Helicopter Drops, and Gold

All of this discussion by the fed about Quantitative Easing and you begin to quickly realize how they are prancing around with the wrong answer, meanwhile, they know very clearly how they failed. Instead of giving away our money to banks, so they could recapitalize their insolvencies, they should have done a helicopter drop! A helicopter drop would have been to give the money back to us so we could spend it to revitalize the economy. No one would have done a better job at distributing the money quickly to much needed businesses, manufacturers, and creditors. The money would have trickled back to the banks. Instead, they handed it off direct to the bank who will surely store the money for a rainy day, or invest the money so it earns. The US Govt. gave away trillions of dollars that could have at least, if not given away, been earning them money, or if given to us, help us stablize our own financial situations and allow us to spend our incomes more readily, thrusting the economy upwards. Oh Well, Obama missed the opportunity to make his presidency more than the failure history will tell of.

Now on to Gold. We saw a $30 price drop yesterday that was caused by a strong dollar. Apparentley there was no technical damage or massive selloffs. I am still waiting to see if many will consider this a buying opportunity and drive prices back toward $1400 or not. Alot of gold skeptics are jumping on this, claiming this is a bubble or a bearish market now. I doubt it will have much lasting effect. If you read my post earlier this week, I was ranting about Uncle Sam and the Fed and how they struggle to keep making mistakes that will ensure gold has quite some time left at the top of the charts.

I also called for stocks to have another collapse and we saw a hint of that yesterday also, as Bank Of America may be forced to buy back it’s bad mortgages it sold off to investors. Could this be a trend where banks will be forced to buy back it’s bad products? I think it is just an eye opener that what is done will come back to haunt if not done the right way. That means we have alot of undoing ahead of us. I think most banks still have a long way to go to recover. We still do not know the extent to which they are at risk of failing. The mess is, all of these foreclosures and falling home values, and they can’t even write most people a mortgage to buy a home as they are near insolvent.

I wonder why more creative plans have not been employed. It is such a one way street with the banks. They give you a 30 year mortgage, and if you miss 3 payments, you are out. Hey, 3 out of 360 is not that bad. Work with the homeowner and cut their payment in half for 2 years or let them keep the 3 missed payments. The banks are being bullys and congress and washington back this. No one could offer a more simple solution. Hey, if you gave someone a loan that could not afford it, your bad, so make it affordable for them at your expense, not all of ours.

Anyway, Washington and the Banks are either too dumb, too numb, or just too arrogant to see the way out of this mess. They are merely prolonging it by forcing failed policies upon us. If anyone thinks Ben Bernanke is going to fix this, they should be given the presidency because apparently, we need more inexperienced nobodies in the White House. We have elected a bunch of sales people that peddle garbage.

If all of that is not bad enough, the White House invites Iran into discussions about the future of Afghanistan. There is a great plan, lets sit down with Taliban leaders and bring in the Iranians so they can all get together and exchange hatred for Americans and network together. Wow! That is a wonderful idea. Go ahead Hillary, now give out a few million in free scholarhsips to our top schools to the terrorists while your at it. Isn’t that what you usually do?

This is the first time in my life I am proud to say I did not vote for any of them. They are a big huge giant mistake. Meanwhile, China is signaling that it is raising it’s interest rates. Analysts claim it is to slow down or simmer their economy as it is doing so well and they do not want to end up like us. I think it is in response to the meeting last week in New York where Obama claimed they were keeping their currency unnaturally low. They probably looked closely at their options and realized that since we are the largest consumer of their goods, it will just fall back on us as we will simply have to pay more for their products.

So, the mess continues to spin out of control and no one in a position of power can see clearly that bandaids will not fix a broken limb. Hopefully, someone gets it before the next 2 years pass us by and we are in the midst of a depression. I think dip #2 is just ahead so brace yourself, don’t get too carried away buying gifts this holiday season, buy some Gold or Silver as a reserve and don’t buy into all of this recovery hype. Buy into the reality hype instead, it will be a safer bet in times of great uncertainty.

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The evil the feds do or Gold Long, Dollar Short, very short

Hmmm. It’s getting to be that you don’t have to wait for the anouncement to get the news. It’s very predictable, as is the outcome. We have a government that is out of touch and a fed that is out of touch. They are both equally out of touch with middle america. It seems that they are sychronized on Goldman Sachs and Hedge Funds. In almost every possible way, they use monetary and political policy to further advance their own investments.

