<< <i>That definition only works on the assumption that the increased money supply is being distributed for purchases of things risign in value. That enormous debt is being held by busted banks to shore up their balance sheet to cover the yet undisclosed TRUE measure of how badly their conventional assets are overvalued. >>
Money supply numbers are not limited to what is being spent.
"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
So, to those in the deflation camp, what exactly is deflating except for jobs and assets that were over inflated such as housing?
"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>That definition only works on the assumption that the increased money supply is being distributed for purchases of things risign in value. That enormous debt is being held by busted banks to shore up their balance sheet to cover the yet undisclosed TRUE measure of how badly their conventional assets are overvalued. >>
Money supply numbers are not limited to what is being spent. >>
I'm well aware of that and in fact it is the crux of my argument. That money is NOT being spent. It is being hoarded to compensate for a bucket of absolute JUNK on bank balance sheets. It will be a miracle if it is ever lent out.
What do you own that has risen in... value.. over the past 3 years?
It helps the natural scheme of things for any country using fiat currency.
Gen 1. buys stuff that appreciates. Gen 2. inherits some from Gen 1 and continues earning "more" (which is illusory) Gen 1. retires and spends down what they bought.
Stores of VALUE...... soar.
Gold has soared. But on INSURANCE against defaults by governments.
Gold now buys MORE of almost everything which per se defeats the inflation argument. Gold is to OFFSET inflation... Not inflate itself.
I say deflation .... you say to-mah-to.
Who cares? I hold massive metal physical position for insurance. I don't care who holds it for what.
Cost-push inflation is caused by increases in the money supply. The fact that banks sucked up this liquidity by getting free bailout money to make their balance sheets look nicer simply means that tax increases will be required to pay the interest on the higher level of debt created for the bank bailouts.
Same camel. More straws.
Oh, and the banker bonuses, let's not forget that. Instead of getting their heads handed to them and getting fired, driven into bankruptcy, and ridden out of town on a rail, their buddies in Congress helped them out just fine.
Count those votes, Congress. Figure out who can vote yes and who can vote no, based on who's up for election next time around.
My fiancee' thinks that "the fix is in" for the next election already. I think so, too. Romney's already made his deal for 2016. They trade sides to make it look good, but they're all the same.
Q: Are You Printing Money? Bernanke: Not Literally
so, I ask again, what exactly is deflating except for jobs and assets that were over inflated such as housing and exactly what definition of inflation are you using?
Because housing sees a natural correction from overinflated prices and artificial demand, many want to declare "deflation." One bubble popping does not equal deflation across the board.
<< <i>What do you own that has risen in... value.. over the past 3 years? >>
personal property, with the previous exception in housing, doesn't rise in value - not even before the past 3 years. Almost all new things you purchase or worth less the day you take them home regardless of whether you are in an inflationary or deflationary climate.
"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
topstuf does not understand what is basic economics.
we are talking price inflation.
oil/gas & food are skyrocketing. tires to put on your car is going up. luckily natural gas is one area that is getting killed. natural gas is cheap right now.
uncle ben can blame the BLS for their numbers, but the Federal Reserve is the one using the foolish term "transitory" when referring to them.
prices for assets like stocks and bonds are not in the inflation index. We are talking a inflation as a price of goods that are consumed.
look for brewing worldwide trade wars to kick prices up a notch or two as protectionism gears up.
for those not clear on what inflation is, think of it as a choice between "increase in my cost of living vs. decline in my quality of life." "Do I eat steak or hamburger this week?"
And our poor seniors on fixed incomes don't get the luxury of choice. They have to decide which prescription doesn't get filled this month.
It's bad enough that price inflation destroys purchasing power. Add dollar devaluation to that and you've got a recipe for financial ruin to the fixed incomers.
Hey, the FED's gonna get everyone to go deeper in debt, one way or the other. After all debt is the lifeblood of the banking rulers.
"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
will continue dropping until they reach their true, unadulterated martket value. >>
So we're not at the bottom of housing? >>
I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas.
Derryb, the money suppply MUST increase with population, otherwise the value of a dollar would rise. Increases in money supply, unless excessively sufficient to overcome population growth and debt destruction, does not lead to inflation.
