^ I was surprised at that news, too. Bad sign for all retailers. I noticed that the massive discounts are everywhere, but funny, the original sticker price seems WAY higher, so the discount really ain't that much.
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^ I was surprised at that news, too. Bad sign for all retailers. I noticed that the massive discounts are everywhere, but funny, the original sticker price seems WAY higher, so the discount really ain't that much.
Not as good as Walmart had forecast but the fact they had any sales growth is a hell of an accomplishment given the economic situation.Quote:
Originally Posted by Spin
"Sales at stores open at least a year rose 1.7 percent last month, missing the 2.7 percent average of analysts’ estimates compiled by Retail Metrics Inc."
^You would expect a positive YoY figure to match the effort and expenditure on new lines in every store....
Here is a very good and to-the-point article about the New Deal approach and Ronald Reagan's approach to massive economic problems in the US.
The article is too long to cut-copy-and-paste.
Please read, then comment:
Very interesting perspective below.
Did getting into WWII save the New Deal?
Pat Buchanan: Obama's choice — FDR or Reagan - Patrick J. Buchanan- msnbc.com
Here is Peter Schiff interviewing. This is one of the BEST interviews he's given, IMO.
The video an audio a little out of sync.
But this is, very telling.
We'll see if Schiff proves right this year and the next:
YouTube - Peter Schiff predictions
Diversify your investments.
I've dumped a few mil in a house and a car in Thai... Life is good....
I'd love to hear some suggestions where better than blue chip stocks/bonds are better than the US .... Iceland? /////
Buy and hold ..... stuff...
^^Good stuff Milkman.
Did you or I find that first? I posted it elsewhere earlier today.
anyway just thought I'd drop by and say hello.
cheers.
"clutch"
^^Gold under the bed.
^^^Good vid, MM. Thanks.
Texpat: I agree. Diversify. And Schiff notes to diversify out of "dollar-based" investments.
SKkin: hello and welcome. (I suppose we've chatted before.) I don't know where you may have posted this latest Schiff clip. But perhaps 2 are better than 1. This is one of his best, IMO.
Jet: Gold is an option, and non-dollar based investments.
Schiff predicts high inflation. Not everyone agrees. But people should keep this possibility in mind.
Here's an article by Schiff on January 9, 2008.
I like his articles from his homepage/web site because he puts these things into laymen's terms.
He notes the case for inflation and possible hyper-inflation, and notes that the Fed is having the Treasury Debt. print more money to buy....US Treasurys.
Link: Euro Pacific CapitalQuote:
January 9, 2009
The Fed’s Bubble Trouble
https://teakdoor.com/images/smilies1/You_Rock_Emoticon.gif
A few weeks ago when the Fed announced a strategy designed to bring down long-term interest and home mortgage rates through unlimited Treasury bond purchases, government debt staged a spectacular rally. To the unschooled market observer, the spike may be difficult to understand. After all, why would the value of Treasury bonds rise while their underlying credit quality is deteriorating faster than Bernie Madoff’s social schedule? The move is actually a perfect illustration of the tried and true Wall Street strategy of “buy the rumor and sell the fact”.
If it is well known that Fed will be a big purchaser of Treasuries, those buying now will be positioned to unload their holdings when the buying spree begins. If the Fed pays higher prices in the future, traders can earn riskless speculative profits. If the traders lever up their positions, as many are likely doing, even small profits can turn unto huge windfalls.
The downside of course, is that all of the demand for Treasuries is artificial. Treasuries are now in the hands of speculators looking to sell, not investors looking to hold. These players are analogous to the mid-decade condo-flippers who flocked to new developments for quick profits. They did not intend to occupy their properties, but rather flip them to future buyers. Once these properties came back on the market, condo prices collapsed, as developers were forced to compete for new sales with their former customers.
This is precisely what will happen with Treasuries. Just as the U.S. government issues mountains of new debt to finance the multi-trillion annual deficits planned by the Obama Administration, speculative holders of existing debt will be offering their bonds for sale as well. In order to prevent a complete collapse in the bond prices the Fed will be forced to significantly increase its buying.
