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Can I ask a question about Iran and the stockmarket?
Posted May 1st, 2008 by kat
output
For the last two days I have been reading about the US posturing against Iran and their refusal to accept US dollars for oil...Despite this news, oil and precious metals have gone down and the dollar has risen...
It's confusing me because I would have thought the opposite would happen...
Could somebody enlighten me?
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Excellent comments so far
which should help to explain why we see the weirdness suggesting up is down and left is right. Let me see if I can add a bit. There are two levels to consider - a market level, and a world level. By now you should realize that the powers that be have the ability to (falsely) influence the markets. However, on the world level it's not so easy because that manipulation potentially means war. Trust me, the market level eventually reacts to the world level, not the other way around. As you should also know, the dollar still has its (relatively) high value because of its world oil hegemony. What we are interested in here, at the world level, is perception. Right now the dollar can still rise at the market level because the U.S. is posturing against Iran. No one knows for sure whether that line in the sand (which could touch off WW3) will be crossed. It's currently a wait and see issue. It's not nearly as easy to engage Iran in war as it was Iraq, but it's just as desperate, in fact, probably more desperate. Iran is OPEC's second largest oil producer. That means a great deal. Without U.S. interference the world would wait and see if Iran truly could venture off on its own course for its oil. Would its bourse work? Would other currencies such as the Euro be a better deal? The U.S. could never take that chance, because the moment perception shifted that the dollar was no longer absolutely necessary in the oil equation, people would quickly realize that the dollar is not what they want to hold since they get nothing for it, but some arrogant debt-burdened Americans. It wouldn't take long for people to start unloading the dollar, shifting to much greener pastures. Unfortunately, our entire economy essentially rests on the fact that we consume, and we can consume because of dollar purchasing power. Once that's gone, the show is literally over.
Points to you on perception.
However, we'd have already nuked Iran because of the bourse.. oops.. them terrorists... if it had not been for Russia and China stepping into that breach.
You are right on the US market having to mirror the global eventually... it currently is not.
If you add up our debt, is is more than every other country in the world.. combined. We are also no longer a producer... we run on a consumer debt economy. In reality, we would be a third world country right now. We consume more than we produce.
The perception of the dollar being a world currency is coming to a close, however. It kinda has to. Once the dollar hits around 60 cents, China will own us.
Game over...lol
The smart investors are moving to places like Singapore so that thier kids can learn to speak Chinese.
We kinda need Ron Paul like... now.
Yes, I agree Iran's bourse
Yes, I agree Iran's bourse would ordinarily have never made it this far. I see two very large obstacles standing in the way of the administration bending Iran to the U.S. will. As you mentioned, Russia and China backing them up, of course. But I also see, believe it or not, us ordinary Americans as an obstacle to outright agression. If we were a total dictatorship we would likely have struck already. Americans are weary of another war, and the administration doesn't know for sure how much they can push their luck, given the virtual recklessness people are aware of to this point.
Get your firewood ready, its going to be a long cold K winter
The K winter is being postponed (well rioting in the streets type stuff) only due to even more irresposability from the Fed. I just looked at the 1929 crash and there was a drop that plateued for a 6 month period, then the market sky rocketed one more time for about two months straight, and as you all know the rest is history.
This summer is the perfect storm to extract the last of our money with high gas and high food prices. The Rockefellers said it is now time for alternative energy. So they are squeezing the last from us on the oil/food market, knowing that we have had enough they will be working to strong arm the alt energy markets.
The buyers market for the rich is coming, and I am affraid that small companies like NANOSOLAR.com will be enticed to sell their low cost technology to a giant who will either shut it down, or exploit us further.
1929 Market Gragh
http://mutualfunds.about....
Speaking of perfect storm...
I've a tornado on and off the ground and baseball-sized hail coming in.. so time to go tuck in the solar panels... night all!
You are right in believing that the opposite should be true
In fact, according to every Keynesian economics textbook that I was ever forced to study, none of this should be happening; and in free markets, they don't. Of course, we haven't actually had free markets since 1913, when the federal reserve was created.
Technically, what is occurring is that the economy is going into the winter phase of what is known as the Kondratieff, or 'K' Cycle. The federal reserve knows this, and they are doing everything they can to stop it. Thus the bizarre market behavior. There is nothing that can stop the K winter from happening. In fact, every time they interfere in the markets, they are going to make things worse in the long term, possibly leading to the collapse of all fiat currencies, the dollar leading the way.
The following explains the Kondratieff Cycle pretty thoroughly, and in layman's terms. It's a long read, but worth it. Enjoy.
http://www.thelongwaveana...
Thank you, Teacher Goldstein..
Always to be counted on for a very thorough answer...and with LINKS!!
"I have once heard that the ability to resist temptation is the truest measure of a mans character."
Dustin Hoffman to Steve McQueen
"Papillion"
What are we looking at, 20 years before "Spring"?
Depends how government treats the Winter, I suppose?
___________
Lisa C.
http://www.women4ronpaul....
Well. if you extropolate
and not take tech into consideration (which is a BAD thing not to take into consideration) then the curve would be 29 years. Too many real variables are in play though that cannot be measured... so it's anyone's guess really.
The solid math without reality in the scenario is 29 years, however.
So who knows...lol.
Thank you again e_goldstein
for an informed comment. The current market situation is a HUGE red flag for us. It means that basically we are no longer dealing with the market being based on reality... it has been entirely propped since MLK weekend, some of us think.
