# Are things getting better?



## hiwall (Jun 15, 2012)

I don't think so.

Europe better? Spain's recession worsens---
http://www.bbc.co.uk/news/business-21258272

The USA better? US economy shrinks----
http://www.foxnews.com/politics/2013/01/30/us-economy-shrinks-01-percent-1st-time-in-3-12-years/


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## PackerBacker (Dec 13, 2012)

hiwall said:


> Are things getting better?


:laugh::laugh::laugh::laugh:


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## k0xxx (Oct 27, 2011)

Some Democrats are calling it "The best-looking contraction in U.S. GDP you'll ever see." What the ...


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## jsriley5 (Sep 22, 2012)

Denial, They know they have to try to keep the masses oblivious until the last possible second. Lucky for them most of the masses eat out of thier hand and beleive everything they see on the telly. They HAVE to be having a good laugh at how stupid the people are.


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## Bobbb (Jan 7, 2012)

The long term trend is degradation. We might get blips of irrational exuberance but they will be short lived and we'll slip back to our downfall.


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## BillS (May 30, 2011)

You have to remember that the GDP figures are adjusted by an artificially low inflation rate. Assume unadjusted growth was 1.9%, the inflation rate used was 2% so the adjusted GDP figure was -0.1%. Now, imagine 1.9% growth with a real inflation rate of 9.9% and you'd have the economy shrinking by 8%. -8.0% is a lot closer to the truth than -0.1%.


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## sailaway (Mar 12, 2009)

My take home pay went down this year, my wage stayed the same.:nuts:


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## invision (Aug 14, 2012)

sailaway said:


> My take home pay went down this year, my wage stayed the same.:nuts:


And things went up.... The question is by what ratio?


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## hiwall (Jun 15, 2012)

Here is a long article that I found interesting.




During the Cold War, Germany moved much of its gold to New York in case the USSR invaded Germany. It was assumed at that time that the US would be a safer storage location, and of course, they could always ask to have it returned if they wished.

But German citizens have become increasingly worried about the security of the 1,536 tonnes of German gold reputedly held at the Federal Reserve in New York. This has resulted in the Bundesbank pursuing repatriation of the gold, beginning with a request to view it in the basement of the Federal Reserve Building, where it is claimed to reside.

Of course, the German government had received periodic assurances from the Fed that the gold is there; however, the issue began to get a bit sticky recently, when the Fed refused a request for inspection.

The world then raised a collective eyebrow, and, whilst not panicking over this development just yet, closer attention has come to bear, not only on the Fed, but on any institution that is entrusted with the storage of gold for other parties.

Concern spread to Austria, where a question arose in Parliament as to where Austria’s gold is stored. The answer provided was that 80% of it (224.4 tonnes) is in the UK. (It was claimed that the reason for this is that, if a crisis of some kind were to occur, it could be more easily traded from London than from Vienna.)

Seems reasonable enough, except that the return of the gold to Austria, if it were requested, may be a bit difficult, as the gold seems to have been leased out by the UK.

To many, a second eyebrow might go up at this point. Lease out the wealth of another nation? Isn’t this a bit… irresponsible?

The New Gold Shuffle

Not to worry, it’s done all the time. In fact, the practice has been endorsed by none other than Alan Greenspan, former Chairman of the Fed. The gold is leased to a bullion bank, which typically pays one percent interest to the Fed, with a promise to return it on a specified date. The bullion bank then sells the gold on the open market and uses the proceeds to buy Treasury bonds, which will net a three to four percent return.

The nicest thing about such an arrangement is that the lessor continues to claim it on his balance sheet as a line item: “gold and gold receivables.” After all, an asset that we have leased out is still an asset, even if it has now been sold by the lessee.

In effect, this means that, if you bought a gold bar today, it is possible that it is a bar that was shipped from the Bundesbank to the Federal Reserve decades ago and is presently listed by the Fed on its balance sheet as “gold and gold receivables.”

Both you and the Fed are claiming to possess the same gold bar. The fly in the ointment, of course, is that only one bar can be the actual bar. The other is a receivable and therefore is an asset on paper only. This, of course, means that there is less gold in the world than has been claimed. How much less? That’s anyone’s guess.

The New Risks

But even if it became generally known that the Fed (and others) are holding paper, rather than physical gold, couldn’t we carry on as before? What could go wrong? Here are some immediate possibilities:

If there were a dramatic rise in the price of gold and the lessor were to call in the return of the gold by the bullion bank, the bullion bank could easily lose far more than the small two to three percent margin it had been enjoying.

If there were a crash in the bond market and hyperinflation set in, the bonds that the bullion bank had purchased could become worthless.

If the nations who shipped their gold to London and New York for safekeeping were to request their return, the storage banks could only deliver if they were to purchase gold at the current rate. If that rate were significantly above the rate at which the gold had been leased to the bullion banks, the storage banks would sustain a significant, possibly unsustainable, loss.

