Loading ...Mish dug out this indicator some time ago… research.stlouisfed.org/fred2/series/LLRNPT
Essentially, banks who are benefitting from free money upon which the Fed also gives them interest (you can’t make this stuff up), have steadily eaten into their reserves. Thus, this money that has been shoveled their way is not going to leave their coffers anytime soon.
tough questions… I don’t have all the answers and the answers I have may not be right… but here it goes…
“How do you see debt monetization by the US in terms of currency inflation?”- It is of galactic proportions as evidenced by bank reserves: i.e. this metric - research.stlouisfed.org/fred2/series/NONBORTAF
2nd, “How do you see the massive amount of credit the Fed extended to the banks in terms of currency inflation?” - for as long as this money does not enter the economy, then it is of no consequence… well, not hyperinflationary that is… considering this trend appears to have reversed - research.stlouisfed.org/fred2/series/PSAVERT - I would say that in the context of an economy that is consumer driven to the tune of 80% of GDP then inflation is not on the cards… the savings rate goes hand in hand with decreasing credit demand and lower money multiplier…
3rd, “What do you think the reason was for the Fed to end the M3 numbers……….and would either #1 or #2 have had any affect on M3?” - I don’t know what the reason was and I should think it would have had an effect on M3… but like all metrics… it always depends on how you count…
“You certainly do not need to address any of the above is you do not feel like it, and I am sure that Augirl, myself, and others would love to see your pasta recipes.”
Oh the pasta recipes! I have been remiss… so many things to do, so littel time… and ragging on government seems to be taking an inordinate amount of time these days… :))
Sorry for the late reply,had to run to work. Acutally I don’t have a problem with the Mexican immigrants long as their invited here and not by greedy business set to exploit them or undermine the American worker. Most are like us in a way of thinking. But now we have people from other third world countrys piling in from every where here in Cali.We have like 90 something diffrent languages and who is sending them here. Our beloved Government. Many of these people wind up on welfare.It is out of hand. I can only assume for the same reasons they wont secure the borders they do it to keep wages down. When the B guy talks about curbing inflation I think he has more in mind than just the dollar.In Georga you don’t have get a recording that says if you speak english press one, Spanish press two, Tagalog three, Vietnamese four, chinese five Hmong six Russian seven, Indian eight,on and on. Now thats what I mean by every Tom Dick and Harry. You have no idea its way out of control thanks to our present Government your kids or grand kids will know.Now when I hear something like >if you speak english press eight Im really gonna be !!!!!!!
let’s hope that holds and we can get some kind of counter trend rally in the metals for awhile. Way overdue.
yes they have debts to pay ,but the small guys can sell gold to the big guys like GG and the Royalty companies like (Franco Nevada) who are cash rich thereby denying the market bullion .Why wouldent a Royalty Co take bullion for cash..thats what they do when they take a % “net smelter”when they lend developement money. Its even better ! Its gold on hand and NOT in deep storage ! Gold is money !
He sought for justice lenders and borrowers alike,his result was to undo the inflation price tax by reassessments down .No one lost capital ,the lender only lost his interest ! ( from Martin Armstrong)
“Suetonius: informs us on this subject that Caesar did not do what everyone had expected. Aside from instructing Antony that he would have to pay the full value of his bid for Poropey’s estate, he did not merely cancel all debt.
“He disappointed popular agitators by cancelling no debts, but in the end he decreed that every debtor should have his property assessed according to pre-war valuation and, deducting the interest already paid directly or by way of a banker’s guarantee, should satisfy his creditors with whatever sum that might represent as a result, creditors lost about a fourth of what they had lent,”
17
ld/42, 4″
IMO, those miners are probably in hock to the bankers, and need to exchange their fresh gold for currency in order to discharge their debts. They might take in each other’s laundry for a while, but could they do it long enough to make a meaningful alteration in the pricing before the financiers pull their plugs?
I won’t have time to delve into what you wrote until sometime tomorrow because I am doing some paper work at this time. Seeing that you are also Italian, though, I’ll have to review it………………LOL.
I will toss out a few questions for you, though. The first is, “How do you see debt monetization by the US in terms of currency inflation?”
