The Daily Reckoning Archives...

The Daily Reckoning archives include issues from:
1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, and 2008

January 2008 - June 2008

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06/27/08 - A Serious Word About Mr. Dung's Dong
by Bill Bonner "Until recently, the Vietnamese economy has been one of the most dynamic of all the emerging markets. That is, until they followed in America’s footsteps, and made a potentially fatal error for their currency, the ‘dong’."

06/26/08 - Stayin' Alive in the New '70s
by Bill Bonner "Yes, dear reader, get ready for a whiter shade of pale, as the two apparitions join in a ghostly hullabaloo. To the question – which will be have, inflation or deflation? – we have consistently replied, ‘both.’"
   - Guest Essay by Christopher Hancock: The 30-Year Timber Investment Race

06/25/08 - Boneheaded Miscalculations
by Bill Bonner "Almost with a single maladroit stroke, a relatively small group of world-improvers undermined the progress of 9 generations. Five years later, Americans are on the losing end of the ‘biggest transfer of wealth in history,’ as T. Boone Pickens described the oil market of 2008."
   - Guest Essay by Dan Denning: Go East, America! Go East!

06/24/08 - The Fraud of the Great Moderation
by Bill Bonner "We don’t have to tell you, but the ‘Great Moderation’ was a big fraud. There was nothing moderate about it. Instead, it was a period of extravagance...excess...over-the-top consumption and borrowing...and outlandish claptrap."
   - Guest Essay by James Howard Kunstler: Stauts Quo-Oh

06/23/08 - The Bottom Has Fallen Out
by Bill Bonner "In 1985, there were only $1.6 trillion in home mortgages. And only $500 billion worth of them were in pools used to back securities. Twenty years later, total mortgage debt approached $10 trillion, with $7.5 trillion of it securitized."
   - Guest Essay by The Mogambo Guru: Inflation in Spades

06/20/08 - Inflation Goes Global
by Bill Bonner "Already, much of the world is scratching and grousing as if it had lice. Consumer inflation is rising at 8.5% in the Middle Kingdom...while the costs of its own inputs soar. But whence all this inflation?"

06/19/08 - Inflation is Winning
by Bill Bonner "On every front the news is the same – prices are rising more steeply than they were a year ago. Oil rose to $136 yesterday. Gold, sniffing the fear of rising consumer prices, rose $6 to $893."
   - Guest Essay by Puru Saxena: Back to Basics

06/18/08 - The Economic Tables Have Turned
by Bill Bonner "What we are looking at is big. It’s an historic turnaround. In financial terms, it is the end of the era of cheap credit. In cultural terms, it’s the end of the prosperous, suburban U.S.A. as we have known it...the U.S.A. that we grew up in."
   - Guest Essay by Kevin Kerr: Invasion of the Locavores

06/17/08 - The Socialization of the Mortgage Business
by Bill Bonner "Homeowners are eager to push some of the cost of negative carry on to someone else. In England, one of the largest mortgage lenders has been nationalized. In America, private mortgage lenders are laying low...government backed mortgage lenders are taking their place."
   - Guest Essay by David Galland: Political Stupidity

06/16/08 - The Good, the Bad, and the Ugly
by Bill Bonner "The market for the basic ingredients of the machine age is no longer controlled by Western consumers. And it means – for the first time ever – that even if Western economies go on the fritz, prices paid by Western households may still go up."
   - Guest Essay by The Mogambo Guru: Silver Saves Investors Big and Small

06/13/08 - Three Little Facts and the End of the World
by Bill Bonner "Every generation faces the furnace at least once or twice before it finally gets fried. Apocalypse comes and goes. Barely had Christ shaken the dust from his sandals when Saint Clement I predicted the second coming; the world would end at any moment, he said."

06/12/08 - Make Way for the Emerging Consumer
by Bill Bonner "If these economies can continue growing at this pace, perhaps they will spare the United States a serious correction. American consumers will finally be able to relax. The whole world economy will no longer rest on their backs. Someone else can do the hard work of consuming."
   - Guest Essay by Dr. Marc Faber: A National Political Brownout, Part II

06/11/08 - The High Cost of Lower Prices
by Bill Bonner "But the big question is: how can the Fed really fight inflation, after the biggest jump in unemployment in 22 years? How strongly can the Fed really resist inflation?"
   - Guest Essay by Dr. Marc Faber: A National Political Brownout, Part I

06/10/08 - Betting on Buffett
by Bill Bonner "We’ve described in these pages why hedge funds are a losing proposition for investors. Over time, the managers’ performance regresses to the mean of all investment advisors – which is to say, he gets about the same as the broad market itself."
   - Guest Essay by Byron King: "We Need to Talk"

06/09/08 - The Clear Loser in the War Between 'Flations
by Bill Bonner "Lately, most of the news has been about inflation. The threat of recession was thought to be past. The oil price has been setting records...and we’re getting more and more consumer inflation-sighting reports from all over the world."
   - Guest Essay by The Mogambo Guru: The Declining Quality of Dollar Menus

06/06/08 - Boomer Trends Coming to an End
by Bill Bonner "Being in the right place at the right time is far more important than brains. Luck provides better investment returns than talent. Too bad. Because our luck seems to be running out."

