October has always been a scary month. There is always talk about some unexpected October surprise. Of course we also know the great fright night of Halloween will arrive and insure that many of us will not escape October without seeing scary figures that look like Nancy Pelosi and Barney Frank pounding on our door. It might not be so fighting if it were not for the fact that Pelosi and Frank have been scaring sane people silly even before BO became a national obsession.
I bet if someone told Americans a few years ago that someone named Barrak Hussein Obama would become President they would have just rolled their eyes. Yes, America is becoming a helter-skelter scary place where communists now hold high office and perverts are now celebrated in city parades. Some patriots and preachers now huddle in the closets that the homosexuals came out of. They are afraid that if they come out against evil, some might even find them to be offensive.
This fall we will have a lame duck fright night secession on that scary House on the hill. The priests of Baal will do their best to destroy anything good before the American people throw Jezebel to the dogs on January 1st and cut them off.
After January we can expect new tactics from Obama. The “Czars” that Obama appointed will try to run America by dictatorial decree. Some Americans wonder how the Politburo got into power in the United States but the answer is often seen in the mirror. Granted, that many of you people lived in denial about what Obama represented. But, when people have been constantly warned and they still fall in the socialist trap, denial that they were part of the problem will not be part of the solution.
Many Americans wanted God out of government and they wanted God out of their lives. They also wanted government to give them a free lunch at the expense of others. That is the real reason why we are now run by socialists, communists and fascist Czars. The Washington Politburo has their appointed people running just about every government agenda, so what government continues to force on us will not just be about who the people elected to office this fall. Scary people in high places are now bringing us October surprises every month of the year.
We have had the worst recession since World War Two and for the first time since the great depression there has been no real recovery following a recession. But, the frightening part of all this is that people still think that the same Politburo that brought about Halloween economics can now provide us with a sane solution. It is almost like those in Washington are doing all they can to follow in the economic footsteps of the late Soviet Union. We used to follow Voodoo Economics but we found out that produces nations like Hatti. Now we have moved toward Halloween economics where a Politburo controls everything. Even Russia has warned us about making that fatal mistake.
The Federal Reserve still thinks that the answer is to create more growth by printing more federal reserve notes and by creating inflation. By the time they quit printing and buying up government debt they will own over $3 trillion in US debt. They bought the US debt with money made fresh off their printing presses and that action will just set the stage for the next fright night game. Halloween economics allows the Fed to print all the money they want without the dollar losing value. Real economics says it can’t happen. So, is it any wonder that the dollar has fallen ten percent in value just on the announcement that Helicopter Ben is back in costume?
Not to be outdone by Halloween economics coming out of the Untied States, many other government central banks are now planing to follow Helicopter Ben’s example. It seems we will now have a race to the bottom of the apple barrel as nations turn on their own printing presses in an attempt to sink their currencies. Instead of a trade war to protect jobs the modern remedy is to have a currency war that produces rotten currencies and lower standards of livings for wage slaves and those that are dependent on entitlements.
Debasing national paper currency just makes everyone in that nation poorer. It really is trying to wipe out debt through a controlled inflationary depression. As paper money becomes more worthless the price of everything you buy will cost more. But, they won’t call it inflation because then they would have to give out cost of living increases. They will just say the dollar is losing value. So suck it up. Nevermind, that they actually created this dunking the dollars game to rob you of your savings and entitlements.
With the predicted actions of our Federal Reserve Bank the dollar has already recently dropped about 10 percent in value against more responsible currencies. Now all commodities reflect the weaker dollar and are becoming much more expensive, so are equities. If countries debase their currency the wage slaves just get poorer because they can buy less with the same amount of currency. China now pays their wage slaves about a third less than what they should and that is why no country can compete with most of their products. So Halloween economics that now follows our more recent Voodoo Economics dictates that all countries rob the still working poor in order to deal with high unemployment.
