<< <i>Nothing seems to affect the spending habits of Americans or their government >>
Why should it?? Go ahead and run up the credit, the gov't is doing it, everyone is doing it, why not live for today. It isn't like we may need the money someday after all the government will take care of us , Right?? Worse case is we go broke and hey, this isn't Asia or South America, even broke people get fed and clothing and medical care.
Spend and enjoy, you don't need a cushion, big brother won't let you fall.
Most of you seem to anticipate an economic meltdown and believe gold will be the solution to financial independence in the interim between said meltdown and recovery. Have any of you really considered what the U.S. will be like in the interim? Do you really think gold will be valued by a population that is half crazy with fear and perhaps starving?
Have you evaluated the average American’s knowledge of financial markets? Do you really think most of them are going to be expecting an economic collapse and be prepared for it? If you are forced to deal with said people for material goods, do you really think they will be wanting your gold? I doubt it. They want what they always want: cigarettes and whiskey. If you had enough security and patience, you could get more gold from these people using whiskey and cigarettes than you could amass through a lifetime of savings and strategic purchasing.
Think of it. How much gold does the average person have? A few grams or ounces in jewelry. This will be worthless to them in the event they are without cigarettes and whiskey. They would come running to you to get these things given enough time. If you had enough whiskey and cigarettes you could probably clean out a small town of 2,500 people out of that many ounces of gold. Think of how much cheaper this will be than purchasing gold now.
By the way, I tend to agree the markets will collapse.
I am not sure the Chinese government thinks of "us" as their best customers. In fact, they probably think that "they" are their best customers and that we are just temporarily occupying their land.....Sort of like a large Taiwan....
<< <i>Most of you seem to anticipate an economic meltdown and believe gold will be the solution to financial independence in the interim between said meltdown and recovery. Have any of you really considered what the U.S. will be like in the interim? Do you really think gold will be valued by a population that is half crazy with fear and perhaps starving?
Have you evaluated the average American’s knowledge of financial markets? Do you really think most of them are going to be expecting an economic collapse and be prepared for it? If you are forced to deal with said people for material goods, do you really think they will be wanting your gold? I doubt it. They want what they always want: cigarettes and whiskey. If you had enough security and patience, you could get more gold from these people using whiskey and cigarettes than you could amass through a lifetime of savings and strategic purchasing.
Think of it. How much gold does the average person have? A few grams or ounces in jewelry. This will be worthless to them in the event they are without cigarettes and whiskey. They would come running to you to get these things given enough time. If you had enough whiskey and cigarettes you could probably clean out a small town of 2,500 people out of that many ounces of gold. Think of how much cheaper this will be than purchasing gold now.
By the way, I tend to agree the markets will collapse. >>
You're talking about a "Mad Max" scenario. Since that is unlikely (but not impossible), gold and silver is more for your financial health versus just something to barter for guns and ammo and whiskey.
If you don't want your savings eaten up by inflation, then gold is a safe haven in the meantime.
Why is it that whenever we talk about gold as an inflationary hedge there are those who think we are talking about a "take to the hills " scenario? Even if the economic system totally collapses, which probably won't happen, we should still have a government in effect. There will still be some economic activity and a source of currency, maybe a much diluted dollar or some other currency, but still a system will be in place with a govenment and military to back it up. In addition there will still be goods available to barter as well as other countries with sound economic systems that will be eager to take gold/silver in trade.(if the US govt doesn't confiscate it)
I don't anticipate a total "Mad Max" scenario. More like a long term inflationary cycle that will end up pricing a pound of ground beef in the 30-50 dollar range. If any of you remember the 70's, menus were often priced in pencil to allow for frequent price changes. This lasted a few years, image it lasting for 15-20 years with 8-15% annual inflation.
A little gold and silver won't go stale like cigarettes, but hey, a case or 2 of good whiskey isn't a bad item to keep around either.
A monetary crisis does not necesarily mean a breakdown of society. Look at the hyper-inflation of Weimar Germany and the USA in 1979-80. In neither case did society completely break down, even though the monetary systems came close to failing. On the other hand, a crushing deflation could result in a collapse of society, especially with the current debt levels of average households.
I think we are far more likely to see the inflationary scenario than the deflationary outcome. Since what we are presently seeing is a monetary phenomenon, the prices of precious metals will likely hold up very well. International trade will continue. Foreigners won't care squat about US paper assets if things go really bad - they'll want whatever portable (exportable) tangible assets they can get for their accumulated US dollars - and that means, among other things, precious metals.
The Soviet Union in 1989 appeared strong from most outward appearances. But on the inside, it was weak economically. The facade caved in and the regime crumbled. But society did not completely disintegrate there, and now they are on the rebound. The USA is in a similar situation, I think (appears stong on the outside, but weak economically). If the USA facade comes down, the Dollar will suffer (decline) against assets such as gold.
The Soviet Union's central-planning approach to the economy was a failure, and shortages of common goods was widespread. The USA supposedly has a "market" economy. But I fear that the US government has been intervening in financial markets to such a great extent that what we have is a defacto centrally-planned economy. This too will likely result in failure. The first signs will be spot shortages of essential goods.
If not for foreign countries (China, Japan, etc) off-loading a lot of inflation from the USA, we would have seen MUCH higher prices for goods in the last five years. But the inflation is still there. It is in the pipeline. The pipe just got bigger, that's all. When the financial flows reverse (which they must ultimately do) all that pipeline inflation will hit the USA regardless of what the FED does.
Consumer confidence comes roaring back; Falling gas prices boost sentiment; factory orders, new-home sales surge
.....yes......all the ills of the money supply and economy were fixed in the past few weeks. Everything is better now and confidence is booming. Gold and PM's are at 18 year highs. But...everyone continue to buy! What's wrong with this picture considering that the money supply growth has been in overdrive since 1995? And that M3 has far outpaced the growth in M2 the past 3 months? M3 is growing 4-5% faster than M2......and now the FED wants to hide that fact so they can stoke the fires without anyone being the wiser. Yes, all of our confidence should be back to normal since everything is now fixed. And in a month or two a contrary report will be dumped by the media on how confidence just fell or was over-reported in November..........Carry on.
