Plunge Protection

What started out as a seemingly contained problem with sub-prime mortgages has metastasized into a full blown financial meltdown. There is now a very real crisis of confidence in Capitalism in general and America’ future. You can’t blame anyone who doesn’t want to deploy new capital. We see record amounts of money in money markets and shorting stocks. I hate to be the one to tell you this, but we don’t trust you.

I understand that you need the financials re-capitalized (make that we need the financials re-capitalized). You are asking a gigantic leap of faith. The risks are great and the rewards most likely modest. Do you actually think we’d would give money to the very same morons or crooks (take your pick) that enabled this mess?

As Eric Cart man would say, “Screw you guys, I’m buying gold.”
I’ve Got Problems…
I have been long on GLD, SLV and precious metals in general as soon as I saw the crooks getting rewarded for losing middle class America's retirement funds...
Oil is risky business, and it profits those who clearly wish to do us and most of the stable world the most harm. Bush and his cronies have lost the war on terrorism by feeding our wealth to the very nations that support the terrorism and weapons of mass destruction that they claimed were there in the first place. The stupidity astonishes me.
But these are Texas oil guys, "bring on the 10 gallon hats, and let's shoot each other in the ass!!". While they rake in their oil profits they will leave behind a country in ruins. There will be no place here to spend and enjoy their wealth so they might as well move to Dubai!
Give us the next 20 years of civil unrest and poverty to work out the mess you good ol' boys created on your watch while you blame the Democrats from your perch in Saudia Arabia
Like many others, I’ve invested in gold (sort of), via ETF’s. In order for me to get physical gold at this point I’ve got extraordinary tax consequences and pretty hefty premiums to convert my US dollars to metal and back. This is not even addressing the issue of safe storage. So I’m as screwed as the next guy in a Mad Max scenario.

There’s more to it than that. I am conflicted because gold by it’s nature, is anti-growth, and doesn’t really help anything. It doesn’t build better infrastructure or create jobs. You can’t eat it or power your car with it. It just sits there, collecting dust instead of interest. It does however, appeal to the conspiracy nut in me.
Let’s Make a Deal

Here’s my big idea. Bonds backed 100% by Gold. Interest bearing securities that can be redeemed for physical gold to capitalize our most troubled sectors. They should be a minimum holding period before redemption. Purchasers will have the option receiving US dollars (with interest) or shiny metal. Fannie and Freddie would be a great place to start. It is beyond the scope of my limited mental capacity to fully design these products, but I would caution you to keep it simple, make supply tight and do it soon!
Careful, We're looking at a potential Depression here... If it's really true, a Depression is a re-pricing of *ALL ASSETS*...

Price of every asset gets repriced down. A destructive cycle of lower demand driving lower prices driving lower jobs driving lower demand will start.

In that scenario, Gold is *NOT* the store of wealth you think it is. Nothing is immune, as whatever "money" someone will pay for a "thing" is going to be less, as the system simply has less money in it.

Good news is everything will be cheap at the end of this process -- bad news is everyone will be poor.
The rumors and conspiracy theories that swirl around gold only add to the sense of mistrust that is so prevalent today. If gold is irrelevant in today’s world, then sell it all. The fact that the bullion depository at Fort Knox is one of the most secure facilities on Earth leads me to believe you don’t feel that way. If you are holding gold in case of emergency, guess what?

I expected turbulence in financials this year, but not like this. I think we are staring at runs on banks now. I can’t really compute what that means, given the printing press and all, but I’m thinking it’s not good. I can only speak for myself, but if you will guarantee me easy conversion to physical gold at my local bank, I’m in.
Parting Shots

I refuse to believe that there is no common ground between Ron Paul and Hank Paulson, conspiracy theorists and central bankers. I am not proposing a magic pill for all the problems we face, but I am sure that Divide we fall. One more thing; don’t think I’m the only on noticing the diminishing “helicopter drops” every time you guys are on TV. We need super-heroes now. Going back to the gold standard is a gold-bug's wet dream. It ain't going to happen.
money is what someone will take for a service or item.

one of the legs of possible recovery, tech, had failed...as we see earnings misses here in Q2. Meanwhile, these tv pundits are slapping each other on the back because citi only lost 2b this Q. merrill missed HUGE.

