| Author |
Message |
Joe
Guest
|
 Posted:
Tue Oct 25, 2005 4:01 pm Post subject:
Re: Bush nominates Bernanke |
|
|
Neill Massello wrote:
| Quote: | Hold on to your gold. It's going to be a bumpy ride.
|
Speaking of gold, could any of you suggest funds that invest in golds
and other natural mineral?
Thanks,
J
|
|
| Back to top |
|
 |
Mark Freeland
Guest
|
| Posted:
Tue Oct 25, 2005 4:01 pm Post subject:
Re: Bush nominates Bernanke |
|
|
Joe wrote:
| Quote: | Speaking of gold, could any of you suggest funds that invest in golds
and other natural mineral?
|
I'll let others address which funds are better or worse, but recognize
that there are gold funds (pure gold, pure gold/gold mining) and then
there are gold + X funds. You seem to be asking about the latter.
The broadest mandate "gold" funds I know of are:
Vanguard Precious Metals and Mining (X = precious and base metals, i.e.
broad metals, but still limited to metals)
USAA Precious Metals and Minerals (X = precious minerals, e.g. diamonds,
but still limited to *precious* minerals)
US Global Investors World Precious Minerals (as above)
(I seem to be working the alphabet from the back - you can stop at AIM
Gold and Precious Metals :-)
--
Mark Freeland
nNeEwTs@sonic.net |
|
| Back to top |
|
|
Steven L.
Guest
|
| Posted:
Tue Oct 25, 2005 4:01 pm Post subject:
Re: Bush nominates Bernanke |
|
|
Herb wrote:
| Quote: | "Steven L." <sdlitvin@earthlinkNOSPAM.net> wrote in message
news:SOh7f.1241$A63.1106@newsread3.news.pas.earthlink.net...
Herb wrote:
"Steven L." <sdlitvin@earthlinkNOSPAM.net> wrote in message
news:zwf7f.1152$Rl1.73@newsread1.news.pas.earthlink.net...
Neill Massello wrote:
Hold on to your gold. It's going to be a bumpy ride.
Definitely going to hold on to my gold.
Greenspan always raised interest rates whenever the price of gold rose
too much--just take a look at gold and the Fed rate during Greenspan's
tenure. From the little I've heard so far, I don't think Bernanke will
do that.
If Bernanke turns out to be another Arthur Burns, watch out.
The price of gold rising too much would be a good proxy for inflation
heating up. I think any Fed governor would vote to raise rates if they
thought inflation was threatening.
That was my point. Greenspan was willing to use the price of gold as
his leading indicator of potential inflation down the road (which is why
the price of gold has remained so low during his tenure). Other
economists don't do that. They estimate inflation with "actual" numbers
like the CPI or the PPI. The fact that Bernanke is on the record as
saying he wants to set a target for *inflation* (not gold prices)
suggests he's one of those.
The problem is that those numbers lag the price of gold. By the time
the PPI starts to soar, it's often too late. You're then forced to
drastically raise interest rates and send the economy into a recession.
I guess I didn't make my point clearly. The price of gold rising IS
inflation.
|
No, that's not the definition of inflation, but gold is my choice for
the best neutral measure of inflation.
| Quote: | I realize that gold doesn't play as much of a monetary role as
it used to but it still largely reflects the value of money. Under
classical economic theory, the price of gold is fixed. It is the price of
money that fluctuates.
I can't believe you think the CPI and PPI are "real" numbers but the price
of gold (determined, as it is, by a relatively free market) is not. Like
the unemployment rate, inflation indices are quite debatable and are only of
use compared to themselves over time.
|
I think we're in "violent agreement" here as to the relative worth of
CPI and PPI versus the price of gold as indicators. But Bernanke seems
to hew to the school of thought that says that these kinds of indices
like PPI can be used as inflation targets, just as central banks in
Europe do. The European central banks don't seem to target the price of
gold as their neutral measure of inflation.
--
Steven D. Litvintchouk
Email: sdlitvin@earthlinkNOSPAM.net
Remove the NOSPAM before replying to me.
|
|
| Back to top |
|
|
Ed
Guest
|
| Posted:
Tue Oct 25, 2005 4:01 pm Post subject:
Re: Bush nominates Bernanke |
|
|
"David Wilkinson" <david@wilkinson6337.freeserve.co.uk>
| Quote: | I thought the rally was due to oil dipping below $60. I still think so
even though it finished slightly above. Gasoline prices have been
dropping as the refineries begin to come back on line.
