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With prices setting new records, the worried wealthy are piling up ingots in home safes. NEWSWEEK goes shopping for precious metal. On the day I held the gold bar in my hand, it was worth $100,000. My companion—an established, accomplished, affluent businessman of retirement age—had bought it as a hedge against the sinking Dow and his fear that Obama's stimulus package will inevitably trigger wild inflation. We had picked it up in the basement of an HSBC bank branch in midtown Manhattan. When I handed it back to him, he put it in his briefcase. We went upstairs, past guards,...

In a fiat world, money is printed into existence by the central bank - in the United States the Fed. Given there is nothing backing up this money, it is inherently worthless. However, one can think of as real. It was printed (even if only electronically), therefore it exists. In addition to the previously mentioned money supply, fractional reserve lending allows credit to be extended by banks and financial institutions on top of that inherently worthless money. Indeed, banks and financial institutions have leveraged credit to base money at ratios of 30-1, 50-1 or even higher. It's pretty amazing if...

  From Canadian Business Online, February 18, 2008   Rise of the Bezzle Sub-prime and the law of unintended consequences. By Jeff Sanford has worked as a business journalist since graduating from Ryerson University in 1999. He has held staff positions at National Post Business magazine and Investment Executive, a bi-weekly newspaper for financial advisors. More stories by this author >> We’ve still got several weeks of winter yet. But at least we’re past January 24th, the day one scientist has calculated to be the “worst day of the year.”  Oddly enough, it’s a day that fell square in...

Unfortunately, we are saddled with a communist sympathizer in the White House. I don't know whether or not he's an actual card carrying commie, but he's definitely an America-hating, anti-capitalist Marxist leftist who thinks communism is the way to go. Now I remember when America used to fight against communism. It wasn't that long ago. Many of us on FR are veterans of wars against communism and some of us believe that American citizens who are communists are the enemy within, ie, the domestic enemy we've sworn to defend against. American citizen? hmmmm... that may be a loophole for Obama....

The numbers paint a grisly picture: The market’s drop post-stimulus now is bigger than it was post 9-11. Food for thought, reasonable people would think...… Considering that the “stimulus” as envisioned by Washington was to serve as a confidence booster, the one valid gauge of success that we have indicates that it is anything but: The Dow Jones Industrial Average closed at 7,933 on Feb. 12, the day before Congress passed the bill. As I write, it is at 6,612, a decline of more than 16% in a tad more than two weeks. I took the liberty to compare these...

There is plenty of blame to go around. Greedy Wall Street speculators took mega-bonuses even when they knew their leveraged companies were tottering — and someone else would pick up the tab. Crooked or stupid politicians allowed Fannie Mae and Freddie Mac to squander billions, as they raked in campaign donations and crowed about their politically correct support for millions of shaky — and now mostly defaulting — buyers. But amid the gloom, there are some valuable lessons that we can take away from the Wall-Street panic. First, cash really is king. For all the talk of a trillion here...

After 16 failed banks to date in 2009, the FDIC raised fees and assessments on member banks to prevent insolvency later this year due to its forecast for more bank failures. FDIC Chairman Sheila Bair Says Insurance Fund Could Be Insolvent This Year “Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry. U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the fees, according to a trade group. “A large number” of bank failures may occur through 2010 because of “rapidly...

PROLOGUE & AFTERMATH - The World Economic Forum took place in Davos Switzerland last week. The global picture enabled a nice snapshot of sentiment, fault for the crisis, blame doled out, the vacuum of leadership, the perks for blunderers in a country club setting (instead of prison), and warnings on a potential situation that could spiral out of control. Amidst all the finger pointing, surprisingly little blame was given to themselves, the corporate chieftains in attendance. Let's be clear! The Davos Forum was a funeral wake, and Putin rode in on a white horse to announce there is a new...

“It’s different this time,” are four of the most alarming words an investor can hear. Very rarely do things turn out differently; history shows that normally they go wrong in almost exactly the same way they did last time round the cycle. But when it comes to the US housing market, there are reasons to expect that things will be different this time. But not in the way that optimists expect – instead the difference is that the damage could be more far-reaching than ever before. Plenty gets written about the vast scale of this real estate bubble, the world...

Afghanistan crisis paves way for return of the Taliban (Filed: 27/06/2006) Five years after the West promised to rebuild Afghanistan, the country is facing its worst crisis since the Taliban was overthrown. Hamid Karzai has criticised the West's refusal to help his government with more money and troops earlier on. President Hamid Karzai and his western backers are seriously disillusioned with each other, while the Islamic militia is resurgent and people are being killed at a rate not seen since the 2001 American-led invasion. At a recent reception for the Queen's 80th birthday at the new British Council in Kabul...

When I told others here on FreeRepublic that I would be voting for the Constitutional party candidates, I was told that I was wasting my vote if I were to vote for a third party. I was told that we conservatives needed to stick together to work on getting Republicans candidates elected, that it was our only hope to reduce federal spending, reduce the size of the federal government and to get conservative judges appointed to the supreme court. So I listened and voted Republican. When we had a Republican congress, senate, and President and our federal budget soared, I...

“I would like you [of the press] to understand the magnitude of what this means. It is transcendent, it’s something that goes well beyond the relationship we have had up to now.” —President Vicente Fox, regarding NAFTA Plus, onboard the presidential plane returning to Mexico from George W. Bush’s Crawford ranch, March 2005. NAFTA (North American Free Trade Agreement) has been in effect almost 12 years and a new stage, NAFTA Plus, is in the works, referred to as “deep integration,” particularly in Canada. The elites of the three NAFTA countries (Canada, the United States, and Mexico) have been aggressively...

No country lasts forever. That’s an inarguable fact. History reveals three primary reasons why countries fall, governments change and ways of life vanish. The Taliban, Saddam, Nazis and many other governments fell because of war with other nations. Revolutions brought on by internal strife, an insurgency, social unrest and disillusionment, reduced respect and admiration of the nation’s military (note that the Marines and Army are finding it very difficult and sometimes impossible to meet their recruiting goals), loss or reduction of social values and norms, and political extremism bring down some governments. Examples include Iran in 1979, France in the...

WASHINGTON - Within a couple of hours last week, crude oil prices hit a record $56 a barrel, President Bush fretted publicly over world oil shortages and the Senate voted to open an Alaskan wildlife refuge to drilling. The converging events drew attention to what administration officials call a temporary global energy crunch. But bigger worries also are bubbling to the surface - fears of a day of reckoning over world oil reserves. Even as China and India are joining the grab for oil, most experts agree that world production will peak sometime in the next several decades - more...

With an overstretched military and economic vulnerability, America can be eclipsed by China in key ways It could simply be this year's edition of the morose introspection that sometimes accompanies autumn. But it could also be the case that the relatively short epoch of the United States as the world's sole superpower is drawing to a close. A U.N. Conference on Trade and Development report released last week indicated that China was the largest recipient of foreign direct investment in 2003, having overtaken the United States. In the past year, foreign investment in the United States had dropped by 53...