I woke up this morning to hear the local news guy saying that the Dow had jumped two-hundred-and-some-odd points in reaction to the Feds injecting another kiloSagan or two of funny money into the system and promising to keep your retirement savings depreciating in real terms at least through 2015.
My first reaction to hearing that the Dow went up was that it was uncoupled from reality, and then I remembered that when money becomes worth less, the prices on everything go up to reflect it, even stocks.
Looks like Jim called it right on Tuesday.
Meanwhile, Congress apparently agreed to push back any further discussion of the parlous state of our national finances until after the election, lest anybody accidentally say something that might cause them to lose their phony-baloney jobs come November.
Correct that stocks inflate like everything else. The stock market is a good place to ride out inflation.
ReplyDeleteThe other factor - when the effective rates of a savings account and bonds are zero, stocks are the only place to put your money if you want a return. So of course more money will flow into the stock market.
Numbers don't lie, but liars use numbers. Or something like that.
ReplyDeleteWeimar, anyone?
In the same vein (heh): as precious metals brokers, my son and I typically lock a parcel to the refinery every Thursday so the funds are wired into our account on Friday. Yesterday if I'd waited another hour till after the Fed's political ploy -I mean announcement- we'd have benefited from a $45 surge in gold prices meaning about an extra $200 in our account for the parcel we sold.
ReplyDeleteWell, they're not real dollars, but still. So what do investors do when they know the system is being gamed and those paper bucks are worth less with a stroke of the pen? Hard money.
And if we weren't a business that needs to keep the cash flow moving, I wouldn't sell a single gram of shiny stuff.
PB
Just as well that the Congress will defer action until after the election; there's a chance(albeit slim) that the talent will improve slightly after the elections.
ReplyDeleteThe market and the Dow are irrelevant; real money is made of metal; gold, silver, brass, copper and lead...
Thank you, Tam.
ReplyDeleteI see that I slighted an important point in that post. The source -- Steen Jakobsen of Saxo Bank -- uses the word "ongoing" about the Fed's free money plan.
And that's just what Ben did yesterday -- announced that he could see no end to the check kiting between his Fed and Geithner's Treasury.
(sigh) It's going to be a long rest-of-our-lives. Gotta prep. Rice. Beans. Ammo. Maybe even a spare better-than-nothing Glock. :)
Thanks, Tam. You GET it. The stock market didn't go 'up;' our dollar went down. We're poorer, not wealthier.
ReplyDeleteAh, but like filling a never-ending ice cube tray, those at the top corner get the 'benefits' of this inflation first.
My job would be a lot easier if I could postpone important decisions two months at a pop.
ReplyDelete"Discussion of the parlous state of our national finances until after the election" by a nothing-to-lose lame-duck Congress.
ReplyDeleteYeah, THAT'S comforting...
This is probably where Obama gets his idea that "The private sector is doing fine". Whenever he wants, he can push the magic money button and the DOW goes up. He doesn't see, or care, that this also makes everything else go up. Milk, eggs, tires for your car, everything. Sure, the increase is more gradual for those things so it isn't as obvious, but it will happen.
ReplyDeleteQE is fine for rich people who have a lot of money in stocks. While their dollars are worth less also, they ride the stock bump so the overall value of their stack of dollars stays the same. Poor people tend to live paycheck to paycheck and don't have the money to put into the stock market, so the poor just have to figure out how to stretch their dollars that much more. I refuse to believe that Obama doesn't know this.
Now which candidate is more for the rich and which is more fore the poor?
s
Neither candidate sees the poor as being a factor in their decisions.
ReplyDeleteObama knows this is how it works. Remember what his job was before he went into elected office: Community Organizer. If you read a bit about Alinsky and the theory of Community Organizing (decent summaries on Wikipedia), Obama's irrational looking aggregation of policies begins to fall into a framework.
ReplyDeleteCommunity Organizers have a goal that is OTHER than the asserted goals used to motivate their followers. The primary goal is to build a base of power that can be used to achieve these goals. Their issues are chosen, not to directly achieve these goals, but as vehicles to drum up enough controversy and interest to engage supporters and followers and then use the power of the resulting mob to get what you want.
It is basically one of the most crass forms of manipulation and the practitioners see themselves as master puppet masters.
Obama is purposefully making things worse so that people will clamor for his "benign" socialist solutions.
His enabling of Muslim Brotherhood and Iran is aimed at creating an external threat that he thinks can be managed. This way, everyone still wants the surveilance state, DHS power, and fears to resist the government because the bad guys might knock over our house if we're divided.