However, since the only way the Fed can buy bonds is by printing money, the more bonds they buy the more inflation they will create. As inflation diminishes the investment value of low-yielding Treasuries, such a scenario will kick off a downward spiral. But the more active the Fed becomes in their quest to prop up bond prices, the bigger the incentive to hit the Fed’s bid. The result will be that all Treasuries sold will be purchased by the Fed. But with the resulting frenzy in the Treasury market, and with inflation kicking into high gear, we can expect that demand for other debt classes that the Fed is not backstopping, such as corporate, municipal and agency debt, to fall through the floor, pushing up interest rates across the board.
In order to “save” the economy from these high rates the Fed will then have to expand its purchases to include all forms of debt. If that happens, run-away inflation will quickly turn into hyper-inflation, and our currency will be worthless and our economy left in ruins.
To avoid this nightmare scenario, the Fed should pull out of the bond market before it’s too late and let prices fall to where real buyers, those willing to hold to maturity, re-enter the market. Given how high inflation will likely be by the time this happens, my guess is that long-term Treasury yields will have to rise well into the double digits to clear the market.
But we should know that the bursting of the bond market bubble will have even more dire consequences than the bursting of prior bubbles in stocks and real estate. Significantly higher interest rates and inflation that will result will severely compound the current problems. Imagine how much worse our economy would be if we faced double digit interest rates? In addition, not only will homeowners be confronted with record high mortgage rates, but the Government will be staring at trillion dollar annual interest payments on the national debt, making interest by far the single largest line item in the Federal budget. Just like homeowners who relied on teaser rates, the Government will face a similar problem when all its low-yielding short-term debt matures.
The grim reality of course is that when the real estate bubble burst the Government was able to “bail-out” private parties. However, when the bond market bubble bursts, it will be the U.S. Government itself that will be in need of the mother of all bailouts. If U.S. taxpayers or foreign creditors are unwilling or unable to pony up, and if the nightmare hyper-inflation scenario is to be avoided, default will be the only option. If misery really does love company, Bernie Madoff’s clients might finally find some comfort.
Retails sales numbers for December just this moment released indicate that things are still getting worse, in fact right now all data coming out of America is horrifying.
Dont confuse the recent upward movement in the market with improving economic conditions, that will be many investors biggest mistake:(
Econoday Report: United States : Retail Sales January 14, 2009
^And I told you what a few months ago...? :rolleyes:
An extract from a daily newsletter I get in my email.
Subscribe
The newsletter is certainly connected to the sales of certain commodities and therefore may well have their own agendas. However they do raise some interesting points.
"If America's leaders are going to have any success at all, they have to understand the game they're playing...and turn to someone for leadership who knows a queen from a one-eyed jack...someone who keeps an ace up his sleeve, just in case. America needs better leadership; not these clueless jokers - Bernanke and Paulson. America is blowing up a bubble in public finance; it needs someone who understands how the public finance system works.
America needs Bernie Madoff. Reports tell us that Madoff has not been arrested. He is at home, apparently watching the news on TV and waiting to hear from the gendarmes.
Why not take advantage of his free time? Why not ask him to do some community service?
*** In a broad sense, the social welfare economies of all the advanced Western nations are nothing more than Ponzi schemes. Typical is the Social Security system of the United States of America. It survives only as long as there are enough new contributors to cover the promises made to the old ones. As in any Ponzi scheme, the first ones into the system do very well. The very first beneficiaries put in little and got a lot out - depending on how long they lived. But as time goes by, the deal goes bad. Middle-aged people today would be better off with a private pension system...and the young are unlikely to see any benefits at all.
John Law never lived to see America's system of public finance at work. Nor did Charles Ponzi. But even without a paternity test, each would have recognized it as his own.
Bernie Madoff is still alive as of this writing. He is the world's reigning champion...title holder in the Ponzi league. Yet, compared to America's system of public finance, his scheme was penny ante...chickenfeed. Madoff's swindle cost investors only about $50 billion. America's dollar swindle will cost them trillions.
The nature of the scheme is most easily understood by looking forward rather than backward. President Obama announced last week that Americans faced "trillion dollar deficits for years to come." Already, the estimate of the deficit for 2009 was $1.18 trillion. Some experts predict a deficit over $2 trillion. At least one guesses that it will come in over $3 trillion, if not in 2009 then the following year.
These huge deficits do not seem to disturb the sleep of the homeland bound citizens. A trillion-dollar annual deficit, over 5 years, would add about $50,000 to each family's burden of debt. But some intuition assures Americans that they will never have to pay it. By instinct alone, they know it's a Ponzi scheme.