The simple and correct thing to do when the housing bubble forced millions of Americans to neglect paying their mortgages would have been to attach their paychecks and offer them assistance in paying their 30 year notes. This would have allowed the housing market to wind down at a much more natural pace. Yes, prices needed to adjust for what should have been higher interest rates to keep the banks lending so home sales would continue. Instead, keep giving the banks cheap money, on top of that, money with no strings attached. What did you think this would do? It did what we all thought it would, begin the transfer of wealth and power to America’s Financial Center, the Banks.

Instead of providing a stimulus to assist the hard working sector of our country, we provided more ammunition against them and are now driving them into poverty at a rate faster than even during the great depression. With so much money being printed, the white house is preparing to announce today that it has spent a trillion more than it has taken in, for a consecutive year, you would think this money would be used to assist the people who ultimately earned that money, and gave it to Uncle Sam. Nope, not one penny. Instead, it is loaned at near zero penalty to banks and hedge fund managers to buy up large amounts of commodoties and cause never before seen inflationary gains to what I argue are the most neccessary component of any economy.

Yes, commodoties are the first huge step of inflation. Some anaylyst would argue that the inflation of commodoites signals a recovery. Nope, not this time. Never before have we had a large private sector buying up all of our resources and stockpiling them for the rich. The basic raw goods used to produce industrial and household goods are now getting bought up well in advance of their own production. You can buy into a hedge fund that, well, sorry, You Cant buy into it, but a wealthy person or firm with the right political connections, i.e., campaign donations, can get your money from the fed at a couple percent annually, to buy up all of the commodoties that ensure your survival, such as wheat, copper, rice, gold, silver, whichever market they prefer to dominate, and inflate the price so they can earn an easy 15 to 20% return on your money.

This is a recipe for financial ruin. This is going to steal all the wealth you have accrued in your lifetime that you have stored in dollars and make them into pennies. This is the single most selfish period in the history of manking. No wonder UFO’s were spotted all over Manhattan the other day, even beings from other worlds are in disbelief that while we are busy hanging on to the jobs that are left and clearing the shelves at our local walmart, we are too stupid to notice everything being stolen from us.

You have to consider that with copper at $4 pound, Gold nearing $1400, Oil approaching $85, Wheat, Oat, Livestock, almost all essential commodoties are climbing steady. So if it is not China taking your dollars and lending it back to the wealthy at super low rates, it is now your own Federal Governement and it’s monetary enforcement agency, otherwise known as the Fed, who just signaled another coming quantitative easing period in which they will buy all the paper behind the cheap loans so the banks can have another round at buying up all  our commodoties in the form of hedge funds. So, another 5o billion gets printed, the hedge funds buy up more commodoties, their prices rise signifigantly as demand drives them higher, and the dollar loses value, causing further rises in prices.

At some point the ultimate price will be paid. The dollars value will be so diminished that these ultra rich will have caused a worldwide depression and widespread poverty. The only thing left to act as a currency will be commodoties. I cannot even contemplate what can curb this appetite for ruin. This is greed at its worst. I think alot of people always thought it was the republicans that were crooks. People were wrong. It is not just the republicans but the democrats too. We now face a government that is owned by the bankers. They provide them the money to campaign effectively. They offer them the strategies to outsmart the electorate voting system. In turn, the elected officials slant policy and power to the banks to allow them the tools and utilities to steal away our wealth and power.

Those of you screaming at the government, believing you will be heard, are wasting your energy. The best thing you could do is to scream to one another, and organize, and on your way to the poles this november, take everything you have out of your bank. Everybody at once should withdraw your money, your investments, the last of your wealth, and take the power back.

It is that simple. You give your money to the bank and they take it and use it against you. Simply take it out of their hands. Use cash. Go buy a money order for a dollar at walmart to pay your bills. I bet that would send a signal so loud, even washington would have to stop dead in it’s track and say what now, They have figured it out!

