By Stephanie Quach

The US has long been the world’s superpower. In a world with a unipolar hegemony, the US gets to be the big bully of the playground while the other countries get to be little victims or supporters of the US who secretly yearn to be just as powerful. Of all the other countries, China seems to the most jealous of all. And they have been conscientiously working towards that goal of theirs. They are now the 5th largest gold reserve in the world, up 76% from 2002. Pretty impressive, I just wonder where they find space to hide their gold bars, considering the fact that China’s population is so large.

Ever seen those “Cash for Gold” advertisements on television and in the mall? I certainly hope that you were smart enough to not believe in those advertisements. Sure, they might actually give you a little cash for the gold you give them. However, it is really no use exchanging gold for cash since the value of the greenback has been dropping while the value of gold has been rising. Seriously, if I were president, I would eliminate every single one of those “Cash for Gold” stores and advertisements. And if you ever were so desperate for money, you could always go to a pawn shop instead. A further benefit of pawn shops is the wide variety of things that they accept. On top of gold , you can pawn off a whole portfolio of items such as watches, Channel handbags and so on.

On the other hand, China has been much smarter. They are doing the exact opposite. The Chinese government is urging people to buy gold and silver, rather than sell them away. Those that obeyed the government must be extremely happy since gold suddenly shot up to a high of $1006.40 on Sept 11, 2009.

Yes, the Chinese people do love gold, just like many Asians, but they are not buying gold just because they want to hang it around their necks or make new better quality dentures. Even the Chinese people seem to be losing faith in the greenback, and are getting rid of it by spending the dollar and replacing it with gold . Gold is certainly much more reliable as a store of value than the greenback.

The Chinese are definitely trying to snatch away the crown from the US and put it on their heads, so that they can be crowned as the world’s superpower. They want the renminbi to replace the US dollar as the world’s global reserve currency according to Ronald Fricke president of Regal Assets . If that ever happens, be ready to flock to China Banknote Printing and Minting (CBPMC), the company in charge of currency production. They will certainly be hiring workers and tree lumbers. That will be followed by a huge bonfire to burn useless greenbacks.

This situation has many implications. How would the yuan be valued? Currently, its value is determined by a basket of currencies, which includes the US Dollar. China would certainly not want to go down the drain with the greenback. Or will China peg its currency to gold? Or maybe even silver?

At this point, nobody knows what China will do. You will probably get sick of seeing Chairman Mao’s face on every single bill you have, especially considering the fact that he isn’t exactly that hot and is in need of some major eyebrow waxing and hair implants…

By Stephanie Quach

The title says it all. Do not believe anything the FDIC says. Do not believe Sheila Bair, Chairman of the FDIC. Firstly, she graduated from the University of Kansas, which is not an Ivy League school. Secondly, she failed to go to a better law school and attended the same school for her graduate studies. According to top-laws-school-rankings.com, University of Kansas ranks #65 in the nation, you do not even need a GPA of 3.5 to get in. Wow, and this lady is in charge of FDIC ? It is safe to say we are in hot soup. On top of being a chairman of the FDIC and a mother of 2 kids, she is also an author and wrote, Isabel’s Car Wash. Car Wash? I never knew we needed a book to teach us how to wash your car! Who knows, this book may be more effective than Nyquil.

Fine, let’s stop making fun of Bair. Let’s talk about her superpowers instead. Bair promises to insure $6.2 trillion in deposits, while having only $10.4 billion in reserves. Perhaps there are money plants growing on the rooftop of the FDIC office. Perhaps we have outsourced printing of money to China and India, so that we can legally take advantage of sweatshops while reducing air pollution in the United States. The air in China is so dirty that you hardly have a clear day, adding more smog from another factory will not make a difference. Furthermore, the FDIC has increased the amount of deposits it would insure from $100,000 to $250,000. Obviously, not everybody reads the news, and banks do not bother to send a note to warn customers with accounts of over $250,000. Looks like these people are next in line to be screwed.

So the main question is: how do you protect $6.2 trillion with only $10.4 billion? The FDIC could tap into a line of credit at the US Treasury, which happens to be insolvent and needs $1.8 trillion itself for US budgetary obligations. The FDIC could also print another $500 billion, but printing money will send the value of the US dollar further down.

The government tells you that the economy is betting better. Unemployment rate fell from 9.5% to 9.4%. These are the numbers you see on the New York Times and you think that Bernanke and Bair are reviving the economy. Obviously, you have to learn to be tricky and not believe it. The only reason the number dropped is because the overall labor force is shrinking- more and more people have given up looking for jobs, so they are not considered “unemployed.” B & B (Bernanke & Bair) claim that banks seem to be performing better, returning TARP money and posting profits. However, the truth is that banks have “fudged” their numbers by removing sour loans from their accounting books. Ronald Fricke president of Regal Assets stated last week that there is no way we are in a place of economic recovery if the stock market is up and precious metals are hitting an all time high, something is going to give out and it isn’t precious metals.

