Why would the Fed want to inflate like that, when they can inflate like they have been for years with the full cooperation of Government? And how do you get inflation if 30% of households aren't paying rent, and 89% of student debt hodlers aren't making payments? The only statistics that show no or low inflation are the Gov's own BLS statistic. Even the Big Mac index shows inflation, lol.
I just don't see it happening. Those of us with even a little gold insulation may fare well enough but the vast majority of Americans will suffer and not stand for it.
I know that it's happened twice in our history but in today's environment? There seems to be next to no bi-partisan agreement on anything of substance and given the pandemic effect on small business, regular folks just trying to make a living and of those flat out, desperate poor folks already... it sounds like a pipe dream to me.
The Fed can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce.
They could make that new price stick by using the Treasury’s gold in Fort Knox and the major U.S. bank gold dealers to conduct “open market operations” in gold...
Unfortunately, it will also slash the value of the dollar. Your savings could quickly evaporate, and your standard of living will suffer.
The Federal Reserve can set the price of gold @ $5,000 if they are willing to buy it from all sellers at that price, not by decree. No different than artificially supporting the price of anything else.
The standard of living of the typical American (overwhelming majority) is guaranteed to crash land at some point, either by inflation, deflation or both. Most Americans are destined to be a lot poorer in the future than they are now.
No central bank can prevent an asset crash given the leverage in today's financial system and what exists today is an unprecedented mania. Due to recent events, I now believe it won't last as long as I previously thought but it still cannot be prevented from happening. So I still expect this to happen first as credit contracts and interest rates rise on practically all debt.
If this happens first, most people will lose most of their fake wealth (as absurdly overpriced stocks, bonds, real estate and practically everything else loses much or most of its value) after which we can expect central banks to reflate and governments to increase bread and circus which will worsen any price inflation.
I believe it will be a combination of an event and process; multiple asset crashes of relatively quick duration and persistent price inflation.
Those who own metals will presumably fare better than the general population but should not expect to escape totally either. Hardly any of these people own enough of either or both to compensate for losing their job or loss of value in other assets. Additionally, gold is historically relatively overpriced, significantly. I believe it will become even more overpriced first but at some point if price inflation gets a lot worse, it is going to lose a lot of relative value versus the physical goods most people need to buy.
@WCC said:
The Federal Reserve can set the price of gold @ $5,000 if they are willing to buy it from all sellers at that price, not by decree. No different than artificially supporting the price of anything else.
The price of gold is set on the futures exchange, not directly by the FED nor by the government. It is however set by their agents.
Keep an open mind, or get financially repressed -Zoltan Pozsar
@WCC said:
The Federal Reserve can set the price of gold @ $5,000 if they are willing to buy it from all sellers at that price, not by decree. No different than artificially supporting the price of anything else.
The price of gold is set on the futures exchange, not directly by the FED nor by the government. It is however set by their agents.
This is where I disagree with your implication that it is artificially suppressed, if you are claiming it. This is what I recall you have claimed before, as with silver.
If this is your implication, look at what gold can buy at today's prices versus previously. I'll grant you with recent insanity, some unquantifiable premium versus the historical norm can be justified or rationalized but it isn't remotely cheap versus hardly anything.
You didn't specify when but if now @ $5,000, someone could buy the median priced US home for about 60oz. When was the last time anyone could do this or anywhere near it, other than maybe at the manic peak of 1979/1980?
It's even worse, as housing is also artificially inflated by the loosest aggregate credit standards ever and artificially low borrowing costs. Real estate is local but the median priced home in the US isn't even close to affordable to most (prospective) home buyers, except due to distorted financial conditions.
The example I gave can happen but no reason to believe it will be more than temporary just as it was before.
You didn't specify when but if now @ $5,000, someone could buy the median priced US home for about 60oz. When was the last time anyone could do this or anywhere near it, other than maybe at the manic peak of 1979/1980?
What makes you think gold is limited to just one manic peak?
Keep an open mind, or get financially repressed -Zoltan Pozsar
You didn't specify when but if now @ $5,000, someone could buy the median priced US home for about 60oz. When was the last time anyone could do this or anywhere near it, other than maybe at the manic peak of 1979/1980?
What makes you think gold is limited to just one manic peak?
@WCC, if gold was somehow fixed at $5,000, the median home price would not be $300K. It would immediately adjust to $400K or$500K or more. That is the intent. To unleash inflation as desired by the Fed and mainstream economists. The author is from the uncool Austrian school and owns plenty of gold. And, he knows it would destroy the average household's standard of living.
Well, usually when failed states fall, rifles and ammo become the default currency in the first few days.
