Krugman: Economic Crisis a Question of When, Not If

[tuvor]

By Pedro Nicolaci da Costa

NEW YORK (Reuters) - The economic policies of President Bush (news - web sites) have set the country on a dangerous course that will likely end in crisis, Princeton economics professor Paul Krugman told Reuters in an interview.

Krugman, who may be best known for his opinion column in The New York Times, said he was concerned that Bush's electoral victory over Sen. John Kerry (news - web sites) earlier this month would only reinforce the administration's unwillingness to listen to dissenting opinions.

That, in turn, could spell serious trouble for the U.S. economy, which under Bush's first term was plagued by soaring deficits, waning investor confidence and anemic job creation.

"This is a group of people who don't believe that any of the rules really apply," said Krugman. "They are utterly irresponsible."

http://story.news.yahoo.com/news?tmpl=story&u=/nm/20041122/pl_nm/economy_crisis_krugman_dc_1

[corporatemedia]

1. Q. When? A. 2001

[grasswire]

2. early this morning...

...I flipped on FOX news when its financial roundtable was on, and they were pounding the administration for its fiscal recklessness. Pounding Snow and Bush for talking down the dollar. And not only pounding, but predicting some disastrous declines in the near future. Steve Forbes is one of the panelists, and he was fit to be tied.

Oy vey. That scared me.

The host asked "how will we know how bad it is going to be" and the panel said "watch the price of gold." The higher gold goes, the worse it will all be otherwise.

[msongs]

3. price of gold soared to another new high today - hooray!!!!!!!!! and

far as I am concerned the worse the economic disaster the better.
that'll teach em not to vote for a bushwhacker.

Msongs
Riverside Ca

Clark 2008 shirts
www.msongs.com/political-shirts.htm

[Barkley]

66. Unfortunately, they' ll blame an economic disaster on gay marriages...

Saddam loyalist and the terrorist.

These people just don't connect the dots.

[tabasco]

75. LMAO. Clenis and the dead-enders ruined the economy.

Maybe Kerry's Purple Hearts were a contributing factor.

[aTm_exrugger]

73. That is one thing I always thought was funny

Listening to hate radio drone on about how good the economy is, and then endorse a gold fund as it is reaching new highs.

I cannot tell if they are lying about one or the other, or just don't know economics (like I am the one to talk). I think it is a little of both.

[tuvor]

4. Yep, money talks, even when you're a bushkisser. n/t

[DBoon]

52. And the Loon is talking louder these days

eom

[barb162]

6. I never watch the show but assume since it is FOX they suck up to

Bush all day long. Is that correct. Well when the jerks who push the idiot and his policies see the writing on the wall, that sounds bad. I bet Forbes is putting all his bucks in foreign countries NOW.

[mulethree]

7. Hmm Gold ?

I thought some law passed this summer letting them forcibly recall
gold coins at face value( e.g. $20 for a $400 coin), similar measures to screw you out of bars and other bullion and other precious metals?

[kostya]

96. Nonsense. Go to goldmoney.com and buy what you want.

[ckramer]

98. This website is great.

thanks for the pointer.

[leesa]

46. And yet they all voted for him 20 days ago.

These are such stupid people!

[nixonwasbetterthanW]

81. Steve Forbes is part of the problem, NOT the solution

Mr. Tax Cut is nothing but a shill for the wealthy. His plans -- shave personal and corporate taxes further, privatize Social Security -- all but guarantee a worsening of the already grotesque debt that this country's national government continues to accumulate. He apparently doesn't take the time to realize that the dollar will be driven downward for the most logical of reasons: our debt holders no longer are certain that we'll be able to pay it all back!

[grasswire]

5. ya know...

...at some point economists and pundits should begin to ask if the real intent of Bushco is to make chaos or to truly seek stability and prosperity. It's like the question of chaos in Iraq. We must finally realize that chaos=profit and more chaos=more profit. So why would Bushco have planned for stability? It would be counter to their own interests to stabilize Iraq and turn it over. By the same token, it is counter to Bushco's interests to have a peaceful and prosperous U.S. Crush the economy and then buy up the assets for pennies. Just watch them.

