RR.. you are right on. Inflation is based on the dollar and how much is buys. Simple example - what did a loaf of bread cost in 1960? Say $1.50? (I'm quessing) Now that loaf of bread is $4.50. Pure and simple inflation.
In 2011, with ALL taxes going up and new taxes taking effect (Vat, healthcare) inflation will take a huge step forward. Taxes must be computed in the cost of goods sold or purchased.
RR.. you are right on. Inflation is based on the dollar and how much is buys. Simple example - what did a loaf of bread cost in 1960? Say $1.50? (I'm quessing) Now that loaf of bread is $4.50. Pure and simple inflation.
1960 bread and 2010 bread may not be the same item anymore even if they are called the same thing. You can't strip things out of product, then put them back in and call it the same food. There are some foods today that bear almost no resemblance to their 1960 versions. That's why a direct price comparison is very difficult. Take that chicken for example. The calories are probably the same or higher, but the inherent nutrients and chemicals used in the processing are radically different. I'd probably prefer to pay more than $4/lb per chicken if I knew how it was fed/grown.
Well... I'm living in Spain now and we are currently in a deflationary environment. Lets just hope China's property bubble doesnt pop like it did here. If that happens - we have global deflation for many years. my 2 cents !!!!
<< <i>Well... I'm living in Spain now and we are currently in a deflationary environment. Lets just hope China's property bubble doesnt pop like it did here. If that happens - we have global deflation for many years. my 2 cents !!!! >>
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
That's one of the best articles I've read. Very level headed and straightforward. However, it did not mention any civil unrest during hyperinflation, which would probably make the novice reader more comfortable with the article.
Thank you for posting this interesting / educational read for my lunch break today! (well sifted LOL) Always find something here to spend my 15 or 20 minutes. Thanks again.
Do your best to avoid circular arguments, as it will help you reason better, because better reasoning is often a result of avoiding circular arguments.
Thank you for posting this interesting / educational read for my lunch break today! (well sifted LOL) Always find something here to spend my 15 or 20 minutes. Thanks again. >>
Then you might like to save this one in your favorites. My favorite site for economic blogs: Dollar Collapse Site
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Sadly, I believe that there is no where to go but deflation. The small bounce we got from govt stimulus has ended, unemployment is rising, everyone is in debt over their ears, and America has lost most of its manufacturing capabilities to foreign countries, so no way to build our way out of it.
I believe the deflation death spiral has already begun, and commodities are going to take a pretty big hit at some point. As prices and consumer demand fall, more and more commodities buyers will lose their jobscut back on their businesses and will have to scale back to a more subsistence form of living. Commodities have ridden the wave of the great inflation scare, but I think that wave is going to come crashing down soon......
WF it's always refreshing to read a "minority" view point, however, if your scenario comes to fruition, a lot of the PM bulls along with the SHTF doomsayers, will end up jumping out of window. ( maybe even 2d story windows)
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
<< <i>Sadly, I believe that there is no where to go but deflation. The small bounce we got from govt stimulus has ended, unemployment is rising, everyone is in debt over their ears, and America has lost most of its manufacturing capabilities to foreign countries, so no way to build our way out of it.
...... >>
When the great depression hit, we had a trade surplus and not much national debt like we have today. Yet, we still went into a great depression. Many economists will tell us that the countries that got out of the great depression quicker were the ones who abondoned the gold standard and practiced heavy quantatative easing.
What are they going to tell us this time when things get as bad or not worse then the great depression ? Didn't the quantitative easing get us out of the great depression ? Then why didn't the quantitative easing save us from this next deflation/depression ?
Make no mistake, the men who hold high places seem to have used all their bullets. There are no aces in the hole anymore. Every trick they are trying is not working.
You say we're not manufacturing anything anymore ? I give you Apple, Google, Microsoft, Verizon, and many other great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore.
<< <i>WF it's always refreshing to read a "minority" view point, however, if your scenario comes to fruition, a lot of the PM bulls along with the SHTF doomsayers, will end up jumping out of window. ( maybe even 2d story windows) >>
I am in the SHTF camp, even though I hope it never, ever happens. I'm not going to sit back and say "told you so" if and when it happens. Many people are going to get very hurt by it, and it ain't going to be pretty. So I'll take no joy in it.
Most economists understand that Europe and North American will lag well behind Asia in our future global economy. And if the Chinese government is encouraging its citizens to buy gold and silver, then every single American would be foolish not to follow the lead of one of Asia's major players. Not having 10-20% of your portfolio in gold and silver is not wise. Heck, I don't even think I'm up to 10% yet, but I still believe we are watching America collapse right before our eyes.
<< <i>but I still believe we are watching America collapse right before our eyes. >>
"Tunnel vision" will do that to you. We may not be able to sustain our present standard of living, but collapsing before our eyes? Unlikely, the "powers to be" will not allow it to happen, even if they have to start a War to save our economy.
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
<< <i>but I still believe we are watching America collapse right before our eyes. >>
"Tunnel vision" will do that to you. We may not be able to sustain our present standard of living, but collapsing before our eyes? Unlikely, the "powers to be" will not allow it to happen, even if they have to start a War to save our economy. >>
2-wars now. Ya think 3 will do the trick? The rich will get richer & the poor poorer.
I believe the deflation death spiral has already begun, and commodities are going to take a pretty big hit at some point. As prices and consumer demand fall, more and more commodities buyers will lose their jobscut back on their businesses and will have to scale back to a more subsistence form of living. Commodities have ridden the wave of the great inflation scare, but I think that wave is going to come crashing down soon......
Commodities that are used everyday by the masses will not go down in price, esp. food and that includes money alternatives such as gold, oil, etc. As Sinclair continues to note, hyperstaginflation is not a demand driven event, but currency driven one. And the currencies will be driven into the ground by debasement. That will drive the price of key goods and services higher. Here is an interesting article on the subject that seems to suggest continued global monetary growth. In this environment the world demand for food, oil, gold, and other key items will continue grow as sovereign currencies cheapen.
You say we're not manufacturing anything anymore? I give you Apple, Google, Microsoft, Verizon, and many other great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore.
Water, food, shelter, consumer staples, etc. are all key manufactured items for a self-sufficient economy. As they say, you can't eat your iphone, ipad, laptop, or cell phone. Though in the rain your 17" laptop can make a crude though quite expensive roof.
<< <i> You say we're not manufacturing anything anymore? I give you Apple, Google, Microsoft, Verizon, and many other great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore.
Water, food, shelter, consumer staples, etc. are all key manufactured items for a self-sufficient economy. As they say, you can't eat your iphone, ipad, laptop, or cell phone. Though in the rain your 17" laptop can make a crude though quite expensive roof.
roadrunner >>
America has plenty of food, water, and way too much shelter, and we're not as self sufficient as we used to be. I recently heard from the chairman of the board at Allegheny (stock symbol Y), and he said he sees no driver for our economy. If our economy has no driver, and we have plenty of goods and services, but no jobs and a growing unemployment situation, then explain to me why we are not self-sufficient with all our manufacturing items.
<< <i>Sadly, I believe that there is no where to go but deflation. The small bounce we got from govt stimulus has ended, unemployment is rising, everyone is in debt over their ears, and America has lost most of its manufacturing capabilities to foreign countries, so no way to build our way out of it.