......and now the FED wants to hide that fact so they can stoke the fires without anyone being the wiser. Yes, all of our confidence should be back to normal since everything is now fixed. And in a month or two a contrary report will be dumped by the media on how confidence just fell or was over-reported in November..........
I just read an interesting article that as of March '06 the Fed told economic reporters that M3 is being discontinued because it's too costly to produce. Probably what roadrunner just said.
What the FED also said about M3 is that it is redundant to track it considering that M2 essentially does the same thing. In most phases of economic cycles this has been true. But if you look back a number of years (as well as the past 3 months) you'll see periods where the FED really goosed the money stock: ie M3 increases far exceed M2 increases %-wise.
It looks like the FED is really getting geared up to pump. M3 annual increases approach 9-10% in the past 3 months. M2 is only up around 5%. That's a huge difference. And the icing on the cake is that M3 exceeds M2 by about $3-4 TRILLION dollars. M3 is about $10 TRILLION while M2 is several trillion less. That's a lot of trillions to just "forget about" in order to save on FED bookeeping. It is very fishy.
I liced in Cuba when the USSR collapse and things went quickly downhill.
All essential items ( food, oil, clothing ) went into severe hyperinflation and extreme shortages.
The Cuban peso plumetted from a 1-1 exchange to the dollar to about 120 to 1.
A box of cigarettes went from .60 cents to 10 pesos in a matter of months.
but society didnt collapse, nothing like a madmax scenario.
Things just got real bad in a very short amount of time...but nothing like the movies...there was a major exudus to better economies and the goverment got a lot stricter to control riots etc.
Gold didnt go up nearly as much as essential but it didnt collapse like the fiat currency. At the worst of times you could exchange your gold watch for a month or two of food....the fiat money was just about worthless.
The US is far superior economy and vastly different society ...so it will be a different experience if an economic meltdown would happen.
But regarless...gold came through ..it wasnt the most ideal tool for trade but it did work when very little things did.
Silver wasnt as good ...and neither were guns.
"Women should be obscene and not heard. " Groucho Marx
<< <i> Why is it that whenever we talk about gold as an inflationary hedge there are those who think we are talking about a "take to the hills " scenario? >>
Because I think some people on here are talking about "take to the hills" scenario. Maybe not recently, but this thread has had more then one contributor to a doom scenario, so I could see where some could good confused by solid anti-inflation advice vs. the world is ending comments.
Not to get to far into the conspiracy side of the debate here, but to me the withdrawal of the M3 report seems to be simple. The Fed and the Treasury are hitting the wall when it comes to selling continually more debt. What this means is that they are going to have to start printing boatloads of dollar bills to pay debts rather than bonds, and notes, and they don’t want the public to know.
If you read between the lines just a little you can find the cracks in the debt dam appearing all over the planet.
The Russians are now accumulating 10to15% in Gold for their reserves.
The Debt auctions are not selling out in the first phases of the sales.
Even the Arabs don’t want any more dollar assets,
"Global: The Case of the Missing Petro-Dollars
Stephen Roach (New York)
“As disruptive as they have been, the oil shocks of the past have all had a silver lining: A significant portion of the revenue windfall accruing to oil producers -- especially those in the Middle East -- has been recycled back into dollar-denominated assets.
The energy shock of 2005 is different. While sharply higher oil prices may have generated close to a $300 billion revenue windfall for Middle East oil producers, the reflow back into dollars through the petro-dollar effect is largely missing in action.
a significant portion of the oil revenue windfall has been plowed back into surging domestic equity markets.
booming domestic real estate projects have also absorbed a meaningful portion of the windfall.
there is deepening concern over the dollar outlook in the Middle East.”
If the United States fails, so does the world, the only thing that the United States is dependent on is OIL..We would not be dependent on that if the United States would get off their ARZ and start drilling the oil fields here on this hemisphere...The only thing this government is doing is hurting the American people. If we had our own oil, nothing could stop this nation or bring it to its KNEES. We have the land to feed its people and the world if need be. The government in the past has seen that many farmers have been run out of business in the past and that was WRONG. The farmers are due the greatest respect and are the very people that we owe our existence to. Without food we would all die...food and water are the greatest resorces of any society, worth more than gold. Gold is only useful when there is nothing else valuable to trade..During WW II my father saw rich women with fur coats and diamond rings on their fingers diging in garbage for food.....is this what America will come to...We as a World Power need to take hold and its people voice their beliefs instead on HeHawing around and not doing anything about our situation...The people of the Greatest Generation are dying by the 1000's per day and the following generations have never seen hardships that generation went through...Can it happen again, YOU BET IT CAN...and it will be worse this go around....During the Depression the United States was not much more than Farmland, many people of the South raised their families on the food they raised with their own hands. Today there are only a handful of farmers that farm this country, Most are corporate farms which ran the small farmer out of business. What we need are people who need to get down to the basics and learn survival skills and that is farming ,we need more people in Agriculture. We need to start drilling our own oil and if we do these things we shall never fail and be self suffecient and what the rest of the world does is their problem. We need to take care of our own first and then and only then if the world needs help, shall we help... Ben Ladin could have been captured already if this goal was kept in sight...What we are doing now in Iraq is nothing but an Oil control game Cheny is in control of...bunch of Control freak School boys that have never served a day in the Miltitary govern this nation and proving they could not balance a check book if they had to....its all so disgusting to think this countries education has fallen this low...Just look at our Leaders and see just how uneducated they really are...if this is the future...than we have no future.
The one thing we dont need is more farmers. The family farm is no longer a viable econonic entity. Economies of scale have changed that business forever. If Ford or Chevy could figure out what the population wanted for a car, they might not be losing share so badly.