[Tace]

10. There Is No Doubt That "Starve The Beast" Is The Name Of Their Game

Ask any longtime Republican. It is exactly what they are doing. They figure they'll be able to gut all social programs and have most of us workin' for Massa'

[barb162]

16. yes, that too

I heard a horrifying stat today, that in my fairly large city and suburban area, that minimum wage jobs went up 100% and that with those jobs people can't live. We are going down the cliff fast now.

[leesa]

49. But they never remember that if everyone is poor, no one can buy their

stuff. So shortsighted!

[prodigal_green]

89. they sell their stuff overseas

where governments promote fiscal responsibility.

[mrbassman03]

104. No, they give us just enough money to buy what they are selling...

Worked in the Caribbean and on other plantations when slavery was abolished. Former slave owners would pay workers just enough to buy the food they were selling to them. The workers had no choice but to stay and work on the plantations for food, exactly like slavery.

[Lorien]

50. The thing is, they ARE the Beast!

this is nothing less than mass pillaging and looting of the taxpayers, IMO. They aren't looking to save the masses billions and downsize government- they're aim is to put those billions in new places; primarily, their pockets.

[barb162]

13. his goal is to enrich his class and his buddies. That is all. Everyone

else be damned. When he and his buddies have as much as they want, then he and his buddies will live in Switzerland or someplace like that.

[Occulus]

84. People like that NEVER have enough.

Think Bill Gates. Yes, there is such a thing as having too damn much money.

I tell people that and they look at me like I'm growing a second head.

[Canuckistanian]

85. True. Just like Francis Bacon said

"Money is like manure, of very little use except it be spread"

[Cornjob]

14. Maybe Bush** subscribes to the Kissinger economic theory...

that the U.S. should have 100 corporations running the whole economy.

Over the past four years, that pattern has emerged. Fewer, larger companies dictating prices and deliveries of goods and services.

There is now a concerted effort to strangle the supply of raw materials coupled with a deconstruction of the delivery system.

As a nation, we are losing our rail capacity by about 10% per year. The retirement rate for obsolete rail cars is far exceeding the building of new units, and the new ones are only being built by a handful of yards.

The consolidation of mining, agriculture, airlines, trucking, etc., is mind-boggling.

Good luck Mr. & Mrs. America!

[bunny planet]

37. I so agree with you, this is what they are doing.

It's all about the chaos.

[nadinbrzezinski]

8. True story

called my broker barely a week after this election.

After some pleasantries were exchanged what follows is a roght transcript

Hey I want you to sell ALL of our gov'ment securities, don't think they will pay in the end

I would not go that far

Oh com'on Grover Norquist said such himself, two years ago, teh goal is to starve the beast, and declare insolvency. Don't want to get caught wiht useless paper

Hmmm... you are paying attention, hope not too many people are, or this will lead to a crash of governemtn securities, so what do you want to go into?

GOLD

Ok (sigh) gold it is.

9. When--SOON

Eventually someone in the arab world--getting angrier every day--will decide to make a target of the financeers of the US attacks, namely, Japan.

This outcome is likely whether or not things go well in Iraq.

But for now, Wall Street is in some kind of absurd rally now, though no one can really say way.

A major problem starts in weeks, as long-term supply contracts for all kinds of companies runs out. You see, it is not that "inflation isn't a problem" as we have been told by the Fed. Indeed, a recent survey shows a third of businesses are cutting back business plans in the US due to inflation problems.

However, one reason huge companies like GM and others haven't been jacking up prices is they had long term supply contracts for things like steel.

Those run out in weeks. Then, suddenly all kinds of things cost 20-50 percent more to make.