You can forget about an interest rate hike. There is no economic recovery, and we havent even hit the recession yet! they like to say we're getting throgh it, but it aint even started yet!

this is why the metals deflation over the last few days ammuses me. I suppose this is real dollar strength? sure feels like a manipulation by etf's or something, and not true dollar strength. besides, i'm not going to list the reasons why the dollar will weaken; we all know them.

the the only way the dollar can strengthen is ....it can't. there is too much debt, and no menas of creating more 'debt money" to keep the systme going.

so the dollar rally over the past couple days is flash in the pan...much like the rally just after the bear stearns fall...

i think the street is working on 2 very outdated, 'baby boomesque' premises:

1. the market will always go up; i.e. a general sense of optimism and forward thinking towards investments like stocks and real estate.

2. entitlements that will weigh down the system, and they actually expect the 'me' and the 'x' generations to support them?
There's a simple way that the current crisis of confidence with USA will resolve to USA's benefit.

It's a question of Relative Reputation and Image.

USA looks bad now because it has screwed up and is losing a lot of money -- relative to other countries who appear to not be screwing up as badly.

Is it really?

Or is it that the whole world is on a roller coaster, tipping over a "peak" and USA the first train? In that case, the first train appears to be crashing, and the rest seems to be moving up.

If this is so, and the decoupling theory is a bunch of crap, then this the crisis of confidence will quickly be resolved when USA finds a bottom and the other economies are still crashing. Out in rual America, folks know how to grow healthy food & store by canning & old fashion smoke houses,city folks only know to go to the local food store or dineing place! Farmers in my smal rual hometown bring new vegs & fruit to vactant lots, in high traffic intersections. I am disabled, so I have plenty of time to see both sides unfolding, as the dollar loses more buying power! When I set with 2 brothers that have been selling now for over 7 yrs, they ask many coustomers if they have Silver coins or Gold they would like to sell! They also bring a daily print out from coinflation.com, showing what a pre 1965 silver coin face value in dollars is for that day, & also a blue book for buying coins! In the last 14 months, more 90% silver dimes,quarters,halfs have been traded for fresh food!! Morgans & Peace Dollars are coming out in huge amounts,coin dealers only offer melt, but these 2 farmers & I have bought some great hard to find rare coins & paid a fair price to the growing amount of people that are spreading the word,getting more for their coins & junk jewerly that TV adds! What started out as a way to give good fresh food to locals, has turned into a way for me to buy rare coins at a fair price, in turn selling or trading them for Bullion! Plus lots of great freash food below wholesale prices & not worrying about where it came from!
How does this fit into all the above post,this only proves, that Gold & Silver is real money,it has been for all through history, & ever Nation that has chose fiat over money backed by Gold & Silver have faded away! Right now a 1964 Washington Quarter will get 1 gallon of gas, but it take 4 1 dollars bills to do the same! The Federal Reserve,over the years,have used Barclays,Goldmans,JP Morgan as Bullion Banks to flood the world with Gold to keep the price surpressed, they are useing ETFs in the same way, but they are now backed in a corner, & that is when they are the most dangerest! The Fed did not bail out Bear Sterns, it Bail out JP Morgan Chase,Freddy & Fanny took all the worthless paper of Goldmans, so Tax Payers are the ones that will feel the Pain for many years to come! Goldman has direct control over Fed Action, by looking into past donations to Dem members of Congress, not only has Goldmans got the power in Congress,but that makes it easy for the Fed to get a pass for actions it does! As the Fed takes the dollar to zero, those holding fortunes in dollars, will be poor, but those with real money Silver & Gold will be the new rich.
To make a point, take a 1964 quarter to a small town, offer it to the owner, for a gallon of gas, see the reaction, then have 7/11/2008 printout of coinflation.com results what a quarter dated 1964 is worth in dollars, I think both will be surprized!!
1 90% present = $3.3854 compare to a 2008 quarter =$0.0538210, Silver closed at $18.72 oz ,so if you tried to buy a roll of 1964 Quarters, I found the cheapest was $142.99 for $10.00 of 90% silver mixed coins, if the Fed combined efforts to surpress Gold & Silver Prices, by use of Naked Short Selling at Comex & in ETFs, then $142 for $10.00 will be cheap, Share holders of GLD & SLV are at risk of loseing all due to default, the FBI could have a hay day just in SLV alone! The next Presidend & Congress will find that the laws put forth since 1913 untill now, may be the worst thing this Nation has ever faced & fixing it will be tough on all!