...... >>
When the great depression hit, we had a trade surplus and not much national debt like we have today. Yet, we still went into a great depression. Many economists will tell us that the countries that got out of the great depression quicker were the ones who abondoned the gold standard and practiced heavy quantatative easing.
What are they going to tell us this time when things get as bad or not worse then the great depression ? Didn't the quantitative easing get us out of the great depression ? Then why didn't the quantitative easing save us from this next deflation/depression ?
Make no mistake, the men who hold high places seem to have used all their bullets. There are no aces in the hole anymore. Every trick they are trying is not working.
You say we're not manufacturing anything anymore ? I give you Apple, Google, Microsoft, Verizon, and many other great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore. >>
Hey Edmund, good points thanks. The reality is that those companies don't actually manufacture any of their products here and are made overseas. Sure, they do employ a certain amount of programmers, sales, and support personnel in the US, but next time you're at it take a look at the back of your Verizon DSL modem or your I-Pod or Computer and you'll see China as the country of origin. Even IBM was sold to China and is now Lenovo. It's interesting that our flag waving politicians made every effort in the 80s, 90s, and 2000s to support the move of most of our manufacturing capability to a communist regime with an abysmal record on human rights. With Chinese workers now demanding normal pay and working conditions it looks it's all come home to roost. To quote Gene Clark "funny how the circle turns around".....
<< <i>I believe the deflation death spiral has already begun, and commodities are going to take a pretty big hit at some point. As prices and consumer demand fall, more and more commodities buyers will lose their jobscut back on their businesses and will have to scale back to a more subsistence form of living. Commodities have ridden the wave of the great inflation scare, but I think that wave is going to come crashing down soon......
Commodities that are used everyday by the masses will not go down in price, esp. food and that includes money alternatives such as gold, oil, etc. As Sinclair continues to note, hyperstaginflation is not a demand driven event, but currency driven one. And the currencies will be driven into the ground by debasement. That will drive the price of key goods and services higher. Here is an interesting article on the subject that seems to suggest continued global monetary growth. In this environment the world demand for food, oil, gold, and other key items will continue grow as sovereign currencies cheapen.
You say we're not manufacturing anything anymore? I give you Apple, Google, Microsoft, Verizon, and many other great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore.
Water, food, shelter, consumer staples, etc. are all key manufactured items for a self-sufficient economy. As they say, you can't eat your iphone, ipad, laptop, or cell phone. Though in the rain your 17" laptop can make a crude though quite expensive roof.
roadrunner >>
Roadrunner, I respect your opinion but haven't you noticed where most of these articles come from? They are from people in the business or connected to people who stand to profit from consumer precious metal sales. This pump and jive routine has created enough fury to drive metals prices up to record highs. However, I believe that it will crash soon, if for nothing else that folks just won't have the cash to spend and will resort to dumping at least a part of their portfolios. This will re-balance the supply and demand issues facing the goldsilver market right now and prices will drop again.
Almost everyone I know is in debt while demands for goods and services are falling. I just talked to a longtime self-employed repairman who told me that he's noticed a dramatic downturn in his service calls (in the last few months) as people are trying to fix things themselves or only fixing the most dire things. I'm seeing local businesses that have been doing well for decades close down. And it's only going to get worse, sadly. I am really angry at what the bankers and their politician friends did to this great nation and I fear that we are coming into some really hard times, maybe worse than the 30s. Maybe it's time to rent "The Waltons" on DVD
<< <i> Roadrunner, I respect your opinion but haven't you noticed where most of these articles come from? They are from people in the business or connected to people who stand to profit from consumer precious metal sales. This pump and jive routine has created enough fury to drive metals prices up to record highs. However, I believe that it will crash soon, if for nothing else that folks just won't have the cash to spend and will resort to dumping at least a part of their portfolios. This will re-balance the supply and demand issues facing the goldsilver market right now and prices will drop again.
>>
The uber rich drive the markets, not joe the plumber. You're absolutely correct about our economy slumping bad, real bad. The middle class and poor are really struggling. Businesses are stale at best.
However, keep in mind that in any economic downturn, especially where the euro and US dollar will fall, the rich billionaires will need a place for their money to go. And again, if Asia/China is really pushing silver and gold as much as we hear they are, then the rich will try to find any investment outside of Europe and the US that will keep their money safe.
My only argument for gold staying at these levels or MUCH higher is that the euro and US dollar will nosedive over the long haul, Asia will become the new economic superpower, and China will be numero uno. When China becomes that, they can do anything they want with the new currency they will be in control of. I would suggest that based on their recommendation to Chinese citizens, that gold and silver will be in the equation. If you ever turn on Larry Kudlow, many of his American bears are recommending gold as the safest place to be. I couldn't agree more, even though I still believe the stock market has a way to run higher from here. I'm looking for a 12,500 DOW before things get real bad in 2011-12. Just a guess, and I could be as wrong as the next person, and I hope I am.
Just got done talking to a pool guy. He's been in the business for 40 years. He once had a 20 guy crew, but three years ago had to shave it down to 4 guys. His new pool installations have fallen over 60% the past three years. He used to never make service calls because he was always busy building pools, but now he takes every service call he can get.
Do we call this deflation or inflation ? I call it an economy that is collapsing before our very eyes. If we want to call it a recession, fine. If we want to call it the worse times since the great depression, fine. But during the recession we had a trade surplus and very little national debt. Now we aren't exporting anything really, and our debt is higher then heaven above. I say we are in the middle of financial armeggedon. Again, I hope I'm very, very wrong, but I call it like I see it.
<< <i> Roadrunner, I respect your opinion but haven't you noticed where most of these articles come from? They are from people in the business or connected to people who stand to profit from consumer precious metal sales. This pump and jive routine has created enough fury to drive metals prices up to record highs. However, I believe that it will crash soon, if for nothing else that folks just won't have the cash to spend and will resort to dumping at least a part of their portfolios. This will re-balance the supply and demand issues facing the goldsilver market right now and prices will drop again.
>>
The uber rich drive the markets, not joe the plumber. You're absolutely correct about our economy slumping bad, real bad. The middle class and poor are really struggling. Businesses are stale at best.
However, keep in mind that in any economic downturn, especially where the euro and US dollar will fall, the rich billionaires will need a place for their money to go. And again, if Asia/China is really pushing silver and gold as much as we hear they are, then the rich will try to find any investment outside of Europe and the US that will keep their money safe.
My only argument for gold staying at these levels or MUCH higher is that the euro and US dollar will nosedive over the long haul, Asia will become the new economic superpower, and China will be numero uno. When China becomes that, they can do anything they want with the new currency they will be in control of. I would suggest that based on their recommendation to Chinese citizens, that gold and silver will be in the equation. If you ever turn on Larry Kudlow, many of his American bears are recommending gold as the safest place to be. I couldn't agree more, even though I still believe the stock market has a way to run higher from here. I'm looking for a 12,500 DOW before things get real bad in 2011-12. Just a guess, and I could be as wrong as the next person, and I hope I am. >>
Hey Edmund, excellent points regarding gold being a safe haven if our fiat currency goes south. I think for folks that bought low gold is a great thing to hold onto mixed with cash. I believe that for folks who bought high there is a great danger for them in the coming 1-3 years. I think this economy is bad enough to outweigh anything the rich can pull off regarding making gold stay or go higher. Pretty soon a lot of gold investors are going to figure out that deflation is the main problem, and they will start to dump at least some of their portfolio back into the market. This of course will cause a market correction and those who bought gold high will end up losing big.