----
Automakers are also bracing themselves for the impact of the rise in steel prices. With automakers' contracts with steelmakers due to expire, steel-makers are expected to seek at least a 20% price increase. DaimlerChrysler (DCX)'s Chrysler Group will in particular feel the impact of the recent sharp rise in steel prices, as it had to renegotiate steel contracts in August, when steel prices were very high. The Chrysler Group renegotiated one-quarter of its steel contracts in 2004. Many of Ford and GM's contracts are due to expire in 2005.

http://www.pwcglobal.com/Extweb/NewCoAtWork.nsf/docid/5A0A794469EE6EF080256F43007B2204

[Tace]

12. "Smart Money" Is Simply Short-Covering Before 2nd-Leg Bear Hits

Take a look at what is known as classic Dow theory. By the way, Dow theory analysis shows up every week on the DU daily stock market thread. Cheers

(On Edit: Then, of course, they'll go short again)

34. Greenspan did a CYA on this Friday

Of course, Greenspan knew about the 2005 problems before the election. And the latest Fed survey had the special question about specifically inflation problems.

I don't see how a bond market crash can be avoided, when you start seeing double digit inflation jumps early next year, as the supply contracts run out.

I'll go out on a limb here and say the next fed raise is .5 basis pts.

[nadinbrzezinski]

44. I'll up you and go to one full point

but that is just me....

I see Greenspan and the Fed trying to slow this down, but once this gets FULLY under way... it is almost on automatic pilot

The measures to stop this had to be taken a year ago... but they will try to close the door in the barn after the animals left... if you get my drift

Inflation at first will feel like two to three percent, and it will suddenly accelerate... once it does that... game over

53. I agree, you have to be about 6mos ahead of the curve

They left rates low for too long to help the election along, and now we pay for it.

Do you honestly see the economy slowing down enough in 30 days or so, to bring steel prices down by 50 pct, so that the supply contracts will work?

GM is going to get a double whammy. Besides the car biz, the mortgage and loan biz will collapse.

[nadinbrzezinski]

56. I'm checking on my portfilio, I think I am selling my Stock

if this is GM... as we are thinking it is

The short answer to your question is NO.

My broker's comment that he hoped people were not paying attention makes me wonder if we are seeing smart investors gettng out of the auto market before it goes down the drain.

Yep this is 1929 redux... on the bright side, on the other side there will be business oportunities, or a revolution... (1932 was the highest polling percentage for the US Communist Party EVER)

65. The VIX ratio ("fear gauge") is at an all time low

http://finance.yahoo.com/q/bc?s=%5eVIX&t=5y

42. About a third of businesses say inflation is cutting back production in 05

http://www.phil.frb.org/files/bos/bos1104.html

2. To what extent has any expected rise in input costs lowered your production plans for 2005?

Not at all
68.8%

Slightly
18.8%

Moderately
10.4%

Significantly
2.1%

This explains some of the poor job growth

[donheld]

11. Excuse my ignorance

so what happens if the dollar loses out to the Euro?

[nadinbrzezinski]

15. Ok first off they have reached the

basement or are very close... (they keep moving it)

But once it reaches it, the dollar may enter what is known as FREEFALL

This translate into many people SELLING it.

Secondly, in order to somehow make it worth investing in our markets, you will see interest rates go up... historically when a coin enters freefall, interest rates can go up all the way to 100% and above (just askk what hapened to Mexicans and Argentinians). Now if the coin really crashes, like the Weimar Republic all your savings will go poof, as is they may still go poof!

Your debt if you are into variable interest, which makes sense in a low interest environment, will go through the roof.

What other things can occur?

Oh yes, the Dollar right now is the coin we all do business (well msot of us, countries are already trasnfering to the Euro as reserve coin) so imagine if oil is suddenly sold in euros?

Oh and by the way, why would China and Japan keep buying our debt?

Yes our economy could and will be crippled, seen this movie before, and it ain't pretty.

That is why it is imperative you get out of personal debt, before interest rates go up there ok.

[Tace]

17. Sadly, The Impending Higher Rates Will Push Many Millions Into Insolvency

[nadinbrzezinski]

18. Yep and why we are at the door of a second Great Depresion

1929 comes to mind... but also will bring the economy to a screeching halt....