Look at ALL the commodity charts and you will see that the vast majority are lower than 4 years ago.
<< <i>I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas. >>
Charts show housing prices are down, but I fail to see them indicate the bottom is in. Until economic issues are addressed and corrected, expect housing prices to continue downward.
<< <i>Derryb, the money suppply MUST increase with population, otherwise the value of a dollar would rise. Increases in money supply, unless excessively sufficient to overcome population growth and debt destruction, does not lead to inflation. >>
unless the population has also tripled since 2009 I'd say inflation is a no brainer:
Could this be where all the new money went? This money had to come from somewhere:
chart courtesy of phils stock world
"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
While the hefty rise in M1 mostly sits on FED bank balance sheets, M2 shows a different story. And to truly understand liquidity/debt money in today's world we have to include all the bogus FED, central bank, and treasury flows. This includes never-ending currency swaps, washed bond sales, otc derivatives, back door lending facilities, FED buying of junk assets which are later dumped into taxpayer owned vehicles such as Fannie and Freddie, Fed custodial account, and a host of bying programs and bailouts that never see the light of day. M1 and M2 only show a tiny part of total liquidity picture. But even last year alone M2 increased by $1 TRILLION. Someone spent that money. It was a QE program unto itself. In today's digi-debt world the money supply aggregates are more a misdirection for Joe Six Pack. He can't see what's really going on. Something like $15 TRILL was pumped into the banks/economies from 2007-2011 yet M2 and M3 showed no such massive increases. The bankers don't even need the M's to play their game of musical chairs with the debt-money system. A lot of the FED pumping of the last 6 months went into European banks, never to show up on our money stats. Just as otc interest rate contracts have rigged the rate curve for the past 4 yrs, so do the opaque debt-money sources rig the game of the money supply (M1/M2). I'd rather focus on the $15 TRILL that was pumped in via the FED off-balance sheets than the couple of trillion that shows up on the public books.
Look at ALL the commodity charts and you will see that the vast majority are lower than 4 years ago.
Let's look at them in a year from now as all those 3-4 yr consolidation patterns complete and then breakout. Most of the grains and softs to me look to be ironing out final 4 yr bottoms. The upside price objective on scary looking charts like corn is quite impressive.
I knew when I read the title of this thread that at some point the board would be subjected to a slew of economics lessons. Everyone here is either an expert on economics or guns.
<< <i>I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas. >>
Charts show housing prices are down, but I fail to see them indicate the bottom is in. Until economic issues are addressed and corrected, expect housing prices to continue downward. >>
<< <i>I knew when I read the title of this thread that at some point the board would be subjected to a slew of economics lessons. Everyone here is either an expert on economics or guns. >>
Inflation is an economic topic. The key to understanding PM price movement is a good understanding of how the economy operates.
Fortunatly, the decisions on whether to buy, sell or hold PMs are no longer relegated to the tossing of bones, chicken feathers or dice. With a good understanding of the affects of economic conditions on various asset classes one can hopefully make better investment decisions. Those that wish to not bother themselves with economic knowledge or learn to form their own opinions should continue to toss the bones, chicken feathers or dice. While opinions found here may be 100% incorrect, if nothing else they will hopefully stimulate discussion and further research by those who desire to better understand the "why" of PM decisions. While I don't make investment decisions based on the advice/opinions of others I do however use those opinions to stimulate my own research in an effort to have a more informed opinion.
Since PMs are widely held by those with economic survival in mind it is understandable that the occasional discussion of personal survival will surface along with talk of dried beans and guns.
In the fairness of full disclosure I admit that I have about a 35% success rate with the tossing of chicken feathers, keep dried beans in the pantry and own a couple of firearms.
"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>I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas. >>
Charts show housing prices are down, but I fail to see them indicate the bottom is in. Until economic issues are addressed and corrected, expect housing prices to continue downward.
