Help me understand something...
coin22lover
Posts: 3,539 ✭✭✭
If in 2008 when the economy tanked, PM prices also tanked, then why does everyone assume that when the economy tanks again/worse, their PM's will skyrocket? What's the difference?
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The feeling now in a lot of circles is that the circumstances are different this time and risk assets instruments and flights to saftey have changed. ie gold and pm's instead of the dollar.
Of course this may or may not happen.
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......
<< <i>If in 2008 when the economy tanked, PM prices also tanked, then why does everyone assume that when the economy tanks again/worse, their PM's will skyrocket? What's the difference? >>
No one was ready for the 2008 crash (except some of us) so there was massive panic as everyone converted all investment classes to cash. The quick recovery of PMs versus other asset classes shows that once heads cooled they knew where to put their money. Investors now are going right from other asset classes and strait into PMs and by passing cash.
This time around, the worse it gets, the better PMs will perform. There will be dips, enjoy them.
"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>If in 2008 when the economy tanked, PM prices also tanked, then why does everyone assume that when the economy tanks again/worse, their PM's will skyrocket? What's the difference? >>
In 2008 things were only about a year out from the first major rumblings of derivative defaults. It was still relatively new. Not having been through a crash like this since 1987, the great depression, or even 1907, the lemmings stampeded into the only "safe" haven they knew, dollars and TBonds. In the 2-3 yrs that have followed both of those "safehavens" have been thrashed considerably. The world has gotten more accustomed to seeing metals as a safe haven, not just cash and TBonds. PM's might still get hit hard during another 2008 type event, but I doubt we'll see 33% gold and 60% silver retracements like we did then. In 2008 this event was more about the US. Now the financial issues are global, along with a global demand for gold/silver that was not present in summer of 2008. The holders of gold and silver will not be quite as impetuous as they were back in 2008. Also realize that in July of 2008 JPM doubled up on their silver and gold otc derivatives to literally implode the metals. If they try a similar type move today it might not fly so easily with the regulators and the move would be flagged as blatant manipulation. If the tactics that worked in 2008 to help pummel gold and silver were still available, then why is silver nearly 4X the price from Nov 2008 and gold 2X higher? In 2008 it wasn't clear that the PTB could just use the "nuclear" paper option to bail out the system to the tune of $10-$20 TRILL. In 2011 we all know this option is readily available if needed....gold and silver know that as well.
roadrunner