Each day I spend an hour or two scanning the stories and memes that are circulating that day, and then maybe another hour thinking about how they fit into the big picture. Everything is, of course, connected, and aside from filtering out the nonsense and the noise, putting it all together into a single comprehensive and cohesive picture is, IMO, the only way to understand what is really happening.
Without such a context, it can seem like nothing makes sense, like we live in a madhouse where inexplicable things just happen out of the blue. But of course it all does make sense; you just have to tune out the nonsense and understand how the rest fits together. You can jump down to the conclusion now if you'd like to see my big picture, or you can bear with me as I explain and then string together a few different memes on the way there.
A recent meme has been how a number of countries are running down their dollar reserves. As we've seen in the monthly TIC reports, official support is basically flat, but now we see a few primarily oil producing countries like Saudi Arabia, UAE and Russia running down their reserves. This is, of course, related to the decline in the price of oil which has made otherwise-strong net-producer currencies weak relative to the dollar. But the declining oil price is only half of the equation. The other half is the rising price of the dollar. They are not just two sides of the same coin, but two different-yet-related things that are happening simultaneously.
Russia has recently declared a clean float while Saudi Arabia and UAE both still peg to the dollar, yet all three are now supporting rather than weakening their currencies due to the double whammy of weak oil and a strong dollar, which means selling dollar reserves to buy back their own currencies. Back in early 2008 when oil was strong and the dollar was weak, both the UAE and Saudi Arabia considered adjusting their pegs and revaluing their currencies upward, but they didn't, instead planning on a GCC monetary union by 2010 which still hasn't happened. So, for the time being, everyone is responding as they see fit to the current state of affairs as if it is a temporary state of affairs, which of course it is.
Another recurring meme over the past few months has been this $9T in foreign, dollar-denominated debt. The problem with this debt is a little more complicated than just the lack of dollars available, and it cannot be solved with a simple currency swap. The problem is that most of this debt was contracted on the basis of an emerging market growth story that is now failing to play out as expected.
This is non-bank debt, meaning the borrowers are not banks, and most of the borrowers are not in the financial industry either. They are real companies, mostly in emerging market countries like Bulgaria, Brazil, Chile, China, Colombia, Czech Republic, Estonia, Hong Kong SAR, Hungary, Indonesia, India, Iceland, Korea, Lithuania, Latvia, Mexico, Malaysia, Peru, Philippines, Poland, Romania, Russia, Singapore, Slovenia, Thailand, Turkey, Venezuela and South Africa, that borrowed in dollars over the past five years because it was cheaper than borrowing in their local currencies, and they did so by issuing bonds.
About half of this $9T was borrowed from private bond investors, and ¾ of it came from lenders outside of the US. And now a few different things are happening to this debt all at the same time leading to a vicious feedback loop that could blow the whole thing up. One thing is that the strong dollar means these companies' local currencies are relatively weak, so you can imagine the impairing effect on their balance sheets as their debt burden grows relative to their local currency-denominated assets and income. Add to that the fact that their growth prospects have diminished over the last five years as well, and you can understand why Western asset managers are now pulling money out of these emerging market bonds.
Pulling money out of these markets means selling bonds, which drives down bond prices and drives up their effective yields. These higher effective yields then compete with new bonds being issued which drives up borrowing costs to the same rate as the effective yield on old bonds. This rise in borrowing costs eliminates credit growth, and exacerbates already-sluggish real growth by causing these companies to tighten their belts and cut back on capital expenditures, which causes more asset managers to pull more money out of these markets, and therein you have the basic vicious cycle. You will find it explained with more detail in this BIS presentation pdf.
Another meme that has been making the rounds is an increase in US oil production even as the price of oil is tumbling, some say contributing to the glut that is causing the price to tumble. It certainly makes sense that a glut or oversupply of a commodity would cause the price to tumble, but I want to explain to you a different causal relationship, where a declining price actually causes some producers to increase production, leading to another vicious feedback loop.
The curse of the commodity producer (as opposed to the producers of end-user products) is that the price you can obtain for your production is out of your control, determined on global markets, and thoroughly detached from your input costs. If your expenses exceed your income because the price of your product drops below your costs, then you're simply out of business, right? Well, not necessarily. That's probably true for a rational operator like yourself, but not necessarily true in the irrational world of the $IMFS with debt-addicted publicly-traded corporate shells operating on slim profit margins and beholden to both creditors and shareholders.
In the $IMFS, many companies not only operate at a loss, but they actually increase production when operating at a loss, and they do so for different reasons. One reason is government subsidies. The rational thing to do with a company that is operating at a loss is to shut it down and liquidate it, selling it off cheaply enough to someone else so that it, or at least its capital, can become profitable once again. But for some industries, primarily labor-intensive industries like auto making, governments will often subsidize losing businesses just to keep people employed in what become, essentially, make-work jobs if the company is operating at a loss. But I don't think that's the case with US oil.
Oil, unlike cars, is a commodity and is not as labor intensive to produce, and in the US, unlike in Saudi Arabia, it is a debt-addicted, publicly-traded industry operating on a relatively slim profit margin. Now, even if you can't turn a profit for your owners, you can still at least service your debt while running at a loss. And even though your reserves are limited by definition, you can actually reduce your short term losses by increasing your long term losses, i.e., running down your limited reserves faster at a loss than you were at a profit.
We see this in the gold mining industry as well, where the large, publicly-traded and debt-financed mines ramp up production on their lowest-hanging fruit right when it is least profitable to do so, because the alternative would be bankruptcy. I think this is why we saw new mining supply rise when the price dropped below their cost of production.
This has been happening in China in a whole slew of different industrial sectors for a few years now, ever since emerging market growth potential within the current $IMFS peaked and the commodity bear market began. The Chinese government itself has identified nine key sectors that are now operating at a loss in China just to service their debt, some with the help of government subsidies. Those nine industries are steel, aluminum, rare earths, cement, electronics, pharmaceuticals, autos, shipbuilding and industrial agriculture.
Think about this for a minute. Would you buy a business whose price is so high that it would not be profitable for you to operate? You might, but only with the intention of reselling it to a greater fool and not with the intention of operating it indefinitely at a loss. I actually did this once, and barely got out alive! Any of you who have bought or sold a business know EBITDA, which is often used to compare the relative profitability of comparable businesses. It's kind of like a P/E ratio.
Imagine buying a car wash that's priced so high that it would take you decades to break even, or if the operating costs associated with it were so high that you'd be operating at a loss and never turn a profit. Imagine you had to pay your car dryers $50 per hour as per union rules and couldn't reduce their numbers or hours. That's operating a business at a loss. It's not that a car wash isn't necessarily a good idea in that neighborhood, but just that its price or its related expenses simply make it unprofitable.
