Peter Schiff recently stated that the worst choice that could be made by the EU would be for them to put more stimulus into play.
After former French President Sarkozy was voted out of office, German Chancellor Angela Merkel lost her most important ally in implementing austerity measures, and so has been under increasing pressure to cave on going the stimulus route rather than cutting back on spending.
Schiff doesn't think Germany will cave in. He said, "Either Greece is going to leave the euro zone, or it's going to have to accept austerity as a price of remaining a member. There's no way that Germany is just going to cave and support the Greek welfare state."
Of course the real issue isn't the largely irrelevant Greece, but the obvious consequences of other nations lining up soon afterwards to demand they be bailed out as well.
Germany will find itself footing the bill for much of that, draining valuable resources that could be used for productive means and redistributing it to governments who refuse to cut spending to sustainable levels. In other words, the German people will get screwed.
Schiff doesn't believe it will happen, but I'm not so sure. Never underestimate the stupidity in regard to failing Keynesianism, which supports the anemic idea that governments can endlessly spend themselves into prosperity.
The failure in Europe and the growing, unsustainable debt levels in the United States show that Keynesianism is dying and a complete failure, and leaders need to accept that as the reality of the future.
Austerity will be forced on nations around the world whether they like it or not, but it won't come without a lot of pain, as the promises made by politicians who are supported by elites pursuing a New World Order, have never been realistic, and the day of reckoning will be soon at hand for those who have refused to take action and continue to kick the can down the road in hopes the default won't happen on their watch.
Peter Schiff is right in saying the worst action by Europe would be to throw more money into the economy via another stimulus, but it would be surprising to me if Merkel holds out and refuses to engage in more money printing, as most leaders and everyday people don't understand the precipice they're all heading for.
If Merkel has any courage, she would resist stimulus and remain firm on austerity as the economic answer for the region. There is no other way.
Showing posts with label Stimulus. Show all posts
Showing posts with label Stimulus. Show all posts
Friday, May 25, 2012
Wednesday, November 17, 2010
Berkshire Hathaway's (NYSE:BRK-A) Warren Buffett: Time to Retire?
Warren Buffett, who runs Berkshire Hathaway (NYSE:BRK-A), since the onset of the economic crisis and recession, has steadfastly stood by the misguided actions of the Federal Reserve and government bailouts, saying it had to be done, even though the consequences over time will be devastating.
Buffett, now 80-years-old, was used by the New York Times to prop up the economic debacle again via an op ed where he said:
"Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street’s giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G. (NYSE:AIG), the world’s most famous insurer, was at death's door."
Buffett, and partner Charlie Munger, as gold investors know, don't understand or even like gold. Buffett long ago abandoned the economic philosophy of his father Howard, and gravitated and embraced Keynesianism, which has led to the disaster we face today.
The reason Buffett supports the policies and actions is he is totally and completely tied up into government excess because he looks for companies that have monopoly positions, or at least as close to it as you can get.
That provides the protective moat he always talks about, and unfortunately the government plays a big hand in that with companies, as it interferes in the marketplace and promotes the types of businesses they prefer to succeed, giving an extraordinary advantage, or creates an unsustainable industry that wouldn't otherwise exist.
One example of that is the energy industry, where solar and wind power couldn't survive without being propped up by the government. There are many others like that.
Buffett has come out of the economic closet over the last several years, and contrary to his past behavior and communication, has made his embracing of the government and politics in a way that he hasn't done before, at least in the openness he has portrayed.
Charlie Munger has also made negative comments about gold, as he sees it as useless, even though it is a major force for safety and battles inflation, among a number of other things.
I wonder if these guys are simply getting too old to run Berkshire and other companies (in the case of Munger), as they are asserting things in a way which makes one wonder if they are being influenced and manipulated behind the scenes.
Either way, Buffett, in my opinion, has lost some of his luster over the last several years as he became more political and revealed his liberal and big government leanings, something that is obviously far beyond his expertise.
Knowing how to identify great companies and sectors to invest in is a far cry from understanding economics and the impact of the Federal Reserve and other central banks.
He understands it for how it helps his businesses, but he seems to neglect it in reference to the toll it'll take when our progeny must pay for the costs of the bailouts and fiscal stimulus.
In this, Buffett is as disastrous as any other misguided so-called economist working from the assumptions of Keynesianism.
