Ron Paul the Prophet - Stocks crashing along with Dollar

[SpicyItalian739]

I just turned on CNBC and EVERYTHING is dropping right now, They had to put Curbs in on trading because it fell so fast :eek:

[noxagol]

I am glad I can hunt proficiently and know how to survive in the wild. I might have to hone those skills some more.

[Richandler]

Good, but I must say that the people on that network are oblivious to anything other than numbers and charts.

[literatim]

They will print up more money and dump it into it again.

[SpicyItalian739]

Good, but I must say that the people on that network are oblivious to anything other than numbers and charts.

They're also going into damage control and claiming that this isn't a big deal and that stocks go up and down all the time.

Isn't this the anniversary of the crash in October 1989?

[10thAmendmentMan]

The market is not "crashing." It's just having a very poor day. After a big swing, there's usually a big swong. :)

We are definitely due for a bear market, though.

[Original_Intent]

The market is not "crashing." It's just having a very poor day. After a big swing, there's usually a big swong. :)

We are definitely due for a bear market, though.

Killjoy. :rolleyes:

[SpicyItalian739]

The market is not "crashing." It's just having a very poor day. After a big swing, there's usually a big swong. :)

We are definitely due for a bear market, though.

Well they are going to print money and pump dollars in and the dollar is going to go down MORE. Usually the dollar going down helps them retool the market but right now they're going down together.

[Johnnybags]

and yes, Uncle Ben thinks having you pay for it thru inflation is best, rather than purge the mal investment and charge the liars who stole it from you. He is ushering in massive inflation. Could not happen with sound money. They think a business cycle is the end of the world because people might vote out scumbag long term politicians.

[michaelwise]

The market started breaking down Tuesday a week ago, the day after it hit a new record high around 14,150, now around 13,500. A downward trend is now established. They are beginning to see the writing on the wall. The problem is too big for the Fed to fix. You ain't seen nothing yet.

[unconsious767]

Don't worry!


http://img99.imageshack.us/img99/4892/helicopterbensmallzs8.jpg

[KewlRonduderules]

I've been saying for a while that we are going to have serious inflation given that the FED lowered the subprime rate leading to a devaluation of the dollar. We are already paying for it. Look at the price of oil. Duh! Anybody who has a remote sense of economics could predict this. They think they can rescue the market- I really doubt that. Greenspan said it himself- the FED has little influence in the global economy when it comes to interest rates.

[10thAmendmentMan]

I do believe that I can out do you, unconsious767:

http://img230.imageshack.us/img230/5610/bernankehelicopterds1.jpg

(this is actually my computer's background)

[noxagol]

Haha, that picture is classic.

[SpicyItalian739]

I've been saying for a while that we are going to have serious inflation given that the FED lowered the subprime rate leading to a devaluation of the dollar. We are already paying for it. Look at the price of oil. Duh! Anybody who has a remote sense of economics could predict this. They think they can rescue the market- I really doubt that. Greenspan said it himself- the FED has little influence in the global economy.

Yes, but remember that the price of oil is the CAUSE of a lot of inflation, not the symptom. World oil supplies may have peaked around Thanksgiving of 2005, and that would certainly explain the resource wars going on right now - and the ones likely coming up.

[steph3n]

Yes, but remember that the price of oil is the CAUSE of a lot of inflation, not the symptom. World oil supplies may have peaked around Thanksgiving of 2005, and that would certainly explain the resource wars going on right now - and the ones likely coming up.

actually oil has not gone up that much, the dollar has gone DOWN that much

[Original_Intent]

No it is a symptom.

The cause is US Treasury printing presses.

[KewlRonduderules]

When the value of the dollar goes down, foreign oil companies request more dollars to make up for lost value in relation to other currencies.

But I hear your point about peak oil. I've read a lot about it. I'm still doing research about the subject.

[murrayrothbard]

http://www.mises.org/images4/Bernanke.jpg

[10thAmendmentMan]

actually oil has not gone up that much, the dollar has gone DOWN that much

Oil was about $50/bbl in January, and it's now about $89/bbl. While the dollar drop has certainly contributed to that, it hasn't dropped 56% since January.

[Vaughn]

On CNBC all the broadcasters keep saying "its ok, it will go up next week! We are not in a recession!". But the look on their faces says something very different...

[noxagol]

Oil was about $50/bbl in January, and it's now about $89/bbl. While the dollar drop has certainly contributed to that, it hasn't dropped 56% since January.

Maybe it has and we just don't know it yet. Who the hell really knows what is going on anymore?

[murrayrothbard]

Oil was about $50/bbl in January, and it's now about $89/bbl. While the dollar drop has certainly contributed to that, it hasn't dropped 56% since January.

Inflation is a monetary phenomenon. There are other factors contributing to high oil prices (increasing demand, geopolitcal tensions, etc) besides monetary inflation. A rise in price is not the same thing as inflation.

[RP4ME]

Well whatever is going on it is part of a downward spiral and this may have been the last thing that the FEd could do to manage it......now if we go to war with Iran the dollar and mkts may again rally.....but not the most constructive wy to set things right! I'd prefer a sound money policy....but that would shed so much light on the scams of politicians and theiving WS insiders.....so we have a big battle ahead!