The day is long past when Americans could say "we owe it to ourselves." A large part of U.S. borrowing is taken up foreigners. There is no way these enormous deficits could be financed by domestic savings. The foreigners have to pony up the dough, or the United States will run out of money. They do so in the hope of getting the money back - with interest. But how can the United States pay back the money it borrows? It has no earnings. It has no surpluses. Instead, it must borrow more to service past borrowings. It must depend on bad money to come in so the good money can go back out. It is a scheme John Law would love; Ponzi would be proud of; and Bernie Madoff can operate.
As we write nothing is more remarkable than the credulity and gullibility of the world's patsies. Bernie Madoff's oldest friends would come up to him and practically beg him to take their trust funds. People joined his Palm Beach country club just so to get close enough so he could separate them from their money.
And now, investors practically stumble over one another in their eagerness to lend money to world's biggest debtor. In all the astonishing figures now crossing the big board probably none is more amazing that the current yield on U.S. Treasury paper. At barely over 2% yield on 10-year notes, investors lend money to the feds and ask nothing in return...except their money back.
Of course, every Ponzi scheme must end. And the scheme of U.S. public finance is already reaching its conclusion. As we write, lenders have still not wised up. But they've gotten poorer."
Didn't know of this thread. Lots of interesting stuff here.
Since gold is priced in $USs like oil, it doesn't really give people in other countries a true idea of its value unless you first convert your currency to $USs and then do the calculation.
And with the wild swings in the tradable value of $USs over the past several months, the quoted $US price of gold could be deceiving to the other 96% of the worlds population.
When the tradable value of the $US dumps the price of gold will appear to soar. but in real tradable terms an ounce of gold may not actually buy any more goods or services. Therefore, will the actual price of gold have truly gone up (except for those buyers in USA) ? It all depends on what currency gold is priced in, and the $US price can be a bit misleading to people in other countries whose currencies have escalated against the $US. Same, same with oil. $40 a barrel means shit unless you live in USA. If you you happen to be one of the other 96% of the worlds population, you have to do the conversion into $USs first before you can work out if oil has gone up or down in real terms.
As Einstein once said, -- everything is relative.
Here's an article by Paul Craig Roberts: Note the reference to Bill Gates and B1-B Visa. Insourcing as well as Outsourcing.
January 11, 2009Quote:
Paul Craig Roberts [email him] was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand. He is the author of Supply-Side Revolution : An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click here for Peter Brimelow’s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct
Quote:
The collapsing US economy
Link: VDARE.com: 01/11/09 - The collapsing US economy[at]- Will the Government Turn to the Printing Press?Quote:
Will theGovernment Turnto the Printing Press?
By Paul Craig Roberts
According to the Bureau of Labor Statistics, nonfarm payroll employment declined by 3,445,000 from December 2007 through December 2008.
The collapse in employment is across the board.
Construction lost 520,000 jobs. Manufacturing lost 806,000 jobs. Trade, transportation and utilities lost 1,495,000 jobs (retail trade accounted for 1,120,000 of this loss). Financial activities lost 145,000 jobs. Professional and business services lost 713,000 jobs. Even government lost 188,000 jobs.
Only in health care and social assistance has the economy been able to eke out a few new jobs.
Many analysts believe the job losses will be as great or greater during 2009.
Moreover, the reported job losses are likely understated. Noted statistician John Williams (Shadow Government Statistics - Home Page) reports that biases in measurement have understated the job loss over the last 12 months by 1,150,000 jobs.
Williams also notes that the official unemployment rate is an enormous understatement, due in part to the Clinton administration’s decision not to count as unemployed those discouraged workers who have been without jobs for more than one year. Williams reports the unemployment rate as it was measured prior to "reforms" designed to minimize the measured rate of unemployment. According to the methodology used in 1980, the US unemployment rate in December 2008 reached 17.5 percent.
Yes, "our" government lies to us about economic statistics, just as it lies to us about "terrorists," "weapons of mass destruction," "building freedom and democracy in the Middle East," and the Israeli-Palestinian conflict.
An objective person would be hard pressed to find any statement made by the US government that is reliable.
The collapse of the job market means even harder times for last year’s and this year’s crops of college graduates. The offshoring of professional jobs and the widespread use by US corporations of H-1b, L-1, and other work visa programs for foreigners have left many recent American university graduates without careers.