<< <i>WF it's always refreshing to read a "minority" view point, however, if your scenario comes to fruition, a lot of the PM bulls along with the SHTF doomsayers, will end up jumping out of window. ( maybe even 2d story windows) >>
Hey OPA thanks! And yes, what's going to happen soon will make many of those folks depressed. If the SHTF it will be a while as I think it would take number of years if it did happen. Those who bought gold high will also be freaked as I agree with those who say there is a gold bubble in the market as we speak. It'll be interesting to revisit this thread in six months to a year and see where things are.
<< <i>WF it's always refreshing to read a "minority" view point, however, if your scenario comes to fruition, a lot of the PM bulls along with the SHTF doomsayers, will end up jumping out of window. ( maybe even 2d story windows) >>
Hey OPA thanks! And yes, what's going to happen soon will make many of those folks depressed. If the SHTF it will be a while as I think it would take number of years if it did happen. Those who bought gold high will also be freaked as I agree with those who say there is a gold bubble in the market as we speak. It'll be interesting to revisit this thread in six months to a year and see where things are. >>
You boys better take the "talking heads" blinders off. Now Mad Max is not going to happen but ya better get your ducks in a row.
Hard times are here going to get worse. Worry about food, shelter, & warmth in winter.
Of course if the credit card company's & banks own every thing in your world - ride that gravy train as long as possible!
Enjoy as the train to nowhere is going to crash. JMO~Peace, Tim
As a candle shines brightest , just before the end. The economy of the Nation is showing faint flickers of light, before the end. It will take a very long time for a bad economy to wring the excesses out of the Nations financial structure.
The stock market is acting like a Bipolar patient swinging between wishful enthusiasm and depressive desperation..Most up days are on decreased volume and most down days are on very heavy volume. Most talking heads are talking up a brighter future but the hard numbers are just not there.
Millions of folks have been out of work for 1-2 years with small likelihood of finding a job. Millions of jobs have disappeared. Outsourced to other countries. Folks in general have not benefited from the stock market and their equity in their homes is gone or has dropped to negative numbers.
Companies can beef up their profit statements by cutting jobs and closing plants. However there is a finite limit to such activity as we soon enter in a declining spin of less sales, less production, less jobs and finally falling profits. Unless the world enters into WW 3, we are facing 5-10 years of tough times.These times will finish the depletion of resources of the middle class and together with the lower class, we will become a Nation of have nots with a very thin crust of haves.The deflation will be brutal and will touch most of the population.I do not see inflation as no one has the money to chase goods and services. Debt will be an awful thing to have and debt will be an awful thing to own, as bankruptcies will eliminate the value of such notes.
A Nation can not live in LaLa Land forever, before the reality of bankruptcy of the Nation and its people comes crashing down. As rich a country as we are in land, water, food and resources, we are bankrupt and are unable to repay existing debt nor can we cut enough of the budget to make a difference.
One more guess/prediction on my part. I sure as heck hope this never happens, and that we see a 20,000 dow with a very stable American economy, but something tells me that if the big boy traders collectively see that America is like the Titanic, then you can bet your every last ounce of gold that we'll have one heck of a run upwards in the stock market before the inevitable crash. They'll try to get everyone they can believing that the market is going to run past 15,000 and then some, and then, boom, down she goes like a rock, and all the bagholders will be totally you know what.
Didn't the quantitative easing get us out of the great depression ?
No, Hitler got us, and the world, out of the Great Depression.
And the horny GI's coming back home started the largest demographic push this country has ever seen. Hard to stop an economy that increased its population 35% in 18 years----an increase in the number of people that was greater than the CURRENT populations of 85% of today's countries----that is, until they get old.
Just got done talking to a pool guy. He's been in the business for 40 years. He once had a 20 guy crew, but three years ago had to shave it down to 4 guys. His new pool installations have fallen over 60% the past three years. He used to never make service calls because he was always busy building pools, but now he takes every service call he can get.
Do we call this deflation or inflation ? I call it an economy that is collapsing before our very eyes. If we want to call it a recession, fine. If we want to call it the worse times since the great depression, fine.
I call it, "most of the houses in the area already have pools, so far fewer new ones need to be dug"
Roadrunner, I respect your opinion but haven't you noticed where most of these articles come from? They are from people in the business or connected to people who stand to profit from consumer precious metal sales. This pump and jive routine has created enough fury to drive metals prices up to record highs. However, I believe that it will crash soon, if for nothing else that folks just won't have the cash to spend and will resort to dumping at least a part of their portfolios. This will re-balance the supply and demand issues facing the goldsilver market right now and prices will drop again.
Your view assumes a demand-pull inflation which obviously is not coming any time soon. But a cost-push inflationary environment can come from a depreciating currency during lousy economic times. In fact all hyperinflations come from that type of environment. We do not need increasing demand for goods to drive up the dollar price of gold. All you need is a depreciating currency where confidence is waning. Joe Six Pack is not driving the gold price or gold demand. That demand is largely coming from overseas (China, India, Middle East, Europe, etc.). Joe Six Pack is a non-player in this world wide game. It's not likely that the Central Banks and investor holdings will liquidate any time soon. Even during the massive deleveraging of 2008 the total inventory of GLD held it's own pretty well. People didn't liquidate. Can't say the same for SLV though. Most of the ads in the PM's sector are still to buy gold from the public, not to sell them gold. When that changes to many sell ads to only a few buy ads, then we'll know the end-game is near. What I do respect is the massive V chart formation in gold that has been created over the past 3 yrs. That tells me much higher prices are coming, not way lower prices. They said the same thing about gold in the 1970's as well. Even said that deflation was coming big-time following the 1974-1975 recession. What followed was big time inflation that was formed by monetary policies way back in the 1960's. The inflationary wave that is eventually coming at as was formed over the previous 25 years of monetary/credit abuse. It will be a Tsunami.
Hey OPA thanks! And yes, what's going to happen soon will make many of those folks depressed. If the SHTF it will be a while as I think it would take number of years if it did happen. Those who bought gold high will also be freaked as I agree with those who say there is a gold bubble in the market as we speak. It'll be interesting to revisit this thread in six months to a year and see where things are.
By first half of 2011 gold will be at new all time highs. Considerably higher than $1300. Yes, we could still revisit $1050 or so before then. In order for gold to crash the dollar has to become much stronger and become the world's leading currency again. Just how do we do that by running $1.7T in annual deficits, selling $100-200B in TBonds every month, having 40 states with severe and growing budget deficits, and more than likely having the govt coming out with QE2 of $1-2T in the near future? Something has to replace gold as the current go-to money alternative. So what's it gonna be? USD? Euro? Yen? Cando? Yuan? Oil? Is world-wide austerity going to drive these currencies to new highs? Or will govt's cave in to massive QE just like they have for decades and print their way to assumed "prosperity?"