The national gross national product relies on about 70% consumption, no money, no consumption... now lets see if we even see deflation out of this beast....

[VegasWolf]

57. Yes, all of those with adjustable rates on their morgtages. As

interest rates rise, their mortgage payments will go up.
People will choke when they have to pay an additional
couple of thousand extra a month. Thankfully, I got
a fixed 30 year a 5%.

[barb162]

19. where would you put dollars now...what the hell is safe?

[nadinbrzezinski]

20. We went VERY CONSERVATIVE, as in precious metals

gold to be specific, why? I think this gov'ment will close the border and disallow any investment in Euros, which I considered

[VegasWolf]

21. They can't stop american investment in euros. I'm buying them.

[nadinbrzezinski]

23. Yes they can... seen this movie before

It is called CURRENCY CONTROLS... Americans have never seen them, at least not in the modern period, but I have... Grew up in Mexico

[VegasWolf]

29. Won't happen here, too many sophisticated ways to move money.

[nadinbrzezinski]

31. You sure? that is why it will happen

everybody cannot fathom it happening... but if you think it won't, ok, I will leave you to believe that.

When facing a fascist government, and that is what we are facing, all previous rules of behaviour are out

[VegasWolf]

39. Thanks, I done pretty well with my instincts, I'll follow them! :)

[demgrrrll]

24. Could someone address the comment made up thread about the law

that allows the government to buy back gold coins at face value?
Did that actually occur and if so what other kind of gold is available and safe for purchase?

[nadinbrzezinski]

28. Yuo don't buy COINS, just like anything else

you buy mine stock as it were... not coins... though I am considereing getting some coints to have at home for barter procedures

[grasswire]

33. my friend....

..the coin dealer is going to be out quite a bit, then. He has hundreds of thousands of dollars in very old coins.

[nadinbrzezinski]

40. Well I have heard rumors of that law

but not quite any specifics

Taht said, I do intend to start getting some metal for trade, as in physical metal

It is amazing to be thinking in the same way my grand father did before WW II started

[girl gone mad]

63. FDR did it in the early 30s.

He demonetized gold, and people were told to turn in their coins for face value (not long after, the redemption price was nearly doubled). I don't believe anyone was ever prosecuted for refusing to turn in their gold, and many people sent their gold to foreign banks.

Technically, the government can seize just about any of your assets for cash if it wants. Considering how many gun nuts hoard gold, I have a hard time imagining the scenario in which precious metals get seized.

If you're concerned, you can get some protection by buying foreign coins with a face value closer to that of the going rate.

[Art_from_Ark]

83. You are right

No one was prosecuted for failing to turn in their gold coins, because technically, it was still legal to own them (as long as the limit on dates/mintmarks was adhered to). The problem was, as you mentioned, that gold was effectively demonetized, and most people at the time couldn't afford to sock away even a small gold coin, so they had to turn whatever they had in. And, as you mentioned, the official price of gold nearly doubled shortly thereafter, rising from $20.67/troy ounce to $35/troy ounce.

However, you're going to have problems finding foreign bullion coins "with a face value closer to that of the going rate". The popular Canadian Maple Leaf, for example, actually has a face value that is worth less than the equivalent weight of the US Gold Eagle coins, which is to say, less than 10% the actual metal value at today's rates versus about 11% for the Eagle. The Australian Kangaroos come a little closer to the actual metal, as they have a face value that is currently about 1/6 the value of the metal.

[barb162]

26. I dumped my stock funds 2 weeks ago and stuck it in cash as I

knew I no longer wanted to be in the market. I also don't want to be in cash but put it there till I decide what the heckI am doing. I thought of 3 month treasuries but I don't even think they are safe anymore. (remember when that was the safest thing...like my whole life). SO then I was thinking of energy or utility type things and a few other things, but I get to a real loss when I think we are headed into a depression and drag the rest of the world with us. If we drag everyone else down, is it shoebox time under the bed?. Appreciate your comments.

