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29-Apr-11 News -- Hamas declares Quartet 'obsolete', while West mulls aid cutoff to Palestinians


Skepticism over Fatah-Hamas reconciliation

** 29-Apr-11 News -- Hamas declares Quartet 'obsolete', while West mulls aid cutoff to Palestinians
** http://www.generationaldynamics.com/cgi ... b#e110429b


** 29-Apr-11 World View -- Explosion in Marrakesh, Morocco
** http://www.generationaldynamics.com/cgi ... 29#e110429

Contents:
"Hamas declares Quartet 'obsolete', while West mulls aid cutoff to Palestinians"


### World View - Explosion in Marrakesh, Morocco
"A terrorist explosion in Marrakesh, Morocco, kills 14 people"
"Syrian protesters in Daraa may have anti-tank guns"
"U.S. GDP growth falls sharply in Q1"
"Jimmy Carter blames South Korea for starvation in North Korea"

Everything in the Israel arena is obsolete, except weapons. Those are pretty much up to date on Israel's side, not so much on the side of Palestine, but that will change after they are a recognized nation. Suppose they all meld together, forswear violence, recognize Israel and become a state. And then they start building a "security force" and that security force's job is to flat stop all Israeli incursion into their country? And Israel kills a bunch of them, and they declare this to be an act of war and ask for UN support against an agressor state. What then? Right now, they'd have support from most of Europe and Russia and quite a few other places.

Reflecting on the finance forum, now there is some discussion as to whether or not Bernake has managed to derail the collapse into inflation. Some time back, I suspected such a thing was happening, and was considering getting into the market, but didn't. Glad I didn't, as the dot com bubble burst about a month later.

And speaking of bubbles, I ran across this today:

http://www.marketwatch.com/story/silver ... genumber=1

Which contains the lovely quote:
**************
“They’re all going to correct very sharply this summer,” he said, referring also to industrial metals such as copper, which he said faces an inventory glut because of stockpiling by China, its biggest buyer.

He thinks silver especially is in a classic mania. I agree.
***************

I too agree. When the commodity bubble breaks, probably this summer, the fallout will work its way through the economy and be utterly devastating a few months later due to falling sales and subsequent layoffs.

I THINK redwood will likely be an early indicator of the drop in all commodities, but that is just my opinion due to who the buyers are.

(well, the original here was a major goof, let me try again! haven't found just a redwood chart, so here's lumber overall.)

http://tfc-charts.w2d.com/marketquotes/ ... sel=Lumber

Something I believe in is the conservation of risk. If risk is assumed by a third party, it actually will remain the same or increase, in that view. Given that risk in stock/bonds has been reduced to near zero by government actions worldwide, that risk does not disappear, it simply shifts. I think it's shifted to commodities. This is simply reflecting the fact that risky investments are always present, and the willingness to accept that risk will not change until something happens to make those who are accustomed to accepting the risk unwilling to accept it. This doesn't mean risky investments aren't there any more, just that few will assume the risk.

This is interesting as a demographic trend.

http://www.marketwatch.com/story/usa-wi ... inginsight

OLD1953 wrote: “They’re all going to correct very sharply this summer,” he said, referring also to industrial metals such as copper, which he said faces an inventory glut because of stockpiling by China, its biggest buyer.

He thinks silver especially is in a classic mania. I agree.
***************

I too agree. When the commodity bubble breaks, probably this summer, the fallout will work its way through the economy and be utterly devastating a few months later due to falling sales and subsequent layoffs.

Either the prices for a huge number of different things is in a bubble, or the value of the dollar is going down. Either silver is a mania or silver is monetizing and the dollar is headed down. It makes a big difference which of these is right. There is a quote I like. "Paper currencies don't so much float as sink at differing rates."

OLD1953 wrote: Something I believe in is the conservation of risk. If risk is assumed by a third party, it actually will remain the same or increase, in that view. Given that risk in stock/bonds has been reduced to near zero by government actions worldwide, that risk does not disappear, it simply shifts. I think it's shifted to commodities.

I think your "conservation of risk" is a cool way of looking at things. Governments typically don't fix problems so much as move them around. So what is going on here, how is the government supporting stocks? The Fed has lowered interest rates to near 0% and is making like $100 billion new dollars every month. Where would this move the risk to? Historically when other governments started printing half the money they spent there was a big "currency risk" and commodities were the safe place to be.

Think about this. The Yuan goes up around 3.5% against the dollar each year, on average, for the last 6 years. A 5 year bond can earn interest of 5% on yuan and only 2% in dollars. So you really get like 6.5% better off each year if you put your money in yuan. A few banks in the US now let people open Yuan denominated accounts, what if this went nationwide? What if lots of people all over the world suddenly want to move from dollars to yuan? Do you think this situation could be risky for the dollar?

http://www.clypg.com.cn/en/tabid/472/In ... fault.aspx

If you read the book "this time is different" there is a pattern that repeats over and over again.
1) Western "fractional reserve banks" tell depositors they can take out
their money any time but loan it out for long terms like 20 years.
2) When too many depositors want their money at the same time the
banks come near bankruptcy.
3) The government steps in and loans the banks money.
4) The government gets deep in debt and risks default.
5) The central bank steps in and loans the government money.
6) Currency crisis.

We can check off 1 to 5 as done. Next comes "currency crisis". It is not "commodity crisis". The only real question is does the dollar just devalue some fixed percentage or does it go into all out hyperinflation.

I have another way to look at it. Bernanke holds the first ever Federal reserve press conference and says he will keep interest rates down and wants more inflation and silver goes up 6% that day. These Bernanke press conferences will now be a regular thing. Do you think silver is going to trend up or down?