I have zero reason to think it will pan out differently in a country with hundreds of millions of guns.
Riflees and ammo quickly climb to the top of the list. Then canned fruits and meats, specialty medical supplies, stable fuel and medications. It will take a lot to get people trading gold and silver for food as a regular thing. We would need a period of sustained looters-with-rifles and a period of healing before we even worked our way up to bartering.
It's more likely that with massive wealth disparities that looting and pillaging would be a sustained thing. I doubt the fall from USD to metals will be as clear as many think it is. But whichever the case, a reckoning will come, and it's not gonna be pretty. This house of cards has never been closer to collapse than it has in the past 50 yrs.
Tl;dr: We have bigger things to worry about in the next few years than a debt reset or currency reset. That is not going to be a pandemic problem for any sub $25m positions.
I think the situation of gold coins or silver becoming a new type of currency would only be a first world problem of the elites. After seeing the full weight of the financial system come down on GameStop, and the disinformation programs and media manipulation that came with it, I think there will be very few willing to support something like that.
Don't forget, debt reset and gold/silver becoming currency is not something for us. It's something for Them, the elites who have gotten billions while our countrymen starved. There would be no legislation or push towards getting the common man any piece of that pie. Buy ammo, gold, CAD/EUR/BTC. The mass exodus from USD has already begun.
I enjoy Rickards, but this is definitely one of his stranger pieces.
The velocity of money a useful concept, but it is also artificial -- a balancing item in an equation that links amount of money to price and number of transactions.
In 2020, the velocity of money plummeted because in spite of a big increase in money supply, COVID related issues kept the economy in check. It is not at all surprising that the increase in money did not lead to vibrant growth. It's not mysterious and it's not scary. Given COVID, it was expected.
The plummeting velocity of money is not a big deal.
The much bigger deal is that we will probably continue to pump money into the economy long after it is prudent. This may even lead to a burst in growth. It will very likely fuel inflation. (With ramifications for gold)
The plummeting velocity of money is not a big deal.
It is to the tax collectors. Dollars only get taxed when they change hands.
It also is a gauge of people's willingness to spend money. Willingness to spend money is second only to the money supply as a cause for price inflation.
The plummeting velocity of money has resulted in deflation, except in the financial asset arena. It is likely, again second only to the money supply, the cause of our enormous asset bubbles.
While a decline in money velocity is the opposite of what one would expect with money creation, the up to now placement of new money (since it's proliferation in 2008) has been engineered to create the bubbles thus far seen. Now we will begin to see the CPI inflationary results of money being put directly into the hands of consumers. The helicopters that were feared since 2008 have at last been fueled. Consumer price inflation will grow right in step with an increase in money velocity as spenders and not only investors are invited to the helicopter parade.
There's a new fiscal attitude in Washington and its growing acceptance of a never ending Magic Money Tree is only going to expedite the eventual destruction of our currency. Rickards, a well respected geo-polictical economist continues to sound the alarm. What separates him from most economists is his understanding of the growing political element of the big economic picture. Got gold?
Keep an open mind, or get financially repressed -Zoltan Pozsar
You didn't specify when but if now @ $5,000, someone could buy the median priced US home for about 60oz. When was the last time anyone could do this or anywhere near it, other than maybe at the manic peak of 1979/1980?
What makes you think gold is limited to just one manic peak?
I did not say it was, only that such prices are almost certainly going to be temporary. I expect a manic peak at some future date, but almost certainly not when most who posting on this forum expect it.
While a decline in money velocity is the opposite of what one would expect with money creation, the up to now placement of new money (since it's proliferation in 2008) has been engineered to create the bubbles thus far seen. Now we will begin to see the CPI inflationary results of money being put directly into the hands of consumers. The helicopters that were feared since 2008 have at last been fueled. Consumer price inflation will grow right in step with an increase in money velocity as spenders and not only investors are invited to the helicopter parade.
This is why I expect the time window between an asset crash and higher CPI from reflation to be narrower than previously. But it won't be enough to prevent widespread economic hardship including forcing most "metal bugs" to sell most or all of their stash, possibly into a falling market.
No one can prevent a financial asset crash from happening first and contrary to what I read here, those with most influence and wealth aren't going to incinerate their own wealth with a printing press until they have to do it to save their necks either.
Don't forget, debt reset and gold/silver becoming currency is not something for us. It's something for Them, the elites who have gotten billions while our countrymen starved. There would be no legislation or push towards getting the common man any piece of that pie. Buy ammo, gold, CAD/EUR/BTC. The mass exodus from USD has already begun.
I agree with you if I understand you correctly.