Inflation is going to go up and the real estate boom has peaked. This is the 70s all over, and we will fix it eventually. The "war" is just too expensive on top of all the other congressional spending. I lived through Vietnam and this feels just like those times.
Retired United States Mint guy, now working on an Everyman Type Set.
"farmers" People need to learn to feed themselves if need be...they need to know how to plant food for their own good...today there is the corporate farmers...what good are they to you when you have no money...NONE...what if there is no gas to run the old corporate Combine! I guess we would have to fend for ourselves...good old hoe and shovel and a good mule would work.
GDP came in today at 4.3% That is a very strong number for an economy our size.
The kicker is this includes disruption from the hurricanes. Back them out and the ecomony was clicking along at a greater than 5% pace in the 3rd quarter. WOW!!!
The kicker is this includes disruption from the hurricanes. Back them out and the ecomony was clicking along at a greater than 5% pace in the 3rd quarter. WOW!!!
Rents Rise, Vacancies Drop As Apartments Join the Boom - WSJ ($) (11/30/2005 8:04 AM)
Nov. 30 (Bloomberg) -- The U.S. economy bounced back in October and November from the hurricanes as more workers found jobs and retailers took an ``optimistic'' view of the holiday shopping season.
Gold drops Nov 30, 2005 15:09 NY Time Bid/Ask 493.90 - 494.70
DJIA 10,847.34 -40.80
Cohodk, Lots of good news today, and the markets are all going down. I am glad I am not a trader!
Lots of good news today, and the markets are all going down. I am glad I am not a trader!
Believe me it can be VERY trying at times. The beauty of being a trader(traitor) is that you never have to choose sides.
As for todays market reaction. The DOW is up almost 800 points(8%) in the last 5-6 weeks. The market always looks ahead, it knew this news was coming. A pullback of 1/3 or 270 points would be normal. So far we are only down 120.
Please dont read into any of my comments as I being bullish or bearish on the market. I really dont care whether it goes to 5000 or 15000. My preference would be a market exactly like this one has been for the past year.
That's a puzzling statement. Traders make money during market rises as well as declines. To say "I am glad I am not a Buy and Hold stock investor" would make sense, however.
Unlike Coh, I prefer falling markets or flat trading ranges. I make substantially more profits in such investment climates and with less Risk.
<< <i>Traders make money during market rises as well as declines >>
Well, that's what they claim. But most of the ones I know do well when the markets rising and think they are superstars. Then when it turns they head back for the day job. Most daytraders are losers. Unless you're one of the guys right there in Wall Street, you always get the news a little late.
<< <i>AP Stocks Surge As Inflation Fears Ease Thursday December 1, 10:30 am ET >>
<< <i>GOLD SPOT MARKET IS OPEN closes in 2 hrs. 42 mins. Dec 01, 2005 10:48 NY Time Bid/Ask 500.50 - 501.30 Low/High 492.30 - 502.30 Change +5.70 +1.15% >>
Why does this make me think the world isn't buying into our numbers game??
Yes if someone is selling losers every day then they have poor trading skills and their account balance will show it (if they stil have one). They would be wise to hire someone to manage their finances.
I know no real traders who stop being traders when the market falls. Heck that's when their performance puts the whoopazz on diversified Buy and Hold. The time for a trader to go get a day job is when the market goes straight up.
Gold was rising 4 years ago back when the investment advisor community was still badmouthing it. When Gold traders were picking off 20% here and there, "advisors" in the press were touting how stupid Gold investors were. Any "trader" who did not look to buy gold until it made the news - in a positive fashion - is keenly unobservant. Perhaps dangerously so.
know no real traders who stop being traders when the market falls. Heck that's when their performance puts the whoopazz on diversified Buy and Hold. The time for a trader to go get a day job is when the market goes straight up.
These are very true words. Thats why I like a market similiar to what we have had for the past 2 years. Not too hard to beat a 5% 2yr return for the s&p.
Just heard an interesting story on the radio (Paul Harvey). It seems they have perfected a new process to liquefy coal under ground that can be stored there for decades. They are making diesel fuel out of it. Since the U.S. have over 350 tones of it this amounts to more oil than all the proven fields combined.
This could turn out to be our savior if it turns out to be ture
GDP came in today at 4.3% That is a very strong number for an economy our size.
Very strong in appearance but certainly tainted by overstating inflation, understating the GDP deflator, massive govt spending on the war, hurricane repairs, as well as other govt spending. In the meantime exports down further, account deficit up again and downsizing and layoffs continuing in many sectors.
The GDP # looks good to the uninformed, but it really does "stink" to high heaven. The number lacks truth. Take all the BS out and you have substandard growth for an economy that is touted to be in recovery.
Ricky, thanks for posting that. As a matter of fact I hadn't been following Tan Range at all and had no idea what it had been doing for the past 2 years. My oversight. Only so much time to stay on top of everything. But I like the way JS does business and handles his affairs. I just may look into taking a small stake in a smaller company such as his with potential to multiply many times over. The guy's been a straight shooter since I've been watching him.
I have a big stake in TRE. Sinclair was THE Gold Guru in the 1970's and made millions. If TRE does anything like his former Gold company did I can retire if I want. I feel we are in a generational PM Bull Market and Gold is going well over $1,000 per ounce and Silver $50+ per ounce. IMHO Silver is even more undervalued.
GOLD, SILVER, WORLD NEWS, ECONOMIC PREDICTIONS 2006
Well my friends the year has pass quickly and much has happened. If it is agreeable to most of you I thought we might end our old Gold, Silver and economic news thread for 2005 and begin a new 2006 thread.
It has been 12 months, and we have had 2240 comments on the 2005 thread, lets see how things shape up in 2006.
If most of you are in agreement please sign in so you will get the notices. In addition please add your comments of how you think the year went, and any predictions you might have for 2006.
<< <i>GDP came in today at 4.3% That is a very strong number for an economy our size.
Very strong in appearance but certainly tainted by overstating inflation, understating the GDP deflator, massive govt spending on the war, hurricane repairs, as well as other govt spending. In the meantime exports down further, account deficit up again and downsizing and layoffs continuing in many sectors.