Unfortunately Romney and Ryan are just Mensheviks to his Bolshevism. Their solution is a little less in the way of deficits, and turning our entitlements into NEED BASED systems to lengthen their lives.
Think of that for a minute--yes, it extends their lives, but the result is that everyone pays in--the successful pay more, and then only the poor or irresponsible receive benefits. Our solution is to save a badly planned ponzi scheme into a Socialist redistribution system.
Fuck That. I foresee a vote for Gary Johnson, a fifth of Jack, some patches, and a can of WD-40 in November.
Simon J.
Chris - I disagree. Obama is counting in the poor to help him. That's why he is creating so many of them.
ReplyDeleteSo the Feds print up Fake Money, give them to the Banks in exchange for all their worthless "Mortgage Backed Securities" (you know, all those Free Housing Loans that the Gooberment told the Banks to give out to Jobless People or Else), and all this is done to
ReplyDelete"Stimulate" the Banks into Lending out Cash, which will save Obama's Job, er... the "Economy."
I'm confused. Isn't this the same kind of thing that the Euro Politicians are telling Countries such as Greece, Spain, Italy, et.el. to Cease and Desist or they won't be Bailed Out?
Well, at least the Euros get to use Worthless Dollars from the IMF ("Your Federal Taxes at Work!") to help "Spread the Wealth".
Oh, it just hit me. (Note to self: more Coffee!). This is QE3, right? So Bernanke has done this Scam twice before, and it didn't work, correct?
ReplyDeleteSo our Highly Trained Guardians of the Economy are using "Third Times the Charm!" as their Methodology?
We are so screwed.
Sell it to me, PB. I'm buying.
ReplyDeleteIn a sluggish economy, it’s not too difficult to keep high inflation hidden – just keep people fearful of the next crash so they hang on to their money instead of spending – the inflation which would be triggered by the demand for goods and services can be replaced by the inflation caused by printing money, so things don’t look so bad.
ReplyDeleteGood thing we’re sporting a high un-under-non-employed, dropped-out-of-the-workforce-so-they-won’t-be-counted rate. Think if people really started working, and had the cash and confidence to replace worn out cars, appliances, and tools so demand driven inflation was added to the mix – things might get a little warm for the people who have been playing monopoly with our lives.
Why… it’s almost like there is some kind of plan. Nah, that’s crazy talk.
In a related aside, a friend who just retired from LE had always wanted a pawn shop so I helped him set one up a few months ago.
ReplyDeleteHe's already busy as you might expect, but folks are keeping their shootin' irons, except when trading for a new one. And that's a rub for him because there's (another) backlog building at the manufacturers/wholesalers; he's backordered on most everything Smif and Ruger...though XD's are readily available but buyers for them ain't. Gun shops are going to have to alter their BO posterboy blurb from "salesman of the year" to "salesman of the decade", sadly I (and apparently a lot of gun buyers) think we're in for another round of hopeychangey.
PB
It's time to buy Things Of Tangible Value, because the money that purchased them will soon get rid of the space in Worth Less.
ReplyDeletePerhaps I should start including equations using i to define my money when I send in my 1040.
The press is calling Romney's definition of middle class as "under $200,000/year" as a gaffe.
ReplyDeleteIf this keeps up, $200,000 will be the yearly minimum wage.
Staghounds: email us at jcjewelers@live.com
ReplyDeletePB
"Harrumph! Harrumph!"
ReplyDelete"I didn't get a 'Harrumph' outta that guy!"
Despite all the rhetoric, neither party "cares" about the middle class. The dems don't care about me, except to tax my ass and give my money to union bosses, politically-favored yet hopelessly doomed by economic reality business ventures, and zero-liability voters.
ReplyDeleteThe repubs don't care about me, but at least they leave me the frak alone.
As was already stated, the dems care DEEPLY about the poor, but only to court their votes as the hand that feeds the dog.
I agree the repubs don't care about the poor. Like me, however, I believe the repubs think the poor "might" be inspired to not be poor by seeing what can happen in "the land of opportunity" if you get off your ass instead of holding out your hand.
And in related news, the US's credit rating dropped again. http://www.cnbc.com/id/49037337
ReplyDeleteFunny how that happens, isn't it?
QE3 strikes and you're out.
ReplyDeleteDammit, Tam, I _would_ have to see this post late at night, when it's too late to buy more alcohol! Staying numb with the Ethyl Hydroxide seems like a good way to slide through The Collapse.
ReplyDeleteI'm looking on the bright side. Hyperinflation means I'll be able to pay off my mortgage with my weekly paycheck. I'll pay off my car with my lunch money.
ReplyDeleteThen I'll dig up my lawn and plant potatoes.
I think I've got all the angles covered.