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sobmaz
ParticipantI know many will not believe me but I put everything into the gold and silver market back in 2002. Of course back then I had less than 50K to do so.
I have always been a believer in the Gold Silver as real money thing and I remember well the 1980 run up. So when I saw metals starting to move back in 01/02, I was all in .
What brought the 1980 run up to an end was the FED bringing rates up to 18%. The FED showed the world, who needs gold and silver when the dollar will be valued as REAL MONEY AND pays interest to boot!
Fast Forward to today. There is nothing to stop the run in Gold and Silver. We have a FED that not only can’t but is unwilling to even talk about raising rates. Can’t because of the Federal Debt, won’t because they know the economy would continue with Depression 2.0.
When money can be created to bail out the mistakes of banks and our government, is it real money? Is money real if it can be created at the stroke of a key stroke and in increasing quantities?
Anything can work as money, paper, metal, rocks, salt and tree bark and all have been money in times past. What makes money money is that it is 1. easily divisible and easily transported and 2. the biggie, it must be limited in supply. The most important quality just happens to be missing from our current monetary system, it is not limited and is in fact very easy to come by for the big powers.
That said, the Fed meeting is Weds and the metals have been screaming. My experience in the Gold sector is flashing a warning of a looming correction. Only a correction but corrections can feel like collapses if you get in at the top.
GDX refuses to set a new high despite gold and silver doing so and I have seen this before. Cramer and everyone on CNBC is pretty much saying get into gold.
Unless this time is different, a steep correction is coming into the Gold sector. The logic will be something to the effect………QE2 is coming to an end. No plans for QE3. The Fed will begin a slow increase in rates in 2012. We have a lot of problems but so does Europe and the dollar will rally sharply.
The reality is, we are in an environment where if the FED raises rates, it would squash the economy. There is so much debt that we can now only function with 0 rates. The reality is a QE3 will be forth coming late this year or early next. QE4 and 5 are in the cards.
Take advantage of the upcoming buying opportunity and be wary about buying before the FED meeting.
Participant[quote=kev374]unless wages go up how can there be inflation? Sure, commodities can go up because there is some fixed demand (people have to buy food, pay for gas, heating etc.) but any inflation in commodities will be at the expense of other asset classes I think.
Wages are definitely not going up but are dropping. If people don’t have more money I don’t see how there can be inflation regardless of how much Uncle Ben prints.[/quote]
You have got to be kidding?…..It is called falling living standards
!
I will explain it to you.Your wages stagnate, the prices of the things you consume go up so you buy less. Does that mean prices on SOMETHING must fall because you consume less overall? NO!!!!! There are 2 billion people rapidly demanding resources as never before!! If you can’t afford to fill your gas tank as often as you did, it doesn’t matter, others will use that oil.. If you can’t buy that beef, someone else in Asia will.
Besides that argument, ever heard of Zimbabwe? There unemployment is super high yet they have massive inflation. The only difference is we have a world reserve currency, they don’t. Really the only difference between zimbabwe and the U.S. is in the faith of the creditors.
Lastly, I know people could care less but if you use the inflation formula from the Clinton Era our inflation rate today is now 5%, and if you use the Federal inflation formula from the Carter era inflation today is running around 8%.
People like to dismiss the old formulas saying…”Well if they don’t use it anymore, it must have been flawed and the formula they use today must be more realistic”.
The fact is the Federal Government has trillions of reasons why it benefits from highly manipulated low inflation rate. You would only be fooling yourself to think there is not a motive to understate.
Why else is everything that is limited in supply triple the 1990 price while official inflation is only up 50%?
From housing to gold, silver, medical care, food and oil, everything is up 300% except the inflation rate……and oh yes, that plastic garbage can from China was 15.00 in 1990 and is now 10.00. B.F.D.!
Participant[quote=kev374]unless wages go up how can there be inflation? Sure, commodities can go up because there is some fixed demand (people have to buy food, pay for gas, heating etc.) but any inflation in commodities will be at the expense of other asset classes I think.
Wages are definitely not going up but are dropping. If people don’t have more money I don’t see how there can be inflation regardless of how much Uncle Ben prints.[/quote]
You have got to be kidding?…..It is called falling living standards
!
I will explain it to you.Your wages stagnate, the prices of the things you consume go up so you buy less. Does that mean prices on SOMETHING must fall because you consume less overall? NO!!!!! There are 2 billion people rapidly demanding resources as never before!! If you can’t afford to fill your gas tank as often as you did, it doesn’t matter, others will use that oil.. If you can’t buy that beef, someone else in Asia will.