One theme that I consistently read in topics like this one in venues like this forum is that the projected financial calamity is always for someone else, but not for those who own gold and silver.
The truth?
Most metal advocates do not and never will own enough of the metal to rescue them financially or even make any noticeable difference to their situation in a monetary crisis. They will lose their job and/or won't be able to pay their bills and debts like most other people because they aren't actually affluent. Presumably they are more financially conservative but this hardly means they can outlast a protracted economic contraction.
They will better off with the metals than without it, assuming they can afford to keep it but there is every reason to believe that many or most of them won't be able to do that.
I don't believe this happened much in 2008, but that's because the financial duress was temporary. In a bigger crisis, no amount of fiscal stimulus is going to prevent living standards from noticeably falling. And if it comes to maintaining the USD as reserve currency by throwing the public under the bus by cutting back on the free stuff, I'm betting on that too.
The debt is growing faster than the economy and the price/availability of ammo is my barometer. Best of luck finding it, the good stuff in the 9mm realm is up over a buck a round. Basically has tripled in the last year, something big is coming down the pike. I've talked to older dealers and they have never seen this sort of demand for weapons, ammo, heads, primers and powder.
@morgansforever said:
The debt is growing faster than the economy and the price/availability of ammo is my barometer. Best of luck finding it, the good stuff in the 9mm realm is up over a buck a round. Basically has tripled in the last year, something big is coming down the pike. I've talked to older dealers and they have never seen this sort of demand for weapons, ammo, heads, primers and powder.
Sounds like a bunch of gun nuts hoarding ammo. Probably Qnon conspiracy nuts dreaming up some fantasy about wearing Viking helmets and attempting to overthrow the gooberment. VERY strange world we live in. Semper Fi!
I was in Mexico back in the 90's when overnite the Government moved the decimal on the Peso two places. My 100 peso was now 1 New Peso. That was a interesting trip!
@morgansforever said:
The debt is growing faster than the economy and the price/availability of ammo is my barometer. Best of luck finding it, the good stuff in the 9mm realm is up over a buck a round. Basically has tripled in the last year, something big is coming down the pike. I've talked to older dealers and they have never seen this sort of demand for weapons, ammo, heads, primers and powder.
@morgansforever said:
The debt is growing faster than the economy and the price/availability of ammo is my barometer. Best of luck finding it, the good stuff in the 9mm realm is up over a buck a round. Basically has tripled in the last year, something big is coming down the pike. I've talked to older dealers and they have never seen this sort of demand for weapons, ammo, heads, primers and powder.
Obviously you are insinuating some kind of large scale civil conflict with a thought like that.
More like a large scale civil defense. One of the many things we learned in the last year is that when law enforcement is overwhelmed, one must be prepared to become the sole protector of his family and his property.
Keep an open mind, or get financially repressed -Zoltan Pozsar
derryb
Posts: 36,203 ✭✭✭✭✭
Comments
Now that is interesting.... Stackers, pay attention.... Cheers, RickO
Why would the Fed want to inflate like that, when they can inflate like they have been for years with the full cooperation of Government? And how do you get inflation if 30% of households aren't paying rent, and 89% of student debt hodlers aren't making payments? The only statistics that show no or low inflation are the Gov's own BLS statistic. Even the Big Mac index shows inflation, lol.
I just don't see it happening. Those of us with even a little gold insulation may fare well enough but the vast majority of Americans will suffer and not stand for it.
I know that it's happened twice in our history but in today's environment? There seems to be next to no bi-partisan agreement on anything of substance and given the pandemic effect on small business, regular folks just trying to make a living and of those flat out, desperate poor folks already... it sounds like a pipe dream to me.
They could make that new price stick by using the Treasury’s gold in Fort Knox and the major U.S. bank gold dealers to conduct “open market operations” in gold...
Click on this link to see my ebay listings.
The Federal Reserve can set the price of gold @ $5,000 if they are willing to buy it from all sellers at that price, not by decree. No different than artificially supporting the price of anything else.
The standard of living of the typical American (overwhelming majority) is guaranteed to crash land at some point, either by inflation, deflation or both. Most Americans are destined to be a lot poorer in the future than they are now.
No central bank can prevent an asset crash given the leverage in today's financial system and what exists today is an unprecedented mania. Due to recent events, I now believe it won't last as long as I previously thought but it still cannot be prevented from happening. So I still expect this to happen first as credit contracts and interest rates rise on practically all debt.
If this happens first, most people will lose most of their fake wealth (as absurdly overpriced stocks, bonds, real estate and practically everything else loses much or most of its value) after which we can expect central banks to reflate and governments to increase bread and circus which will worsen any price inflation.
