Thread: US Stocks Plunge, Dow Falls Over 300 Points As Fears Grip Market

Some food for thought (hope you are hungry)

1. The Euro is going to become a transactional currency. Like every other currency.

2. Bretton Woods 2 is flawed - see FOFOA's dilemma. Bretton Woods 2 is failing -> separation of monetary functions.

3. The Euro architects understood this inevitability, and "attempted" to plan for this inevitable occurrence. They understood they "money concept" discussed in FOFOA's "Return to Honest Money." And the horror to humanity if this were destroyed altogether and back to a "barter like state" we went- hence the Euro.

4. The separation of monetary functions means currencies now held as stores of value (largely held as "derivative" debt instruments under Bretton Woods 2) must devalue.

5. As explained in FOFOA's "Synthesis," the "hope" is that the architectural design of the Euro will allow the Euro's devaluation to be largely directed into gold (hence the 0% tax on gold within the zone)and thus avert a "massive hyperinflation", in contrast to the dollar's devaluation and hyperinflation against real goods.

6. From Greece is the Word - "Freegold, then hyperinflation." The dollar will hyperinflate. The Euro will, as FOFOA wrote, **probably** not hyperinflate. If you have some humanity and understand what is coming, you , HOPE the Euro will not hyperinflate against the real world as the dollar will. But the Euro will devalue.

7. As FOA wrote, the Eurozone is trying to pull in as many trading partners as possible to **SUFFER LESS.** The Euro is no example of ephemeral perfection, but in relation to the dollar's end game, it's a ray of hope for humanity as compared to the destruction of the money concept.

8. As Another wrote, if the Euro fails, gold becomes the oil currency. No one with an appreciation for the import of that idea is rooting against the Euro.

9. Having humanity = "hoping," (perhaps praying) the Euro survives. Don't get lost in idiotic political ideology, it's not about socialism or liking Europeans - it's about understanding what money really is - a concept, (to poorly paraphrase, its a set of socially remembered barter transactions) - and thus appreciating the horror that comes with it's collapse and a "return" to "more barter-like" state.

I dont understand why some people here argue against somebody that specializes in a certain field. What makes people think they understand monetary theroy without actually studying it ?

Originally Posted by socal

5. As explained in FOFOA's "Synthesis," the "hope" is that the architectural design of the Euro will allow the Euro's devaluation to be largely directed into gold (hence the 0% tax on gold within the zone)and thus avert a "massive hyperinflation", in contrast to the dollar's devaluation and hyperinflation against real goods.


6. From Greece is the Word - "Freegold, then hyperinflation." The dollar will hyperinflate. The Euro will, as FOFOA wrote, **probably** not hyperinflate. If you have some humanity and understand what is coming, you , HOPE the Euro will not hyperinflate against the real world as the dollar will. But the Euro will devalue.

How is it you don't understand...this is understood by all

....and why is it that you biligerently fail to move on to the next logical conclusion that precious metals are part of the same defunct system.

You have spent hours cutting and pasteing information that is readily available to the world....information that was studied by some of us while you were still in highschool....

it is to your credit that like all young men you wish to alert older members of this community to the coming future...with absolutely no thought to your own aclaim.

Well done indeed.

....but can you move on from your "Chicken Little" cronicals and instead of pasteing what...to all is old news....come up with origional interlectual property that will guide the rest of us, who obviously, by your account are somewhat lacking in this gift.

Originally Posted by socal

" There is no other way to put this, all you central bankers are thick ! I am Baby Maker, I know better then all of you."

Now that is blaitant perjoury and character assisation....read carefully the postings and you may begin to understand the drift of my contribution...not just to you....Socal...but to those you are trying to recrute to your delusion..to reaffirm that delusion to your own good self...

1. There is no safe place.

2. The monetary system is in grave danger...may even fail.

3. Protect your family and yourself by investing wisely in defensive generational utilities...water, food, property.

4. Socal...unlike you I do not know better than you or anyone...I've have survived trade for forty years...past results are no indication of future outcomes, but I will go with my experience and judgement and try not to be distracted by some hystrical schoolboy named....Socal...or any thing else for that matter.