The GDP # looks good to the uninformed, but it really does "stink" to high heaven. The number lacks truth. Take all the BS out and you have substandard growth for an economy that is touted to be in recovery.
roadrunner >>
Roadrunner,
Believe me I take every stat with a grain of salt. However I have not seen one bit of evidence that that proves this economy is not doing well. Can you please expound? The examples you provide in the first paragraph have been occuring for the past 50 years. And this economy continues to get bigger.
Well, I'm going to move my post over here from the '06 thread...Orville's right. Without the history of this thread, the evolution of the predictions/positions then anything new almost becomes out of context so here ya go...let's stay here.
From the '06 thread:
Ok, Goldsaint...the thread you offered us for '05 was well timed and received a good number of responses. Many drifters wandered into the thread to espouse some political diatribe and then ran off and there were a number of folks that just had an opinion that they needed to air. This thread had been one of my favorite all time threads because I am interested in metal, it's probably a genetic anomaly but I do like metal. I'm a masterplanner by profession and I make a living by anticipating change and accomodating new influences so predictions are big with me, but only if they are based on some rational facts/influences/trends/science/study. I like order but provide for the opportunity for disorder, like to consider conditional statements on what if and what to do given this situation of that occurance, so...this thread has been a hoot.
This has evolved into a very polite and disciplined thread and I like it. The one thing that amazes me is the level of financial sophistication that some posters have and the various arenas that are represented...day traders, market analysts, realestate/mortgage brokers, metals people, coin people, investors of all type and discipline, even lowly planners. The common part of this thread that is so compelling is that it is about something near and dear to all of us: It's about the money and economic survival/prosperity.
So, here's to '06. This new year is poised to welcome a new financial age, in my view. Realestate is in transition, metal is in transition, energy is in transition, then you have disasters, terrorism, energy, and markets. There is a change in the wings for the world order as China, the sleeping giant, wakens and begins to take steps into the brave new world with 1920's infrastructure and a huge, bright, ambitious population that thursts for freedom, both economic and political. China is covered in pollution and filth and an ancient form of government, possibly the last of the significant communist political systems that is doomed to failure if it doesn't adapt to a 21st century world. The US is no longer the only gorilla in the jungle and must share with China as old Europe is challenged to either fade into the past or find some way to become relevant in the future. Space is no longer the last frontier, it's the next area to be colonized/owned/fought for/bought and sold...it's a brave new world.
And that brings us to us...how do we, as individuals remain financially secure and prosperous so that we can care for our families and remain competitive in our chosen areas of interest? How do we stay light of foot and able to respond to changes. Hoperfully, this thread may provide some insight or some ideas or thoughts, things to ponder and facts to digest, opinions to consider and maybe some great revelations that will benefit those that pay attention. The greatest resource we share in this thread is our collective understanding, our individual knowledge and skills, and our willingness to share information for our mutual well being.
Let me add one more voice to the chorus to keep this thread going. I've been busy this AM and just now got a chance to look over here and I was dismayed to see a second thread.
I read it, I didn't post to it one way or another. I suppose we will have to follow the herd with regards to which thread draws the crowd. I'd rather not have two threads to follow. This has been an interesting ride, a one year thread, a true Threadzilla.
Here's to keeping this one going. besides, 2005 isn't over yet and we are going to see the usual profit takers selling off and a drop in the PMs along the way.
What will really be interesting, is if we don't see that, or so little of it that the usual 5-10% drop doesn't occur.
That will be something to ponder. If the usually dependable calendric pattern begins to fall away, then my guess is that we are really into the next big step of this bull run.
For now, I'm planning on it. I'm getting ready to sell off a small portion of my silver holdings this weekend. I'm still thinking we are going to see silver finish the year below $8 and gold at between $475-$485. December is always an interesting month for the PMs.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Well I can see we have a mixed review on the new thread. I agree that it is not necessary to have a new thread each year, but the original thread had become so long that it is nearly impossible for any new members to read, and also very hard to find related material in the hundreds of pages.
All that being said many many forum members have posted, and even though I began both threads these threads belong to all of us so lets let the majority rule and vote.
Someone help me out here and add a poll to both threads.
Vote for
GOLD, SILVER, WORLD NEWS, ECONOMIC PREDICTIONS (old thread)
or
GOLD, SILVER, WORLD NEWS, ECONOMIC PREDICTIONS 2006 (new thread)
Yes, let's keep it here as Hammerman has stated. If some newbie wants to take a day to read all 44 pages and get a good primer of what took us a few years to figure out.......then that's a good thing. I wish I had a thread like this to read 3 years ago to prime me up.
Believe me I take every stat with a grain of salt. However I have not seen one bit of evidence that that proves this economy is not doing well. Can you please expound? The examples you provide in the first paragraph have been occuring for the past 50 years. And this economy continues to get bigger.
I can counter that with I am not aware of even one true financial stat that cannot be refuted that shows a sound and growing economy. My point was that the numbers we now have are fudged beyond belief. They are worthless. Unemployment numbers, jobs reports (birth death model), CPI, GDP, etc. 20 years ago these stats were accurate. GDP/GNP as reported were accurate. Now the Fed wants to hide M3 claiming it is superfluous. What a crock. They can now add Trillions of electronic dollars into the economy with no one (except their connected bankers and supporters) being the wiser. But you and I feel it at the pump and in the stores a year after the fact.
Yes, GDP is 4% on paper. I would submit it is closer to 1% once you extract the BS modifiers. That's my point. You can claim a growing economy at 4% GDP and 5% unemployment. But I say those numbers are a crock and more like 1% and 8% respectively. We'll both know the real answers in a few years. Gold tends to be a harbinger of whether the numbers are good or bad. So far gold has risen for 4 straight years. So far the support is on my side saying we have bogus numbers. When gold drops off the cliff in 2006 then I'll pay homoge to those who said the stats were right in the 1st place. For now, my view is correct as gold has said so.
