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Bailouts and Moral Hazard

Bailouts and Moral Hazard are not just for “banksters”. The money quote from this piece about Nortel’s bankruptcy is: “I’d rather end up on welfare than give our hard-earned assets to these vultures,” Mills said in the statement” Mills admits he is not negotiating in good faith, with a taxpayer bailout of his personal finances […]

Ilinois Credit Downgrade

The state of Illinois owes $271B (See here). That they acknowledge. This is owed to someone. Now their credit rating is downgraded again. People should be thinking about the creditors. Who are they? I don’t mean vendors of supplies purchased by the state. I mean the bondholders, not just who own state debt but who […]

The “Housing Recovery”

Here is a chart of new homes sold, courtesy of the St. Louis Fed.

Is Silver a Good Trade Right Now?

Report of tightness in the silver market are appearing all over the blogosphere. Does one trade this informaiton, or is there a better way to judge how tight the gold and silver markets really are? And therefore, is there a better way to trade the gold silver ratio

Japanese Monetary Policy = Insanity

After 20 years of trying to fight deflation, and 10 or 11 rounds of Quantitative Easing, now Japan is trying the same thing again and expecting a different result. Aside from proving that they are insane, it also proves that the widely accepted theory (rising money supply = rising prices and falling currency) doesn’t work. […]

Deflation? It’s not about falling prices!

Here is what Deflation is really about… – falling real estate values – falling stock market values – falling employment – falling banking system – falling incomes – falling economy That’s why governments and central banks are trying so hard to fight it (in vain). http://www.reuters.com/article/2013/01/21/us-spain-banks-protests-idUSBRE90K0N920130121

Impact of Germany’s Gold Repatriation

Germany has announced that it plans to take home all 374 tonnes of its gold stored at the Banque de France, and 300 out of 1,500 tonnes held at the Federal Reserve Bank of New York (http://www.ft.com/intl/cms/s/0/97970542-5fd2-11e2-b128-00144feab49a.html#axzz2I9UZ7iGA). Bill Gross of PIMCO tweeted: “Report claims Germany moving gold from NY/Paris back to Frankfurt. Central banks don’t […]

EU Ponders Gold Backed Bonds

Portugul and Italy consider using their national gold reserves to back new debt issuance. Is this a good idea?

Buying Growth, Not Sustainable

There is no way to make SS “actuarially sound”, and there is no way for the government to massively distort the economy in a “business friendly way.” It is not possible to make a sound annuity under an irredeemable currency.  The interest rate is falling, which means dwindling income for the annuity.  And of course […]

Zero Interest Rate – Bad for Everyone

Zero Interest Rate Policy isn’t just bad for savers and those living on a fixed income, in other words the people.  It is also bad for banks.  Net Interest Margin, which should be a major profit center at a bank, if not the profit center, is negative at JP Morgan. JPM Beats Thanks To Ongoing […]