Recently, Bill Gates of Microsoft was pleading with Congress to allow even more foreigners in on work visas. According to Gates, there is a shortage of American workers despite a 17.5 percent unemployment rate. I personally know American computer engineers, both seasoned and recent graduates, who cannot find jobs.
What Gates and American corporations want is cheap labor, in effect indentured servants, unprotected people who don’t demand an American standard of living and who have no student loans to repay.
If Congress expands the work visas as US unemployment mounts, we will have one more piece of evidence that "our" representatives have no sympathy for the American people.
Where were America’s leaders while the economy slipped over the precipice?
Our leaders were telling us lies in behalf of special interests into whose pockets Washington was pouring the taxpayers’ money. Our leaders engineered wars that put billions of dollars into such disreputable pockets as Halliburton’s, the firm of the American outlaw, Dick Cheney, and into Blackwater, supplier of the overpaid mercenaries that the Bush Regime uses to beef up its military force in Iraq. Some of the taxpayers’ billions, of course, recycled into "our" representatives reelection campaign funds.
Our leaders were too busy making trips to Israel to reaffirm their support for Israel’s ongoing theft of Palestine and for wars that enable this theft.
Our leaders were too busy serving financial interests by dismantling regulatory barriers to over-leveraged greed. The extraordinary level of leveraged debt and the fraudulent financial instruments resulted in annual compensation for hedge fund managers and investment bankers larger than a king’s ransom.
When the leveraged mortgages went bust, the banksters declared a "crisis" and Congress responded by ripping off the American taxpayers for another trillion dollars.
More is to come. Credit card debt, car loans, and commercial real estate mortgages have been securitized, too. There is little doubt there are derivatives based on this enormous pile of debt. As each "crisis" unfolds, it will mean more bailout rewards for the crooks who deep-sixed the US economy.
It is not implausible that by the end of this year the unemployment rate, honestly measured, will be as high as during the Great Depression.
Few in Washington think there is any cause for alarm. Obama is calling the situation "serious" not because he believes it is but in order to get another trillion dollar "stimulus" package on the taxpayers’ books. Stimulus will do the trick, economists say, and, moreover, the Federal Reserve has already extended $2 trillion in loans, but won’t say to whom the money has been lent.
This massive expansion of new debt, economists think, is going to fix the economy and put people back to work. They think the solution to excessive debt is more debt.
The federal government budget deficit for the 2009 fiscal year will be $2 trillion at a minimum. That is five times larger than the 2008 budget deficit.
How can the Treasury finance such a massive deficit?
There are three sources of financing. Possibly people will flee from stocks, bank deposits, and money market funds into Treasury "securities." This would require a form of "money illusion" on the part of people. People would have to believe that investments can be printed, and that printing so many new Treasury bonds would not dilute the value of existing bonds or reduce their chance of redemption. They would have to believe that the bonds would be repaid with honest money, not by running the printing presses.
A second source of financing might be America’s foreign creditors. So far in our descent into massive debt foreigners have footed the bill. Our foreign creditors now hold very large amounts of US debt and other dollar-denominated
"securities." They are likely to develop a case of cold feet when they see a $2 trillion expansion in US debt in one year. Their most likely response will be to start selling their existing holdings.
Who would purchase them? The only way the Treasury can redeem the bonds that come due each year is by selling new bonds. Not only must the Treasury find purchasers for $2 trillion in new debt this year but also must find buyers for the bonds that must be sold in order to redeem old bonds that come due.
The third source of financing is for the Federal Reserve to monetize the debt. In other words, the Treasury prints bonds and the Fed purchases them by printing money. The supply of money thus expands dramatically in relation to goods and services, and high inflation, possibly hyperinflation, would engulf America.
At that point the US dollar, if still on its feet, collapses. The import-dependent American population, dependent on imports for their mobility, their clothes, shoes, manufactured goods, and advanced technology products, no longer will be able to afford these imports.
A scary scenario? Yes. Overdrawn? Perhaps, but perhaps not. The United States has spent the last 7 years in pointless wars that benefited only the military-security complex and Israel’s aggression against Palestinians and Lebanon. According to prominent experts, the out-of-pocket cost and already incurred future liabilities of Bush’s wars comes to $3 trillion.
The cost of the Bush Regime’s wars, together with the 2009 budget deficit that Bush has bequeathed to Obama, equals half of the accumulated national debt of the United States.
