Frankly, I never did get much into research and building arguments from data. It's not my wheelhouse
Weak is the house with no foundation.
I will say that without large amounts of financial instruments there certainly had to be enough money (gold) to cover the goods and services extent. There was obviously a close correlation
You could easily research GDP of the US in 1900 and compare it to the value of gold extant at the time. This would at least be one small way to prove to yourself if your conjecture is accurate, as it seems you may not be so sure of your assertation yourself.
@cohodk said: Frankly, I never did get much into research and building arguments from data. It's not my wheelhouse
Weak is the house with no foundation.
I will say that without large amounts of financial instruments there certainly had to be enough money (gold) to cover the goods and services extent. There was obviously a close correlation
You could easily research GDP of the US in 1900 and compare it to the value of gold extant at the time. This would at least be one small way to prove to yourself if your conjecture is accurate, as it seems you may not be so sure of your assertation yourself.
No, my problem has never been one of confidence but rather one of accuracy.
But, hey, all prognosticators are lucky to ever be right about anything at all. I'd put my accuracy up against anyone but Nostradamus.
I've called five of the last two bull markets in silver but I actually do a very good job of calling tops and bottoms of the markets I follow.
Inflation is coming back. And it's coming much faster than anyone anticipates.
Why? Do you see supply constraints for goods and services? Or a huge increase in demand for goods and services? Maybe a big increase in wages?
What do you see that leads you to a rapid acceleration in inflation?
It's something I've warned about for years and it's a double whammy. Chiefly it's the vast amounts of money that governments have pumped into a struggling economy. Rather than letting bad financial institutions run by crooks fail they propped them up and pumped money into them. Now all that was required was a little spark to get the economic engine firing on all cylinders and money velocity will take us straight up.
The trigger is demographics. Baby boomers are starting to retire in huge numbers creating a labor shortage of biblical proportions. A lot of jobs can just be eliminated and should never have existed at all but there are millions of jobs that must be done and can't be done by those coming out of the failed educational system that is still failing worse day by day. This will be an ongoing problem for at least two generations.
China is spending $2 to make products that cost another $1 to ship to the US and then selling them for 50 cents. This won't continue. This will contribute to both inflation and job creation further exacerbating the labor shortage.
@Baley said:
The irony of Cladking calling for a bull market in Silver is not lost on the chorus
Yeah, yeah, I'm always a bull.
But until silver hit $14 I was a short term bear. Indeed, I was even considering staying short term bearish at first. It was only then that I realized I was the last bear.
One thing for sure, silver (and gold) has certainly shown a nice upward push recently. We seem to be in a period of political chaos that is likely to continue for a couple of years. As the battles play out, investors may take another look at the age old refuge of gold and silver.
Clacking, I believe you were a former educator, so I find it shocking that you would write without research. The use of hyperbole and rhetoric, really does not add credence to a claim.
Unfortunately, much if what you wrote has no merit, and hence, your opinion may be readily dismissed.
I dont believe you have identified the source of your anticipated inflation, to which I am curious.
I dont believe you have identified the source of your anticipated inflation, to which I am curious.
Let's start with the $12 Trillion created with QE. While the true definition of "inflation" is an increase in the money supply, we all know this is followed by price inflation. We also know most of the new money went into inflating asset prices that only a blind man cannot see are now in bubbleland. As these asset bubbles deflate where do you think all that funny money will go? I can assure you the FED will not destroy it. It will wreck havoc in the non-asset economy.
What does the law of supply and demand dictate will happen when you greatly increase the supply of money? Hint: each unit will buy less. Price inflation: when it takes more money to buy what was cheaper yesterday.
Keep an open mind, or get financially repressed -Zoltan Pozsar
If the $trillions were created to wipe out the mortgage loan losses on the banking system's books, they aren't "inflationary" since they only benefit a small segment of the population and the money never sees the light of day. As long as the bonuses remain intact, it's all good - right?
As long as the new money flows to defense contractors and remains hidden in the Homeland Security and HUD accounts, nobody asks questions about the $21 trillion that was created and got spent with no accountability.
When the 5 richest counties are in the DC area, you know exactly who is getting paid and from where it originates.
China is looking at bonds that pay perpetual interest and have no maturity date. Looks like they took a lesson or two from the Fed.
The system won't last much longer at this rate. Nobody will support it.
Q: Are You Printing Money? Bernanke: Not Literally
I dont believe you have identified the source of your anticipated inflation, to which I am curious.
Let's start with the $12 Trillion created with QE.
I'm not sure what number it was, but $12T sounds very high.