2nd, “How do you see the massive amount of credit the Fed extended to the banks in terms of currency inflation?”
3rd, “What do you think the reason was for the Fed to end the M3 numbers……….and would either #1 or #2 have had any affect on M3?”
You certainly do not need to address any of the above is you do not feel like it, and I am sure that Augirl, myself, and others would love to see your pasta recipes.
The multiplier does not say anything about inflation.
The only thing the multiplier speaks of is the efficiency of the currency; that is, how much does each unit of currency contribute to the progression of the economy. This entry on my blog may better explain my contention:
guidoromero.wordpress.com/2009/11/07/the-utility-of-a-fiat-monetary-system/
So, you don’t recognize dollar inflation in any manner other than the traditional multiplier effect?
It is in theory a fine idea. That’s what the USA did between 1930 and 1970.
Of course, since nobody was allowed to check, the USA printed way more paper than there was gold. Untill France came along that is, and asked to redeem their Dollars for the gold they thought they were entitled to. And that’s when the cookie crumbled and we abrogated Bretton Woods.
In several thousand years of human history inflation has always and everywhere been at the heart of devastation of society. Sometime terminal devastation. More often just simple devastation and war.
Societies (i.e. governments) will always try to prevail over their peers. It is inevitable.
It is telling of the direction we are going in when government becomes the single largest employer and when public salaries are grossly higher than private sector salaries. When at the same time the currency looses is traditional multiplier effect and government is still expanding, then you are looking at a situation of self cannibalization.
The outcome is scripted and won’t be pretty…
In the past two years, what waning traction money printing had, has been utterly lost…
research.stlouisfed.org/fred2/series/MULT
Bernanke let the cat out of the bag when he wrote his treatsie on deflation titling it “making sure it does not happen”. Deflation is perceived as the bogey man. But deflation is only the bogey man if you are in debt to the tune of several times your underlying assets… as governments are…
by guidoamm @ 23:49 pm.
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No doubt that human fear and greed will never be controlled, yet to a large extent the greed IMO can be controlled by Gold as money, or with Gold backing of paper currency. The Romans might have clipped coins, but that is a major stretch from the exponential methods employed with no Gold involvment in a paper money system, no?
If the self control of humans is what all of this rests on, I am afraid we are forever doomed.
“…………….and on the other hand they are attempting to restart the inflationary cycle… “
I don’t think that they are trying to “re-start the inflationary cycle.” IMO, they are moving to more aggressive means of currency inflation like outright monetization of debt, just to get to the natural end of the inflation cycle where Gold will rise to balance the budgets. The more aggressive type of currency inflation is necessary to move all of the debt onto the govy’s balance sheet into that end, no?
I can pretty much guarantee that no main stream politician can contemplate a monetary system other than fiat. Anyway, as I stated earlier, the monetary system matters not in the least. We could very well achieve the goals of sound money in a fiat system by fixing the amount of money to a set of parameters.
Similarly, a world currency would not resolve our problems. Think of the Euro. The Euro is a dry run for a world currency. The problem remains inflation. Anyway, the US$ is the defacto world currency. That’s what a US$ fiat monetary system based on floating exchange rates is. That’s just a fancy way of saying that currencies are convertible to US$ and that the value of individual currencies is predicated on the value of other currencies.
Upon introduction of the Euro, individual currencies were devalued by anywhere between 20% (DMark) to 50% (Italian Lira). Thus buying the US$ some needed respite. At the same time, we had been working on globalization thus buying further breathing room for the US$.
Many will have forgotten or not know that the USA were already bankrupt in the 60s. Essentially back then the USA were exactly in the same position we find ourselves in today globally. That is, inflation has saturated the system and underlying activity no longer suffices to service the debt brought about by inflation that has been forcibly pushed ever faster.