[VegasWolf]

32. I am moving my cash to euros and buying into european ecn's

so that i can have euro based stock trading. The trick is
moving 401K's because of early withdrawal penalties. My lawyer
friends are looking into sinking their 401 into european property
as a means of avoiding the penalty.

[girl gone mad]

60. Gold.

You should have at least 5% invested in gold as an insurance policy against economic turmoil. Make sure you buy coins or bars, not gold stocks. Gold stocks will be as worthless as everything else if our economy tanks.

[mmonk]

82. I started putting some money

into an international bond fund that only only has 17% in short term US exposure and 84% in foreign bonds with the remainder in foreign currency (primarily yen and euros).

[__Inanna__]

22. Hmmm, I fess up to being ignorant then

If a person has domestic stocks, should they be switching over to foreign stocks? If a person has domestic mutual funds, should they be looking at something else as well? Last, isn't now kind of a bad time to get into gold if it's so high?

Numbers were never my thing, but I could use some guidance from anyone who is good with this sort of stuff.

Is a person better off in real estate? Probably not, I am thinking, in the event of another terrattack.

This sure has messed things up for a lot of people.

[nadinbrzezinski]

25. I'd talk with a finantial advisor

be aware they are PUSHING Federal and State Securities.

Now some stocks are "safe" I mean I don't expect disney go go broke any time soon... down yes, out and crash and burn, no, not quite.

That said, keep it varied but consider getting out of ANY gov'ment bonds, and I mean it

Norquist has stated the goal: What happens when a company declares Chapter 11? Insolvency and they are free from paying their creditors, which if you hold any... that is exactly what you are, a creditor.

But talk to a pro on this... I am not qualified to give you advise, but as I said, we sold our gov'ment securities and went VERY CONSERVATIVE and went to Gold... hell I even considered the mattress saving method ok

[__Inanna__]

47. thanks

Nadinbrzezinski (hard name to spell :-)and everyone for your thoughts. I am VERY conservative, super risk averse, and sat on a lot of cash for a long time before the dot com debacle. I didn't make any money, but I didn't lose a ton either. My house is paid for, so if the RE market goes, I guess I'll just deal with it. I have no plans to move anyway. I actually made this last move with another 911 scenario in mind, as I am hoping no one will be interested in my little neighborhood (knock on wood). I have some pretty safe stocks (I think), although don't know what to do with Chevron. I do have some bonds I should look at.

I will have to call a broker where my portfolio is and see what to do. I HATE making financial decisions, but now's not the time to stick my head in the sand. I've been reading the DU thread on the dollar and stocks, but it's WAY over my head. Appreciate everyone's input.

[nadinbrzezinski]

51. Keep toNadin

and that said, ask questions, think and do what you think is right, but don't take advise from us.

I don't think any of us are finantial advisors, hell I know I am not.... I am a historian by training and a writer by trade... and I see what bush is doing as a bad parody of what Hoover did to the Economy between 1928-1932. That is what drives me to make the decisions I have made

[Strelnikov_]

Boosh Makes Hoover Look Like A Clinton

World a' hurt coming our way.

[nadinbrzezinski]

58. Those who refuse to learn from history are doomed to

repeat it

Carlos Santayana....

Why am I writing this? WHAT DO YOU THINK IS BUSH'S model for Reaganomics? Reagan?

Nope, the model is Hoover, FULLY HOOVER

[Strelnikov_]

61. From What I Remember, While Hoover Made Some Mistakes

his largest mistake was not responding to the deteriorating economic position, placing his faith in the 'Invisible Hand'. Hoover was also considered to be a 'wiz kid' administrator (until he screwed up, that is).

Boosh not only possesses a mediocre intellect, but is also arrogant and self assured, a disastrous combination.

If you gave me a choice between Hoover and the chimp, I would take Hoover hands down.