Buffett, now 80-years-old, was used by the New York Times to prop up the economic debacle again via an op ed where he said:
"Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street’s giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G. (NYSE:AIG), the world’s most famous insurer, was at death's door."
Buffett, and partner Charlie Munger, as gold investors know, don't understand or even like gold. Buffett long ago abandoned the economic philosophy of his father Howard, and gravitated and embraced Keynesianism, which has led to the disaster we face today.
The reason Buffett supports the policies and actions is he is totally and completely tied up into government excess because he looks for companies that have monopoly positions, or at least as close to it as you can get.
That provides the protective moat he always talks about, and unfortunately the government plays a big hand in that with companies, as it interferes in the marketplace and promotes the types of businesses they prefer to succeed, giving an extraordinary advantage, or creates an unsustainable industry that wouldn't otherwise exist.
One example of that is the energy industry, where solar and wind power couldn't survive without being propped up by the government. There are many others like that.
Buffett has come out of the economic closet over the last several years, and contrary to his past behavior and communication, has made his embracing of the government and politics in a way that he hasn't done before, at least in the openness he has portrayed.
Charlie Munger has also made negative comments about gold, as he sees it as useless, even though it is a major force for safety and battles inflation, among a number of other things.
I wonder if these guys are simply getting too old to run Berkshire and other companies (in the case of Munger), as they are asserting things in a way which makes one wonder if they are being influenced and manipulated behind the scenes.
Either way, Buffett, in my opinion, has lost some of his luster over the last several years as he became more political and revealed his liberal and big government leanings, something that is obviously far beyond his expertise.
Knowing how to identify great companies and sectors to invest in is a far cry from understanding economics and the impact of the Federal Reserve and other central banks.
He understands it for how it helps his businesses, but he seems to neglect it in reference to the toll it'll take when our progeny must pay for the costs of the bailouts and fiscal stimulus.
In this, Buffett is as disastrous as any other misguided so-called economist working from the assumptions of Keynesianism.
Thursday, September 16, 2010
Citigroup (NYSE:C) Sees $1,300 Gold in a Week
With one caveat, Citigroup (NYSE:C) says within a week we could see gold hit $1,300, and the caveat is if the Federal Reserve in the U.S. announces they're going to implement quantitative easing again.
If that happens, all bets are off as to how high gold prices could go, as gold prices today broke another all-time record, and that will continue to happen on a consistent basis.
The reason this will happen is the U.S. government and Federal Reserve through all that they had with the over $1 trillion already spend in an attempt to battle the recession. It didn't work. They have nothing left to throw at it be more money, which will result in the price of gold continuing to skyrocket.
Repercussions from the original stimulus spending are starting to be felt, as the core Producer Price Index in the U.S. increased 0.4 percent in August, part of the reason for the surge in gold prices today.
The U.S. government and Federal Reserve are drunk with spending, and like an unrepentant wino, think another drink won't hurt them.
Even some of advocates of the first Obama stimulus, like Alan Greenspan, are calling for the government and central bank to stop the madness and let the market heal itself; something that should have been done in the first place.
They won't, as they think one more drink, or spending spree, won't hurt them. This is why we can be confident going forward gold prices aren't going to go anywhere but up. Nightcap anyone?
If that happens, all bets are off as to how high gold prices could go, as gold prices today broke another all-time record, and that will continue to happen on a consistent basis.
The reason this will happen is the U.S. government and Federal Reserve through all that they had with the over $1 trillion already spend in an attempt to battle the recession. It didn't work. They have nothing left to throw at it be more money, which will result in the price of gold continuing to skyrocket.
Repercussions from the original stimulus spending are starting to be felt, as the core Producer Price Index in the U.S. increased 0.4 percent in August, part of the reason for the surge in gold prices today.
The U.S. government and Federal Reserve are drunk with spending, and like an unrepentant wino, think another drink won't hurt them.
Even some of advocates of the first Obama stimulus, like Alan Greenspan, are calling for the government and central bank to stop the madness and let the market heal itself; something that should have been done in the first place.
They won't, as they think one more drink, or spending spree, won't hurt them. This is why we can be confident going forward gold prices aren't going to go anywhere but up. Nightcap anyone?
