|Last Updated: Mar 25th, 2013 - 16:46:15
Thought for the Day
"One of the wonders of leverage is that it amplifies losses on the way down just as it amplifies gains on the way up."
We set out four years ago to find out how New Zealand could lift its game and grow the economy at a faster rate than Australia. The answers seemed to be clear enough but our government persisted with more regulation, high taxes and printing more paper money. We dropped another two places down the OECD this last year.
But our journey into economics has produced some interesting insights into the world of banking. If you want to know what is really going on then these articles will be most enlightening.
Sep 28, 2007, 11:48
The Credit Crisis Could Be Just Beginning
Derivatives outstanding earlier this year stood at $485 trillion - or eight times total global gross domestic product of $60 trillion.
If you think about this you will realise that this is a colossal amount of money. Where did this money come from? Where will it go to?
Since 90% of it is debt money most of it will disappear as our "Credit Crunch" takes hold around the world. We haven't got just one country printing funny money, but the whole world (as far as I can tell) is engaged in printing fiat money.
This article explains how the bust that is now happening may play out. No-one can predict exactly what will happen as politicians will make various decisions designed to help the process but which will just alter the descent back to real money again. Osama bin Laden might as well just sit back in his hide-out and enjoy the sun. Western democracies are in the process of destroying themselves. The Muslim world is busy exchanging oil for gold (not US dollars anymore) and we all know the golden rule*.
* He who has the gold makes the rules.
Sep 25, 2007, 12:49
In Gold We Trust
As we have been pointing out for some time now, the Central Banks of the world are printing money and issuing credit to the tune of 10% to 15% over the money supply each year. China is doing 20% and Russia 50%.
We are no longer in a world of stable money. What do our financial statistics mean if the measuring stick is changing by 15% pa?
The Yankee dollar says, "In god we trust". Our Asian journalist says, "In Gold we trust".
The banks no longer trust each other so Asians have difficulty in trusting banks. If they really lose faith and sell their money for gold we will see the biggest gold rush in history.
Has this already started?
Sep 12, 2007, 09:50
Patterns That Reveal Gold Price Capping
As we have seen recently the Central Banks are inflating our currencies by 10% to 15%. This entices entrepreneurs to invent new money entities like Derivaties, Hedge Funds, CDOs and etc, etc. All using leveraged debt to maximise profit. Eventually this house of cards falls down and to stop the painful crash our Central Banks pump yet more paper money into the system to keep it afloat. This will work for a while but the incentive for leveraged debt is a powerful force and so the cycle will continue.
As people come to understand what is happening they will move away from paper money and assets based on paper towards more concrete assets. We see this already with the current real estate price boom. But another move is taking place. People are moving into the stock exchange looking for real assets and moving into gold money rather than the paper variety.
The Central Banks are making an effort to stop people moving towards gold and this article gives an overview of this happening. This is an unproven hypothesis at this stage but everything seems to point in this direction.
Not only are citizens starting to become concerned about the value of their money but also Nations are looking at their foreign currency reserves and asking themselves about REAL value.
The Chinese, with $1,300,000,000,000 in US paper dollars - unbacked by gold or anything else but an assurance from the Yanks - are naturally starting to be concerned if recent reports are correct.
This all is starting to look like a very big problem.
[ Visit Website ]
Aug 14, 2007, 11:03
Italy to Use Gold Reserves to Cut National Debt
Russia and Asia are keen on gold. Western Central Banks regard it as a "barbaric relic". We are in at the beginning of an interesting money fight!
Aug 2, 2007, 10:21