No matter who you vote for, Republican, Democrat, Tea Party, Independant, they  are all part of the same mechanism that is pushing you further away from having an enjoyable life and into a stress filled daze of paranoia. If you want to vote for yourself for once, get your money into your own hands and out of their banks and stock markets, and regain your wealth. It is a simple concept. By you working your tail off and taking the money you earn and bringing it to the bank, you are allowing them to borrow your money to buy up the core essentials of your survival, and sell it back to you at a much much higher rate. The little interest or dividends they give you simply do not exceed the inflation of the goods you are buying.

We will need lawmakers to make law of conditions for banks to not use depositors money to increase their own portfolios or buy assets, but to lend the money back to those who will pay fair market interest rates on the money. The same must be applied to Wall Street. They should be allowed only to reinvest in R&D and Marketing and Other company related purchases. Hedge funds are simply a form of a monopoly.

While alot of you though it was the housing market that got us into this mess, open your eyes and look some more. It is much more than that. It is an out of control federal government that has caused this and now has us headed into a worldwide economic disaster. While I know that you won’t take my advice to take action and will instead simply stand in the middle of the road, staring into the speeding lights about to run you over, remember what I said. Fire an email off to your local bankers, ugh, I mean politicians and tell them you are going to pull all of your deposits from the bank, and partake in an organized sell off of your stocks and investements. It’s time you put the gun to their heads.

China, Us, and Gold…..

For those who wonder how we got into this economic mess, this disaster that seems so hopeless, here is the one thing it is all attributed to: http://articles.cnn.com/2000-10-10/politics/clinton.pntr_1_wto-membership-china-global-trade-regime?_s=PM:ALLPOLITICS

It was back in 2000 and Bill Clinton, the man who rid america of it’s deficite, lobbied hard to strike a deal with congress to get passage of a bill that would allow China to sell us cheap goods. In turn, they would stockpile our currency while keeping the value of their own artificially low. Then, they loaned our dollars back to us at super cheap rates, causing an economic bubble from 2005 until it burst a short time later.

If America hadn’t been dealt a super low blow already by having to compete with cheap labor from abroad, the Clinton administration fought hard with Congress in backroom deals that now have us in the most hopeless and desperate situation we have faced since the Great Depression in the 30’s.

Recently, Obama has signed a bill that will allow America to tax goods from china to offset their price so Americans can compete with their low currency, low wages. Is it the right move? I think it is not. Now that we are  addicted and dependant upon these cheap products, it essentially keeps inflation at bay in our miserable economy. At the end of the day too, alot of American super companies are utilizing the cheap and skilled labor of China to manufacture it’s products.

The lates round of trade war talks occured in Washington this past week between China & the USA. China expects us to raise interest rates so they can get a bigger return on all of the greenbacks they have loaned back to us. We expect them to raise the value of their currency so that we can compete by selling our overpriced goods to them. With their currency so low, our merchandise is not affordable in most cases.

The reaction China had taken was to use monetary policy to lower the value of their currency even more. So what have we done, we have announced that we are going to print another 50 billion in greenbacks to fund a huge infrastructure project. I have to say that for once, I am glad that the money is going back to serve us. It may also put alot of construction workers and labor unions back to work.

As much as people are complaining about the government printing dollars and spending like crazy, it is really the only way to combat the chinese in this currency/trade war. I think that we are allowing China to believe it has the upper hand while we are really setting them up for a disastrous economic bubble. Then, we will use their vulnerable position to overthrow their communist government and push for a democracy. My concern is that we are lacking the fundamentals to help us through this tough economy we are in by not training our labor force to provide very high quality goods. While the chinese and other cheap labor markets are not capable of producing high end goods, similar to Germany, they are pacing better than us at reaching that status.

America needs to get off the couch and back to engineering school and science class and pave the way with new environmentally friendly technologies to power and transport us safely into the future so we can outlast the trade war with China and hope it does not lead to a major World War.

In the meantime, Gold and Commodoties should fair well in the coming years as both currencies will bottom out and get so low in this game of chicken. The key to rising gold prices will be in China’s resistance to inflate the value of their currency. As long as we are consuming their cheap goods, then gold is to remain high. Once the tide turns and Chinese begin buying our products, then gold prices will fall. I’m looking at that as a key indicator for now, but as with all financial situations, there are many other factors driving prices as well…….