Monday, November 17th, 2008...3:00 am
[995] “Don’t mention our currency!”
Jump to Comments
We talk about the finite people; Mike Milken and his pardon; the currency problem - the US dollar and UK pound are unmentionables; becoming a bank to grab the TARP funds; when will the taxpayer say, ‘enough?’
14 Comments
November 17th, 2008 at 5:23 am
Peter Weller
November 17th, 2008 at 7:38 am
Hi all,
Heard an interview with the CEO of Greggs, apparently he’s quite bullish regarding their future he reckons that although he will lose the working class customers i.e. plumbers etc, as they will start packing their own lunches, that these will be replaced by the bankers, etc, who no longer able to afford eating at restaurants and will start eating at Greggs.
November 17th, 2008 at 9:48 am
Is it a coincidence that Osbourne questions the UK currency now that he is ejected from the elite yachting club? Will Natty ‘Dread’ Rothschild let this blurt of truth go unpunished.
His sudden desire to actually speak truths about the economy are welcome, but perhaps done in spite rather than to champion reform.
Given his public schoolboy history, and his prior closeness to Murdoch, we might well now be treated to a News of the Screw photo-expose of George in some Bullingdon style homo-erotic extravaganza as the establishment silences him for his stepping out of line.
November 17th, 2008 at 10:38 am
As a former Brit, I must congratulate you on your brilliant podcast. Brings back memories of spam and pasties. I am almost inspired to pick up an imported bottle of HP Sauce. Have you tried the frozen sausage rolls yet?
November 17th, 2008 at 11:21 am
I weep for sterling and for savings.
http://blogs.ft.com/maverecon/2008/11/could-the-uk-face-a-sterling-crisis-or-are-we-in-one-already/
The greatest service that Max and Stacy could offer is to let people know what they need to construct a financial survival kit. No-one really knows what even the near future holds these days, so what people need is to be able to respond to protect themselves from clear threats to a currency or an asset class, to hedge their risks and avoid stumbling from one bursting bubble to another (private pensions, tech stocks, housing, commodities, etc), or from one failing institution into another.
I got some notion of the scale of the ‘credit crisis’ when I realised that since July/August ‘07, in simple terms, all banks were scared to lend to each other throughout the system. So why would savers feel any more confident? And how would this hit economic activity? I could trace it back to the forced closure of the Bear Stearns funds in July ‘07, and the end of the yen carry trade the year before, both noted at the time by Ambrose Evans-Pritchard in The Telegraph.
I would then have loved to get out of Sterling when I read this in September ‘07, but while I understand the politics, have some notion of the economics, I don’t really understand the financial tools required to be able respond:
http://ftalphaville.ft.com/blog/2007/09/14/7313/britain-is-only-about-housing-financial-services-and-subprime-lending/
“Take the example of the UK, which is in many ways far more exposed than America. For the US is a very diversified economy, competitive in many sectors and with a highly competitive labour market. It is certainly not just about housing. By contrast, Britain is only about housing, financial services and subprime lending.”
CLSA’s Christopher Wood in his client newsletter, Greed & Fear
November 17th, 2008 at 11:48 am
Great show Max and Stacy. Seniors in Japan and the “Hells Grannies” from Monty Python should get together and form a gang.
I have read that gold could be $53,ooo an ounce. Is that right? Is is possible? 53,000 what? USD’s? Buttons? Jack and the Beanstalk magic beans?
When you mentioned Paulson’s head the other day, the image of Conan throwing Thulsa Doom’s head down the stairs comes to mind. What a sound.
Keep the fires burning guys.
November 17th, 2008 at 12:31 pm
http://www.moneyandmarkets.com/the-g-20s-secret-debt-solution-27996
That would be $53,ooo devalued ‘new’ dollars (or $5,300 current dollars) to apparently wipe up ‘100% of the outstanding public and private sector debt in the U.S.’.
Larry Edelson is predicting:
# Gold would be priced at over $10,000 an ounce.
# Currencies would be devalued by a factor of at least 12 to 1, meaning it would take 12 new dollars or euros to equal 1 old dollar or euro.
Put those together any you’d get 10,000/12 = $833 current dollars. (current gold price = $748)
He thinks hoards of gold investors will cash in their gold for $10,000 (devalued) an ounce for gold (equiv. to $833 current dollars), which he believes would allow central banks to monetize and reduce the burden of debts, via inflating asset prices in fiat money terms.
It doesn’t make any sense to me, and he doesn’t have any verifiable evidence for his assertion that that this ’secret plan’ is under consideration.
Further comments on it here:
http://ftalphaville.ft.com/blog/2008/11/14/18260/gold-at-53000-an-ounce/
November 17th, 2008 at 2:00 pm
Stacy,
I think you have an excellent idea: DESTROY THE DEBT. Since this debt is created by fiat, it can be destroyed by fiat. Aren’t CDO’s, CDS’s and derivatives simply contracts of some sort between banks and other parties? Well, contracts can be ruled null and void, even after they are signed. Consider an older example.
Years ago in the US, many people, when buying a house signed a “racial covenant” promising never to sell the house to a non-white person. (GW Bush’s house had one: http://www.slate.com/id/1003204/). No doubt these contracts had an influence on the value of the house at the time. However, in due time all such contracts were ruled NULL AND VOID by law. Since then, people have occasionally signed such contracts but there is no way to enforce them because they are illegal to enter into.
Why couldn’t Obama sign a law declaring all CDO’s to be invalid contracts, making there no way to enforce the terms of these contracts?
