Bill Bonner (The Daily Reckoning):

The Dow rose again yesterday – up 44 points. Gold went up too – to a new record of $1,114.

Can anything stop stocks and gold?

Trees do not grow to the sky, dear reader. And for every bounce there is a bust.

“It’s amazing, the US is doing everything that Japan did wrong,” said a friend yesterday.

Let’s see… in the 1980s Japan’s corporate leaders thought they were going to take over the world. Investors thought so too. They expanded. They wheeled. They dealed. Prices shot up and they all thought they were geniuses.

In the ‘80s, everyone wanted to be Japanese. Management consultants used Japanese words to describe commonplace insights.

For example, instead of saying that businesses always need to try to do things better, they referred to “kaizen” as if it were the secret of success.

And

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In this edition of Max Keiser’s “On the Edge”, he discusses the management and state of the US economy, the outlook for the US dollar and other topical matters with Paul Craig Roberts, assistant Treasury Secretary in the Reagan administration, who earned fame as the “Father of Reaganomics“. He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service.

Keirser’s in-your-face presentation style may not be everybody’s cup of tea, but it certainly makes for thought-provoking viewing material.

Part 1:

Part 2:

Source: YouTube (here and here), October 23, 2009.

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What’s ahead? A “Lost Couple of Decades… ” says Comstock partners.

Yesterday, we estimated that it would take 19 years for the economy to complete its de-leveraging . It was not a very scientific estimate. But total debt has gone down about $2 trillion over the last 24 months. So, if it continued at that rate, it would take about 19 years to erase the extraordinary amount of debt built up in the bubble years.

Now, along comes the Comstock crowd with roughly the same guess – two decades. They figure that the savings rate will go up to 10% and that the effect of taking that money out of the consumer economy will be to put the US into a long, soft slump – just as we predicted in our first book.

And there’s another reason to expect a very long period of downsizing: that’s just the way economies work. Market

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A "W" Recession?

Martin Feldstein has recently raised the possibility that we might experience a relapse into recession in 2010 (a perfect symmetrical W), with the next dip in 2010. In my view, this means (1) we should have opted for a bigger and better composed stimulus package, and (2) the timing of expenditures in the stimulus package might not be as problematic as many commentators have indicated.

"I think we"re going to see a temporary substantial improvement," Feldstein, the former head of the National Bureau of Economic Research and a Reagan administration adviser, said today in an interview on Bloomberg Radio. "I emphasize the words temporary and substantial."

Feldstein -- a member of the private panel that dates the start of recessions and recoveries -- suggested the economy will contract into next year, and that the pattern of economic turnaround will be more of a seesaw than what he

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We live in a global economy. And, unless we destroy the global economy that now exists the way the world destroyed the first global economy starting with the 1914 conflict and proceeding through the next fifty-five years or so, we will continue to face the duties and responsibilities of operating within a world economy. And, those duties and responsibilities begin with the currency of the country.

It is hard to have confidence that the United States accepts this fact.

I know that we are in a recession (depression?). I know that the immediate pressure on the Obama Administration is to “get the economy going again.” I know that the Treasury Department and the Federal Reserve, both dependent partners in the effort to get the financial system functioning, must provide whatever means it takes to avoid further deterioration of financial markets.

Still, there is a need to listen

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For those interested in making the most of these difficult times check out the above site for the most comprehensive database of natural resource companies (gold/silver/uranium/copper/zinc/diamond mining; oil and gas operations; etc.) with warrants trading on the Canadian and U.S. stock exchanges.

This article is a follow-up to my recent piece on “America’s Financial Oligarchy” which was a synopsis of Simon Johnson’s “The Quiet Coup” on how the financial industry has effectively captured our government. It is an edit and review of a lengthy 231-page report prepared in March 2009 by the Consumer Education Foundation (see wallstreetwatch.org/reports/sold_out.pdf) on how, over the years, the ‘Money Industry’ as they refer to the financial oligarchy, sold out America to gain such control. Like Simon’s article the Consumer Education report deserves much more exposure than it will receive in its original format and hence my effort to distill it into a 3-page summary, …

I’m confident that there are thousands of blog lurking gold bugs who are going to want to comment on this article from Mark Leibovit of VRGoldLetter.com. Mark hits on a number of issues, which include a possible conspiracy theory. Mark will be on PBS tonight talking about Gold, and if you visit VRGoldLetter.com, be sure and use the promo code “INO” for a discount.

But more importantly read the piece below and let the comments fly! It’s time for all of those blog lurkers to make their thoughts and opinions known!

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In the short term, the precious metals, especially Gold, are trading counter to the stock market, but we have also seen precious metals rally along with stock market during the 2003 and 2008 bull cycle.  Regardless, in the long-term, precious metals should rally because of currency debasement and the resulting inflation which follows.  I have recently inaugurated the

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Highlights include American International Group, Inc. (AIG), Citigroup, Inc. (C), General Motors Corp. (GM) and Ford Motor Co. (F).As we head into earnings season, it seems clear that we are in for another quarter of rough sledding. As things stand now, the total net income for the S&P 500 is expected to be 27.5% lower than in the first quarter of 2008. This is after a very large increase in the expected profitability of the mega-banks for the quarter -- one that appears tied to the change in mark-to-market rules, which improves accounting profits, but does nothing to help economic profits.Still, this will mark a major improvement over the fourth quarter, when the total net income for the 500 firms fell by 62% excluding extraordinary items. Much of that was due to exceptionally large losses in firms like American International Group ...

In general, there are two things you can do with your money -- spend it or save it. Money that is saved is generally channeled into investments, either directly as in the individual buying of stocks, or indirectly through banks and other financial intermediaries.The Graph below shows the personal savings data for the U.S. as far back as the monthly data is available. From the late 1950's through the mid-1980's, U.S. consumers would generally put away between 8 and 10% of what came in (mostly pay checks, but the data is based on all disposable income). During boom times, it would be towards the low side of that, and would spike higher during recessions, occasionally going as high as 12% or so.We then went into an extended decline, until the savings rate actually briefly went negative a few years ago. Since the start of 2005, ...

One way for the US economy to escape its doldrums will be for the country to expand its exports. Everyone’s great American hero, President Ronald Reagan, knew that.

Declassified US government documents show that in the 1980s while Iraq’s Saddam Hussein was involved in the genocide against his country’s Kurdish population (using poison gas), the US opposed punishing Iraq with a trade embargo.

The reason was simple. It was cultivating Iraq as an ally against Iran and as a market for US farm exports.

According to the documents, the Reagan administration “got carried away with their own propaganda. They began to believe that Saddam Hussein could be a reliable partner.”

Kinda makes you wonder if Osama bin Laden were to come out of hiding and start his own country if the US wouldn’t try to, once again, be his friend… make him a trading partner.

Source:

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