succumb to the hype.
11,750 hardly has the same purchasing power today as it did in January of 2000. The significant inflation of the last six years (bogus CPI numbers not withstanding) has rendered any direct dollar comparisons meaningless. To get a more accurate assessment, try measuring the index in terms of something other than depreciating dollars. Historically, the best comparison is relative to gold. Back in January of 2000, with the Dow Jones at 11,750 and gold at $280 per ounce, the Dow was worth about 42 ounces of gold. Today, with the Dow at 11,000 and gold over $550 per ounce, the Dow is only worth less then 20 ounces of gold. In other words, measured in terms of gold, the Dow has actually declined in value by over 50%. To make a real new high, given the current price of gold, the Dow would have to rise above 23,000.
http://www.gold-eagle.com/editorials_05/schiff011306.html
------------
So, if the DOW desires to run with the big dogs it is first going to have to get off the porch, or better yet, out from under the porch. A 13,000 DOW is a dead dog, a money loser, in terms of real purchasing power relative to the purchase of that asset class in 2000. In all asset classes it is important to determine whether the perceived rise (numerical) is based on a price crisis (inflation) or supply and demand. Any asset class can go up (numerically) on either score or a combination of the two. An inflation inspired rise is strictly an illusion as the asset class is not gaining in real value but imaginary value because the measuring stick (the dollar) is not constant. If the dollar goes down 20%, there is an automatic corresponding numerical gain of 20% in the asset class being measured. The numerical gain, in this instance is not a REAL gain, but only an illusion of gain. In essence, and absent any supply and demand pressure, the 20% gain was simply a break even computation. For example, if the G-Fund gains 5.00% in 2006 and the real inflation rate (not based on phoney CPI figures that exclude food, housing, and fuel) is 8%, the G-Fund loses 3% of its purchasing power. In honest weights and measures, the numbers and markings on the measurement device never change. When it comes to a fiat currency, there are no honest weights and measures other than gold. Gold is currently telling the story of a great fraud being perpetrated on those ignorant of what real money is and isn't. Few are listening. Gold will hit $750 or higher before the end of this year. Most of the gold gain to $600 will be related to price crisis rather than supply and demand. The run from $600 to $3,000, between now and 2012, will be more greatly influenced by supply and demand and therefore will represent REAL gains versus the illusionary gains associated with a falling dollar.
OK Whimpy. Having read all of your recent threads in this area... what are you suggesting members of this MB do? Are you suggesting we take on a different TSP investment strategy? Is the sky falling? Are you saying the money we're all going to be making will be worthless by the time we collect it? What else is new? I don't mean to sound combative here, but I (as well as possibly others reading) would just like to understand your point(s) with the seemingly "right wing" financial wisdom you've provided. 
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