Global economic crisis

[Dionne]

Based on technical analysis, based on some obscure Italian mathematician with a series based on adding the previous two numbers, 1,1,2,3,5,8,13,21,34,55..., where beyond the fourth member of the series the ratio converges between the two numbers adjacent near 0.618, that the DJIA and other major indices follow, this coming anniversary of Black Tuesday will see a blood bath on Wall Street, and stocks will take at least five years to recover to pre-crash levels. He sees a potential floor approaching 4600 for the DJIA. 400 for the S&P


Based on GE and Walmart having to pay a couple of points over LIBOR and collateralize their overnight and short term loans, and the size of the bailout and budget deficit, the federal government will crash, be unable to sell new debt, unless they collateralize government notes with a fixed quantity of Ft Knox gold.



No idea if that is correct or not, but that is what my boss thinks. He is out of the market completely, except for gold mining shares. He was about a $50,000 a year engineer for an oil company in West Texas 11 years ago, he is worth over $15 million now, so he may know what he is talking about.

Do you really think we have a substantial gold reserve remaining at Knox?

[Brent]

Yuck.

DOW
8576.48
-734.51
-7.89%
NASDAQ
1637.34
-141.67
-7.96%
S&P 500
907.96
-90.05
-9.02%

[HURAKAN]

We live in very unstable times.

[Ed Mahmoud]

4,000 metric tons of gold, roughly, at Ft Knox is what I hear.


If they don't back t-bills somehow, the way the deficit is growing, they'll have to offer some impressive rates to get people to buy them.

Besides the housing/credit crisis, the likelihood of new punitive tax rates on businesses and small business owners, the engines of economic activity, in the next few years can't make people feel confident the economy will grow.

[Cyclenall]

That wiped out most of the gains on Monday. Some think it was because all those that bought stocks when ultra low sold a lot of it today and there you go . It's much more likely though because of the bad news with the economy.

[JonathanBelles]

Im getting sick of the news media. When the DOW goes up, the recession is over and we've hit the bottom. When it goes down, its the worst recession in decades.

[Dionne]

4,000 metric tons of gold, roughly, at Ft Knox is what I hear.


If they don't back t-bills somehow, the way the deficit is growing, they'll have to offer some impressive rates to get people to buy them.

Besides the housing/credit crisis, the likelihood of new punitive tax rates on businesses and small business owners, the engines of economic activity, in the next few years can't make people feel confident the economy will grow.

No way....the numbers are way to high. One metric ton is 1000 kilos.

[RL3AO]

Maybe people should stop focusing on the Dow.

[Brent]

Maybe people should stop focusing on the Dow.

I think you're right, and I agree with fact, I also hate the way the news media acts about it.

[JonathanBelles]

Usually when the Dow goes up or down, most everything goes the same way.

[Nimbus]

The Nikkei is down 911 at the break.

http://www.nni.nikkei.co.jp/CF/FR/MKJ

[mf_dolphin]

4,000 metric tons of gold, roughly, at Ft Knox is what I hear.


If they don't back t-bills somehow, the way the deficit is growing, they'll have to offer some impressive rates to get people to buy them.

Besides the housing/credit crisis, the likelihood of new punitive tax rates on businesses and small business owners, the engines of economic activity, in the next few years can't make people feel confident the economy will grow.

No way....the numbers are way to high. One metric ton is 1000 kilos.

147.3 million oz.

http://www.usmint.gov/about_the_mint/fu ... un_facts13

[Ed Mahmoud]

4,000 metric tons of gold, roughly, at Ft Knox is what I hear.


If they don't back t-bills somehow, the way the deficit is growing, they'll have to offer some impressive rates to get people to buy them.

Besides the housing/credit crisis, the likelihood of new punitive tax rates on businesses and small business owners, the engines of economic activity, in the next few years can't make people feel confident the economy will grow.

No way....the numbers are way to high. One metric ton is 1000 kilos.

147.3 million oz.

http://www.usmint.gov/about_the_mint/fu ... un_facts13

147 million ounces is 4600 non-metric tons, knock off about 10% for the conversion between 2 pounds and a kilogram, still over 4000 metric tonnes.

[Dionne]

"The depository is a secure facility. No visitors are allowed, no exceptions."

So when was the last time that someone actually saw the gold that is a reliable source? And why is our government placing a value of $42/ounce on the stash?

[mf_dolphin]

I guess you don't count the US Mint as a reliable source? If they aren't then we're in a whole lot of trouble.

[Dionne]

I guess you don't count the US Mint as a reliable source? If they aren't then we're in a whole lot of trouble.

Anyone can stamp coins or print cash dollars. It's common knowledge our economy is flooded with bogus/counterfeit bills. You cannot cash a $20 bill without a cashier checking the validity with a specially designed pen. Old forges in upstate New York have forged fake coins with numismatic value. I have also been a victim of those scams. But it's a really nice 1909S VBD in poor condition, and most think it's real.

As a lifelong collector of minted coins......my answer is "NO"....I do not think the US Mint is reliable. They have not been reliable since 1964 with the introduction of clad coins. Remember the hording of coins that were silver versus the clad?

Regarding the are we in a "whole lot of trouble" question. My answer is ....NO, not at this time. This could and does change every day.

Earlier today I s/w a friend at a country beer joint. We all gather to play Dominoes. We're an older group. I'm the pup. Mr Bowen (his first name) is the senior. Mr Bowen was 5 years old during the depression. He told me that there wasn't any money. When there was money it was always coins. He remembers buying whiskey for 60 cents. He's a WW2 veteran. I've beaten him once playing the stones.

I think we're entering a new global phase. Mr Bowen told me "we were once the greatest nation....but nothing lasts forever".

I trust old timers. He's got me thinking.

[mf_dolphin]

The subject was the gold in Ft Knox. How we got on clad coins and conterfeit 20's is beyond me

[Dionne]

The subject was the gold in Ft Knox. How we got on clad coins and conterfeit 20's is beyond me

Your question was the mint being a reliable source?

I gave you my answer. No.

The second part of your question was about us being "in trouble".

Again my answer was No. With a disclaimer.

Do you think the gold is at Knox?

[mf_dolphin]

If you go back and read the link I posted it says that there are 147.3 million ozs of gold at Ft Knox. That was in response to your post that "No way....the numbers are way to high. One metric ton is 1000 kilos." So yes I do think the gold is at Ft Knox

[Ed Mahmoud]

There certainly is not enough government gold to back the currency. We couldn't go back to the gold standard if we wanted. I just reported my bosses musings that companies like GE and Wal-Mart were having to collateralize overnight loans, and I got to thinking what happens when the government can't just sell more debt, because of the size of the deficit.

Because of the lower risk, maybe gold backed T-Bills might carry a lower rate, and save the taxpayers some money.