Could be. A quote though from Finance.Yahoo: "U.S. stock market futures
drifted lower Tuesday in what can be either seen as profit-taking after
the biggest one-day gain in six months or a renewed evaluation of Ben
Bernanke, the next chairman of the Federal Reserve."
|
I think it's because oil went back above $60 and consumer confidence fell. |
|
| Back to top |
|
|
Neill Massello
Guest
|
| Posted:
Tue Oct 25, 2005 9:06 pm Post subject:
Re: Bush nominates Bernanke |
|
|
Steven L. <sdlitvin@earthlinkNOSPAM.net> wrote:
| Quote: | That was my point. Greenspan was willing to use the price of gold as
his leading indicator of potential inflation down the road (which is why
the price of gold has remained so low during his tenure). Other
economists don't do that. They estimate inflation with "actual" numbers
like the CPI or the PPI. The fact that Bernanke is on the record as
saying he wants to set a target for *inflation* (not gold prices)
suggests he's one of those.
The problem is that those numbers lag the price of gold. By the time
the PPI starts to soar, it's often too late. You're then forced to
drastically raise interest rates and send the economy into a recession.
|
My Bernanke bogeys aren't based on the indicators he uses nor on his
advocacy of an inflation "target", although I think that's a bad idea,
especially when the target is greater than zero.
My fear of Bernanke began during the great deflation scare of a few
years ago, when he was the most outspoken advocate within the Fed for
the "whatever it takes" approach to pumping out money to sustain
economic growth. He advocated open market operations to buy long term
Treasury and even corporate debt, if necessary, to drive down long-term
interest rates. For an approving account of this "Bernanke put" from a
four-square Keynesian, read Paul McCulley's Fed Focus column from
December 2002.
Of all the Fed papabile, the President seems to have chosen the one most
enamored of the printing press. The new Fed chairman doesn't see
inflation as a problem; that's one reason it probably will be. |
|
| Back to top |
|
|
Mike Stone
Guest
|
| Posted:
Tue Oct 25, 2005 10:31 pm Post subject:
Re: Bush nominates Bernanke |
|
|
Steven L. <sdlitvin@earthlinknospam.net> wrote:
| Quote: | Definitely going to hold on to my gold.
Greenspan always raised interest rates whenever the price of gold rose
too much--just take a look at gold and the Fed rate during Greenspan's
tenure. From the little I've heard so far, I don't think Bernanke will
do that.
If Bernanke turns out to be another Arthur Burns, watch out.
|
Bernanke only seems to have the ire of gold bugs and people who worship
supply-side economics. Liberal & right of center economists have been
very happy with the pick.
So I'm fairly content. As much as I disklike Bush in general, he picked
someone qualified. Bernanke has good credentials.
-Mike |
|
| Back to top |
|
|
Mike Stone
Guest
|
| Posted:
Tue Oct 25, 2005 10:38 pm Post subject:
Re: Bush nominates Bernanke |
|
|
Steven L. <sdlitvin@earthlinknospam.net> wrote:
| Quote: | the PPI starts to soar, it's often too late. You're then forced to
drastically raise interest rates and send the economy into a recession.
|
Take away our housing boom and we'd probably still be stuck in a recession.
If not recession, we'd definitely have very small GDP growth.
Matter of fact, most of the rest of the world is fearful of our housing boom
dying off.
http://www.townhall.com/opinion/columns/robertnovak/2005/08/13/155168.html
--
A footnote: High officials in the Japanese Ministry of Finance recently commented privately
that the vibrant U.S. home mortgage market is supporting an otherwise shaky global economy.
--
There's a very strong consensus that we're due for a recession in the next 2yrs.
Actually, we have a recession every 7or8 years so this is a pretty lame prediction
on my part.
-Mike |
|
| Back to top |
|
|
Mike Stone
Guest
|
| Posted:
Tue Oct 25, 2005 10:47 pm Post subject:
Re: Bush nominates Bernanke |
|
|
Herb <XXX@yyy.com> wrote:
| Quote: | I guess I didn't make my point clearly. The price of gold rising IS
inflation. I realize that gold doesn't play as much of a monetary role as
it used to but it still largely reflects the value of money. Under
classical economic theory, the price of gold is fixed. It is the price of
money that fluctuates.
I can't believe you think the CPI and PPI are "real" numbers but the price
of gold (determined, as it is, by a relatively free market) is not. Like
the unemployment rate, inflation indices are quite debatable and are only of
use compared to themselves over time. Few think they really measure
inflation, they are just the best guesses that we have.
|
Hey Herb,
Question for you. I bought into gold a while back and have been happy with the
return so far.