The problem most of us face, is what do we do to protect ourselves against both depression
and hyper inflation lasting long periods of time? To protect against either extreme would mean
taking almost the opposite precautions.The odds seem to be about even as to which way we go.
Everything tried has failed and the magic gun seems pretty empty of magic bullets.Whether right
or wrong I am doing the following:
1.Pay off all short term debt leaving just the mortgage payments
2. Accumulate 90% silver coinage quarters and halves. I am afraid that gold is too expensive and not as usable in a world gone mad Silver coinage would be understood and accepted at what ever the value of silver coinage may be. A little Gold may not hurt ,but I am talking about a day to day medium of exchange ,to buy food, if paper becomes worth its intrinsic value, which is nothing.
3. Stockpile needed medications for the wife and myself.
4. Do have some means of home protection.
5. Always keep both cars at,least half full of gas.
6. Have emergency first aid supplies in the house. These to include bandages, antibiotic cream and ointment, blood pressure machine,a means to purify water,anti biotic capsules broad spectrum,splints, hand crank radio and lighting system.
7. Have a few hundred dollars in the house ,in the event that credit cards and checks are temporarily not accepted.
8. Keep a few months expense money in the bank.
9. Pray a lot , that we all get thru what may come.
I am sure that this is not enough, but it is the best that I can do at this time.
Double ditto...... Manufacturing has and is leaving the good ole USA!!!!!! Until that is corrected...... other nations will buy more gold. Keep it simple my friends. Example: Where was your last piece of clothing manufactured? Where was the last windmill manufactured? Where was your last car manufactured?
Homebuilding? Non existant today, but most everything manufactured here.
Finally...... a moritorium on drilling????? Oh my gosh killing the people of that industry!!!!!!
Make it simple my friends, follow the jobs..... oh wait there ARE NO JOBS! the government is printing money and I'm buying gold, silver and food.
This is how an apparently deflationary condition instantly flips to strongly inflationary.
The Death of Paper Money As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974. By Ambrose Evans-Pritchard Published: 7:05PM BST 25 Jul 2010
Ebay is offering a well-thumbed volume of "Dying of Money: Lessons of the Great German and American Inflations" at a starting bid of $699 (shipping free.. thanks a lot).
The crucial passage comes in Chapter 17 entitled "Velocity". Each big inflation — whether the early 1920s in Germany, or the Korean and Vietnam wars in the US — starts with a passive expansion of the quantity money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck.
People’s willingness to hold money can change suddenly for a "psychological and spontaneous reason" , causing a spike in the velocity of money. It can occur at lightning speed, over a few weeks. The shift invariably catches economists by surprise. They wait too long to drain the excess money.
"Velocity took an almost right-angle turn upward in the summer of 1922," said Mr O Parsson. Reichsbank officials were baffled. They could not fathom why the German people had started to behave differently almost two years after the bank had already boosted the money supply. He contends that public patience snapped abruptly once people lost trust and began to "smell a government rat".
Some might smile at the Bank of England "surprise" at the recent jump in Brtiish inflation. Across the Atlantic, Fed critics say the rise in the US monetary base from $871bn to $2,024bn in just two years is an incendiary pyre that will ignite as soon as US money velocity returns to normal.
And this is just the monetary increases that are published. There's no saying how much of our debt has been monetized through more opaque channels, such as TBond purchases by the UK, and US "households." If the people ever get the idea that fraud could be in play, the switch gets flipped.
There's no saying how much of our debt has been monetized through more opaque channels, such as TBond purchases by the UK, and US "households." If the people ever get the idea that fraud could be in play, the switch gets flipped.
Yeah, "US households" have increased their bond purchases by a factor of 10 times which is especially incredible considering that household income is down and unemployment is up.
Anybody in here bought any US Bonds lately? I know that I haven't.
The lighter fluid analogy is apt.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>There's no saying how much of our debt has been monetized through more opaque channels, such as TBond purchases by the UK, and US "households." If the people ever get the idea that fraud could be in play, the switch gets flipped.
Yeah, "US households" have increased their bond purchases by a factor of 10 times which is especially incredible considering that household income is down and unemployment is up.
Anybody in here bought any US Bonds lately? I know that I haven't.
The lighter fluid analogy is apt. >>
We often don't agree, but I concur on this subject, I have been whittling down my bond holdings for over 6 months.
<< <i>There's no saying how much of our debt has been monetized through more opaque channels, such as TBond purchases by the UK, and US "households." If the people ever get the idea that fraud could be in play, the switch gets flipped.
Yeah, "US households" have increased their bond purchases by a factor of 10 times which is especially incredible considering that household income is down and unemployment is up.
Anybody in here bought any US Bonds lately? I know that I haven't.
The lighter fluid analogy is apt. >>
I've been taking low risk low reward trading positions on TLT (20-year bond ETF) all year. For the year, bonds (TLT) have outperformed both stocks (SPY) and gold (GLD).
All year there have been strident warnings in the media about an imminent U.S. bond market collapse. In my experience, those kind of warnings on any market, are often one, two, three or more years too early, and are long forgotten when the rout does come. It is a rare event when the popular pundits get it right, when they are so strident and so sure in their public warnings on financial TV and lead magazine articles in major publications. The opposite trade is often the percentage play and so far has been the case this year. Just like when there is a bull or bear on the cover of a magazine, the opposite trade is often a good idea when a time bomb and the bond market are the lead illustration such as on a recent Barrons cover.
On this forum, in March 2010, there was a thread asking about shorting bonds. TBT an inverse bond ETF was mentioned. Those that shorted bonds via buying TBT at the time of the thread are looking at about a 25% loss (TBT was high 40s in March now about 36) in four months. Yikes.
<< <i>The problem most of us face, is what do we do to protect ourselves against both depression
and hyper inflation lasting long periods of time?
...
9. Pray a lot , that we all get thru what may come.
I am sure that this is not enough, but it is the best that I can do at this time. >>
The "permanent portfolio" was an idea popularized by Harry Browne in the 1970s or 80s. The basic version is 25% cash equivalents, 25% gold, 25% long term bonds, 25% stocks, rebalancing about once a year as each sector moves up and down. While there is no guarantee of this working out well going forward, it has done fairly well over the past 30+ years, in a variety of up and down markets.
It certainly isn't the worst idea I have heard. It's simplicity is a strength. Sure it would be great to allocate optimally every year for max upside, instead of diversifying, but virtually no one can do that consistently.
I was just driving to my hotel from the office and I was thinking about easing into a position of TBT. The chatter of the collaspe of the bond market has died down quite a bit. That get's my attena up. And yes bubbles can take years to pop.
I used to trade in and out of TBT/TLT like a thief in the night but I haven't gotten arrested with it this year. Boring old bonds have been good to me but they are starting to cost me some sleep. Need to pare down to sleeping weight..............MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Companies that manufacture in the good old USA should get significant tax breaks
Companies that outsource should have their products hit with a tariff if sold in USA
Companies that offshore their headquarters to save taxes, should have execs go to jail
Keep the veto but reduce to 53 votes and limit the number of vetoes each party may use in a year.
