Comments on This is the Dead Land, this is Cactus Land: The Fake Bull Market: A Dollar Mirage

Greg Bacon, GDP growth is positive and sustained,...

2011-06-22T01:35:53.228-07:00

Greg Bacon,

GDP growth is positive and sustained, corporate earnings have been strong -- whatever the hedge funds are doing, there is a fundamental basis for the stock market rally the past year. P/E ratios are at historical averages, and projected earnings are strong.

The US corporations doing well are making their money from global demand, not just US demand.

I agree that there are issues: the repeal of Glass-Steagall in 1999 allowed depository banks to become investment banks, exposing normal depositors to investment losses (e.g., mortgage-backed securities), and computerized trading and commodity hoarding (e.g., silver) allow the hedge funds to manipulate the market.

And in Washington, both parties have been profligate in spending. I would point to the huge increase in military spending as a make-work jobs program for uneducated young males, and a business subsidy to defense contractors. However much the US dollar is being devalued, the bigger crime is that all this spending has no return-on-investment, unlike infrastructure, education and R&D.

There's nothing special about gold -- it...

2011-06-20T01:57:14.030-07:00
There's nothing special about gold -- it's just another commodity metal

I disagree, gold is one thing the world's largest counterfeiting outfit, the Federal Reserve, can't make and endless amount of like it does the increasingly worthless USD.

As for the Stock Market going on a binge when everything else in the USA is tanking, IMO the Fed has been giving away OUR money to those 'Too Big to Fail' Wall Street gangster outfits who then set up phony off-shore entities who trade furiously on the NYSE in order to prop up our failing economy and to lure the 'marks' back to the craps table to fleece what little money they have left.

This can only go on for so long and when this bubble pops, look out below.

The point is that if you did price things in gold,...

2011-06-19T07:14:02.473-07:00
The point is that if you did price things in gold, you would still only be able to buy the same amount of stuff. Apart from the well-known ills of deflationary pricing, it doesn't matter if you price things in dollars, gold or avocados.

There's nothing special about gold -- it's just another commodity metal.

I especially like the productivity graph, http:/...

2011-06-18T21:01:06.115-07:00
I especially like the productivity graph,

http://www.epi.org/page/-/old/images/LM_EFCA_testimony_20070327.jpg

It makes a stunning point if you convert the pay to gold. Remember, the GDP numbers you show are in $ and when you say it is all about buying power, of course you are right. But why have dollars been able to "buy" so much? Only because of the reserve status of the dollar and the reluctance of the Chinese to increase the value of the Yuan.

What is needed is a "Julian Law" where a...

2011-06-18T09:29:04.600-07:00
What is needed is a "Julian Law" where anyone who has borrowed from a bank and has repaid the
loan in principal and interest is freed from debt. No more paying 3 times the price of a house to the bank in interest! Then we need a nationalization of the Federal Reserve Bank and the recovery of the money they have stolen from America with their counterfit debt money that they create out of nothing and charge interest on. JFK was murdered because he created his own money instead of borrowing it from the Fed.

Comparing the dollar to gold or other fiat currenc...

2011-06-18T05:30:58.152-07:00
Comparing the dollar to gold or other fiat currencies is irrelevant. What matters is purchasing power for stuff you actually use, like a house or car. As you can see, by purchasing power we have indeed been in a bull market:

http://www.indexmundi.com/g/g.aspx?c=us&v=67

This suggests that the conventional wisdom is correct, that the middle class has missed out on this bull:

http://www.epi.org/page/-/old/images/LM_EFCA_testimony_20070327.jpg

The money goes to the rich, i.e. the ownership class:

http://money.cnn.com/2011/02/16/news/economy/middle_class/index.htm