No surprises here The power of the word 'might' led to a .1% drop in the S&P and a .06% increase in T-Bonds.
How many times have they said they 'might' taper? How many times have they put it off? It's all noise. It was good for a PM smack down though.
Anyone here with half a brain knows the better data will never come, thus QE until this current monetary system collapses. There aren't that many commentators I listen to anymore but Jim Rickards is one of them and he recently made some very good points: 1) The Fed has already tapered twice in recent times - once at the end of QE1 and once at the end of QE2. Both times it failed and they had to turn the taps back on. What would be different this time if the Fed tapered? Nothing, because the situation is actually worse. 2) The drops in gold and silver are not entirely due to market manipulation - the main cause is because we are in a DEPRESSION and we are experiencing DEFLATION (even though there are asset bubbles). If anything, the dropping gold and silver prices means that Fed policy has FAILED. What is their policy? Their policy is to cheapen the dollar, not to make exports more competitive but to IMPORT INFLATION from overseas to counteract deflation - in this they have failed miserably. Why? Because the US dollar has actually gotten STRONGER and we know this by measuring it against gold. 3) If things get desperate enough, the US Fed will TRASH the dollar to force the inflation they cannot currently get. The irony is that at this stage, the Fed will WANT the price of gold to skyrocket because that means that the US dollar has weakened and inflation will counteract the Us's current deflation. ^ But we could still be years away from point 3 and I kick myself everyday for jumping into gold and silver too early.
Good analysis from Rickards, thanks for adding it Earthjade. It's a strange feeling to accept we are in a Depression. Did people in the 1930s actually call it the Great Depression until it was over? I suspect not.
AS, "Did people in the 1930s actually call it the Great Depression until it was over? I suspect not." I am sure they did. Many or most in Australia were in a bad way BEFORE the Wall St Crash in Oct 1929 and doing it tough. Not sure if they called it the "Great" depression but they certainly called it a 'depression'. The media did! I do not think we are at the moment, but it will probably be preceded by an event such as a Bond Market Crash, probably far worse than Wall St. JMO OC PS, agree with #3
Well fair enough. For all my reading of history, 20th Century Australian history, apart from military history, is not a strong point. But if I have the time I'll still check up on this...
AGAIN, If anyone wished to know what the Great Depression was REALLY like for the average Australian family, I cannot recommend highly enough the book:- 'Weevils in the Flour' by Wendy Lowenstein. Once you have read it you will stack twice as fast and twice as much. Check out your local library. OC
Second the recommendation. I first read this is the mid seventies and it changed my perspectives a lot. If we get anywhere near a book like this for the next round it will be even grimmer.
Rickards said, and I agree, that the media does not use the term "Depression" because there is no accurate meaning for it. With the term "Recession", that is two consecutive periods of negative GDP combined with increasing unemployment. Besides that, I think the term "Depression" has a deep psychological resonance with the Americans that they want to avoid. Can you imagine if the Fed used the term "in this current Depression...", the stock market would tank overnight and the Fed wants everybody happy and spending money. But if we take the Depression to be from 1929 to 1939, there were actually years of growth in that period. Apparently, things went bad from 29 to 32 and then it picked up again from 33 to 36 before coming back down. So if you liekn it to our current age, then you can see how saying we have been in a depression since 2007 is not inaccurate. Australia however, really has fared better than most by all measures. If you ask Spain, they surely feel the full effects of this Depression with 25% unemployment and America is in denial but this: The amount of Americans on food stamps is 60 million, or roughly 1/5 of the population. If America today had a minimal social safety net of 1930 calibre, then there is no way in hell that they would deny they were in a "Depression" with people starving in the streets. Instead, the US government chooses to crash the economy into a flaming wreck of debt to keep people fed and with a roof over their heads. Now, caring for other people is the way it should be, but the powers that be cannot see any other way to do it than printing money. When we see all this, it really confirms that holding gold and silver is not just a smart investment but a necessity. I just wish the PM markets didn't make me spread my butt cheeks on so regular a basis. If silver goes any lower and my wife will kill me (she agrees with the fundamentals in principle but cannot abide by the fact we took a big "gamble" and so far are losing money).
Funny you mention your wife, with us it's a decision of metals or mortgage when we have some spare change. at the moment mortgage seems a better option.
When I think of the Great Depression I think of families living in tents with children eating a boiled potato for dinner and no shoes. If you asked a person in the thirties how we compare today I think they would say not being able to upgrade to a new phone and not being able to go out to dinner more than once a week is not really a depression. We are doing pretty well I think.
I do agree with the belief that the mere use of the word "depression" would have detrimental consequences and thus should be avoided as part of mainstream discussion. I mean, its OK here amongst us... but it makes the populous gittery and behave in strange, unpredictable ways... and the world is vexing enough as it is...
Do not know a great deal about the depression of 1893, and that only from a book called 'The Land Boomers'. In those days, social security support consisted of what the church charitable agencies could provide. There was NIL government support in pensions, unemployment and so on. The "susso" (sustenance payments) of the 1930s was non existent. My unemployed great grandfather committed suicide by throwing himself in the Yarra in 1894. OC
byron, Hand your wife a Silver Eagle, and tell her that coin will feed your kids one day. She will not care about market values then. OC
Earthjade, I have an 80 year old mate in Bend, OR. Visited him in 2004. He lives in a converted double garage with a bed in a loft 'upstairs'. He pays US$400 a months for it. He 'exists' on a military pension, plus State and Federal support programs such as SNAP. Every so often I 'find' a US$50 note in an old wallet, and send it to him. OC
A tent would have been considered a luxury in the Great Depression..The men were continually on the move. Forced to do so because TPTB didn't want large groups of starving men gathering in the one place. To get food rations you had to move at least 30 miles every 2 weeks. The food rations were nothing to write home about. They consisted of flour, sugar, tee and a tin of treacle/jam. Men of all different walks of life were on the road together. Doctors, lawyers. civil servants along with the working class marched around the country and became known as swagmen. A lot of people in the cities and towns, which consisted of mainly women and children only survived by growing and trading vegetables and also through the generosity of small corner shop owners who gave credit so as to save the sight of starving children.. Some were lucky to own a cow from which they shared the milk to make butter. The women worked so hard to feed their children by baking scones, bread, cakes etc. Raising chooks provide both eggs and meat. A lot of men were on what was called relief work for very poor wages.. They too worked hard with the pick and shovel to get enough to try to feed their family. My grand father was an foreman in the local council, head of works dept, he was well respected by the men who did the hard yards because he let them up to straighten their backs.. Some bosses didn't AND WERE HATED BY THE WORKERS. Time certainly change. Today debt will be a bigger factor today. In those days if you didn't have the cash you didn't buy. Regards Errol 43
Uncle Ben is worse than a troll box day trader, jawboning the economy up and down to suit wherever he's positioned.