So welcome to the fright night Halloween Economics of world free trade. Heck, if China just decided to make their currency what it should be worth, everything in WalMart would double in price overnight. But, what is worth more to the world, competing with China for manufacturing jobs or having low priced Chinese goods on the shelves of WalMart? That is the vat that world trade has put us in.
Speaking about WalMart, they thought that having rollbacks and less choices of products would bring them more sales and more profits. It did not work out like they expected. So now they are raising prices again and bringing back more product choices. I am doubtful that these people are rational because the fall in their sales has nothing to do with their marketing gimmicks. WalMart is selling less because people without jobs have less money to spend. Duh. Do they really think that by charging more for their products that people will start to spend more money than they have? People without jobs or that are underemployed are going to cut back, not spend more.
Those running WalMart seem to live in some corporate fantasy world where their own sales keep increasing during economic downturns. They really should be able to understand that high unemployment and underemployment is the real cause. Not to mention that Dollar Stores now undersells them on certain items and Dollar Stores are located in places that are often more convenient. If WalMart really wants to make more money they should just add another isle for Halloween and stock it right after Easter, because Freddy Kruger types are right up America’s alley, and various flavored candies are more addictive than drugs. This really is Halloween Economics 101.
Anyone running WalMart still know about competition? I guess they lost that concept when they thought they ran everyone else out of businesses. Corporations are much like people and government, once they get too large they just slow down.
The Mortgage foreclosure scandal may turn into one scary fright. Lawyers apparently were told by banks to sign hundreds of foreclosures a day without even reading what they were signing. It seems like everyone is taking lessons from Congress. It may turn out that many that bought these foreclosures may not even have a legal right to the property. The prior owners might have grounds to sue them and take their house back. Then the buyers of the repossessions will have to sue the title companies.
If enough title companies get sued, title companies may no longer give title insurance on foreclosures and then mortgage companies may no longer lend on foreclosures. Besides that, if you were a buyer and had the cash would you now buy a foreclosure and risk getting sued? This foreclosure scandal sounds like a perfect government driven full employment program for lawyers.
So what may happen is that the banks will get stuck with a lot of property that they will never be able to sell or even collect payments on. Are you ready to bail out the banks that are too big to fail all over again? I guess those that are not too big to fail are doomed to fail anyway when they actually have to disclose all their worthless holdings in 2012. This just might make them fail sooner. The illegal foreclosure problem partly stems back to those that were bundling and selling mortgages and also losing tract of just who owned the title. Now judges and lawyers have been signing repossessions without even knowing who owns the property.
I would think that the federal government will come up with some fascist way to deal with this. They will probably restrict law suits and run roughshod over state property laws. Maybe before they are done the federal government will become the landlord of repossession. Then they can just redistribute the houses to all government dependents for near nothing and declare that the housing crises is over. Just spread the wealth around and let the taxpayers bail out everyone. Because everyone with a brain knows we are going to default on our national debts sooner or later anyway, or else our government will make dollars become so worthless that it will amount to the exact same thing.
Such is the nature of Halloween economics and scary figures bringing us October surprises.
Hi Don,
I think of all the scary things in your article, the last paragraph is the scariest of all.
With Quantitative Easing II just announced, go long gold. Precious metals is really the only way to preserve your wealth as the gov’t continues to attempt to wear-out the printing presses. 30% of one’s portfolio is a good figure.
Just to add to my last post: I read a few weeks ago that someone in Europe (can’t remember his name, was a BBC article) said that the only way to rescue the U.S. housing market was to, and I quote, “NATIONALIZE ALL HOME MORTGAGES.” Unbelievable. I never really thought I’s see the day where this was even considered.
To Frank’s point. I heard this week that 98% of all new mortgages are federally backed. As a home builder I can provide anecdotal evidence that this is indeed true.
I would like someone to prove to me that the price of gold is not manipulated.
I don’t have any, but for those who are banking on precious metal as the way to keep their wealth……
To Frank’s point: I don’t think precious metals will be a safe store of wealth either. Sooner or later I’m betting the government will “confiscate” these, making them illegal to own and “paying” for them in worthless paper.