I cannot predict what 2006 will bring. Only that the PM's and physical assets will continue to prosper long term. Gold could fall to $350 in 2006. It could also reach $700. But I am very confident that the trend, even with huge whipsaws, is decidedly up over time. That is what counts and what we should be playing for. I made a big mistake by selling 1/4 of my gold position in Sept when gold first hit $475-484 again. I was sure that it would be beat back down by COT as it had the other 2 times since 2003. Nope. Gold has withstood the assault and held strong. I'm very surprised. The weak lillies that would have folded in 2004 or 2003 aren't there. The hands are stronger and they are across the world. Sinclair keeps stating that we are on our way to $875 and then to $1650. Nothing can stop it. He has been right about gold since the early 1970's. I'll follow his wisdom before I believe govt stats and Greenspeaks. Helicopter Ben is gonna bury us in paper after March 2006.
Gold finally bottomed out in 1982 at around $450-500 after a decade a readjustment and releasing gold to float. It's the same price today but after increasing the money stock by 5X. Gold always followed the money stock rise....until rampant gold management (CB sales) started in the 80's and 90's. Time has come to make anothe readjustment. Gold just cannot be the same as it was in 1982. To say so means you feel gold is disconnected as money. I think gold is starting to show that it's days as a "barbarous relic" only lasted about 20 years. Gold is currency once again. Welcome to the 21st century where real money once again reigns. We have much readjusting to do after 20 years of keeping the lid on gold. Didn't we keep the lid on gold from 1934 to 1971 ($35/oz)? What happened when it was allowed to float?
We've grown for 50 years but on the backs of the labor of Asia due to cheap labor...while we held the reserve currency. A classic con that we have benefited from greatly. We've increased the money supply, exported our inflation, and lived high off the hog since the 1960's. We then took it to excess in the 1990's. Do you really think we can go another 50 years sucking off Asia and printing gads of worthless Fed Reserve Notes? The world is wise to the game and gold is one of the battlefields. You own gold, you control the money.
Something about the history of it and so forth. Also, we have an exciting month ahead of us yet, it's hardly 2006 already.
I'll follow the herd wherever we end up. Since I have been with it from the beginning, I just clicked last each time I opened it. It is very easy to keep up with.
For the newbies, let them do their homework and read the entire thing. Besides there is some great stuff here that will be lost otherwise if this thread falls to page 87.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Comments
<< <i>Nothing seems to affect the spending habits of Americans or their government >>
Why should it?? Go ahead and run up the credit, the gov't is doing it, everyone is doing it, why not live for today. It isn't like we may need the money someday after all the government will take care of us , Right?? Worse case is we go broke and hey, this isn't Asia or South America, even broke people get fed and clothing and medical care.
Spend and enjoy, you don't need a cushion, big brother won't let you fall.
Have you evaluated the average American’s knowledge of financial markets? Do you really think most of them are going to be expecting an economic collapse and be prepared for it? If you are forced to deal with said people for material goods, do you really think they will be wanting your gold? I doubt it. They want what they always want: cigarettes and whiskey. If you had enough security and patience, you could get more gold from these people using whiskey and cigarettes than you could amass through a lifetime of savings and strategic purchasing.
Think of it. How much gold does the average person have? A few grams or ounces in jewelry. This will be worthless to them in the event they are without cigarettes and whiskey. They would come running to you to get these things given enough time. If you had enough whiskey and cigarettes you could probably clean out a small town of 2,500 people out of that many ounces of gold. Think of how much cheaper this will be than purchasing gold now.
By the way, I tend to agree the markets will collapse.
In a meltdown situation, I prefer to have stockpiled guns and ammo.
I for one do not think there will be a complete breakdown, but a transition. Afterall China does not want to lose its best customers (US).
Random Collector
www.marksmedals.com
$20 Saint Gaudens Registry Set
<< <i>Most of you seem to anticipate an economic meltdown and believe gold will be the solution to financial independence in the interim between said meltdown and recovery. Have any of you really considered what the U.S. will be like in the interim? Do you really think gold will be valued by a population that is half crazy with fear and perhaps starving?
Have you evaluated the average American’s knowledge of financial markets? Do you really think most of them are going to be expecting an economic collapse and be prepared for it? If you are forced to deal with said people for material goods, do you really think they will be wanting your gold? I doubt it. They want what they always want: cigarettes and whiskey. If you had enough security and patience, you could get more gold from these people using whiskey and cigarettes than you could amass through a lifetime of savings and strategic purchasing.
Think of it. How much gold does the average person have? A few grams or ounces in jewelry. This will be worthless to them in the event they are without cigarettes and whiskey. They would come running to you to get these things given enough time. If you had enough whiskey and cigarettes you could probably clean out a small town of 2,500 people out of that many ounces of gold. Think of how much cheaper this will be than purchasing gold now.
By the way, I tend to agree the markets will collapse. >>
You're talking about a "Mad Max" scenario. Since that is unlikely (but not impossible),
gold and silver is more for your financial health versus just something to barter for guns
and ammo and whiskey.
If you don't want your savings eaten up by inflation, then gold is a safe haven
in the meantime.
I don't anticipate a total "Mad Max" scenario. More like a long term inflationary cycle that will end up pricing a pound of ground beef in the 30-50 dollar range. If any of you remember the 70's, menus were often priced in pencil to allow for frequent price changes. This lasted a few years, image it lasting for 15-20 years with 8-15% annual inflation.
A little gold and silver won't go stale like cigarettes, but hey, a case or 2 of good whiskey isn't a bad item to keep around either.
Link to MSNBC article
"there is nothing to fear but fear itself"
Liberty: Parent of Science & Industry
I think we are far more likely to see the inflationary scenario than the deflationary outcome. Since what we are presently seeing is a monetary phenomenon, the prices of precious metals will likely hold up very well. International trade will continue. Foreigners won't care squat about US paper assets if things go really bad - they'll want whatever portable (exportable) tangible assets they can get for their accumulated US dollars - and that means, among other things, precious metals.
