Meltdown

[BachQ]

Matt Simmons: Peak Oil Primer (7-part series)

Part 1 of video series: http://www.youtube.com/watch?v=gmRmTbyPxjQ

[ezodisy]

The game changer

By George Soros

January 28 2009

[Sarastro]

Are there any predictions for 2010? Particularly the fall of 2010? Is the economy going to recover?

[ezodisy]

why 2010? What about this year?

[Sarastro]

It's personal.

[ezodisy]

It's personal.

well then, if you want a prediction from me, I'll just nick your own words (thanks)

the fall of 2010

[Sarastro]

Why is it so necessary to know why I need predictions for 2010? Just wanted. Maybe not only your predictions....I remember you posted some guy's predictions for 2008 and what really happened and what he has forecast for 2009. Is there anything like this for 2010?

[ezodisy]

It's not, I only asked once and then gave you my prediction (rather vague, but that won't stop me from taking any credit  ). I haven't seen much about 2010 yet, though there's that Russian chap Kondratieff who thinks we're in the tail end of a 50 year cycle (the big plunge part).

[BachQ]

Why is it so necessary to know why I need predictions for 2010? Just wanted. Maybe not only your predictions....I remember you posted some guy's predictions for 2008 and what really happened and what he has forecast for 2009. Is there anything like this for 2010?

Sarastro, you may be referring to Gerald Celente, one of the leading trends experts:

Gerald Celente

pt 1 http://www.youtube.com/v/3XgbvHqayTI

pt 2 http://www.youtube.com/v/LKnIVKWetV4&feature=related

Gerald has tons of clips available, and above are his two most recent.  He probably has the best track record around, and just as he correctly predicted the "panic of 2008," he now predicts the "collapse of 2009."

Are there any predictions for 2010? Particularly the fall of 2010? Is the economy going to recover?

Before we can reach an economic recovery, we must first reach bottom.  Who knows when that will be!?! 

[Sarastro]

we must first reach bottom

Are we not there yet?
Thanks for the clips!

[Archaic Torso of Apollo]

A conversation with James Howard Kunstler:

http://www.themorningnews.org/archives/birnbaum_v/james_howard_kunstler_redux.php

[Lethevich]

It's getting closer

I love great ambition, this whole project might almost make up for the lack of wind power investment.

[karlhenning]

Cheney Dunk Tank Raises $800 Billion for Nation

[BachQ]

US Map for Unemployment, State Budget Deficits, and Foreclosures

http://money.cnn.com/news/storysupplement/economy/gapmap/index.htm

Florida and California lead the pack.

[BachQ]

Der Spiegel (30 Jan 09): Can Countries Really Go Bankrupt?

The image is even bleaker in the United States, where economist Nouriel Roubini estimates that losses in the financial sector will total $3.6 trillion. In the United Kingdom, the government has partially nationalized the Royal Bank of Scotland and Lloyds TSB -- and many experts see a full nationalization as inevitable. ... The borrowing being done by countries to finance the bailouts, economic stimulus programs and shortfalls in tax revenues will create a lasting burden. Worse, with the decline in the banking sector continuing, it is unclear that such massive spending will be effective....

[BachQ]

Stiglitz Criticizes Bad Bank Plan as Swapping 'Cash for Trash' -- Jan. 31 (Bloomberg) --   Nobel laureate Joseph Stiglitz said any decision by President Barack Obama to establish a so-called bad bank to rid financial companies of toxic assets risks swelling the national debt. Obama's administration is moving closer to buying the illiquid assets currently clogging bank's balance sheets and preventing them from boosting lending, people familiar with the matter said this week. That amounts to swapping taxpayers' "cash for trash," Stiglitz said in a panel discussion at the World Economic Forum in Davos, Switzerland today. "You shouldn't chase good money after bad. We're talking about a national debt that's very hard to manage."

A conversation with James Howard Kunstler:

http://www.themorningnews.org/archives/birnbaum_v/james_howard_kunstler_redux.php

Very extensive interview.  0:) Kunstler's right that we're amid a perfect storm of greed, incompetence, economic turmoil, misallocation of resources, and environmental destruction.

It's getting closer
I love great ambition, this whole project might almost make up for the lack of wind power investment.

Yeah, it is getting closer.  I hope the UK has the sense to channel some of its bank bailout money toward tidal power generation, and other alternative energy technologies.

Cheney Dunk Tank Raises $800 Billion for Nation

[ezodisy]

First time I've seen this
------------------


Nicholas Copernicus: The Principles of a Sound Currency

The Causes of National Disaster

Numerous as are the disasters which normally lead to the decay of kingdoms, principalities, and republics, the four following are in my opinion the most to be feared:-war, disease, famine, and inflation. No person can ignore the evidence for the first three, but very few people except rare individuals of very great insight bother themselves about the fourth cause which is bound up with the soundness of the currency. Why is this? It is because this fourth cause of disaster operates not by a sudden blow, but with a stealthy and hidden power it gradually works the overthrow of states.