My point is that prices determine what is profitable and what is not. In the car wash scenario, maybe you go bankrupt with your unprofitable car wash and it is liquidated for pennies on the dollar. The new buyer who gets it for a song could then operate it profitably because his income will exceed his costs. In this latter case, isn't the neighborhood better off having cleaner cars?
This is an overly-simplified example, but just consider whether or not much of the world today is completely priced out of profitability. Think about my simple example of a neighborhood car wash. If owning the business itself is priced too high, either its purchase price or its operating costs (not the price of getting your car washed), then it will probably either fail or never get started in the first place without a government subsidy. If the employees have to be paid too much, there will be either fewer jobs or no jobs at all, so few in the neighborhood will even be able to afford a car wash, let alone a car.
To what end does such a system lead, in which asset prices are driven so high that the businesses themselves are not profitable in the real economy? It's called a Ponzi or pyramid system, in which profits are made not from the real economy but from the greater fool, the greater fool in aggregate being the savers. Which brings me back to these companies that should be going out of business but are instead ramping up production to service their debt and stay in business long enough for the insiders to get the hell out and pass on the greater losses to the savers.
This ties in to my next and final trending meme, which is corporate buybacks. The buyback meme is a true sign that we're in the final Ponzi phase of this system, in my opinion. Buybacks are a way for corporate shells to fall on the grenade while the insiders get out. They are also a way to juice stock prices that would otherwise be falling.
I'll get into this more in the next section, but if we look at specifically who is profiting from the most recent outrageous buyback trend, it is not the oil companies. Some companies are really profiting from the outrageous buybacks. From the top-ten list of buybackers, Apple is at the top and its stock is up 40% YoY. Others in the top ten are Cisco Systems, up 35% YoY. Oracle, up 20%. Intel, up 53%. Microsoft, up 30%. Wells Fargo up 27%, Home Depot up 30% and Pfizer up 6%. Exxon Mobil is third on the list, and it's down 7%, which I read as it would have fallen harder than that if not for the buybacks which were to slow the decline giving the insiders time to GTFO.
It's not that I think US oil production will end, just that it's currently unprofitable even as production ramps up at record rates, presumably to service the debt and keep the shares trading while their shell corporations borrow more money to buy back some of the shares (from insiders?) even as the share prices decline. Or maybe it's a conspiracy by the USG to hoard a bunch of cheap oil in old tanks so that it can continue to wage war and dominate the ROW even after the ROW turns against us (j/k ;). Exxon (the shell corporation and its employees) is not giving up, BTW, but that still doesn't mean its shares are a good store of value right now for its owners. There is a difference.
And that brings me to my final meme or story that is just starting to circulate, which is these corporate buybacks, where debt-addicted, publicly-traded companies are taking advantage of extremely low interest rates to issue bonds and then use the borrowed money to buy back their own shares. Sounds positive for business, right? I don't think so, but it's probably helping to levitate the stock market.
Buybacks have been happening at the incredible rate of $46B per month for the last year, nearly the same rate as our trade deficit!
(Bloomberg) -- The biggest source of fresh cash in American equities isn’t speculators or exchange-traded funds -- it’s companies buying their own stock, by a 6-to-1 margin.
Chief executive officers, who just announced the biggest round of monthly repurchases ever, executed about $550 billion of buybacks last year, according to data compiled by S&P Dow Jones Indices. That compares with a net $85 billion of deposits by customers of mutual and exchange-traded funds, the biggest gap since 2012, data compiled by Bloomberg and Investment Company Institute show.
If you sell a share of stock in the U.S. market, there’s a fair chance the buyer is the company that issued it -- and it’s buyers who’ve been on the right side of the trade since 2009. Buybacks are helping prop up a bull market that is entering its seventh year just as investors bail out and head back to bonds.
“Buybacks have come up in every meeting with clients and always have, because of the observation that the largest buyers of stocks have been companies themselves,” Dan Greenhaus, chief strategist at BTIG LLC in New York, said by phone. “For the last few years, that’s been the right call.”
Repurchases by U.S. companies averaged $46.1 billion a month in 2014, compared with $7.1 billion in ETF and fund inflows. Investors have pulled more than $10 billion out of equity funds in January and February and sent $38 billion to bonds -- even as companies announced $132.7 billion more in buybacks. February’s total of $104.3 billion was the highest on record, according to TrimTabs Investment Research.
Buyback Index
Companies with the most buybacks are beating the market. The S&P 500 is up 1.6 percent on the year after falling from a record on Monday to 2,092.21 as of 11 a.m. in New York. The S&P 500 Buyback Index, which contains the 100 companies with the highest repurchase ratio, has climbed 4 percent this year.
“It’s amazing that people are still sitting on the sideline getting zero-something percent returns,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said in a phone interview. “Usually when you get where everyone says we’re in a bull market you see big money coming out of lifeboats and chasing yield, yet we haven’t seen the mass money come in.”
The reluctance of investors to pile into equities has left corporate America the larger source of cash throughout the bull market. [thanks to capital inflows from the ROW which financed low interest rates for corporate bonds!] Buybacks exceeded inflows [from actual investors] by $468 billion last year when the S&P 500 climbed 11 percent and $318 billion more in 2013, when the gauge had its biggest advance since 1997.
Companies in the S&P 500 have spent more than $2 trillion on their own stock since 2009 [$2T is comparable to the $9T borrowed outside the US], underpinning an equity rally in which the index has more than tripled. They were on pace to spend a sum equal to 95 percent of their earnings on repurchases and dividends in 2014, data compiled in October showed. [Why not all on dividends?]
Buyback Incentives
Not everyone is convinced buybacks are good. They’re used to boost per-share earnings in a way that enhances the pay of chief executives, according to William Lazonick, a professor of economics at the University of Massachusetts Lowell.
“Companies use a phony ideology saying if you maximize your shareholder value you somehow increase the efficiency of the economy,” Lazonick said in a phone interview. “But the only justification for doing it that holds water is that executives [who are employees, not owners, other than the restricted portion of their compensation that is locked in shares] get a lot of their income from buybacks.”
Home Depot Inc., Comcast Corp. and TJX Cos. were among 123 companies that disclosed repurchases in February. The increased buybacks came as plunging oil and a strengthening dollar threaten to stall five years of earnings expansions. [So they borrowed at almost no cost and used the new debt money to buy up the publicly-traded share price which increased their bonuses even as earnings stagnated or declined? Brilliant!]
Profits from S&P 500 members will decline at least 3.2 percent this quarter and next [but hopefully not share prices!], according to analysts’ estimates compiled by Bloomberg. For the full year, growth will be 2.3 percent, down from 5 percent in 2014.
Profit Contractions
Buybacks will boost per-share earnings, with the potential of helping avoid the first back-to-back profit contractions since 2009, according to Yardeni Research Inc.