Off and on, there is talk of a potential two tier US$ devaluation. Something along the lines of devaluing US$ held overseas by a greater amount than US$ held withing US borders. This of course would only be a stop gap that would buy us some time as the Euro did before. The problem remains the quantity of inflation we have pushed into the system. Till that is purged, nothing changes…. hence my contention that we are hurtling towards a world war… this one will be the real deal with civilians packed off to the front or employed by the war industry and food and energy rationing at home… my contention is by 2015 latest…
The problem is not the monetary system. The problem is the degree of fiduciary duty government is willing to extend to society.
Any monetary system can be gamed including a monetary system based on gold. The Romans debased their gold coins.
Fiat money is actually a brilliant concept. The problem is in an evnironment of competing nations states. This simple truth ensures that inflation (expansion of credit and money in excess of production) becomes necessary and vital to what is perceived as legitimate raison d’etat.
In an environment of competing entities, the tendency will always be to outspend other entities in order to prevail economically or militarily. Hence, inflation is guaranteed. But inflation is a dinamyc that is exponential thus it is constrained by underlying resources. As the inflationary dyanmic progresses, money gradually looses its traditional multiplier effect as contemplated in Keynesian theory. Thus, government has an interest in closing an eye on practices that initially may be considered as border line legal. However, towards the end of the inflationary cycle, tolerance no longer suffices so that government has a vested interest in sponsoring practices that contradict the letter of the law untill, at some point, governmetn must collude in criminal practices all in an effort to keep inflation on a positive trajectory.
Of course, it doesn’t help either that GDP is the one single measure that is at the heart of any and all social and economic metric one cares to look at. Thus the tendency is always to goose GDP in any way possible. But of course, goosing GDP via inflation says nothing about the quality of development.
That’s what my entire blog is all about.
As a by the by, inflation is also at the heart of the depletion of resources thus at the heart of climate change doctrine. I am dumbfounded at the glaring contradiction our governments are caught up in when on one hand they are peddling climate change doctrine and on the other hand they are attempting to restart the inflationary cycle… fascinating if astounding…
“This is all so very confusing for some who just don’t understand a lot of what is going on.”
If you truly want to understand, then look at everything you see, upside-down.
First, Gold does not go up and down in value as it is a constant value; Gold only goes up and down in “price” because it is priced in paper currencies. It is the value of the paper currencies that constantly is changing. Thus, Gold is the only Real Money of constant value that man accepts as a Real Money Stable Source of Value……….although Silver is generally considerd a cousin to Gold in the same way.
2nd, Gold is not now, or is it ever “manipulated.” Gold cannot be manipulated because it is accepted as a Real Money constant value. “paper gold” is a paper derivative contract of Real Gold, and paper gold is constantly manipulated and “sold to the people as Gold.” Just like paper fiat money is a derivative of Real Money Gold due to the fact that paper currency could never exist without Real Money Gold either backing it, or at least being around to “back it” at crucial times………….paper Gold is also a dervative of Gold used by the elite to fake out investors since paper Gold has no real tie to Gold, in fact, paper gold simply cannot “perform” in times of crisis when people turn to Gold because of the fact that paper gold is inflated in quantity far beyond the amount of Real Gold in existence…….and more importantly because the elite would never allow much Real Gold to be accessed through paper gold……….only enough to maintain the illusion (Hi, Illusion) that the paper gold market is the Gold market.
3rd, Gold does not really “go parabolic” at any point in time, nor does Gold ever drop in value. The “price of gold” only goes parabolic when the paper currencies fall dramatically in value………AND the “price of gold” only does that when “ALL PAPER CURRENCIES” fall dramatically in value, all at the same time like the point in the paper currency cycle seen into 1980. In terms of value, Gold just sits there, day after day, and week after week, and month after month, and year after year, and decade after decade, and century after century…………as a constant value. All of the volatility in the “price of Gold” is created by the volatility of greed and fear of man in his perception of the “value” of paper fiat currencies as the denominator of the price fraction of anything……………..X/ currency. As the “price of the currency” as the denominator in the pricing fraction of anything (X) denominated in the currency “rises”, it generally affects the price of the item (X) lower due to the math. As the “price of the currency falls” as the denominator of the pricing fraction, then the price of the item (X) generally rises as the answer to the fraction. During times of very aggressive currency printing, or currency inflation, the price of the currency in the denominator falls aggressively and completely overwhelms the supply and demand fundamentals of everything that represents “X” in the numerator (top of the fraction) so we tend to see “price inflation” across the board. Still, those rising prices due to the falling price of the currency denominator is “mathematical only”, and like the Dow rise since March of 2009, the “value” of the Dow can still be falling even though the “price” as overwhelmed by the changes in the denominator currency price ……….is rising. This is why I say that “during aggresive currency inflation, Price and Value Diverge.” This is easy to show in a chart, and I have shown it, before. Price tracks value during times of currency deflation, but price and value diverge during times of currency inflation.