We also know most of the new money went into inflating asset prices that only a blind man cannot see are now in bubbleland.
The Fed keystroked money into existance. The Fed used the money to buy Treasuries and Mortgage Backed Securities. The Fed put money into "Excess Reserve Balance" accounts for banks in the Fed's books. The banks then had little need to pump lots of money to backstop themselves since they had tons of free cash from the Fed that was keystroked into existence. The Fed let them have this play money and the banks played -- unfortunately, instead of lending it, which was deemed too risky by the banks, the banks chose to sink it into sure money assets. The Fed didn't inflate anything but Treasury and MBS prices, the recipient banks did the asset inflation part of it and I'm guessing Treasuries were part of what the banks bought, too.
As these asset bubbles deflate where do you think all that funny money will go? I can assure you the FED will not destroy it. It will wreck havoc in the non-asset economy.
There have been many papers and speeches from the Fed on balance sheet normalization. Unfortunately, I have not read any. I'm not sure how they will go about it. I do know that right now the Fed is primarily selling the short dated Treasuries they bought with their keystroked money. Where it goes from there, I don't know.
What does the law of supply and demand dictate will happen when you greatly increase the supply of money? Hint: each unit will buy less. Price inflation: when it takes more money to buy what was cheaper yesterday.
The Fed did increase the supply of money with the "are you printing money? not literally" keystroked money creation back during the financial crisis.
What has it gotten us? Right now it's a $1.27 for a British Pound and a little over $1.14 for the Euro. All that money creation hasn't killed the dollar. It's still "King Dollar," and I believe it will be that way for years and years to come.
How many "flight away from USA" countries are there? Euro? Pound? Yen? Swiss Franc? Either they have debt problems of their own or, in the case of Switzerland, there would be too much money chasing too little assets (a/k/a people will find a point to stop adding money there as they have done in the past) Perhaps the Euro is the best choice? perhaps the Commie Chinese will get their head around their rising debt and actually become a safe haven... that is if they can also keep inflation down as the standard of living goes up.
Anyway... beyond the simple "choices of safety zones"... if one or more safety zone is actually found, then we have something to worry about as far as the dollar is concerned.
However, I don't see any real safety zones. So many areas on the globe are following us by creating more debt than they can service with just taxes. So many are unsafe-ty zones like us. "Everybody's Doing It." I don't see a currency crash coming from this. I'd guess the end result would be more like a ""new tax"" for everyone... thanks for buying our debt we're going to force "inside the country only" banks to take less or maybe nothing** and the rest will be refinanced... and there will be a huge standard of living hit as we can't issue more debt to finance our lifestyle.
(prod your Congress members to make 1,000 year surviving infrastructure now while people are still dumb enough to lend us money.... build those new bridges and widen those highways.... add more airports... put in new water, sewer and gas lines.... etc. Fast please!)
**don't worry about another liquidity crisis from this. we can keystroke more money into their reserve balances.
@cohodk said: As these asset bubbles deflate where do you think all that funny money will go? I can assure you the FED will not destroy it.
The stock market deflated by about 4 trillion over the last few months, where did that go?
When the stock market dropped in 2008, where was this rapid inflation?
There is a lack of understanding of what CAUSES inflation. You guys have the symptoms down, but not the cause.
I'm certainly no expert in this area... but aren't we comparing apples to oranges? I just don't see where a loss in stocks... based on a company's value and worth... can be compared to the creation (and destruction) of funny money, which can be created by a printing press or just the touch of some magic buttons on a keyboard. Or perhaps I just misunderstand the point you are trying to make. But I do try to learn....
oh, and what does the above mean for silver and gold? perhaps a short term pop for them both when the whole... government debt losses hot potato... finally lands on all of us. However, I don't see that happening for years and years. The world in the way of non-governmental institutions still has tons of money to put into more governmental debt.
Watch CNBC and see how our new issue Treasury auctions are still oversubscribed to this day.
Unfortunately mother nature keeps her own set of books and you can't fool mother nature.
You can't take more out of a bank than you put in without a loan. You can't get a loan from mother nature and we are bankrupt. The only way to avoid the pain of bankruptcy is to inflate a little of the debt away.
Also unfortunately inflation is caused by an aggregate decrease in the perception of the value of money. It has nothing to do with printing money or anything else. Anything that causes people to believe money is worth less causes it to be worth less through inflation.
The way that the FED and banks have been acting determines the nature of the manifestation of inflation. They've been borrowing from the future to service debt today until "today" is arriving as increasing money velocity propelled by demographic changes.
