do you think the FED will do QE3 sometime this year?

You think the rest of the auto industry wouldn't have been affected if GM and Chrysler had been allowed to go under? Please... the fact remains, they're doing quite well now.

Being lender of last resort is not Soviet Union "socialism". Calling everything that is not anarchy "socialism" is simply ignorance. Disaster, death and dispair are good for gold prices.

 

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I agree. PMs can't really protect against that sort of situation. They work best at getting some of your purchasing power from this side of inflation to the other, but that requires at least some respect for private property.

 

This one I'm not sure about since you also can't multiply wealth by concentrating it. In the nations where wealth becomes super-concentrated among an elite class, economic growth and the median standard of living falls. In the US where it is now widely recongnized that "corporations are people too" there is a danger of this happening.

 

I don't disagree with your thoughts, but thought I would clarify why corporations are people. I know a lot of people like to throw out this is some sort of conspiracy. It actually was a ruling in the 1800's. The reason a corporation was ruled to be a person was to allow limited recourse corporations. If a corporation was not a person, they cannot be held liable for anything, therefor the stockholders directly would have to be sued. This would break the model for a limited liability corporation, where shareholders can only lose up to their investment, their personal property is not at risk. These types of corporations are what have made America and the world great, a fact shown in how almost every major entity in the world except for governments are limited liability corporations. You simply cannot have nearly any entity, nor democratization of equity participation, without this model.

Pragmatically nowadays, corporations are people because it allows for extra taxation nowadays. Since they are people, they can be directly taxed. Then any income they give to shareholders is taxed at the shareholder level. This high combined level of taxation is very important to most countries budgets.

 

Just to introduce levity, I like this bumpersticker:

"I'll believe corporations are people when Texas executes one of them."

But I do see the benefit that corporations are people...just levity...carry on...

 

Nope. This is what they said to justify their actions. Create FUD when there is no other reasonable explanation. We have bankruptcy laws and they have been proven to work just fine.

If GM was doing well, they still would not need the government to own them and they would not be stuffing their dealers with inventory which are not needed. (hint: it's at a record high) Chrysler doing well? LOL The Fiat launch was bungled into a disaster and their dealers are all screaming about the money they were forced to spend on it.

 

Try thinking about this one some more. You are peeing on the wrong tree.

 

I understand why this was done and the benefits. But there is a dark side to it also that isn't being addressed. I believe that before the ruling in the 1800s, corporations had to periodically demonstrate that they were serving some public purpose other than to generate profits for the owners. If they could not, they could lose their corporate charter. It's just as important to control huge corporations as it is government and religious entities. Anything that gets too large and powerful can pose a threat to the individual.

 

You too. Remember, I'm the one who thought it out instead of just copying what someone else wrote. The problem occurs at both ends of the spectrum.

 

I don't think that it will happen this year

 

Guys with their economic theories...made me think of "boys with toys:" http://www.youtube.com/watch?v=6DBoFNylEeo

 

You are attempting to discredit the messenger rather than deal with the message. Who posted it is irrelevant.

 

http://kingworldnews.com/kingworldn...tion_to_Fed_Minutes_Wrong,_QE3_is_Coming.html

 

I made a simple comment that any well-balanced individual would have taken as a normal discussion point. It doesn't speak will for the state of your mental health that you feel the need to lash out in every direction to parry imaginary attacks.

 

If you have finished with the distraction concerning your opinion of the mental health of each of us, I will get back to the topic. You mis-interpreted the bullet that you responded to before you went off on this tirade. It has nothing to do with wealth concentration.

 

>Originally Posted by Peter Schiff
... Somebody is going to have to buy all of those bonds and if the Fed is not going to do it, who will? Right now, the Fed is doing QE. Whether they want to officially call it QE, they are doing it. They are doing Operation Twist and buying government bonds. The Fed has to buy government bonds to keep interest rates from skyrocketing. As they stop, rates are going to go up and when they it will choke off the ‘recovery’ that is dependent on low rates. So, if you take the Fed at its word, this is going to be a bigger disaster (than Europe). I think there is going to be more suffering. If you think that the riots are bad in Greece, wait until you see what the riots are going to be like here.<

I think the answer to Peter Schiff is that in a normal free market, a higher interest rate on Treasuries would easily permit them to be absorbed by the market. Comments about skyrocketing interest rates are just meant to stir up the subscriber base. In fact, the world is starved for yield, and a return to a "normal" interest rate of, say 5%, would result in enormous demand for treasury bonds by insurance companies, retirees, and pension funds seeking to meet the actuarial assumptions built into their products. It is only the government insistance on borrowing at near zero interest rates that causes the problem. I know all of the arguments about the government not being able to afford to pay 5%, but this is a red herring. Higher interest rates would force lower government spending, and that's not a bad thing.

 

The tirade was yours. And I know the comment had nothing to do with wealth concentration. That's why I brought it up. The comments were incomplete and insufficiently thought out. But believe what you want. Nobody can make you think.

 

You fundamentally don't understand how this works. Interest rates are not being "held low" because the government insists on it.

 

Another "nobody is smarter than fatima" moment...

I think it's a bit naive to believe that the Treasury Dept. doesn't work with the Fed on this. I know my thoughts don't concur with your "evil bankers rule the planet" worldview, but I stand by what I said.

 

What about all of the existing debt out there that would require a much greater payment return when the interest rates go up? The Volcker scenario you are describing is the only way out that I can see, but it won't work unless the economy is prosperous enough to support it. If they can't even stop doing QE, how are they supposed to raise rates? They aren't necessarily borrowing near zero because they want to, but rather because if they didn't the derivatives market would come unhitched. When I bought my silver in 2008 it wasn't simply because the price was right. The biggest reason for me was because I was watching them steadily lower interest rates for years and when it finally hit zero I had no idea what they were going to do, since interest rates can't be negative right? Enter QE stage left. This monetary policy is a result of propping up the housing bubble, which was used to prop up the tech stock bubble. The problem now is that we are propping up our own money which has much greater consequences than doing so with commodities. There is no other greater instrument to be used to prop it up.