Our Heavenly Father will have to provide for us just as He said He would; we need to seek after His concerns…
Brian from Oz, I had heard awhile back, (can’t recall where) that 120 years or so ago a $20 gold piece, which was more or less an ounce, would buy 1 man’s finely tailored suit of clothes. Seems to me that’s about where we’re at today, about $1200 for the same product. Tells me that gold hasn’t been inflated. Fiat currency has deflated.
Gold is being manipulated by downward pressure and it has been for a few years. It is cheap right now: http://www.gata.org/about
Hi Ken C and Frank
I do compare currency with what I could purchase when I was a boy but cannot remember what the price of gold was then.
Your point Ken, is well taken.
Lest everyone become Gold bugs I think I will put in my two cents.
Ken C, The problem with that suit analogy is that $1200 fine suit seems overpriced to me. I can still get a fine suit for myself for $300. I know I can get a really great suit for $600. The price of a suit depends upon where you buy it. Gold was $350 an ounce just a few years ago and people were using that same analogy. Inflation has not gone up much since then. Gold at $1300 using the prices of suits today is way overpriced.
Gold today is pricing in future inflation, speculation and risk holding government paper. So those buying gold at these prices today are really speculating that these other investments will decline due to inflation or devaluation. They are probably correct. But, my point is that the price of Gold today does not reflect what it costs to mine it and what it would be worth under normal demand conditions. Gold today reflects the belief that national currency are in trouble and that they will lose much of their value. Others are just riding the Gold bubble up. If by chance somehow our government really cuts spending and somehow balances the trade deficits by exporting more so that our debt starts decreasing relative to GNP Gold will drop in value. It will drop to what it costs to mine enough Gold to meet normal demand using today’s technology. I think that still can be done for far less than $500 an oz.
Frank, yes governments do manipulate the price of Gold. They tend to sell when prices get very high, as do rich people. Even the poor that have Gold jewelry tend to sell when Gold is high and times are tough. Just our federal government has about 300 billion in Gold reserves at today’s prices. They could sell off some at any time and drop prices if they wish.
Also, as implied by Brett. Government has before and once again can make gold for coins and bullion illegal to own. They would then make you sell it at their own set price. If we should get in a world war with Islam or China or if we get into hyperinflation I think the confiscation of Gold and Silver is more likely than not.
So although Gold might look like a good investment right now it could become a bad investment really fast. The Bible actually teaches diversification of wealth but the Bible also says it is better to put your treasure in heaven. In other words, use your wealth for God’s work on earth now.
“In other words, use your wealth for God’s work on earth now”
Thanks for saying that, because that’s what I’m doing. It’s the safest bet.
Yes Don $1200 for a suit seems absurd to me. I was just trying to give Brian a parallel as to the purchasing power of gold. I’m not advocating buying gold. I learned from my dad long ago that something is only worth what someone will pay for it. Be it gold or suits. Apparently there are people out there that pay $1200 for suits. Personally I think they’re nuts. It speaks more to the point of our dollar purchasing power being devalued.
As for the actual value of gold, I always found it quite amusing that what man values greatly here on earth, God uses to pave the streets with in the Holy City.
At $1369 an oz today Gold mining must be a great business to be in right now since most can make a profit at $300. Its almost as good as oil for the Arabs, they get it out of the ground for about $4 and sell it for over $80. Then they cry not enough!
If Gold and Silver keeps going up I am going to get my metal detector out and go where no man has gone before.
Inflation does not seem high, yet. The key word is yet. Just 18 months ago, the goons on CNBC and Fox Business would’ve called you insane for saying that gold will soon see 1300+/ounce.
Keep in mind that the government does not include the cost of energy and food in their inflation figures. It will take a few more years for the printed money to filter it’s way back into the economy. When it does, $1300 gold will seem very cheap. Then everyone will be a “gold bug”.