06/05/08 - What Has Really Changed?
by Bill Bonner "The United States also keeps its key-lending rate well below the inflation rate – and for the same reason. The Fed lends at 2%. Inflation was last clocked running twice as fast."
   - Guest Essay by Christopher Hancock: Inflation's Back: Embrace the Madness

06/04/08 - Big Ben's Loose Lips
by Bill Bonner "The headman at the Fed may want a stronger dollar...or a weaker one; it’s usually not his place to say so. That’s what the Treasury Secretary is for."
   - Guest Essay by Frank Shostak: The Oil Price Bubble

06/03/08 - What Came First - Inflation or the Egg?
by Bill Bonner "One thing that high oil prices lead to is higher prices for everything else. And higher prices lead to less purchasing power on the part of the average consumer, which leads to fewer sales, which leads to less output, which leads to lower earnings and slower growth...etc. etc."
   - Guest Essay by Kevin Kerr: Are We Witnessing the Slow Death of the American Dream?

06/02/08 - Out of Gas
by Bill Bonner "Consumer confidence is out of gas too – at its lowest reading in 28 years. And no wonder; house prices are still falling...while consumer prices are going up much more quickly than CPI numbers suggest."
   - Guest Essay by The Mogambo Guru: A Paralyzing Rise in Money Supply

05/30/08 - The Wrong Kind of Bubbles
by Bill Bonner "Keynes explicitly classified the two components in the money supply as ‘industrial circulation’ versus ‘financial circulation.’ The distinction is important; it is like the difference between a woman and a female impersonator. They may be alike in almost every respect, except the essential ones."

05/29/08 - As Simple as Supply and Demand?
by Bill Bonner "On the one hand, there is the background of supply and demand. Even here, the picture is not a clear one. Oil supplies seem to be running out. Of the world’s 60 top oil producers, 54 report declining output."
   - Guest Essay by Gary Dorsch: Raging Bull (Market)

05/28/08 - The Consumers are Taking Their Lumps
by Bill Bonner "Who can blame the lumpenconsumer for getting down in the dumps? Everything that we warned him about is happening to him. His bills are coming due...his assets are going down...and his income is falling."
   - Guest Essay by James Howard Kunstler: "Far From Normal"

05/27/08 - Awaiting the Final Bubble
by Bill Bonner "Ah, dear reader...just a little dignity, a little grace, a little courage and beauty. That’s all we ask. Can we find it on Wall Street? In Washington? In politics or economics? We hope so, because that’s all we have to work with here at The Daily Reckoning."
   - Gues Essay by Chris Mayer: Acid Rocks

05/26/08 - Welcome to Squanderville
by Bill Bonner "That financial super-boom also probably marked America's great peak - when everything went so well for so long that politicians and central bankers all wanted to claim credit for it."
   - Guest Essay by The Mogambo Guru: Inflationary Tortillas

05/23/08 - The End of the Great Moderation
by Bill Bonner "The average investor makes far more by accident than by fund manager. And here we venture a guess: of all the times and places in which a U.S. investor might hope to get a decent return on his money, this is not one of them."

05/22/08 - The Return of Bond Vigilantes
by Bill Bonner "As soon as bond investors saw inflation coming, they would act like vigilantes – selling off their bonds and forcing up yields. Higher yields cooled off the economy...and reduced inflation."
   - Guest Essay by Addison Wiggin: The Prospect of Monetary Crash

05/21/08 - Welcome to the Greatest Show on Earth
by Bill Bonner "Did anyone...anywhere...mention that capitalism could be relied upon to sort out the agricultural sector? Did anyone recall that a free market – with prices set by willing producers and consumers – works more efficiently than one that is rigged by lawmakers?"
   - Guest Essay by Chris Mayer: Last Dance for Oil?

05/20/08 - No More Mr. NICE Nation
by Bill Bonner "Here in London, Mervyn King, head of the Bank of England, has noticed the same thing. The ‘NICE’ 10 years are behind us, he says. By ‘NICE’ years, he means the years of Non-Inflationary Continuous Growth."
   - Guest Essay by Puru Saxena: Growth & Inflation Debate

05/19/08 - What Does Inflation Mean to You?
by Bill Bonner "Classical economics tells us that an asset price bubble is always followed by an asset price bust. Inflation is followed by deflation, in other words. But in our funny, complicated world, we get both inflation and deflation at the same time."
   - Guest Essay by The Mogambo Guru: 'Oil Bust' Headline Makes a Good Punch Line

05/16/08 - Beta Beats Alpha
by Bill Bonner "The most reliable and entertaining trait of humankind is vanity. Despite much evidence to the contrary, men see themselves at the very center of the universe...the alpha of all creation. Without man, nothing happens...trees fall in the forest, but who cares?"

