Can Ben Bernanke and his magic printing press destroy the US dollar?
Or will the world, bizarrely desperate for dollars versus their debased local currencies, not let him?
March 19, 2009
Soot and Ashes Serious Question of the Day
Can Ben Bernanke and his magic printing press destroy the US dollar?
Or will the world, bizarrely desperate for dollars versus their debased local currencies, not let him?
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34 comments:
Keefer,
yup
you answered your own question
"the world, bizarrely desperate for dollars versus their debased local currencies, not let him"
There is no alternative to the Dollar.
It wont be gold.
It may be food.
Gold is going to explode.
Forex is letting you gamble with 2% margin adding jet fuel to the fire.
BOOM!
Walmart was packed today.Got to love this depression.
I'm thinking food and oil.
I'm not thinking shiny yellow stuff today.
Anyone with me?
I'm in for food an oil. And guns & ammo too.
Stocked up on ammo when it was available (I was in local hunting and fishing mega-store this week -- only had 9mm (at least they had some) and 357 sig (not "real" 357s) -- the rush is still on for ammo.
My cars are full of gas, my pantry is stocked, and the gun cabinet is full.
I'm with you Keith.
I see food going through the roof!
You can't eat precieous metals and oil is needed for war.
The Germans aren't letting the Euro go down.
The Federal Reserve System is a Ponzi scheme with unlimited cash flow and immunity from legal prosecution.
off this particular subject, but a relevant topic nonetheless, is the AIG bill to confiscate 90% of bonus profits. I know its specific to AIG employees(or, so we are told), but, as a small business person it makes me quite nervous. Many small business folks do a "bonus out" at the end of their corporate year, and it would only take a few clauses in the bill to change it to apply to anyone who benefits from "bonuses". It just seems like an excuse to me, since they are going to get the money back anyway, there are several ulterior motives here.
I'm stocking up on POGs.... to the moon
oh he would look good, dangling at the end of a rope in some hanging tree in washington dc.
Hi Keith,
Ive been in cash since 9/07. Although Schiff and others had many good points it seems they may have been wrong from an assest protection point of view. Being liquid also allows one to rapidly shift strategies as things change in the medium to long term. Gold has risk but holding some physical gold makes sense. Although Bernanke is printing money, it has to enter the general circulation to cause price inflation. Japan went this route and hyperinflation did not occur. If the money supply globally lost maybe $50T in stock markets alone, it will take significant printing by central banks to counter the deflationary forces. Europe may be in worse shape than the US. So, short to medium term the US dollar will be ok, with fluctuations. Long term, Schiff and others may be right, but a lasting economic decline for the US is more likely a generational phenomenon, not something measured in months or a few years (ie. in the long term we are all dead).
I actually have no issue with the money creation he is doing. The money distruction elsewhere is breathtaking. I have an argument where he is creating the money. Give it to the US tax payer, not the failed Banks.
DP
The point isn't the few trillions that the Fed has added to its balance sheet. It is about Bernanke's policy, which is to print until he gets inflation - $10T, $50T, $100T - he doesn't care. He will print as much as it takes and trade it for worthless collateral.
Prices will rise dramatically, but wages will not. Have fun.
The Europeans have a lot of problems that we don't and should be in worse shape. They will come out on top, though, because we have one crippling disadvantage - good old Zimbabwe Ben.
UN panel to recommend world ditches US dollar!
http://adjix.com/p8uk
Bernanke does not have unlimited power, the US public and even US congress will not allow Bernanke to print unlimited amounts. Where that limit is, who knows. He is simply trying to counter the massive monetary deflationary forces and he doesn't care about inducing moderate inflation in the next few years. He is fighting a battle he can't win , some questions are whether he is minimizing the causalties or exacerbating them, and is he selectively picking which groups of combatants go on the suicide run.
Look, the U.S.A. is the greatest nation in the world. No one even comes close. Thus the rest of the world will allow us to spend, spend, spend. Also, the rest of the world knows that we are too big too fail. Let's face it, they got themselves screwed by lending us money hand over fist and now they can not allow the U.S.A. to fail.
Keith said: "I'm not thinking shiny yellow stuff today."
I agree. If it gets to the point where the shiny yellow stuff truly rules, then it'll be Soot and Ashes shortly thereafter, if not before.
I have exposure to the price of gold via the gold miner etf GDX.
These last couple days have felt very validating. However, GDX has merely come back to where it was a couple months ago - I've owned it for several months.
I also own DAG (agriculture etf). I was down about 15% on it as of yesterday. I tried to buy more but used a limit order and the price was above the limit I set all day. I try not to chase stocks although I perhaps should have made an exception today.
Bernanke's move to buy longer term treasuries yesterday was perhaps the boldest I have seen him take.
Before yesterday, the entire market was playing 'buy the rumour, sell the news' - prices rose or fell in anticipation of an event but then when the anticipated event ocurred, the price would move in the opposite direction to that expected. Traders were all so aware of the events that they had already been built into the price so that when the event occurred there was no more benefit to boost prices. Traders actually sold when bailouts were announced.
