Replies to post #9116 on Zeev's Turnips Patch-No Politics (ZEEV)

[Bruce A Thompson]

Goldman Sachs would have you believe

There is absolutely no connection between any of Goldman Sachs' trading activities and its investment research

Let me see now. A GS trader has the authorization to buy a Million dollars worth of 19 day expiration options without so much as bit of research being done. Followed less than 4 business hours later by a GS upgrade in the underlying security.

That's not a coincidence! It's being caught with your pants down by the NY Times. <g>

BT

[Public Heel]

Itsallover - seignorage and cost of empire

Yes, there are costs to having an empire. One, of course, is the huge cost of maintaining our military, although the overwhelming majority of these costs just flow back into our own economy. Another is that we make enemies, and thus end up suffering 9/11-type attacks.

However, the benefits of empire, at least for now, are much greater. One is seignorage, that is, the "right" to print money that everyone will accept as having real value. How many countries can run huge trade deficits year after year without suffering economic collapse (after all, Argentina never did what we're doing, and look what's happened to them)? The reason we can do this is seignorage. As long as other people will "buy" our money with cars and oil and clothes and televisions, we can keep it up.

When we lose our seignorage privileges, though, and the dollars start flowing back, we'll be in big trouble.

[Gizmo]

The problem with gold as I see it is all that supply sitting in the vaults at the central banks. It seems that as the POG rises more and more would come to market, depressing prices. Also, I wonder how much inventory the producers are hoarding to sell into better prices. The only hope I see for gold is if investment demand rises substantially. That would open a whole different can of worms. World economic conditions would need to be much worse than currently.

Gizmo