Besides that argument, ever heard of Zimbabwe? There unemployment is super high yet they have massive inflation. The only difference is we have a world reserve currency, they don’t. Really the only difference between zimbabwe and the U.S. is in the faith of the creditors.
Lastly, I know people could care less but if you use the inflation formula from the Clinton Era our inflation rate today is now 5%, and if you use the Federal inflation formula from the Carter era inflation today is running around 8%.
People like to dismiss the old formulas saying…”Well if they don’t use it anymore, it must have been flawed and the formula they use today must be more realistic”.
The fact is the Federal Government has trillions of reasons why it benefits from highly manipulated low inflation rate. You would only be fooling yourself to think there is not a motive to understate.
Why else is everything that is limited in supply triple the 1990 price while official inflation is only up 50%?
From housing to gold, silver, medical care, food and oil, everything is up 300% except the inflation rate……and oh yes, that plastic garbage can from China was 15.00 in 1990 and is now 10.00. B.F.D.!
Participant[quote=kev374]unless wages go up how can there be inflation? Sure, commodities can go up because there is some fixed demand (people have to buy food, pay for gas, heating etc.) but any inflation in commodities will be at the expense of other asset classes I think.
Wages are definitely not going up but are dropping. If people don’t have more money I don’t see how there can be inflation regardless of how much Uncle Ben prints.[/quote]
You have got to be kidding?…..It is called falling living standards
!
I will explain it to you.Your wages stagnate, the prices of the things you consume go up so you buy less. Does that mean prices on SOMETHING must fall because you consume less overall? NO!!!!! There are 2 billion people rapidly demanding resources as never before!! If you can’t afford to fill your gas tank as often as you did, it doesn’t matter, others will use that oil.. If you can’t buy that beef, someone else in Asia will.
Besides that argument, ever heard of Zimbabwe? There unemployment is super high yet they have massive inflation. The only difference is we have a world reserve currency, they don’t. Really the only difference between zimbabwe and the U.S. is in the faith of the creditors.
Lastly, I know people could care less but if you use the inflation formula from the Clinton Era our inflation rate today is now 5%, and if you use the Federal inflation formula from the Carter era inflation today is running around 8%.
People like to dismiss the old formulas saying…”Well if they don’t use it anymore, it must have been flawed and the formula they use today must be more realistic”.
The fact is the Federal Government has trillions of reasons why it benefits from highly manipulated low inflation rate. You would only be fooling yourself to think there is not a motive to understate.
Why else is everything that is limited in supply triple the 1990 price while official inflation is only up 50%?
From housing to gold, silver, medical care, food and oil, everything is up 300% except the inflation rate……and oh yes, that plastic garbage can from China was 15.00 in 1990 and is now 10.00. B.F.D.!
Participant[quote=kev374]unless wages go up how can there be inflation? Sure, commodities can go up because there is some fixed demand (people have to buy food, pay for gas, heating etc.) but any inflation in commodities will be at the expense of other asset classes I think.
Wages are definitely not going up but are dropping. If people don’t have more money I don’t see how there can be inflation regardless of how much Uncle Ben prints.[/quote]
You have got to be kidding?…..It is called falling living standards
!
I will explain it to you.Your wages stagnate, the prices of the things you consume go up so you buy less. Does that mean prices on SOMETHING must fall because you consume less overall? NO!!!!! There are 2 billion people rapidly demanding resources as never before!! If you can’t afford to fill your gas tank as often as you did, it doesn’t matter, others will use that oil.. If you can’t buy that beef, someone else in Asia will.
Besides that argument, ever heard of Zimbabwe? There unemployment is super high yet they have massive inflation. The only difference is we have a world reserve currency, they don’t. Really the only difference between zimbabwe and the U.S. is in the faith of the creditors.
Lastly, I know people could care less but if you use the inflation formula from the Clinton Era our inflation rate today is now 5%, and if you use the Federal inflation formula from the Carter era inflation today is running around 8%.
People like to dismiss the old formulas saying…”Well if they don’t use it anymore, it must have been flawed and the formula they use today must be more realistic”.
The fact is the Federal Government has trillions of reasons why it benefits from highly manipulated low inflation rate. You would only be fooling yourself to think there is not a motive to understate.
Why else is everything that is limited in supply triple the 1990 price while official inflation is only up 50%?
From housing to gold, silver, medical care, food and oil, everything is up 300% except the inflation rate……and oh yes, that plastic garbage can from China was 15.00 in 1990 and is now 10.00. B.F.D.!