[jonahtrainer]

Yes, but remember that the price of oil is the CAUSE of a lot of inflation, not the symptom. World oil supplies may have peaked around Thanksgiving of 2005, and that would certainly explain the resource wars going on right now - and the ones likely coming up.

I do subscribe to the Peak Oil Theory. However, that is not the cause of the inflation. Inflation is a purely monetary cause by an increase in the money supply.

However, the problems that come from not having money tied to energy in anyway will be disastrous. There is no ruler to determine ROI or EROEI. A monkey that spends 100 calories to climb a tree to get a banana that provides 40 calories will not survive very long because of the negative EROEI. By analogy, our entire world economy is based on a monetary system that provides no comparison to efficiently calculate EROEI.

By contrast, a one ounce gold coin represents about 3 million calories of energy because that is approximately how much energy it takes to produce. I derive the figure by comparing the cost of gold to that of wheat.

Either way, we are in for an Age of Turbulence.

[murrayrothbard]

By contrast, a one ounce gold coin represents about 3 million calories of energy because that is approximately how much energy it takes to produce. I derive the figure by comparing the cost of gold to that of wheat.



So are you saying in a sound money market economy a minted gold coin would be "worth" more than an equal weight of unminted gold?

[SpicyItalian739]

Oil was about $50/bbl in January, and it's now about $89/bbl. While the dollar drop has certainly contributed to that, it hasn't dropped 56% since January.

This is true, our current Fiat system is based on the assumption that in general we will always EXPAND our economy and that we will can borrow now and pay it back with profit and borrow MORE later, ad infinitum. The problem is that this is all tied to the prospect of CHEAP energy, which may be coming to an end. The rate of change of the value of our dollar is intimately tied to the rate of change of the value of oil:

Since oil is becoming more scarce and demand is STILL rising exponentially (with population and industrialization in smaller countries), the cost is beginning to rise at an accelerated pace. Your Dollar buys you less "stuff" partially because it costs more to get the energy to make your "stuff". The Dollar loses value because you need more to buy the energy to make things.

This leads me to believe that in turn you need MORE Dollars to buy oil since they are worth less which causes MORE inflation.

It's all very closely related and as you can tell I understand the concepts but I can't quite articulate this, as I am no economist; But I AM a scientist, and the universe runs on ENERGY.

Isn't it interesting that within a decade of banning slavery (cheap labor which gets converted into energy and then work), we started turning to hydrocarbons (cheap energy which turns into cheap work)?

I don't think the repercussions of the end of cheap oil will be within the Fed's control, and this would explain why the government is trying to spend us into a debt that can NEVER be paid off. They're trying to prolong their lives before we realize how bad things may get.

[10thAmendmentMan]

Inflation is a monetary phenomenon. There are other factors contributing to high oil prices (increasing demand, geopolitcal tensions, etc) besides monetary inflation. A rise in price is not the same thing as inflation.

Not sure why you quoted me rather than the guy I was responding to, but thank you for putting what I was trying to say so succinctly.

[RP4ME]

Oil was about $50/bbl in January, and it's now about $89/bbl. While the dollar drop has certainly contributed to that, it hasn't dropped 56% since January.

yes but the dollar is overvalued and perhaps its true value has not been showcased.....due to manipulation?

[murrayrothbard]

Not sure why you quoted me rather than the guy I was responding to, but thank you for putting what I was trying to say so succinctly.

Sorry, probably meant to hit the "reply" button instead of the "quote"...:o

[SpicyItalian739]

I do subscribe to the Peak Oil Theory. However, that is not the cause of the inflation. Inflation is a purely monetary cause by an increase in the money supply.

Not THE cause of inflation, A cause of inflation.

If it takes Y gallons of gas for a semi truck to take X number of goods across the country to your local supermarket, and the price of gas is CONSTANTLY trending upwards because of permanently higher supply than demand, then the cost of X number of good will have to factor in the price increase for Y gallons of gas.

Our entire society is based around cheap hydrocarbons.

Combine this with insidious tinkering by the bankers via the Fed and you can see a great threat to our way of life knocking on our doors.

[winston_blade]

Quick question....is there a chart or something that I can look at that has the stock market prices over the last hundred years with inflation worked in. I would like to see how much we have actually grown over the years.

[murrayrothbard]

Not THE cause of inflation, A cause of inflation.

If it takes Y gallons of gas for a semi truck to take X number of goods across the country to your local supermarket, and the price of gas is CONSTANTLY trending upwards because of permanently higher supply than demand, then the cost of X number of good will have to factor in the price increase for Y gallons of gas.

Our entire society is based around cheap hydrocarbons.

Combine this with insidious tinkering by the bankers via the Fed and you can see a great threat to our way of life knocking on our doors.


That's not inflation. First off the price of the a can of peas in the grocery store is set solely by the supply of and demand for a can-of-peas-in-grocery-store-X. In order for the price of gas used in transporting said cans of peas to affect the price of the peas in the store, you would have to assume that the consumers' demand scale would also shift, thus raising the price. But, even assuming this somehow occurs, it is not inlfation. It is just a change in price brought about by changing supply/demand dyanamics in the market.

Inflation is a monetary phenomenon. It is an increase in the supply of money in the economy. Rise in prices does not necessarily imply inflation.