“In the last earnings season, the strength of the dollar clearly had a negative impact on earnings guidance by a lot of companies,” Dan Miller, who helps oversee $23 billion as director of equities at GW&K Investment Management, said by phone. “In some cases, the announcement of buybacks was perhaps meant to soften the blow a little bit. It shows the management is committed to their own stock.” [Yeah, sure. That's the interpretation "management" wants its owners to think. ;D]
Switching Positions
Corporations and investors have switched positions as the bigger buyer of stocks. Inflows from equity funds exceeded corporate buybacks every year in the late 1990s, contributing a total of $640 billion over the three years through 2000. That compared with $418 billion from share repurchases. [So the roles have reversed in this particular stock market run-up. It's not being driven by actual investors like all rallies were in the past!]
Companies have since taken the lead, with buybacks setting a record $589 billion in 2007. Last year, corporations beat all other groups as the biggest source of fresh [-ly borrowed] cash to the stock market, according to a January report by Goldman Sachs Group Inc., which tracks money flows from pension funds, foreign investors and ETFs.
The S&P 500 will increase about 7 percent to 2,238 by the end of 2015, according to the average of 21 equity strategists surveyed by Bloomberg. The Nasdaq Composite Index closed above 5,000 for the first time in 15 years on Monday and is within 2 percent of a record.
S&P 500 companies hold $1.75 trillion in cash and marketable securities, data compiled by Bloomberg show.
“These companies do this because they can,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a phone interview. “So many have tremendous amounts of cash historically and the investment rates on short-term cash are not too attractive. It’s good for the company and good for stockholders.”
Here's my take on buybacks. The shareholders are the owners of these companies, and if the company is making a profit it should go to the owners. If the owners agree to take on a new interest payment in order to concentrate the shares by reducing the number of shares outstanding, those interest payments come out of profits, so total profits go down by the amount of the new interest payment. So a bond-financed buyback is a transfer of some portion of total profits from owners to creditors at the very least.
If a company buys back its own shares with cash profits, in essence it is using its profits to reduce the number of shares outstanding rather than paying its owners a dividend (a profit). So the owners see their percentage of ownership in the company increase while the liquidation value of the company declines (because it either used up some of its cash for the buyback or it contracted some new debt). That's what owners (shareholders) actually own, the liquidation value of a company as well as the right to the profits (dividends).
As outsiders (non-shareholders), we see the price of the shares rising, but that's an illusion because what has actually happened was the equity (the liquidation value) of the company was reduced by either decreasing cash or increasing debt, and the number of outstanding shares was also reduced at the same time, a net-neutral operation. A company holding its own shares is like a bank holding its own liabilities, or like me holding an IOU to myself. The net asset value remains the same, only the percentage that each share represents has changed.
Think about it in reverse. If a company that bought back shares decides to reverse that action and sell them for cash, that is essentially the same thing as diluting its outstanding shares to raise capital. So buybacks are essentially reducing capital (actually reducing liquidation value, either by decreasing cash or increasing debt) in order to concentrate shares.
The problems with this, as I see them, are manifold. Since this is really just a rebalancing of net liquidation value versus share concentration, the optics of a rising share price send a false signal to the market. And if this is the driving force "underpinning an equity rally in which the index has more than tripled," then perhaps the rally was an illusion.
If a company has surplus cash, why not just pay out dividends to the owners? It doesn't matter how many shares are outstanding because their price can change, just like it doesn't matter how much gold exists. From a net asset value perspective, nothing is gained in a buyback, just like from a market capitalization perspective nothing is lost in a stock split.
In fact, these buybacks are done for a purpose. They are done to boost employee compensation at the expense of the owners. The answer to cui bono in a buyback is certain employees, not owners, of the company, more specifically the executives (the CEO etc...), the managing employees. This is a way to convert net asset value into executive bonuses right under the noses of the owners, even at a time when the business is not profitable. It is also done to boost share prices more than they would otherwise rise, or keep them from falling as fast as they would otherwise decline.
In my view, buybacks are little more than a bookkeeping trick used by CEOs to fleece their unsophisticated owners (shareholders), kind of like a body that begins consuming itself and concentrating its energy in the core while starving the extremities, just to maintain the status quo of its heart a little bit longer. Yet if it happens en masse as it has been, due to cheap corporate debt financed by a flood of foreign capital, it's not just the shareholders who'll end up getting hurt—it's everyone invested, saving or speculating in any kind of paper.
Conclusion
What is happening is a massive inflow of private capital into the US and the dollar. This is not new surplus revenue being invested in the US right after it is earned, nor is it (any longer) the result of structural support or the systematic weakening of foreign currencies, also known as neomercantilism. This is, as far as I can tell, a massive shifting of existing private investment funds from other places into the US and its dollar. The simplest way I can put it is that it seems to me like the world is running into our bomb shelter that's rigged to blow up once everyone is "safely" inside. I suppose from another angle, still using my own past imagery, we could call it the head-fake.
The reason for this massive capital inflow is, I think, quite simply that the rest of the world has become unprofitable under this dying $IMFS, so you want to move toward the focal point where presumably everyone will be moving in order to capitalize on being early to the bubbles that will ensue. And in this case, the dollar and the US markets are the perceived focal point, with AAPL at the very center.
What we've seen with foreign currencies is that, whether loosely or strictly pegged to the dollar, their foreign reserves tend to correlate inversely to the strength of the dollar. Whenever the dollar is weak, their foreign exchange reserves rise, and when the dollar is strong, they decline. Comparing a chart of the USDX with Russia's foreign exchange reserves shows this quite clearly.
An inflow of capital into the dollar makes the dollar strong, and an outflow makes it weak. This is a function that is peculiar to the $IMFS, because in a different system the dollar's capital account would be subservient to its current account or physical plane trade balance. But similar to how paper gold drives the price with the physical gold market being subservient to the paper one, so too is the US physical plane trade balance and the price of the dollar subservient to the paper markets and capital account flows.
When capital is flowing, it affects two things in combination. It affects the US trade deficit and it affects the price of a dollar on the DX. It is a combination of these two that is the result of the flow in the capital account. If the DX is not moving, then the trade deficit represents the entire net flow in the capital account. If the DX is moving, then the capital flow is either more or less than the trade deficit. If the DX is rising, then the capital inflow is greater than the trade deficit, and if the DX is declining then the capital inflow is lower than the trade deficit. And, of course, in the past, structural support worked in tandem with private sector capital flows to keep the DX and the US trade deficit more or less stable, but right now it's private sector flows that are driving everything.
As private sector capital moves into the US, it needs dollars to buy US assets. So first it sells its foreign assets for foreign currency, then it uses that foreign currency to buy dollars needed to buy US assets. This drives down the local currency and drives up the dollar. The local CB can absorb some of that pressure by providing the dollars its locals want to buy from its foreign exchange reserves. This neutralizes the locals' effect on the FX, and this is how countries like Saudi Arabia and the UAE keep their currencies pegged to the dollar.
