Last Updated: Oct 22nd, 2010 - 15:35:08 Newsletters : 2007 Newsletters : 9 November 2007 Thought for the Day "If history repeats itself, I should think we can expect the same thing again." Anton Oliver Nov 8, 2007, 10:17 Newsletters : 2007 Newsletters : 9 November 2007 Gold Eyes All-time High On Currency Crisis Fears. One of the things about the recent sub-prime Credit Crunch is that the banks know what is going on and won't lend each other money. People in the Western world don't seem to be thinking about the implications of all this but what about the Central Bankers of China, India, Saudi Arabia and the other oil countries? Are they starting to move against the US Federal Reserve already? How can they protect their interests? Our theory tells us what will happen but not when. It just depends on when we get panic in the streets like at Northern Rock last month! Can the Central Banks fix the next panic? I remember my Granny telling me about that old Chinese curse, "May you live in interesting times"! Nov 8, 2007, 19:29 Newsletters : 2007 Newsletters : 9 November 2007 Roller Coaster Our theory of economics tells us that as governments pump out more and more paper money the entrepreneurs amongst us think of more and more clever ways of generating businesses from this excess cash which is so freely available. This includes the money people who have discovered ways of slicing and dicing mortgages to gain a AAA rating from high risk paper. So we get the housing boom in the USA (and elsewhere) but in the USA we have the boom caused by selling houses to people who couldn't afford the deposit on the house or the repayments but signed up to the new super mortgages anyway. Well, as our theory shows the boom eventually leads to the bust (we leave out the boring explanation) and house prices fall and the "subprime" mortgages which have been sliced and diced and sold around the world are now worth down to 20 cents in the dollar - or, who knows, no-one will buy them! These asset backed securities have now more than halved in value. If we had $100 billion in these assets two years ago we now have, maybe, $45 billion now. This is paper money created from nothing by the central bank going back to nothing, where it came from. This is the inevitable cycle of paper money and cause of much anguish amongst those involved. The Federal Reserve, however, has a solution. More of the same! And the Central bank of Europe and the UK join in to help. The result is a new influx of credit (paper money) which will start off the new boom. This is how the American housing boom got started. Alan Greenspan solved the Tech boom and the dot.com bust with lots of very cheap credit. So there will be a new boom as the money searches for maximum return. Those of you who have been following the story closely may have an inkling about where it will appear. Join in and sell before the bust! Lets all have fun!!! Nov 6, 2007, 17:59 Newsletters : 2007 Newsletters : 9 November 2007 Creative Kazis And just to show our "green" side this article on pisciculture and composting lavatories. Ain't technology wonderful? Nov 6, 2007, 16:47 Newsletters : 2007 Newsletters : 9 November 2007 Interview With Theodore Butler Don't they say in the best detective novels; Follow the money? It certainly seems a good idea when it cmes to following the happenings in economics - especially when the money turns out to be just paper and only worth the promises of politicians. So real money is gold and silver. Historically and traditionally the world's choice as the medium of exchange, especially gold. As you will have read so far the two metals are the only commodities that not traded on a free market like all other commodities but are subjected to price manipulation by the Central Banks of Western society and other associated parties. Our paper money world is now getting a bit strung out with merchant bank manipulations that we are now reading about in the daily papers. What does this mean for the world of REAL money? James Cook interviews one of the world's experts on silver. Nov 4, 2007, 09:34 Newsletters : 2007 Newsletters : 9 November 2007 Dollar Falls To Record Low On Chinese Talk Of Diversifying Reserves. The Chinese understand that the way to win the battle for superiority over the American Empire is not to adopt the previous Russian Nuclear method of Mutual Assured Destruction but to win the economic battle. The only way to do that is to introduce Capitalism and grow a country of 1.2 billion wealthy citizens. As the Americans waste their heritage on wars and goodies for the voters the Chinese are working hard on economic growth. All this while the world wrestles with the problems of paper money. The Banks, the Central Banks and the Politicians all have a vested interest in the status quo and they cannot afford to admit the possibility that fiat currencies have never worked in the history of the planet and Austrian Economic theory shows that they cannot work. So it is coming down to the War of the Currencies. The yanks are behind the 8 ball and the Chinese are starting to twist the knife - if you will permit a rather mixed metaphor! The Europeans watch more or less helplessly and the Bank of England has thrown in the towel. We live in interesting times indeed, but it will get even more interesting if all fiat currencies start to collapse at the same time! What a pity that our theory gives little hint as to timing. Nov 3, 2007, 10:03 Newsletters : 2007 Newsletters : 9 November 2007 Perpetual Trade Deficits Can Be Good This is a very interesting discussion of the hypothetical "Rothbardian Utopia". As our world of fiat currencies slowly (or rapidly) demolishes the paper money system the idea of a 100% gold currency will become more obviously desirable. Have a read of this and imagine if the South Island secceded from NZ, leaving politicians and us riff-raff here in the North Island, and changed to a solid gold standard of money. Would they be crazy? Sep 12, 2007, 10:22