[MC2]

So, Rocc, you don't believe Karl could have changed his thesis a bit since last September, eh? If someone learns something that changes their outlook, they should persist in the way they thought, even if they risk losing valuable assets?
Why don't you write him an email and ask him about that old Ticker? I can remember a few around that time when he was still talking up gold, too. Things change.
The fact you are so malignant towards him (not just this thread) tells me you sufferred some rough treatment over there, probably because you're such a gold bug. Very obvious, dude.

Maybe you should open your mind and be willing to change your thesis before you lose your ass.

[roccman]

$this->bbcode_second_pass_quote('MC2', 'S')o, Rocc, you don't believe Karl could have changed his thesis a bit since last September, eh? If someone learns something that changes their outlook, they should persist in the way they thought, even if they risk losing valuable assets?
Why don't you write him an email and ask him about that old Ticker? I can remember a few around that time when he was still talking up gold, too. Things change.
The fact you are so malignant towards him (not just this thread) tells me you sufferred some rough treatment over there, probably because you're such a gold bug. Very obvious, dude.

Maybe you should open your mind and be willing to change your thesis before you lose your ass.

[sjn]

$this->bbcode_second_pass_quote('MC2', 'S')o, Rocc, you don't believe Karl could have changed his thesis a bit since last September, eh? If someone learns something that changes their outlook, they should persist in the way they thought, even if they risk losing valuable assets?
Why don't you write him an email and ask him about that old Ticker? I can remember a few around that time when he was still talking up gold, too. Things change.
The fact you are so malignant towards him (not just this thread) tells me you sufferred some rough treatment over there, probably because you're such a gold bug. Very obvious, dude.

Maybe you should open your mind and be willing to change your thesis before you lose your ass.

[DantesPeak]

$this->bbcode_second_pass_quote('roccman', '')$this->bbcode_second_pass_quote('MC2', 'S')o, Rocc, you don't believe Karl could have changed his thesis a bit since last September, eh? If someone learns something that changes their outlook, they should persist in the way they thought, even if they risk losing valuable assets?
Why don't you write him an email and ask him about that old Ticker? I can remember a few around that time when he was still talking up gold, too. Things change.
The fact you are so malignant towards him (not just this thread) tells me you sufferred some rough treatment over there, probably because you're such a gold bug. Very obvious, dude.

Maybe you should open your mind and be willing to change your thesis before you lose your ass.

[shortonoil]

MC2 said:

$this->bbcode_second_pass_quote('', 'G')old and silver are commodoties and should be treated as such.

[roccman]

$this->bbcode_second_pass_quote('sjn', '')$this->bbcode_second_pass_quote('MC2', 'S')o, Rocc, you don't believe Karl could have changed his thesis a bit since last September, eh? If someone learns something that changes their outlook, they should persist in the way they thought, even if they risk losing valuable assets?
Why don't you write him an email and ask him about that old Ticker? I can remember a few around that time when he was still talking up gold, too. Things change.
The fact you are so malignant towards him (not just this thread) tells me you sufferred some rough treatment over there, probably because you're such a gold bug. Very obvious, dude.

Maybe you should open your mind and be willing to change your thesis before you lose your ass.

[MC2]

Rocc, think about what you're saying. If oil "doesn't flow" (and I'm onboard with Peak Oil) how can that not be deflationary? If energy is not there to fuel economic expansion, how do you inflate? Are we going to see short term inflationary feints now? Yes, defiinitely. What happens when the music stops playing? We've lost trillions in speculative "value" peddled to certain someones out there in the derivative blow-up that's underway. That money is GONE. JP Morgan may have 90 trillion at risk itself. Joe6Pk is up to his asshole in debt, has mortgages, some ARMs due to reset, and this represents a lot of debt which will never be paid back, so that goes "poof" too. All this destruction of wealth and credit is deflationary.
They cannot inflate the problem away. If you want to believe that Hank Paulsen said he was going to take on the MBS and extend an unlimited blank check, you really need to go back and look at his actual words. Sure, people will read into that all kinds of mythical impossibilities. There ISN'T ENOUGH MONEY IN THE SOLAR SYSTEM TO FIX THIS!!

That's why deflation must happen now. The inflation has already occurred folks. It happened over the last 15-20 years, with one bubble after another being inflated, and now it will reset. There's nothing left to inflate. End game.

[seldom_seen]

$this->bbcode_second_pass_quote('MC2', 'T')here's nothing left to inflate.

[roccman]

$this->bbcode_second_pass_quote('MC2', '
')
That's why deflation must happen now. The inflation has already occurred folks. It happened over the last 15-20 years, with one bubble after another being inflated, and now it will reset. There's nothing left to inflate. End game.