Any reduction in their foreign exchange reserves represents a net outflow of private capital, since their currencies are hard pegged to the dollar. These are still strong currencies, it's only the $IMFS that is making them appear weak. Even though the oil price has declined dramatically, all three of the countries I mentioned are still running a positive balance of trade, but in the $IMFS as I said, the capital account is in the driver's seat.
Even the dramatic decline in the price of oil is attributable to the $IMFS. As I've said in the past, speculative paper markets (futures markets in particular) when properly subservient to the physical market, absorb and reduce the risk and price volatility that real producers and real consumers do not want to be exposed to. But in the $IMFS the opposite is true; the paper markets actually cause the risk and volatility, simply because this system promotes saving in money and its derivatives.
"Capital flows" is really just another way of describing all this paper money sloshing around from one thing into another, causing the risk and volatility that real producers and real consumers would rather not be exposed to. It's just that when it crosses foreign exchange currency boundaries, you have to be careful when thinking about it because the currency effects can be confusing.
Many things changed through the financial crisis in 2008, and one of them was the driver of dollar-denominated credit expansion outside of the US. Before 2008, non-US dollar credit growth (sometimes called Eurodollars) was driven mostly by banks making the loans, but in 2009 the banks pulled out of that sector and private sector capital flooded in. That's why half of that $9T in foreign dollar denominated debt is held by private bond investors today, and why "capital flows" or "all this paper money sloshing around from one thing into another" is such a dynamic problem for that debt and those stagnating economies. If that debt had all been bank credit like before 2008, then interest rates would move slowly in concert with interest rates elsewhere. But because today it is private money, capital outflows can cause interest rates to be much more volatile and deadly.
Now think about how that $9T in debt meme—$4+ trillion of which is in private bonds which asset managers are pulling out by selling those bonds—might relate to the corporate buyback meme. As that money is being pulled out of emerging market corporate bonds, where do you think it is going? Could it perhaps be going into US corporate bonds?
The article above says that US corporations have bought back $2T of their own shares since the stock market started rising in 2009, and a quarter of that, half a trillion, was bought back last year alone. And it was largely financed by issuing bonds and borrowing that money from the bond market. So you see, everything is connected! A massive capital inflow into the US bond market can result in crazy-low interest rates while also, as the article says above, "underpinning an equity rally in which the index has more than tripled." Isn't the $IMFS great? ;D
Sincerely,
FOFOA
The picture's far too big to look at, kid.
Your eyes won't open wide enough.
And you're constantly surrounded
By that swirling stream of what is and what was.
Well, we've all made our predictions,
But the truth still isn't out.
But if you wanna see the future,
Go stare into a cloud.
And keep trying to find your way out
Of that maze of memories.
It all sort of looks familiar,
Until you get up close,
And then it's different, clearly.
But each time you turn a corner,
You're right back where you were.
And your only hope is that forgetting might
Make a door appear.
Well, is it your fear of being buried
That makes you so afraid to speak?
An avalanche of opinions,
Like the one that fell that I'm now underneath.
It was my voice that moved the first rock,
And I would do it all again.
So, I mean it's cool if you keep quiet,
But I like singing.
So, I'll be holding my note,
And stomping and strumming
And feeling so very lucky.
And there is nothing I know,
Except this lifetime's one moment,
And wishing will just leave me empty.
So you can try and live in darkness,
But you will never shake the light.
No, it will greet you every morning,
And it will make you more aware with its absence at night,
When you're wrapped up in your blankets, baby-
That comfortable cocoon.
But I've seen the day of your awakening, boy,
And it's coming soon.
So, go ahead and lose yourself in liquor,
And you can praise the clouded mind.
But it isn't what you're thinking, no,
It's the course of history,
Your position in line.
You're just a piece of the puzzle,
So, I think you'd better find your place.
And don't go blaming your knowledge on some fruit you ate.
Cause there's been a great deal of discussion, yes,
About the properties of man.
Animal or angel, you were carved from bone,
But your heart, it's just sand,
And the wind is gonna scatter it,
And cover everything with love.
So, if it makes you happy,
Then keep kneeling, momma,
But I'm standing up.
Because this veil, it has been lifted, yes,
My eyes are wet with clarity.
I've been a witness to such wonders.
Oh, I've searched for them all across this country.
But I think I'll be returning now
To the town where I was born.
And I understand you must keep moving, friend,
But I'm headed home.
Yeah, I'm gonna follow the road
And let the scenery sweeping by easily enter my body.
And I'll send ya'll this message in code-
Underground, over mountains,
Through forests and deserts and cities.
All across electric wire, it's a baited line.
Yeah, the hook's in deep, boys,
There's no more time.
So you can struggle in the water-
Be too stubborn to die.
Or you could just let go
And be lifted to the sky.
Your eyes won't open wide enough.
And you're constantly surrounded
By that swirling stream of what is and what was.
Well, we've all made our predictions,
But the truth still isn't out.
But if you wanna see the future,
Go stare into a cloud.
And keep trying to find your way out
Of that maze of memories.
It all sort of looks familiar,
Until you get up close,
And then it's different, clearly.
But each time you turn a corner,
You're right back where you were.
And your only hope is that forgetting might
Make a door appear.
Well, is it your fear of being buried
That makes you so afraid to speak?
An avalanche of opinions,
Like the one that fell that I'm now underneath.
It was my voice that moved the first rock,
And I would do it all again.
So, I mean it's cool if you keep quiet,
But I like singing.
So, I'll be holding my note,
And stomping and strumming
And feeling so very lucky.
And there is nothing I know,
Except this lifetime's one moment,
And wishing will just leave me empty.
So you can try and live in darkness,
But you will never shake the light.
No, it will greet you every morning,
And it will make you more aware with its absence at night,
When you're wrapped up in your blankets, baby-
That comfortable cocoon.
But I've seen the day of your awakening, boy,
And it's coming soon.
So, go ahead and lose yourself in liquor,
And you can praise the clouded mind.
But it isn't what you're thinking, no,
It's the course of history,
Your position in line.
You're just a piece of the puzzle,
So, I think you'd better find your place.
And don't go blaming your knowledge on some fruit you ate.
Cause there's been a great deal of discussion, yes,
About the properties of man.
Animal or angel, you were carved from bone,
But your heart, it's just sand,
And the wind is gonna scatter it,
And cover everything with love.
So, if it makes you happy,
Then keep kneeling, momma,
But I'm standing up.
Because this veil, it has been lifted, yes,
My eyes are wet with clarity.
I've been a witness to such wonders.
Oh, I've searched for them all across this country.