I believe it will be a combination of an event and process; multiple asset crashes of relatively quick duration and persistent price inflation.
Those who own metals will presumably fare better than the general population but should not expect to escape totally either. Hardly any of these people own enough of either or both to compensate for losing their job or loss of value in other assets. Additionally, gold is historically relatively overpriced, significantly. I believe it will become even more overpriced first but at some point if price inflation gets a lot worse, it is going to lose a lot of relative value versus the physical goods most people need to buy.
yawn, no dollar reset in our lifetimes. Keep wishing I guess. lol
The whole worlds off its rocker, buy Gold™.
It was reset by .00000000000056803 cent while you were typing your post. Rust moves slowly until it consumes everything.
Keep an open mind, or get financially repressed -Zoltan Pozsar
The price of gold is set on the futures exchange, not directly by the FED nor by the government. It is however set by their agents.
Keep an open mind, or get financially repressed -Zoltan Pozsar
former FED chair, now Treasury secretary tells G-7 "time to go big is now."
The $30 trillion injected thus far is obviously not enough.
The sooner we blow it all up, the sooner we can begin fixing it.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Momma always said "Go big or go home". Semper Fi!
The whole worlds off its rocker, buy Gold™.
This is where I disagree with your implication that it is artificially suppressed, if you are claiming it. This is what I recall you have claimed before, as with silver.
If this is your implication, look at what gold can buy at today's prices versus previously. I'll grant you with recent insanity, some unquantifiable premium versus the historical norm can be justified or rationalized but it isn't remotely cheap versus hardly anything.
You didn't specify when but if now @ $5,000, someone could buy the median priced US home for about 60oz. When was the last time anyone could do this or anywhere near it, other than maybe at the manic peak of 1979/1980?
It's even worse, as housing is also artificially inflated by the loosest aggregate credit standards ever and artificially low borrowing costs. Real estate is local but the median priced home in the US isn't even close to affordable to most (prospective) home buyers, except due to distorted financial conditions.
The example I gave can happen but no reason to believe it will be more than temporary just as it was before.
What makes you think gold is limited to just one manic peak?
Keep an open mind, or get financially repressed -Zoltan Pozsar
If you add the Nibiru cataclysm into the picture. We are in deep Scheiße.
@WCC, if gold was somehow fixed at $5,000, the median home price would not be $300K. It would immediately adjust to $400K or$500K or more. That is the intent. To unleash inflation as desired by the Fed and mainstream economists. The author is from the uncool Austrian school and owns plenty of gold. And, he knows it would destroy the average household's standard of living.
Well, usually when failed states fall, rifles and ammo become the default currency in the first few days.
I have zero reason to think it will pan out differently in a country with hundreds of millions of guns.
Riflees and ammo quickly climb to the top of the list. Then canned fruits and meats, specialty medical supplies, stable fuel and medications. It will take a lot to get people trading gold and silver for food as a regular thing. We would need a period of sustained looters-with-rifles and a period of healing before we even worked our way up to bartering.
It's more likely that with massive wealth disparities that looting and pillaging would be a sustained thing. I doubt the fall from USD to metals will be as clear as many think it is. But whichever the case, a reckoning will come, and it's not gonna be pretty. This house of cards has never been closer to collapse than it has in the past 50 yrs.
Tl;dr: We have bigger things to worry about in the next few years than a debt reset or currency reset. That is not going to be a pandemic problem for any sub $25m positions.
I think the situation of gold coins or silver becoming a new type of currency would only be a first world problem of the elites. After seeing the full weight of the financial system come down on GameStop, and the disinformation programs and media manipulation that came with it, I think there will be very few willing to support something like that.
Don't forget, debt reset and gold/silver becoming currency is not something for us. It's something for Them, the elites who have gotten billions while our countrymen starved. There would be no legislation or push towards getting the common man any piece of that pie. Buy ammo, gold, CAD/EUR/BTC. The mass exodus from USD has already begun.
I enjoy Rickards, but this is definitely one of his stranger pieces.
The velocity of money a useful concept, but it is also artificial -- a balancing item in an equation that links amount of money to price and number of transactions.
In 2020, the velocity of money plummeted because in spite of a big increase in money supply, COVID related issues kept the economy in check. It is not at all surprising that the increase in money did not lead to vibrant growth. It's not mysterious and it's not scary. Given COVID, it was expected.
The plummeting velocity of money is not a big deal.
The much bigger deal is that we will probably continue to pump money into the economy long after it is prudent. This may even lead to a burst in growth. It will very likely fuel inflation. (With ramifications for gold)
It is to the tax collectors. Dollars only get taxed when they change hands.