Call it a topsy turvy market.
But Bernanke made this move somewhat pre-emptively. I mean, we all knew he was going to do it. But Bernanke, sneaky bugger that he is, pre-empted the anticipatory price rise.
So he has re-established this causality between his actions and their effects. He has taken back control and I think the market likes it.
It's just a shame that he is also signing the death warrant for the american economy.
ben has a lot of printing to do to catch up with the ~30 trillion of destroyed wealth and credit.
Obamy is guaranteeing the economy will recover.
Next up: make fish and bread magically appear in baskets around the country where ever he goes.
the funny thing is that at the same time that russia and others might be proposing going to a single international monetary standard, the US is basically flooding everything with trillions of dollars.
How can anything else have the capacity or the wherewithal to put out that much dough, printed or not, at this crucial time. I think even though we might suffer some inflation here, there may be a play afoot to put so many dollars out there that it becomes even more of the international standard
He's trying to fill a bottomless hole. Negative sentiment will turn this whole thing into a fantasia-esque exercise: the more he drops from the helicopter, the less debt it will satisfy...
UN panel to recommend world ditches US dollar!
http://adjix.com/p8uk
Anybody seen the anti-christ yet?
Dude can't be far behind as fast as this is falling into place...
casey said...
Walmart was packed today.Got to love this depression.
March 19, 2009
---------------
People still have a bit of Credit Card Credit left.
My cars are full of gas, my pantry is stocked, and the gun cabinet is full.
March 19, 2009 9:12 PM
You are a wise man.
Ben knows that Chinese/Japanese appetite for US assets is decreasing mainly due to their shrinking trade surplus. It seems he has decided to monitize by buying treasuries at least for now. Gold/Commodities will have a run at least for now.
Anonymous Anonymous said...
ben has a lot of printing to do to catch up with the ~30 trillion of destroyed wealth and credit.
March 19, 2009 11:32 PM<<<<
the wealth destruction was only on paper wasn't it? the losses were the result of asset deflation and not because of selling of stock market portfolios. etc. people didn't sell because their stock brokers kept telling them , don't worry about it, it will come back. believe me, if he has to come up with 30T , he will by hook or by crook. they don't call him helicopter ben for nothing.
You should look at the silver/gold ratio during Weimar. It spiked massively as people tried to achieve PORTABLE wealth. This is why people value gold (amongst other reasons). Try sneaking across a border with a frig. Or a couple barrels of oil. You get the idea.
Anonymous Debase This said...
I'm in for food an oil. And guns & ammo too.
Stocked up on ammo when it was available (I was in local hunting and fishing mega-store this week -- only had 9mm (at least they had some) and 357 sig (not "real" 357s) -- the rush is still on for ammo.
My cars are full of gas, my pantry is stocked, and the gun cabinet is full.
March 19, 2009 9:12 PM<<<
because of the public uproar about it, the DoD backed off on their idea of destroying all used military brass. gun owners were furious because this would have meant the end of ammo supplies, more or less, for many popular calibres. they floated a trial baloon and it caused a major fire storm....stay tuned...
http://tinyurl.com/dcgb5y
How many guns can you use? I have a collection and figure this is the time to sell what I don’t want. Sold $3000 worth this week. Got top dollar.
As for the dollar and interest rates, watch as the pendulum swings violently in the other direction as the market overcompensates for past injustice.
Remember the past people, don’t follow the herd.
Who knows?
The USA may go back on the gold standard. Otherwise how will we pay back all this debt?
.
Brass,
Primers,
copper,
even lead,
in short supply
Have a nice day!
.
I was out driving around our city and was stopping at local gun shops and sporting retailers.
Some had large supplies of firearms (rifles, shotguns mostly)
But, most were low on ammunition.
What was available was either very common (9mm, 38,.22) or odd for most shooters (i.e. .416 Rigby, .35 Whelen)
Prices were moderate or high reasonable.
Then I accidentally came across a very small rather hidden store front that just said in small lettering..... 'ammo'.
I went in an saw wall to wall floor to ceiling Ammo!
New manufacture, and stuff 20, 30, 40, 50 years and older...in the original boxes!
Pistol, Rifle, Shotgun!
Shelves, bins, ammo cans, baskets, boxes, crates, plastic carriers...some not even unpacked yet!
Some people are into porn...this is mine!
His prices were rather high and on some Very High!
BUT....The point to all this is, if you needed it, he probably had it.
After a few trips in, I got to know a little more about this guy, a very likable fellow.
When I asked where did you get all of this?
His reply, "Some people collect, cars, plates, spoons....yada, yada,
I've collected ammo, and have for about 35 or 40 yrs".
This guy is making a killing, he is selling hand over fist (mostly cash), but whats funny is the shelves never really empty, he has so much, he just keeps bring out more!!
God Bless America!
p.s. No I'm not going to tell you where!
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