News & Analysis
DB Briefs: US Threatens Syrian Leader / The EU Needs More Centralization? / Gold's Irrational Rise?
U.S. and Allies Say Syria Leader Must Step Down
The United States and several of its major allies on Thursday called on Syria's president, Bashar al-Assad, to give up power. The carefully choreographed announcements came after months of popular protests and increasingly deadly reprisals that the United Nations commissioner for human rights said amounted to crimes against humanity by the Syrian authorities. ... "We have consistently said that President Assad must lead a democratic transition or get out of the way," Mr. Obama said in a written statement released Thursday morning after coordination with allies in Europe. – NY Times
Dominant Social Theme: The UN will make the world a better place, thanks to R2P.
Free-Market Analysis: We have covered this topic for some time now, as it became very clear to us that the global power elite, via the United Nations' broad powers to depose leaders of nation states, is intent on fast tracking the implementation of "democracy." Of course, prior to the UN adoption of R2P, nation states operated for the most part under the Treaty of Westphalia for centuries. In reality, R2P gives the Anglosphere enormous, worldwide powers. Any nation-state that does not obey the Anglosphere's dictates can now find itself on the wrong side of a massed international "coalition of the willing" led by NATO and fulfilling the strategic desires of the City of London, Washington DC and perhaps even Tel Aviv.
A Shaken Europe Looks for Bolder Fixes
A dramatic selloff in European financial markets on Thursday renewed fears that Europe's banks are too weak to withstand the Continent's debt crisis, increasing the chances that the region's leaders will be forced to pursue radical steps toward fiscal union in order to preserve their common currency. ... Germany and France presented the latest in a series of initiatives aimed at bolstering the euro zone's architecture. Investors immediately criticized the plan, which included steps toward tax harmonization and stricter budget controls. – Wall Street Journal
Dominant Social Theme: What we need is more centralization of power... more uniformity.
Free-Market Analysis: All of this illustrates amply that the EU fully intends to become a United States of Europe despite the long and ancient tradition of its member states, which, unlike the colonies, are cohesive tribal cultures that go back thousands of years. The parallels between the US, a political entity that has been around 200 years and Europe, which has been settled for some 10,000 years, are minimal at best. The more the EU bestrides Europe by trickery and legislative sleight of hand, the more it is likely resented by those it seeks to dominate. Initially, the EU was nothing more than a trading zone. Had its membership known that they were participating in the raising of an empire with 500 million inhabitants, chances are the EU would never have generated the level of cooperation necessary to survive, let alone thrive.
Gold Jumps to Record in Longest Rally Since 2007
Gold rose to a record above $1,860 an ounce, poised for the longest run of weekly gains since April 2007, as escalating concern the global economy is slowing drove equities lower and spurred demand for a haven. ... "The drivers of the gold price at this point in time are all future expectations, such as more global liquidity and worsening of the status quo in global GDP," said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. "Either the gold market has adopted a very negative, and in our opinion not justifiable, negative, Armageddon-like view, or it is building an irrational bubble." – Bloomberg
Dominant Social Theme: Gold's rise is irrational.
Free-Market Analysis: This is a constant theme being trumpeted by mainstream media. Earlier today, while watching the pom-pom show "CNBC Europe," we listened in amazement as Joe Kernan arrogantly diminshed gold as something he "just wouldn't want to own." Instead, Kernan would rather take the gold and buy a car because, as he says, "he doesn't have any cavities to fill." Do mainstream media pundits like Kernan not realize how ridiculous they sound? Gold is only "building an irrational bubble," as LGT's Dincer says above, for those who have no rational understanding of Austrian economics and monetary history. We suggest Kernan and Dincer go spend an extended period of time at the Mises Institute. Perhaps it wouldn't make any difference in what they say anyway.
Posted by Avatar on 08/19/11 12:25 PM
In regards to gold, the truth lies somewhere between the views of Joe Kernan and Austrian economics. In every scenario, investors trade a commodity up over its true value before the "Oh,No " realization becomes evident. Gold will certainly never go to a value of zero but it certainly can be a bubble commodity just as the Tulips of Holland. Governments have successfully substituted one fiat currency for another e.g. Brazil in the 1990's. The Elite Bankers have a back up plan if they cannot manage this fiasco. The pain will as usual be born by the masses of average citizens. I vote we contact the Pleadians for guidance.