[nadinbrzezinski]

62. Key words

Invincible Hand... that is exactly the same thing that not necesarily the kid (he is a puppet), but his advisors are pedling

The policies are out of Hoover's econ policies, down to the invincible hand and deregulation

[Waistdeep]

79. I think you may have merged your philosophers .....

George Santayana
Carlos Santana

But I loved the image ........

[Art_from_Ark]

93. That quote is from George Santayana

You're confusing him with his 54th cousin, songwriter Carlos Santana :hi:

[area51]

70. Hoover

I call Bush GW Hoover because he's like Herbert Hoover; H. Hoover presided over the 1st Great Depression, & Bush -- aka GW Hoover -- is presiding over the 2nd Great Depression. As any unemployed (or underemployed) person knows, it's next to impossible to get a job in this economy.

[pokercat999]

101. Crap

where's Harvard

[lastliberalintexas]

87. Not Hoover- Calvin Coolidge

Hoover was just the guy at the helm when the ship crashed, but he wasn't the one who had plotted the course. That was Collidge and his CEO cronies. And it just so happened that Collidge was Reagan's hero- go figure.

Hoover can be blamed for not responding correctly when the crash hit, but not really for causing it.

[Tace]

27. One Suggestion: Don't Take Financial Advice From Message Boards

Talk with a shrewd financial advisor who is not making money by selling you product. In other words, pay someone (if you must) to give you advice, not sell you stuff.

[VegasWolf]

36. Yes, just be sure you get a good one, I've had a couple I wouldn't

trust my childrens allowence with. Check them out thouroughly!

[barb162]

41. I had one once and I would have done better on random walk

[jsquared]

80. The problem is that almost all financial advisors are bullish.

That's based on the fact that they don't really make much of a living in a bad market/economy and that almost all research that comes out of their companies is optimistic on the economy and market. I really went against advice by going into eurobonds and inverse funds (betting in the opposite direction of the indices) with my advisor. I really think the only solution is self-education.

[grasswire]

30. real estate prices are going to plummet soon

NOW is not the time to buy real estate. It's the time to sell if you can, to salvage equity. And if you don't have a fixed interest rate on your mortgage, better refinance right now and get one.

On the other hand, if you have dollars to spare after the real estate market crashes, you can buy at will.

[nadinbrzezinski]

35. that is partly what I am hoping

We were going to be in the market, but right now cannot afford it

Maybe after the crash we will... oh lord I hate to think what will happen to MILLIONS of people

Last Crash in 1932 at least half the population went hungry at least one day of hte week.

43. I agree

Real Estate is going to have the biggest YOY drop in history.

There is a huge inflation spike in the pipe--the largest ever. Many of the supply agreements for large cos. expire soon. The use of supply contracts and derivatives to overcome short term price increases runs out, and will have a whipsaw effect.

[VegasWolf]

45. Even if real estate doesn't plummet it will still be based on

USless dollars. Overseas real estate a good
deal, especially with US tanking.

48. But rates will be FORCED up, unexpectedly in 05

IN between now and early '05, the economy is not going to tank enough to bring steel prices in a range for cos. like GM and many others to get new supply agreements.

They will be forced to pass along huge price rises, or go bankrupt. Some of the smaller cos are already going bankrupt.

This explains Greenspan's comments on Friday. He's not going to say "I lied to you, and inflation was really bad in 04, except some cos. had supply agreements and derivatives, but they are running out"

That is too complicated, because then people would figure out that some cos. were having problems and laying off (which is exactly what happened).

So Greenie waited until after the election to break the news, claiming possible "problems with foreign credit."

So Krugman is DEFINITELY right, it is not a matter of IF, but WHEN.

[VegasWolf]

54. What BUT, I don't disagree! As I said, my assets are fleeing

the country. The interesting question of when
is when. I am guessing we have 6 - 8 months
before the flocks start getting worried.

[kineneb]

102. But what of the poor...

like me who have no assets, only debt? I read Krugman and follow what is happening in the Asia Times and I see nothing good heading our way.