But I think I'll be returning now
To the town where I was born.
And I understand you must keep moving, friend,
But I'm headed home.
Yeah, I'm gonna follow the road
And let the scenery sweeping by easily enter my body.
And I'll send ya'll this message in code-
Underground, over mountains,
Through forests and deserts and cities.
All across electric wire, it's a baited line.
Yeah, the hook's in deep, boys,
There's no more time.
So you can struggle in the water-
Be too stubborn to die.
Or you could just let go
And be lifted to the sky.
473 comments:
«Oldest ‹Older 401 – 473 of 473The way I see it. Gold is an insurance policy rather than a lottery ticket. If I cashed in, I'll be bailing out and providing opportunities for relatives and friends. America will not be the same, NYC will not be the same, Wall St. will not be the same and tourists will not come with empty suitcases to be filled with goods for half the price at home. I suspect we will move back to a manufacturing from a service economy.
Gold should be nothing more than the grease that smoothen a likely catastrophic bumpy ride and seed money for a new beginning. It's totally incomprehensible that some see it as a lottery ticket which ones want to cash-in and buy sh*t.
maximize the purchasing power of my savings
"It's quite humorous when people use Anothers quotes as the source of proving Anothers thesis."
FOFOA has written 443 sources proving Another's thesis and FOFOA used Another's quotes for guidance.
The above quotes are from An Eye for Gold
Humorous is the fact that certain posters are still here.
It confuses me why someone ( a rational someone) who frequents a blog, the fundamentals of which they do not agree with and over a long period of time comment incessantly about how they disagree.
It is not like the regulars and newly interested are starting a movement that might endanger these folks positions. Perhaps it is a deep (non-sexual, mind you) love that forces them to try to saved the damned. Perhaps they have no where else to go. Maybe they have a few loose screws in the hard drive or a short in the logic circuits. If I found a bunch of losers yakking away about some silly theory I thought was wrong I'd never go back. I have other things to learn and do. It reminds me of poker players who just like the company and manly jokes even if they can't afford to play the game. Then again maybe it is a shades of grey kinda thing where abuse turns them on. Strange stuff.
+1 Michael dV
And why stick around only to say "I don't agree, I don't agree" and then not give an analysis on why?
Saying "lol read the news", or "it hasn't happened yet, opportunity cost" is not an analysis.
Drive-by trolling.
So you're all against the idea that if the Chinese and Russian et al giants collude with the european and US Giants, that they're not going to be able to continue the charade for much longer? I'm going to state this again. WE HAVE NEVER been in a situation where the world becomes as one, before. No more red team vs blue team dichotomy. We're all in this together this time. The USA is being knocked down a peg into second place but the USD will still play an important role - they're all in this together. Stop quoting 20 year old Another quotes and start looking at what's going on right now. Mainly on the geopolitical front.
Stu:
So what bothers you is the hypocrisy of members of this blog who claim that they can wait for decades for freegold when reason dictates that they should be annoyed like you are at the lost opportunity to earn money?
HINT: the USA is NOT being isolated via the AIIB. This is all a part of the larger script at hand. Start thinking like Giants! Go have another look behind the curtain, you need a refresher of what the plans are on this present day, moment.
Georgiew89:
What I suggest is that you buy gold, but much, much later down the road, like in another 20 years. In the meantime I recommend that you invest in stocks and whatnot. How does that sound?
Michael dv
I can explain it if you like.
The problem with the dissidents is their lack of a coherent model.
They understand and agree with parts of the freegold theory, but are unable to integrate their small truths into the coherent whole presented here. Their frustration and persistence stems from our not acknowledging their own personal small truths since we take a big picture view. Our dismissal of such are incomprehensible to them, and creates anger at us for being such 'idiots' for not agreeing with them on their small truths.
Ideas such as the K-wave theory are actually quite decent, and natural. It follows the basic idea that humanity tends to invent new fields of knowledge (spring), it then enters an expansionary phase (summer), followed by a stagnant phase (autumn), followed by decline (winter), and the last phase tends to correspond with invention in another large field, starting the cycle again. In this case the failure is to see that while such cycles influence economic growth, it is a separate phenomenon from the monetary system.
Risk management is another decent and reasonable idea.
So is investing.
The problem lies in their inability to integrate different sets of knowledge as they hold rigid conflicting views, and don't know what to assign priority too and of what the relevance of each part is in the whole.
So, we have continued arguments where they bring up their special pet ideas, and we ignore that (while not necessarily disagreeing on micro level) to point out the holistic view. This infuriates them and we continue talking past each other.
Unfortunately I don't see much hope of convincing such individuals as they are unwilling to let go of any of their petty points in order to attempt understanding.
Hope that helps.
TF
Ps. Sorry for rambling. I note it is not a very eloquent response.
Georgie: I will ask you again.
You said, "They will use everything they can to keep this going and they still have the ammo."
What ammo are you talking about?
Georgie said, "Start thinking like Giants!"
Think like a Giant
Georgie how is that idea contrary to Freegold?
Since when was Freegold a red team vs blue team dichotomy?
Since when was timing an issue?
What are you trying to say with the AIIB issue?
@Georgiew89
If everyone is on the same page why would some nations accumulate Gold? Shouldn't they all be leveraging to get more USD? like you? Have you considered petitioning them about the ills of holding Gold for the next 10-20 years? Maybe you could do a blog.
Shouldn't they simply keep buying Treasuries?
Regardless that they went negative for the first time in 50-odd years.
Do you think everyone will sit idly bar and see their assets inflated away, without taking alternative recourse?
While I don't think anyone wants to be the first one to the exit and to initiate the end of the present system - many are sure preparing for some potential change.
Even if every Nation on earth works together that doesn't guarantee there will be a smooth transition - that a domino can't fall somewhere... and they all know about the inevitability of this - thereby the prep. They know HI is not a monetary event, but a psychological one - and hence, un-timeable.
When the going gets real tough - you may find these copacetic nations end up being stone-cold mercenaries. Maybe it would take one dumping USD in the open market. Or one small bank - that doesn't want US paper. One Hedge fund. The next crash could be THE game-changer - or less! - and you want to time it. Can you appreciate how reckless that seems to people who differ from your perceptions?
You seem disgruntled because many here are content to own Gold in this current Koyaanisqatsi environment, when you think we should roll the dice to accumulate USD - use leverage. Knowing the little I know - I can't imagine anything more stressful. Do you think peace-of-mind is worth anything? How much is it worth? Can you accept that the value of peace-of-mind is a personal decision?
The risk for obtaining immediate USD is not worth more than the potential reward, and peace of mind, of holding physical. The length of time is irrelevant.
Michael dv,
I totally agree and find it equally humorous. Of course they will neither answer nor acknowledge your comment as cockroaches don't have a real purpose other than pure infestation.
