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BILL_THA_PHARMACIZT
Member since Nov 18th 2004
942 posts
Mon Mar-21-05 07:36 PM

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"GM Declaring bankruptcy...dollar crashes by 90%"


          

It may take a few months for this to play out. You may have time to buy silver at under $10/oz. for a few more weeks or months. But after GM declares bankruptcy, which may take between 3 months to a year, get ready for the dollar to crash by more than 90% in the following 6-12 months.


http://www.kitco.com/ind/Hommel/printerfriendly/mar182005p.html

You are on a rock spinning around the sun. It is a very oppressive system.

  

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Topic Outline
Subject Author Message Date ID
But they don't hear you tho| Article text here:
Mar 21st 2005
1
Damn
Mar 21st 2005
2
Not Quite
Mar 26th 2005
27
RE: GM Declaring bankruptcy...dollar crashes by 90%
Mar 21st 2005
3
try to spend a dollar in Europe.
Mar 21st 2005
4
RE: try to spend a dollar in Europe.
Mar 21st 2005
6
      The dollar is weak, and has no prospect of getting
Mar 21st 2005
7
           RE: The dollar is weak, and has no prospect of getting
Mar 21st 2005
9
                I never commented on american product prices.
Mar 21st 2005
10
                RE: I never commented on american product prices.
Mar 21st 2005
12
                     They are holding onto our debt like crazy tho.
Mar 21st 2005
13
                     RE: They are holding onto our debt like crazy tho.
Mar 21st 2005
14
                     bwahahahahahaha
Mar 26th 2005
24
                          RE: bwahahahahahaha
Mar 26th 2005
26
                no subject
Mar 26th 2005
22
                     RE: no subject
Mar 26th 2005
25
RE: GM Declaring bankruptcy...dollar crashes by 90%
Mar 21st 2005
5
      RE: GM Declaring bankruptcy...dollar crashes by 90%
Mar 21st 2005
8
           RE: GM Declaring bankruptcy...dollar crashes by 90%
Mar 21st 2005
11
                RE: GM Declaring bankruptcy...dollar crashes by 90%
Mar 22nd 2005
16
                RE: GM Declaring bankruptcy...dollar crashes by 90%
Mar 22nd 2005
20
i'd love to read 3M's take on this
Mar 22nd 2005
15
editorial from investment editor of the Times
Mar 22nd 2005
17
this is crazy...
Mar 26th 2005
23
      This speaks to being overleveraged
Mar 26th 2005
28
this is quite interesting.
Mar 22nd 2005
18
RE: GM Declaring bankruptcy...dollar crashes by 90%
Mar 22nd 2005
19
interesting stuff.
Mar 26th 2005
21
Exactly/Worry about Gas Prices & Healthcare Costs
Mar 26th 2005
29

FireBrand
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Mon Mar-21-05 07:41 PM

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1. "But they don't hear you tho| Article text here:"
In response to Reply # 0
Mon Mar-21-05 08:10 PM by FireBrand

  

          

Ceasar was supposed to be a god. Julias Caesar was killed on the Ides of March. (March 15th)

Today, we don't make men gods. Instead society has made our financial system into a false god.

On March 15th, 2005, (the ides of March) we may have just witnessed the beginning of the death of our financial system as General Motors stock took a nosedive from $34/share down to $30. http://finance.yahoo.com/q/bc?s=GM&t=5d&l=on&z=m&q=l&c=

It does not seem like much (GM down just over 10% in one day), but as of March 17th, the stock is down to $28.35, and the market cap is down to $16 billion. (GM is down nearly 18% for the week.) It's the type of volatility that we usually only see in silver stocks!

What does this mean?

GM's stock price decline is like a dagger right into the heart of the U.S. financial system, and the dollar itself!

Why did it happen?

Apparently, someone in power did the equivalent of shouting "the emperor has no clothes" and people woke up, and are beginning to see more clearly! The media decided it was time to expose the truth that GM is nearly insolvent, and will expect to lose $1.50/share in the first quarter alone!

But the story is worse than that! GM has $300 billion in debt http://finance.yahoo.com/q/ks?s=GM

...and has a market cap, now, of $16 billion. See the problem there? The bondholders could buy the company nearly 20 times over if they used their money to buy stock instead of loan it to the company. The implication is clear--that GM is headed towards bankruptcy, and will default on the bondholders, who will then own a company worth less than $16 billion dollars!

For every one point that interest rates rise, refinancing GM's debt will cost an additional $3 billion in annual interest payments -- money that they clearly do not have! Where is GM going to get another $3 to $6 to $9 billion as interest rates rise by 1%, 2%, and 3% more? Selling cars? Nope. Selling stock? Unlikely in this market! Borrowing more? From who? The U.S. government itself is propping up this bond market, and there are no buyers even for U.S. bonds, and there haven't been for months now!