05/15/08 - The Fed's Emperor's Club
by Bill Bonner "Fed governors chose the easy path – they chose to try to boost up the economy...and let the dollar go to hell. That’s why the greenback has lost half its value against major foreign currencies since the beginning of this century. And it’s why we have had two major, related asset bubbles so far this decade – one in housing and the other in housing debt."
   - Guest Essay by Addison Wiggin: Pathological Consumption

05/14/08 - Success Leads to Excess
by Bill Bonner "In the United States, there are 480 cars per 1,000 people. In China, there are only 10. And China could be the world’s largest automaker in just a matter of months. Our advice to Americans: fill up your tanks."
   - Guest Essay by Christopher Hancock: The True Chinese Economy

05/13/08 - Not Your Father's Recession
by Bill Bonner "We’ve been living and traveling outside the United States for the last 14 years. It’s a big world...there’s a lot to see. And what we see is a world that is changing fast...growing...evolving...experimenting...and leaving America behind."
   - Guest Essay by David Galland: The Battle for $900 Gold

05/12/08 - How Do You Say 'We Surrender' in Mandarin?
by Bill Bonner "By the time China has the world’s largest economy, it will also have 30 million young men who cannot hope to find a wife. What will they become? Soldiers!"
   - Guest Essay by The Mogambo Guru: Government Approves 'Unemployed' as Job Description

05/09/08 - The End of Democracy
by Bill Bonner "Modern democracy, like modern capitalism, is a self-limiting ailment...and this fact is becoming clearer to the United States with each passing day."

05/08/08 - Consumeris Americanus: A Look at an Endangered Species
by Bill Bonner "But let’s begin by looking at Consumeris Americanus, a species that has been having its share of trouble lately. Its habitat is threatened by falling house prices...its food supply has become more expensive. What’s the outlook?"
   - Guest Essay by Kevin Kerr: The Food Crisis, a First-Hand Report

05/07/08 - Going on a Tax Holiday
by Bill Bonner "All these measures are designed to do the same thing – make people feel richer than they really are. Thanks to the Fed’s emergency low interest rates, they can borrow more money and pay less for it. Thanks to the ‘rebate’ checks, they can spend more money too."
   - Guest Essay: Eternal City, Chronic Trouble

05/06/08 - An Empty Belly is a Dangerous Thing
by Bill Bonner "It is the worst of times for people with big appetites and little money. Many of them will go hungry. And an empty belly is a dangerous thing. First, people develop a ‘lean and hungry look.’ Then, they stab you in back."
   - Guest Essay by Nathan Lewis: The Key to Managing Currencies

05/05/08 - Poverty Time Bomb
by Bill Bonner "The price of food is soaring everywhere. The grains are selling near record prices...and so is oil. This is no laughing matter. Reuters tells us that 20% of Asians live on less than a dollar a day. Many are farmers with their own local supplies of cheap food. But more and more of them live in cities and pay global prices for their daily bread."
   - Guest Essay by The Mogambo Guru: The Magic of 'Product Substitution'

05/02/08 - Victims of Success
by Bill Bonner "Throughout history, it is clear that becoming successful is hardly ever easy. Often times it takes a great deal of fortitude, and it can even be very dangerous. But as Bill Bonner explains in this DR Classique (originally publish on May 4th of last year), without these inherent dangers, our lives as we know them might be completely different."

05/01/08 - The Financial Policies of Never-Never Land
by Bill Bonner "Lending money below the inflation rate...giving out money you don’t have, when you are already so deep in debt you will never get out – how could any of this be good for the real economy? But by this time we are so far into Never-Never Land that we will never find our way back."
   - Guest Essay by Addison Wiggin: How to Sell the Dollar, Part II

04/30/08 - Bring on the Correction
by Bill Bonner "After a correction, stocks are going back up. The dollar too. Gold, meanwhile, is going down. Bernanke, Bush and the whole company of angels and archangels who watch over our economy and our money are winning, they believe."
   - Guest Essay by Addison Wiggin: How to Sell the Dollar, Part I

04/29/08 - Whatever Happened to Monetary Integrity?
by Bill Bonner "Look to the left, dear reader. Look to the right. Do you see Paul Volcker at the Fed? Nope. Volcker is still alive – warning that there is a painful adjustment coming. But at the Fed itself, there is only Ben Bernanke, promising to drop dollars from helicopters..."
   - Guest Essay by Jim Rogers: Investing in the Commodities Market

04/28/08 - Drowning in the Flood of Liquidity
by Bill Bonner "Just because a lot of people made a lot of mistakes, it doesn’t prevent the authorities from making more. They’ve bailed out banks in Britain...and Wall Street brokers in America. The Fed has cut rates 6 times already...and is ready to cut a 7th time this week – bringing the key Fed lending rate to about half the level of consumer price inflation."
   - Guest Essay by The Mogambo Guru: Fried in the Financial Sun

04/25/08 - Mission Creeps
by Bill Bonner "‘Buy when blood is running in the streets,’ goes the old adage. Many people believe that time is now...and Bill Bonner can’t help but wonder: What accident is so bloody and so menacing, that it has the world’s three most powerful central banks racing across town, scattering crowds and ignoring traffic signals?"