FSL:
I think you should have not chosen CPI, but Interest Rates and income taxes to really determine the relative benefits of investing in Gold or Fixed Deposits. As these are the two instruments that are closest. BTW in India, Interest rates were 12% during the period you are talking about and income taxes were 40%. Gold has had a Capital Tax of 20%. So do take that into consideration. Sometime in late 90s max tax rate dropped down to 33%.
The other problem is that you are making your estimates in a pre-freegold era and extrapolating it to post freegold era.
There have been a few phases in the world history regarding gold and interest rates.
Pre 1930 was Gold Standard, when gold was fixed to dollars, and there was no monopoly in creating currency. It was a real gold standard, nearly gold specie, in that money quantity was fixed to the gold quantity mostly. In this period inflation and deflation both happened with equal probability.
Post 1933 to 1971 was modified gold standard, where gold was fixed to dollars, but there was monopoly in creating currency. It was a managed gold standard, in that money quantity was increasing compared to the gold quantity. People were not allowed to hold gold. In this period deflation happened but much more rarely to inflation.
Post 1971, till late 90s was the era of paper currency, with managed gold prices. Gold was managed via paper gold and CB selling. Money quantity had no relation to gold. People were allowed to hold gold. In this period deflation did not happen at all. Gold prices dropped, due to the consequence of price management.
Post 2001 till now, gold has been managed automatically via paper gold only. Central bank selling was stopped. Central banks have only been tweaking the market slightly but not managing it directly much. Gold prices rose till 2011, and have been dropping since.
If you notice in all these periods gold's price has been managed. First by fixing, then by selling and lastly by the function of a paper gold market. After the paper gold crash (advent of freegold) gold price will not be managed anymore. Its not being directly managed at the moment.
If you look at the behavior of gold in all of these phases you will notice these are different. So I am not sure how you are extrapolating the results here into freegold. I can only assume that you do not understand freegold, nor know the history very well.
What we do after freegold, will depend on the individual. Its not like all freegolders will behave the same way. Everybody has their own priority.
I for one would sell some part of my stash to buy land and properties that can be rented out for income. Rest I will hold.
My wild guess for the freegold period is that inflation will be managed to near 2%. Gold should rise by 3-4% and risk free interest rates provided by banks would be sufficient to manage the inflation that is 2%. Rental would give around 4-5%. While decent businesses would give around 5-6% average.
Gold will not be as good as rental or businesses, but it would be better than risk free businesses.
The real reason for the expected revaluation is because Gold has been managed for so long and its price has trailed the increases that it should have had if it was truly free. This difference has compounded for more than a 100 years. Resulting in a 30-50X required revaluation. It has nothing to do with what giants want. Its basically due to its wealth storage function.
Has the impact on the environment been assessed? I'm not so familiar with geology but at first thought I would expect a lot of small unauthorized mining ventures would pop up.
With a >10X revaluation even small amounts in the ground would make mining profitable..,
Feb 5th 2015:
Gold Is the Worst Investment in History
"Owning physical gold in the form of bullion has many drawbacks. Wide bid and ask prices on physical gold ensure that the moment you purchase it you are already underwater on your investment. In addition, shipping costs for the heavy metal will further add to your cost basis."
The guy has a point. As a investor you have to be in the moment. Like a shark in the water, if you stop moving you die. Only a fool with that mindset would buy gold bullion.
As the oppositional tone persists, one must ask oneself, "Where do my loyalties lie?"
http://roacheforque.blogspot.com/2015/03/casino-loyale.html
Only a fool with that mindset would buy gold bullion.
Quite!
Yes, the trolls cannot see the whole and they focus on their pet ideas, concluding that they aren't compatible with concepts this blog is dedicated to exploring.
Yes, this makes the troll irritable. The troll see's it as a personal attack that we cannot embrace his world view. If the troll was not a troll, and was someone more akin to the vast majority of readers here, he would simply leave at this point. His conclusion would be that it is pointless to argue with people who either cannot or will not embrace his superior viewpoint.
So we have two issues that really defines the troll. First, he takes disagreement as a personal attack against both his intellect and character. Secondly, the troll must extract revenge against all that have wronged him. Being right and simply depriving us of his superior intellect is not sufficient. He must make everyone as miserable as possible by being the biggest pain in the ass he can be.
So lets not kid ourselves here, the troll isn't a troll because they cannot put together the comprehensive view. They are a troll because they are built to be a troll. They are sad, angry, self-centered, and insecure. We could come up with a theory of the lifecycle and motivations of squirrels as it relates to nut gathering, and if it didn't agree with the troll's theory we would see the same behavior we see here.
What these sad fuckers don't get is how pathetic they look to the rest of us. Their lack of empathy gives rise to a self-centric personality. They cannot step out of their own bubble universe in order to look back in through someone else's eyes. If they could, they would see how desperate their actions appear to us non-trolls. They would be embarrassed. Trolls cannot be embarrassed.
BTW, trolls and psychopaths share many similar traits. It's estimated that psychopathy is exhibited in as much as 10% of the population. Lets say that is grossly over-estimated. Lets say it's more like 1%. Would that fit with what we see here at this blog? We always seem to have one resident troll, sometimes two. They either get banned or they eventually get bored and leave.
The psychopath craves stimulation. So does the troll. Feeding the troll is simply providing stimulation for him. This post is providing nourishment to our trolls. I normally do not do this, but from time to time our readers need to sharpen their view of what we're dealing with. There is no educating a troll. There is zero chance a troll will come around. There is no shaming a troll. There is no winning against a troll. There is no way to force a troll from the blog. He either must be banned or he must leave on his own accord.
The best way to get rid of a troll is to starve him out. He will eventually get so hungry for attention, he'll leave to go find it elsewhere. So let the troll post, and then ignore it. Do not respond in any way to anything he writes. With any luck, the time will be short before he moves on. If he persists, feel assured that FOFOA will banish him to the small and exclusive (to trolls) club of fuckups who just couldn't figure it out.
So I've wasted 10 minutes of my life writing this post. I consider it a public service announcement.
Please do not feed the trolls.
Au contraire Dante, we (as individuals) rarely if ever have to confront the "present" ...that is until we DIE!
It's the same in the monetary sphere - where entities are focused on the future. The "present" is only encountered when the System supporting the said monetary sphere Dies. FWIW.
"shipping cost will further add to your cost basis."
Lol.
After my 'ah-ha' moment I forgot about the concept of "cost basis".
BTW, the reflexive response to the above is that I'm quite simply a zealot or cultist. In reality, I share more interests with the current batch of trolls than they realize. I am an active trader and employ leverage to generate digits of credit (casino chips) in various markets. I do this for fun mainly, with a secondary goal of building wealth. The secondary goal is by happenstance and is a consequence of winning more than I lose in the casino. Inevitably my chip balance grows to a point where I begin to realize that I wouldn't mind getting paid for those chips. At this point I liquidate 50% of my chips and then I either buy something I want or need, or I save it in bullion.