So, therefore, GM will soon be a $300 billion dollar blow-up!

How big is that? It's bigger than Enron, Global Crossing, LTCM, K-Mart, and the IRAQ war all put together!

$300 billion going belly up is a big enough event to topple the U.S. government! How so? It will shake the confidence in the entire financial system. Companies as big as GM are not supposed to go bankrupt in our "normal" world. They are "supposed" to be "too big to fail".

The value of the "official" U.S. gold hoard of 261 million oz., at $440/oz. is only a mere $115 billion.

See what this $300 billion blow-up will mean? Imagine the financial chaos as a pile of wealth almost three times larger than the current value of the U.S. "official" gold hoard evaporates!

The annual deficit is around $700 billion. How will the U.S. government sell bonds to finance the deficit if bondholders are getting wiped out?

If the government can't sell bonds while running a deficit, then the government must simply be printing money to fund the deficit--and they are, as can be seen in the rate of growth of the money supply, M3! Therefore, inflation is raging, and interest rates must keep pace, which is why GM is doomed!

Interest rates must head up, as confidence in the U.S. dollar bond market will be shaken like a tree in a hurricane!

Foreign nations are all sounding the alarm already that they will be selling U.S. bonds to diversify the holdings of their central banks: Russia, India, China, South Korea, Japan... what major foreign nation is left to buy them?

A tsunami of dollar selling is about to begin, and will make the recent dollar decline seem like a small bump in the road.

It may take a few months for this to play out. You may have time to buy silver at under $10/oz. for a few more weeks or months. But after GM declares bankruptcy, which may take between 3 months to a year, get ready for the dollar to crash by more than 90% in the following 6-12 months.

Germany's hyperinflation in the 1930's took about a year and a half. Recently, Argentina's took place nearly overnight. Who knows which way the dollar will die, whether a quick death, or a more slow and painful one?

Either way, the dollar is dead. Long live gold and silver!

Jason Hommel
Silverstockreport.com





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Bdiddy04
Member since Oct 28th 2004
1591 posts
Mon Mar-21-05 10:02 PM

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2. "Damn"
In response to Reply # 1


  

          

I need a moment to digest this. I post something tangiable tonight or tomorrow morning.

_______________________________________
Follow me @bstokessmooth

  

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M2
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Sat Mar-26-05 08:45 PM

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27. "Not Quite"
In response to Reply # 1


          

Starting off - let me say that I've already diversified my cash into foreign currencies as a "hedge" to make money from the delta in the currencies, but I don't think that the US currency is going to crumble, but it will fall another 15-20%.


First - Let's be real, the purpose of this article is to sell Silver and Gold, pure and simple.

Second - Whilst GM does have a significant impact on the American Economy by way of the amount of revenue it pulls in and the # of people it employs, it's #3 position on the Fortune 500 is spurious at best, as literally dozens of companies have outearned GM as far as profits go for years.

Thing is, GM is still earning a profit - yes, they're cutting expectations as far as earnings, but they're still earning a profit and their Long Term debt stands at about $160B not $300B as the Article stated.

I don't know all the details of GM's Debt situation, but I seriously doubt that 100% of the interest rates on their debt is tied to theinterest rates set by the Fed - like most corporate bonds, the bonds were sold at a particular interest rate that won't change over the life of the bond.

GM will have to pay more in interest to sell future bonds, but the existing debt isn't going to suddenly get too expensive to service as US interest rates go up.

Also, GM isn't in a situation where its assets outweigh it's debts, it has a positive balance sheet with (Nearly $40B in Cash) and will free up more cash via layoffs, probably phasing out another brand and by working to cut its costs related to healthcare, as the healthcare costs it pays for present employees and pensioners is crushing the company cost wise.

I could see if the company was unprofitable and had more debt than assets and a rapidly dwindling liquid asset position, but the trend over the last couple of years has been that their liquid assets have gone up.

I would say that GM's position is tenuous, sure - but on the verge of Bankruptcy?

No.

GM should be able to service its debt, even with higher costs when they have to take on new debt, but there is room in the company as far as sheeding unprofitable assets and restructuring to make sure the money is available.

Finally, let's put GM in perspective - Toyota is already expected to Surpas GM as the #1 Car Maker in the world in the coming years and the General's relevance as a dominant player in American Business has been fading for years.

It's more emotional than anything else, if GM does go bankrupt or becomes a minor player (they arguably already are) in the car industry, there will be reprocussions, but not enough to take 90% of the value out of the dollar.

Fourth - Foreign nations are STILL buying our bonds, so saying that they no longer are is a straight up lie.