04/24/08 - Noisy Markets
by Bill Bonner "Others argue that the worst is still ahead...that the stock market will melt down...that housing prices will fall another 20%...and that the whole world will go into a monumental downturn."
   - Guest Essay by Chris Mayer: The Switzerland of Asia

04/23/08 - An Overreaching United States
by Bill Bonner "After being on top of the world so recently, now...the United States slips and slides. The banks are in trouble...homeowners are in trouble...and the economy is in such trouble that the feds are now considering new emergency measures to rescue it."
   - Guest Essay by Kevin Kerr: Portfolio Soaked with Profits

04/22/08 - From Artificial Boom to Real Bust
by Bill Bonner "In a real downturn, the United States (and other developed nations) would stop importing so much oil...and so much merchandise from China, which would have the consequence of reducing energy consumption by China too. Result: lower energy prices and a worldwide recession...maybe even the worst worldwide depression in history."
   - Guest Essay by Addison Wiggin: The Twilight of the Great Dollar Standard Era

04/21/08 - The Long Slope of Hope
by Bill Bonner "The newspaper headlines may be negative, but sentiment is not. Most people think this is a good time to buy a house – meaning, they still think ‘you can’t go wrong in property.’ And stocks at 20 times earnings are no bargains..."
   - Guest Essay by The Mogambo Guru: Disproportionate Derivatives

04/18/08 - Wages of Sin
by Bill Bonner "Why worry about money when you have a printing press? As long as there’s paper in the machine, you’ll never run out. Well, as Bill Bonner explains, the problem arises when people forget that with every fiat currency, less is more."

04/17/08 - The New Fiscal Creed
by Bill Bonner "We held our own Council of Nicea last night...about 3AM...after much meditation and drinking. And we came up with a creed. This is the way we think things are now..."
   - Guest Essay by Dr. Marc Faber: A "Water Torture" Bear Market, Part II

04/16/08 - All Hands on Pumps!
by Bill Bonner "Do Americans care what happens to the Brits? Not particularly. Unfortunately, the two countries are both in the same boat...both had been sailing along so happily in the sloop: the ‘Anglo-Saxon’ Economic Model. Now, they’re taking on water."
   - Guest Essay by Dr. Marc Faber: A "Water Torture" Bear Market, Part I

04/15/08 - Junk Bond Nation
by Bill Bonner "We’re beginning to see the whole world financial situation as a U.S. problem. There is a lot going on...but the big story seems to be about America (and Britain, to the extent it shared the Anglo-Saxon economic model) ...its money, its wealth and its place in the world..."
   - Guest Essay by Byron King: Energy and Capital

04/14/08 - The Biggest Financial Losers
by Bill Bonner "Neither inflation nor deflation will be a clear winner, in other words. Instead, like WWI, both will do damage...and in the end, very few people will be better off. Some possible exceptions – gold miners, commodity producers, and emerging markets."
   - Guest Essay by The Mogambo Guru: Cursing the Loss of Purchasing Power

04/11/08 - Sowing the Wind, We Reap the Whirlwind
by Bill Bonner "All over the world, food fights are breaking out. Not because there is too much food or too little, but because it has gone way up in price. Bill Bonner explains..."

04/10/08 - The Fog of Financial War
by Bill Bonner "Many don’t know which side they are on and are willing to switch sides at any minute. But in the fog of war you always get a lot of people bumping into one another. That’s why we get such peculiar reports from the front - such as when the feds cut short rates (which is inflationary)...but long rates nevertheless go up (which is deflationary)."
   - Guest Essay by Chris Mayer: The Crisis & Opportunity in the Exciting World of Sewage Pipes

04/09/08 - An Economic Triple-Threat
by Kate "Short Fuse" Incontrera "Alan Greenspan has been popping up all over the press lately - after 18 years of Greenspeak, it looks like the former Fed chief wants to set the record straight...at least from his point-of-view."
   - Guest Essay by James Howard Kunstler: Upscale

04/08/08 - Increased Spending in the Mistake Market
by Bill Bonner "The feds must like mistakes too. As near as we can figure, ‘success’ – for them – must mean getting people to make more of them. That’s why they are lowering borrowing rates – so an over-indebted nation can borrow more."
   - Guest Essay by Byron King: The Flipping Industry

04/07/08 - One Bubble Pops...Another Inflates
by Bill Bonner "If our analysis is correct, the inflation that is holding up stock prices will be felt even more in other places – namely, in commodities, gold and consumer prices. When one bubble pops, the next one always appears somewhere else. So don’t even think about buying back into the finance sector."
   - Guest Essay by The Mogambo Guru: The Government Genie Flips a Coin

04/04/08 - The Bottoms Are In - Or Are They?
by Bill Bonner "Look around you; you’ll see bottoms everywhere. Yesterday, prices on just about everything were rebounding. The euro rebounded against the dollar. Asian markets rose. Wheat, soy, rice prices – all on the way back up. The CRB index rose too."

04/03/08 - Here Come the Bread and Circuses
by Bill Bonner "It’s all going according to plan, as we see it. The empire is rolling over. Now, in its advanced, decadent phase, the imperial government must provide bread – in the form of plastic food stamps...and circuses – in the form of national party conventions, elections and foreign wars."
   - Guest Essay by Byron King: Energy Policy: Get it Right...Or Else!