I am naturally quite risk averse. But I also love to play games. I never play for fun. I always play to win. My profession compensates me such that I am in the top 1% of earners, yet there is no inherent risk in what I do. If I were so inclined, I could make more playing in the markets than I do working in my profession. But, there is inherent risk that makes such a move undesirable.
I have a love/hate relationship with the $IMFS. I hate the distortions that pervert and poison our society and our government. I love it because it offers me the opportunity to play and win while be compensated for my time. Kind of like a professional athlete.
Not for one instant do I see the digits in my brokerage account as wealth. They are casino chips. When my stack gets high enough I start to imagine those digits as wealth that I could have if only I were to cash in my IOU. So I see myself as providing a service and am paid on credit, that being to take the opposite side of someone's bet. At some point my balance becomes interesting, then I cash in. I am way too risk averse to let the balance roll in order to generate even more credit.
I fully embrace the Freegold thesis. After Freegold I will likely not play anymore. Not for lack of desire, because the nature of the markets will dramatically change. I see the markets as a casino full of loud drunks, where they panic from one table to the other chasing the next big win. They do this with a seemingly bottomless chip tray filled with other people's chips. I make it my business to follow these characters and occasionally bet with and against them, depending on the intensity of their obnoxious behavior.
Again, I abhor risk. It isn't really that risky to place bets in a casino full of drunks who are using other people's money. It is another matter when the casino is quiet and filled with sober and professional gamblers. My chances of winning against such professionals are highly impaired. I'm not playing if I am not winning.
A zealot would abandon all things paper in favor of a 100% reserve in gold. Additionally, he would associate morality with this position. Perhaps 80% of my wealth is in gold reserves. If I could, I would convert another 10% into gold reserves, but am constrained by my employer in that regard. That leaves 10% of my potential net wealth in paper. That is my play money that I don't mind losing if somehow I have my ass handed to me in a hat box. I do not see this position as the right one to have. It's right for me and my disposition. So, I find myself on the far end of the spectrum in opposition to the fellow that does not understand gold and money. That person should own 10% in gold reserves and 90% in whatever else floats his boat. More or less a life insurance policy for their paper portfolio.
(cont.)
If our trolls weren't trolls, I would tell them to get their 10% in gold, turn out the lights here, and move on to a trading blog that captures their interest. Clearly they reject the Freegold thesis, by default a total gold critic should should own 10%. This of course will not satisfy them. They will insist we are overly taken with an unproven thesis, built around circular logic and self-fulfilling argumentation. I would counter by simply reminding them this blog is a tribute to Another and his friend. What else do they want here? For us to tear down there writings and cast doubt on their credibility? Someone should start another blog for that. Who better than one of our resident trolls?
Oh yes, I forgot. It isn't about the thesis or the credibility of those who originated the concept. It is about the business of being a troll.
Matrix,
I'm on board with death by starvation. My biggest reason is this blog offers SO MUCH yet the comment section at times gets pretty bogged down with this bull shit. There is a lot more understanding that I have yet to achieve so I hope we can get back to answering more questions and spend less time with the attacks.
The trolls seem to forget that we are all here because we QUESTION EVERYTHING. They hide behind this "freehold cult" theory that we all just immediately accept everything we hear as fact. When that can't be further from the truth.
We are here BECAUSE we don't accept everything fed to us.
Back to real discussions.
My sister's daughter made $8,765 last month just by trolling a single website. I tried it too and now I'm making more than I ever have, just bought a new Hummer with rotating spin wheels. Check it out, could change your life. trollfordollars.com.
Congrats Anand,
You've drank the poisonous water of life. Now transmute it before it kills you and become a male Reverend Mother. Many a goldtard have tried. Tried and failed? No, tried and DIED!
For so few can look into that place in which gold does not do well. It overwhelms them into gibbering catatonia . It sends them retreating to the comfort of old faulty theories laden with QtoM baggage, sends them desperately reading the tea leaves of anonymous blog posts dripping in the same QtoM brew. Why, oh why, would a saver place his PP in gold when he can get a real positive yield on a fiat deposit? Let's all channel Nancy Kerrigan...whyyy? whyyyy? whyyy? would a saver do something so stupid after the bowels of the monetary system haven been given a gilded debt enema ?
Do it Anand. Transmute the water. You've unwittingly discovered the corollary to Barsky-Summers. Move the frame of reference to interaction of interest rates, price levels, and debt capacity. Free yourself from the bondage of these terms “saver” and “separation of SoV and MoE”.
This freegold thing is nothing more than the fantasy of some white, middle-aged bourgeois traumatized by the bubbles of recent years. You wanna know why the whole Hereafter thesis is a nonstarter? Gold really can’t be separated from the system. You can imagine that it’s no longer at the bottom of Exter’s pyramid but in the real world information is still going to be exchanged between gold and the credit markets. Additionally, if most of the world puts its savings into gold, the vast majority of your fellow shareholders will be E-trade babies, many of them Indians and Chinese. Have you read some of the retail trader blogs over there? OMG. Just like here during the dotcom mania. What’s going to happen when the next big investment fad comes along and tens of trillions of MZM as gold flees to the big party and you want to start retirement? It’s much better off having gold function as insurance, as something to deflate against, as that 5-10% of a portfolio exhibiting negative beta when all the other financial instruments take a crap. That’s the natural order of things.
What Austerity Looks Like Inside Greece
http://www.newyorker.com/business/currency/what-austerity-looks-like-inside-greece
"Wells Fargo won regulatory approval on Tuesday from federal banking regulators to use its own tailored risk models for determining its capital requirements.
The sign-off by the Federal Reserve and the Office of the Comptroller of the Currency comes about one year after the regulators gave similar approvals to other big banks."
I say my liabilities and assets are in perfect harmony.
Nothing to see here.
"The Holy Roman Empire was neither holy nor Roman nor an empire. Discuss."
http://youtu.be/XoBMJAEOvPA
If there are not enough resources to match wealth. Wealth will be undervalued and resources will be overvalued. So even after revaluation gold will remain hiding if resource availability don't rise.
Resource can be like services, infrastructure, skills, assets, investment opportunities.
MatrixSentry:
Top 1% of earners? Damn! I thought you said you were an airline pilot. I must be thinking of somebody else.
From Google: "You might be surprised to learn that the top 20 percent of income earners bring in a household income of just over $100,000. The top 10 percent of earners have a household income of more than $148,687. To be considered in the top 1 percent, household income is at least $521,411.
Jan 21, 2014"
Damn Gramps, you are a one-trick pony. Too bad Trader Dan's site went to pay only....