They buy our bonds, because they need us to buy their products - even if they diversify their bonds, they won't stop buying our bonds as we're their biggest customer.

The return they get from the bonds + the revenue their economies is get, makes it worth it.

They're not going to call in our bonds like a marker on the Sopranos.

Think of it like this: This guy you know, he owes you money and pays it back with interest, he also comes to your store and buys goods every day, he's your biggest customer and without him you're out of business.

Do you stop lending him money because he misses a mortgage payment, ye yet keeps paying and buying from you, or do you help him move to a cheaper apartment and make sure he can still keep paying you?


Don't misinterpret a service pitch for financial analysis.





Peace,










M2



The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

  

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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Mon Mar-21-05 10:18 PM

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3. "RE: GM Declaring bankruptcy...dollar crashes by 90%"
In response to Reply # 0


  

          

>http://www.kitco.com/ind/Hommel/printerfriendly/mar182005p.html

This is complete and utter propaganda.

It was written with a chicken little mentality by someone who wants to scare you into buying gold and silver from him.

First of all, the federal Government won't let the largest American car maker go into bankruptcy, and the talk about the dollar falling by 90% is complete bullshit, contingent on the entire world disavowing America as the economic and political superpower, something it can't do.

S.ean | Geezers need excitement. If their lives don't provide it they incite violence. Common sense. Simple common sense.

  

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FireBrand
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Mon Mar-21-05 10:31 PM

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4. "try to spend a dollar in Europe."
In response to Reply # 3


  

          

I hear it's an interesting experience.
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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Mon Mar-21-05 10:44 PM

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6. "RE: try to spend a dollar in Europe."
In response to Reply # 4


  

          

>I hear it's an interesting experience.

There is a difference between the dollar being weak and the euro being strong, and the dollar crashing 90%.

Just as a guide post... that would mean you would spend almost 180 dollars for a loaf of bread.

And, while I bet you think your post was cute... go try to buy an American product in Europe, yeah... a lot cheaper than the European product right?

S.ean | Geezers need excitement. If their lives don't provide it they incite violence. Common sense. Simple common sense.

  

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FireBrand
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Mon Mar-21-05 10:50 PM

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7. "The dollar is weak, and has no prospect of getting"
In response to Reply # 6


  

          

stronger. Stronger with what? Nanotechnology? We don't CREATE shit here anymore. The only thing keeping this economy affloat is some slick slight of hand reassuring consumer confidence. Korea is now talking about converting to the euro too? You know what it would mean for China, and other asian countries that own our debt to convert to the Euro?

come,come man.


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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Mon Mar-21-05 10:56 PM

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9. "RE: The dollar is weak, and has no prospect of getting"
In response to Reply # 7


  

          

>stronger.

Man, you obviously know little about international finance either.

1.If American goods are cheaper they will be bought, now while figuring in the contingency that they will never be as cheap as Chinas, but still with them being cheaper they will be bought.

What does this do?

It provides liquid capital to American producers.

Now, I don't think that America should think that its future is built on a production based economy, but in the right now, if we've got something we can use it.

2.Germany and France are piling up huuuuuuuge debts. They are breaking the EU's on rules to keep piling on these debts, as the debts get bigger and more Euros go toward financing that debt and less towards capital investment... guess whats going to happen?

If you answered "the Euro is going to fall" then you would be right!

And, finally, Korea won't switch to the Euro.

Why?

Because you don't cut the aid you recieve from your largest donor by 1/3 to exchange it from dollars to Euros.

S.ean | Geezers need excitement. If their lives don't provide it they incite violence. Common sense. Simple common sense.

  

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FireBrand
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Mon Mar-21-05 11:08 PM

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10. "I never commented on american product prices."
In response to Reply # 9
Mon Mar-21-05 11:08 PM by FireBrand

  

          

I don't know where they stand to be honest.

As for Korea? Well, if they and China continued to be cornered on this energy issue I think they might consider moving on. They know that we can't afford to move more troops to the line in order to hold Il an'em at bay.

China? Well, I dunno. They are getting agressive with acquisitions such as IBM, etc- and I don't know that they wouldn't do what is best for their considerable market.

Japan is in hand I think.

and no, I don't know much about finance, let alone international finance which is why this site is so dope cus folk like you can enlighten me



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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Mon Mar-21-05 11:19 PM

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12. "RE: I never commented on american product prices."
In response to Reply # 10


  

          

>I don't know where they stand to be honest.

Its simple enough... if it costs fewer dollars to make a product, and you get more dollars for every Euro, American made products are going to be cheaper than European products (people in France have actually started buying California sparkling wine {champaigne} because its that much cheaper. Its no way to plan for a long term economy, but right now its allowing liquid dollars to flow into the economy.

