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Why I Could Never Be A Paid Shill For The Feds
Gold Eagle ^ | 02/04/2008 | Jason Hommel

Posted on 02/24/2008 7:23:42 AM PST by Christopher Lincoln

On this Valentine's day, let us remember and pay a tribute to all people who love the Government, and while we are at it, let's pay tribute to the Government itself by buying a T-Bill !

Thank goodness most of America and the rest of the world still loves the Federal Government of the United States and the Federal Reserve enough to continue to hold about $30 trillion worth of bonds that are paying, on average, about 5% while inflation is about 17%.

Such Fed-loving bond holders clearly approve of all the spending habits of the United States government, by their actions of holding bonds, and willingness to lose 12% of their capital per year, and must fully approve of the institution known as the Federal Reserve.

(Excerpt) Read more at gold-eagle.com ...


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KEYWORDS: bahog; economy; gold; goldbuggery; inflation; silver
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To: an amused spectator

Well if your city got at a discount rate for a very long time that doesn’t really count IMO as indicative of inflation (but of course good for you to have all of those years at a cheaper rate). Avg Kw/h across the country has been right at what your new rate is for quite a while rising about 3-5% a year.


41 posted on 02/24/2008 7:17:51 PM PST by rb22982
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To: rb22982
OK, I see what's going on with you. You still believe in the markets, and such.

I've been on FR a VERY long time, and I've seen a lot of strange things, and absorbed a lot of strange information.

Some years ago, I came to the conclusion that the governmental authorities had maxed out their ability to overtly tax the ordinary serfs without a revolt. I then reasoned that further taxation would have to come in the form of price increases on things that the ordinary serf couldn't do without - to whit, food and energy.

Now, either we're in a "bubble" as you assert, or the government is enhancing its revenue collection methods, as I assert.

A friend of mine has postulated that gasoline prices will go over $4.00 per gallon before the end of the year. I demurred.

Want to take that bet with him?

42 posted on 02/24/2008 7:23:12 PM PST by an amused spectator (AGW: If you drag a hundred dollar bill through a research lab, you never know what you'll find)
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To: an amused spectator
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html

Average kw/h went up 4% last year overall. Residential was up 5% or 10.69¢ per kwh.

43 posted on 02/24/2008 7:23:48 PM PST by rb22982
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To: an amused spectator
I've been on FR a long while as well. Yes I still believe the markets work although oil is of course influenced by more than normal markets due to government regulations and hostile countries (not just ours--but all over the globe).

I think it's quite possible (I'll say 35% chance) that gas hits $4.00 gallon within a year for a short time frame IF we do not have a recession. I also think it's likely gasoline will go back under $2/gallon at some point in the next 5 years for a decent length of time (unless government raises taxes drastically). Keep in mind though that gasoline stocks right now in the US are at an all time high and gasoline usage is dropping.

Here is what I see. In 98-00, Equities were in a huge bubble. That bubble money started to move in 2000 and through 2004/early 2005 into real estate. In 2005, it started into commodities. When will the bubble collapse? Depends on if we go into a recession, China, India, and what our government does with regards to an energy policy.

44 posted on 02/24/2008 7:30:01 PM PST by rb22982
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To: rb22982
Good post, and good analysis!

I'm somewhat more cynical than you about these things, because I was here during the impeachment wars, when the rule of law in the US collapsed, and the prosecution of perjury, obstruction and witness tampering became a "beauty contest". I believe that the markets were manipulated during that time to facilitate the "beauty contest".

My problem now is that my guesses are coming true.

45 posted on 02/24/2008 7:40:46 PM PST by an amused spectator (AGW: If you drag a hundred dollar bill through a research lab, you never know what you'll find)
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To: an amused spectator

I have no doubt the markets are manipulated. I think the government does want inflation but not at runaway levels. I lurked on FR from about late 99 through middle of ‘00. I think we’ll have 1 more year of inflation, a year of flat and then it depends on the economy whether we drop into deflation (if Obama is elected in a tidal wave, watch out for a major depression/recession which would be extremely deflationary) or begin our inflationary drive again of around 3% annually if McCain or Hillary gets elected.


46 posted on 02/24/2008 7:53:07 PM PST by rb22982
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To: rb22982
I lurked on FR from about late 99 through middle of ‘00.

It's hard for an intelligent person to lurk here without exploding. I imagine it was tough for you.

Re startling deflation or 3% "status quo" inflation - I really dislike the way the Greenies are driving the energy markets.