Money as a Standard of Economic Value

Gold or silver, minted into coin according to the laws laid down by the state, make up that supply of money which serves to determine the price of things which are bought and sold. Money is then a generally accepted measure or standard of value. But this measure is fixed in conformity with the established law. Otherwise, there would of necessity be disorder in the state and buyers and sellers would be constantly misled just as would happen if the yard or the bushel or the pound did not always represent the same measure of length or quantity or weight. Now this standard of value in economic transactions is in my opinion to be found in the value of money. Although this value may have as its basis the value of the money as a precious metal, it is necessary to distinguish the value of money as money from the value of money as metal. Money in fact may be valued at a higher value than that of its metallic content and the opposite may also be true.
The invention of money was caused by necessity. Although by simply weighing gold and silver one could have carried out market exchanges, since these metals in the unanimous opinion of men were considered above all else as being precious things, nevertheless there would have been numerous inconveniences in having always to carry such a weight around. Moreover, not everyone is skilled in knowing at first glance the purity of the gold or silver. Men, therefore, established the practice of marking on each piece of money by the exercise of lawful authority, the gold or silver content of the piece and this value was guaranteed on the faith of the public authorities.
It became the custom to add copper to the coinage particularly to silver coins. There were two reasons for this; in the first place so that the coins would be less exposed to re-minting and melting down than if they have been made of pure silver; in the second place so that the monetary unit of silver, divided into smaller units and even into small change, should have in consequence of the alloy-that is of the copper mixed with it-a convenient size. A third reason can be added to these first two: as coins constantly suffer from wear and tear in their use as money, a copper alloy makes them last longer.

The Value of Money

Money is valued at its just and true worth when it contains an amount of gold or silver which is only a very tiny fraction less than the quantity of those metals for which it can be exchanged-the difference should be just enough to pay for the actual cost of coinage. The minting itself by the guarantee which it carries adds value to the coin above the value of the metal itself.
Money loses its value when it is issued in too great a quantity, for example as when men prefer silver bullion to silver coin. Money loses all its worth when it can no longer buy as much as the silver which it contains and when there is profit to be made by melting it down. The only remedy for this state of affairs is to cease coining any more money until it has recovered its par value and has gained again a monetary value greater than that of the silver itself.
The value of money depreciates for a number of reasons:-it may be because of a defect in the metallic content as when the amount of copper in the alloy is greater than is proper; it may be that the coin itself is light in weight even though the amount of alloy is correct. It may be-and this is the worst-because the two defects occur at the same time.
Money loses its value when it has been long in use because the process of circulation wears out the metal and diminishes the size of the coin; then a new coinage restored to its proper value must be issued. This situation may be recognized by an infallible sign, namely, when the silver in a coin weighs decidedly less than the amount of silver which could be bought at the price represented by the face value of the coin. When this occurs, there is a depreciation in the value of the money.

Depreciated Currency in Practice

After having made these general observations on money, let us turn to a detailed study of Prussian money and show how it has become so debased in value. 0, Wretched land of Prussia which is paying by your ruin, alas, for the mistakes of a bad government. Although the nominal value and the real value of the coinage were both depreciating at the same time, more and more money continued to be minted. But since the costs of coinage were not even covered, the money became more and more debased and the money of account continually fell in value . . . . Such were inevitably the results of the debasement of the currency when the authorities did not consider it necessary to maintain the intrinsic value of the coins at their face value. The set habit of melting down money and reissuing it at a debased value has in no way ceased in our time. It makes me ashamed and unhappy to tell what this money must inevitably become and indeed what it has already become. . . .
What will happen if nothing is done? Prussia, stripped of gold and silver, will have merely a copper coinage and this will stop foreign trade and ruin all commerce. Where, in fact, will you find any foreign merchant who will be willing to exchange his merchandise for copper money? Which one of our merchants will be able to buy commodities in foreign countries with this debased currency? Yet it is with indifference that the authorities watch this terrible disaster happen to Prussia. By their inaction they are permitting the ruin and the utter destruction of this beloved country. . . . While the Prussian currency and consequently the country itself are suffering from these vices, the jewellers and bullion dealers alone profit from our misery. They take out the old (and good) coins and melt them down in order to sell the silver and they thus obtain from the uninformed man in the street a greater value in silver than the value of the coins they give him in exchange. When the best of the old coins have completely disappeared, they then pick out the least bad of the coins still in circulation, leaving only the worst coins to circulate as money. From this cause comes the continued complaint which echoes and re-echoes on every side that the price of gold and silver, the price of corn, foodprices, and the wages of labor, indeed, the prices of everything that makes up the daily cost of living are always rising. Our negligence prevents us from seeing that the increasing dearness of everything comes from the depreciation of the currency. As a matter of fact, prices of commodities increase and decrease proportionately to the quantity of money and in particular to the quantity of the precious metals? . . for gold and silver constitute the foundations of the currency and determine its value.