>China? Well, I dunno. They are getting agressive with
>acquisitions such as IBM, etc- and I don't know that they
>wouldn't do what is best for their considerable market.

China still needs America. It can't hold up the international economy. Its still 15 years away from that. If in 15 years we were having this discussion, then I would be acting like my ass is on fire, but not now, its not worth it. China, while the largest consumer of raw materials, isn't capable of the infrastructure to support the rest of the world like we are. They are holding on to our T-bills basically as an insurance policy if their economy gives out (which it could). If Chinas banking system crashes in the next 36 months (which is a possibility) and they start to sell off T-bills to prop up their economy, then I would act like my ass is on fire, but I think China is aware now of the very large scale problems any issues they have will result in, and are planning on a soft landing where they slowly start to write off the trillions of dollars in bad loans they have.


>Japan is in hand I think.

Yeah man, its a given.

>and no, I don't know much about finance, let alone
>international finance which is why this site is so dope cus
>folk like you can enlighten me

I do the little bits that I can. Keep up the good work on the moderating.

S.ean | Geezers need excitement. If their lives don't provide it they incite violence. Common sense. Simple common sense.

  

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FireBrand
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Mon Mar-21-05 11:27 PM

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13. "They are holding onto our debt like crazy tho."
In response to Reply # 12


  

          

Couldn't they be malicious with that? I should know more about T-bills, but I never study like I should. Can't T-note, bills, and (i forget the other denomination) be cashed in early with a penalty?



And as for France buying our wines and champagne...California Wines have actually beaten French wines in international competition. They might be buying Napa Valley ish not just because it's a bit cheaper, but because it's just better.

I dunno about the Champagne, that could be a different story.



******************************
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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Mon Mar-21-05 11:45 PM

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14. "RE: They are holding onto our debt like crazy tho."
In response to Reply # 13


  

          

>Couldn't they be malicious with that? I should know more
>about T-bills, but I never study like I should. Can't T-note,
>bills, and (i forget the other denomination) be cashed in
>early with a penalty?

To be general, our debt is T-bills.

The government needs some way to finance the debt, so they offer up an offering of treasury notes at some interest rate which can be bought by anyone. This is of course built on the idea that we can put the money we raise into capital ivestments and paying down the debt and with that the revenue of the government will grow at a greater rate than the interest rate we give to the buyers of the bills.

And, yeah T-Bills can be called in esp. by nations as necessary with a percentage penalty.

Basically what has happened is our economy is artificially propped up by the Chinese. They own a couple billion in t-bills, and because of that our interest rates have been depressed, which has allowed for this recent housing boom (which is basically what the economy has been built on since the tech bubble-- again this is all built on pretty gross generalizations, but you get the idea). Now the worst case scenario is that the chinese have a banking run which forces them to admit RIGHT NOW that they have several hundred billion in unserviceable debt, they will call in their t-bills and in reaction the American government will liquidate piles of investments, and raise intrest rates astronomically overnight. This will make your loan on a house unbelieveable, the housing market will drop out and the main fixture of peoples investments will very quickly become worthless.

Now what this is all held up by is the mutual knowledge that they need us, more than we need them. If that worst case scenario comes through, America will face a depression that dwarfs the one in the 30's, and because of that the world will face a depression that dwarfs the one in the 30's. But we still have enough power to make it through the depression (I don't think we could return to our current level of power, but I think we would return to a global prominence equal to the EU or England). But, if we were to get in trouble, and say create an artificial building boom that sucks up piles of raw materials we could price China out of competition and basically ruin them. They wouldn't have the infrastructure and power to make it through, and as long as we looked strong we would be alright (no matter what our national balance sheet says, because if we were to go by that America would already be in the middle of a destructive depression)

S.ean | Geezers need excitement. If their lives don't provide it they incite violence. Common sense. Simple common sense.

  

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afrobongo
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Sat Mar-26-05 04:47 PM

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24. "bwahahahahahaha"
In response to Reply # 12


          


>(people in France have actually started buying California
>sparkling wine {champaigne} because its that much cheaper.


______________________________

*TWINNING*

  

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chief1284
Member since Nov 08th 2004
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Sat Mar-26-05 08:19 PM

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26. "RE: bwahahahahahaha"
In response to Reply # 24


  

          

I know, I know! Just LOL! And get this from post 13:

"They might be buying Napa Valley ish not just because it's a bit cheaper, but because it's just better."

Damn some people in here need educating about wine!