<< <i>Derryb, the money suppply MUST increase with population, otherwise the value of a dollar would rise. Increases in money supply, unless excessively sufficient to overcome population growth and debt destruction, does not lead to inflation. >>
unless the population has also tripled since 2009 I'd say inflation is a no brainer: >>
I guess you purposely neglected to consider the words "excessively sufficient" and "debt destruction"?
<< <i>I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas. >>
Charts show housing prices are down, but I fail to see them indicate the bottom is in. Until economic issues are addressed and corrected, expect housing prices to continue downward.
<< <i>Derryb, the money suppply MUST increase with population, otherwise the value of a dollar would rise. Increases in money supply, unless excessively sufficient to overcome population growth and debt destruction, does not lead to inflation. >>
unless the population has also tripled since 2009 I'd say inflation is a no brainer: >>
I guess you purposely neglected to consider the words "excessively sufficient" and "debt destruction"? >>
no, it appeared you were not recognizing that the increases in the money supply you referred to are excessive and that you were claiming them as necessary to keep up with population growth. Glad to see you in the inflation camp.
"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>I knew when I read the title of this thread that at some point the board would be subjected to a slew of economics lessons. Everyone here is either an expert on economics or guns. >>
When the majority balance swings to guns, we'll see some positive changes. Not until then.
It's how the nation was born. But THOSE guys had the courage of their convictions.
No, I view the increase in money supply as just sufficient and not excessive enough to counter-act the massive amount of debt that is being destroyed everyday.
I am certainly not in the same camp as you, but probably also not in the camp you think I am.
I've been hearing commod prices are going to rip higher every year, yet nothing. Remember last year when PC and I got into about the rising grain commods and I said they will all collapse back down? Someday, you will be right, but not until demand outstrips supply and I learned long ago to never bet against the American farmer.
<< <i>No, I view the increase in money supply as just sufficient and not excessive enough to counter-act the massive amount of debt that is being destroyed everyday.
I am certainly not in the same camp as you, but probably also not in the camp you think I am. >>
Creating money for the purpose of covering bad debt only leads to more bad debt and more money creation. I hope it continues.
It didn't take long for me to learn that "loaning" my son money only increased his credit card usage. Once he realized there was no more free money he got his financial house in order.
"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
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
<< <i>No, I view the increase in money supply as just sufficient and not excessive enough to counter-act the massive amount of debt that is being destroyed everyday.
I am certainly not in the same camp as you, but probably also not in the camp you think I am. >>
Creating money for the purpose of covering bad debt only leads to more bad debt and more money creation. I hope it continues.
It didn't take long for me to learn that "loaning" my son money only increased his credit card usage. Once he realized there was no more free money he got his financial house in order. >>
So what did he do? Cut back on spending? Sounds at the very least to be disinflationary.
<< <i>No, I view the increase in money supply as just sufficient and not excessive enough to counter-act the massive amount of debt that is being destroyed everyday.
I am certainly not in the same camp as you, but probably also not in the camp you think I am. >>
Creating money for the purpose of covering bad debt only leads to more bad debt and more money creation. I hope it continues.
It didn't take long for me to learn that "loaning" my son money only increased his credit card usage. Once he realized there was no more free money he got his financial house in order. >>
So what did he do? Cut back on spending? Sounds deflationary. >>
No, I cut back on the supply of money to him. That is deflation.
"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>Funny thing about Mcdonalds, today I brought my 5 year old niece there to get her and my other niece happy meals and myself a Ice Coffee, it rang up to around $12. The guy next to me in lines order came to $23 and I sat there thinking how insane $23 sounds for MC'ds. I remember as a kid in the late 70's the family going there for dinner and it costing way under $10 for the 4 of us. >>
I remember 4 of us for $5 and change, of course burgers were like 39 cents
Today, I just learned my $1 fries are now $1.19 --- 19%
>>
Different town, different McDonald's
$1 fries !!!
needless to say, I won't be stopping at the $1.19 McDonald's again.
There's far more to the inflation argument than just looking at money supplies and population growth considering over 80% of the liquidity injected into world markets over the past 5 yrs was done by means other than the standard monetary aggregates (ie M0, M1, M2, M3). Those archaic tools are window dressing (ie emperor's new clothes) to keep the masses convinced that all is well. The bankers and govts are too smart to leave an obvious trail of liquidity creation. They've created an unregulated and opaque debt-money system that functions independently of congress.
