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Stock Ideas Investors Daily Edge Depression Watch
Stock Ideas Investors Daily Edge Depression Watch 
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Dear Reader, Let me be blunt. Wall Street stocks are finished. And soon, the investors that own them will be too. Greed and the desire for instant gratification have consumed the market. And for most, there will be no escaping the consequences. |
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| Depression Watch |
| Friday, 03 October 2008 | ||||||||
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The US has earned itself a depression through a deadly combination of greed and fraud. If you ever wondered why gold bugs rail against fiat abuses…. wonder no more. What you are now witnessing and living is the inevitable result of a compromised monetary system. IDE readers put forth invaluable commentary regarding last Wednesday’s “D” Word editorial, The "D" Word Part 4: "Are We There Yet, Daddy?". We have some sharp readers that help move this dialog along nicely. From Doug… My hat’s off to you. You are one of the few people I know that acknowledges we will (are already in IMHO) hit a Deflationary period before the inflation kicks in. It is the nature of the beast - with such unwinding of leverage still on the very near horizon, I don't think the Fed can print enough money to keep up with the implosion of credit... Thanks, Doug. The inflation/deflation debate has long held the attention of those of us who foresaw the current crisis. Both can exist at the same time as we have seen this year. Soft and hard commodity prices have risen (they’re not finished) while home and financial assets have taken a drubbing. You know that the Fed and associated creatures will do everything within their power to inflate away their problems. Along that line of thought are comments from Matt… Good day. I agree with your assessment for a potential new great depression, or at least a decade of no or low growth environment for the US. But I find the call for inflation down the line not very likely. Japan put scads of money into their system and they didn't get hyperinflation from that -- why should we? On the contrary, I think most Americans are going to convert to a new religion of being frugal and marching to the mantra of "waste not want not". Being how our economy is 70% consumer driven then I predict this will be a massive slowdown caused by Americans saving more and getting their personal balance sheets in order. It won't matter how many programs Congress throws at the problem -- people are going to slow down their consumption and save more for retirement.
You make excellent points here, Matt. The Japanese experience looms in the background and troubles the inflationists. It’s definitely not a matter of black and white. The Japanese have a cultural history of saving as do the Chinese. It is not unusual for a family to save 30% of their earnings. I don’t believe Americans, on the whole, suffer such frugality. They are expected to take the bait of free and easy money from this perspective. That is our culture. We will simply have to see how it plays out. Watching indicators like the True Money Supply will be critical. Jerry makes the following comments… I am expecting an inflationary depression. The $700 billion bailout is taxpayer robbery. It represents a $10,000 tax bill for every worker in this country. They will give the money to the banks to pay for the golden parachutes of all the bank CEO's and CFO's who get fired and buy up all the bad mortgages the bankers made. It is a big socialist take over of the financial community. Meanwhile the homeowners will be laid off from work and continue to go into foreclosure by the millions. You’re really close here, Jerry. All signs, however, indicate we’ve passed the point of socialism and fallen into fascism, link to “Is Fascism in Fashion?”. It is also called “corporatism” and is modeled after Mussolini’s marriage of government, favored cronies and force. It is a hideous model. Yesterday’s IDE editorial addressed exactly who stands to be “too well connected to fail”. From responder BOG… Another good contrary article, thanks. Curious that Socialism for the wealthy is being used to save capitalism from itself by imposing capitalism for the poor. This is blatant Fascism. The arrogance, abuses, thievery and insulting by the rich Socialists of the capitalist poor is not even being done with an effort of having good manners, just Fascist thuggery by the criminal Bush gang and the Wall St criminals who want their criminal activities paid for by American taxpayers with interest. $700 billion, we had been told that the prior $300 billion would save the day for the criminals. Remember all these $trillion's do not include interest. Imposed capitalism, the last vestiges of Freedom in the USA, the freedom not to engage in the corruption of Wall St. has been eliminated. Too bad more people aren’t as informed and angry as BOG. “Capitalism” centered on fraudulent money is nothing to be admired. That is the point to which we’ve regressed. Without honest money and honest markets, you are at the whim of those abusing the system for their own benefit. In from Michael… You forgot to mention increasing frequency of runs on banks as another indicator. Today in Hong Kong, long lines of nervous depositors were forming outside branches of the Bank of East Asia. I've always enjoyed your bare knuckles style. Keep up the good work. Good point. You and I both know the FDIC insurance will soon need reinforcements. Imagine that, help for the “little” guy. Trickle down bailouts. Bare knuckles are called for. I have little dispute with those watching Braveheart reruns and searching for ancient vivisection manuals. Hopefully, the tar and feathers treatment won’t be skipped. Patty asks a key question… Where does one buy physical precious metal and know the transaction is safe? We have ownership in some mid-cap mining companies and a junior exploration stock. We also just attempted to purchase some bullion through the Perth Mint only to be told that as of the night before, they would only accept orders of $100,000 or more. Our $20,000 order wasn't worthy.... Sheesh, looks like only the big guns win again. If you were to use someone like Perth Mint you would want to make sure you get the precious metals in hand or have allocated metal directly set aside under your name. A lot of people who think they own gold or silver are going to discover they only hold paper claims to non-existing metal. You can try www.tulving.com, http://www.ajpm.com/htbin/gold.cgi or Roberts and Roberts Brokerage Inc. 1-800-874-9760. Friends of mine have used these firms satisfactorily. If you are interested in digital gold/silver you can investigate James Turk’s Gold Money http://www.goldmoney.com/ Is it time to just hide and watch this unfold? Methinks William Wallace would be screaming out… FREEDOM! Protect yourself resourcefully, Rusty P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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