------------------------------------------------------------

Check my man Lao at www.myspace.com/lazzriel

  

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hdub
Member since Oct 19th 2004
3264 posts
Sat Mar-26-05 02:48 PM

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22. "no subject"
In response to Reply # 9


          


>And, finally, Korea won't switch to the Euro.


i know for a fact that workers ate financial firms in singapore have been begging to be switched to the euro, what makes you so confident that asia's sticking with the dollar

...(the end)...

  

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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Sat Mar-26-05 05:03 PM

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25. "RE: no subject"
In response to Reply # 22


  

          

>i know for a fact that workers ate financial firms in
>singapore have been begging to be switched to the euro, what
>makes you so confident that asia's sticking with the dollar

I think I laid it out clearly when I said that no country in their right mind would be willing to cut the largest aid given to them by a 3rd to switch the currency into euro's.

Sean

  

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BILL_THA_PHARMACIZT
Member since Nov 18th 2004
942 posts
Mon Mar-21-05 10:32 PM

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5. "RE: GM Declaring bankruptcy...dollar crashes by 90%"
In response to Reply # 3


          

The entire corporate run fractional reserve banking system is propaganda.
Articles like the one I posted are chipping away at the illusion.


one piece at a time.

You are on a rock spinning around the sun. It is a very oppressive system.

  

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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Mon Mar-21-05 10:51 PM

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8. "RE: GM Declaring bankruptcy...dollar crashes by 90%"
In response to Reply # 5


  

          

>The entire corporate run fractional reserve banking system is
>propaganda.
>Articles like the one I posted are chipping away at the
>illusion.
>one piece at a time.

Holmes-- you posted an opinion peice, by a company that SELLS GOLD BULLION.

You aren't chipping away at an illusion, you are buying into propaganda from someone with no intention other than to sell you shit.

First of all your author ends with a sales pitch!

"Either way, the dollar is dead. Long live gold and silver!"

Secondly this guy knows not one iota of international finance.

No one is going to start selling American bonds anytime soon.

Why?

Because China can't prop up the global economy.

America is propping up the global economy.

What you posted is complete and utter bullshit. This guy is simply trying to scare people into buying gold TO MAKE A PROFIT FOR HIMSELF.

Was I the only one who took critical reading in school? Is it that hard to look at the origin of something and (in this case, blazingly) see its motivation?

S.ean | Geezers need excitement. If their lives don't provide it they incite violence. Common sense. Simple common sense.

  

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BILL_THA_PHARMACIZT
Member since Nov 18th 2004
942 posts
Mon Mar-21-05 11:16 PM

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11. "RE: GM Declaring bankruptcy...dollar crashes by 90%"
In response to Reply # 8


          


yes he is trying to make a case to buy gold and silver.
Everyone has motivation for their actions.
ALL politicians persue their interests , ALL business's persue their interests and ALL news articles do the same either in their ideology , philosophy or business interest(s). There is always going to be motivation and portions of information that gets twisted , ignored, manipulated or distorted....The trick is to find the pieces that can be empirically followed and backed-up ... and use that information to anticipate the future.

If you really want to do a piece-by-piece critique of the article as oppose to just acknowleging that it was written by sombody that was persuing their own interests - feel free.

im listening.

edumicate me.









You are on a rock spinning around the sun. It is a very oppressive system.

  

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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Tue Mar-22-05 12:20 AM

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16. "RE: GM Declaring bankruptcy...dollar crashes by 90%"
In response to Reply # 11


  

          

>If you really want to do a piece-by-piece critique of the
>article as oppose to just acknowleging that it was written by
>sombody that was persuing their own interests - feel free.

I can't promise anything as I have to work in the morning and have had a 12 pack so far, but I will do what I can.

>On March 15th, 2005, (the ides of March) we may have just
>witnessed the beginning of the death of our financial system
>as General Motors stock took a nosedive from $34/share down to
>$30. http://finance.yahoo.com/q/bc?s=GM&t=5d&l=on&z=m&q=l&c=
>
>It does not seem like much (GM down just over 10% in one day),
>but as of March 17th, the stock is down to $28.35, and the
>market cap is down to $16 billion. (GM is down nearly 18% for
>the week.)

First of all this is all speculation. Until the presentation of GM's numbers for the first and second quarters of this year this guy is going off of inference and implication. And while your and his handy response is some Enronian like scheme of debt hiding, you can't hide the amount of money this guy is talking about.

>What does this mean?
>
>GM's stock price decline is like a dagger right into the heart
>of the U.S. financial system, and the dollar itself!

While GM is a large company (the largest American car maker I believe) and his implication is possible, its worse than the worse case scenario... its like the worst case scenario without anyone saying "Hey... guys! This is really bad!" What this guy is proposing that is going to happen is the equivalent of a truck going down a mountian, and no one having the simple forsight to even press the brake a little.