<< <i>"How can they say " INFLATION IS SUBDUED"..."
Because they have become quite adept at flat out lying. >>
Bingo! And it's going to get worse between now and November.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>"How can they say " INFLATION IS SUBDUED"..."
Because they have become quite adept at flat out lying. >>
Bingo! And it's going to get worse between now and November. >>
We'll have a rip-roaring gang-buster economy by November. It's in the cards. We'll be told we are lucky to pay only $4-$5 for petrol. We'll be told the employment rate is at an astounding 92%, blah, blah, spin, spin.
<< <i>the money suppply MUST increase with population... >>
Why? >>
Otherwise you would have more people demand the same dollar which would cause the value of the dollar to go higher. Fiat based economies work best when there is a little bit of inflation--such as we've had over the last 80 years. If the value of the dollar would continue to rise, no one would spend them. The economy would stagnate. This is why the FED is constantly seeking some inflation and dreadfully afraid of deflation.
<< <i>Otherwise you would have more people demand the same dollar which would cause the value of the dollar to go higher. >>
What does "demand for dollars" have to do with it?
edited to add... dollars aren't just out there, floating around- they belong to someone. Although there may be people out there demanding them, I'm not sure why that's any different from people demanding flat screen tvs or 20" rims. You wouldn't suggest that those be made available to those who demanded them, would you?
If you want dollars, you find a way to create value for someone such that they are willing to exchange their dollars for your product/service.
If you want dollars, you find a way to create value for someone such that they are willing to exchange their dollars for your product/service
Exactly. You just answered your own question.
People work, and they DEMAND dollars for their payment. The more people working and the higher their salary, the greater the demand for dollars. Everytime there is an increase in minimum wage, the FED must print more dollars to meet the demand. This is why wages, imo, are the most important part of the inflation arguement.
If the FED did not print more dollars, then those dollars currently in existance become more valuable since people demand more of them for their services.
Surely you could substitute TVs for dollars, but this would be a VERY limited medium of exchange as I doubt you would be able to trade that TV for a tank of gasoline.
a minimal increase in money supply is needed with population growth.
a new dollar is not needed for every new expenditure. The dollar I pay you in salary will most likely be paid by you to the guy who mows your lawn or to the grocer who will pay his employee with it. The reuse of dollars (velocity) allows one single dollar to pay many, many salaries (and multiple taxes every time it changes hands).
The new money created out of new credit is more than ample to meet the need.
"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><< Fiat based economies work best when there is a little bit of inflation--such as we've had over the last 80 years. >>
Gold-based economies also show incremental increases in the money supply, as more gold continues to be mined each year. >>
Fact is less gold was mined from 2001-2010 than in years 2000 and earlier. And during those 10 years world population was increasing nicely. 2011 is the first year in a decade where world annual gold production has risen...a little. Gold's total above ground supply does increase at a 1.5% per year clip because it doesn't get used up. But that pales to world fiat currency growth. The US increased M2 10% last year and was even outdone by a number of other nations. Gold's meager 1-2% inventory growth per year balances with the population growth. Fiat on the other hand has generally far outpaced population growth. But since actual circulating currency supplies (FRN's) are scarcer than gold people think they have something. What they don't see is the 10-1 to 100-1 dilution occuring in digi-debt money. If all of that suddenly appeared in the form of printed currency, it would be hyperinflation, game over. This is one of the reasons why the govt is stingy with printed notes. Other reasons include making it much easier to monitor people's money flows in order to apply taxes, fees, etc.
Comments
<< <i>That definition only works on the assumption that the increased money supply is being distributed for purchases of things risign in value.
That enormous debt is being held by busted banks to shore up their balance sheet to cover the yet undisclosed TRUE measure of how badly their conventional assets are overvalued. >>
Money supply numbers are not limited to what is being spent.
"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
Box of 20
"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>
<< <i>That definition only works on the assumption that the increased money supply is being distributed for purchases of things risign in value.