It's been said that you can line up every accountant in the world and never reach a conclusion. I never believed you can predict that even the sun will come up by merely crunching numbers and watching trends. I think a reckoning is soon to start unfolding and that everything that has, is, and will happen will define how this reckoning unfolds. Silver price is merely an early sign post on what will be a long and poorly defined journey for which even the historians won't agree on the beginning and end.
If this sounds too metaphysical then you're welcome to figure I'm wrong again. God knows I've done this many times before and am likely to do it again.
The Treasury Department auctioned $15 billion in 30-year bond at a high yield of 3.344 percent. The bid-to-cover ratio, an indicator of demand, was 2.42. Indirect bidders, which include major central banks, were awarded 64.4 percent. Direct bidders, which includes domestic money managers, bought 12.8 percent.
The bid-to-cover ratio is the dollar amount of bids received in a Treasury security auction versus the amount sold. The bid-to-cover ratio is an indicator of the demand for Treasury securities. A high ratio is an indication of a strong demand.
Your previous comment made it seem like the $12T was all in the US, which would have been false and appropriately questioned. Please be more specific in your comments.
Why? Do you see supply constraints for goods and services? Or a huge increase in demand for goods and services? Maybe a big increase in wages?
What do you see that leads you to a rapid acceleration in inflation?
It's something I've warned about for years and it's a double whammy. Chiefly it's the vast amounts of money that governments have pumped into a struggling economy. Rather than letting bad financial institutions run by crooks fail they propped them up and pumped money into them.....
That part is so true.
But there is one problem with your theory. 90% of the money pumped into the economy is landing in the hands of 10% of the populace. 2/3 of America is still living hand-to-mouth and there is no sign that will change. Absent large amounts of money in the hands of large amounts of people inflation will stay in check and there are no signs that will happen.
I also believe there is a great deal of money sitting on the sidelines waiting for a clear buy signal. Normally this is in reference primarily to real money, real demand, and real silver but in this case it's pent up investment demand by previous financial players. These people made and lost money previously in both bear and bull markets.
This should result in a massive up day or two. I doubt a 15% move is out of the question.
Comments
Frankly, I never did get much into research and building arguments from data. It's not my wheelhouse
Weak is the house with no foundation.
I will say that without large amounts of financial instruments there certainly had to be enough money (gold) to cover the goods and services extent. There was obviously a close correlation
You could easily research GDP of the US in 1900 and compare it to the value of gold extant at the time. This would at least be one small way to prove to yourself if your conjecture is accurate, as it seems you may not be so sure of your assertation yourself.
Knowledge is the enemy of fear
No, my problem has never been one of confidence but rather one of accuracy.
But, hey, all prognosticators are lucky to ever be right about anything at all. I'd put my accuracy up against anyone but Nostradamus.
I've called five of the last two bull markets in silver but I actually do a very good job of calling tops and bottoms of the markets I follow.
Inflation is coming back. And it's coming much faster than anyone anticipates.
The irony of Cladking calling for a bull market in Silver is not lost on the chorus
Liberty: Parent of Science & Industry
Why? Do you see supply constraints for goods and services? Or a huge increase in demand for goods and services? Maybe a big increase in wages?
What do you see that leads you to a rapid acceleration in inflation?
Knowledge is the enemy of fear
Silver seems to be "up" these days.
I knew it would happen.
It's something I've warned about for years and it's a double whammy. Chiefly it's the vast amounts of money that governments have pumped into a struggling economy. Rather than letting bad financial institutions run by crooks fail they propped them up and pumped money into them. Now all that was required was a little spark to get the economic engine firing on all cylinders and money velocity will take us straight up.
The trigger is demographics. Baby boomers are starting to retire in huge numbers creating a labor shortage of biblical proportions. A lot of jobs can just be eliminated and should never have existed at all but there are millions of jobs that must be done and can't be done by those coming out of the failed educational system that is still failing worse day by day. This will be an ongoing problem for at least two generations.
China is spending $2 to make products that cost another $1 to ship to the US and then selling them for 50 cents. This won't continue. This will contribute to both inflation and job creation further exacerbating the labor shortage.
Yeah, yeah, I'm always a bull.
But until silver hit $14 I was a short term bear. Indeed, I was even considering staying short term bearish at first. It was only then that I realized I was the last bear.
Even if the current move is a bull trap silver will be back in the long run...
One thing for sure, silver (and gold) has certainly shown a nice upward push recently. We seem to be in a period of political chaos that is likely to continue for a couple of years. As the battles play out, investors may take another look at the age old refuge of gold and silver.