>Why did it happen?
>
>Apparently, someone in power did the equivalent of shouting
>"the emperor has no clothes" and people woke up, and are
>beginning to see more clearly! The media decided it was time
>to expose the truth that GM is nearly insolvent, and will
>expect to lose $1.50/share in the first quarter alone!
>
>But the story is worse than that! GM has $300 billion in debt
>http://finance.yahoo.com/q/ks?s=GM
>
>...and has a market cap, now, of $16 billion. See the problem
>there? The bondholders could buy the company nearly 20 times
>over if they used their money to buy stock instead of loan it
>to the company. The implication is clear--that GM is headed
>towards bankruptcy, and will default on the bondholders, who
>will then own a company worth less than $16 billion dollars!

Again, as I just said, what this paragraph implies is that GM if the situation is as bad as they say it is, that GM isn't going to do anything to try and soften the fall, or even more importantly any creditors of GM are going to try to soften the fall.

Well, what will happen? The creditors of GM will break their necks to refinance and reorganize GM's debt into a manageable situation. Why? Because companies that go into bankruptcy don't pay back debts like companies that don't go into bankruptcy.

While these numbers may just be out of my ass, if I remember correctly debt repayment of companies that go into bankruptcy is something like 31%. Now, if you're a creditor to GM, you want to get more than just 31% of your investment back. You want to get all of it back and then some.

So what do you do? You change the payment schedule, you adjust the interest rate and you consolidate some of your credits with GM to make sure that it can pay you back. You might shake up the board, and insist that someone representing you is the chair or something like that... but under no circumstances do you want GM to go bankrupt... why? Because you'd have to write off 300 billion dollars in debt.

>For every one point that interest rates rise, refinancing GM's
>debt will cost an additional $3 billion in annual interest
>payments -- money that they clearly do not have! Where is GM
>going to get another $3 to $6 to $9 billion as interest rates
>rise by 1%, 2%, and 3% more? Selling cars? Nope. Selling
>stock? Unlikely in this market! Borrowing more? From who? The
>U.S. government itself is propping up this bond market, and
>there are no buyers even for U.S. bonds, and there haven't
>been for months now!

Conjecture and bullshit this paragraph is says wise Yoda.

First of all to expect that the debt repayment would stay the same in a worst case scenario is ignorant (see last paragraph) further, where is he getting this expectation that we are going to raise interest rates by 3%?

And as for buyers for US Bonds, hes basically lying. US bonds are still rated at buy, and he had better hope that there are buyers for US bonds, otherwise the interest rates he hints at would already be through the roof, making his house payment unpayable (see my last post to FireBrand)

>$300 billion going belly up is a big enough event to topple
>the U.S. government! How so? It will shake the confidence in
>the entire financial system. Companies as big as GM are not
>supposed to go bankrupt in our "normal" world. They are
>"supposed" to be "too big to fail".

Again, all hyperbole and bullshit, this guy is speculating so much I want to call him a 49er and try to sell him a pair of jeans. While a GM bankruptcy is a bad bad situation, it won't wreck the federal government, and the entire financial system. Will it cause a big shock (again, even postulating that it could happen) yes. Will it destroy the government?

Not in your or mine own wildest dreams.

The Federal Government can bail out GM if necessary. Thats what happens when you can talk about trillions of dollars in debt and have it only be 4.6% of your GNP.

>The value of the "official" U.S. gold hoard of 261 million
>oz., at $440/oz. is only a mere $115 billion.

What does this have to do with anything? This guy is simply trying to scare y'all into some 'Deep Impact' like fear that we are going to be destroyed by the restructuring of GM's debt. And first of all it won't happen, and secondly the goverments gold hoard doesn't matter because we haven't been off the gold/silver/anything standard for years.

Now, does this create a tricky situation? Yes. It basically means that the green in your wallet only has value because you and others think it does.

Now if other countries thought that the dollar didn't have value, you know what would happen?

Life would resemble the dark ages over night.

World wide.

And there are enough smart people working in the global financial markets who if only for selfish self preservation can't let that happen. So... again... its not gonna happen like this Chicken little wants you to think it is.

>See what this $300 billion blow-up will mean? Imagine the
>financial chaos as a pile of wealth almost three times larger
>than the current value of the U.S. "official" gold hoard
>evaporates!

Who gives a fuck about the US gold hoard? Like I said earlier, our gold hoard doesn't have anything to do with our currency, and what really matters are the T-bills owned by China, Japan, American citizens and the EU. This guy is a fucking sham, and I feel like I Am wasting my time with this pitiful shit.

>The annual deficit is around $700 billion. How will the U.S.
>government sell bonds to finance the deficit if bondholders
>are getting wiped out?