Isn't this all just psychological? I mean, the *real* demand for Gold has increased
somewhat due to India & China's rising middle class but on a whole, the real demand
is driven by:
- inflation worries
- fear of a dollar crash
- fear of an equities crash
It's certainly not driven by real fundamentals they way other commodities are. |
|
| Back to top |
|
|
Mike Stone
Guest
|
| Posted:
Tue Oct 25, 2005 10:49 pm Post subject:
Re: Bush nominates Bernanke |
|
|
Joe <lda_vinci@yahoo.com> wrote:
| Quote: | Speaking of gold, could any of you suggest funds that invest in golds
and other natural mineral?
|
I like:
GLD
PSAFX
Fidelity's Funds (can't remember their name but it should be easy to look up
off of morningstar.com) |
|
| Back to top |
|
|
Flasherly
Guest
|
| Posted:
Wed Oct 26, 2005 12:01 am Post subject:
Re: Bush nominates Bernanke |
|
|
Neill Massello wrote:
| Quote: | My fear of Bernanke began during the great deflation scare of a few
years ago, when he was the most outspoken advocate within the Fed for
the "whatever it takes" approach to pumping out money to sustain
economic growth. He advocated open market operations to buy long term
Treasury and even corporate debt, if necessary, to drive down long-term
interest rates. For an approving account of this "Bernanke put" from a
four-square Keynesian, read Paul McCulley's Fed Focus column from
December 2002.
|
A consensus concurs that the FED following of quantitative inflation
objective isn't justified, even given the FED's longer trackrate. From
2003 FED pannel, he does argue communication as a means within public
awareness, countering, but within a perceived crucial price stability
setpoint over to equate an optimal long-range inflation rate, for the
federal open market committee then to render a tangible setpoint over a
sustainable business cycle level, with due consideration for its
impact, in course, as a chosen macroeconomic medium. The implications
of what he argued then, favorable and timely implimentation of a FOMC
rate -- seems interesting in light of Bush lauding him in the news
yesterday, as 'a man with concise language'. |
|
| Back to top |
|
|
Herb
Guest
|
| Posted:
Wed Oct 26, 2005 12:01 am Post subject:
Re: Bush nominates Bernanke |
|
|
"Steven L." <sdlitvin@earthlinkNOSPAM.net> wrote in message
news:8cs7f.1657$yX2.1018@newsread2.news.pas.earthlink.net...
| Quote: | Herb wrote:
"Steven L." <sdlitvin@earthlinkNOSPAM.net> wrote in message
news:SOh7f.1241$A63.1106@newsread3.news.pas.earthlink.net...
Herb wrote:
"Steven L." <sdlitvin@earthlinkNOSPAM.net> wrote in message
news:zwf7f.1152$Rl1.73@newsread1.news.pas.earthlink.net...
Neill Massello wrote:
Hold on to your gold. It's going to be a bumpy ride.
Definitely going to hold on to my gold.
Greenspan always raised interest rates whenever the price of gold rose
too much--just take a look at gold and the Fed rate during Greenspan's
tenure. From the little I've heard so far, I don't think Bernanke
will
do that.
If Bernanke turns out to be another Arthur Burns, watch out.
The price of gold rising too much would be a good proxy for inflation
heating up. I think any Fed governor would vote to raise rates if they
thought inflation was threatening.
That was my point. Greenspan was willing to use the price of gold as
his leading indicator of potential inflation down the road (which is why
the price of gold has remained so low during his tenure). Other
economists don't do that. They estimate inflation with "actual" numbers
like the CPI or the PPI. The fact that Bernanke is on the record as
saying he wants to set a target for *inflation* (not gold prices)
suggests he's one of those.
The problem is that those numbers lag the price of gold. By the time
the PPI starts to soar, it's often too late. You're then forced to
drastically raise interest rates and send the economy into a recession.
I guess I didn't make my point clearly. The price of gold rising IS
inflation.
No, that's not the definition of inflation, but gold is my choice for
the best neutral measure of inflation.
I realize that gold doesn't play as much of a monetary role as
it used to but it still largely reflects the value of money. Under
classical economic theory, the price of gold is fixed. It is the price
of
money that fluctuates.
I can't believe you think the CPI and PPI are "real" numbers but the
price
of gold (determined, as it is, by a relatively free market) is not.
Like
the unemployment rate, inflation indices are quite debatable and are
only of
use compared to themselves over time.
