[seahorse]

Here's a good link to a radio interview explaining what caused the PMs to drop and the dollar to rise. As we all know, when the Fed lower rates, it should raise the value of the dollar. It didn't, so why not? Bc that rate cut coincided with the collapse of Bear Sterns. Bear sterns had to liquidate their profitable longs in gold and shorts on the dollar.

Here's a link to the radio interview:

Tickerforum

[shortonoil]

mkwin said:

$this->bbcode_second_pass_quote('', 'A') derivative is a contract for difference there are no income streams for contracts for differences.

[mkwin]

Swaps are not really derivatives. As you say they are more about insurance where one party exchanges a fixed rate for a floating rate or vice versa. I was, however talking about futures, forwards and options not swaps.

Swaps have a massive notional value but, even then, I fail to see where any actual capital is destroyed or created. It is, as with futures, just transfered to the winning party. If the buyor of the risk has gone insolvant, the premium payed might be lost to the counter party but it would have been spent in other areas of the economy. Maybe on a nice boat or lots of chanpayne for the owner who knows.

[mkwin]

$this->bbcode_second_pass_quote('', 'B')ull, on a commodities future, you pay upfront.

[centralstump]

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('', 'B')ull, on a commodities future, you pay upfront.

[mkwin]

$this->bbcode_second_pass_quote('centralstump', '
')rofl

To Paraphrase: "no it is not money upfront, because I am getting a loan from another entity to pay for it."

.

[threadbear]

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('', 'I') disagree. Fractional banking has influenced an incredible pyramid scheme of growth and boom times, particularly through wars. Not that it's completely responsible for the population explosion but it is a huge catalyst as is oil. We would have never used as much of the planet's resources with a demurrage system that influences long term thinking for maximum wealth.

[mkwin]

$this->bbcode_second_pass_quote('threadbear', '
')Most pyramid schemes don't start out that way, unless that is their intent, from the beginning. There is usually a credible scheme in operation at the beginning, and then a degradation into a ponzi as more recruits are required to fill the bottom tier of the pyramid.

The question isn't whether it has become a ponzi or not, it's if it was intended to proceed that way, or not, from the beginning.

[threadbear]

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('threadbear', '
')Most pyramid schemes don't start out that way, unless that is their intent, from the beginning. There is usually a credible scheme in operation at the beginning, and then a degradation into a ponzi as more recruits are required to fill the bottom tier of the pyramid.

The question isn't whether it has become a ponzi or not, it's if it was intended to proceed that way, or not, from the beginning.

[mkwin]

$this->bbcode_second_pass_quote('threadbear', ' ')

The US may have had a budget surplus of 236 billion, during Clinton's tenure, but they still had an accrued debt of trillions. One of the ways they were able to achieve a budget surplus was by raising the capital gains tax and income tax on the wealthy. That was just great. Are you quite sure that Clinton would have acted substantially different than Bush on the issue of ifinancial deregulation. Was it not his administration that reduced the power and the budget of the SEC, initially?

This is not a left versus right wing problem. After all, they're both wings of the same bird, the ponzi complicit turkey.

[sjn]

mkwin, you really need to wake up. The problems discussed on this site haven't come about by chance. They're the inevitable consequence of the 100+years of economic growth you are referring to. The World3 model from the LTG can produce results you like when the assumptions are invalid, you should take another look at how realistic that scenario is. Would you assume we have a much more plentiful supply of cheap oil? Can you presume we are all going to live equitablily and share out what remains peacefully and co-operatively? Do you think the environment isn't going to radically change how we have to live our lives (if we're lucky!) with GW, dying seas and mass extinction, depleting fresh water, disappeared forests and much, much more?!? Industrialization was always a Ponzi scheme, but the worst of it was the fact that it wasn't built on peoples savings, but on the consumption of the natural world. People were only (semi-)willful participants.

Also you seem to miss the point being made with leveraged investments. In effect the margin is the collateral you put up for a broker to borrow money to make a larger investment on your behalf. If it doesn't work out the way you hoped the broker needs to cover for the loss (margin call) and you need to put up more collateral or accept the loss. Or at least that's how I understand it.

[shortonoil]

mkwin said:

$this->bbcode_second_pass_quote('', 'Y')ou are right it is not an issue of left or right and the democrats would have probably failed to regulate this collateralized debt problem also. My point was, however, that it is unfair to call everything a ponzi scheme because of 7 years of regulation failure and bad public finances.

[ECM]

$this->bbcode_second_pass_quote('mkwin', 'W')ell the total gain by Clinton was 500 billion during his tenure, which, if continued, could have cut public debt substantially but that is beside the point.

You are right it is not an issue of left or right and the democrats would have probably failed to regulate this collateralized debt problem also. My point was, however, that it is unfair to call everything a ponzi scheme because of 7 years of regulation failure and bad public finances.

[mkwin]

$this->bbcode_second_pass_quote('', 'T')he problems discussed on this site haven't come about by chance. They're the inevitable consequence of the 100+years of economic growth you are referring to.

[sjn]

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('', 'T')he problems discussed on this site haven't come about by chance. They're the inevitable consequence of the 100+years of economic growth you are referring to.

[centralstump]

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('centralstump', '
')rofl

To Paraphrase: "no it is not money upfront, because I am getting a loan from another entity to pay for it."

.

[mkwin]

$this->bbcode_second_pass_quote('centralstump', '')$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('centralstump', '
')rofl

To Paraphrase: "no it is not money upfront, because I am getting a loan from another entity to pay for it."

.

[mkwin]

$this->bbcode_second_pass_quote('', 'N')o. Lots of dreaming. The USGS estimate was based on a flawed premise; the rest of the world "under-reporting" their reserves in the same manner as US oil companies did to the SEC resulting in "reserve growth". This is so wrong it isn't even funny. Perhaps you should read TOD's primer on reserve growth and WHT's work on analyzing the enigma.

[patience]

Us $ Index down .406 at $7165. Gold headed up at $949.40, and Silver headed up at $18.32. Looks like we may have a bottom for now in PM's.

Something tells me commodities will hang in there, as long as the dollar is still going down. Putting my money where my mouth is, and buying what imported goods we will need for some time to come, expecting higher prices in the US. Yeah, the money supply is contracting, and yeah, prices are going up here. Don't know a bloody thing about analysis, but I can read a price sticker, with bifocals. Oh, and I'll be getting a couple pairs of new glasses, too.

[DantesPeak]

The title of this thread should be changed to “Biggest Commodity Fake-out in 52 Years”.

The Fed and ECB are flooding the world with new money (despite what the ECB says about interest rates). The Fed lent money at only 0.25% today – that’s only one quarter of one per cent.

In these circumstances where the US dollar is losing more of its intrinsic value every day, widespread deflation is not possible.