Eliminate a single senators right to put a hold on appointments
All appointments by the president must be approved by an up or down vote within 60 days of submission.
Senators should be limited to only a small fixed number of special appropriations for their state per year.
Senators and congressmen who cheat on their spouses must attend sessions in their underwear for an entire year.
Members of Congress who miss more then 1/3 of their attendance shall be removed from office ,unless for reasons of serious and verified illness.
All lobbyists must be registered and pay an annual fee of 100,000 dollars per year per lobbyist.
Members of Congress shall not be allowed to return to their home district except for specific times per year. They should be expected to work weekends and holidays ,if that is required to do the public business.
The salary of members of Congress as well as perks can not be increased or added to in any year that there is not a balanced budget.Upon retiring, all remaining campaign funds must be turned in to the Treasury Department.
In the event that Social Security is reduced or the qualifications are increased, like changes shall be made in the pensions of members of Congress. After all, they are the servants of the people and not royalty.
Comments
In 2011, with ALL taxes going up and new taxes taking effect (Vat, healthcare) inflation will take a huge step forward. Taxes must be computed in the cost of goods sold or purchased.
I knew it would happen.
1960 bread and 2010 bread may not be the same item anymore even if they are called the same thing. You can't strip things out of product, then put them back in and call it the same food. There are some foods today that bear almost no resemblance to their 1960 versions. That's why a direct price comparison is very difficult. Take that chicken for example. The calories are probably the same or higher, but the inherent nutrients and chemicals used in the processing are radically different. I'd probably prefer to pay more than $4/lb per chicken if I knew how it was fed/grown.
roadrunner
!!!!
<< <i>Well... I'm living in Spain now and we are currently in a deflationary environment. Lets just hope China's property bubble doesnt pop like it did here. If that happens - we have global deflation for many years. my 2 cents
!!!! >>
A Labrador seagull avatar!
casey research
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
mention any civil unrest during hyperinflation, which would probably make the novice reader more comfortable with the article.
<< <i>another view on inflation/deflation:
casey research >>
Thank you for posting this interesting / educational read for my lunch break today! (well sifted LOL) Always find something here to spend my 15 or 20 minutes. Thanks again.
<< <i>
<< <i>another view on inflation/deflation:
casey research >>
Thank you for posting this interesting / educational read for my lunch break today! (well sifted LOL) Always find something here to spend my 15 or 20 minutes. Thanks again. >>
Then you might like to save this one in your favorites. My favorite site for economic blogs:
Dollar Collapse Site
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I believe the deflation death spiral has already begun, and commodities are going to take a pretty big hit at some point. As prices and consumer demand fall, more and more commodities buyers will lose their jobscut back on their businesses and will have to scale back to a more subsistence form of living. Commodities have ridden the wave of the great inflation scare, but I think that wave is going to come crashing down soon......
<< <i>Sadly, I believe that there is no where to go but deflation. The small bounce we got from govt stimulus has ended, unemployment is rising, everyone is in debt over their ears, and America has lost most of its manufacturing capabilities to foreign countries, so no way to build our way out of it.
...... >>
When the great depression hit, we had a trade surplus and not much national debt like we have today. Yet, we still
went into a great depression. Many economists will tell us that the countries that got out of the great depression quicker
were the ones who abondoned the gold standard and practiced heavy quantatative easing.
What are they going to tell us this time when things get as bad or not worse then the great depression ? Didn't
the quantitative easing get us out of the great depression ? Then why didn't the quantitative easing save us from
this next deflation/depression ?
Make no mistake, the men who hold high places seem to have used all their bullets. There are no aces in the hole
anymore. Every trick they are trying is not working.
You say we're not manufacturing anything anymore ? I give you Apple, Google, Microsoft, Verizon, and many other
great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore.
<< <i>WF it's always refreshing to read a "minority" view point, however, if your scenario comes to fruition, a lot of the PM bulls along with the SHTF doomsayers, will end up jumping out of window. ( maybe even 2d story windows)
I am in the SHTF camp, even though I hope it never, ever happens. I'm not going to sit back and say "told you so" if and
when it happens. Many people are going to get very hurt by it, and it ain't going to be pretty. So I'll take no joy in it.
Most economists understand that Europe and North American will lag well behind Asia in our future global economy.
And if the Chinese government is encouraging its citizens to buy gold and silver, then every single American would be
foolish not to follow the lead of one of Asia's major players. Not having 10-20% of your portfolio in gold and silver is
not wise. Heck, I don't even think I'm up to 10% yet, but I still believe we are watching America collapse right before our eyes.
<< <i>but I still believe we are watching America collapse right before our eyes. >>
"Tunnel vision" will do that to you. We may not be able to sustain our present standard of living, but collapsing before our eyes? Unlikely, the "powers to be" will not allow it to happen, even if they have to start a War to save our economy.
<< <i>
<< <i>but I still believe we are watching America collapse right before our eyes. >>
"Tunnel vision" will do that to you. We may not be able to sustain our present standard of living, but collapsing before our eyes? Unlikely, the "powers to be" will not allow it to happen, even if they have to start a War to save our economy. >>
2-wars now. Ya think 3 will do the trick? The rich will get richer & the poor poorer.
Commodities that are used everyday by the masses will not go down in price, esp. food and that includes money alternatives such as gold, oil, etc. As Sinclair continues to note, hyperstaginflation is not a demand driven event, but currency driven one. And the currencies will be driven into the ground by debasement. That will drive the price of key goods and services higher. Here is an interesting article on the subject that seems to suggest continued global monetary growth. In this environment the world demand for food, oil, gold, and other key items will continue grow as sovereign currencies cheapen.
Central Banks, the BIS, and world money growth
You say we're not manufacturing anything anymore? I give you Apple, Google, Microsoft, Verizon, and many other
great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore.
Water, food, shelter, consumer staples, etc. are all key manufactured items for a self-sufficient economy. As they say, you can't eat your iphone, ipad, laptop, or cell phone. Though in the rain your 17" laptop can make a crude though quite expensive roof.
roadrunner
<< <i>
You say we're not manufacturing anything anymore? I give you Apple, Google, Microsoft, Verizon, and many other
great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore.
Water, food, shelter, consumer staples, etc. are all key manufactured items for a self-sufficient economy. As they say, you can't eat your iphone, ipad, laptop, or cell phone. Though in the rain your 17" laptop can make a crude though quite expensive roof.
roadrunner >>
America has plenty of food, water, and way too much shelter, and we're not as self sufficient as we used to be. I recently heard from the chairman of the board at Allegheny (stock symbol Y), and he said he sees no
driver for our economy. If our economy has no driver, and we have plenty of goods and services, but no jobs and a growing
unemployment situation, then explain to me why we are not self-sufficient with all our manufacturing items.
<< <i>
<< <i>Sadly, I believe that there is no where to go but deflation. The small bounce we got from govt stimulus has ended, unemployment is rising, everyone is in debt over their ears, and America has lost most of its manufacturing capabilities to foreign countries, so no way to build our way out of it.
...... >>
When the great depression hit, we had a trade surplus and not much national debt like we have today. Yet, we still
went into a great depression. Many economists will tell us that the countries that got out of the great depression quicker
were the ones who abondoned the gold standard and practiced heavy quantatative easing.
