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XMFRedwood (87.70)

May 2010



Modern Day Seigniorage - Greek Style

May 27, 2010 – Comments (3)

Media reports suggest Greek investors are snapping up gold coins in large numbers, but what's more interesting is the price they are paying, and to whom.  If the reports are to be believed, the Greek government is selling gold sovereigns at an price per ounce of $1,700.  This is a whopping $500 over the London spot price.    [more]



The Slippery Slope

May 26, 2010 – Comments (0)

Back in 1895, the U.S. government was in a pickle.  The country had gone through a boom and bust and was losing gold left and right to investors exchanging paper for bullion.  Gold stocks were declining so fast that the U.S. risked not having enough gold on hand to meet demand and if those trends continued, would default on its promise to exchange gold for paper notes.  After exhausting domestic sources of funds (the big New York banks) in 1894, the only solution was to borrow gold from foreigners.  But the Cabinet was dead set against being in debt to a bunch of foreigners.  What a far cry from today, where Japan, China and others finance our government.   [more]



Real Balance Sheet of the U.S. Government

May 25, 2010 – Comments (1)

Has anyone ever looked at the balance sheet of the U.S. Government?  Check it out here, click on “Financial Statements” and go to page 11 of the document.  I'll summarize it quickly*:  [more]



Why East is Growing Faster Than West

May 24, 2010 – Comments (5)

The West is in trouble because our competitive position is slowing being eroded – in many ways.  This isn’t a surprise because companies that dominate markets eventually have to lower their prices and respond to competition.  And competition over the past 50 years has been relentless – first from the Japanese, then from the Asian tigers, and now from the Chinese.  Almost everything trends toward a commodity.    [more]



Russia Understands Power

May 21, 2010 – Comments (8)

Having just gotten back from Russia, I can assure you that Russians understand power.  Take for example the statue of Marshal Zhukov outside the Kremlin.  He’s massive and astride a giant horse, which for most countries in the West would be enough.  But not for the Russians.  Under the hooves of the Marshal’s horse is a flattened, defeated German eagle.  The imagery is startling.  See here:   [more]



Can the IMF Save the United States?

May 21, 2010 – Comments (5) | RELATED TICKERS: GG , NEM , ABX

Ahhhh, the irony.  For years the U.S. and the G8 have policed the international financial system, forcing austerity measures on wayward emerging economies through their proxy the International Monetary Fund.    [more]



Losing Influence in Central Asia

May 20, 2010 – Comments (1)

I just got back from a trip to Central Asia and what I found out is disturbing.  Thanks to an ineffectual State Department, U.S. influence is rapidly on the wane in Kyrgyzstan, which is important to the U.S. because we ferry troops into Afghanistan though our base at Manas airport.  We have few allies in the region, especially so after our relations with the Uzbeks soured, making Kyrgyzstan an important partner.    [more]

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