The Soviet Union in 1989 appeared strong from most outward appearances. But on the inside, it was weak economically. The facade caved in and the regime crumbled. But society did not completely disintegrate there, and now they are on the rebound. The USA is in a similar situation, I think (appears stong on the outside, but weak economically). If the USA facade comes down, the Dollar will suffer (decline) against assets such as gold.
The Soviet Union's central-planning approach to the economy was a failure, and shortages of common goods was widespread. The USA supposedly has a "market" economy. But I fear that the US government has been intervening in financial markets to such a great extent that what we have is a defacto centrally-planned economy. This too will likely result in failure. The first signs will be spot shortages of essential goods.
If not for foreign countries (China, Japan, etc) off-loading a lot of inflation from the USA, we would have seen MUCH higher prices for goods in the last five years. But the inflation is still there. It is in the pipeline. The pipe just got bigger, that's all. When the financial flows reverse (which they must ultimately do) all that pipeline inflation will hit the USA regardless of what the FED does.
.....yes......all the ills of the money supply and economy were fixed in the past few weeks. Everything is better now and confidence is booming. Gold and PM's are at 18 year highs. But...everyone continue to buy! What's wrong with this picture considering that the money supply growth has been in overdrive since 1995? And that M3 has far outpaced the growth in M2 the past 3 months? M3 is growing 4-5% faster than M2......and now the FED wants to hide that fact so they can stoke the fires without anyone being the wiser. Yes, all of our confidence should be back to normal since everything is now fixed. And in a month or two a contrary report will be dumped by the media on how confidence just fell or was over-reported in November..........Carry on.
roadrunner
I just read an interesting article that as of March '06 the Fed told economic reporters that M3 is being discontinued because it's too costly to produce. Probably what roadrunner just said.
Tom
It looks like the FED is really getting geared up to pump. M3 annual increases approach 9-10% in the past 3 months. M2 is only up around 5%. That's a huge difference. And the icing on the cake is that M3 exceeds M2 by about $3-4 TRILLION dollars. M3 is about $10 TRILLION while M2 is several trillion less. That's a lot of trillions to just "forget about" in order to save on FED bookeeping. It is very fishy.
roadrunner
All essential items ( food, oil, clothing ) went into severe hyperinflation and extreme shortages.
The Cuban peso plumetted from a 1-1 exchange to the dollar to about 120 to 1.
A box of cigarettes went from .60 cents to 10 pesos in a matter of months.
but society didnt collapse, nothing like a madmax scenario.
Things just got real bad in a very short amount of time...but nothing like the movies...there was a major exudus to better economies and the goverment got a lot stricter to control riots etc.
Gold didnt go up nearly as much as essential but it didnt collapse like the fiat currency. At the worst of times you could exchange your gold watch for a month or two of food....the fiat money was just about worthless.
The US is far superior economy and vastly different society ...so it will be a different experience if an economic meltdown would happen.
But regarless...gold came through ..it wasnt the most ideal tool for trade but it did work when very little things did.
Silver wasnt as good ...and neither were guns.
Groucho Marx
<< <i> Why is it that whenever we talk about gold as an inflationary hedge there are those who think we are talking about a "take to the hills " scenario? >>
Because I think some people on here are talking about "take to the hills" scenario. Maybe not recently, but this thread has had more then one contributor to a doom scenario, so I could see where some could good confused by solid anti-inflation advice vs. the world is ending comments.
If you read between the lines just a little you can find the cracks in the debt dam appearing all over the planet.
The Russians are now accumulating 10to15% in Gold for their reserves.
The Debt auctions are not selling out in the first phases of the sales.
Even the Arabs don’t want any more dollar assets,
"Global: The Case of the Missing Petro-Dollars
Stephen Roach (New York)
“As disruptive as they have been, the oil shocks of the past have all had a silver lining: A significant portion of the revenue windfall accruing to oil producers -- especially those in the Middle East -- has been recycled back into dollar-denominated assets.
The energy shock of 2005 is different. While sharply higher oil prices may have generated close to a $300 billion revenue windfall for Middle East oil producers, the reflow back into dollars through the petro-dollar effect is largely missing in action.
a significant portion of the oil revenue windfall has been plowed back into surging domestic equity markets.
booming domestic real estate projects have also absorbed a meaningful portion of the windfall.
there is deepening concern over the dollar outlook in the Middle East.”
Inflation is going to go up and the real estate boom has peaked. This is the 70s all over, and we will fix it eventually. The "war" is just too expensive on top of all the other congressional spending. I lived through Vietnam and this feels just like those times.
The kicker is this includes disruption from the hurricanes. Back them out and the ecomony was clicking along at a greater than 5% pace in the 3rd quarter. WOW!!!
Knowledge is the enemy of fear
Rents Rise, Vacancies Drop As Apartments Join the Boom - WSJ ($) (11/30/2005 8:04 AM)
Venture-Capital Start-Ups Hit 4-Year Highs - WSJ ($) (11/30/2005 7:53 AM)
Nov. 30 (Bloomberg) -- The U.S. economy bounced back in October and November from the hurricanes as more workers found jobs and retailers took an ``optimistic'' view of the holiday shopping season.
Gold drops
Nov 30, 2005 15:09 NY Time
Bid/Ask 493.90 - 494.70
DJIA 10,847.34 -40.80
Cohodk,
Lots of good news today, and the markets are all going down. I am glad I am not a trader!
Believe me it can be VERY trying at times. The beauty of being a trader(traitor) is that you never have to choose sides.
As for todays market reaction. The DOW is up almost 800 points(8%) in the last 5-6 weeks. The market always looks ahead, it knew this news was coming. A pullback of 1/3 or 270 points would be normal. So far we are only down 120.
Please dont read into any of my comments as I being bullish or bearish on the market. I really dont care whether it goes to 5000 or 15000. My preference would be a market exactly like this one has been for the past year.