That enormous debt is being held by busted banks to shore up their balance sheet to cover the yet undisclosed TRUE measure of how badly their conventional assets are overvalued. >>
Money supply numbers are not limited to what is being spent. >>
I'm well aware of that and in fact it is the crux of my argument. That money is NOT being spent. It is being hoarded to compensate for a bucket of absolute JUNK on bank balance sheets. It will be a miracle if it is ever lent out.
What do you own that has risen in... value.. over the past 3 years?
Probably ALL your costs have risen.
That will destroy assets faster than anything.
<< <i>So, to those in the deflation camp, what exactly is deflating except for jobs and assets that were over inflated such as housing? >>
You can't exclude housing which has been the ONLY engine of inflation since we lost our manufacturing base.
It helps the natural scheme of things for any country using fiat currency.
Gen 1. buys stuff that appreciates.
Gen 2. inherits some from Gen 1 and continues earning "more" (which is illusory)
Gen 1. retires and spends down what they bought.
Stores of VALUE...... soar.
Gold has soared. But on INSURANCE against defaults by governments.
Gold now buys MORE of almost everything which per se defeats the inflation argument. Gold is to OFFSET inflation... Not inflate itself.
I say deflation .... you say to-mah-to.
Who cares? I hold massive metal physical position for insurance. I don't care who holds it for what.
Same camel. More straws.
Oh, and the banker bonuses, let's not forget that. Instead of getting their heads handed to them and getting fired, driven into bankruptcy, and ridden out of town on a rail, their buddies in Congress helped them out just fine.
Count those votes, Congress. Figure out who can vote yes and who can vote no, based on who's up for election next time around.
My fiancee' thinks that "the fix is in" for the next election already. I think so, too. Romney's already made his deal for 2016. They trade sides to make it look good, but they're all the same.
I knew it would happen.
<< <i>I say deflation .... you say to-mah-to. >>
so, I ask again, what exactly is deflating except for jobs and assets that were over inflated such as housing and exactly what definition of inflation are you using?
Because housing sees a natural correction from overinflated prices and artificial demand, many want to declare "deflation." One bubble popping does not equal deflation across the board.
<< <i>What do you own that has risen in... value.. over the past 3 years? >>
personal property, with the previous exception in housing, doesn't rise in value - not even before the past 3 years. Almost all new things you purchase or worth less the day you take them home regardless of whether you are in an inflationary or deflationary climate.
"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
we are talking price inflation.
oil/gas & food are skyrocketing. tires to put on your car is going up. luckily natural gas is one area that is getting killed. natural gas is cheap right now.
uncle ben can blame the BLS for their numbers, but the Federal Reserve is the one using the foolish term "transitory" when referring to them.
prices for assets like stocks and bonds are not in the inflation index. We are talking a inflation as a price of goods that are consumed.
for those not clear on what inflation is, think of it as a choice between "increase in my cost of living vs. decline in my quality of life." "Do I eat steak or hamburger this week?"
And our poor seniors on fixed incomes don't get the luxury of choice. They have to decide which prescription doesn't get filled this month.
It's bad enough that price inflation destroys purchasing power. Add dollar devaluation to that and you've got a recipe for financial ruin to the fixed incomers.
Hey, the FED's gonna get everyone to go deeper in debt, one way or the other. After all debt is the lifeblood of the banking rulers.
"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
Box of 20
<< <i>
<< <i>
<< <i>Housing prices just hit a ten year low.
MJ >>
will continue dropping until they reach their true, unadulterated martket value.
So we're not at the bottom of housing? >>
I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas.
Derryb, the money suppply MUST increase with population, otherwise the value of a dollar would rise. Increases in money supply, unless excessively sufficient to overcome population growth and debt destruction, does not lead to inflation.
Look at ALL the commodity charts and you will see that the vast majority are lower than 4 years ago.
Knowledge is the enemy of fear
<< <i>I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas. >>
Charts show housing prices are down, but I fail to see them indicate the bottom is in. Until economic issues are addressed and corrected, expect housing prices to continue downward.