Participant[quote=kev374]unless wages go up how can there be inflation? Sure, commodities can go up because there is some fixed demand (people have to buy food, pay for gas, heating etc.) but any inflation in commodities will be at the expense of other asset classes I think.
Wages are definitely not going up but are dropping. If people don’t have more money I don’t see how there can be inflation regardless of how much Uncle Ben prints.[/quote]
You have got to be kidding?…..It is called falling living standards
!
I will explain it to you.Your wages stagnate, the prices of the things you consume go up so you buy less. Does that mean prices on SOMETHING must fall because you consume less overall? NO!!!!! There are 2 billion people rapidly demanding resources as never before!! If you can’t afford to fill your gas tank as often as you did, it doesn’t matter, others will use that oil.. If you can’t buy that beef, someone else in Asia will.
Besides that argument, ever heard of Zimbabwe? There unemployment is super high yet they have massive inflation. The only difference is we have a world reserve currency, they don’t. Really the only difference between zimbabwe and the U.S. is in the faith of the creditors.
Lastly, I know people could care less but if you use the inflation formula from the Clinton Era our inflation rate today is now 5%, and if you use the Federal inflation formula from the Carter era inflation today is running around 8%.
People like to dismiss the old formulas saying…”Well if they don’t use it anymore, it must have been flawed and the formula they use today must be more realistic”.
The fact is the Federal Government has trillions of reasons why it benefits from highly manipulated low inflation rate. You would only be fooling yourself to think there is not a motive to understate.
Why else is everything that is limited in supply triple the 1990 price while official inflation is only up 50%?
From housing to gold, silver, medical care, food and oil, everything is up 300% except the inflation rate……and oh yes, that plastic garbage can from China was 15.00 in 1990 and is now 10.00. B.F.D.!
Participant[Don’t you mean the ultimate bubble? Last I checked, it still cost less than $500/oz to get the yellow stuff out of the ground. Somehow the overall inflation and money printing do not seem to raise the real cost of gold.[/quote]
I am not going to go around in circles but let me point out that there is indeed Gold that can be mined for less than 500 an ounce. However Gold production would be much much less if only the easiest Gold were mined.
Some miners spend over a 1000 an ounce to mine, others 3 or 400.
Anyway, now that I know your position on Gold , I don’t think we could ever agree on anything.
Participant[Don’t you mean the ultimate bubble? Last I checked, it still cost less than $500/oz to get the yellow stuff out of the ground. Somehow the overall inflation and money printing do not seem to raise the real cost of gold.[/quote]
I am not going to go around in circles but let me point out that there is indeed Gold that can be mined for less than 500 an ounce. However Gold production would be much much less if only the easiest Gold were mined.
Some miners spend over a 1000 an ounce to mine, others 3 or 400.
Anyway, now that I know your position on Gold , I don’t think we could ever agree on anything.
Participant[Don’t you mean the ultimate bubble? Last I checked, it still cost less than $500/oz to get the yellow stuff out of the ground. Somehow the overall inflation and money printing do not seem to raise the real cost of gold.[/quote]
I am not going to go around in circles but let me point out that there is indeed Gold that can be mined for less than 500 an ounce. However Gold production would be much much less if only the easiest Gold were mined.
Some miners spend over a 1000 an ounce to mine, others 3 or 400.
Anyway, now that I know your position on Gold , I don’t think we could ever agree on anything.
Participant[Don’t you mean the ultimate bubble? Last I checked, it still cost less than $500/oz to get the yellow stuff out of the ground. Somehow the overall inflation and money printing do not seem to raise the real cost of gold.[/quote]
I am not going to go around in circles but let me point out that there is indeed Gold that can be mined for less than 500 an ounce. However Gold production would be much much less if only the easiest Gold were mined.
Some miners spend over a 1000 an ounce to mine, others 3 or 400.
Anyway, now that I know your position on Gold , I don’t think we could ever agree on anything.
Participant[Don’t you mean the ultimate bubble? Last I checked, it still cost less than $500/oz to get the yellow stuff out of the ground. Somehow the overall inflation and money printing do not seem to raise the real cost of gold.[/quote]
I am not going to go around in circles but let me point out that there is indeed Gold that can be mined for less than 500 an ounce. However Gold production would be much much less if only the easiest Gold were mined.
Some miners spend over a 1000 an ounce to mine, others 3 or 400.
Anyway, now that I know your position on Gold , I don’t think we could ever agree on anything.
Participant[quote=Eugene][quote=sobmaz]
The newly created capital is used to buy necessities, necessities that are increasingly made in Asia.Mr. Ching Chong, is lifted out of poverty producing what we now fail to produce for ourselves. Mr. Chong, takes his new economic freedom and buys MILK. Hey buys oil.