What are they going to tell us this time when things get as bad or not worse then the great depression ? Didn't
the quantitative easing get us out of the great depression ? Then why didn't the quantitative easing save us from
this next deflation/depression ?
Make no mistake, the men who hold high places seem to have used all their bullets. There are no aces in the hole
anymore. Every trick they are trying is not working.
You say we're not manufacturing anything anymore ? I give you Apple, Google, Microsoft, Verizon, and many other
great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore. >>
Hey Edmund, good points thanks. The reality is that those companies don't actually manufacture any of their products here and are made overseas. Sure, they do employ a certain amount of programmers, sales, and support personnel in the US, but next time you're at it take a look at the back of your Verizon DSL modem or your I-Pod or Computer and you'll see China as the country of origin. Even IBM was sold to China and is now Lenovo. It's interesting that our flag waving politicians made every effort in the 80s, 90s, and 2000s to support the move of most of our manufacturing capability to a communist regime with an abysmal record on human rights. With Chinese workers now demanding normal pay and working conditions it looks it's all come home to roost. To quote Gene Clark "funny how the circle turns around".....
<< <i>I believe the deflation death spiral has already begun, and commodities are going to take a pretty big hit at some point. As prices and consumer demand fall, more and more commodities buyers will lose their jobscut back on their businesses and will have to scale back to a more subsistence form of living. Commodities have ridden the wave of the great inflation scare, but I think that wave is going to come crashing down soon......
Commodities that are used everyday by the masses will not go down in price, esp. food and that includes money alternatives such as gold, oil, etc. As Sinclair continues to note, hyperstaginflation is not a demand driven event, but currency driven one. And the currencies will be driven into the ground by debasement. That will drive the price of key goods and services higher. Here is an interesting article on the subject that seems to suggest continued global monetary growth. In this environment the world demand for food, oil, gold, and other key items will continue grow as sovereign currencies cheapen.
Central Banks, the BIS, and world money growth
You say we're not manufacturing anything anymore? I give you Apple, Google, Microsoft, Verizon, and many other
great American companies. We are manufacturing just as well as we used to, except it's not just steel and iron ore anymore.
Water, food, shelter, consumer staples, etc. are all key manufactured items for a self-sufficient economy. As they say, you can't eat your iphone, ipad, laptop, or cell phone. Though in the rain your 17" laptop can make a crude though quite expensive roof.
roadrunner >>
Roadrunner, I respect your opinion but haven't you noticed where most of these articles come from? They are from people in the business or connected to people who stand to profit from consumer precious metal sales. This pump and jive routine has created enough fury to drive metals prices up to record highs. However, I believe that it will crash soon, if for nothing else that folks just won't have the cash to spend and will resort to dumping at least a part of their portfolios. This will re-balance the supply and demand issues facing the goldsilver market right now and prices will drop again.
Almost everyone I know is in debt while demands for goods and services are falling. I just talked to a longtime self-employed repairman who told me that he's noticed a dramatic downturn in his service calls (in the last few months) as people are trying to fix things themselves or only fixing the most dire things. I'm seeing local businesses that have been doing well for decades close down. And it's only going to get worse, sadly. I am really angry at what the bankers and their politician friends did to this great nation and I fear that we are coming into some really hard times, maybe worse than the 30s. Maybe it's time to rent "The Waltons" on DVD
<< <i>
Roadrunner, I respect your opinion but haven't you noticed where most of these articles come from? They are from people in the business or connected to people who stand to profit from consumer precious metal sales. This pump and jive routine has created enough fury to drive metals prices up to record highs. However, I believe that it will crash soon, if for nothing else that folks just won't have the cash to spend and will resort to dumping at least a part of their portfolios. This will re-balance the supply and demand issues facing the goldsilver market right now and prices will drop again.
The uber rich drive the markets, not joe the plumber. You're absolutely correct about our economy slumping bad, real bad.
The middle class and poor are really struggling. Businesses are stale at best.
However, keep in mind that in any economic downturn, especially where the euro and US dollar will fall, the rich billionaires
will need a place for their money to go. And again, if Asia/China is really pushing silver and gold as much as we hear they are, then the rich will try to find any investment outside of Europe and the US that will keep their money safe.
My only argument for gold staying at these levels or MUCH higher is that the euro and US dollar will nosedive over the long
haul, Asia will become the new economic superpower, and China will be numero uno. When China becomes that, they can do anything they want with the new currency they will be in control of. I would suggest that based on
their recommendation to Chinese citizens, that gold and silver will be in the equation. If you ever turn on Larry Kudlow, many
of his American bears are recommending gold as the safest place to be. I couldn't agree more, even though I still believe
the stock market has a way to run higher from here. I'm looking for a 12,500 DOW before things get real bad in 2011-12.
Just a guess, and I could be as wrong as the next person, and I hope I am.
ago had to shave it down to 4 guys. His new pool installations have fallen over 60% the past three years. He used to
never make service calls because he was always busy building pools, but now he takes every service call he can get.
Do we call this deflation or inflation ? I call it an economy that is collapsing before our very eyes. If we want to
call it a recession, fine. If we want to call it the worse times since the great depression, fine. But during the recession
we had a trade surplus and very little national debt. Now we aren't exporting anything really, and our debt is higher then
heaven above. I say we are in the middle of financial armeggedon. Again, I hope I'm very, very wrong, but I call it
like I see it.
<< <i>
<< <i>
Roadrunner, I respect your opinion but haven't you noticed where most of these articles come from? They are from people in the business or connected to people who stand to profit from consumer precious metal sales. This pump and jive routine has created enough fury to drive metals prices up to record highs. However, I believe that it will crash soon, if for nothing else that folks just won't have the cash to spend and will resort to dumping at least a part of their portfolios. This will re-balance the supply and demand issues facing the goldsilver market right now and prices will drop again.
The uber rich drive the markets, not joe the plumber. You're absolutely correct about our economy slumping bad, real bad.
The middle class and poor are really struggling. Businesses are stale at best.
However, keep in mind that in any economic downturn, especially where the euro and US dollar will fall, the rich billionaires
will need a place for their money to go. And again, if Asia/China is really pushing silver and gold as much as we hear they are, then the rich will try to find any investment outside of Europe and the US that will keep their money safe.
My only argument for gold staying at these levels or MUCH higher is that the euro and US dollar will nosedive over the long
haul, Asia will become the new economic superpower, and China will be numero uno. When China becomes that, they can do anything they want with the new currency they will be in control of. I would suggest that based on
their recommendation to Chinese citizens, that gold and silver will be in the equation. If you ever turn on Larry Kudlow, many
of his American bears are recommending gold as the safest place to be. I couldn't agree more, even though I still believe
the stock market has a way to run higher from here. I'm looking for a 12,500 DOW before things get real bad in 2011-12.
Just a guess, and I could be as wrong as the next person, and I hope I am. >>
Hey Edmund, excellent points regarding gold being a safe haven if our fiat currency goes south. I think for folks that bought low gold is a great thing to hold onto mixed with cash. I believe that for folks who bought high there is a great danger for them in the coming 1-3 years. I think this economy is bad enough to outweigh anything the rich can pull off regarding making gold stay or go higher. Pretty soon a lot of gold investors are going to figure out that deflation is the main problem, and they will start to dump at least some of their portfolio back into the market. This of course will cause a market correction and those who bought gold high will end up losing big.