<< <i>Derryb, the money suppply MUST increase with population, otherwise the value of a dollar would rise. Increases in money supply, unless excessively sufficient to overcome population growth and debt destruction, does not lead to inflation. >>
unless the population has also tripled since 2009 I'd say inflation is a no brainer:
Could this be where all the new money went? This money had to come from somewhere:
chart courtesy of phils stock world
"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
all the bogus FED, central bank, and treasury flows. This includes never-ending currency swaps, washed bond sales, otc derivatives, back door lending facilities, FED buying of
junk assets which are later dumped into taxpayer owned vehicles such as Fannie and Freddie, Fed custodial account, and a host of bying programs and bailouts that never see the
light of day. M1 and M2 only show a tiny part of total liquidity picture. But even last year alone M2 increased by $1 TRILLION. Someone spent that money. It was a QE program
unto itself. In today's digi-debt world the money supply aggregates are more a misdirection for Joe Six Pack. He can't see what's really going on. Something like $15 TRILL was
pumped into the banks/economies from 2007-2011 yet M2 and M3 showed no such massive increases. The bankers don't even need the M's to play their game of musical chairs with
the debt-money system. A lot of the FED pumping of the last 6 months went into European banks, never to show up on our money stats. Just as otc interest rate contracts have
rigged the rate curve for the past 4 yrs, so do the opaque debt-money sources rig the game of the money supply (M1/M2). I'd rather focus on the $15 TRILL that was pumped in via
the FED off-balance sheets than the couple of trillion that shows up on the public books.
Look at ALL the commodity charts and you will see that the vast majority are lower than 4 years ago.
Let's look at them in a year from now as all those 3-4 yr consolidation patterns complete and then breakout. Most of the grains and softs to me look to be ironing out final 4 yr bottoms.
The upside price objective on scary looking charts like corn is quite impressive.
Everyone here is either an expert on economics or guns.
<< <i>
<< <i>I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas. >>
Charts show housing prices are down, but I fail to see them indicate the bottom is in. Until economic issues are addressed and corrected, expect housing prices to continue downward. >>
Only way to know when a bottom is in:
when prices have gone up 10-15%
<< <i>I knew when I read the title of this thread that at some point the board would be subjected to a slew of economics lessons.
Everyone here is either an expert on economics or guns. >>
Inflation is an economic topic. The key to understanding PM price movement is a good understanding of how the economy operates.
Fortunatly, the decisions on whether to buy, sell or hold PMs are no longer relegated to the tossing of bones, chicken feathers or dice. With a good understanding of the affects of economic conditions on various asset classes one can hopefully make better investment decisions. Those that wish to not bother themselves with economic knowledge or learn to form their own opinions should continue to toss the bones, chicken feathers or dice. While opinions found here may be 100% incorrect, if nothing else they will hopefully stimulate discussion and further research by those who desire to better understand the "why" of PM decisions. While I don't make investment decisions based on the advice/opinions of others I do however use those opinions to stimulate my own research in an effort to have a more informed opinion.
Since PMs are widely held by those with economic survival in mind it is understandable that the occasional discussion of personal survival will surface along with talk of dried beans and guns.
In the fairness of full disclosure I admit that I have about a 35% success rate with the tossing of chicken feathers, keep dried beans in the pantry and own a couple of firearms.
"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>
<< <i>I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas. >>
Charts show housing prices are down, but I fail to see them indicate the bottom is in. Until economic issues are addressed and corrected, expect housing prices to continue downward.
<< <i>Derryb, the money suppply MUST increase with population, otherwise the value of a dollar would rise. Increases in money supply, unless excessively sufficient to overcome population growth and debt destruction, does not lead to inflation. >>
unless the population has also tripled since 2009 I'd say inflation is a no brainer:
>>
I guess you purposely neglected to consider the words "excessively sufficient" and "debt destruction"?
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>I would say, and thanks to the charts above, that housing in 90% of the USA has bottomed. Are there some weak markets, sure, but there are also some very UNDERPRICED areas. >>
Charts show housing prices are down, but I fail to see them indicate the bottom is in. Until economic issues are addressed and corrected, expect housing prices to continue downward.
