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Income tax is not the only tax you're paying.

The main reason for HFT is to "front run" the market, to game the traditional customers of the price discovery mechanism, and make a risk-less profit. This dis-incentivises the market for everyone else, who see it as corruption and move their money elsewhere.

The big picture though is one of a big liquidity event, in which the velocity of money is rapidly falling as everyone tries to save up enough cash to ride out the oncoming greater depression. The rapid printing of money is showing up in the 17% growth of the M3 Money Supply, but is getting hoarded up by banks and corporations as rapidly as it's getting created. This is the only thing keeping inflation from at bay, for now.

Once the Tsunami of dollars starts to find its way to main street, and chasing goods and services, an inflationary wave will hit us all, and we'll learn to get used to $10/gallon gasoline, and they start to remember it fondly not much later.

Oh, man, that was bad, good catch.

I'm still concerned about M3, and I found a site that recreates M3 from other Fed data still available. You'll see that that hasn't dipped below 5% annual growth since 2005, and was over 14% for most of 2008. It's currently trending downwards, which is good, but 5% growth of M3 is still a hell of a lot of new money.

And then there's the Fed's $9 Trillion in off-balance sheet transactions that they can't even account for. If you count those as part of the money supply (and I do) then the supply of dollars has in fact doubled.

You are both stupid and dangerous. Check out the fucking M3, and give me a fucking break.

http://www.nowandfutures.com/key_stats.html

You think that M1 means SHIT compared to M3? In fact, the M3 is so badly underreported and mis-reported (usually on VERY low esitmate side of the spectrum) that the FUCKING FEDERAL RESERVE STOPPED TELLING PEOPLE WHAT THE M3 IS.

Go fuck yourself, moron, truth-denying agent of destruction. You are a fucking traitor.

You are both stupid and dangerous. Check out the fucking M3, and give me a fucking break.

http://www.nowandfutures.com/key_stats.html

You think that M1 means SHIT compared to M3? In fact, the M3 is so badly underreported and mis-reported (usually on VERY low esitmate side of the spectrum) that the FUCKING FEDERAL RESERVE STOPPED TELLING PEOPLE WHAT THE M3 IS.

Go fuck yourself, moron, truth-denying agent of destruction. You are a fucking traitor.

People who held stocks and real estate rode out Wiemar quite well! The stock market graph is quite interesting. Note that in the early stages the market fell, but when the inflation was raging there was actually a spike in stocks when measured in a currency that was more stable at the time (the dollar).

The buyers of stocks in 1920s Germany knew they were buying the productivity and resources of the German economy, which they figured (correctly) would make it through the inflationary period. The fundamentals of stocks make sense. A diversified portfolio represents some portion of the economic output.

Next came the Nazi period. Then gold makes more sense, and I mean physical bullion since Nazi paper would have had obvious problems. Now, how do you know when to actually do that, and what's a rational way to do that? What is the purpose for physical posession? Can a rational person justify having any physical gold?

I say yes, but not to the extent that some gold bugs would have us horde the metal, or use it to back the currency. I say yes only to the extent that it's an insurance policy, and one that like all insurance policies may or may not pay out.

Most people wouldn't consider it a wise investment to spend too much of their income on an insurance policy. Nevertheless, that's what it is; so holding a modest ammount of gold in your portfolio (the rule of thumb is 5%) makes sense if you are really concerned about political turmoil that would cause you to leave your country. Make sure that you also insure your insurance! However much bullion you store in your safety deposit box or home, insure it. Make sure you buy a gun too, so that you can move your gold in the presence of bandits. Be sure to set aside some to bribe the border guards. Coins are better than bars, because they are more practical units. See how insane this gets? You'll probably lose your house, car, and probably a significant fraction of your friends and family in a situation like that. You might lose your life. I don't think you can really insure against a Nazification of the US; certainly not by buying gold anyway.

One positive thing I can say about gold though, is that since it won't go to zero it makes a fantastic trading vehicle. Accumulate during a volatile period, sell the spikes. Very nice. I haven't been quite gutsy enough to do it with a large fraction of my money though.

Inflation is what counts, and its under control.

Sure, after you quit publishing M3, start dumping gold reserves, and remove everything that keeps getting more expensive from the "basket" like gas and food.

One can only "innovate" a gallon of milk so much. So, food prices generally rise with inflation. (IIRC, they're actually one of the prime measures of inflation.)

You are right, but if only the BLS agreed with you. Most of the inflation numbers people quote are so-called core inflation which excludes food prices. This makes sense if we want to talk about last months inflation, but not so much if want to discuss year over year inflation. I don't know why more careful distinctions aren't drawn by the press when they report this sort of stuff, but that's the breaks.