[mkwin]

$this->bbcode_second_pass_quote('seldom_seen', '')$this->bbcode_second_pass_quote('MC2', 'T')here's nothing left to inflate.

[MC2]

Mk, a 15 per cent increase, if it occurred, would not begin to replace the losses we are incurring in the destruction of money (debt) through the tens of trillions of derivatives (some say hundreds of trillions). This doesn't even begin to address the additional destruction that's coming from credit card debt that will not be collected, as people lose their jobs in the coming recession/depression.

I have to back out of this "debate," but I'll leave you with a thought - what most see happening in Peak Oil is mirrored in our economy. We are at "Peak Everything," including financial markets (still down only 10 per cent or so from all time peaks), and the same forces that are going to work to CONTRACT the oil economy are working in finance and equities. I think we've all been blinded by twenty years of good times rolling and the continuous banter about the need to fight "inflation" while it was, in fact, always going on and has been represented by the run-up itself, fueled by a succession of bubbles, terminating in the last and biggest - housing.
Inflating the money supply is only a shadow show, as someone has to be on the other side of every trade. Who will buy our treasury auctions?
Pick and choose. It's taken me eight months to come to the conclusion that inflation is not going to be the road we take, because the math doesn't support it. Everyone is free to make up their own minds - we're all going to need all the help we can get! Times are going to get very hard.

Here's the link once more:
http://market-ticker.denninger.net/

Good luck!

[RdSnt]

The way I understand the current situation is that the money flooding in is for inter-bank lending which is what has stopped moving. It's not about getting money into the public's hands now.
The way I see it, the banking system (at least the big Wall Street banks) have generated such a huge problem for themselves, based on leveraged, derived debt, that they are completely disconnected from the general public. It means they are doing whatever they can to rescue themselves and what happens to the general economy is irrelevant.
And I might add the the size of the global economy is tiny compared to the leveraged obligations that need to be justified, to the tune of hundreds of trillions of dollars.
That is all just numbers on ledgers, but there are profit expectations which were themselves leveraged into other debts. That's all got to balance out at some point; the problem is it can't be balanced. The net worth of the entire planet (quite literally) is not nearly enough to back these obligations.

$this->bbcode_second_pass_quote('threadbear', 'W')hat I have difficulty with is the means of money delivery, even if they do start printing like crazed counterfitters, if so many no longer qualify for loans. If banks seize up more than they already are how is this cash going to circulate? The Japanese had this problem of getting cash into the hands of people, and tried dealing with it in a number of different ways, one of which was launching massive infrastructure projects, subsidizing banks and sharply lowering their interest rates.

Wikipedia:
The easily obtainable credit that had helped create and engorge the real estate bubble continued to be a problem for several years to come, and as late as 1997, banks were still making loans that had a low guarantee of being repaid. Correcting the credit problem became even more difficult as the government began to subsidize failing banks and businesses, creating many "zombie businesses".
The time after the bubble's collapse (崩壊 hōkai?), which occurred gradually rather than catastrophically, is known as the "lost decade or end of the century" (失われた10年 ushinawareta jūnen?) in Japan. The Nikkei 225 stock index eventually bottomed out at 7603.76 in April 2003 before resuming an upward climb.

http://en.wikipedia.org/wiki/Japanese_a ... ice_bubble

[DantesPeak]

Zimbabwe now has hyperinflation with a credit collpase and falling supplies of energy, and no advanced electronic system of bank payments.

The Fed, being in a much better position, can and will issue trillions of $s if necessary. There is no limit to its balance sheet, and it balance sheet is already being rapidly undermined by taking on low quality assets such as providing an unconditional (although illegal) guarantee of Bear Stearn's $13 trillion in derivatives.

It appears to me that the market ticker debate only wants to look at selective facts, just as its view of Peak Oil is warped.

[roccman]

$this->bbcode_second_pass_quote('MC2', ' ')It's taken me eight months to come to the conclusion that inflation is not going to be the road we take, because the math doesn't support it.

[seahorse]

I like viewing the tickerforum, but they are day traders (stocks, as opposed to currencies). As day traders of stocks, it becomes obvious they don't follow big trends and this creates biases. For example:

(1) They don't trade currencies, yet they want to argue that cash is king, even when the dollar has dropped more than 50% against the Euro in 7 years. This has caused them to miss out on the boom in precious metals prices (bc they are biased towards stocks and nothing else).

(2) In my humble view and very layman view, their bias towards stocks causes them to believe that as stocks go down in a deflation/depression, cash will increase in value. The facts don't support this. Looking to the Great Depression to argue cash is king is not analogous to today. In the Great Depression, cash was king, but our dollar was also back by gold, so, a very different time period.