Posted by alexsemen on 08/19/11 12:15 PM
How could even dare to belive such imbecilityies , even it is comming from NASA affiliate once !
There is no Aliens whatsoever those fake experts has told you all kind of Steven Spielberg hollywood insanity.
Please grow up and read a little real scientific literature and never USA comics ! Get real and use a little bit of decency !
Posted by Frank on 08/19/11 12:13 PM
What's happening to the price of gold is the most interesting of all stories for me. Not only does its continued rise reflect the collapse in confidence the US Dollar (in reality it's only worth the paper it's printed on), but since the US Dollar is the world's reserve currency held by banks & people around the world, what will happen to the price of gold if there is widespread belief that anything held in terms of US Dollars is, indeed, worthless? And do the supposed physical repositories of gold actually hold the gold they say they have? Even if they hold the gold, has the gold been "sold" multiple times to different people or institutions? Will there be a "run on gold" like there were "run on banks" involved in fractional reserve banking panics... only the first few people got their money out, the rest lost it.
At some point, there will be a gold bubble that will "pop". I hear all kinds of figures ($3000, $13,000, higher?). It will all be tied in to our Federal debt crises & collapse in the confidence in the US Dollar. This is why, in my opinion, the President & Congress are playing with fire the longer they take to balance the budget & start to pay down the debt... even if it causes a lot of short term pain.
Posted by John Danforth on 08/19/11 11:27 AM
Gold is in backwardation (near term futures higher than long term futures price). This is unprecedented, never before happened for longer than a few hours at a time.
This likely indicates worry about a physical shortage. Perhaps it's just transitory.
If not, big holders of gold taking physical possession out of bank repositories (like Venezuala is doing) might lead to a collapse of paper gold instruments and another zoom in the price of physical.
All that means to small fry like me is that silver is on sale. (And the dollar is toast.)
Posted by WorkingClass on 08/19/11 10:00 AM
Do mainstream media pundits like Kernan not realize how ridiculous they sound?
Corporate Media sock puppets are very well paid to "catapult the propaganda" as former president George The Lessor famously said. If they are aware that they are propagandists and feel no shame they are sociopaths. If they are unaware they are merely fools. But what of their viewers? How many are asking themselves - why am I watching corporate propaganda? How many are merely fools?
Posted by boatman on 08/19/11 09:58 AM
news flash--there's no oil in syria, and obozo's out of ammo... ..heyyy-oooo
Posted by Frank on 08/19/11 09:39 AM
"The United States and several of its major allies on Thursday called on Syria's president, Bashar al-Assad, to give up power."
I agree Assad is a rotten dictator & it would probably be better for the USA & the world if he went away, but I'm just sick & tied of the USA sticking its nose into other people's business. We can't afford to be the world's policeman & here we are looking for more trouble!
I would be interested in knowing what the DB thinks our best response to the situation in Syria should be.
Posted by Iapetus on 08/19/11 09:34 AM
Somebody should start publishing various stock prices in inflation adjusted $USDs to make it hit home and show people how poorly dollar denominated investments are really performing. I think the $USD has lost at least 10% of it's value just this year if you base it on a reasonably determined basket of prices. Stagflation makes it difficult to determine accurate inflation rates as lower demand certainly effects many prices. Has anyone seen any charting on perhaps the DOW or S&P, adjusted for inflation?
Posted by memehunter on 08/19/11 09:10 AM
Speaking of irrationality, here is a report from NASA-affiliated scientists at Penn State University, as conveyed by the Guardian:
"Aliens may destroy humanity to protect other civilisations, say scientists
Rising greenhouse emissions could tip off aliens that we are a rapidly expanding threat, warns a report"
Click to view link
I recommend reading the entire article. Unfortunately, it does not seem to be meant as a joke.
Posted by Pewky on 08/19/11 08:02 AM
"Gold Jumps to Record in Longest Rally Since 2007"
I turned on the idiot box last and tuned in to the comedy channel or so I thought. I did not realize my mistake until the 1st commercial break. Hell, I thought I was watching a comedy show.....my local cable has the Comedy channel #60 but I was actually tuned in to channel #61 - It was the"Ed Show" on CNBC. It's actually funnier than the comedy channel.