The Economic Effects of Sound and Unsound Currency

. . . It cannot be denied that sound money is advantageous not only to the government but to men of every rank and condition while unsound money is extremely harmful. There is a great volume of evidence for this contention, and experience-the most reliable guide-plainly demonstrates its truth. In point of fact we see those countries flourishing which possess a sound currency while those which have only an unsound currency fall into decadence and perish. . . . The increasing debasement of our currency is leading our country, stricken by this and other calamities, to the very brink of disaster.
It is indisputable that countries which have a sound currency shine in manufactures, possess the best workmen, and have everything in abundance. Contrariwise, in states which have a debased currency, you find a lack of accomplishment, idleness and sloth. Business and culture alike are there neglected, and the most wretched poverty is endured. We can still remember when the prices of corn and other foodstuffs were cheap in Prussia -but that was when we had a sound currency. Now that the money in circulation has become debased we note with every day that passes how the price of food and of the other necessities of life increases. . . .

Monetary Reform

At the same time, in order to avoid falling again into the monetary confusion which characterizes our times-a confusion arising from the simultaneous circulation of new [sound] currency and old [debased] currency, it would be necessary, at the time of issuing the new money, to de-monetize the old currency and to withdraw it from circulation. Men would be permitted to exchange it at the mint for the new currency in proportion to its intrinsic value. Unless this were done, it would be a waste of time to reestablish sound money. . . .

Comparison of gold and silver: We have already stated that gold and silver are the foundation upon which rests the value of money. What we have already said about silver money applies almost equally well to gold money. It now remains to discuss the principles which govern the relative values of gold and silver. . . . It is recognized that provided that the coins and the ingots are of the same metallic fineness and of the same weight . . . the same ratio of exchange will exist, between pure gold and pure silver as between minted gold and minted silver of the same denomination and that similarly the same ratio of exchange will prevail between gold minted into coin and gold in ingot form and silver minted into coin and silver in ingot form.
. . . The preceding example will enable us to form clear ideas on this matter. There are many ways of establishing a sound currency and I cannot describe every one of them, but common agreement after ripe deliberation will enable us to choose the method which will be most advantageous to the country. When once the standard money of account has been established correctly in relation to the Hungarian ducat, it will be easy to establish the value of other coins by reference to the amount of gold and silver which they contain. . . .

Epilogue on Re-establishing a Sound Currency

To succeed in restoring and then maintaining a sound currency, several things must be considered. They are as follows:
1. It must not be changed in value except after ripe deliberation by the government authorities and only then if there is unanimous agreement.
2. One single place must be chosen for the minting of the money which must be minted in the name of the entire country and not in the name of a single city. . . . In this way, the Polish currency will preserve its value over the whole area of this vast kingdom.
3. When the new currency is issued, the old currency must be de-monetized and withdrawn from circulation.
4. It is essential to have an inviolable and unchangeable rule to mint only 20 marks and no more from a pound of silver, deducting only the quantity of silver necessary to cover the expenses of coinage. In this way, the Prussian currency will have a fixed relation to the Polish currency. . . .
5. Too great a quantity of money must not be issued.
6. All the different kinds of coins should be issued at the same time. . . . The proportions and quantities of the smaller coins to the larger coins must be left to the discretion of the issuing authorities, but once the relative values of the various coins have been established, they must be maintained.

One last difficulty arises from existing contracts, that is the reconciliation of contractual obligations before and after the issue of the new coinage. A way must be found for a transition which will prevent parties to existing contracts from being harmed too much. . . .

[BachQ]

Gold could double soon: The failure of a U.S. Treasury auction could cause gold to exceed $2,000/ounce

U.S. Debt Default, Dollar Collapse Altogether Likely The prospect of the United States defaulting on its debt is not just likely. It's inevitable, and imminent.


4 Feb 09
Nymex oil = $40/bbl
Comex Gold = $900/oz

[BachQ]

First time I've seen this

That's new to me as well. 

...The four following [disasters] are in my opinion the most to be feared: war, disease, famine, and inflation....

[snip]

...Money loses its value when it is issued in too great a quantity ...

[snip]

...Too great a quantity of money must not be issued....

Copernicus would have a coronary if he were alive to witness the deeds of Bernanke, Paulson, Geithner, Gordon Brown, Alistair Darling & Co. .......  Not to mention the PIIGS.

[BachQ]

I think the guy (or guys) who suggests 0 is way off the mark. BOE has never gone below 2. It ain't gonna happen now.

FT ALPHAVILLE: The Bank of England cut its benchmark interest rate to 1% -- the lowest since the bank was founded in 1694.