I believe we may eventually have to directly relieve the waffling politicians of their burden of responsibility for the energy policy of the US.

47 posted on 02/24/2008 8:05:28 PM PST by an amused spectator (AGW: If you drag a hundred dollar bill through a research lab, you never know what you'll find)
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To: an amused spectator
It's hard for an intelligent person to lurk here without exploding. I imagine it was tough for you.

I was 18 at the time and just taking in the vast amount of knowledge on here. I was also an avid PC Gamer then so I didn't spend nearly as much time on it then as I do now.

Re startling deflation or 3% "status quo" inflation - I really dislike the way the Greenies are driving the energy markets.

Yup--the 'environmentalists' are seriously scary and completely irrational. I have a few people in my family that I just can't talk to about it. I can have a more rational debate on abortion with them than I can about energy and drilling.

I believe we may eventually have to directly relieve the waffling politicians of their burden of responsibility for the energy policy of the US.

I hope the markets take care of it for us, but you may very well be right.

48 posted on 02/24/2008 8:12:23 PM PST by rb22982
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To: rb22982
M3 increase is about 15% with M2 being about 6%.

Thanks for answering my question.

Inflation is not even close to M3 rate although it is near M2.

Well, the government's number is near (but below) M2, although the real cost of living increases for real people is well above M2. Maybe it isn't as high as M3, but then again, maybe Jason Hommel considers purchasing gold and silver, as an investment, a "cost of living." I don't know where he gets the 17% figure, but I will observe that he is a resident of California, and so his costs might be rising will above the national average.

If you factor in productivity gains, 4.5-5% inflation is probably correct, although oil is the latest bubble.

I don't think oil is a bubble. More than 2 billion people in China and India are grasping for what we consider a middle-class existence. Including a car (or two). There are bidders under the price of oil - a lot of them.

When oil drops back down to 50/barrel (or less) which it will at some point most likely, are you going to cry deflation as loud as you do now with inflation?

Actually, I think the best measure of inflation is "increase in the money supply". That will never, ever go down so long as the fiat printing press churns out new dollars by the trillions. As a matter of fact, that's why I'm a gold bug (so you're free to dismiss me if you wish). I think gold will go much higher than it is now, and I'm not saying that because I want to sell you mine. I have been a buyer recently, and I plan to buy more. And I am more bullish on silver than gold.

49 posted on 02/24/2008 8:30:16 PM PST by coloradan (The US is becoming a banana republic, except without the bananas - or the republic.)
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To: coloradan
My overall cost of living is below the government's # but food and gas make up only around 15% of my budget. My electricity rates are up around 4% from last year.

Commodities are in a bubble but you can refuse to believe it if you want. China & India are why oil went from 15 to 50. Oil went from 60 to 100 on mainly speculation (The barrel/oil up almost 50% in just the last 6 months). Gasoline stock buildup in the US is at an all time high and inventory levels have risen dramatically the last 8 weeks in a row. We (the US) are using less gasoline now than a year ago.

50 posted on 02/24/2008 8:36:06 PM PST by rb22982
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To: rb22982

The result of calculating consumer prices the same way from 1980 - present (blue) as well as calculating it by the constantly readjusting government method (blue).

Feel free to disregard this chart. Commodities are just in a bubble. I'm a gold bug and ought to be disregarded. The US dollar is invincible!! And no one in the government is influenced by the inherent conflict of interest between having to calculate inflation numbers, and being forced to pay more for entitlement programs indexed to those numbers. Not a soul! Immense budget deficits notwithstanding!

51 posted on 02/24/2008 8:42:20 PM PST by coloradan (The US is becoming a banana republic, except without the bananas - or the republic.)
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To: coloradan

You’d be hard pressed to find data to back up the alternate CPI # for about anything. If that was to be taken seriously, prices on everything should be ~942% higher than what it cost in 1980.


52 posted on 02/24/2008 8:49:25 PM PST by rb22982
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To: coloradan
You’d be hard pressed to find data to back up the alternate CPI # for about anything. If that was to be taken seriously, prices on everything should be ~942% higher than what it cost in 1980.

Which I should note means that the median house would be $796,000, not $200k; milk would be $22.50/gallon, not $3.50, gasoline would cost $13/gallon, not $3.25, and a dozen eggs would cost $9.50, not $1.50. So no I don't believe those 'shadow' stat inflation.

53 posted on 02/24/2008 9:04:01 PM PST by rb22982
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