5. If you have bothered to think on what I have posted....even you may recognise words like...sober...caution...deversify...realignment.. .protect...

advice given freely with no agender...other than to help.

Originally Posted by socal

I am not a Psychologist so I cant undo the damage done. You know the damage is deep when facts and history are blatantly denied.

Can help you here...can recommend a few good ones....

the delusion that only you can see and recognise what is the financial future needs be addressed...
and certainly that phalic like fantasy of your "Golden Horn"...

you do realise that you are only singing from the same damaged text...don't you.



Now muppet....I am definately going to have to give you a pass...
the market opens in a hour....and I have work to do.

Try for something origional....show us you can think....and are not just a "timeshare salesman"...with and old rental to flog.

Sept. 11, 2011, 8:41 p.m. EDT
China trade surplus shrinks in August


By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — China’s trade surplus narrowed sharply in August as imports climbed to a record, according to weekend reports.
China’s trade surplus totaled $17.8 billion in August, according to reports citing government data, down from $31.5 billion in July.

The result was well below expectations for a trade surplus of $23.4 billion, according to a survey of economists compiled by Dow Jones Newswires.
Imports rose 30.2% from a year earlier, and gained on the 22.9% rise in July. Exports rose 24.5% on the same year-ago period, and up from a 20.4% lift in July, the reports said.
The rebound in imports was reportedly largely due to Chinese companies’ restocking of raw materials including refined oil, iron ore and other metals.

Virginia Harrison is a MarketWatch reporter based in Sydney.

GFF
0.668 0.645 07/09/11 700,000 451,500.000 -15,820.000 -3.390 11:13 AM

U.S. Stock Futures
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Nasdaq -13.25 / -0.61% Level2,151.00 Fair Value2,158.76 Difference-7.76 Data as of 8:20pm ET
Dow -82.00 / -0.75% Level10,867.00 Data as of 8:36pm ET

Simple 100-level economics (which I have studied) would tell me that China will not call in its US chips (US debt holdings) because they were aquired when the dollar was roughly 25% more vlauable then it is now. That means China would lose real money in real terms UNLESS the debts were financed with repayments in RMB - which I don't beleive they are. They are in USD.

Secondly, a call by China for repayment on the USD debt would trigger a further collapse in the USD, making the debt near worthless.

And that is why the present status quo continues. It's a stand-off and everyone knows it.

HERE SOMETHING THAT IS FRIGHTING....IT'S ONLY OPINION...
BUT SOMEWHAT INDICTIVATE OF DAMNED IF YOU DO AND DAMNED IF YOU DON'T...
DON'T THINK THE BANKS COULD EAT THE LOSS...THEY WOULD RATHER SPREAD IT OUT OVER TIME..