Knowledge is the enemy of fear
I am glad I am not a trader!
That's a puzzling statement. Traders make money during market rises as well as declines. To say "I am glad I am not a Buy and Hold stock investor" would make sense, however.
Unlike Coh, I prefer falling markets or flat trading ranges. I make substantially more profits in such investment climates and with less Risk.
<< <i>Traders make money during market rises as well as declines >>
Well, that's what they claim. But most of the ones I know do well when the markets rising and think they are superstars. Then when it turns they head back for the day job. Most daytraders are losers. Unless you're one of the guys right there in Wall Street, you always get the news a little late.
<< <i>AP
Stocks Surge As Inflation Fears Ease
Thursday December 1, 10:30 am ET
>>
<< <i>GOLD SPOT MARKET IS OPEN
closes in 2 hrs. 42 mins.
Dec 01, 2005 10:48 NY Time
Bid/Ask 500.50 - 501.30
Low/High 492.30 - 502.30
Change +5.70 +1.15%
>>
Why does this make me think the world isn't buying into our numbers game??
Daddy: Do you think Santa could bring me some gold bars this Christmas??
Yes if someone is selling losers every day then they have poor trading skills and their account balance will show it (if they stil have one). They would be wise to hire someone to manage their finances.
I know no real traders who stop being traders when the market falls. Heck that's when their performance puts the whoopazz on diversified Buy and Hold. The time for a trader to go get a day job is when the market goes straight up.
Gold was rising 4 years ago back when the investment advisor community was still badmouthing it. When Gold traders were picking off 20% here and there, "advisors" in the press were touting how stupid Gold investors were. Any "trader" who did not look to buy gold until it made the news - in a positive fashion - is keenly unobservant. Perhaps dangerously so.
I agree and have felt that way for a long time.
These are very true words. Thats why I like a market similiar to what we have had for the past 2 years. Not too hard to beat a 5% 2yr return for the s&p.
Knowledge is the enemy of fear
Dude....You callin me a loser?!!
Knowledge is the enemy of fear
When I started to trade, I set my goal as beating the S&P 500 index by 1% each and every year.
It never occurred to me that I'd be trying to beat 5%!
This could turn out to be our savior if it turns out to be ture
Very strong in appearance but certainly tainted by overstating inflation, understating the GDP deflator, massive govt
spending on the war, hurricane repairs, as well as other govt spending. In the meantime exports down further,
account deficit up again and downsizing and layoffs continuing in many sectors.
The GDP # looks good to the uninformed, but it really does "stink" to high heaven. The number lacks truth.
Take all the BS out and you have substandard growth for an economy that is touted to be in recovery.
roadrunner
roadrunner:
I bet you know about Jimbo's stock:
Stock Symbol TRE 1 year chart
I think it's a rocket ship to the moon. LOL
The guy's been a straight shooter since I've been watching him.
thanks for the link.
roadrunner
I have a big stake in TRE. Sinclair was THE Gold Guru in the 1970's and made millions. If TRE does anything like his former Gold company did I can retire if I want.
Well my friends the year has pass quickly and much has happened.
If it is agreeable to most of you I thought we might end our old Gold, Silver and economic news thread for 2005 and begin a new 2006 thread.
It has been 12 months, and we have had 2240 comments on the 2005 thread, lets see how things shape up in 2006.
If most of you are in agreement please sign in so you will get the notices.
In addition please add your comments of how you think the year went, and any predictions you might have for 2006.
This is now a permanent thread that can keep going forward.
<< <i>GDP came in today at 4.3% That is a very strong number for an economy our size.
Very strong in appearance but certainly tainted by overstating inflation, understating the GDP deflator, massive govt
spending on the war, hurricane repairs, as well as other govt spending. In the meantime exports down further,
account deficit up again and downsizing and layoffs continuing in many sectors.
The GDP # looks good to the uninformed, but it really does "stink" to high heaven. The number lacks truth.
Take all the BS out and you have substandard growth for an economy that is touted to be in recovery.
roadrunner >>
Roadrunner,
Believe me I take every stat with a grain of salt. However I have not seen one bit of evidence that that proves this economy is not doing well. Can you please expound? The examples you provide in the first paragraph have been occuring for the past 50 years. And this economy continues to get bigger.
Knowledge is the enemy of fear
From the '06 thread:
Ok, Goldsaint...the thread you offered us for '05 was well timed and received a good number of responses. Many drifters wandered into the thread to espouse some political diatribe and then ran off and there were a number of folks that just had an opinion that they needed to air. This thread had been one of my favorite all time threads because I am interested in metal, it's probably a genetic anomaly but I do like metal. I'm a masterplanner by profession and I make a living by anticipating change and accomodating new influences so predictions are big with me, but only if they are based on some rational facts/influences/trends/science/study. I like order but provide for the opportunity for disorder, like to consider conditional statements on what if and what to do given this situation of that occurance, so...this thread has been a hoot.
This has evolved into a very polite and disciplined thread and I like it. The one thing that amazes me is the level of financial sophistication that some posters have and the various arenas that are represented...day traders, market analysts, realestate/mortgage brokers, metals people, coin people, investors of all type and discipline, even lowly planners. The common part of this thread that is so compelling is that it is about something near and dear to all of us: It's about the money and economic survival/prosperity.
So, here's to '06. This new year is poised to welcome a new financial age, in my view. Realestate is in transition, metal is in transition, energy is in transition, then you have disasters, terrorism, energy, and markets. There is a change in the wings for the world order as China, the sleeping giant, wakens and begins to take steps into the brave new world with 1920's infrastructure and a huge, bright, ambitious population that thursts for freedom, both economic and political. China is covered in pollution and filth and an ancient form of government, possibly the last of the significant communist political systems that is doomed to failure if it doesn't adapt to a 21st century world. The US is no longer the only gorilla in the jungle and must share with China as old Europe is challenged to either fade into the past or find some way to become relevant in the future. Space is no longer the last frontier, it's the next area to be colonized/owned/fought for/bought and sold...it's a brave new world.