Wednesday, September 15, 2010
Eldorado (NYSE:EGO), Yamana (NYSE:AUY) Novagold (AMEX:NG) Soar on Record Gold Prices
It'll take time to see if the relatively benign economic news concerning the weakness of the European Union is the ultimate catalyst is leveraging gold prices to expected levels, along with the somewhat lagging gold mining stocks like Eldorado Gold Corp Ltd (NYSE:EGO) Yamana Gold, Inc. (NYSE:AUY) and Novagold Resources Inc (AMEX:NG), which soared as gold prices once again surpassed record levels.
Gold miners have responded to soaring gold prices as a mixed bag, which in some cases is justified by the unknown or lack of performance, but in many cases, based on the fundamentals, such as in the case of Yamana Gold, seem to not be able to catch the gold price wave, and has lagged behind some competitors with much less reserves and quality management.
When talking about "benign" economic news, I mean by that that other recent news should have devastated the markets and pushed gold prices and miners higher, like the revelation the stress tests for European banks were pathetic, and the banks were much more exposed to sovereign debt than revealed.
So the idea that Europe isn't as strong economically as thought, is rather weak in comparison to the recent stress test revelation.
I think this is why the price of gold skyrocketed Tuesday, because there is a pent-up realization that the economy and its condition has been covered over by rigged reports and focus on the positive only by the mainstream media, which can't seem to report honestly unless their man Obama and the Democrats are made to look bad.
No matter, the truth is slowly coming out to the general population as to the devastate U.S. economy, and even with reports generated to make it appear confusing and mixed, that is slowly dissipating into an understanding of the danger we're still in, and gold is waiting there for investors to put their money into to protect themselves.
The idea of throwing out more stimulus is a surety now, or at least the attempt to do if, and if that happens, gold will again get a big upward bump as investors seek to protect themselves against a debased currency and out-of-control spending.
Gold miners will take part in the response to this scenario as it continues to play out, and they have, in many cases, a lot of room to run before things level out.
Gold miners have responded to soaring gold prices as a mixed bag, which in some cases is justified by the unknown or lack of performance, but in many cases, based on the fundamentals, such as in the case of Yamana Gold, seem to not be able to catch the gold price wave, and has lagged behind some competitors with much less reserves and quality management.
When talking about "benign" economic news, I mean by that that other recent news should have devastated the markets and pushed gold prices and miners higher, like the revelation the stress tests for European banks were pathetic, and the banks were much more exposed to sovereign debt than revealed.
So the idea that Europe isn't as strong economically as thought, is rather weak in comparison to the recent stress test revelation.
I think this is why the price of gold skyrocketed Tuesday, because there is a pent-up realization that the economy and its condition has been covered over by rigged reports and focus on the positive only by the mainstream media, which can't seem to report honestly unless their man Obama and the Democrats are made to look bad.
No matter, the truth is slowly coming out to the general population as to the devastate U.S. economy, and even with reports generated to make it appear confusing and mixed, that is slowly dissipating into an understanding of the danger we're still in, and gold is waiting there for investors to put their money into to protect themselves.
The idea of throwing out more stimulus is a surety now, or at least the attempt to do if, and if that happens, gold will again get a big upward bump as investors seek to protect themselves against a debased currency and out-of-control spending.
Gold miners will take part in the response to this scenario as it continues to play out, and they have, in many cases, a lot of room to run before things level out.
Friday, August 6, 2010
Gold Soars for 8th Straight Day, Payrolls Down, Recession Worries Up
News outlets reporting on the "disappointing" and "unexpected" results of the U.S. payroll data, somehow find themselves using those words every time the economic data confirms the frailty of the U.S. economy, which when you remove the government props, at best show they've only slowed down the economic crisis, and at worst, and most probable, exasperated it.
Now we're almost surely going to enter into a period of more quantitative easing, which is just another way of saying the Federal Reserve is going to resume it endless printing of money.
Peter Schiff concurs, saying in a report, “It is now widely accepted that the continued domestic weakness will cause the Fed to significantly expand stimulus efforts through so-called quantitative easing. It’s a strong signal for traders to flee the dollar.”
Now that the historical inverse relationship between gold and the U.S. dollar seems to have returned, after a period of time it moved off that to a euro/gold inverse relationship, we should see gold start to rise again as the reality of the weak American economy again sinks into the minds of investors.
Gold is already responding, as it has ended in positive territory for the eight trading day in a row, moving up to $1,205.30 for December delivery on the Comex division of the New York Mercantile Exchange. That was for the most actively traded contract.