It also is a gauge of people's willingness to spend money. Willingness to spend money is second only to the money supply as a cause for price inflation.
The plummeting velocity of money has resulted in deflation, except in the financial asset arena. It is likely, again second only to the money supply, the cause of our enormous asset bubbles.
While a decline in money velocity is the opposite of what one would expect with money creation, the up to now placement of new money (since it's proliferation in 2008) has been engineered to create the bubbles thus far seen. Now we will begin to see the CPI inflationary results of money being put directly into the hands of consumers. The helicopters that were feared since 2008 have at last been fueled. Consumer price inflation will grow right in step with an increase in money velocity as spenders and not only investors are invited to the helicopter parade.
There's a new fiscal attitude in Washington and its growing acceptance of a never ending Magic Money Tree is only going to expedite the eventual destruction of our currency. Rickards, a well respected geo-polictical economist continues to sound the alarm. What separates him from most economists is his understanding of the growing political element of the big economic picture. Got gold?
Keep an open mind, or get financially repressed -Zoltan Pozsar
I did not say it was, only that such prices are almost certainly going to be temporary. I expect a manic peak at some future date, but almost certainly not when most who posting on this forum expect it.
>
This is why I expect the time window between an asset crash and higher CPI from reflation to be narrower than previously. But it won't be enough to prevent widespread economic hardship including forcing most "metal bugs" to sell most or all of their stash, possibly into a falling market.
No one can prevent a financial asset crash from happening first and contrary to what I read here, those with most influence and wealth aren't going to incinerate their own wealth with a printing press until they have to do it to save their necks either.
>
I agree with you if I understand you correctly.
One theme that I consistently read in topics like this one in venues like this forum is that the projected financial calamity is always for someone else, but not for those who own gold and silver.
The truth?
Most metal advocates do not and never will own enough of the metal to rescue them financially or even make any noticeable difference to their situation in a monetary crisis. They will lose their job and/or won't be able to pay their bills and debts like most other people because they aren't actually affluent. Presumably they are more financially conservative but this hardly means they can outlast a protracted economic contraction.
They will better off with the metals than without it, assuming they can afford to keep it but there is every reason to believe that many or most of them won't be able to do that.
I don't believe this happened much in 2008, but that's because the financial duress was temporary. In a bigger crisis, no amount of fiscal stimulus is going to prevent living standards from noticeably falling. And if it comes to maintaining the USD as reserve currency by throwing the public under the bus by cutting back on the free stuff, I'm betting on that too.
The debt is growing faster than the economy and the price/availability of ammo is my barometer. Best of luck finding it, the good stuff in the 9mm realm is up over a buck a round. Basically has tripled in the last year, something big is coming down the pike. I've talked to older dealers and they have never seen this sort of demand for weapons, ammo, heads, primers and powder.
https://www.midwayusa.com/9mm-luger/br?cid=21659
Sounds like a bunch of gun nuts hoarding ammo. Probably Qnon conspiracy nuts dreaming up some fantasy about wearing Viking helmets and attempting to overthrow the gooberment. VERY strange world we live in. Semper Fi!
The whole worlds off its rocker, buy Gold™.
simply a fear of expected changes to gun laws. Fear always leads to hoarding.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Tell me about it. I'm running out of places to store all my butter and beans.
The whole worlds off its rocker, buy Gold™.
I was in Mexico back in the 90's when overnite the Government moved the decimal on the Peso two places. My 100 peso was now 1 New Peso. That was a interesting trip!
100% Positive BST transactions
Obviously you are insinuating some kind of large scale civil conflict with a thought like that.
ISO 1978 Topps Baseball in NM-MT High Grade Raw 3, 100, 103, 302, 347, 376, 416, 466, 481, 487, 509, 534, 540, 554, 579, 580, 622, 642, 673, 724__________________________________________________________________________________________________________________________________ISO 1978 O-Pee-Chee in NM-MT High Grade Raw12, 21, 29, 38, 49, 65, 69, 73, 74, 81, 95, 100, 104, 110, 115, 122, 132, 133, 135, 140, 142, 151, 153, 155, 160, 161, 167, 168, 172, 179, 181, 196, 200, 204, 210, 224, 231, 240
More like a large scale civil defense. One of the many things we learned in the last year is that when law enforcement is overwhelmed, one must be prepared to become the sole protector of his family and his property.
Keep an open mind, or get financially repressed -Zoltan Pozsar
How ammo is being sold on the street these days...
Dime bag?
Keep an open mind, or get financially repressed -Zoltan Pozsar
I'm hoping not.
I have a feeling will be finding out pretty soon though.