They are buying time, is all. If you want to connect some more dots, the infrastructure and social mindset needed to go past those last 2 tipping points into fullblown fascism isn't here yet. They got arrogant and screwed up, although to be fair there was no way that they could have taken into consideration the effect the internet has had on thier plan. So again, they are buying time. They can no longer attack Iran without severe repercussions, the dollar is sliding into that dark goodnight... they are running out of tools to prop up the economy.
You are entirely correct, goldstein. The winter is apon us..and the longer they put off the inevitable market correction (more like a market apocalypse at this point) then the worse it's going to be. Think about it this way... we see how the market is reacting right now. What are we not seeing?
If you feel that the tone of my post is a trifle neurotic, I more than understand. The me of 6 years ago would have thought the today me slightly mad as well.. ;)
That is why we need a r3VOLution... and also why it is inevitable. We've all run out of time.
It Began in the Reagan years.
It's only extremely apparent now because markets are failing and the dollar is in its death throe (as opposed to the 90s).
___________
Lisa C.
http://www.women4ronpaul....
It began in 1912.... ;)
When A guy named JP Morgan thought a central bank would be a grand idea to make money, so bought the presidency for a guy named Woodrow Wilson in exchange for him signing the Federal Reserve Act.
Three years after the initiation of the Federal Reserve, Woodrow Wilson said:
"The growth of the nation ... and all our activities are in the hands of a few men ... We have come to be one of the worst ruled; one of the most completely controlled and dominated governments in the civilized world ... no longer a government of free opinion, no longer a government by conviction and the free vote of the majority, but a government by the opinion and duress of a small group of dominant men."
And here we are... ;(
I will accept that as a much better answer than last MLK day.
___________
Lisa C.
http://www.women4ronpaul....
Look at the last MLK day for fun.. that weekend
The markets were deflating... the Dow to open 700 or so under, to start... Asian markets hit a wall...the $IDX was a trigger as well. That's when the Fed and the PPT REALLY stepped in and when our economy was no longer representitive of reality at all.
It has been going downhill for years, yes.
But we shoulda tanked then.
Now we're on borrowed time, is what I meant.
I'm not arguing with you.
Trust me, I've seen this happen for years. Just last Friday in fact -- end of the week AND and an expiry day for silver??? Forgetta bout it.
Manipulation occurs for the most part:
Upon the market opening in New York
On Fridays
On the last day of the month
5 minutes before the DOW closes
On option expiry days
On the last day of the quarter
When the jobless "numbers" are released (or any number that is below what analysts are expecting)
When oil soars
When the dollar tanks
Yadda, yadda, yadda...
___________
Lisa C.
http://www.women4ronpaul....
Not arguin here either...
~cause smart females are sexy!
Why, of course we are! **blush**
I forgot one other manipulation time, when a major non-US market has a holiday. Umm, like May Day? Markets closed in India, China, and Europe -- the US gets to play "bank" all by itself.
___________
Lisa C.
http://www.women4ronpaul....
It is difficult to make
It is difficult to make sense of these things with so much going on. Iran no longer conducting transactions in dollars, the oil pipeline from Iran that India and Pakistan will be a part of (China wants to get in on that action as well) and several Gulf states considering to drop the dollar peg (no more exporting inflation tax to them!).
There's also news today about student loan lenders getting bailed out (in addition to the subprime mortgage lenders). Today Congress passed a Bill (which Bush is expected to sign into law) that "injects liquidity" into the student loan market by basically having the department of education buy up student loans that the lending banks and investors do not want.
Series I inflation-indexed savings bonds have dropped to an interest rate of 0% for the first time... (today)
Add to that consumer confidence lowest in many years, jobs are down, sales are down, inventories are up...
But still, the gov tries to convince people that everything is fine. The Federal Reserve stated the other day, right after lowering rates again, that they will not be lowering rates further in the future. Right. They have no idea what is in store for the future, so I have little trust in what they say they will do in the future.
Treasury Secretary said today that we are nearing the end of the credit crisis, but then he goes on to say that there is now more behind us than in front of us since the credit crisis began 9 months ago. So he's basically saying 9 more months of bad news expected, but trying his best to make it sound like a good thing. Um... 9 more months of bad news is pretty bad news if you ask me...
So with all these developments in the past few days markets go up today....
Market manipulation, irrational exuberance, whatever you want to call it - the results aren't making a lot of sense to me.
It might be a good time to invest as safely as you can, because who knows what we are being primed for. My guess is that we can go a lot farther down than we can up, regarding the stock market. You would expect many people to be running for safety with all this news adding up... and we know what safety usually means in the investing world: gold (& silver).
kat you're not supposed to look behind the curtain.
You are already enlightened it seems.
"I would have thought the opposite would happen..."
Yes, you would have thought the opposite would happen.
Because it should.
___________
Lisa C.
http://www.women4ronpaul....
Someone famous once said
The markets can stay irrational longer than you can stay solvent.
This is an irrational time where people are confusing wealth transfer with wealth creation.
Wealth has been transferred from me and you to Wall Street banks. Their profits look a lot better than expected. Shareholders of those guys are enriched. But when the rest of the economy sputters because there is no business activity creating wealth given the high costs of raw materials... bad things are coming home to roost.
Bump
Anybody?
__________
"I have once heard that the ability to resist temptation is the truest measure of a mans character."
Dustin Hoffman to Steve McQueen
"Papillion"
The markets are being
The markets are being manipulated. Also, you must take into account futures contracts.
They are printing so much money its crazy. Thats why i'm buying silver weekly for now on.