I think we're in "violent agreement" here as to the relative worth of
CPI and PPI versus the price of gold as indicators. But Bernanke seems
to hew to the school of thought that says that these kinds of indices
like PPI can be used as inflation targets, just as central banks in
Europe do. The European central banks don't seem to target the price of
gold as their neutral measure of inflation.
|
As I understand it, the Fed's mandate is to maintain steady growth with low
inflation. I would settle for a Fed that followed that. Traditionally Fed
Chairmen have been bankers who seem to think inflation is worse than
negative growth.
-herb |
|
| Back to top |
|
|
Herb
Guest
|
| Posted:
Wed Oct 26, 2005 12:01 am Post subject:
Re: Bush nominates Bernanke |
|
|
"Neill Massello" <neillmassello@earthlink.net> wrote in message
news:1h4zcxf.1itt4bhv21vo2N%neillmassello@earthlink.net...
| Quote: | Steven L. <sdlitvin@earthlinkNOSPAM.net> wrote:
|
[snip for brevity]
| Quote: |
Of all the Fed papabile, the President seems to have chosen the one most
enamored of the printing press. The new Fed chairman doesn't see
inflation as a problem; that's one reason it probably will be.
|
Inflation is a problem but the cure (sending growth into a tailspin) is
often worse than the ailment. I do agree that growth must come before
stable currency (though both would be preferred).
-herb
> |
|
| Back to top |
|
|
Steven L.
Guest
|
| Posted:
Wed Oct 26, 2005 12:01 am Post subject:
Re: Bush nominates Bernanke |
|
|
Mike Stone wrote:
| Quote: | Joe <lda_vinci@yahoo.com> wrote:
Speaking of gold, could any of you suggest funds that invest in golds
and other natural mineral?
I like:
GLD
PSAFX
|
PSAFX is a very odd recommendation to make to Joe, given that it's 70%
in cash, 20% in bonds and only about 10% in gold stocks.
--
Steven D. Litvintchouk
Email: sdlitvin@earthlinkNOSPAM.net
Remove the NOSPAM before replying to me. |
|
| Back to top |
|
|
Steven L.
Guest
|
| Posted:
Wed Oct 26, 2005 12:01 am Post subject:
Re: Bush nominates Bernanke |
|
|
Mike Stone wrote:
| Quote: | Steven L. <sdlitvin@earthlinknospam.net> wrote:
Definitely going to hold on to my gold.
Greenspan always raised interest rates whenever the price of gold rose
too much--just take a look at gold and the Fed rate during Greenspan's
tenure. From the little I've heard so far, I don't think Bernanke will
do that.
If Bernanke turns out to be another Arthur Burns, watch out.
Bernanke only seems to have the ire of gold bugs and people who worship
supply-side economics. Liberal & right of center economists have been
very happy with the pick.
|
I remember how "liberal economists" nearly wrecked this country's
economy in the 1970's. Arthur Burns was the Fed chairman who gave this
country stagflation. Just as Bernanke was a trusted aide of Bush
(Council of Economic Advisers), Burns was a trusted aide of Nixon. The
result was the same. People tend to forget that on economic issues,
Nixon was very liberal.
Bernanke faces reputation as inflation 'dove'
As Fed governor, former Princeton economist led battle against deflation
By Martin Wolk
Chief economics correspondent
MSNBC
Updated: 6:01 p.m. ET Oct. 25, 2005
With his unquestionably solid qualifications to serve as next chairman
of the Federal Reserve, Ben Bernanke is likely to win easy Senate
approval to take over the powerful post from Alan Greenspan early next year.
But some market analysts say they fear the former Princeton University
professor might be too soft on inflation and lacks the strong stomach
that might be needed to fight structural imbalances that threaten the
nation’s long-term economic health.
Bernanke’s image as an inflation “dove” stems in large part from his
role as the central bank’s leading voice warning about the potential
dangers of deflation when he was a Fed governor from 2002 until this
year. In his landmark November 2002 speech on how to fight deflation,
Bernanke said one possible tool would be a broad-based tax cut which he
described as “essentially equivalent to Milton Friedman's famous
‘helicopter drop’ of money.”
This has led to an exaggerated image of a Bernanke so committed to
growth at any cost that he would personally fly around dropping dollar
bills from the sky if needed.
“Of course it was taken out of context,” said Axel Merk, manager of the
Merk Hard Currency Fund in Palo Alto, Calif. “He was just speculating.
But you get the feeling that he is very willing to do whatever it takes
to get the economy into whatever shape he wants to to be in.”
Merk has been a regular critic of the chairman-designate in market
commentaries over the past year, arguing that Bernanke could usher in an
era of higher inflation, slower growth and a weakening dollar.
Chip Hanlon, president of Delta Global Advisors, also worries about the
implications of Bernanke’s 2002 speech, which included the observation
that the government “has a technology, called a printing press,” that
can be used to manufacture inflation if needed.