04/02/08 - The Phony Depression
by Bill Bonner "The last time there was a nationwide drop in the housing market was in the ’30s. Not since the ’30s, has there been such a crisis in the finance sector. And the last time there was such a hubbub of pressure to reform Wall Street was – you guessed it – the ’30s."
   - Guest Essay by Greg Guenthner: The China Story You Won't Find Anywhere Else

04/01/08 - A Truly Remarkable Day
by Bill Bonner "The dollar rose against all foreign currencies; the euro dropped back to $1.30. A shop owner in Paris was heard to say that he actually liked Americans. Commodities fell, and the price of gold dropped to $750 an ounce."
   - Guest Essay: Gold is Going to the Moon

03/31/08 - Neutering the Markets
by Bill Bonner "The real problem in today’s capital markets is not that the machinery of capitalism is broken, but that it’s working. And that is what the reformers aim to stop. They want to ‘fix’ the markets..."
   - Guest Essay by The Mogambo Guru: The Voyages of the Economic Enterprise

03/28/08 - Das Phony Kapital
by Bill Bonner "Today we continue with the last installment of our trilogy. We render unto the Caesars of Wall Street, the Commoduses of the Central Banks, and Neros in Washington what is properly theirs – that is, not earnest criticism – just idle mockery."

03/27/08 - In An Uncertain World
by Bill Bonner "Since the real economy relies on consumer spending and credit to keep going, it seems a good bet that it will slow down. Already, the United States is probably in recession."
   - Guest Essay by Ed Bugos: Gold Bull Market Only in its Teens

03/26/08 - Game Over?
by Bill Bonner "Naturally and predictably, Americans can no longer spend money so freely. Retail sales fell 0.6% in February and are projected to grow at their weakest pace in 17 years – if they grow at all. And what’s a consumer economy to do if consumers stop consuming?"
   - Guest Essay by Tom Au: Here Come the Modern 1930s

03/25/08 - Masters of the Universe No More
by Bill Bonner "So, here is the same question we asked last week: how can such clever people be so clueless about what they've got in their own pockets?  Is it worth $2 a share?  Or $10?"
   - Guest Essay by James Howard Kunstler: Black Swans Everywhere

03/24/08 - Weapons of Financial Destruction
by Bill Bonner "It’s not just Bear shareholders who might be feeling pinched. All up and down Wall Street, the masters of the universe are getting their bonuses reduced...their stocks cut in half...and their stock options are expiring worthless."
   - Guest Essay by The Mogambo Guru: Risk Management Addiction

03/21/08 - IOU's With Handcuffs
by Bill Bonner "The TIPS are favored by investors who want the certainty of the full faith and credit of the U.S. government...but who are also certain that they can’t put too much faith in the U.S. government’s money."

03/20/08 - A Third Army on the Financial Front
by Bill Bonner "While that picture has fairly well described the financial world for the last year or so...we think it is time to add a complicating feature. It is as if a third army has appeared on the field of battle...of unknown size...and unknown intentions."
   - Guest Essay by Kevin Kerr: Food For Thought

03/19/08 - Central Banking for Dummies
by Bill Bonner "Since we’re sticking with our Trade of the Decade – buy gold on dips...sell stocks on rallies – the news of this latest Fed intervention gives us another great opportunity to dump shares. Don’t miss it."
   - Guest Essay by Chris Mayer: Stock Market Cycles: Survive them and Prosper

03/18/08 - Hell Week
by Bill Bonner "Soon, other Wall Street institutions are going to begin announcing their latest results. The tide has gone out; we’re going to see who’s been swimming naked, says Buffett. One thing we’re going to see is huge leveraged loan portfolios written down."
   - Guest Essay by Dan Denning: Bernanke is Going to Run Out of Bullets

03/17/08 - The Bad News Bear
by Bill Bonner "When Wall Street got the news of the Bear’s predicament, stocks were sold off – driving the Dow down 300 points. Then came word that the Fed and JP Morgan Chase were on the case, and the index bounced back, closing down 194 points. Hardest hit was Bear Stearns itself – down 47%."
   - Guest Essay by The Mogambo Guru: Borrowing to Get a Better Bargain

03/14/08 - Entering the Helicopter Phase
by Bill Bonner "The banks have lent a lot of money to hedge funds. The funds didn’t hedge...they gambled. As a result, many are now in trouble; they can’t repay the money."

03/13/08 - A Monetary Morality Tale
by Bill Bonner "How could that happen? Aren’t these people supposed to be whiz kids? Can’t they do projections of volatility and expected rates of return? Isn’t the whole point of a hedge fund to HEDGE against these extraordinary losses?"
   - Guest Essay by Ed Bugos: Can th Real Bull Market Please Stand Up?

03/12/08 - Victims of Our Own Good Fortune
by Bill Bonner "We had it too good for too long. A unique set of circumstances allowed Americans to borrow and spend more than anyone ever could before...and so they did."
   - Guest Essay by Byron King: Profiting from the Automotive Energy Revolution

03/11/08 - We've Got the Golden Ticket
by Bill Bonner "The price of the yellow metal will probably go to $2,500 before this bull market is over. If it goes down to $700 or so before – well, we’ll just wait it out, happy to be holding gold, rather than say, shares in Blackstone which went down 55% already...or shares in a hedge fund that may disappear altogether...or an extra house with a stopped-up toilet."
   - Guest Essay by Kevin Kerr: Shutting the Golden Door: No Room at the Inn

03/10/08 - Putting 2 and 2 Together
by Bill Bonner "Falling employment means families have less to spend. Rising prices mean they will need to spend more to stay in the same place. And here, Dear Reader, do you see what has happened?"
   - Guest Essay by The Mogambo Guru: Bernanke Gets it Backwards

03/07/08 - Disasters Waiting to Happen
by Bill Bonner "Foreclosures just hit a new record level, as owners ‘give up’ trying to make mortgage payments on houses that aren’t worth what they owe on them. And now comes news that U.S. household net worth declined in the 4th quarter. With the loss of equity in their homes, Americans were down $532.4 billion."