[mrbassman03]

105. Well, crap... The $40 million dollar house on my island will not be sold..

Oh, here is info about it. It's insane.
http://www.windermere.com/index.cfm?fuseaction=Listing.ListingDetail&ListingID=5002055

check out the photos...

[Kathy in Cambridge]

38. Don't forget to rate the article a "5"

keeps it on the front page.

[TroubleMan]

55. I got two words - DOLLAR DUMPING

If China and the Saudi's ever pulled their money out from US, we'd be screwed.

[WannaJumpMyScooter]

59. AFTER the election this gets published? Nice. Good work

Media!

64. The Federal Reserve has been lying for MONTHS--

And why not, everyone else does?

[barb162]

76. oh yes, Uncle Al couldn't say anything a week before the election?

He is such a shrub shill, never saying a nasty word about our dcficits or anything really until 2 weeks AFTER the election. (Just like you never heard the word draft before the election)

[Carolab]

67. This part really got to me

The only bright spot in having Bush in power for another four years, said Krugman, is that further economic mismanagement might trigger some sort of popular outcry.

"I do believe at some point there is going to be a popular tidal wave against what has happened," concluded Krugman. "In the meantime, you keep banging on the drum, you keep telling the truth.

"And then eventually we have the great demonstrations, which I think are important to let the government know that many Americans are not happy with what is happening," he said.

[leftchick]

69. sadly that is what it has come to....

ameriKans are so cluless as to the bush* agenda turning us back a century. It will take a revolt but first ameriKans have to realize wtf is going on.

[Catt03]

91. I agree with him

and...I think we are a bunch of sorrys who won't move until it gets desperate. Maybe not even then because we will just blame it on someone and die victims.

[aikanae]

68. another article on foreign currency rates vs dollar

http://www.informationclearinghouse.info/article7316.htm

this explained the situation a little more clearly to me

[teryang]

71. Gold at 448 now.

Gold is cheap at this price.

[DustMolecule]

72. Ack! There's something I remember in US history about the US government

being able to seize people's gold (unless the gold was was, say in an antique coin, which had more value than just the gold itself). I believe the US government DID do this at some point and the laws which allowed the gov't to do it are still 'sitting out there' somewhere.

Does anyone know what I'm referring to? (I hate it when I can't remember this stuff fully....aargghh).

[happyslug]

78. The Government can claim anything it wants, whenever it wants.

Be it Gold, Land, Drugs etc. The Government can ban you owning any one item (or many items).

It was this legal concept that Franklin Roosevelt (FDR) used to end private Gold Ownership in the US. FDR asked Congress for the power to confiscate Gold, the Power was given to him and FDR exercised that Power. Congress can do that to anything, silver, copper, your car etc. ANYTHING.

Please note FDR confiscated Gold was that prior to the Great Depression Gold roughly equaled $20 an ounce. Gold Coins were minted based on that price level (The $20 Gold Double Eagle was just under One ounce of Gold). When FDR confiscated Gold, he demanded people turn in the Gold Coins (Most of which were held by banks). Once the Gold Coins were back in the Possession of the US Government he raised the official Exchange rate from $20 to a ounce of Gold to $35 to an ounce of Gold (Where it remained till Nixon lifted the Exchange rate between Gold and the Dollar in 1971).

Please note The $35.00 an ounce price was a domestic price, it held even when the WORLD price of Gold dropped back down to $20 an ounce.

What a lot of people get confused was that at the Time FDR "confiscated gold" most of the actual gold was already in the hands of the US Government, what people had were "Gold Certificates" i.e. paper money printed by the Government with a promise to redeem the Gold Certificate for its value in Gold Coin. What Congress did was state that the promise to pay in Gold actually meant the Treasury will pay you the face value of the Certificate, but that payment did not have to be in Gold (No matter what the Certificate said). It is THIS fact, changing a promise to pay in gold to one to pay in Dollars that gold bugs point out was a "Confiscation". No one really lost money, just their right to redeem Gold Certificates for Gold Coin.