Several years ago United States Comptroller General David Walker informed Congress and the White House that the accrued liabilities of the US government exceeded the ability to pay. Yet, "our" leaders ignored the Comptroller General and rushed headlong to add more trillions of dollars to federal liabilities. In effect, the United States is bankrupt at this present moment. According to generally accepted accounting principles, the federal government has a negative net worth of $59.3 trillion.
Who is going to lend to a bankrupt government that is ruled by financial crooks, the military-security complex, and the Israel Lobby? How long will the world finance US aggression that disrupts energy prices, keeps the world on edge, and makes America’s creditors complicit in war crimes?
No harm in printing another 5 trillion then is there:)Quote:
Originally Posted by Milkman
Well, the rest of the world is!Quote:
Originally Posted by Milkman
For a time anyway. Reason being that so many countries like China and Japan are in so deep with $US loans that it would virtually bankrupt their own economies if they let the $US world hegemony fail.
Every country knows the current system of trading in $USs which are not backed by anything but a printing press is not sustainable. But every country has so much of their national wealth hoarded away in $USs that no one, not any country, including places like Russia, want to see the $US crash . Every country is hoping and wishing the inevitable will not happen. Hoping and wishing the eternal bubble of financial expansion in $USs without an accompanying expansion in productivity will continue forever. They know that cant happen, but the alternative is a complete collapse of the world economy and a subsequent redistribution of wealth which is uncertain.
So they all do their best to defer it as long as possible by pouring money into a failed system.
Here's a recent 5 minute discusson by Schiff on January 8, 2009 about Obama's government plan to help the US in the difficult time.
I agree with Schiff, that Obama wants bigger government and printing more more or borrowing it from the Chinese or Japanese.
Schiff also said the recession will last for perhaps a full decade.
We'll wait and see.
YouTube - Peter Schiff January 8 2009 Fox Business
It will all settle down eventually. The recent experiment with the $US as the measure of wealth on the world stage has created a false impression of actual US wealth. US governments of late borrowed money (which is actually tradable goods and services when it all comes out in the end) to prop up their spending and the US people got sucked in to believe they could borrow their way out of debt also.
Now the USA finds itself oweing a lot of money to the rest of the world without any way of paying it back. And the US government thinks if it borrows more money it will make things right again. Printing more $USs is the next option. But of course an oversupply of $USs devalues the currency both domestically and on the international market. There aint many options left unless USA can create a miracle and suddenly increase productivity in exports in line with the tradable value of their currency. Well, thats not going to happen as we all know. Its simply impossible. And the US government doesn't have control of the international trading value of the $US currency. As the worlds default trading currency the $US is bigger than the US government. The big money people are pulling out of actual productive investments in countries all around the world and putting their reserves into $USs. The $US is booming when it should be busting based on productivity. But the reason why it is booming is that it is the worlds trading medium, and nothing to do with the health of the US economy. This is a double edged sword for US political leaders as it tempts them to go deeper into debt and print more money to keep things going, while at the same time knowing that they are creating an even bigger bubble based on unsustainable debt.
But then again, why should US political leaders NOT take advantage of this current situation when the rest of the world is prepared to trade their labour and products for $USs that can be churned out at will?
The current Obama strategy is no different than it would have been under any other administration, -- spend, borrow and print. As long as the rest of the world is dumb enough to trade their productive labour for $US paper money the US will prosper at the rest of the worlds expense.
But of course we all know where this is going, and when the rest of the world realizes they have been had and stops investing in $USs the value of $USs will drop dramatically. So too will the US debt in real terms of tradable goods and services in equivalant value of $USs.
Borrow, spend and print aint such a bad strategy for USA after all, because in the end other countries around the world will pay for the US excesses of recent years. Not a bad trick hey?
^ Its a great trick and one that I'm keen to profit from when it collapses. Do you have any suggestions on how to be positioned financially / investment ideas for the day when the inevitable occurs?
rice.
^The problem post financial collapse will be trade itself. Collapse of the units of trade (currency), means of trade (banks) and mechanics of trade (shipping) will mean that, although on first consideration, rice would be a good bet. However when considering issues such as storage, theft and loss by pests/damp, it may not look so bright after all.
storage and transport would be issues , but rice and other food and the ability to produce more of it could be a solid base for many.
and on the transport note , I think oil will bottom out around 20USD ( if there still is a USD then ) and go back to 25-30.
though I would also say that oil is about 25-30 USD now at the USD index from 6 months ago compared to the inflated USD now.