03/06/08 - Bracing for the Bailout
by Bill Bonner "All of this is tempting the feds to intervene. Look at it from their point of view: if they do nothing and things get worse, they’ll be accused of inaction...or worse, insensitivity. Nothing is worse than inaction."
   - Guest Essay by Nathan Lewis: Worse than 1973

03/05/08 - A Fed Failure?
by Bill Bonner "Today, it gets worse. Not only are the Fed’s rate cuts not working – they’re actually ‘doing more harm than good,’ says a report on MarketWatch. While this is undoubtedly true, we don’t like to see the press gang up on poor Ben."
   - Guest Essay by Dr. Marc Faber: Failed Experiments in Fiscal Stimuli

03/04/08 - Nasty Weather Ahead
by Bill Bonner "But here at The Daily Reckoning, we are in no hurry to pronounce judgment on Ben Bernanke’s plan to save the U.S. economy. We don’t have to. We knew it was a mistake from the very beginning."
   - Guest Essay by David Galland: Get Ready - Here Come the Gold Stocks!

03/03/08 - Financial Fantasies
by Bill Bonner "Of course, fantasies were behind the whole boom. For example, Americans lived beyond their means and thought they could do so indefinitely. This led to the curious situation in which fewer than 10% of the world’s people – in the U.S.A – were spending more than 80% of the entire world’s savings."
   - Guest Essay by The Mogambo Guru: A World Without Demand

02/29/08 - Are We Following in Japan's Footstoops?
by Bill Bonner "Are we finally come to the grim harvest we predicted in this spot eight years ago? Are we now, at long last, faced with a long, slow slump a la Japan?... The United States ‘risks a lost decade like Japan,’ says a headline in the London Telegraph."

02/28/08 - What Happens When Consumers Stop Consuming?
by Bill Bonner "The Fed fights deflation...and leaves inflation alone, since they believe that inflation instigates growth (and is often mistaken for growth by casual observers)... But it looks to us as though BOTH deflation and inflation are becoming more dangerous."
   - Guest Essay by Christopher Hancock: The Death of the American Consumer

02/27/08 - Feds Rush to Refill the Punchbowl
by Bill Bonner "The feds are trying to keep the party going, of course, by refilling the punch bowl as fast as they can. The U.S. money supply is increasing about five times faster than the economy itself."
   - Guest Essay by Jim Nelson: The One Solution to Renewable Energy's Fatal Flaw

02/26/08 - The Ultimate Sell Signal
by Bill Bonner "Americans have only three major assets. They have property – houses, mostly. They have financial assets – stocks and bonds. And they have the value of their own labor. All of those assets are stagnant...or actually going down. And they may continue going down for many years."
   - Guest Essay by Dan Amoss, CFA: Return of the Russian Bear

02/25/08 - Dark Side of the Boom
by Bill Bonner "Oil exporters not only sell oil...they use it too. And while the sheiks and sultans may have the money to keep their harems hot, the average Abdul on the street is feeling left out in the cold."
   - Guest Essay by The Mogambo Guru: Nearly Perfect Data

02/22/08 - There Will Be Blood
by Bill Bonner "Over and over again – from the crash of ’87...to the Asian crisis...through the LTCM meltdown...and then the big dot.com crash...followed by the mini-recession of 2001...now the collapse of subprime and the bear market in housing – the Fed reached up its sleeve and slipped out an ace."

02/21/08 - Sell the U.S.; Buy Latin America
by Bill Bonner "But how do you take advantage of the boom in Latin America...and without getting whacked by a downturn in commodities? Here at The Daily Reckoning, we are suspicious of commodity prices."
   - Guest Essay by Lew Rockwell: Government the Destroyer, Part II

02/20/08 - Smothered in Paper
by Bill Bonner "There’s a new kind of inflation – it is practically everywhere...in every country...and it risks spinning out of control. That is why gold is hitting new highs – against almost every currency...and every other market...in the world."
   - Guest Essay by Chris Mayer: India's Treasures: What to Buy

02/19/08 - Considering the Price of Tea in China
by Bill Bonner "If the future is really as bleak as economists seem to think, how come the stock market hasn’t gone down more? The stock market looks ahead; why couldn’t it see trouble on the way?"
   - Guest Essay by Nathan Lewis: Nowhere to Hide

02/18/08 - A Financial War With No Winners
by Bill Bonner "The present war between inflation and deflation is going the same way. One side gets beaten up. Then, the other side gets walloped. Even when one gets an advantage, it comes at a high price."
   - Guest Essay by The Mogambo Guru: The Happy Mogambo Retirement Fund

02/15/08 - The Devilish Mixture of Stagflation
by Bill Bonner "One part slump...one part inflation...and one part who-knows-what. Of course, the feds are eager to put more inflation into the brew. If they had their druthers, the concoction would have more of a kick – with more exciting price increases and less depressing slump."

