Last Updated: Mar 25th, 2013 - 16:46:15 Newsletters : 2008 Newsletters : 20 June 2008 Thought For The Day In 1988 our M3 money supply amounted to some $43,101 million. Twenty years later our M3 money supply had expanded to $201,273 million. This is an annual compound interest rate of around 8%. No wonder we are experiencing inflation. Jun 17, 2008, 17:05 Newsletters : 2008 Newsletters : 20 June 2008 "Catastrophic" Event Feared As Fed Fights ECB On Rates REAL economics predicts what will happen when we print too much paper money or issue too much cheap credit with a flick of a computer button. - Disaster. People who can, flock to the easy money and speculate on fancy money strategies or property speculation and the boom is on. Then comes the crash and the price must be paid. Hopefully not by you. Jun 20, 2008, 12:08 Newsletters : 2008 Newsletters : 20 June 2008 Bear Bailout Shows Fed Doesn't Follow Normal Rules For Its Own Books When paper money is just backed up by the promises of politicians and the Central Bank then we have to be very sure that people believe those promises. If people start to lose faith in the value of money there will be a stampede for the exits of world shaking proportions. This does not depend on the facts - just the perceptions! Real economics predicts that after every boom there will be a bust. It further seems that the bigger the boom then the bigger will be the bust to follow. This is not proven but is a reasonable hypothosis. We also know that every attempt to use paper money unbacked by gold by nations in the past has led to runaway inflation and total debasement of the currency - as is happening in Zimbabwe right now. Here is a discussion in the popular press which poses these serious problems. Remember - perception is all. Jun 20, 2008, 10:07 Newsletters : 2008 Newsletters : 20 June 2008 Silver Saves Investors Big And Small In the USA they have a "Misery Index". Add together inflation and unemployment rates and that is the Misery Index. But of course there is the Official Misery Index and the REAL Misery Index. I wonder how that would work for New Zealand? The Mogambo Guru continues with a basic lesson in supply, demand and price economics. Jun 17, 2008, 12:08 Newsletters : 2008 Newsletters : 20 June 2008 Bernanke Said To Worry More About Recession Than Inflation Central Bankers are looking more and more like Junior Wizards of Oz; - Behind the curtains swinging on levers of mysterious function and panicking about what is REALLY happening. You can fool all of the people some of the time and some of the people all the time but you cannot fool all the people all the time. Good luck guys! Jun 17, 2008, 11:22 Newsletters : 2008 Newsletters : 20 June 2008 Germans Begin Rejecting Euros From Latin Bloc Not all Euros are equal. What is the value of a piece of paper that politicians assure will be exchangeable for a piece of paper with the same denomination? German citizens have problems with the purported value of different euro notes. When the populace starts to lose conficence in paper money holding its value the government is in trouble. Jun 13, 2008, 16:46 Newsletters : 2008 Newsletters : 20 June 2008 Emerging Markets Face Inflation Meltdown Most, if not all, countries are inflating their paper currencies by 10% to 15% (if not higher). When this leveraged paper money system begins the "unwind" phase we face big problems. Jun 13, 2008, 15:02 Newsletters : 2008 Newsletters : 20 June 2008 Quote for the Day WISE WORDS FOR ELECTION TIME You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away men's initiative and independence. You cannot help men permanently by doing for them, what they could and should do for themselves. Author -- Abraham Lincoln Freedom is not free! Jun 6, 2008, 10:52