<< <i>Derryb, the money suppply MUST increase with population, otherwise the value of a dollar would rise. Increases in money supply, unless excessively sufficient to overcome population growth and debt destruction, does not lead to inflation. >>
unless the population has also tripled since 2009 I'd say inflation is a no brainer:
>>
I guess you purposely neglected to consider the words "excessively sufficient" and "debt destruction"? >>
no, it appeared you were not recognizing that the increases in the money supply you referred to are excessive and that you were claiming them as necessary to keep up with population growth. Glad to see you in the inflation camp.
"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>I knew when I read the title of this thread that at some point the board would be subjected to a slew of economics lessons.
Everyone here is either an expert on economics or guns. >>
When the majority balance swings to guns, we'll see some positive changes. Not until then.
It's how the nation was born. But THOSE guys had the courage of their convictions.
I am certainly not in the same camp as you, but probably also not in the camp you think I am.
Knowledge is the enemy of fear
I've been hearing commod prices are going to rip higher every year, yet nothing. Remember last year when PC and I got into about the rising grain commods and I said they will all collapse back down? Someday, you will be right, but not until demand outstrips supply and I learned long ago to never bet against the American farmer.
Knowledge is the enemy of fear
<< <i>No, I view the increase in money supply as just sufficient and not excessive enough to counter-act the massive amount of debt that is being destroyed everyday.
I am certainly not in the same camp as you, but probably also not in the camp you think I am. >>
Creating money for the purpose of covering bad debt only leads to more bad debt and more money creation. I hope it continues.
It didn't take long for me to learn that "loaning" my son money only increased his credit card usage. Once he realized there was no more free money he got his financial house in order.
"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>
<< <i>No, I view the increase in money supply as just sufficient and not excessive enough to counter-act the massive amount of debt that is being destroyed everyday.
I am certainly not in the same camp as you, but probably also not in the camp you think I am. >>
Creating money for the purpose of covering bad debt only leads to more bad debt and more money creation. I hope it continues.
It didn't take long for me to learn that "loaning" my son money only increased his credit card usage. Once he realized there was no more free money he got his financial house in order. >>
So what did he do? Cut back on spending? Sounds at the very least to be disinflationary.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>No, I view the increase in money supply as just sufficient and not excessive enough to counter-act the massive amount of debt that is being destroyed everyday.
I am certainly not in the same camp as you, but probably also not in the camp you think I am. >>
Creating money for the purpose of covering bad debt only leads to more bad debt and more money creation. I hope it continues.
It didn't take long for me to learn that "loaning" my son money only increased his credit card usage. Once he realized there was no more free money he got his financial house in order. >>
So what did he do? Cut back on spending? Sounds deflationary. >>
No, I cut back on the supply of money to him. That is deflation.
"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
Knowledge is the enemy of fear
<< <i>
<< <i>Funny thing about Mcdonalds, today I brought my 5 year old niece there to get her and my other niece happy meals and myself a Ice Coffee, it rang up to around $12. The guy next to me in lines order came to $23 and I sat there thinking how insane $23 sounds for MC'ds. I remember as a kid in the late 70's the family going there for dinner and it costing way under $10 for the 4 of us. >>
I remember 4 of us for $5 and change, of course burgers were like 39 cents
Today, I just learned my $1 fries are now $1.19 --- 19%
Different town, different McDonald's
$1 fries !!!
needless to say, I won't be stopping at the $1.19 McDonald's again.
<< <i>McDouble is $1.29 and large Coke is $1.00 (this is Chicago). >>
MDouble here is $1 and the smallest drink is $1.
although if not deflationary, it is expected to result in lower inflation.
There's far more to the inflation argument than just looking at money supplies and population growth considering over 80% of the liquidity injected into world markets over
the past 5 yrs was done by means other than the standard monetary aggregates (ie M0, M1, M2, M3). Those archaic tools are window dressing (ie emperor's new clothes) to keep
the masses convinced that all is well. The bankers and govts are too smart to leave an obvious trail of liquidity creation. They've created an unregulated and opaque debt-money
system that functions independently of congress.
Because they have become quite adept at flat out lying.