That’s quite a bit of risk.

In the present market, there are any number of possible triggers that could cause the people of Germany, Austria, or a host of other nations to demand that their gold be returned home. Indeed, pressure is on the increase. The governments who have shipped out their gold for “safekeeping” would have a lot of explaining to do to their constituents, if the storage banks are not forthcoming.

So, is it time for the odiferous effluvium to hit the fan? Not quite yet. Before that occurs, there will still be some dancing around by the Fed and others.

The Fed has already stated, in so many words, “We’re sorry, but we can’t let you have all your gold at one time, but we’d be prepared to send it to you over a period of years.”

For many observers, the present situation should be well beyond the point of the raised eyebrow. It should be glaringly apparent that the amount of gold presently claimed to be in storage in the world’s banks is, to a greater or lesser extent, overstated.

Continuing the Charade

The Bundesbank should, of course, now say, “I’m afraid that’s not good enough. It’s our gold. We’ve advised you how much of it we want back now, and we must insist that you produce it immediately.”

If they were to take this perfectly logical step and the Fed refused, there could be a run on the banks, and, very possibly, within as short a period as twenty-four hours, a worldwide bank holiday might be declared with regard to gold.

However, this is not what will transpire. Neither logic nor sound banking practices are the object here. The object is to maintain the charade that exists within the banking community. The Bundesbank is just as fearful of a run as the Fed and will be only too willing to accept the Fed’s terms.

What must be borne in mind is the root cause of the request. It was not the Bundesbank itself that originally wanted the transfer to take place; it was the German people who, quite rightly, have become distrustful of the fact that their gold has been in New York for so long and want to see it repatriated. It is not the banks who wish to correct the situation. Not one bank wishes to expose the inappropriate practices of any other bank. Their loyalty is to each other and not to their depositors.

So, is that it? Have we heard the last of this issue? I think not. The cat is out of the bag at this point, and the depositors’ distrust and uncertainty will not be quelled by the counter-offer. Tension will continue to mount amongst depositors, and, at some point, the situation will reach an impasse.

All those who presently have gold in a banking institution would be prudent to keep an eye on the present situation. We might consider taking delivery of any gold we have in a bank, wherever it may be. Regardless of what form it is in, from ETFs to allocated gold, we would do well to assess the degree to which we feel our gold is at risk. In doing so, we may determine that a gold account is more at risk in, say, a New York or London bank than a Swiss bank. (Not all banks will be equal in terms of risk.)

If we do resolve to divest ourselves of bank-related precious metal holdings, it would be prudent to take action soon. (Clearly, those who attempt to remove their wealth the day after a run has occurred tend to do less well than those who attempt to remove their wealth the day before the run.)

We might also consider whether a possible run may become systemic, causing a bank holiday on all the bank’s activities, thus freezing any currency that we may have on deposit. We may conclude that it is prudent to only retain in our bank enough money to allow cheques to clear – an amount sufficient to cover a few months’ expenses.

In the near future, we may well find that a significant amount of gold that is claimed to exist in the world will “disappear.” Whilst we cannot control this eventuality, we may be able to save the gold that is being held in our names from disappearing.


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## GrinnanBarrett (Aug 31, 2012)

What truly amazes me right now is the Volitivity Index or VEX. It is around 13. The lower the number on. A scale of 1 to 100 the higher the confidence level of money is in the market. I have been in the market for over forty years and I will tell you the Dow is too high for world economic conditions. People are throwing money at stocks that have no real value or much less than quoted. 

Is there gold in Fort Knox? I don't know. What I do know is World Markets lithe China, Europe and the US are time bombs waiting to explode. When Someone tells me there will never be another Great Depression I am amazed at the stupidity of that thinking. Right now we are living through the Roaring 20s waiting for 1929. You can only push an economy so far before it implodes. 

We produce less and less as a nation every day. We consume like there is no tomorrow. Who knows where the world's gold is? It won't make much difference when a loaf of bread costs $100. GB


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## kappydell (Nov 27, 2011)

Don't the people claiming things are 'all better' have eyes??? Their refusal to face facts by sticking their heads in the sand is becoming legendary.


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## Dude111 (Dec 28, 2012)

jsriley5 said:


> Denial, They know they have to try to keep the masses oblivious until the last possible second. Lucky for them most of the masses eat out of thier hand and beleive everything they see on the telly.


Yes quite an excellent reply my friend!!!!