It's incredible to hear the mainstream media outlets focus on the release of census workers, which they attempt to paint as a temporary situation. Unfortunately they, in general, weren't near as aggressive in saying that when the census workers were hired and propped up the jobs market as if was on a solid foundation months ago.
There is nothing really new in these numbers, other than confirming what any discerning person already knew, and that is the private sector hasn't been hiring, and the hiring by the government for needless jobs (even without the census workers included), have created the illusion of at least a level situation. That fallacy has been destroyed with the removal of the government props and we see the American economy naked as it actually is.
I don't believe there has ever been an economic recovery in the United States, only the selling out of the future of our children and grandchildren as the Obama administration and the Federal Reserve attempt to print and spend money in order to buy time until a real recovery begins.
Unfortunately, their Keynesian strategy is backfiring, and future generations will have to pay for the outrageous stimulus programs which have done absolutely nothing to help the economy, but rather are only extending the recession longer.
Not only that, but now an increased tax burden has been added to the problem for the American people, and that should cause an even deeper rebellion and resentment from those Americans, who are increasingly discovering what these actions are doing to their country.
As far as how this affects the relationship between gold and the euro, that has started to revert to the former relationship of moving in tandem with one another, although there is little reason for that to happen, as nothing has really happened to change the sovereign debt crisis in Europe, other than the media's decision to report the crisis is relatively over.
The market is acting like there has been a real change, so while they believe it, the euro/gold relationship looks like it'll act like it has in the past.
If and when that changes, all bets are off as to how high gold prices will go, as there is really nothing in the way any longer to keep it down.
Those with discernment understand the enormous economic challenges ahead, and will invest or hold their money accordingly. Gold will remain one of the best places for safety and returns for some time to come.
Now we're almost surely going to enter into a period of more quantitative easing, which is just another way of saying the Federal Reserve is going to resume it endless printing of money.
Peter Schiff concurs, saying in a report, “It is now widely accepted that the continued domestic weakness will cause the Fed to significantly expand stimulus efforts through so-called quantitative easing. It’s a strong signal for traders to flee the dollar.”
Now that the historical inverse relationship between gold and the U.S. dollar seems to have returned, after a period of time it moved off that to a euro/gold inverse relationship, we should see gold start to rise again as the reality of the weak American economy again sinks into the minds of investors.
Gold is already responding, as it has ended in positive territory for the eight trading day in a row, moving up to $1,205.30 for December delivery on the Comex division of the New York Mercantile Exchange. That was for the most actively traded contract.
It's incredible to hear the mainstream media outlets focus on the release of census workers, which they attempt to paint as a temporary situation. Unfortunately they, in general, weren't near as aggressive in saying that when the census workers were hired and propped up the jobs market as if was on a solid foundation months ago.
There is nothing really new in these numbers, other than confirming what any discerning person already knew, and that is the private sector hasn't been hiring, and the hiring by the government for needless jobs (even without the census workers included), have created the illusion of at least a level situation. That fallacy has been destroyed with the removal of the government props and we see the American economy naked as it actually is.
I don't believe there has ever been an economic recovery in the United States, only the selling out of the future of our children and grandchildren as the Obama administration and the Federal Reserve attempt to print and spend money in order to buy time until a real recovery begins.
Unfortunately, their Keynesian strategy is backfiring, and future generations will have to pay for the outrageous stimulus programs which have done absolutely nothing to help the economy, but rather are only extending the recession longer.
Not only that, but now an increased tax burden has been added to the problem for the American people, and that should cause an even deeper rebellion and resentment from those Americans, who are increasingly discovering what these actions are doing to their country.
As far as how this affects the relationship between gold and the euro, that has started to revert to the former relationship of moving in tandem with one another, although there is little reason for that to happen, as nothing has really happened to change the sovereign debt crisis in Europe, other than the media's decision to report the crisis is relatively over.
The market is acting like there has been a real change, so while they believe it, the euro/gold relationship looks like it'll act like it has in the past.
If and when that changes, all bets are off as to how high gold prices will go, as there is really nothing in the way any longer to keep it down.
Those with discernment understand the enormous economic challenges ahead, and will invest or hold their money accordingly. Gold will remain one of the best places for safety and returns for some time to come.
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