For more on Gold Certificates see:
http://www.glenpub.com/index.htm
http://www.usrarecurrency.com/GoldCertificatesInformationPage.htm




Here is FDR's Executive Order on Confiscation of Gold:
http://www.the-privateer.com/1933-gold-confiscation.html

[DustMolecule]

86. Thank you for the information happyslug

I'm gonna do some more checking for myself tonight to see if what you are mentioning was what I was thinking of.

[Art_from_Ark]

94. Roosevelt didn't end *all* private ownership of gold

It was still legal for private citizens to own gold coins and gold jewelry.

[loudsue]

74. Sell Stocks: Buy Food....You'll be glad you did!!

Within 2 years, the most precious commodities in the United States will be

1) Clean Water
2) Uncontaminated Food

The republicans and the kool-aid drinkers have destroyed this country.

:kick::kick::kick:

[barb162]

77. just like the rest of the third world

[Left Brain]

88. I'm a financial nitwit but

I follow you guys' stock and financial reports like crazy and appreciate these discussions.

Question (& pardon my ignorance): If the market goes to complete hell in a hand-basket soon, what would be the effect on Bushco's effort to privatize social security? My thought is, would it not take the wind out of their sails on this issue? (Albeit, as if we wouldn't have bigger and more immediately critical things to worry about *when* it happens.)

[rman]

90. kick

-

[struggle4progress]

92. kick for gradually coming to terms with reality

:kick:

[TexanDem]

95. Any warnings about any of this on CNBC?

Anybody been hearing any discussion about these indicators of catastrophe on the cable news channels - any of them? I don't listen a lot to financial news, but when I do, it's all cheery and how wonderful the numbers all are! After seeing other financial threads referring to printed media articles about the dollar dropping, China, Russia, etc, divesting of some of the US dollars and the rise in gold prices, I would think it would be of interest, but then I guess they're afraid of panic in the street?
I'm so glad I found this group!

[Name removed]

99. Deleted message

Message removed by moderator. Click here to review the message board rules.

[VegasWolf]

100. I thought CNBC was a comedy channel. Remember when they were talking

about how Yahoo at $500 at share was actually a very good buy!
Wow, I was laughing soo hard I couldn't stand up. They were
better than Chevy Chase during his coke days. Try Bloomberg
for some financial info.

[flying_blind]

97. QUESTION: Is this true?

THE FEDERAL RESERVE BANK IS A PRIVATE COMPANY.

Article 1, Section 8 of the Constitution states that Congress shall have the power to coin (create) money and regulate the value thereof. Today however, the FED, which is a privately owned company, controls and profits by printing money through the Treasury, and regulating its value.

The FED began with approximately 300 people or banks that became owners (stockholders purchasing stock at $100 per share - the stock is not publicly traded) in the Federal Reserve Banking System. They make up an international banking cartel of wealth beyond comparison (Reference 1, 14). The FED banking system collects billions of dollars (Reference 8, 17) in interest annually and distributes the profits to its shareholders. The Congress illegally gave the FED the right to print money (through the Treasury) at no interest to the FED. The FED creates money from nothing, and loans it back to us through banks, and charges interest on our currency. The FED also buys Government debt with money printed on a printing press and charges U.S. taxpayers interest. Many Congressmen and Presidents say this is fraud (Reference 1,2,3,5,17).

Who actually owns the Federal Reserve Central Banks? The ownership of the 12 Central banks, a very well kept secret, has been revealed:
http://www.worldnewsstand.net/today/articles/fedprivatelyowned.htm

I recently fell on a video that is quite long, which I have so far given over only about 45 minutes to. The above claim is also made in the video. Can it be so? If so, what are the implications?

The Money Masters

Part 1: http://www.indybay.org/uploads/moneymasters1.wmv

Part 2: http://www.indybay.org/uploads/moneymasters2.wmv

[Dcitizen]

103. I am not responsible for paying back national debt

The economy is still good shape at least a year plus from now unless...