Moderators: Elvis, DrVolin, Jeff
Trump, Apmex, and Goldilocks
Submitted by Michael Victory on 09/14/2011 14:25 -0400
Donald Trump Goldilocks
via TVR
From Robbie Whelan of the WSJ and BMG:
In the latest development in the growing surge of support for a return to some form of gold standard, Donald Trump has decided to accept gold bullion as a deposit on a commercial lease. This follows a news story reported on earlier this year where Utah became the first state to legalize gold and silver coins as currency.
On Thursday, the newest tenant in Donald Trump’s 40 Wall Street, a 70-story skyscraper in Manhattan’s Financial District, will hand Mr. Trump a security deposit worth about $176,000. No money will change hands, rather three 32-ounce bars of gold.
The occasion will mark the first time the Trump Organization has accepted 99.9% pure gold bullion, rather than cash, as a deposit on a commercial lease. The tenant, precious-metals dealer Apmex, will sign a 10-year lease for 40 Wall’s 50th floor at a leasing rate of about $50 a square foot, according to Apmex Chief Executive Michael R. Haynes. The company is promoting the use of gold as a replacement for cash in some situations.
“Gold has been a valuable asset class for the last 10,000 years, but the world has drifted away from it,” Mr. Haynes says. “I figured, Trump is a smart guy, and he’ll realize that taking gold is a better idea than taking cash.”
Mr. Trump said he sees the deal as a repudiation of the Obama administration’s economic policies, of which he has been a vocal critic.
“It’s a sad day when a large property owner starts accepting gold instead of the dollar,” Mr. Trump said in an interview. “The economy is bad, and Obama’s not protecting the dollar at all….If I do this, other people are going to start doing it, and maybe we’ll see some changes.”
To view the entire Robbie Whelan article: Trump’s New Gold Standard
why is that? is lord keynes dictum of "psychopathology" attributable to man's "accursed hunger for gold?" i wonder when comrade lenin's dream of plating public urinals with the substance will come to pass? if it's so pathetic that people would value it, why isn't it thrown in the street like garbage? why is so much of it locked up in a federal reserve vault 8 stories under manhattann? why does it continue to be mined? why does it continue to be traded by a secretive cartel? why is the vast majority of the most abundant commodity (over 100,000 tons) un-accounted for in private hoards? why?Gold is the one and only commodity that has no marketing problem. There is no sales resistance and no competition to overcome. --Melchior Palyi (1892-1970),
There have been many attempts to define the characteristic principles of economics in a
similar vein to Euclidean geometry and all were utterly lacking until the mid 19th century.
For it was then that the father of what was to become the ‘Austrian’ school, Carl
Menger, espoused the true and simple nature of economics with just one axiom…
Value does not exist outside of the consciousness of mankind.
This might not seem like a statement worth considering more than once, but its
simplicity conceals the fundamental truth not only of economics, but of the nature of
existence (however that is another story.) This axiom is a necessary and sufficient
building block for the whole of economics. All economic traditions bar the ‘Austrian’ do
not adhere to this statement whether blatantly or more hidden. ‘Classical’ economics
always ties value down to something else other than the human being: land; labour and
cost of production to name but a few. Karl Marx assumed labour determines value. Marx
was wrong with tragic consequences.
Economics begins and ends with the human being. Menger’s axiom (as it shall now be
known), certainly not scientific, mathematical or mechanical in character, has the ability
to turn economics from a fuzzy and error fraught subject into an ideology on par with
quantum physics in terms of rigour. A philosophical, poetic and non-scientific axiom has
the ability to turn a non-science, indeed a nonsense, into a science as much as it can.
How is this done?
Menger’s axiom gives rise to marginal utility. Marginal utility is the only correct
expression of economics. It is the ‘boundary use’ that determines value to the human
being. Each substance that satisfies a particular need can be graded with regards to
satisfying various human needs. For example, water is undoubtedly of great use to the
human being. Humanity cannot exist without water. Any particular individual might have
the following ordinal uses for water, assuming they don’t have access to it currently:
relief of own thirst; relief of pet’s thirst; watering flowers and cleaning windows. As each
use to the individual is satisfied, the next use is considered all the way to cleaning
windows – which is the marginal use in this case – that determines its ‘value’ to the
human being.
