Date: Wed Sep 01 2004 13:34
trotsky (Hambone, 11:40) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
a good summary, all in all. i remain of course in the deflationist camp, on account of the K-cycle theory and the fact that i think the private sector debt mountain can't be inflated away - debtors will get what they deserve, not what they want, and the same goes for many creditors as you have correctly remarked ( 'Joe will walk away' ) .
but i disagree completely with the rest of the deflation gang that this means a rising external value of the dollar.
since the K-cycle is likely to be a global phenomenon, the same arguments put forward in favor of the dollar can be put forward in favor of the yen or the euro. there's only one major difference, and it's a decisive one: the US dollar is the currency of the world's, and history's, biggest debtor. this means that the foreign held net long position in dollar based assets is at a historic record high, and a delationary bust will without a doubt entail at least a partial unwinding of this huge position ( $5.2 trillion at last official count ) .
for several reasons gold can be expected to flourish in a deflationary bust. first of all, it has historically always done so ( i.e. its purchasing power has ALWAYS increased during deflationary eras, vs. everything else, including all commodities ) , and secondly, being the only form of money not associated with a corresponding liability, or 'promise to pay', it will attract the funds of all those who have funds to protect.
last but not least, the markets know that the central banks will fight deflation with all the means at their disposal, stopping short only of the literal helicopter. thus gold will also react to the perceived incentive for CBs to print as much money as they possibly can under the circumstances.
Date: Wed Sep 01 2004 13:14
trotsky (Aurum, 11:14, apologies for lengthy OT) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
i disagree with this assessment insofar as Islam is no different from other religions in terms of its mumbo-jumbo coefficient if you will.
one only needs to look at e.g. Christianity's brutal and immoral history to realize the following: the decisive factor in whether the harmful consequences of the inherent backwardness of religions manifest themselves consists entirely of whether the religion in question is able to exercise political power. threatening Galileo and Kepler with burning at the stake was no less backwards and reprehensive than what is now happening in Iran. had things gone according to the wishes of an endless succession of bloodthirsty and powerhungry popes and their executive arms such as the inquisition, the people in Christianity's sphere of influence would be mired in total ignorance and bigotry to this day. luckily the reformation and resistance of of Western thinkers from Paine to Nietzsche put paid to the Church's political ambitions.
nowadays, at least in Europe, modern day Christians have a much more healthy relationship with their religion. it is generally accepted that the tenets of the New Testament contain many universally acceptable rules and that by keeping an open mind and exercising tolerance people can reconcile their faith with the modern world and the fruits of knowledge the Church wanted to keep from us. the faith has by and large lost its life-denying, threatening aspects.
now admittedly this is not the case yet in much of Islam's sphere of influence - but this simply means that the process of political disempowerment of the Islamic faith hasn't yet occurred to a sufficient degree. there are however already examples of states where this process has begun, such as e.g. Malaysia or Turkey. Islamic terrorism, or Islamic fundamentalism more generally, is a REACTION to the beginning intrusion of modernity and reform, just as the Christian Church initially resisted reform by instituting a reign of terror.
this is a passing phase...a natural progression of history. coming back to the example of the mullahs of Iran, when they deposed the Shah's repressive regime in '79, the population was almsot 100% behind them. this has changed markedly - although they have managed to beat back the reformers on several occasions, they are ultimately a dying regime. Iran's youth certainly has no personal memory of the Shah's dictatorship and is thus less inclined to let the mullahs get away with their brand of repression based on the historical merit stemming from their liquidation of the hated Shah.
in conclusion, i think it's wrong to single out Islam as a religion and pointing to its backwardness without noting that in this point, it is essentially not different from the other major religions. it is merely at a different stage of historical development in many countries than e.g. Christianity by comparison.
if one combs the Q'ran, a pre-medieval work, for statements that sound like incitement to violence, or proclamations asserting it to be the only valid philosophy, one must not forget that the Bible is chock-full of exactly the same stuff.
all faiths are inherently intolerant in that sense and have historically tended to spread their word with the help of the sword ( except perhaps Buddhism ) .
Date: Wed Sep 01 2004 12:02
trotsky (humble1@money supply) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
recent money supply data, in their totality, prove that the K-winter's 'pushing on a string' has begun. while the monetary base which the Fed directly controls has jumped up like crazy in '04, year-on-year growth rates of broader aggregates like M2 are at 10-year lows.
iow, in spite of no-one taking away the punchbowl as the saying goes, credit growth seems to be stalling out. this bodes ill for the mortgage credit and residential real estate bubble, and by extension for the overindebted US consumer.
Date: Wed Sep 01 2004 11:42
trotsky (@AGT) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
the recent Black Fox drill results are remarkably good. it's probably fair to say that the current uncertainty over the impending financing has created a good buying opportunity.
there's certainly some risk associated with the financing issue, but the stock price appears to be discounting this more than adequately by now.
Date: Wed Sep 01 2004 11:25
trotsky (Razorback@'Bartiromo not an airhead') ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
if you say so, then you haven't paid attention. on the rare occasions when she has to depart from the script, you realize that she knows absolutely nothing about the subject she's been reporting on for years now.
not that she is an exception in the financial reporting biz. knowledge of the topics at hand doesn't seem to be a requirement for the job. among her collegues, the only one i could vouch for in terms of apparently possessing at least a basic understanding of economics and financial markets is Ron Insana ( again, gleaned from departures from the script, usually on occasion of interviews ) .
Date: Wed Sep 01 2004 11:01
trotsky (Aurum@Iran) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
i friend of mine has just returned from visiting friends in Iran. now, this guy travels a lot in the ME, and he reported he was shocked by the pervasiveness and scale of repression in the country. said that the mullahs have erected a system of denunciation and citizen-on-citizen spying on a par with what Eastern Germany's SED had to offer. it's 'like medieval times, only worse' - and according to his friends, 50% of the citizenry actually SUPPORT this madness.
shows of defiance ( like e.g. the frequent student protests ) or transgressions against the strict shariah laws are punished with utterly out-of-proportion, inhumane sentences as a matter of course. as an interesting aside, a surprisingly large percentage of the populace appears to be addicted to heroin. |
