No link ...just notes from another poster on another forum...
Seems as though the little guy is gonna take this crack up boom on the chin...
Got gold?
$this->bbcode_second_pass_quote('', '"')When pressed on this particular point, Lindsey said that, 'no, a 20-30 percent drop in the value of the dollar would have minimal impact within the U.S. Larry (Lawrence) Lindsey'"
PeakOil is You
You be the judge of its credibility...I say spot on
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You be the judge of its credibility...I say spot on
by roccman » Sun 28 Oct 2007, 18:47:45
Let's see, that would put Bucky around 54 to 62. No wonder taking Iraq and Iran is a 'must do' in their books. We wouldn't have any oil otherwise.
$this->bbcode_second_pass_quote('', 'L')arry Lindsey lays it on the line
By Ed Steer
for Casey Research
www.CaseyResearch.com
Friday, October 26, 2007
One of the speakers I was particularly interested in hearing at the New Orleans Investment Conference this year was Larry (Lawrence) Lindsey, the former economic adviser to President George Bush in the early years of his first term in office.
[snip]
When he started his speech, Lindsey asked whether the cameras mounted in the speaker's hall were TV cameras. Once he was assured that they weren't, away he went. I made notes but I'm going to do some paraphrasing here and touch only the high points.
The first thing Lindsey said was that he was a card-carrying member of "the Brotherhood of International Central Bankers," and once a member, always a member ... all for one, and one for all.
He commented that the Fed had turned the humble American home from a place to live into a financial asset that had become a cash cow for homeowners who were using it like an ATM machine. Now we've all heard that before, but coming from him, it was candor I wasn't expecting. He went on to say that once the Fed people noticed how bad the quality of loans was becoming, they were reluctant "to tinker with a boom," so they sat on their hands.
Lindsey's charts went into the collateralized debt obligation problem, the asset-backed commercial paper, mortgage-backed securities .. the lot. He said that it will "force banks et al. to mark these products to market (over time) instead of their current practice of marking to model ... or to myth." He wasn't the least bit worried about how the hedge funds would manage because, as he said, they were very good at looking after themselves.
He appeared delighted that Wall Street had been able to unload hundreds of billions of dollars' worth of (now toxic) CDOs on the rest of the world, saying that "we Americans were very clever" in doing this.
He showed graphs of the real estate market including the number of months of supply and said that now that the real estate credit cycle had ended, few would be able to refinance mortgages that had had teaser rates, and that housing prices were going to go into a steep decline.
In answer to a question from the audience about the obviously bogus Consumer Price Index numbers, Lindsey said that it was a government statistic and that, speaking as a businessman himself, anyone in business should definitely not rely on it.
His comments on interest rates were to the effect that by mid-2008, the Fed Funds rate would be 3.5 percent.
There was much more to the speech than this, but it was all along the same lines of "yep, we created this economic, financial, and monetary monster, here's the road map of how we did it, and the results. Now it's up to the citizens of the United States and the rest of the world's financial community to live with the consequences."
His comments were eerily similar to those made back in the early 1970s by then-Treasury Secretary John Connolly when he said (to European central bankers, I believe), "It may be our currency but it's your problem." Going further back in time, Marie Antoinette said, shortly before being relieved of her head, "Let them eat cake."
And you were wondering why the Treasury International Capital numbers were so bad in August? Wonder no longer.
As soon as the speech was over I hurried out into the hall to catch Lindsey before he took off. I managed to get a couple of minutes alone with him, picking up a few more items of interest.
First I asked him how he felt about being removed from his advisory position with Bush after having the audacity to predict that the war in Iraq would cost the United States at least $200 billion. This week, of course, we heard that the new estimates have it that the war will cost $2.4 trillion.