Hanlon said Bernanke “should actively work to distance himself” from
that statement.
“That high-profile statement has not been forgotten, and it suggests
that when in doubt he will lean toward the side of a loose, inflationary
monetary policy,” Hanlon said in a commentary. “While equities markets
may welcome such a ‘stimulative’ mindset, currency markets will likely
treat Bernanke with great suspicion, particularly with regard to the
U.S. dollar.”
Indeed while the stock market rallied Monday on news of the nomination,
the dollar fell and market interest rates rose on concern that Bernanke,
currently chairman of President Bush’s Council of Economic Advisers,
might be less effective than Greenspan at fighting inflation.
Mary Ann Hurley, a bond trader at D.A. Davidson & Co., said Bernanke
will begin working to counteract those perceptions at his Senate
confirmation hearing, which is likely to be held before Thanksgiving.
“Being a Fed chairman is radically different than being a Fed governor
or a Council of Economic Advisers chairman or living in academia,”
Hurley said. “And once he is faced with the reality of the markets
hanging on every word he says and every action he does I’m not sure the
label of being soft on inflation is going to stick.”
Marvin Goodfriend, a professor of economics at the Tepper School of
Business at Carnegie Mellon who has worked with the presumed future
central bank chairman at the Fed, said Bernanke’s dovish reputation is
undeserved.
“That deflation risk was not very likely, but should it have happened it
would have been very costly,” Goodfriend said. “His public remarks
during the period were called for, and I don’t think they say very much
about whether he or anyone would be easier on inflation on the upside.
.... My own feeling is he personally understands the risks of losing
credibility from inflation on the upside very well.”
Goodfriend also said that Bernanke’s idea for setting an explicit
inflation target -- highlighted as an area of disagreement with
Greenspan -- would be merely an extension of the Fed’s growing efforts
to be transparent and open about its policy goals and intentions.
“The Fed has been doing something very close to formal inflation
targeting over the past 18 years or so. Making it a little more explicit
would be a good thing,” he said. “In any case putting a priority on low
inflation is the foundation for effective monetary policy, whatever the
goals happen to be.”
Goodfriend also said Bernanke, who has rarely offered his thoughts on
political issues or fiscal policy, might try to narrow his portfolio to
focus more specifically on monetary policy and issue where the Fed can
make a difference.
But that could be tough as he makes the transition into a position where
Congress, financial markets and the public at large will seek his
guidance on a wide range of economic issues.
Bernanke's first test will begin within weeks, when members of the
Senate Banking Committee could grill him on anything from rising budget
deficits and future tax cuts to the nation’s trade deficit and energy
policy.
“I think that Bernanke will get an intense hearing before the committee,
and he ought to get an intense hearing,” Sen. Paul Sarbanes of Maryland,
the top Democrat on the banking panel, said Monday.
Shelby, whose panel is charged with considering the nomination, said he
expected Bernanke will face “a vigorous examination on both sides of the
aisle,” agreed committee Chairman Richard Shelby, R-Ala. But he saw no
obstacles to Senate confirmation.
© 2005 MSNBC Interactive
© 2005 MSNBC.com
http://msnbc.msn.com/id/9817877/
--
Steven D. Litvintchouk
Email: sdlitvin@earthlinkNOSPAM.net
Remove the NOSPAM before replying to me. |
|
| Back to top |
|
|
Steven L.
Guest
|
| Posted:
Wed Oct 26, 2005 12:01 am Post subject:
Re: Bush nominates Bernanke |
|
|
Mike Stone wrote:
| Quote: | Steven L. <sdlitvin@earthlinknospam.net> wrote:
the PPI starts to soar, it's often too late. You're then forced to
drastically raise interest rates and send the economy into a recession.
Take away our housing boom and we'd probably still be stuck in a recession.
If not recession, we'd definitely have very small GDP growth.
Matter of fact, most of the rest of the world is fearful of our housing boom
dying off.
http://www.townhall.com/opinion/columns/robertnovak/2005/08/13/155168.html
|
The housing bubble (it's long since past being a boom) has been driven
by debt. Refinancing to lower interest rates gave people more
disposable income. That's over now. I expect this bubble to burst,
just as the stock market bubble burst in mid-2000.
--
Steven D. Litvintchouk
Email: sdlitvin@earthlinkNOSPAM.net
Remove the NOSPAM before replying to me. |
|
| Back to top |
|
|
|
|
|
|
FAQ
Memberlist
Register
Profile
Log in to check your private messages
Log in