>If the government can't sell bonds while running a deficit,
>then the government must simply be printing money to fund the
>deficit--and they are, as can be seen in the rate of growth of
>the money supply, M3! Therefore, inflation is raging, and
>interest rates must keep pace, which is why GM is doomed!

The government is selling bonds. China continues to buy mountians of American debt. This guy is a fucking sham.

>Interest rates must head up, as confidence in the U.S. dollar
>bond market will be shaken like a tree in a hurricane!

Ooooh! Now he gets all poetic and shit! Like a tree in a hurricane! Isn't that just heavy imagery.

What this guy is basically saying is that the world is going to knowingly toss itself into a global economic catastrophy that we can't even use the depression of the 30's as a sounding board on. What this guy is saying is that all of the American bond holders are going to bankrupt the American government first at their own peril, and secondly at their neighbors peril.

So, lets get in on some doomsday shit...

Lets say that GM does file for bankruptcy, and in a failed attempt the American government fucks up the dollar while trying to buy out GM's debt. In a run China, Korea and Russia sell call in their t-bills. The run on t-bills results in this guys fucking apocalyptic 90% fall in the Dollar.

As I am sure you know being all educated and everything... China's currency is tied to America's. Now the compexities of this, and how it has pushed us into our current position is heavy, but they couldn't just say overnight "well... the Yuan (Chinas currency) isn't tied to the dollar any more" so... in result, China's currency would fall by 90% likewise.

Bankrupting them too.

Would you willingly bankrupt yourself?

I didn't think so.

This guy is a fucking sham.

S.ean | Geezers need excitement. If their lives don't provide it they incite violence. Common sense. Simple common sense.

  

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TarnishedSpoon
Member since Aug 20th 2003
366 posts
Tue Mar-22-05 02:12 PM

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20. "RE: GM Declaring bankruptcy...dollar crashes by 90%"
In response to Reply # 11


  

          

>im listening.
>
>edumicate me.

So I did...

whats up, cat got your tounge?

Sean

  

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zewari
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7113 posts
Tue Mar-22-05 12:00 AM

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15. "i'd love to read 3M's take on this"
In response to Reply # 0


  

          


_¸»¬æ¤º²°¯¯°²º¤æ¬«SiG»¬æ¤º²°¯¯°²º¤æ¬«¸_



"Moral fibre in your diet helps eliminate all your bullshit" - PG

  

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zewari
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Tue Mar-22-05 12:34 AM

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17. "editorial from investment editor of the Times"
In response to Reply # 0


  

          

source: http://www.newstatesman.com/Economy/200501310021

The business - Patrick Hosking junks General Motors
Patrick Hosking
Monday 31st January 2005

General Motors is less a car-maker these days than a bank, but a bank with debts in excess of $300bn. Now the penny is finally dropping on Wall Street, writes Patrick Hosking

To understand the disturbing imbalances in the US economy, look no further than General Motors. The idea of GM as a proxy for wider American capitalism is well established. "What's good for General Motors is good for America," its chairman Charlie Wilson is supposed to have told the US Senate in 1953, and the quotation (not entirely accurate, but close) passed into folklore. To some Americans, especially in and around Detroit, GM virtually embodies the US. Just after 9/11 it launched its "Keep America Rolling" campaign, which put across the idea that it was a patriotic duty to go out and buy a new Chevvy.

GM, the biggest corporation in the world in 1953, is still a decent-sized company, employing 325,000 people and churning out parking lots-worth of Chevrolets, Pontiacs, Buicks, Cadillacs and Oldsmobiles. In Britain, it makes Vauxhalls and on the Continent Saabs and Opels. Yet it is no longer primarily a car firm. GM is rather a vast agglomeration of financial assets and liabilities with a small car-making operation on the side. It makes more money from financial services than from car manufacturing. Its debts, however, now total $301bn - which is roughly the GDP of a medium-sized European country such as Belgium. Its unfunded healthcare promises (to workers and former workers) are $57bn - more than twice its entire stock-market value. It plugged the vast deficit in its pension fund last year by getting deeper into debt to bondholders.

GM's entire sales pitch has been built on lending Americans the money to buy their cars. The "Keep America Rolling" campaign offered no less than five years' free credit to buyers, a perk which cost the firm $3,600 for every car it shifted.

There are other little local difficulties. GM has a 10 per cent stake in Fiat's car-making division. Now Fiat is threatening, under a deal agreed five years ago, to force it to buy the other 90 per cent. That would add another $10bn to GM's mushrooming debts.

The penny has already dropped on Wall Street. Standard & Poor's, the influential credit rating agency, warns that it might have to downgrade the company's credit. But its bonds are already in the lowest category of "investment-grade" quality. A downgrade would entail them being reclassified as junk bonds. That would force many institutional bondholders to sell. Pension funds generally aren't allowed to own junk - or "high-yield" debt, as the banks delicately call it.