Clacking, I believe you were a former educator, so I find it shocking that you would write without research. The use of hyperbole and rhetoric, really does not add credence to a claim.
Unfortunately, much if what you wrote has no merit, and hence, your opinion may be readily dismissed.
I dont believe you have identified the source of your anticipated inflation, to which I am curious.
Knowledge is the enemy of fear
Let's start with the $12 Trillion created with QE. While the true definition of "inflation" is an increase in the money supply, we all know this is followed by price inflation. We also know most of the new money went into inflating asset prices that only a blind man cannot see are now in bubbleland. As these asset bubbles deflate where do you think all that funny money will go? I can assure you the FED will not destroy it. It will wreck havoc in the non-asset economy.
What does the law of supply and demand dictate will happen when you greatly increase the supply of money? Hint: each unit will buy less. Price inflation: when it takes more money to buy what was cheaper yesterday.
Keep an open mind, or get financially repressed -Zoltan Pozsar
If the $trillions were created to wipe out the mortgage loan losses on the banking system's books, they aren't "inflationary" since they only benefit a small segment of the population and the money never sees the light of day. As long as the bonuses remain intact, it's all good - right?
As long as the new money flows to defense contractors and remains hidden in the Homeland Security and HUD accounts, nobody asks questions about the $21 trillion that was created and got spent with no accountability.
When the 5 richest counties are in the DC area, you know exactly who is getting paid and from where it originates.
China is looking at bonds that pay perpetual interest and have no maturity date. Looks like they took a lesson or two from the Fed.
The system won't last much longer at this rate. Nobody will support it.
I knew it would happen.
As these asset bubbles deflate where do you think all that funny money will go? I can assure you the FED will not destroy it.
The stock market deflated by about 4 trillion over the last few months, where did that go?
When the stock market dropped in 2008, where was this rapid inflation?
There is a lack of understanding of what CAUSES inflation. You guys have the symptoms down, but not the cause.
Knowledge is the enemy of fear
I'm not sure what number it was, but $12T sounds very high.
The Fed keystroked money into existance. The Fed used the money to buy Treasuries and Mortgage Backed Securities. The Fed put money into "Excess Reserve Balance" accounts for banks in the Fed's books. The banks then had little need to pump lots of money to backstop themselves since they had tons of free cash from the Fed that was keystroked into existence. The Fed let them have this play money and the banks played -- unfortunately, instead of lending it, which was deemed too risky by the banks, the banks chose to sink it into sure money assets. The Fed didn't inflate anything but Treasury and MBS prices, the recipient banks did the asset inflation part of it and I'm guessing Treasuries were part of what the banks bought, too.
There have been many papers and speeches from the Fed on balance sheet normalization. Unfortunately, I have not read any.
I'm not sure how they will go about it. I do know that right now the Fed is primarily selling the short dated Treasuries they bought with their keystroked money. Where it goes from there, I don't know.
The Fed did increase the supply of money with the "are you printing money? not literally" keystroked money creation back during the financial crisis.
What has it gotten us? Right now it's a $1.27 for a British Pound and a little over $1.14 for the Euro. All that money creation hasn't killed the dollar. It's still "King Dollar," and I believe it will be that way for years and years to come.
How many "flight away from USA" countries are there? Euro? Pound? Yen? Swiss Franc? Either they have debt problems of their own or, in the case of Switzerland, there would be too much money chasing too little assets (a/k/a people will find a point to stop adding money there as they have done in the past) Perhaps the Euro is the best choice? perhaps the Commie Chinese will get their head around their rising debt and actually become a safe haven... that is if they can also keep inflation down as the standard of living goes up.
Anyway... beyond the simple "choices of safety zones"... if one or more safety zone is actually found, then we have something to worry about as far as the dollar is concerned.
However, I don't see any real safety zones. So many areas on the globe are following us by creating more debt than they can service with just taxes. So many are unsafe-ty zones like us. "Everybody's Doing It." I don't see a currency crash coming from this. I'd guess the end result would be more like a ""new tax"" for everyone... thanks for buying our debt we're going to force "inside the country only" banks to take less or maybe nothing** and the rest will be refinanced... and there will be a huge standard of living hit as we can't issue more debt to finance our lifestyle.
(prod your Congress members to make 1,000 year surviving infrastructure now while people are still dumb enough to lend us money.... build those new bridges and widen those highways.... add more airports... put in new water, sewer and gas lines.... etc. Fast please!)
