Learn the ups and downs and start trading in the commodity and currency markets. Stay nimble. I stay out of equities because its a rigged market. Commodities and currencies are far more straightforward and predictable. I stay in the tangible world. Cotton is cotton, wheat is wheat and the demand for cotton or wheat is far more possible to predict than the FED pumped equity market. I’m long ag commodities and strong on the AU, CA, and Singapore dollars. Stay nimble.

if i take ten thousand, and put 1000 on each of 10 companies. to lose all my money would require them all to go bankrupt, and even then i may not lose it all

but if i sell and buy, and sell and buy, i can even invest in winners and end up broke.

put and call options are another thing

China and others are buying because they are backed. (though not by gold)

from yesterdays news

China’s sovereign wealth fund hopes to reduce its reliance on purchases of U.S. Treasurys and boost investments in other assets as the U.S. economic recovery makes U.S. government debt less attractive, the Shanghai Securities News reported Tuesday, citing the fund’s head.

they are charged above all with worrying about the government’s ability to repay the nominal principal and interest of the bonds.

If a $100 bond comes due, the Treasury can sell a new $100 bond to pay off the principal without increasing the total amount of debt. And there’s still $2.5 trillion of tax revenue coming in. That’s plenty to cover interest payments. If anything, the law is pretty clear that interest payments on the debt are the last thing the government can stop paying, not the first.

the US CAN NOT PRINT MONEY as it feels like. period

however there has been a subtle change in things.

i will try to explain this, but this is not where my bailiwick exists

if people understood this a bit more, then they would get whats going on in a more sane way and it would be much easier to tell who is being the bad guy and so on.

by the way, the whole trillion dollar coin thing shows that they know the rules and are following them, while the public does not. yet, the public will not allow THAT version of gaming the spirit by applying the letter of the law.

in order for the fed to print money, it has to create backing for it.

we do not have fiat currency the way people express it. we have rules as to what or how currency can be made and how its used and so on.

and guess what? The debt ceiling is the cap on this when the budget no longer works!!!!!!!

once you ‘get’ how this works, you will get why they created asset bubbles and what tiny change they made in some way made it happen.

can he fed say… print me up a billion new crisps? not at all
it first has to create a reserve asset. now, given how the fed was created these assets used to be limited to NON FISCAL things.

[i am not an economist kind of guy so terms will not be right, but essence will be close]

the treasury will not print money for the fed unless there is a reserve of some sort to back it. just not gold… if it tries, it wont matter, as only the fed can issue currency and the notes serial numbers are tied to the reserves that back them

they want you to think that the bind is republican when it was (i think) andrew jacksons thinking… but i can be totally wrong on this one as far as jackson goes

so what is the gig with the trillion dollar coin?

well, the treasury has another vehicle for printing monetary things.
ie. commemorative coins. and they do not have to be backed by the fed reserves… and the treasury can issue them.

so the idea is to get around the limit on printing your own money!!!!

they create a platinum commemorative coin…
the treasury can issue that
then they could give it to the fed, who would then have a trillion dollar asset to put in reserve, and so could then tell the treasury to print a trillion now that its backed. and then the fed can issue it.

cute. eh?

but even the idea shows how stupid the american people are if they can watch that be suggested and not get it.

anyway… the neat trick that happened that changed all this over obama is his failure to create a budget… and so the fed started amasing reserves that are FISCAL… not structural…

it USED to be that the fed could only buy treasuries..
which then would allow it to have a reserve to cause a print

this kept its power away from fiscal things..

however, with the cloward and piven welfare manufactured strategies, they started buying up hard assets, like property. (and by overpaying, they drive up the artificial worth of the asset)… and in this way, created an asset reserve so as to print money.

ie. they bankrupted the homeowners to get the asset into the state hands so they could then make a reserve of it, which allowed them to then convert these assets of the peoples who owned them, into a reserve.. once they had the reserve, they could print all that cash

i think that they intended for the people to take the money that they just printed after getin the asset reserve, to then buy back the commodities of assets. in this way, then clearing the books of the too many dollars. but we are dumb but not that dumb, and so people did not buy the assets with the money the fed injected after making a reserve of them, as the money never got to them as the banks who get the issued currency held on to it. after all, its at zero interest. so they could hold it forever and not pay a dime. right?

This is fiscal policy. When the Fed lends directly or buys assets other than Treasuries, the total debt + money increases. The traditional restriction that the Fed should only buy Treasuries separates it from fiscal policy. As some of James’ clever ideas point out, you just have to be a bit clever to channel this newly-created money to social security recipients.

now here is where the deeper understanding comes from

people wrongly imply that if the debt ceiling does not go up, then the USA will default. but that is wrong, not to mention, default to whom?

if a 100 dollar bond comes due, the treasury can sell a new 100$ bond to pay for it. with over 2.5 trillion in tax revenue coming in on top of all the RESERVES…

so the US defaulting would be a choice, this is why i said WHOM

all this is structural debt and its backed… so china is not going to be cheated… what is outstanding is ONLY 16 trillion..

so what about the unfunded liabilities? well, the reason they play games here is that they are saying that these are only fiscal promises to ourselves, not actual debts!!!!!!!!!

unlike treasuries and other BACKED debt, these are really only political promises that we as the people think we can hold the system to. but just as a internal budget choice can be changed by the budgeter, so can this.

so the left knows that a default on welfare, social security, tsa, etc… is not technically a default any more than a father cutting off the allowance of a daughter would be considered a default, and the bank wont be seeking redress.

SAME here…

oh.. the population may go into a civil war being denied what was promised them, but is that a default? i say yes in terms of the people. the young daughter may just rebel and so on…

so to the daughter or son whose allowance is cut off, dad defaulted on his promises… but since this promise technically has no legal obligation its a default in action, not legal parlance (so to the kind of people that look at it with a lawyer mentality, would say it has no reality to it legally)

and this is where everyone is getting all twisted up.

because Americans believe a promise is a contract!!!!

so they see these promises as legal obligations as they would be between themselves. but the politicians see such as conveniences that can be changed at will (if they could get everyone to cooperate).

but the lawmakers realize they can change a law they made in the morning by just changing it in the afternoon. short the limitations thrust upon them, they could do this 5 times a day every day and so on. (at the sacrifice of social stability, which they see as an opportunity to prove we cant get along).

so this is where the problem is….

if they intended to pay the internal bills, this would be a problem

but the idea of efficiency and control in a SOVEREIGN DEMOCRACY (see russia), is to promise you tomorrow what you never get for your complicity, cooperation and hard effort today!!!!!

ie promise them what they will never have and who will be stuck with the hot potatoe long after i am gone…

The Fed interest rate policy is cutting both ways and the longer it goes on, the worse it is for pensions. Few are remarking on this, but it may be more important than anyone knows.