And that brings us to us...how do we, as individuals remain financially secure and prosperous so that we can care for our families and remain competitive in our chosen areas of interest? How do we stay light of foot and able to respond to changes. Hoperfully, this thread may provide some insight or some ideas or thoughts, things to ponder and facts to digest, opinions to consider and maybe some great revelations that will benefit those that pay attention. The greatest resource we share in this thread is our collective understanding, our individual knowledge and skills, and our willingness to share information for our mutual well being.
Light the rocket!
What an amazing year it has been. I have enjoyed reading others' opinions. And I look forward to this thread again next year.
Knowledge is the enemy of fear
I read it, I didn't post to it one way or another. I suppose we will have to follow the herd with regards to which thread draws the crowd. I'd rather not have two threads to follow. This has been an interesting ride, a one year thread, a true Threadzilla.
Here's to keeping this one going. besides, 2005 isn't over yet and we are going to see the usual profit takers selling off and a drop in the PMs along the way.
What will really be interesting, is if we don't see that, or so little of it that the usual 5-10% drop doesn't occur.
That will be something to ponder. If the usually dependable calendric pattern begins to fall away, then my guess is that we are really into the next big step of this bull run.
For now, I'm planning on it. I'm getting ready to sell off a small portion of my silver holdings this weekend. I'm still thinking we are going to see silver finish the year below $8 and gold at between $475-$485. December is always an interesting month for the PMs.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Well I can see we have a mixed review on the new thread.
I agree that it is not necessary to have a new thread each year, but the original thread had become so long that it is nearly impossible for any new members to read, and also very hard to find related material in the hundreds of pages.
All that being said many many forum members have posted, and even though I began both threads these threads belong to all of us so lets let the majority rule and vote.
Someone help me out here and add a poll to both threads.
Vote for
GOLD, SILVER, WORLD NEWS, ECONOMIC PREDICTIONS (old thread)
or
GOLD, SILVER, WORLD NEWS, ECONOMIC PREDICTIONS 2006 (new thread)
GOLD, SILVER, WORLD NEWS, ECONOMIC PREDICTIONS (old thread)
I wish I had a thread like this to read 3 years ago to prime me up.
Believe me I take every stat with a grain of salt. However I have not seen one bit of evidence that that proves this economy is not doing well. Can you please expound? The examples you provide in the first paragraph have been occuring for the past 50 years. And this economy continues to get bigger.
I can counter that with I am not aware of even one true financial
stat that cannot be refuted that shows a sound and growing economy. My point was that the numbers we now have are fudged beyond belief. They are worthless. Unemployment numbers, jobs reports (birth death model), CPI, GDP, etc. 20 years ago these stats were accurate. GDP/GNP as reported were accurate. Now the Fed wants to hide M3 claiming it is superfluous. What a crock. They can now add Trillions of electronic dollars into the economy with no one
(except their connected bankers and supporters) being the wiser.
But you and I feel it at the pump and in the stores a year after the fact.
Yes, GDP is 4% on paper. I would submit it is closer to 1% once you extract the BS modifiers. That's my point. You can claim a growing economy at 4% GDP and 5% unemployment. But I say those numbers are a crock and more like 1% and 8% respectively. We'll both know the real answers in a few years. Gold tends to be a harbinger of whether the numbers are good or bad. So far gold has risen for 4 straight years. So far the support is on my side saying we have bogus numbers. When gold drops off the cliff in 2006 then I'll pay homoge to those who said the stats were right in the 1st place. For now, my view is correct as gold has said so.
I cannot predict what 2006 will bring. Only that the PM's and physical assets will continue to prosper long term. Gold could fall to $350 in 2006. It could also reach $700. But I am very confident that the trend, even with huge whipsaws, is decidedly up over time.
That is what counts and what we should be playing for. I made a big mistake by selling 1/4 of my gold position in Sept when gold first hit $475-484 again. I was sure that it would be beat back down by COT as it had the other 2 times since 2003. Nope. Gold has withstood the assault and held strong. I'm very surprised. The weak lillies that would have folded in 2004 or 2003 aren't there.
The hands are stronger and they are across the world. Sinclair keeps stating that we are on our way to $875 and then to $1650.
Nothing can stop it. He has been right about gold since the early 1970's. I'll follow his wisdom before I believe govt stats and Greenspeaks. Helicopter Ben is gonna bury us in paper after March 2006.
Gold finally bottomed out in 1982 at around $450-500 after a decade
a readjustment and releasing gold to float. It's the same price today but after increasing the money stock by 5X. Gold always followed the money stock rise....until rampant gold management (CB sales) started in the 80's and 90's. Time has come to make anothe readjustment. Gold just cannot be the same as it was in 1982. To say so means you feel gold is disconnected as money. I think gold is starting to show that it's days as a "barbarous relic" only lasted about 20 years. Gold is currency once again. Welcome to the 21st century where real money once again reigns. We have much readjusting to do after 20 years of keeping the lid on gold. Didn't we keep the lid on gold from 1934 to 1971 ($35/oz)? What happened when it was allowed to float?
We've grown for 50 years but on the backs of the labor of Asia due to cheap labor...while we held the reserve currency. A classic con that we have benefited from greatly. We've increased the money supply, exported our inflation, and lived high off the hog since the 1960's. We then took it to excess in the 1990's. Do you really think we can go another 50 years sucking off Asia and printing gads of worthless Fed Reserve Notes? The world is wise to the game and gold is one of the battlefields. You own gold, you control the money.
roadrunner
Something about the history of it and so forth. Also, we have an exciting month ahead of us yet, it's hardly 2006 already.
I'll follow the herd wherever we end up. Since I have been with it from the beginning, I just clicked last each time I opened it. It is very easy to keep up with.
For the newbies, let them do their homework and read the entire thing. Besides there is some great stuff here that will be lost otherwise if this thread falls to page 87.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff