Market Wrapup, Freeze Frame - Nothing Moved Today

Financial Sense Online ^ | 10/08/03 | Mike Hartman

[Reagan Renaissance]

Excerpt: Most people know that a football field is 120 yards long (each end zone is ten yards) and 50 yards wide. When the coaches sit down to design various plays, they might have a running play designed to gain five yards or a passing play designed to go 15 yards downfield. The game gets started and not long into the first quarter the offensive teams find it much easier to make first downs. All of their plays seem to be going further than they are designed to go. The defense can’t stop the points from running up on the scoreboard. The playing field “looked” to be normal with each ten yards marked-off with a yard line and the smaller dashes for each individual yard at the hash-marks, but upon further inspection it is discovered that each yard only measures 32 inches. Now that’s a new concept.

The yard is the measuring unit for a football field, but what would happen if the length of the yard changed on a random basis? You would never know how to “value” or measure the potential of a given play in the book. The design would not match up to the revised measurements of the field. Likewise, the markets are trying to put a price on a barrel of oil, but the unit of measure (the dollar) keeps changing in value. It’s a constantly moving target. Our unit of measure is broken. We don’t really know what it is going to be worth, even a few months out from now. How can we plan our game tactics, when we don’t know how big the field is going to be?

If the yard was acting like the dollar for the last 90 years, we would need to backtrack and reduce the yard by about a quarter of an inch per year. After the first four years the yard would be 35 inches and continue to decline by one inch every four years. That is exactly what has happened to the U.S. dollar since the Federal Reserve was created back in 1913. The changes have been very subtle along the way, but reality tells us that the dollar has lost over 95% of its purchasing power since its inception. If you started out with a yard equaling 36 inches and gave it the same treatment as the dollar over the years, your yard is now a whopping 1.8 inches long. Our football field that used to be 120 yards long is still 120 yards. Measured in the “old yards” the field is actually 6 yards long.

That is why there is so much confusion about the implications of a falling dollar.

[Reagan Renaissance]

Ever wonder why most American households depend on two wage earners, and still can't make ends meet. This will help you understand the hidden tax of inflation. Rush would say the government and the media over-rate the dollar. Democrats, under Wilson, designed the Federal Reserve.

The Federal Reserve orchestrated the inflation that led to the "roaring twenties". The Federal Reserve manipulated fractional reserve banking to lower bank reserves which made excessive margin lending possible. It also made the banks unsafe. The federal government through the Federal Reserve caused the Great Depression. And the federal government under Roosevelt made the depression deeper and prolonged it. If the nineties resemble and remind you of the roaring twenties, and they should, then what will the decade ahead resemble?

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[STONEWALLS]

"Ever wonder why most American households depend on two wage earners, and still can't make ends meet."

.....I saw a study the other day to the effect that two income households file for bankruptcy more often than single income households do......thanks for posting the Market wrapup Reagan Renaissance.

Good luck to everyone!

Stonewalls the Ant

[lelio]

Already posted

[BIGZ]

Not to critical but a football field is 160 feet wide or 53.3 yards.