02/14/08 - The Greenback Gets Around
by Bill Bonner "The monetary system of planet earth, circa 2007, is simple. Arab nations export oil. Europe exports luxuries. Asia exports autos and gadgets. America exports dollars. Yes, dear reader, the buck gets around. It has more stamps in its passport than we do."
   - Guest Essay by Lew Rockwell: Government the Destroyer, Part I

02/13/08 - The Fed's Open Checkbook Policy
by Bill Bonner "Faced with what appeared to be a ’70s style slump, Bernanke rushed off in the opposite direction – offering lower interest rates and more cash. He hopes to avoid a recession and – who knows – this morning’s news suggests that he may have done the trick."
   - Guest Essay by Chris Mayer: Booming Trade Along the New Silk Road

02/12/08 - All Quiet on the Western Front?
by Bill Bonner "But what can borrowers do with the money? Not buy a house! House prices are falling nearly 10% per year. Add the cost of money and maintenance and a house investor is likely to be down 20% in a 12-month period."
   - Guest Essay by Byron King: Depleting Resources, Leaping Population

02/11/08 - The Battle Between Greed and Fear
by Bill Bonner "There is a fierce battle raging – between inflation and deflation...between Mr. Market and the market manipulators...between greed and fear...between growth and recession. In short, boom...or bust?"
   - Guest Essay by The Mogambo Guru: Oil Crisis Rush Hour

02/08/08 - Inflation or Death
by Bill Bonner "Capitalism is a moral system, not an economic system. It rewards virtue and punishes error...and after punishment...atonement...and then, a new appreciation for virtue."

02/07/08 - A Year of Reckoning
by Bill Bonner "And now, it appears to us that Americans are learning their lesson. They are finally downsizing...cutting back...making do. Soon, we predict, we will read that they are saving more money. ‘Thrift’ will make a come back."
   - Guest Essay by James Howard Kunstler: Serial Bubbles?

02/06/08 - A Misguided Belief in Capitalism
by Bill Bonner "Mr. Market can be an agreeable fellow. He’ll go along with a good gag...for a while. But he eventually gets tired of it. Eventually, he finds a way to break out. And it looks like he is now on the loose. And he’s armed."
   - Guest Essay by Dan Denning: Addicted to Economic Data

02/05/08 - Financial Setbacks
by Bill Bonner "There is no magic to Free Enterprise. It is the best way to create wealth, but it does not prevent people from making mistakes. Capitalism offers people a chance to make money. But it also offers them a chance to make fools of themselves."
   - Guest Essay by Byron King: The New Government Standard For Oil

02/04/08 - Capitalism and the American Way
by Bill Bonner "Capitalism we define as merely a state of nature...where people are free to go about their business based on customary, consensual rules in an evolved, vernacular market system. The more you tamper with it, the less well it works."
   - Guest Essay by The Mogambo Guru: Freaking Doomed by Doubling Power

02/01/08 - Banana Republic, Without the Bananas...or the Republic
by Bill Bonner "The U.S. economy is under a lot of scrutiny these days – and rightly so. But some of the name-calling it has undergone has been unwarranted...or at least inaccurate. Bill Bonner explains..."

01/31/08 - Taking Gold in the Inflation Olympics
by Bill Bonner "If you measure ‘inflation’ by looking at real money – gold – the current inflation rate is considerably higher. A year ago, an ounce of gold was still under $700. Today, it’s $920 – a jump of nearly 20%."
   - Guest Essay by Lew Rockwell: Are Consumers Driving Us into Recession?

01/30/08 - Putting it in Reverse
by Bill Bonner "So what next? It seems obvious us that the U.S. middle class needs to reverse course. Stop spending so much, stop working so many hours, focus on quality of output and quality of life. In a word: downsize."
   - Guest Essay by Bud Conrad and David Galland: Will Gold Crash in a Recession?

01/29/08 - Trading Cash for Krugerrands
by Bill Bonner "But here we are...and gold is rising. And now it goes up by $10...$15...$20 in a single day. And now people are starting to read about it in the papers. And people are starting to wonder how high the price will go...and where they can buy Krugerrands."
   - Guest Essay by The Mogambo Guru: An Indication the Economy is Lagging

01/28/08 - Resorting to 'Zimbabwe Economics'
by Bill Bonner "Learning comes at a price. When markets are rising, nobody learns anything. It’s when they go wrong that people put on their thinking caps and take instruction."
   - Guest Essay by Dan Amoss, CFA: Sell the Garbage Stocks Short

01/25/08 - Against the Gods
by Bill Bonner "The world held its breath on Tuesday morning.  On the day after 'Black Monday' everybody wanted to know what would happen when the U.S. stock market opened. How can this be happening to the richest country in the world? Bill Bonner explores how the American economy got to where it is today, below..."

01/24/08 - The Aftermath of a Phony Boom
by Bill Bonner "People thought they were getting richer – that’s the illusion that soft money policies are intended to create – so they increased their expenses and went deeper into debt. Now they’re facing a serious recession in the worst financial shape of any generation in history."
   - Guest Essay by Jim Nelson: The $4.25 Small-Cap Insurance Policy that Doubled in a Month

01/23/08 - The Battle on Wall Street
by Bill Bonner "In the event, the fireworks from the Fed slowed Mr. Market’s advance...but did not stop it completely. The Dow retreated down as much as 400 points...staged a counterattack...and ended up with a 128-point loss."
   - Guest Essay by Byron King: Canada is a Very Big Place, eh?