**don't worry about another liquidity crisis from this. we can keystroke more money into their reserve balances.
I'm certainly no expert in this area... but aren't we comparing apples to oranges? I just don't see where a loss in stocks... based on a company's value and worth... can be compared to the creation (and destruction) of funny money, which can be created by a printing press or just the touch of some magic buttons on a keyboard. Or perhaps I just misunderstand the point you are trying to make. But I do try to learn....
oh, and what does the above mean for silver and gold? perhaps a short term pop for them both when the whole... government debt losses hot potato... finally lands on all of us. However, I don't see that happening for years and years. The world in the way of non-governmental institutions still has tons of money to put into more governmental debt.
Watch CNBC and see how our new issue Treasury auctions are still oversubscribed to this day.
Between 2008 and 2015, the Fed's balance sheet, its total assets, ballooned from $900 billion to $4.5 trillion.
https://www.cnbc.com/2017/11/24/the-fed-launched-qe-nine-years-ago--these-four-charts-show-its-impact.html
Unfortunately mother nature keeps her own set of books and you can't fool mother nature.
You can't take more out of a bank than you put in without a loan. You can't get a loan from mother nature and we are bankrupt. The only way to avoid the pain of bankruptcy is to inflate a little of the debt away.
Also unfortunately inflation is caused by an aggregate decrease in the perception of the value of money. It has nothing to do with printing money or anything else. Anything that causes people to believe money is worth less causes it to be worth less through inflation.
The way that the FED and banks have been acting determines the nature of the manifestation of inflation. They've been borrowing from the future to service debt today until "today" is arriving as increasing money velocity propelled by demographic changes.
It's been said that you can line up every accountant in the world and never reach a conclusion. I never believed you can predict that even the sun will come up by merely crunching numbers and watching trends. I think a reckoning is soon to start unfolding and that everything that has, is, and will happen will define how this reckoning unfolds. Silver price is merely an early sign post on what will be a long and poorly defined journey for which even the historians won't agree on the beginning and end.
If this sounds too metaphysical then you're welcome to figure I'm wrong again. God knows I've done this many times before and am likely to do it again.
Is it Competition for limited amounts of goods and services, requiring increased bids to secure them?
The world seems awash in goods and services, with lots of alternatives for anything that's in a temporary shortage.
How can prices rise fast when there is a glut of stuff for sale?
Liberty: Parent of Science & Industry
from October:
The Treasury Department auctioned $15 billion in 30-year bond at a high yield of 3.344 percent. The bid-to-cover ratio, an indicator of demand, was 2.42. Indirect bidders, which include major central banks, were awarded 64.4 percent. Direct bidders, which includes domestic money managers, bought 12.8 percent.
https://www.cnbc.com/2018/10/11/us-bonds-and-fixed-income-global-equity-markets-in-turmoil.html
The bid-to-cover ratio is the dollar amount of bids received in a Treasury security auction versus the amount sold. The bid-to-cover ratio is an indicator of the demand for Treasury securities. A high ratio is an indication of a strong demand.
https://www.investopedia.com/terms/b/bidtocoverratio.asp
**There are still a lot of suckers buying our debt.
The world has an over capacity problem. Factories everywhere. Why build another factory that will sit vacant? Better uses have been to buy own stock..
Folks need more money to buy junk they dont need. Still not enough out there.
Now contrast that with Weimar that had no capacity and Zimbabwe and Venezuela which also had no capacity and a dictatorship govt.
Knowledge is the enemy of fear
$12 Trillion of QE
Keep an open mind, or get financially repressed -Zoltan Pozsar
Your previous comment made it seem like the $12T was all in the US, which would have been false and appropriately questioned. Please be more specific in your comments.
Knowledge is the enemy of fear
That part is so true.
But there is one problem with your theory. 90% of the money pumped into the economy is landing in the hands of 10% of the populace. 2/3 of America is still living hand-to-mouth and there is no sign that will change. Absent large amounts of money in the hands of large amounts of people inflation will stay in check and there are no signs that will happen.
.
https://goo.gl/images/ZFgJ7x
Somewhere down here is a good buy.
I also believe there is a great deal of money sitting on the sidelines waiting for a clear buy signal. Normally this is in reference primarily to real money, real demand, and real silver but in this case it's pent up investment demand by previous financial players. These people made and lost money previously in both bear and bull markets.
This should result in a massive up day or two. I doubt a 15% move is out of the question.
good call. i was thinking it could fall to $12. But I agree it appears to have bottomed (for now at least).
My Coin Blog
My Toned Lincoln Registry Set
Hold onto your hats and keep your arms inside the ride at all times.
Gold has been trying to signal inflation but it can't because it's manipulated.
It's the manipulation coming undone and not the economy.