Comments on: Hard Truths

By: gloppie

gloppie — Sat, 10 Jan 2009 07:14:34 +0000

“chief among them is that all economies of the world (via their respective central banks) issue fiat currencies, which means they can simply print money (inflate) to counteract organic deflationary pressures”.

What about systemic deflationary pressures ?

I haven’t read the rest of the piece, I’m too tired and it sounds quite pedant.
We’re not all bankers here you know.

By: Greg0658

Greg0658 — Sat, 10 Jan 2009 00:08:42 +0000

That was some analysis, history and economic science lesson.
I kept thinking of my last post about US debts in
http://www.ritholtz.com/blog/2009/01/counter-intuitive-nfp/#comments
and how … maybe a line from Meatballs I “it just doesn’t matter”

My final conclusion at this time is … I suppose they will but wonder if the kicked in the balls commonmen will play this game as in days past to the extent needed? Got land, seeds and a big sword? And to the other side … Got human eggs and semen in store?

and on gold – and this being Friday night at theBP – my most prized pile is my music library
The Alan Parsons Project – what goes up
http://www.youtube.com/watch?v=5AdS86RWlgs
from Pyramid a great album

By: ben22

ben22 — Fri, 09 Jan 2009 21:40:35 +0000

Well written gents, I really enjoyed the “The Shadow Gold Price” as well.

though I do not run a hedge, I have positioned clients similar as you from what I can gather.

By: ardano

ardano — Fri, 09 Jan 2009 21:23:37 +0000

Dear Paul and Lee:

Interesting, but a different tact from your post in November. Here’s my what if…

Taking your analysis to heart. There are a few outcomes to consider. The first was addressed by the recent NYT article on China’s interest in US bonds. If China, OPEC, etc. don’t support the US Dollar/bond mkt, the world will suffer another depression. Paulson/Bernanke seem to think they can flood the world with US Dollars and not break the global financial system. If they’re wrong, we’re all in trouble. The only way they’re right is if the world buys all these dollars, and dollar denominated bonds and equity shares, thus insuring the US remains the world’s reserve currency for years to come.

I look forward to BP readers telling me what I”m missing…These days I’m not sure what anyone “knows” any more…

By: Spero

Spero — Fri, 09 Jan 2009 17:03:07 +0000

“The only way out is to inflate away the value of US debt and inflate nominal wages by distributing new money and credit. … Ultimately, we believe a coordinated global currency devaluation is the only possible resolution (consider it a form of pre-packaged bankruptcy of the global central banking industry).”

Isn’t that just a de facto default on the debt?

If so, why than not make it a de jure default?

By: gjw

gjw — Fri, 09 Jan 2009 15:45:16 +0000

This is why I enjoy the Cafe, detailed and professional treatment without all of the hyperbole.
My favourite quote “Things don’t just happen, they happen just. We are not morally indignant at the uncanny parallels between the manner in which a scoundrel runs a Ponzi scheme and the manner in which the government runs, say, social security or bank bailouts. Our morality play knows no preferences – liberal nor conservative, progressive nor traditional, Keynesian nor Austrian. ”
Just like the comment from your NFP article this morning about the economy in the crapper, we all know this so lets get on with understanding how we can make money. Articles like Hard Truth help us do just that without all of the noise.

Thanks for a contiued great work.
Graham