Quit being gullible and dumb. As they say in school, “I don’t know” is not an excuse. The FDIC is not your business partner; they are not there to help you. They need to survive too, so that Bair will still have a job. She does not want to become unemployed and go back to writing about car washes, maybe Tom’s Car Wash next time round, so that Isabel’s Car Wash can have a companion book. If you have over half of the FDIC insurance limit in the bank do yourself a favor and move it into gold you will be properly hedged against inflation and your money will actually hold its value.

By Stephanie Quach

Now let us look at why we should we worried about the dollar. Firstly, as part of the Troubled Asset Relief Program (TARP), the government has handed out $700 billion to various banks, automakers and other companies. The company that topped the list was AIG, that received $69.8 billion, followed by Freddie Mac, that received $50.7 billion. In third place is GM, and then the banks- Citigroup and Bank of America. Only $70 billion of the $700 billion bailout has been returned. What about the remaining 90% of the total? Maybe the remaining will eventually return the money, or they may take the easy route and bail out. The latter will lead to dire consequences such as loss of even more fate in these failing firms and a further loss in confidence in the weak dollar.

Furthermore, the FDIC has “temporarily” increased its maximum deposit insurance limits by 150% from $100,000 to $250,000. With only $10.4 billion in reserves, the FDIC now promises to insure $6.2 trillion in deposits. “Temporarily” essentially implies that the FDIC is essentially lying. Even if the FIDC were to print extra bills, printing bills costs money and uses capital. Such a huge increase in money supply will lead to inflation as well.

With unemployment rates hitting 9.7%, 1 out of every 10 workers are sitting at home, desperately searching Ineedajob.com or Monster.com. Ronald Fricke president of Regal Assets says we have the highest unemployment rate since 1983 with over 170,000 unemployed this year alone.

As the economy continues to worsen, the only thing that is not going downhill with the rest of the world is gold. Looking at gold from a long term view, gold has remained stable throughout the years, even if the economy was doing as poorly as it is now. Rather than hold on to the greenback and pray that its value will go up, hold on to gold- you won’t regret it.

By Stephanie Quach

Congrats to Ben Bernanke. He is no ordinary man. His “temperament, courage and creativity” won him a second term as Fed Chairman, ensuring him a job at least for the next few years, saving him from unemployment. Bernanke is not just a talented Harvard-MIT-bred economist, he is also a YouTube superstar. Don’t let his looks deceive you- his gray beard and moustache certainly do not look hot (maybe we need to extend Cash for Clunkers to cover shavers as well), he is a sensation on YouTube with many videos of him. The best video is a song dedicated towards him, called “Every Breath You Take,” sung by Columbia Business School’s Dean Glenn Hubbard.

http://www.youtube.com/watch?v=3u2qRXb4xCU

If Bernanke does not win a third term, he could consider singing as his career. In addition to royalty from the numerous textbooks he has written, he can get extra income from sales of his CDs. I wonder if his $40,000 a year college education has trained him well in the field of singing. And how well has it trained him in the field of economics? Sure, we all know that he is smart. He scored 1590 out of 1600 on his SAT and won the state spelling bee competition. However, if you look at his achievements closely, he did not get full score on his SAT – a 1590 means he made 1 mistake, and finished only 26th in the National spelling bee competition in Washington because he could not spell “edelweiss.”

Let’s face the truth and stop pretending to be positive. We are in the worse economic recession since the Great Depression. Bernanke created wonderful programs like”TARP” and “Cash for Clunkers” to save our economy “from the brink of depression.” Companies like AIG, Merrill Lynch, GM were all bailed out. What does this imply? The message to large firms from Bernanke is: If you want to screw up, don’t screw up small time because nobody cares. If you want to screw up, then you should screw up big time, because the government always will come to save you.

Also, Bernanke was slow in recognizing the severity of the crisis. This in turn, caused him to make up for his slowness by attacking the problem extremely aggressively, leading to yet another problem – inflation. Cash for Clunkers increased auto sales, helping Japanese automakers Toyota and Honda more than American automakers. At the same time, car sales were so great that there is now a shortage of cars. It is good that people were given an incentive to spend money again, the only problem being that they are spending money that they do not actually have.

We all hold out hopes in one man, Bernanke, to improve the economy. I personally wonder how many gold bars and coins he keeps in his home. Maybe he is unhappy with his annual salary as the Fed Chairman- he gets almost $200,000 a year, which is not very much for all the responsibilities he has to undertake. As Ronald Fricke president of Regal Assets has said if Ron Paul gets his way and the Federal Reserve is audited Ben Bernanke may be looking for a new job. If he does not get a raise and does not perform well, you might have to buy a Bernanke stress ball while you continue your job search…