Sept. 12, 2011, 12:00 a.m. EDT
Massive default is best way to fix the economy

Commentary: Clearing away the debt is the only way forward

By Brett Arends, MarketWatch
NEW YORK (MarketWatch) — You want to fix this economic crisis? You want to put people back to work? You want to light a fire under the economy?
There’s a way to do it. Fast. And relatively simple.
But you’re not going to like it. You’re not going to like it at all.
Default. A national Chapter 11 bankruptcy.
The fastest way to fix this mess is to see tens of millions of homeowners default on their mortgages and other debts, and millions more file for bankruptcy.
I told you that you wouldn’t like it.
I don’t like it much either. It sticks in the craw that people got to borrow all that money and won’t have to pay it back.
But you know what? The time to stop that was five or 10 years ago, when the money was being lent.
It’s gone.
And mass Chapter 11 is, by far, the least obnoxious solution to our problems.
That’s because the real cause of our economic slump isn’t too much government or too little government. It isn’t red tape, high
taxes, low taxes, the growing divide between the rich and the poor, too much government debt, too little government debt, corporations, poor people, “greed,” “socialism,” China, Greece, or the legalization of gay marriage. It isn’t, in short, any of the things all the various nitwits say it is.
It’s the debt, stupid.
We’re hocked up to the eyeballs, and then some. We’re at the bottom of a lake of debt, lashed to an anchor. American households today owe $13.3 trillion. That has quadrupled in a generation. It has doubled just in the last 11 years. We owe more than any other nation, ever. And for all the yakking about how people are “repairing their balance sheets,” they’re not. From the peak, four years ago, they’ve cut their debts by a grand total of 4%.
And a lot of that was in write-offs.
More than a quarter of American mortgages are underwater. Many are deeply underwater.
In states like Nevada and Florida the figures are astronomical.
The key thing to understand is that most of that money has gone to what a fund manager friend of mine calls “money heaven.” Most of these debts will never, ever be repaid in real money. Not gonna happen.
Think how corporations handle this kind of situation.
It happens all the time. Banks and bondholders find they have lent, say, $1 billion to a company whose assets and earning capacity will only repay, say, $300 million. What happens? Does the company soldier on with
$1 billion in debt it can never repay? Do the stockholders send back their dividend checks? Do they sell their homes to pay off the bonds?
Not a chance. The company goes through Chapter 11. The creditors ‘fess up to their blunder, they face up to their losses, and they fix it. They write down the loans and take the equity instead. The balance sheet is cleaned up, and the company starts again.
Why not homeowners?
Most of the objections to this idea are well-meant, but misinformed.
A fund manager I asked raised the issue of “moral hazard.” Why should anyone pay their mortgage if some people were getting a pass, he asked?
The answer: For the same reason GE and Verizon kept paying the coupon on their bonds while Lehman Brothers defaulted. You want to keep your credit standing. And you want to keep your equity.
If a company defaults, the stockholders get wiped out. If a homeowner defaults, the bank takes the home. I like keeping my home, as well as my savings, and my credit rating. Most people are the same.
Some will say the financial impact would be terrible. But the banks would just be facing up to reality. And a lot of these mortgages are already trading at distressed levels.
Some will say, “why should people get away with borrowing imprudently?” The response: Why should the banks get away with lending imprudently?
There’s no point telling people not to borrow money. They always will. I have yet to see a Wall Street executive turn down free money. I have yet to see a company in an IPO say, “Don’t give us so much money!” People like money. They will take as much as they are offered.
In a free economy, the people who are supposed to ration the loans are the lenders. Banks are supposed to lend carefully and responsibly. What else are they paid for? Accepting deposits? You could hire people on minimum wage to do that.
Some will say, “it’s immoral” for borrowers to default. Alas, most of these people are being inconsistent. They are usually the first ones to defend a company when it closes down a factory and ships the jobs to China, or pays the CEO $50 million for doing a bad job, on the grounds that “this ain’t morality, pal, this is business!”
But when Main Street wants to do the same thing, they start screaming “Morality! Morality!”
We don’t live in an economy based on morals and fairness.
T Mobile doesn’t charge me what’s “fair” each month. They charge me what’s on the contract. Your employer doesn’t pay you more if you need more. He pays you your economic value. Did Dick Grasso give back his bonus? Bob Nardelli? Dick Fuld? We operate in an economy based very firmly on contracts, and nothing else. Companies, and the wealthy, live by the letter of the law.
American mortgage contracts allow for default. Half of the states in this country are “non-recourse,” which broadly speaking means you can send in the keys and walk away from a bad loan. The other half are sort of “semi-recourse.” The bank can come after you for any shortfall, but only in a limited way. Broadly speaking they can’t touch retirement accounts and basic assets. You can typically keep your car, personal effects, often things like life insurance.
Most of the people who are deeply underwater don’t have that much anyway.
And the banks knew this. When they were lending $500,000 to a bus driver with $1,000 in his checking account, they knew that their loan was only guaranteed by the value of the home.
If they didn’t know it, they should have. Their incompetence is not our problem.
It’s tempting to say, “if someone borrows money, they should repay it.” Generally speaking, I agree. I pay all my debts. But while that makes sense when applied to any individual, it doesn’t work so well when it’s applied to everyone.
We have tens of millions who cannot repay their debts. But they are all trying to. That sucks huge amounts of money out of the economy. And that means these people cannot function properly as consumers or workers. That’s the reason people aren’t coming into your restaurant. It’s the reason people aren’t taking your yoga class. It’s the reason they haven’t hired you to redo the kitchen.
And so tens or hundreds of millions of perfectly responsible business owners and employees are also suffering from this slump. That’s the reason we have a shortage of demand. That’s the reason no one is hiring.
Even worse: People who are underwater on their mortgage, but who do not want to default, cannot move to where the jobs are either. They are stuck with their home.
You want to break this logjam? Try Chapter 11 for the nation. Massive defaults. Clear the decks, clean the books.
What are the alternatives?
Government cutbacks, higher taxes, and a balanced budget? In a normal economy, fine. But in this situation, when the private sector is also slashing its spending, that could lead to absolute catastrophe. That’s what happened in the Great Depression. And our debt levels are worse than in the Great Depression.
Government borrowing? That’s the Keynesian solution. “The consumer can no longer borrow like a crazy person,” says the Keynesian, “so Uncle Sam has to do so instead.” It’s just transferring private madness to public madness.
Inflation? That’s probably the least bad alternative. But it’s just default by another name. And instead of taking money from the imprudent banks that caused the problem, it robs grandma’s savings.
Twice before, advanced economies have gone through what we are going through now — namely a massive hangover after a massive debt binge.
The first was the U.S. in the 1930s, the second was Japan in the 1990s.
The U.S. didn’t get out of it until the 1940s unleashed inflation and reduced the debt’s value in real terms.
Japan still hasn’t gotten out of it. They have deflation, while government debt has skyrocketed.
The correct moral hazard is to punish the banks who lent imprudently by making them eat their own losses.
I told you that you wouldn’t like it. I don’t either. But the alternatives are worse.