<< <i>WF it's always refreshing to read a "minority" view point, however, if your scenario comes to fruition, a lot of the PM bulls along with the SHTF doomsayers, will end up jumping out of window. ( maybe even 2d story windows)
Hey OPA thanks! And yes, what's going to happen soon will make many of those folks depressed. If the SHTF it will be a while as I think it would take number of years if it did happen. Those who bought gold high will also be freaked as I agree with those who say there is a gold bubble in the market as we speak. It'll be interesting to revisit this thread in six months to a year and see where things are.
<< <i>
<< <i>WF it's always refreshing to read a "minority" view point, however, if your scenario comes to fruition, a lot of the PM bulls along with the SHTF doomsayers, will end up jumping out of window. ( maybe even 2d story windows)
Hey OPA thanks! And yes, what's going to happen soon will make many of those folks depressed. If the SHTF it will be a while as I think it would take number of years if it did happen. Those who bought gold high will also be freaked as I agree with those who say there is a gold bubble in the market as we speak. It'll be interesting to revisit this thread in six months to a year and see where things are. >>
You boys better take the "talking heads" blinders off. Now Mad Max is not going to happen but ya better get your ducks in a row.
Hard times are here going to get worse. Worry about food, shelter, & warmth in winter.
Of course if the credit card company's & banks own every thing in your world - ride that gravy train as long as possible!
Enjoy as the train to nowhere is going to crash. JMO~Peace, Tim
faint flickers of light, before the end. It will take a very long time for a bad economy to
wring the excesses out of the Nations financial structure.
The stock market is acting like a Bipolar patient swinging between wishful enthusiasm and
depressive desperation..Most up days are on decreased volume and most down days are on
very heavy volume. Most talking heads are talking up a brighter future but the hard numbers
are just not there.
Millions of folks have been out of work for 1-2 years with small likelihood of finding a job. Millions
of jobs have disappeared. Outsourced to other countries. Folks in general have not benefited from
the stock market and their equity in their homes is gone or has dropped to negative numbers.
Companies can beef up their profit statements by cutting jobs and closing plants. However there is a finite
limit to such activity as we soon enter in a declining spin of less sales, less production, less jobs and finally
falling profits. Unless the world enters into WW 3, we are facing 5-10 years of tough times.These times will
finish the depletion of resources of the middle class and together with the lower class, we will become a Nation
of have nots with a very thin crust of haves.The deflation will be brutal and will touch most of the population.I do
not see inflation as no one has the money to chase goods and services. Debt will be an awful thing to have and debt
will be an awful thing to own, as bankruptcies will eliminate the value of such notes.
A Nation can not live in LaLa Land forever, before the reality of bankruptcy of the Nation and its people comes crashing
down. As rich a country as we are in land, water, food and resources, we are bankrupt and are unable to repay existing debt
nor can we cut enough of the budget to make a difference.
Camelot
a very stable American economy, but something tells me that if the big boy traders collectively see that America is like
the Titanic, then you can bet your every last ounce of gold that we'll have one heck of a run upwards in the stock market
before the inevitable crash. They'll try to get everyone they can believing that the market is going to run past 15,000
and then some, and then, boom, down she goes like a rock, and all the bagholders will be totally you know what.
No, Hitler got us, and the world, out of the Great Depression.
And the horny GI's coming back home started the largest demographic push this country has ever seen. Hard to stop an economy that increased its population 35% in 18 years----an increase in the number of people that was greater than the CURRENT populations of 85% of today's countries----that is, until they get old.
Knowledge is the enemy of fear
ago had to shave it down to 4 guys. His new pool installations have fallen over 60% the past three years. He used to
never make service calls because he was always busy building pools, but now he takes every service call he can get.
Do we call this deflation or inflation ? I call it an economy that is collapsing before our very eyes. If we want to
call it a recession, fine. If we want to call it the worse times since the great depression, fine.
I call it, "most of the houses in the area already have pools, so far fewer new ones need to be dug"
Liberty: Parent of Science & Industry
Your view assumes a demand-pull inflation which obviously is not coming any time soon. But a cost-push inflationary environment can come from a depreciating currency during lousy economic times. In fact all hyperinflations come from that type of environment. We do not need increasing demand for goods to drive up the dollar price of gold. All you need is a depreciating currency where confidence is waning. Joe Six Pack is not driving the gold price or gold demand. That demand is largely coming from overseas (China, India, Middle East, Europe, etc.). Joe Six Pack is a non-player in this world wide game. It's not likely that the Central Banks and investor holdings will liquidate any time soon. Even during the massive deleveraging of 2008 the total inventory of GLD held it's own pretty well. People didn't liquidate. Can't say the same for SLV though. Most of the ads in the PM's sector are still to buy gold from the public, not to sell them gold. When that changes to many sell ads to only a few buy ads, then we'll know the end-game is near. What I do respect is the massive V chart formation in gold that has been created over the past 3 yrs. That tells me much higher prices are coming, not way lower prices. They said the same thing about gold in the 1970's as well. Even said that deflation was coming big-time following the 1974-1975 recession. What followed was big time inflation that was formed by monetary policies way back in the 1960's. The inflationary wave that is eventually coming at as was formed over the previous 25 years of monetary/credit abuse. It will be a Tsunami.
Hey OPA thanks! And yes, what's going to happen soon will make many of those folks depressed. If the SHTF it will be a while as I think it would take number of years if it did happen. Those who bought gold high will also be freaked as I agree with those who say there is a gold bubble in the market as we speak. It'll be interesting to revisit this thread in six months to a year and see where things are.
By first half of 2011 gold will be at new all time highs. Considerably higher than $1300. Yes, we could still revisit $1050 or so before then. In order for gold to crash the dollar has to become much stronger and become the world's leading currency again. Just how do we do that by running $1.7T in annual deficits, selling $100-200B in TBonds every month, having 40 states with severe and growing budget deficits, and more than likely having the govt coming out with QE2 of $1-2T in the near future? Something has to replace gold as the current go-to money alternative. So what's it gonna be? USD? Euro? Yen? Cando? Yuan? Oil? Is world-wide austerity going to drive these currencies to new highs? Or will govt's cave in to massive QE just like they have for decades and print their way to assumed "prosperity?"
roadrunner
and hyper inflation lasting long periods of time? To protect against either extreme would mean
taking almost the opposite precautions.The odds seem to be about even as to which way we go.
Everything tried has failed and the magic gun seems pretty empty of magic bullets.Whether right
or wrong I am doing the following:
1.Pay off all short term debt leaving just the mortgage payments
2. Accumulate 90% silver coinage quarters and halves. I am afraid that gold is too expensive and not as usable
in a world gone mad Silver coinage would be understood and accepted at what ever the value of silver coinage may be.
A little Gold may not hurt ,but I am talking about a day to day medium of exchange ,to buy food, if paper becomes worth its
intrinsic value, which is nothing.