01/22/08 - The Share-Strangled Banner at Half-Mast
by Bill Bonner "The Fed cut rates 75 basis points a week before their regularly scheduled meeting next week. This is the biggest cut since 1982, after rates had been driven up to 20 percent to fight inflation."
   - Guest Essay by James Howard Kunstler: Disarray

01/21/08 - The Rules Don't Change
by Bill Bonner "A few weeks ago, the war in Iraq was Americans’ number one concern. Now, ‘It’s the economy, stupid.’ The trouble is, the economy is something that neither the candidates, nor the man who currently lays his head on the White House pillow, know anything about."
   - Guest Essay by The Mogambo Guru: Oil Battles Gold for Investment Supremacy

01/18/08 - Clowning Achievements
by Bill Bonner "American politics, like the empire itself, suffers from some wasting disease. But even from its hospital bed, it still puts on a good show. The whole baroque fandango is one part Dada theatre, one part religious revival..."

01/17/08 - Gold Says 'I Told You So'
by Bill Bonner "Every dog has his day. And it looks to us that the mangy cur that sits at the number 79 slot on the periodic table is having his day at last."
   - Guest Essay by Patrick J. Buchanan: Subprime Nation

01/16/08 - Fighting the Little Devils in Front of Us
by Bill Bonner "Word on the street is that the Fed may act before its regularly-scheduled meeting later this month...and it may cut rates by a whopping 0.75%. Whether or not it will actually be able to stop the correction now in progress, we don’t know. But our Trade of the Decade just looks better and better. Buy gold on dips; sell stocks on rallies."
   - Guest Essay by Dr. Marc Faber: Uncharted Economic Waters

01/15/08 - The Art of Socializing Risk
by Bill Bonner "They’ve found new and more socially acceptable ways of taking losses from those who deserve them and passing them along to the general public. This is known popularly as ‘inflation,’ a word that describes the process of jacking up consumer prices without the consumer understanding why."
   - Guest Essay by Chris Mayer: The Graying of America

01/14/08 - Trouble is Here - And He's Brought Friends
by Bill Bonner "If the economy softens substantially, or stays soft for a long time, many companies will default on their bonds. When that happens, not only will the defaulter default, but so might the insurer...and then, the insured too. In other words, all three could go broke."
   - Guest Essay by The Mogambo Guru: Free Money to the Rescue

01/11/08 - Marking to Madness
by Bill Bonner "Today’s financial world may be a mess, but we financial journalists couldn’t ask for a better one. Bill Bonner explains..."

01/10/08 - Mr. Market Moonwalks Toward Deflation
by Bill Bonner "Which is it – boom or bust? Inflation or deflation? Prosperity or poverty? The combination of opposing ideas seems to rattle most observers. They can’t tell whether Mr. Market is coming or going. But here at The Daily Reckoning, we take ambiguity as comfortably as gin."
   - Guest Essay by Dan Amoss, CFA: Strengthening a Weak Economic Link

01/09/08 - The Sushi Slump
by Bill Bonner "The Titans are going to get together and destroy the U.S. economy. Inflation will reduce Americans’ purchasing power. Deflation will collapse the value of their assets. Between the anvil of falling prices...and the hammer of rising ones – the American middle class is going to get smashed."
   - Guest Essay by Nathan Lewis: Sell Oil, Take Gold

01/08/08 - The Glory of the Financial Markets
by Bill Bonner "No matter what people say...no matter what officials do...the markets always do what they have to do. Americans have been spending beyond their means for years. They haven’t been saving any money. And they’ve been losing their competitive edge to foreigners. Somehow, they had to get poorer, because that’s what excess consumption does to a people."
   - Guest Essay by Kevin Kerr: The Softer Side of Commodities

01/07/08 - Worried About the 'Stag' of 'Flation'
by Bill Bonner "The last thing they want to see is a Japan-style deflationary slump...So they’re doing all they can to avoid it. When it comes to stagflation, they don’t mind the ‘flation’ part; it’s the stag that worries them."
   - Guest Essay by The Mogambo Guru: The Cornered Rat Defense of Inflationary Collapse

01/04/08 - Predictions, Guesses, and Complete Fantasies for 2008
by Bill Bonner "In today’s essay, Bill follows the theme of the first week of the year, and offers his forecast for 2008...or as he calls them, the ‘financial obituaries’."

01/03/08 - FOMC-ing the Need for Further Rate Cuts
by Kate "Short Fuse" Incontrera "The minutes from December’s FOMC meeting were released yesterday... Apparently, the turmoil in the housing market was worse than they expected, and surprise, surprise, it has affected consumer spending."
   - Guest Essay by Christopher Hancock: An Economic and Social Epidemic

01/02/08 - Economic Cold and Flu Season
by Kate "Short Fuse" Incontrera "Some of the main concerns for the health of the U.S. economy are the effects that are still being felt from the bursting housing bubble. The rate of foreclosures is unheard of - even before many mortgages have reset to higher rates."
   - Guest Essay by James Howard Kunstler: Forecast 2008

01/01/08 - 2007: A Year in Review, Part II
by Kate "Short Fuse" Incontrera "The first day of a new year gives us an interesting opportunity to look back at the year behind us...and to try to learn from our experiences and mistakes."

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