Brett Arends is a senior columnist for MarketWatch and a personal-finance columnist for the Wall Street Journal.

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Dow -176.00 / -1.61% Level10,773.00 Data as of 5:23am ET

[quote=baby maker;1870983]

Originally Posted by socal

5. As explained in FOFOA's "Synthesis," the "hope" is that the architectural design of the Euro will allow the Euro's devaluation to be largely directed into gold (hence the 0% tax on gold within the zone)and thus avert a "massive hyperinflation", in contrast to the dollar's devaluation and hyperinflation against real goods.


6. From Greece is the Word - "Freegold, then hyperinflation." The dollar will hyperinflate. The Euro will, as FOFOA wrote, **probably** not hyperinflate. If you have some humanity and understand what is coming, you , HOPE the Euro will not hyperinflate against the real world as the dollar will. But the Euro will devalue.

How is it you don't understand...this is understood by all

....and why is it that you biligerently fail to move on to the next logical conclusion that precious metals are part of the same defunct system.

You have spent hours cutting and pasteing information that is readily available to the world....information that was studied by some of us while you were still in highschool....

it is to your credit that like all young men you wish to alert older members of this community to the coming future...with absolutely no thought to your own aclaim.

Well done indeed.

....but can you move on from your "Chicken Little" cronicals and instead of pasteing what...to all is old news....come up with origional interlectual property that will guide the rest of us, who obviously, by your account are somewhat lacking in this gift.

haha. Obviously you have seen and heard of none of this. None of it is mainstream information. You are just a typical baby boomer (like the rest of the bommers here)who fully expects this to be just another cycle within Bretton Woods 2. You are investing for this to be a cycle within Bretton Woods 2 (buying stocks) and you kick and scream at anything that suggests otherwise.

Originally Posted by socal

" There is no other way to put this, all you central bankers are thick ! I am Baby Maker, I know better then all of you."

Now that is blaitant perjoury and character assisation....read carefully the postings and you may begin to understand the drift of my contribution...not just to you....Socal...but to those you are trying to recrute to your delusion..to reaffirm that delusion to your own good self...

1. There is no safe place.

2. The monetary system is in grave danger...may even fail.

3. Protect your family and yourself by investing wisely in defensive generational utilities...water, food, property.

Bretton Woods 2 to the death eh ? You cant go without your "easy money" Bretton Woods 2.

4. Socal...unlike you I do not know better than you or anyone...I've have survived trade for forty years...

2011 minus forty = 1971

When did Bretton Woods 2 start ????? ..... 1971.

5. If you have bothered to think on what I have posted....even you may recognise words like...sober...caution...deversify...realignment.. .protect...

advice given freely with no agender...other than to help.

