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Ron Paul : Tough Medicine is the Treatment Says Dr. No (13 Mar 08)

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March 15, 2008 – Comments (8) | RELATED TICKERS: GLD , SKF , SRS

Not much to say on my part, Dr Paul nails it.

 

8 Comments – Post Your Own

#1) On March 15, 2008 at 10:54 PM, lquadland10 (< 20) wrote:

Hey Aba, I thank you for keeping me less emotional and more logical. I have changed my mind again. I was talking to an old timer and he said if you had a job and a garden the Depression was not to bad. Yep, I think now I need a good depression. Leaman next and check this out Borrowers Find What Citigroup Says Isn't What It Does (Update1)

By Bob Ivry

March 14 (Bloomberg) -- Real estate developer John Wimmer paid Citigroup Global Markets Realty Corp. almost $1 million last year to lock in a 5.6 percent mortgage rate on the refinancing of six commercial properties.

At the November closings, Citigroup, citing plummeting demand for mortgage bonds, boosted the rate to 7.123 percent.

``I was very upset,'' Wimmer said in a phone interview from his office in Hales Corners, Wisconsin. ``We had many proposals to lock the rate with other financial institutions and we picked Citigroup because of their reputation and strength.''

Wimmer sued. So did a developer in Kentucky after Prudential Mortgage Capital Co. invoked the ``material adverse change'' clause in their loan agreement to raise his rate.

Banks have used the clause after calamities such as the terrorist attacks of Sept. 11, 2001, to free themselves from lending obligations. With the spreads between commercial mortgage- backed securities and 10-year U.S. Treasuries at their widest in at least 12 years, banks are applying the concept to avoid lending at money-losing rates, scuttling deals, leaving borrowers at risk and casting doubt on contracts that have already been negotiated.

``We are in an extremely uncertain time and no one should feel sanguine about any agreements that are on the table,'' said Scott A. Singer, executive vice president of Singer & Bassuk Organization in New York, which arranges real estate financing. ``Lenders with the best intentions find the game changing on them. This is a time to put your head down and execute business as quickly and efficiently as you can.''

Sept. 11 Attacks

Commercial mortgage lenders had not used the material adverse change clause, or MAC, to back out of commitments since the Sept. 11 attacks, and the case law on its invocation in mortgage lending has not been established, said Douglas Buck, a real estate attorney at Foley & Lardner LLP in Madison, Wisconsin.

``No one has developed a standard,'' Buck said. ``To borrowers, material adverse change has to be a total catastrophic event, like 1929 or 9/11, but I don't think that's what it is in the eyes of the lender. IF there's a 60- or 70-basis point jump in the market, that's not a material adverse change. It's a bad business decision.''  which one will fall next and Ron Paul will be our next president.

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#2) On March 16, 2008 at 3:24 AM, AnomaLee (28.76) wrote:

It's not that bad... We'll either have a new currency within 10 years or we'll be buying everything in Euro's. 

Nuevo Peso
Nuevo Soles
    Meet the Nuevo U.S. Dollar

Hey, we're all learning to speak spanish anyway... 

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#3) On March 16, 2008 at 4:29 PM, SLVreason (< 20) wrote:

So with the fed most likely to cut the rate again on tuesday, will commodities continue to boom and till when? how much further down can the us dollar go?

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#4) On March 16, 2008 at 7:36 PM, abitare (49.76) wrote:

What is working is: commodities. All the funny money and hedge funds are running up commodities. China has raised rates 6 times this year in order to stop the inflation. 

Commodities will continue to boom as long as the dollar is in trouble and due to supply/demand issues. If Helicopter Ben raises rate the commodity market will take a hit. But long term there is plenty of room in the commodity market for a long term bull.

The world wants a better diet and the American lifestyle, that will take commodities and raw materials. Not all commodities will rise like parabolic gold and silver. 

However, in a typical recession ALL assets decline, including commodities. The problem has been the "global growth" and declining dollar have made a huge run up in commodities as people are trying to protect their wealth.

I am not buying gold or silver at this level. But there does seem to be some very systemic issues in the market, which may move gold much higher. 

I like agriculture and short the investment banks more then gold.

The dollar can go much, much, much lower. All fiat currencies fail it is just a matter of time. Not worth a continental is one of the first currencies to fail in the US. 

Take a look here at the dervative market:

http://bp2.blogger.com/_H2DePAZe2gA/R9sT8yG-HKI/AAAAAAAAA7k/A-SlM2Kotng/s1600-h/OCCpg1.png

The imploding has just begun BSC was not even in the top 25.

Also take a read of deflation American style here.  

My investment ideas.

1. Short investment banks. SKF works or any bank here 

2. Buy commodities agriculture and silver over gold. I prefer the actual hard asset in hand or safety deposit box (at least $30k  in hard assets for someone over 50 years old, a safe + a hand gun). There might be a systemic failure in the coming years, having gold or silver would be better then paper in a bank that is closed down or froozen.  

If you are under 60 years old you should spend at least $25k to get some sort of side business. Lawn care, A/C repair, resume writing, selling ice cream......

As a point: EVERYONE is short the US dollar, Everyone is Long gold and oil, which means... there might a huge reversal on any good news. If I wanted to buy in I would either be slow accumulator or wait for the good news and buy the dip.  

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#5) On March 16, 2008 at 9:41 PM, abitarePERFECT (29.23) wrote:

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#6) On March 16, 2008 at 11:28 PM, lquadland10 (< 20) wrote:

Short investment banks. SKF works or any bank here   so what does this report mean and how do I read it. Please break this down for me.

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#7) On March 16, 2008 at 11:31 PM, abitare (49.76) wrote:

lq,

Take a look at abitareperfect blog. Those banks are listing their derivative amounts. It is an amazing amount of leverage. 

JPM has $91 TRILLION in derevatives an AMAZING amount. 

Nice to meet you Hendrix

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#8) On March 17, 2008 at 12:04 AM, HendrixGal (< 20) wrote:

Thanks for taking the time to stop by my blog. I left a nice comment on my blog to you. I wish you much success on here.  But please understand that some of us are new and just use a lot of common sense and plenty of street smarts in making their choices.

Plus I don't gamble with money, I research my companies before I invest my HARD EARNED money down on them for the LONG RUN.   Just like I will on here.  Do my research first.  So let the little fish swim next to big ones on here. Okay.....  Peace~ Happiness and Harmony~ Former Northern California Gal~   Dana   Stillwater. Oklahoma

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