Lindsey shoved right past the question and said that it was a war that the United States must win because the security of the country and the world depended on it. He pointed out that Franklin Roosevelt had spent 150 percent of U.S. GDP on World War II. I jumped in rather bravely and asked, "Does that mean that the U.S. is prepared to spend $15 trillion on this war?" Lindsey thought about it for two seconds and said that 150 percent of GDP was more like $22 trillion, and if that was what was required, so be it.
At that moment I felt like Alice in Wonderland shortly after she had taken the red pill. I was incredulous.
Going further down the rabbit hole, I forayed into the gold world. I worded my next question in such a way that Lindsey couldn't answer it with a simple yes or no. I mentioned his comments in the speech about CPI and told him that it was obvious that the inflation genie was out of the bottle, as commodity prices were on the rise and gold was up to $750. I asked him how long he thought the Fed and the Treasury Department were going to hold the gold price down. He answered along the line of "Neither the U.S. Treasury or the Fed is doing anything to influence the gold price. It's all coming from the European central banks." He volunteered that he was, in fact, a "gold bull" because of all that was happening in the world. He repeated that he was a "gold bull."
By then a crowd had gathered around us, and others were asking questions. The first question was about a dollar devaluation, either planned (Plaza Accord-style) or unplanned, and how that would affect the United States. Lindsey's answer was that it was foreign holders of dollar assets who would be hurt the most, not the United States. When pressed on this particular point, Lindsey said that, "no, a 20-30 percent drop in the value of the dollar would have minimal impact within the U.S."
[snip]
See you in the trenches, and bring your crash helmet with you.
"There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
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roccman - Light Sweet Crude
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Re: You be the judge of its credibility...I say spot on
by Bas » Sun 28 Oct 2007, 19:17:27
The dollar already lost 40% against the Euro, and it was bound to happen. Ever since after WWII the US dollar was "overvalued" because it was the backbone of the financial system, this created "artificial" trade imbalances which grew ever bigger. Economists have been "warning" for years that a big correction was inevitable and that's what's happening now; the end result will be that imports (oil, chinese goods) will become more expensive and American exports on the world market more competative.
There are a lot of people who make this sound more dramatic than needs be, but I disagree with Lindsay that it won't have an effect on the American economy, the result will be more inflation as we see now, and that has a negative impact on the economy by reducing real wages. In fact by acknowledging the inflationary problem right now and at the same time saying that a further drop of the dollar will not have an effect on the economy (most notably wage earners), he's contradicting himself.
On the same account we'll have winners and losers as a result of this within other countries.
There are a lot of people who make this sound more dramatic than needs be, but I disagree with Lindsay that it won't have an effect on the American economy, the result will be more inflation as we see now, and that has a negative impact on the economy by reducing real wages. In fact by acknowledging the inflationary problem right now and at the same time saying that a further drop of the dollar will not have an effect on the economy (most notably wage earners), he's contradicting himself.
On the same account we'll have winners and losers as a result of this within other countries.
- Bas
Re: You be the judge of its credibility...I say spot on
by roccman » Sun 28 Oct 2007, 19:24:48
$this->bbcode_second_pass_quote('', 'h')ttp://www.lewrockwell.com/north/north123.html
THE CRACK-UP BOOM
There is a long-term deflation scenario that I accept: the scenario presented by Ludwig von Mises in 1912. He predicted the possibility of long-term monetary inflation, followed by price inflation, followed by a contraction in the division of labor, followed by a raging mania to get out of money and into commodities. This scenario, he called the crack-up boom. It is always followed by the adoption of a new currency unit and massive readjustments in the economy. This is the depression stage.
THE CRACK-UP BOOM
There is a long-term deflation scenario that I accept: the scenario presented by Ludwig von Mises in 1912. He predicted the possibility of long-term monetary inflation, followed by price inflation, followed by a contraction in the division of labor, followed by a raging mania to get out of money and into commodities. This scenario, he called the crack-up boom. It is always followed by the adoption of a new currency unit and massive readjustments in the economy. This is the depression stage.
"There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
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roccman - Light Sweet Crude
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