Second, inflation is more likely around 6%. See for background: http://www.shadowstats.com/ The gist of which is BLS changed its method of computing CPI at the beginning of the Clinton Administration.

Shadow stats gives a pretty rigorous assessment. My own analysis of Federal Reserve Annual Reports pegs inflation at roughly 10%, but my work was very rough back-of-the-envelope type stuff based on trends in Fed's SOMA account. So, I am willing to believe 6%. Other analysis: http://www.nowandfutures.com/cpi_lie.html

If you read the Economist, the last page publishes a commodity price index. The percent change over one year ago is roughly 15-20% per year, consistently every publication week.

People aren't owning their homes now, they are getting longer and longer term mortgages, as I pointed out, they own larger debts. Before the globalism push 30 year to 50 year to interest only mortgages were mostly unheard of., you just didn't see it. And inflation? You believe the official numbers when they removed the *critical* M3 stats last year? Why would you believe that? Why would they do that other than to help hide the fact the printing presses are roaring? Independent analysts have done their best to come up with some real numbers and they are findng it is (roughly)twice as high as the government claims. Here, check it out. And the jobs? Huh? They reclassified burger flipping as manufacturing, and stuff like that. They count the loss of a 20$ an hour job with full complete and robust bennies manufacturing with a swap in to walmart at 7$ with toy bennies as "still a job".

I don't. It's a job maybe, but not the same. that's cooking the books to make it look the same or better when it isn't.

I take the long view, because I've been around. I just don't fall for three card monte stuff.

Sorry, it's still hooie. I am not tryng to flame or be mean but it's hooie. They are cooking the books and calling debt wealth, when it is not. Globalism as they are practicing it, not academic theory as it is somehow taught but as it is on the ground, is serving mostly to increase the bottom line of the top 1% while they push credit on everyone else, give it to them, and try to convince them more credit=produced wealth. Sorry, that is the magic beans for the cow scam. It really is. Credit created out of thin air with the central bankers and printing press money and fractional reserve is not the same as produced wealth, nor will it ever have the same impact as using actual work that leads to produced wealth then being traded.

Sorry, it's a scam for the rubes. As for other nations in a similar situation per debt and trade imbalances? Yes,hell yes, they are in potential future deep doo doo as well unless they stop the huge manufacturing shift.

You can NOT printing press your way to "wealth". You have to work for it by producing true tangible wealth. You can't just reshuffle around what is already produced and call it "more". You can dump the same 5 gallons of water back and forth with many buckets, and I don't care how many buckets you wind up using (analogy is with paper financial "products" here), you'll still only have 5 gallons. You can reclassify how much is in a gallon, you still won't have any more.

And if you still want to argue,you need to argue against some powerful folks who know what is what. I could point you to a Fed governor who said the same thing just a few months ago, or perhaps the GAO office, and other top economists, they saw the credit exposure globally is pretty risky right now. And if you recall, it wasn't too many weeks ago the US sent a huge economic delegation to china basically begging them to do something with the yuan, and the chinese told them to *get stuffed* because they are calling the shots now because they *produce wealth*, they don't just talk about it and manage it and bring up powerpoint slides, they manufacture it. They also said they have "enough dollars now".

"Enough". Let that sink in a scosh.

Wealth is grown, mined, or manufactured from the previous two. That's it. Everything else is paperwork shuffling or wealth rearranging and servicing. Servicing wealth does not produce more wealth, that's a variation on the broken windows economy. Extending more layers of credit paper on top of already produced wealth does not increase the pool of wealth, it just makes more credit and dilutes the produced wealth. Printing up more money using numbers picked out of thin air doesn't make your money more valuable, it makes it less valuable. Yes, you can "free trade" in it,and trade is a wonderful

It may be peak copper, but there is another possible reason:

Consider for a moment that gold and silver are normally used as a hedge against inflation. Over the last 20 years they have not kept up with inflation though. If you do any reading on the subject some claim this is due to central banks manipulating the price of gold/silver to help disguise inflation. If the above is true, gold and silver prices would stay depressed, but inflation would show up in other commodities. E.G. base metals as they have not been used as a typical investment hedge and thus the central banks would not have tried to manipulate their prices directly.

The Fed quietly announced thanksgiving weekend in 2005 that they would no longer publish the M3 money supply figure. For those who don't know the M3 figure is the estimate of total US dollars out in the world. It was used by many as a direct gauge of US monetary inflation policy.

Here is a link to a reconstituted M3 figure Some think the removal of this information was done to hide the true scope of the impending financial problems that are on the horizon.