I am not giving advice. I am just presenting past history of the monetary order and how the authorities have prepared for the future, to the best of their ability. Because it is a fact that monetary orders to not last more then 20 to 30 years.

Gold was the canary in the Bretton Woods 1 coal mine and Bretton Woods 1 died. Gold is also the canary in the Bretton Woods 2 coal mine and it is dying. I am just pointing to the dying canary.

Anyone care to comment on the obvious...

Please note Sovereign Debt problems increasing and gold falling...
this we were told will not happen by the Gold Bugs...
maybe their right...but not indicated...at this time...

Metals Stocks Archives | Email alerts
Sept. 12, 2011, 3:14 p.m. EDT
Gold tumbles as Europe fears spark run to cash

By Laura Mandaro and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures on Monday fell to their lowest in two weeks as concerns about French banks sparked a stock selloff and spurred investors to sell other assets to cover losses.
Gold for December delivery /quotes/zigman/661658 GC1Z +0.54% was down $46.20, or 2.5%, at $1,813.30 an ounce on the Comex division of the New York Mercantile Exchange.
“Gold sell stops are being placed as asset managers need to raise cash to stem portfolio losses,” wrote George Gero, vice president in global futures at RBC Capital Markets, in emailed comments.
With gold’s recent record run, some investors also have judged the metal to be overvalued, according to Stephen Platt, a commodity analyst with Archer Financial Services in Chicago.
Gold set an intraday record of $1,923.70 an
ounce Tuesday last week, but the failure “to make new highs and sustain them was a source of disappointment” that may have spurred the recent selling, he said.
The retreat for gold deepened at the start of the New York trading session after a selloff for bullion in Asia and European market action, alongside a pullback in equity markets around the globe.
European and U.S. stocks tumbled on a report that Moody’s Investors Service is considering a downgrade of French banks due to their exposure to Greece. Stocks had dropped sharply Friday on worries that the euro zone’s more stable economies were becoming more reluctant to prevent the so-called peripheral countries, such as Greece and Italy, from defaulting.
The Dow Jones Industrial Average /quotes/zigman/627449/delayed DJIA +0.63% added to losses, recently off 106 points, or 1%, at 10,884. Europe’s Stoxx 600 /quotes/zigman/2380150 XX:SXXP -2.52% dropped 2.5%. Japan’s Nikkei Stock Average /quotes/zigman/5986735 JP:NIK -2.28% was off 2.3%.
Exacerbating the pressure on gold, the dollar index /quotes/zigman/1652083 DXY -0.12% , which measures the U.S. unit against a basket of six major rivals, rose to 77.524, from 77.066 late Friday in North American trading.
A stronger greenback tends to make gold and other dollar-priced commodities less attractive to holders of other currencies. Read more about currencies.
The broader metals complex also started the week on a downbeat note. Silver for December delivery /quotes/zigman/663010 SI1Z +0.69% fell $1.41, or 3.4%, at $40.22 an ounce.
December copper /quotes/zigman/635638 HG1Z +0.87% dropped 4 cents, or 0.9%, at $3.97 a pound.
Platinum and palladium also traded down, with October platinum /quotes/zigman/2304883 PL1V +0.19% off $28.50, or 1.6%, at $1,809.40 an ounce. December palladium /quotes/zigman/2304931 PA1Z -0.40% lost $27.25, or 3.7%, at $711.35 an ounce.


Laura Mandaro is a MarketWatch editor, based in San Francisco. Virginia Harrison is a MarketWatch reporter based in Sydney.

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Dow +62.00 / +0.56% Level11,051.00 Data as of 6:12pm ET

Here is the second shoe to drop....The French are in talks with the Chinese to sell French bonds to the Chinese....what do you think the Chinese will want to price them in Yuan or USD/EURO ?

Sept. 12, 2011, 9:16 a.m. EDT
Treasurys turn down as stock futures pare loss


NEW YORK (MarketWatch) -- Treasury prices turned down slightly on Monday, pushing 10-year yields up after hitting a record low, as U.S. stock futures pared losses and traders gear up for the first of three government-debt auctions this week. Yields on 10-year notes /quotes/zigman/4868283 10_YEAR +1.72% , which move inversely to prices, turned up 1 basis point to 1.93%, after touching an all-time low of 1.88%