It is a measure of the surreal world of the financial markets that the main concern is not that one of America's biggest employers is looking fragile, but that the flood of paper reclassified as junk could destabilise a corner of the bond market. Some investment bankers are changing definitions so that GM's potential junk won't be defined as junk in the indexes. Black can become white if it ensures the smooth running of the capital markets.

GM's problems chime exactly with a new report from Edward Chancellor, author of Devil Take the Hindmost, the story of investment bubbles through the ages. In Crunch Time for Credit? (out on 1 February), he argues that both America and Britain are in a huge credit bubble, which will eventually burst with hugely destructive consequences. The cheapness and abundance of credit has created the illusion of prosperity and boosted property values and shares. Puffed-up property values have in turn provided security for more loans. "An Englishman's home is no longer just his castle," writes Chancellor. "It is also a leveraged hedge fund, a pension fund, a cash machine and a source of limitless credit creation."

Central bankers have fanned the flames by slashing interest rates. Alan Greenspan, chairman of the US Federal Reserve, comes in for particular censure from Chancellor. The dismantling of credit controls in the 1970s and 1980s has allowed the banks free rein to splurge credit to almost anyone who wants it.

Companies such as GM have been inflating the bubble, borrowing colossal amounts and encouraging US consumers to do the same. GM today is just as much an iconic symbol of US capitalism as it was in Charlie Wilson's day. But then it was a manufacturer; now, to all intents and purposes, it's a bank.

The Financial Services Authority has often been left looking leaden-footed by its US counterparts. Eliot Spitzer, the New York State attorney general, has arguably done more to improve standards in London than the 2,000 FSA officials in Canary Wharf. Now the German regulator, BaFin, claims it has "concrete evidence" that Citigroup - working mainly on the FSA's home turf in London - manipulated the bond market last year. It has asked for a criminal investigation. Yet the FSA's inquiry has so far produced nothing.

Patrick Hosking is investment editor of the Times
_¸»¬æ¤º²°¯¯°²º¤æ¬«SiG»¬æ¤º²°¯¯°²º¤æ¬«¸_



"Moral fibre in your diet helps eliminate all your bullshit" - PG

  

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hdub
Member since Oct 19th 2004
3264 posts
Sat Mar-26-05 02:51 PM

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23. "this is crazy..."
In response to Reply # 17


          

...z's articles here definitely take this beyodn the one guy trying to sell silver level

...(the end)...

  

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M2
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Sat Mar-26-05 08:49 PM

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28. "This speaks to being overleveraged"
In response to Reply # 23


          


A situation many Americans and Corporations are in - now if you want to use GM as a Proxy for a situation many Americans and Corporations are in and say it's indicative of problems that will hit the economy from multiple angles.

Than yeah, I agree - let's go with that.

But GM's stock dropping, they're going to declare bankruptcy and take down the dollar by 90% is a bit fatuous.






Peace,









M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

  

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jose3030
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Tue Mar-22-05 12:57 AM

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18. "this is quite interesting."
In response to Reply # 0


  

          

________________________
http://www.twitter.com/jose3030 - Twitter

  

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TarnishedSpoon
Member since Aug 20th 2003
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Tue Mar-22-05 09:08 AM

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19. "RE: GM Declaring bankruptcy...dollar crashes by 90%"
In response to Reply # 0


  

          

http://money.cnn.com/quote/quote.html?pg=qu&sid=2160&osymb=GM&time=5yr&uf=0&x=17&y=9

When looking at GM's 5 year history, while this is the lowest it has been the drop 6 days ago isn't the largest its had in the last 5 years, and when taken with the big picture looks like a restructuring and correction of an outrageously inflated stock price.

Sean

  

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FireBrand
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21. "interesting stuff."
In response to Reply # 19


  

          


******************************
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******************************
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<----Aiight, I'ma set it. YO son, check the fly shit son!

  

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M2
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Sat Mar-26-05 09:10 PM

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29. "Exactly/Worry about Gas Prices & Healthcare Costs"
In response to Reply # 19


          


Plus their Balance Sheet as far as Liquid Assets has been improving lately, that's another positive sign with respect to them being able to service their debt.

What's going to drag the economy down is the rapidly increasing cost for Gas/Energy (Hitting GM hard) and the rapidly rising costs for Healthcare (Also hitting GM Hard) for American manufacturers, Healthcare costs are a huge issues as they're having to fork over billions in healthcare costs, whilst their competitors operate in nations that have universal healthcare and have healthier citizens, so they don't have that cost dragging down their profits.





Peace,








M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

  

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