<< <i>"How can they say " INFLATION IS SUBDUED"..."
Because they have become quite adept at flat out lying. >>
Bingo! And it's going to get worse between now and November.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>
<< <i>"How can they say " INFLATION IS SUBDUED"..."
Because they have become quite adept at flat out lying. >>
Bingo! And it's going to get worse between now and November. >>
We'll have a rip-roaring gang-buster economy by November. It's in the cards. We'll be told we are lucky to pay only $4-$5 for petrol. We'll be told the employment rate is at an astounding 92%, blah, blah, spin, spin.
<< <i>the money suppply MUST increase with population... >>
Why?
<< <i>
<< <i>the money suppply MUST increase with population... >>
Why? >>
Otherwise you would have more people demand the same dollar which would cause the value of the dollar to go higher. Fiat based economies work best when there is a little bit of inflation--such as we've had over the last 80 years. If the value of the dollar would continue to rise, no one would spend them. The economy would stagnate. This is why the FED is constantly seeking some inflation and dreadfully afraid of deflation.
Knowledge is the enemy of fear
<< <i>Otherwise you would have more people demand the same dollar which would cause the value of the dollar to go higher. >>
What does "demand for dollars" have to do with it?
edited to add... dollars aren't just out there, floating around- they belong to someone. Although there may be people out there demanding them, I'm not sure why that's any different from people demanding flat screen tvs or 20" rims. You wouldn't suggest that those be made available to those who demanded them, would you?
If you want dollars, you find a way to create value for someone such that they are willing to exchange their dollars for your product/service.
Gold-based economies also show incremental increases in the money supply, as more gold continues to be mined each year.
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Exactly. You just answered your own question.
People work, and they DEMAND dollars for their payment. The more people working and the higher their salary, the greater the demand for dollars. Everytime there is an increase in minimum wage, the FED must print more dollars to meet the demand. This is why wages, imo, are the most important part of the inflation arguement.
If the FED did not print more dollars, then those dollars currently in existance become more valuable since people demand more of them for their services.
Surely you could substitute TVs for dollars, but this would be a VERY limited medium of exchange as I doubt you would be able to trade that TV for a tank of gasoline.
Knowledge is the enemy of fear
a new dollar is not needed for every new expenditure. The dollar I pay you in salary will most likely be paid by you to the guy who mows your lawn or to the grocer who will pay his employee with it. The reuse of dollars (velocity) allows one single dollar to pay many, many salaries (and multiple taxes every time it changes hands).
The new money created out of new credit is more than ample to meet the need.
"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
We now return you to your regularly-scheduled commentary...
I knew it would happen.
<< <i>Report from Taco Bell - the prices of bean burritos have continued to rise while the size has been virtually cut in 1/2 since about a year ago.
We now return you to your regularly-scheduled commentary... >>
Americans must be ordering three times as many of those burritos as they used to order, since Americans seem to be getting fatter and fatter
<< <i><< Fiat based economies work best when there is a little bit of inflation--such as we've had over the last 80 years. >>
Gold-based economies also show incremental increases in the money supply, as more gold continues to be mined each year. >>
Fact is less gold was mined from 2001-2010 than in years 2000 and earlier. And during those 10 years world population was increasing nicely.
2011 is the first year in a decade where world annual gold production has risen...a little. Gold's total above ground supply does increase at a 1.5% per year clip
because it doesn't get used up. But that pales to world fiat currency growth. The US increased M2 10% last year and was even outdone by a
number of other nations. Gold's meager 1-2% inventory growth per year balances with the population growth. Fiat on the other hand has generally
far outpaced population growth. But since actual circulating currency supplies (FRN's) are scarcer than gold people think they have something. What they don't see is
the 10-1 to 100-1 dilution occuring in digi-debt money. If all of that suddenly appeared in the form of printed currency, it would be hyperinflation, game over. This is
one of the reasons why the govt is stingy with printed notes. Other reasons include making it much easier to monitor people's money flows in order to apply taxes, fees, etc.
Knowledge is the enemy of fear
Start quoting them by the liter.
My Adolph A. Weinman signature