Derivatives are like the Death Star, and are in the process of blowing up one sector after another. They seem to have invincible might, but perhaps have this one critical weakness: they can be destroyed by law. We need X-wing pilot Obama, guided by Obi-wan Milkan to exploit that weakness and blow up this whole Derivative Death Star.
November 17th, 2008 at 3:41 pm
An American Solon?
http://en.wikipedia.org/wiki/Solon#Moral_reform
It doesn’t seem likely. It’s not as if the external debt can simply be washed away.
Perhaps there’s an argument for trying to contain debt settlements and defaults within the financial sector in a process of consolidation, whilst seeking to aid those damaged beyond it on a more equitable basis which distinguishes between speculators and those serving basic economic needs (housing, savings, pensions over landlording and investments).
November 17th, 2008 at 9:43 pm
True, there is a Japanese company that now makes a car that runs on water. And there’s a French company that makes cars that run on compressed air. I still think it’s a little early to be throwing aside the internal combustion engine, unless you are recommending genocide in the US, where our food is planted, tilled, harvested and delivered by internal combustion engines. Let’s give the American toddlers a little transition time, shall we?
And while we’re disparaging old technology, let me suggest we abandon the plow. I mean christ, it’s been with us since the fricking Roman Empire. It’s time has come and gone. Or that century-old aspirin– for crying out loud, take a Vioxx (which killed 58,000 Americans over 5 years). And don’t even get me started on that primitive, tree-killing printing press!
November 17th, 2008 at 10:24 pm
There’s so much gold in this podcast I don’t even know where to start. Suffice to say, this is preposterously relevant subject matter. Wit. Intelligence. Entertainment. Thank God I’ve found Max Keiser Radio. I love this shit.
Max and Stacy, GOLD.
Stacy hit the proverbial LAST SPIKE on the head with this series of statements… With this commentary, you have dive-bombed in on the problem, smacked it in the ass and shaken it to its core. You NAILED it. This is the crux. The essence. The #1 issue. The fucking point.
“Well yeah, exactly. Why doesn’t one of these guys - these thousands of guys that work there - why don’t they just say, you know, get five of their mates from work and go start their own factory. They know how to make a car. Make something new…”
Yes, the auto industry is getting ready to completely collapse, and Mr. Obama is promising to prop them up. To that I say, DISGUSTING.
DISGUSTING, DISGUSTING, DISGUSTING.
America has gone from Citizen Kane to Cynical Blame. Sad.
Max, stop singing. Thanks!
November 19th, 2008 at 12:43 am
Stacy, it was kind of you to mention my reference to Solon.
I think it almost rhymes with a part of the body Max often seems to fixate upon (but more like the way Sting sung ‘So lon[ely]‘ for The Police). It’s the same sound as found in ‘draconian’ (derived from the name of the first aristocratic laws of Draco which Solon set aside). In the end you just have to go with your best shot, and understand that 99% of people won’t know any different.
Max didn’t want to run with it, maybe he didn’t see the link to the suggestion earlier in the show of quarantining the bankers. Or to previous notions raised in the show that citizens might use the state to legislate to preserve their economy and society from the overweening demands of finance.
That was really the implication of what I was suggesting above, to allow the financial H-bomb go off within the sector that manufactured it. Preserving public wealth to aid those caught in the fallout, those whose basic means of living (jobs, housing, savings) are threatened rather than institutions and speculators who are merely losing wealth they thought they owned. Save the TARP for the citizens, not use it all to relieve of their liabilities at the expense of common citizens who’s debts hang even heavier around their necks. Then inflate to see who profits most from the next round of creative destruction.
You might have got Max’s attention if you’d mentioned Solon’s parallel reforms of Athenian sexual mores and family law:
http://en.wikipedia.org/wiki/Solon#Solon_and_Athenian_sexuality
These may well have been the logical corollary to his financial and political reforms, “to ‘democratize’ the availability of sexual pleasure”. This led to publicly-funded brothels, the regulation of pederasty, and the graduation of punishments for transgressions. See Plutarch’s Lives on laws concerning women [22]:
http://en.wikisource.org/wiki/Lives/Solon#22
Background:
Will Durant, The Life Of Greece - The Story Of Civilization Part II, (1939)
http://www.archive.org/details/lifeofgreecethes012193mbp
George Grote, Solon’s Early Greek Legislation, (1856)
http://en.wikisource.org/wiki/The_Great_Events_by_Famous_Historians,_Vol._1/Solon%27s_Early_Greek_Legislation
I E S Edwards, The Cambridge Ancient History (1970) only partially available, but fascinating on the 25% devaluation that accompanied the selective debt repudiation (from the bottom up), and constitutional/legal reforms which brought the lowest classes within the polity and granted access to the law. The book was compiled in the wake of another Sterling devaluation.
http://books.google.co.uk/books?id=0qAoqP4g1fEC&pg=PA377
November 19th, 2008 at 7:51 am
its also very intresting that ponzi was the main inspiration for the yellow pages! ;o
November 19th, 2008 at 7:54 am
and he started the Sec. . . .wow as I keep reading the wikipedia article its like this guy was the antichrist or somethin. . .it seems like this guy is where the bankers of today get their ideas from
November 19th, 2008 at 8:04 am
“And don’t even get me started on that primitive, tree-killing printing press!”
Actually in germany some company is develping a plastic display for newspapers, and other documents
I beleive you can just download the info into the plastic thingy with is no bigger than an 11.5×14 piece of plastic the circits or whatever are on a thin plastic sheet, and you can scroll through pages of saved information and delete at will etc. . .
and its pretty inexpensive to make as well. . .hell, I might actually look into that. . .maybe I could sell that here in jpn!
Leave a Reply