Another difference between now and the Great Depression is that now the US has massive trade and budget deficits that can only be funded if foreigners continue to buy our treasuries, which they will only continue to do if the American consumer continues to keep spending. So, in the Great Depression, the US didn't depend on foreigners to buy bonds and give strength to the dollar. Its very different today. Further, in a depression/deflation, the American consumer will not keep consuming, and thus, the incentive for foreigners to buy bonds and prop the dollar will not be there. They might, though, bc decoupling is a myth. The fact that so many other currencies are pegged to the dollar simply means there is only one currency. So the world will desparately try to prop up the dollar as long as possible.

Further, the cash is king argument fails to explain why the stock market "crashed" in 2001, yet the dollar also dropped and precious metals increased in value. The 2001 example is exactly why I think the dollar can continue to drop in a deflation and precious metals can continue to rise. In fact, despite this last weeks drop in precious metals, they continued to rise despite some steep drops in the dollar and stock market. It waits to be seen, but the recent drops in PMs could easily be attributable to the Bear Sterns fallout creating margin calls. Time will tell.

All this to say, I'm not sure cash will be the only King in a deflation. PMs should hold their own.

Last, Tickerforum do not accept Peak Oil at all, and as Rocc points out, this is a serious blindness in their thinking. Plateau oil certainly explains our stagflation. With plateau oil or peak oil in a few years, we will continue to see rising fuel and food costs even while other assets deflate. Thus, they only see part of the picture.

[roccman]

Excellent post SH!

"it will be different this time"...

yes - it WILL be different ...

Never in the history of man has one energy source been so wholly dependent on by such a significant amount of people.

TF is for day traders only.

If you get out of line on TF and don't march to the beat of the neo con drum you will be banned.

There is ONLY one permitted thread for gold discussion.

Karl Denninger is of the mindset the "6,000 warheads" wins in the end.

Karl knows ZERO of overshoot/carrying capacity and think Africa is the most overpopulated place on earth.

Karl believes "the world will get it worse than america".

That said...there is value in what Karl brings...albeit not back of the envelope stuff.

For the play by play the TF is the place to get solid breaking news and discussion about that news, but for the long term outlook...a little "light" and "heavy" on ego.

[mkwin]

$this->bbcode_second_pass_quote('', 'M')k, a 15 per cent increase, if it occurred, would not begin to replace the losses we are incurring in the destruction of money (debt) through the tens of trillions of derivatives (some say hundreds of trillions).

[seahorse]

As for hyperinflation, here's how I see that happening (keep in mind I don't understand treasuries, so, there can easily be more than one way for the US to take the hyperinflation road).

If the US takes on the burden of paying the bad mortgage debts, then things could get hyperinflationary. It seems the US is considering this route, by expanding the portfolios of the GSEs and all this talk about the US actually buying the mortgages. So, if the world gov'ts take on all that debt, without tax revenues to pay for it, things would get hyperinflationary. At a minimum, the dollar has to deflate to some degree.

In the end, I don't know how the dollar survives even without the mortgage crisis. David Walker, former head of the US GAO, repeatedly warned about the US financial tsunami in unfunded liabilities for Social Security, Medicaid, Medicare etc. Those problems will hit in 10 years and can easily bankrupt the US (its bankrupt already, we just aren't developing a workout plan). Further, add in the ongoing $2 trillion in war expenditures we may be bankrupt much sooner, say, 2010. Keep in mind war spending is carried "off-budget" so that they won't affect the current "budge deficit."

This ongoing problem with the mortgage backed securities just shows one thing: that Americans now view the gov't is there to solve all problems (bail outs expected), that we live in some form of socialist oligarchy, and that, in the end, in one form or another, that this mindset will lead to the US taking on these debts and bailing out "the homeowner" who took out a bad loan and the lender who made a bad loan, all at the expense of the US taxpayer and the value of the US dollar.

Forget what happened last week in PMs, in five years, I don't see how the dollar can be worth very much. So, other than buying some PMs, bullets, maybe energy stocks, there's just not a lot of ways a people like ourselves can protect our savings. One could buy farm land, but if you can't pay cash for it, it may not be a good investment. Plus, it farming is difficult and expensive, especially if you don't know what you are doing, so there is still risk there. I do think there is a difference between saving and investing. Saving is trying to preserve your capital, investing trying to grow it (for example, some will invest by taking out loans and buying a business or stocks using margins). Not saying you can't try to do both, but I believe there is a subtle distinction between saving and investing.

[MC2]

Sea, there are PLENTY of us peak oilers on TF.

Later guys, good luck!

[roccman]

$this->bbcode_second_pass_quote('MC2', 'S')ea, there are PLENTY of us peak oilers on TF.

Later guys, good luck!