Franco,
Just going by what my W2 says ;-)
My bust. My earnings are top 1% in my state. Probably closer to top 5% in the country.
http://www.businessinsider.com/one-percent-state-map-2014-9
Cali, NY, and North Dakota have me beat!
OBA, finally I'm now starting to understand your charts. ;-)
Regarding Greece, this guy pretty much nails it:
If I were 25 and Greek
It blows my mind that very few countries have apprenticeships as Germany. I think Universities and Colleges have something to do with it, ie. Education-Industry with less and less connection with reality.
@MF and Matrix
Nice posts
I'm in the top 10% in the country but definitely one of the paupers in my circle of friends.
Dante: College in the US is a business, a money making business with the total amount of student loans over 1 trillion and it is one of the few loans that is not discharged in bankruptcy.
One of my good friends, when he first went to college, accepted every credit card he could find (credit cards are pushed hard an heavy on freshman). He maxed out all of them by with cash advances, took the lump sum, paid for his entire four years in advance, and then..... he declared bankruptcy. He graduated on time and with no debt.
FSL: Wow! Best of luck.
Matrix: Agreed on feeding the troll. FSL will not get any more responses from me.
Gold's not trading now, but USD just flashed crashed.
via Reuters: Turs. April 2, 2015
"China Knocking on the Door of IMF Major League, U.S.
Wavers"
the best MSM coverage of the topic since Lew spoke on Tues.
in San Francisco
Nicklesaver
Inspirational video..
@Indenture,
"The Holy Roman Empire was neither holy nor Roman nor an empire. Discuss."
I read the "Sack of Rome 410" - http://en.wikipedia.org/wiki/Sack_of_Rome_%28410%29
If America were the Western Roman Empire then China is the Visigoths. The currencies today are the standing armies back in the Roman time.
I believe China, like Alaric, is outraged of the treachery and frustrated by all the past failures at accommodation (IMF Veto & Governance Reform 2010), have given up on negotiating with America and is building the battering ram (AIIB) for the sack of Rome.
Bitcoin and game theory: we’re still scratching the surface
How probability can help you control your destiny
a little late but:
Game Theory Tips For Your NCAA Bracket Challeng
"I believe China, like Alaric, is outraged of the treachery and frustrated by all the past failures at accommodation (IMF Veto & Governance Reform 2010), have given up on negotiating with America and is building the battering ram (AIIB) for the sack of Rome. "
That sounds melodramatic and all, but I don't think so. If China wanted to sack Rome, all they would need to do is dump its $1.2 trillion of US treasuries all at once, and bam! What it sounds like to me is that China is trying to put the life vest on without rocking the boat too much.
Maybe China wants to kill U.S. softly!
Revisit the Matrix and Matrix Reloaded (the third was largely a farce). I know it's cliche but they are a good fantasy, sci-fi way of interpreting our present system.
You see, remember how Morpheus felt at the end of Matrix Reloaded? The sense of deflation. It's not that Morpheus was wrong! It's that what he dedicated his life to (end of the war, freeing humans from the matrix) was not what actually happened.
That's my message, I'll leave it at that for this thread. You are going to win, in a way, but the world isn't going to look like you expect it to, because all of your assumptions about how the world looks like still stem from the present system.
Freegold isn't going to change much of anything, anymore than Neo was going to free all of the humans. At best you will have a little retirement nest egg to make an escape from the chaos which is likely to surround you.
Alaric initially wanted to work within the framework of the Roman Empire. If he was made magister militum per Illyricum from the get go, which was the Roman command he wanted, he might stay loyal as the mercenary (RMB) to support the Roman Legions (dollar).
Maybe it's not too late to offer terms to China, the position of magister utriusque militae might have lessen Alaric's final aggression, a more prominent position as per IMF Veto & Governance Reform may give the Chinese more incentive to stay on the boat.
@ Motley Fool and Matrix
Your efforts are deeply appreciated. In fact you might wanna save the antitroll links for a quick reference later on.
@ Michael dV
Trolls trolling for fiat at FOFOA`s blog while freegolders trolling somewhere else for gold. LoLing and rolling over.
Random,
you sound as if you see Freegold as inevitable.
But why are you using the term “victory” then? IMO, victory happens if someone is forcing something to happen. Yet inevitableness does not need any support like this.
And since I am not reading very thoroughly the comments in these days: Why “pyrrhic”? The inevitable has negative side effects, at least? Which ones?
At best you will have a little retirement nest egg to make an escape from the chaos which is likely to surround you.
Not so bad in the end, eh?
Freegold isn't going to change much of anything, anymore than Neo was going to free all of the humans.
Yes, that’s my feeling too. To change things thoroughly the human mind has to get changed from his very depth. But, nevertheless: A collapsing $IMFS will have many side effects, which, in the end, could foster man’s desire for a deeper change too.
Thx for short clarification. Links to posts and/or comments are also fine.
speaking of OMFIF co:founder David Marsh,
OMFIF will host a breakfast discussion in Washington D.C.
during the April IMF meetings, for select Central Banks and
official sector institutions. Subject:
"Gold, the Renminbi and the multi-currency reserve system"
I note that the IMF conference in which Woland's referenced breakfast discussion takes place occurs on the 93rd anniversary of the Genoa Conference.
I just picked up a used copy of his hardback at amazon for $4.39.
"The Euro-The politics of the New Global Currency"
and, (for those who don't mind their news 4 weeks old):
CIPS to launch Sept/Oct 2015, if testing runs smoothly
China's international payments system ready, could launch by end-2015 - sources
I haven't had a chance to read this yet but here is a link from Woland's comment above:
https://www.gold.org/sites/default/files/documents/gold_renminbi_multi-currency_reserve_system.pdf
Thanks for the link KP.
Pretty underwhelming read. Waste of time IMHO. Cements my opinion of "World Gold Council" and their hench-men as a bunch of consensus-seeking douche bags.
Wow, so the CIPS and the renminbi are newsworthy around here? What are you proffering with these Chinese-friendly articles? If you're thinking FG somehow depends on the actions of the Chinese, then please continue; I enjoy them purely for comedic value. Time for a new article FOFOA, please.
Stories about the Yuan are note worthy because it represents the Chinese economy
Phat Repat,
The Chinese provided the most recent structural support for the IMF$ system while, apparently, they built their gold reserves. It now appears they have removed this support and are preparing and lobbying for de-dollarization. If you believe that freegold come after the dollar world reserve system and China is removing or has removed the last amount of structural support then, yes, at least to some degree the timing of FG appears to depend on the actions of the chinese. Whether this is right or wrong, time will tell.
Phat said, "Time for a new article FOFOA, please."
Sure, no problem! ;D
The Golden Phoenix
Sincerely,
FOFOA
Thank you kindly, sir! :-)
New comments are not allowed.