3. Stockpile needed medications for the wife and myself.
4. Do have some means of home protection.
5. Always keep both cars at,least half full of gas.
6. Have emergency first aid supplies in the house. These to include bandages, antibiotic cream and ointment,
blood pressure machine,a means to purify water,anti biotic capsules broad spectrum,splints, hand crank
radio and lighting system.
7. Have a few hundred dollars in the house ,in the event that credit cards and checks are temporarily not accepted.
8. Keep a few months expense money in the bank.
9. Pray a lot , that we all get thru what may come.
I am sure that this is not enough, but it is the best that I can do at this time.
Camelot
Example:
Where was your last piece of clothing manufactured?
Where was the last windmill manufactured?
Where was your last car manufactured?
Homebuilding? Non existant today, but most everything manufactured here.
Finally...... a moritorium on drilling????? Oh my gosh killing the people of that industry!!!!!!
Make it simple my friends, follow the jobs..... oh wait there ARE NO JOBS! the government is printing money and I'm buying gold, silver and food.
The Death of Paper Money
As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974.
By Ambrose Evans-Pritchard
Published: 7:05PM BST 25 Jul 2010
Ebay is offering a well-thumbed volume of "Dying of Money: Lessons of the Great German and American Inflations" at a starting bid of $699 (shipping free.. thanks a lot).
The crucial passage comes in Chapter 17 entitled "Velocity". Each big inflation — whether the early 1920s in Germany, or the Korean and Vietnam wars in the US — starts with a passive expansion of the quantity money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck.
People’s willingness to hold money can change suddenly for a "psychological and spontaneous reason" , causing a spike in the velocity of money. It can occur at lightning speed, over a few weeks. The shift invariably catches economists by surprise. They wait too long to drain the excess money.
"Velocity took an almost right-angle turn upward in the summer of 1922," said Mr O Parsson. Reichsbank officials were baffled. They could not fathom why the German people had started to behave differently almost two years after the bank had already boosted the money supply. He contends that public patience snapped abruptly once people lost trust and began to "smell a government rat".
Some might smile at the Bank of England "surprise" at the recent jump in Brtiish inflation. Across the Atlantic, Fed critics say the rise in the US monetary base from $871bn to $2,024bn in just two years is an incendiary pyre that will ignite as soon as US money velocity returns to normal.
And this is just the monetary increases that are published. There's no saying how much of our debt has been monetized through more opaque channels, such as TBond purchases by the UK, and US "households." If the people ever get the idea that fraud could be in play, the switch gets flipped.
roadrunner
Yeah, "US households" have increased their bond purchases by a factor of 10 times which is especially incredible considering that household income is down and unemployment is up.
Anybody in here bought any US Bonds lately? I know that I haven't.
The lighter fluid analogy is apt.
I knew it would happen.
<< <i>Anybody in here bought any US Bonds lately? I know that I haven't. >>
Yes. The Pimco Total Return Bond fund has been good to me.
<< <i>There's no saying how much of our debt has been monetized through more opaque channels, such as TBond purchases by the UK, and US "households." If the people ever get the idea that fraud could be in play, the switch gets flipped.
Yeah, "US households" have increased their bond purchases by a factor of 10 times which is especially incredible considering that household income is down and unemployment is up.
Anybody in here bought any US Bonds lately? I know that I haven't.
The lighter fluid analogy is apt. >>
We often don't agree, but I concur on this subject, I have been whittling down my bond holdings for over 6 months.
<< <i>There's no saying how much of our debt has been monetized through more opaque channels, such as TBond purchases by the UK, and US "households." If the people ever get the idea that fraud could be in play, the switch gets flipped.
Yeah, "US households" have increased their bond purchases by a factor of 10 times which is especially incredible considering that household income is down and unemployment is up.
Anybody in here bought any US Bonds lately? I know that I haven't.
The lighter fluid analogy is apt. >>
I've been taking low risk low reward trading positions on TLT (20-year bond ETF) all year. For the year, bonds (TLT) have outperformed both stocks (SPY) and gold (GLD).
All year there have been strident warnings in the media about an imminent U.S. bond market collapse. In my experience, those kind of warnings on any market, are often one, two, three or more years too early, and are long forgotten when the rout does come. It is a rare event when the popular pundits get it right, when they are so strident and so sure in their public warnings on financial TV and lead magazine articles in major publications. The opposite trade is often the percentage play and so far has been the case this year. Just like when there is a bull or bear on the cover of a magazine, the opposite trade is often a good idea when a time bomb and the bond market are the lead illustration such as on a recent Barrons cover.
On this forum, in March 2010, there was a thread asking about shorting bonds. TBT an inverse bond ETF was mentioned. Those that shorted bonds via buying TBT at the time of the thread are looking at about a 25% loss (TBT was high 40s in March now about 36) in four months. Yikes.
link to March thread
<< <i>Anybody in here bought any US Bonds lately? I know that I haven't. >>
Yes...Series I bonds. Been doing that for 20 years.
<< <i>The problem most of us face, is what do we do to protect ourselves against both depression
and hyper inflation lasting long periods of time?
...
9. Pray a lot , that we all get thru what may come.
I am sure that this is not enough, but it is the best that I can do at this time. >>
The "permanent portfolio" was an idea popularized by Harry Browne in the 1970s or 80s. The basic version is 25% cash equivalents, 25% gold, 25% long term bonds, 25% stocks, rebalancing about once a year as each sector moves up and down. While there is no guarantee of this working out well going forward, it has done fairly well over the past 30+ years, in a variety of up and down markets.
It certainly isn't the worst idea I have heard. It's simplicity is a strength. Sure it would be great to allocate optimally every year for max upside, instead of diversifying, but virtually no one can do that consistently.
I was just driving to my hotel from the office and I was thinking about easing into a position of TBT. The chatter of the collaspe of the bond market has died down quite a bit. That get's my attena up. And yes bubbles can take years to pop.
Maybe just maybe this has put in a bottom?
I used to trade in and out of TBT/TLT like a thief in the night but I haven't gotten arrested with it this year. Boring old bonds have been good to me but they are starting to cost me some sleep. Need to pare down to sleeping weight..............MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Companies that outsource should have their products hit with a tariff if sold in USA
Companies that offshore their headquarters to save taxes, should have execs go to jail
Keep the veto but reduce to 53 votes and limit the number of vetoes each party may use in a year.
Eliminate a single senators right to put a hold on appointments
All appointments by the president must be approved by an up or down vote within 60 days of submission.
Senators should be limited to only a small fixed number of special appropriations for their state per year.
Senators and congressmen who cheat on their spouses must attend sessions in their underwear for an entire year.
Members of Congress who miss more then 1/3 of their attendance shall be removed from office ,unless for reasons of serious and
verified illness.
All lobbyists must be registered and pay an annual fee of 100,000 dollars per year per lobbyist.
Members of Congress shall not be allowed to return to their home district except for specific times per year. They should be
expected to work weekends and holidays ,if that is required to do the public business.
The salary of members of Congress as well as perks can not be increased or added to in any year that there is not a
balanced budget.Upon retiring, all remaining campaign funds must be turned in to the Treasury Department.
In the event that Social Security is reduced or the qualifications are increased, like changes shall be made in the pensions
of members of Congress. After all, they are the servants of the people and not royalty.
Camelot
England