The mechanical process above is an application and constant reapplication of Menger’s
axiom. It is an ‘iterative’ or ‘self-similar’ procedure. The mechanism by which the value
of a substance is achieved is similar in nature to the mechanisms that achieve fractal
boundaries. The elaboration of this is well beyond this short missive. Professor
Mandelbrot has shown that price point evolution (i.e. price charts) tends to exhibit
fractal characteristics. A reflection on the application and reapplication of Menger’s
axiom shows that the observations as well as the mechanisms are fractal in nature. There
is no reason to assume that both the mechanism and observation would be similar in
nature. Curiously they are...
The discovery of marginal analysis shattered the prevailing disciplines in economics at
the time, but the reluctance to apply it in totality to all aspects of economic action
survived. Cost of production, or ideas in a similar mould, would always be used to halt
ideas progressed in the marginal style completely erroneously. Whenever this was done it
was always against the grain of Menger’s axiom whether explicitly or not. The truth of
the matter is that land and labour do feature in all economic activity to be sure, but their
value is determined in so far as they satisfy a human need – they are an expense of
economic endeavour, not the cause. The price of copper is not guaranteed to rise
because of an exponentially rising cost base of production, as commentators frequently
frame an argument for ever rising commodity prices. Rather the cost base of copper
production is bid higher as a result of people desiring more copper. Should that desire go
away, no matter how high the cost base of production, the price of copper will fall.
Menger’s axiom is the gateway to understanding the true nature of economics. Reflecting
on it from time to time is a must. Let it be the mantra of the ‘Austrian’ school. Menger
did not have the time to complete the finer details of marginal analysis. That is up to his
intellectual descendants – whom you should count yourselves amongst. It is up to us to
ensure that the ignorance of classical economics is destroyed and that the truth of the
Austrian school rises in its place.
Wombaticus Rex wrote:A tremendous and unexpected bonus to Graeber's work has been watching the signal ripple through the economics community -- the response has been every bit as educational and vivid as the book itself.
http://www.zerohedge.com/news/social-po ... easy-chartTyler Durden's picture
Social Ponzi Insecurity In One Easy Chart
Submitted by Tyler Durden on 09/19/2011 - 22:47 Congressional Budget Office
Where a million essays, debates, rants, and denials have been littered over the past month arguing whether or not Social Security is a ponzi or not, we believe one simple chart should suffice to explain to the reader just where we stand. As those who follow the data series know too well, outlays exceeded revenues in 2010 for the first time ever, for a backward looking basis, and so when applying CBO data on future SSTF revenues and outlays (as a % of taxable payrolls), using 10 year moving average data, for forward looking projections, outlays surpass revenues and basically never look back until at least the end of the century. In other words: this is a construct that relies exclusively on new capital coming in to keep it funded and from imploding under its own weight, something better known in literature as a pyramid scheme. But yes: it is not a ponzi scheme in that it most certainly is not voluntary.
http://www.zerohedge.com/news/andy-lees ... d-stimulusTyler Durden's picture
Andy Lees Kills The Argument Of Endless Debt-Funded Stimulus
Submitted by Tyler Durden on 09/19/2011 - 15:34
There are those who watch quietly from the sidelines as month after month, year after year, decade after decade, the Keynesians among us (especially those who only focus on the upswing in the business cycle and always ignore the downswing) announce that the only thing the economy needs to grow is a just a little more debt... more debt.... much more debt.... And for the most part it worked: for years every dollar in additional debt generated a little less than a dollar of economic growth, or GDP. Alas, slowly but surely, we have been pushed to the point where incremental debt generates no incremental growth: an event that if it were to be recognized for the debt-stimulus dead end it is, would put an end to years of flawed economic thought taught in the world's most prestigious universities. Yet there is more to it, and as always it goes to the age-old question of capital allocation efficiency, and specifically how with time, any centrally-planned attempt to allocate capital effectively always fails, usually accompanied by incurring insurmountable leverage. Probably one of the best and most succinct summary of this core quandary facing the entire developed world and the voodoo economics profession in general, was done by UBS's Andy Lees today, who in one note, deconstructed the primary flaws, and outright lies, at the base of the last ditch economic rescue effort planned by Obama, by the world's army of "fiscal stimulants" and by the western world in general.
For all its seductive attractiveness Friedmanite economics is ignoring the effect of irredeemable debt on productivity. It watches debt per GDP and is happy as long as this ratio stays below 100 percent by a fair amount. However, what should be watched is the ratio of additional debt to additional GDP. By that indicator the patient’s condition could be diagnosed as that of pernicious anemia. It set in immediately after the dollar debt in the world was converted into irredeemable debt. The increase in GDP brought about by the addition of $1 of new debt to the economy is called the marginal productivity of debt. That ratio is the only one that matters in judging the quality of debt. After all, the purpose of contracting debt is to increase productivity. If debt volume rises faster than national income, there is big trouble brewing, but only the marginal productivity of debt is capable of revealing it. Before 1971 the introduction of $1 new debt used to increase the GDP by as much as $3 or more. Since 1971 this ratio started its precipitous decline that has continued to this day without interruption. It went negative in 2006, forecasting the financial crisis that broke a year later. The reason for the decline is that irredeemable debt causes capital destruction. It adds nothing to the per capita quota of capital invested in aid of production. Indeed, it may take away from it. As it displaces real capital which represents the deployment of more and better tools, productivity declines. The laws of physics, unlike human beings, cannot be conned. Irredeemable debt may only create make-belief capital.
: Economists and politicians tell us that if we try to cut the level of debt the economy will slow and it will become self-defeating; debt will rise relative to GDP. Whilst this is sounds fair enough, how does this fit in with the truism that if debt is rising relative to GDP then by definition we are allocating capital unproductively and therefore unsustainably?
The answer is simple definitions. Clearly over the last few years vast amounts of capital have been written off and yet we have not revised previous estimates of GDP. We have effectively ignored that some element of the economic activity was unproductive and unsustainable. If debt rises by 10% relative to GDP, then only 90% of the stated GDP is actually sustainable. The 10% balance is made up of non-jobs that are dependent on debt accumulation. They are either consuming down our productive balance sheet, and thereby borrowing from our future level of economic activity, or alternatively borrowing from another country’s either present consumption level or their productive balance sheet. Either way, unless we are going to default, we are again borrowing from our future level of economic activity. We are putting the balance sheet through the P&L account and accounting for that as profit or GDP but without an offsetting liability.
Realistically therefore we should not look at debt-to-stated GDP, but rather debt-to-“sustainable” GDP.
because it has kept millions of senior citizens from the throes of the devastating poverty they would otherwise be doomed to without it — and as millions of such persons were doomed to prior to it.
Programs like Social Security and Medicare are not the expenditures that are destroying America, but the United States' ridiculously manic and over-blown thirst for empire most certainly is
on edit: hey! the centennial anniv is seven months away! April 15 of all days!ROSE
I saw the iceberg, Mr. Andrews. And I see it in your eyes. Please tell me the truth.
ANDREWS
The ship will sink.
ROSE
You're certain?
ANDREWS
Yes. In an hour or so... all this... will be at the bottom of the Atlantic.
CAL
My God.
Now it is Cal's turn to look stunned. The Titanic? Sinking?
Elihu wrote:depends on the definition of "sucessful".because it has kept millions of senior citizens from the throes of the devastating poverty they would otherwise be doomed to without it — and as millions of such persons were doomed to prior to it.
not sure i agree with the characterization "thoes of devastating ..doomed, etc" even the SSA doesn't call it a "retirement" plan anymore. now it's just a "supplemental retirement income" something or other. a euphemism to cover the declining benefits promised. has it helped some people out? sure it has. that's not the point. the principle of this program jeopardizes the long term viability of society as a whole. not this program in particular. the principle. it's un-funded. un-paid for. unbacked by sustainable wealth or revenue. that's an unhealthy habit for the well meaning society that implemented it. now we're all going to suffer.Programs like Social Security and Medicare are not the expenditures that are destroying America, but the United States' ridiculously manic and over-blown thirst for empire most certainly is
expenditures. the key word. when it comes to revenues and expenditures, bankruptcy doesn't care what you spent the money on. some good, most bad. doesn't matter. game over. we can't mix good and bad. the question is, who's got control of the public purse? us plebes had better quit arguing over the crumbs. before it's too late. <author's note, i think it's already too late>ROSE
I saw the iceberg, Mr. Andrews. And I see it in your eyes. Please tell me the truth.
ANDREWS
The ship will sink.
ROSE
You're certain?
ANDREWS
Yes. In an hour or so... all this... will be at the bottom of the Atlantic.
CAL
My God.
Now it is Cal's turn to look stunned. The Titanic? Sinking?
uhh. i guess you "skimmed". or i failed to communicate.Oh ffs. It's not "entitlements" that are sinking america,
gnosticheresy_2 wrote:libertards cumming in their pants
Elihu wrote:uhh. i guess you "skimmed". or i failed to communicate.Oh ffs. It's not "entitlements" that are sinking america,
Elihu wrote:not sure i agree with the characterization "thoes of devastating ..doomed, etc" even the SSA doesn't call it a "retirement" plan anymore. now it's just a "supplemental retirement income" something or other. a euphemism to cover the declining benefits promised. has it helped some people out? sure it has. that's not the point. the principle of this program jeopardizes the long term viability of society as a whole. not this program in particular. the principle. it's un-funded. un-paid for. unbacked by sustainable wealth or revenue. that's an unhealthy habit for the well meaning society that implemented it. now we're all going to suffer.
Elihu wrote:gnosticheresy_2 wrote:libertards cumming in their pants
na na nu boo boo. you're not the only one that can take the debate to another level! unfortunately it always seems to be down...
gnosticheresy_2 wrote:the only arguments I have ever seen against "entitlement" programmes like social security or public pensions or <insert name of programme designed to *care* for your fellow citizens neighbours parasites> has been from the right.
it's T-bills. the actual receipts went into the general fund and were spent.Paying all promises on schedule to hundreds of millions of people for 76 years without fail. Accumulating a $2.6 trillion surplus in the process,...The program is in surplus!
there you go. it's always "worked" before. nothing could ever go wrong...And the same "ponzi scheme" has also been running successfully in many other nations for decades.
Elihu wrote:gnosticheresy_2 wrote:the only arguments I have ever seen against "entitlement" programmes like social security or public pensions or <insert name of programme designed to *care* for your fellow citizens neighbours parasites> has been from the right.
state mandated charity retains no moral dimension on the part of those who are coerced to comply with it. the eager and the grudging both pay. pointing this out does not mean that one lacks empathy or care for fellow citizens. blur this distinction and we are left with the ephemeral "left" and "right". plebs in a box fighting it out. hypothetically, is the system as constituted the only or best way to deliver assistance to people in need? questionable. you only need look at the beneficiaries. how their supposed patrimony has been spent in the wars and corruption. handed over to millionaires. all the promises made that are not going to be kept. and the thin ice they are on right now pending systemic failure. cui bono? it amazes me how the "custodians" of this benificence escape all scrutiny when really they should be the center of the conversation.
but this is not to argue about the "rightness" or "wrongness" of charity and who should deliver it. it's about debt. how the current system is based on it and whether or not or how long it can go on. at least that's what i'm attempting to discuss. it's possible that this worry is much lower in actual priority than i perceive it in which case, sorry for the argument. let the show go on...it's T-bills. the actual receipts went into the general fund and were spent.Paying all promises on schedule to hundreds of millions of people for 76 years without fail. Accumulating a $2.6 trillion surplus in the process,...The program is in surplus!there you go. it's always "worked" before. nothing could ever go wrong...And the same "ponzi scheme" has also been running successfully in many other nations for decades.
see paycheck stub. withheld at the source. fed inc tax, and fica (ss and medicare). after that? gone. the fica is designated as going into the "trust" fund and after current bennies are paid, the surplus (ceased in 2010 according to td) is/was promptly borrowed by the general fund, the trust fund receiving a T-bill in return (an IOU). that's the sleight of hand accounting. really it's just straight boodle for the MICC. as td pointed out, if any of this is actually the way it happens, who knows, the fund is going to need capital infusions on top of payroll taxes from here (or very close) on out just to pay current bennies. hello qe3,4,5,6..... scroll up the thread to that greenspan quote. i'm out on this thread (reserve the right to respond to insults of course) this arcana brings alot of hate with it and i like most everybody here. don't want to end up toxic-er...What were the receipts denominated in?
Elihu wrote:state mandated charity
the ephemeral "left" and "right". plebs in a box fighting it out.
hypothetically, is the system as constituted the only or best way to deliver assistance to people in need?
but this is not to argue about the "rightness" or "wrongness" of charity
it's T-bills. the actual receipts went into the general fund and were spent.
there you go. it's always "worked" before. nothing could ever go wrong...
Users browsing this forum: No registered users and 163 guests