Helicopter Ben & Other Banks Threw Out Cash
The following is from Casey's Resource Plus:
"But today's banking system as pointed out in recent Investment Outlooks, has morphed into something entirely different and inherently more risky. Our modern shadow banking system craftily dodges the reserve requirement of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever. Financial derivatives of all descriptions are involved but credit default swaps (CDS) are perhaps the most egregious offenders. - Bill Gross
After the mass market interventions by the central banks on Tuesday, I have no idea what the future will bring in the short term. It is now apparent that the central banks will do anything to prevent a collapse. With the FOMC meeting scheduled for next week, it's unclear as to what action they'll take on interest rates, as they have appeared to have abandoned emergency rate cuts to reliquefy the system in favour of swapping "cash for trash". Let's see how long this money 'fix' keeps the Wall Street junkies feeling no pain this time."
Solvency is what is needed, not liquidity. The liquidity injections simply add more unbacked paper currency to markets awash in dollars already. That yield is inflation yielding price inflation which means higher dollar costs for everything we purchase.
The dollar is down substantially since the banks blew the bugle and charged in with 100s of billions of dollars. Gold has rebounded higher in relation to about half of the major currencies of the world. It started upward as the London market opened and took a leap as New York opened. It is now 979.30 and silver is moving upward from 19.92 now.
Most of the mining stocks are making a better showing with the markets being open for only about forty minutes. We must watch to see how they go forward into the rest of the day. By the way, crude moved to 108 yesterday in response to the trashing of the dollar. Most currencies are moving up in relation to the dollar.
At least scan the articles by Turk and Butler, I sent out this morning. They are both informative. We still should take a long term view on precious metals, in particular, and on other commodities, as well. We are in and will continue for a time in a period of stagflation with price inflation with wages lagging behind the curve. The job picture is worsening whether the government statistics show it or not.
Be thankful that the Sovereign God Who loves and care for His people remains in control of all. He moves all men, whether His or not, to carry out His will. We are the means by which He controls all.
Best to each, Doug
"But today's banking system as pointed out in recent Investment Outlooks, has morphed into something entirely different and inherently more risky. Our modern shadow banking system craftily dodges the reserve requirement of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever. Financial derivatives of all descriptions are involved but credit default swaps (CDS) are perhaps the most egregious offenders. - Bill Gross
After the mass market interventions by the central banks on Tuesday, I have no idea what the future will bring in the short term. It is now apparent that the central banks will do anything to prevent a collapse. With the FOMC meeting scheduled for next week, it's unclear as to what action they'll take on interest rates, as they have appeared to have abandoned emergency rate cuts to reliquefy the system in favour of swapping "cash for trash". Let's see how long this money 'fix' keeps the Wall Street junkies feeling no pain this time."
Solvency is what is needed, not liquidity. The liquidity injections simply add more unbacked paper currency to markets awash in dollars already. That yield is inflation yielding price inflation which means higher dollar costs for everything we purchase.
The dollar is down substantially since the banks blew the bugle and charged in with 100s of billions of dollars. Gold has rebounded higher in relation to about half of the major currencies of the world. It started upward as the London market opened and took a leap as New York opened. It is now 979.30 and silver is moving upward from 19.92 now.Most of the mining stocks are making a better showing with the markets being open for only about forty minutes. We must watch to see how they go forward into the rest of the day. By the way, crude moved to 108 yesterday in response to the trashing of the dollar. Most currencies are moving up in relation to the dollar.
At least scan the articles by Turk and Butler, I sent out this morning. They are both informative. We still should take a long term view on precious metals, in particular, and on other commodities, as well. We are in and will continue for a time in a period of stagflation with price inflation with wages lagging behind the curve. The job picture is worsening whether the government statistics show it or not.
Be thankful that the Sovereign God Who loves and care for His people remains in control of all. He moves all men, whether His or not, to carry out His will. We are the means by which He controls all.
Best to each, Doug
posted by Doug @ 8:46 AM
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