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## invision (Aug 14, 2012)

GrinnanBarrett said:


> What truly amazes me right now is the Volitivity Index or VEX. It is around 13. The lower the number on. A scale of 1 to 100 the higher the confidence level of money is in the market. I have been in the market for over forty years and I will tell you the Dow is too high for world economic conditions. People are throwing money at stocks that have no real value or much less than quoted.
> 
> Is there gold in Fort Knox? I don't know. What I do know is World Markets lithe China, Europe and the US are time bombs waiting to explode. When Someone tells me there will never be another Great Depression I am amazed at the stupidity of that thinking. Right now we are living through the Roaring 20s waiting for 1929. You can only push an economy so far before it implodes.
> 
> We produce less and less as a nation every day. We consume like there is no tomorrow. Who knows where the world's gold is? It won't make much difference when a loaf of bread costs $100. GB


Your absolutely correct... i can't see how it is @ 14k either... but i will say this, i believe that the market is rising based on comments from the main stream media... this am i caught part of ABC with George S. and a group... first was gun control and it ended with one saying its just time we remove the 2A, after all we are a civilized nation... George said let's move on to talk about how the economy has recovered now we are back over 14k... really? They started in talking about how great everything was moving forward, but one guy shrugged as he said job numbers and gdp should be higher. . Almost like who cares... my wife went really? They are that dumb... i was no but the people drinking this cool-aid they are serving want to be...


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## hiwall (Jun 15, 2012)

I wonder what the DOW would be at without all the funny money that the Fed is "printing"?
It has to re-set sometime. This year? I think so.


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## invision (Aug 14, 2012)

hiwall said:


> I wonder what the DOW would be at without all the funny money that the Fed is "printing"?
> It has to re-set sometime. This year? I think so.


If the fed wasn't printing money and didn't do tarp, we could have had a controlled recession, that was painful, but would probably be right about where we are now... With a hell of a lot less debt too.... But no one thinks that way anymore... They don't want painful... Just wait... Nobody has seen painful yet.... When we go belly up, and the rest of the global economy is brought down too... Massive pain.


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## Bobbb (Jan 7, 2012)

hiwall said:


> I wonder what the DOW would be at without all the funny money that the Fed is "printing"?
> It has to re-set sometime. This year? I think so.


Dow reflects earnings of the corporations which constitute the index. We're dealing with productivity and profit. The Fed deals with the medium of exchange. It doesn't really matter if we use $1,000 to buy a roll of toilet paper which costs $500 to make and sell or if we use $1 to buy the same roll which costs $0.50 to make and sell (notice how the cost is 50% of the price in both examples.)

So long as corporations can make and sell in a fashion which increases productivity over time they can justify their stock price. Think back to the 70s when we had had interest rates and high inflation - corps still made profits back then and those profits influenced stock prices.


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## hiwall (Jun 15, 2012)

Bobbb said:


> Dow reflects earnings of the corporations which constitute the index. We're dealing with productivity and profit. The Fed deals with the medium of exchange. It doesn't really matter if we use $1,000 to buy a roll of toilet paper which costs $500 to make and sell or if we use $1 to buy the same roll which costs $0.50 to make and sell (notice how the cost is 50% of the price in both examples.)
> 
> So long as corporations can make and sell in a fashion which increases productivity over time they can justify their stock price. Think back to the 70s when we had had interest rates and high inflation - corps still made profits back then and those profits influenced stock prices.


Bobbb thank you for a rare short reply
I have to say that I respect your opinions on this forum. You obviously are better educated than I. But...........
If I understand your above post then I think you are way way off base on this. What you said makes logical sense and really should be true in the stock market. Solid company, selling a good "in demand" product, making a fair profit, with good far-sighted management should have a steady increasing stock value. In reality the stock market prices often have very little to do with a company's financials. Outside forces and stock manipulators change stocks prices daily. After QE2 was done the stock market waited on baited breath for the Fed to announce QE3. Once it was announced the market went up and is still going up thanks to the never-ending QE3. The same happened with the previous QE's. Pumping "new" dollars in huge amounts ($2.8 billion per day) into the economy has to inflate the market. The money has to go somewhere. Just think about all that money. No one is just going to hold on to that cash, they try to make it earn profit. By buying stocks and bonds. QE not only is holding up our market but but European markets and European countries(thru bond purchases) as well. This works really good until it all crashes.


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## Gians (Nov 8, 2012)

*Got Food?*



hiwall said:


> I don't think so.
> 
> Europe better? Spain's recession worsens---
> http://www.bbc.co.uk/news/business-21258272
> ...


http://photoblog.nbcnews.com/_news/2013/02/06/16868890-desperate-greeks-scuffle-at-free-food-handout?lite
Could happen...when is anybody's guess.


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## BillS (May 30, 2011)

kappydell said:


> Don't the people claiming things are 'all better' have eyes??? Their refusal to face facts by sticking their heads in the sand is becoming legendary.


Most of the people in the media are sellouts for Obama. There are very few who are willing to speak out. Those who do are demonized.


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