Lastly for this section, the pricing scheme for currencies whereby each of the major currencies is priced against a basket of other variably price currencies (that are also priced in the same manner) is a gimmick that leaves no constant reference point in the pricing system. It is kinda created like the game where you smack one head that pops up with a hammer while another head pops up instead. There is absolutely “no relationship” between this currency pricing system and the “value” of the currency, itself. Thus, at times a currency will “rise in price” while the same currency is actually “falling in value.” Thus, with this type of currency pricing system all currencies can be falling in value if all are being inflated, yet one or more of the currencies falling in value will actually be rising in price………………..because all currencies can fall to zero, but in reality none will ever fall anywhere near zero due to the “constant sum” mechanism of each being “priced” AGAINST others. Thus, the currency pricing system “fails” during times of aggressive currency inflation by many or all of the major currencies. And, that pricing system was IMO put into effect in the early 70’s, just for that reason going into aggressive currency inflation into 1980……………..as a mechanism to confuse the many to “protect” the major currencies from the fear of man.
Thus, your confusion is simply a marvelous ploy by those at the top to protect their paper fiat currency systems against a move to Real Money Gold. So, this time around what seems to being offered as a remedy to the paper fiat system? Why, it is a one world paper fiat system………to replace a many paper fiat system. I can’t see much difference between the two, except that instead of many politicians deciding to continue the paper fiat currency printing game, now there will only be one set of politicians doing so for the whole world, no? So, if this system is implemented, then the next time in the cycle when the one paper fiat species has been inflated to the moon in terms of spending what we don’t have, just who will be called on to bail it out? Well, Gold, of course………………….just like it has for thousands of years. Will anything change? Of course not………….except in terms of a smaller number of polticians make the paper inflation decisions.
shares as I understand. Love the symbol - “PHYS”!!!
www.businessinsider.com/sprott-ipo-physical-gold-trust-2009-12
Courtney Comstock | Dec. 14, 2009, 7:34 AM | 
1
Last week, Sprott Asset Management filed an F-1 for a $575 million IPO of a small gold trust called the Sprott Physical Gold Trust (PHYS).
In the prospectus, Sprott lists a number of advantages of the fund like, a “convenient way to own physical gold bullion” and an “ability to redeem units for physical gold bullion.”
All gold ETFs are backed by physical gold, of course, and large investors have redeemed bullion from the like of GLD, but Sprott is really trying to play up the physical aspect — hence the name and the ticker “PHYS” — though arguably that’s mainly marketing
VIDEO: watch.bnn.ca/squeezeplay/february-2010/squeezeplay-february-4-2010/#clip263664
For years I’ve wondered the same thing - where was the miners outrage?
I’ve called dozens of companies inquiring. With rare exceptions they just don’t care.
Check out the major shareholders and who sits on the Board. I’m afraid most miners work for the banksters. Their purpose in life is to keep pumping product into demand …. regardless of price.
I’d love to be wrong about this.
This is all so very confusing for some who just don’t understand a lot of what is going on. You presented some very easy to understand comments about it and is appreciated.
Hanging on to my shiny stuff.
I think Augirl simply called it……………….”What a girl wants……………what a girl needs”………or something like that.
I dunno guys, note the wording “western powers” especially with the Olympics starting the day after .. Vancouver’s downtown core is fortressed up and locked down but there are security people that are plenty concerned . what a world.
aggie.. pay no attention to the other thing you asked about ,,,GR is dreaming in technicolor 
The taxpayer will just see another billion Dollars inflated to take care of the mis-hap.
