Tuesday, December 16, 2008

The Weipan Gambit

As in elements of Weimar and Japan, which is pretty much where we are after today's action by the Federal Reserve. The cutting of the fed funds rate to a target range of zero to 0.25 percent was essentially a formality, though shocking when put in perspective. The important part was the FOMC statement, which made it clear that someone with this record of complicity is asking us to trust his judgement while he prepares to do literally anything next. And in terms of records, in 2005 Dallas Fed president Richard Fisher said, "As a member of the FOMC, I will never vote to monetize fiscal profligacy." You can see how he voted today here. As long as these guys are allowed anywhere near the levers of policy, there can be no material or psychological end to the current period.

I've been writing for a long time, so far correctly, that personal savings are not safe if kept in the domestic, dollar-denominated system. In every other nation that has gone down this road, the only people whose standard of living wasn't destroyed saw what was happening early enough to protect themselves. It's barely been a year since the financial markets started to go south. What will the system will be capable of during the next five or ten?

Some theme music while we wait to find out...


Anonymous Anonymous said...

Just wondering.

What's a worse violation.

Being sexually violated when you are young or robbed of your retirement when you are old?

12/16/2008 5:12 PM  
Anonymous Anonymous said...

How can savers protect ourselves? Gold bullion? And even if so, 401Ks don't offer that.

Japan's experience with lowering rates wasn't so long ago as Persia's with overextending itself by invading Greece so how could history have gone unobserved in this case?

12/16/2008 8:45 PM  
Anonymous Anonymous said...

so what would you take the wheelbarrow full of cash and convert it to?

12/16/2008 9:39 PM  
Anonymous Anonymous said...

What they said, TCR.

What would a wise person with personal savings do with their personal savings at this point, if personal savings are not safe?

12/17/2008 1:28 AM  
Anonymous Anonymous said...

You invest defensively, in your self and your family. Out here in the West that could includes:

"Vacation property" with year round access to water. Preferably 200+ Miles from the nearest City.

High Quality goods that may soon beyond your reach.

Good “glass” for your Rifles.
High quality gear that will last for years (Filson, Wiggy’s etc.)
An automatic movement watch. (no Quartz)
Hi-Cap Magazines, reloadable brass and Guns that are legal to own in your Jurisdiction.

Gold and Silver you take physical possession of.

A high quality Generator.

Purchase CD’s denominated in other currencies. (Google: “world currency CD” etc.)

If you don’t understand how a company makes money don’t buy the stock. (*Cough* ENRON)

Invest in your health. Stay in shape, eat right, stay current with your dentist.

Go and meet your neighbors.

Teach your children the 21st Century Financial Birds and Bees. (Children are supposed watch your back when you get too old to do so yourself. – your mileage may vary.)

Never invest with anyone you meet through Church or other affinity organization.

Never give money to anyone who knocks on your door or cold calls you. (How many times do we read those pitiful stories in the news?)

Know the difference between tax avoidance and Tax evasion. Don’t ever think you’re smarter than the IRS. (I’m looking at you Wesley Snipes)

Understand the concept of Risk. Not just the financial kind. Everyday risk like:

Living in a flood plane. (A free Dumb Ass tag for all those people.)

Driving after 11pm at night. (Cops, Drunks, and YOU)

Injury prone hobbies/ sports like skiing, flying, or base jumping etc.(You without health insurance.)

Waiting for the government to tell you to evacuate in the face of a hurricane. (FEMA will save you..right?)

And lastly, watch less TV. Read more. (History and Economics are particularly topical)

12/17/2008 12:47 PM  
Anonymous Anonymous said...

As anyone posting here would know I certainly agree with Anon above. But to make a very straight forward point to the anon earlier. You do not want gold and silver in your 401k. You do not want the government to know you have an ounce of gold or silver. That...in fact...is the beauty of owning gold and silver. Think of it as a smarter alternative to a Roth IRA. People can't steal what they don't know you have. That includes lawyers in liability cases, Ex-wives and divorce attorneys, The Government especially. Infact as I mentioned once earlier if you ever see yourself getting caught up in a legal mess....cash out all your assets buy gold and silver...hide it well...spend a couple days losing money and being a big Jackas5 at a casino...then when they ask you where all your money went cry a few crocodile tears about your gambling addiction. LOL. Another great futurue possiblity is that in your retirement you can claim poverty and take advantage of any government handout programs as the rules will probably change the more and more the government goes broke. There will probably be means testing at some point...so you can claim total poverty...extract as much money as possible from all those predatory government programs these liberal losers keep passing...and you cash your gold in at your local gold dealer. You will be living high on the hog in your retirement. LOL.

12/17/2008 2:21 PM  
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