So, your average guy isn’t getting more, however more people now have the means to buy world commodities.
The situation is, we can now create infinite amounts of capital out of thin air, lifting billions out of poverty but mother nature just won’t cooperate with that infinite word.
Prior to 1972, capital formation had limits.[/quote]
That newly created capital is not used to buy anything. It is not in the hands of people who do any real buying. It never leaves the vaults of financial institutions.[/quote]
You have got to be kidding, right?
Let me spell it out for you.
The FED prints money and buys u.s. treasuries, keeping borrowing costs low for the Federal Government. The Federal Government, able to borrow at near zero rates, borrows for wars, stimulus and the reproductive cycle of the Duck Billed Platapussy.
When the Federal Government can borrow into existence trillions of dollars at near zero rates, that money makes it to Iraq for bribes, for Iraqi schools and roads. The Federal Government is able to extend unemployment benefits. The Federal Government is able to bail out Freddie Mac and Fanniea and on and on and on.
All this money begins circulating in the world economy and ends up in the hands of more and more people who then consume more and more commodities.
Where you get the idea newly created money doesn’t see the light of day, well, I think you have been listening to Ben Bernanke a bit too much.
A lot of smart economist disagree with you and Ben, and the ultimate truth detector does as well, which is Gold.
Participant[quote=Eugene][quote=sobmaz]
The newly created capital is used to buy necessities, necessities that are increasingly made in Asia.Mr. Ching Chong, is lifted out of poverty producing what we now fail to produce for ourselves. Mr. Chong, takes his new economic freedom and buys MILK. Hey buys oil.
So, your average guy isn’t getting more, however more people now have the means to buy world commodities.
The situation is, we can now create infinite amounts of capital out of thin air, lifting billions out of poverty but mother nature just won’t cooperate with that infinite word.
Prior to 1972, capital formation had limits.[/quote]
That newly created capital is not used to buy anything. It is not in the hands of people who do any real buying. It never leaves the vaults of financial institutions.[/quote]
You have got to be kidding, right?
Let me spell it out for you.
The FED prints money and buys u.s. treasuries, keeping borrowing costs low for the Federal Government. The Federal Government, able to borrow at near zero rates, borrows for wars, stimulus and the reproductive cycle of the Duck Billed Platapussy.
When the Federal Government can borrow into existence trillions of dollars at near zero rates, that money makes it to Iraq for bribes, for Iraqi schools and roads. The Federal Government is able to extend unemployment benefits. The Federal Government is able to bail out Freddie Mac and Fanniea and on and on and on.
All this money begins circulating in the world economy and ends up in the hands of more and more people who then consume more and more commodities.
Where you get the idea newly created money doesn’t see the light of day, well, I think you have been listening to Ben Bernanke a bit too much.
A lot of smart economist disagree with you and Ben, and the ultimate truth detector does as well, which is Gold.
Participant[quote=Eugene][quote=sobmaz]
The newly created capital is used to buy necessities, necessities that are increasingly made in Asia.Mr. Ching Chong, is lifted out of poverty producing what we now fail to produce for ourselves. Mr. Chong, takes his new economic freedom and buys MILK. Hey buys oil.
So, your average guy isn’t getting more, however more people now have the means to buy world commodities.
The situation is, we can now create infinite amounts of capital out of thin air, lifting billions out of poverty but mother nature just won’t cooperate with that infinite word.
Prior to 1972, capital formation had limits.[/quote]
That newly created capital is not used to buy anything. It is not in the hands of people who do any real buying. It never leaves the vaults of financial institutions.[/quote]
You have got to be kidding, right?
Let me spell it out for you.
The FED prints money and buys u.s. treasuries, keeping borrowing costs low for the Federal Government. The Federal Government, able to borrow at near zero rates, borrows for wars, stimulus and the reproductive cycle of the Duck Billed Platapussy.
When the Federal Government can borrow into existence trillions of dollars at near zero rates, that money makes it to Iraq for bribes, for Iraqi schools and roads. The Federal Government is able to extend unemployment benefits. The Federal Government is able to bail out Freddie Mac and Fanniea and on and on and on.
All this money begins circulating in the world economy and ends up in the hands of more and more people who then consume more and more commodities.
Where you get the idea newly created money doesn’t see the light of day, well, I think you have been listening to Ben Bernanke a bit too much.
A lot of smart economist disagree with you and Ben, and the ultimate truth detector does as well, which is Gold.
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