Actually, the government does include the cost of energy and food in their inflation figures. They give the CPI changes with the food and energy figures included and they also give it without it.
Since food and energy changes so often economists and media cannot rely on it from month to month when reporting on inflation trends so they often use the figures where food and energy is removed but food and energy is included in the official CPI.
There are many people who believe the dollar is going to lose most of its value within a few years and gold reflects that. The Fed would say they are wrong and that they will keep future inflation under control. So if the Fed is right those that buy gold are making a bad investment if they are wrong gold may still be cheap.
I would say that gold prices have about 100 percent inflation over the next 5 to 10 years already built in the prices today. That would mean the value of the dollar would have to drop half of its value this decade for Gold to be a good investment.
I have been saying our standard of living will be cut in half over over the decade if we even survive as a nation. So if you think the dollar will be buy less than half of what it does today in 2020 you might buy Gold. But also keep in mind that if inflation is running at 12 percent a year CD’s will be running at 14 percent so its not like your other investments cannot keep up.
However, that really is a moot point because if creditors even demand 10 percent on treasures for very long our nation will go into default because we will not be able to pay both the interest on our debt and the costs of government. $20 trillion debt x .10 percent is 2 trillion a year in interest alone. Today we already pay about $600 billion a year in interest. Our debt is extremely high and much of it is short term.
Therefore, I think the outlook for the dollar in the long term is bleak but it is not impossible to fix if we dumped most entrenched socialism and all unfair world trade. The changes in the US will have to be toward the very conservative even radical.
If the Tea Party movement fails to bring about the needed changes in the US by 2013, stick a fork in us. Were done.
Let me rephrase what I said earlier: The government inflation figures typically reported on the evening news do not include the price of food or energy.
I agree with you about the standard of living falling in the U.S. And the way it will be done will be through the weakening of the dollar. A look at the 10-year dollar chart is a scary sight. No treat there, just tricks. And as the dollar weakens, there will be less buyers for treasuries, which leaves only the Fed to buy our debt. We all know that is only moving printed money from one hand to the other. All of this bodes well for gold, but not so well for the U.S.
I disagree with the assumption that CD’s will always do better than inflation. CD’s could only be a good investment if there are buyers of debt on the free market. Very short term I would agree with you, but the game has changed in the last couple of years. The world knows we can’t pay our debts and that is why the Fed has been buying up treasuries an M.B.S’s. Without the Fed printing money and handing it to the gov’t, there would literally be almost no home sales in this country outside of cash sales.
I really do not see any way out of this mess that our gov’t and debt has gotten us into. This is why the world leaders are talking about moving to some type of global basket of currencies. And we all know where that will eventually lead to.
I was talking about very short term CD’s. I only used CD as one example of how you can keep up with high inflation without buying Gold. Hyperinflation conditions is another issue entirely. Long term CD’s under an increasingly inflationary trend is asking to lose money. So are buying long term treasuries. Nobody in their right mind could possible think that they can make money on 10 and 30 year treasuries at 3 or 4 percent interest. Those that have them hope to dump them on some other sucker as soon as they can. for example, pension funds.
The Fed is no longer just buying treasuries it is also buying bad mortgage debt and we can be certain that they will never collect back much of that debt.
It is really tragic when you have private Federal Reserve banks forcing down long term interest rates by buying up government debt with paper hot off their own printing presses and then giving private banks loans at .25 percent so the banks can take the money and buy US treasures that they still can sell for more. They call it stimulating the economy. I call it It is a Ponzi scheme.
I agree that there probably is no way out because Americans under any political party will never give up socialist entitlements. Just look at France. This week the people have just about shut down the country because the government intends to increase the retirement age from 60 to 62.
I say just default on our debts while we still are a world power and just start over. I assure you if we just start a new currency some countries will still trade with us because we can make things that nobody else can get anywhere else. For example, food and high tech weapon systems.
Europe never paid their war debts back to us. Also the Soviet Union left many nations holding the bag as did nations like Argentina. So now maybe its our turn.