Saturday, August 21, 2010

Tim Geithner/Obama Are Full Of Sh%t

with regard to demanding a stronger yuan from China.  The price inflation consequences for this country would be disasterous.  Think about what percentage of everyday necessities consumed in this country comes from China.  Walmart's prices would go through the roof.  Food stamp and unemployment benefit leeches will be doomed.

Just a little nugget of golden truth for this beautiful Denver Saturday.  "Joe's" comment in yesterday's post triggered this thought.  IF you do see China letting its currency revalue significantly higher, better make sure you have a lot of your wealth moved into physical gold/silver.  As soon as the sheeple in this country get just a real whiff of price inflation, we will get to see what a real gold rush looks like.


  1. My view is that the Chinese are gearing up to allow their currency to rise in value as part of an effort to create a viable consumer economy within their own borders to replace the U.S. market. At the point they determine that they can create sufficient demand within their borders and in neighboring countries, and I have no conviction that they necessarily can-they will cut the U.S. loose.

    I agree that the notion promulgated by Geithner and The Great Mocha Dope, er, Hope that China should revalue their currency higher to benefit U.S. trade is ridiculous since we simply don't have the sort of export potential to make hay with such a development. They must know this, and it's even more galling when one considers that Geithner and TGMH are globalists working on behalf of interests that made it their business to destroy the U.S. labor/export market.

    In the meantime, we are fast reaching the point of Peak everything-or at least, by my runes, the point where pushing the envelope towards peak everything is a price too high to pay for global ecosystems, see The BP Gulf of Mexico gusher- such that the popular idea that one part of the world will surpass another and rise to prominence at the other's expense- See China v. U.S. seems like outdated and wishful thinking.

    Perhaps China will succeed with its neo-colonialist ventures in Africa and elsewhere and be able to become the Planets engine for growth for generations to come, but I not only reservations about their chances for success, but deep misgivings about the advisability of attempting to do so. I have no doubts that they of the a mindset that amounts to "Become the global economic hegemon or bust."

    Pardon the length of my post.

  2. "As soon as the sheeple in this country get just a real whiff of price inflation, we will get to see what a real gold rush looks like"...not really, your average sheeple is not part of the equation when it comes to gold. they will never make the connection and if by dint of some miracle, some actually do, it will be far too late. they're all broke anyway and its only bound to get worse. the ship is already leaving the harbor and they'll be standing there on the dock for some time nursing their coulda woulda to Geithner and Obama they're just a waste of breath, mostly their own...

  3. great comments Edwardo.

    YF, I'm talking about when maybe only 10-15% of the people figure out they need to own gold vs. the 2% who know now.

  4. Where do I pick up my 2% percenter patch? (wink)

  5. well... by the time/if high inflation takes place people won't be able to buy any PM as they will buy neccesities like food etc. Most of their income would only cover just that, so PM will be sold.

  6. Actually, you are 1/2 right. Most people how are hoarding pm's have the means and have taken precautions for the food shortages. The MRE Depot is always out of supplies now.

    People who WANT to buy pm's won't have money pay $3k/oz for gold, and that assumes there is gold around to bought in large quantities - I don't think there will be...

  7. I know of one very large asset accumulator (who told me years ago his firm does not follow monetary policy) which has zero pm for clients and only thru index funds does it hold pm in any other form.

    This is a firm where from a practical perspective the minimum investment is 50 mil--mostly indexed and hedge funds.

    the hedge funds are actually among the better ones. So it is going to be interesting to see what happens there--will the hi net worth lose almost everything? Or will eventual hyperinflation give illusion they are still rich?

    May we live in interesting times.

    as for geithner--what a putz.


  9. I would bet those index funds with exposure to PM's are paper proxies. These people will be shocked when they find out they have been riding naked all along. I see formerly rich people rioting in the streets.

    Joe M.

  10. Joe--the PM is thru SPX asset allocations which means if my memory is correct it holds a little NEM--which underperformed say GG by a factor of 4 or 5 over the last 10 years. ABX and NEM were big drags on HUI due to the hedged positions. I think hui was up something like 600% the last 10 years (and thats a huge secret) while NEM and ABX were up around 200%--today NEM and ABX (from memory) constitute 14% of hui each--

    so I can imagine what happens there now that they are unhedged.

    nonetheless--to have just a small % of NEM in a portfolio is rather meaningless.

  11. Dave, I've heard people say on message boards to leave offers waaay out for the stocks you own... They say this prevents the broker to lend out your shares for people looking to short the stock. Is this true?

    Thanks much.

  12. I don't know. That's an interesting idea but the bulletin board market is so corrupt I don't think brokers would care. The only way to guarantee that your shares aren't lent out is to take delivery of the shares.