Friday, October 16, 2009

When Money Becomes Worthless

The Financial Times last Tuesday noted a disturbing new trend – hedge fund and other investors are increasingly seeking to invest in physical commodities themselves, rather than in futures. Given the excess of global liquidity, this is not entirely surprising. It does, however, raise an ominous possibility of a supply shortage in one or more commodities, caused by investor demand that exceeds available mine output and inventory. That could potentially produce a collapse in economic activity similar to that from the 1837-41 and 1929-33 liquidity busts, but with the opposite cause. (more)

If Silver Could Walk, It's About To Run A Marathon

In the 21st century we have been brainwashed and manipulated, our liberty has been taken away and we didn't even know it. It's an ironic image, the gold and silver eagle coins have "LIBERTY" stamped in large words. Liberty can be considered as: "to think or feel, or do just as one pleases", but what if there was someone making u think, the way they want you to think.

People don't understand that money doesn't have to be printed or even minted in today's society; it is simply electronic, adding zeroes to the end of a large number, which continues to grow. (more)

'Wall Street's Naked Swindle' Matt Taibi

1929 And Today - Sobering Parallels Abound

When was the last time you saw stocks decline 54% followed by a 55% rally?

When was the last time you saw stocks (NYSEArca: VTI - News), bonds (NYSEArca:

AGG) and commodities (NYSEArca: DBC - News) move in sync for nearly two years?

When was the last time asset allocation did not really provide the diversification and protection it was supposed to?

When was the last time, a ten year investment in the stock market delivered negative returns?

Investors that care to harken back 80 years will find that the 1929 - 1932 era is the only period of time that compares to today. In fact, the parallels between now and then are bountiful and scary. (more)

The Job Market, in Charts

You may have heard by now that the unemployment rate reached 9.8 percent in September. There are lots of other ways to gauge the health of the job market, however. Here are a few graphs that show how tough it is out there. First we have a chart showing a breakdown of monthly job losses (or, in some cases, gains) by industry, from the Federal Reserve Bank of Atlanta: (more)

Reich: Dow 10,000 Means Nothing

Former U.S. Labor Secretary Robert Reich believes that the Dow’s recent rally to the 10,000 mark is “fluff” that has no relation to the real economy.

Reich, a professor and Clinton-era Labor Secretary, now an informal economic advisor to President Obama, says that “anyone who hasn't learned by now that there's almost no relationship between the Dow and the real economy deserves to lose his or her shirt in the Wall Street casino.”

Reich wonders how the Dow broke through the 10,000 barrier, last seen before the economic meltdown in the United States when, as he put it, “the rest of the economy is in the toilet.” (more)