Deeds, shmeeds. We require energy, commodities and some finished products to survive but can also use some products to build and add value to our businesses. The Saudis have energy, various countries have commodities and the Asians have some useful products. Those of us with an eye to the future have collected some PMs. Some time in the future those other countries will more preferentially take those PMs to printed up dollars. The Fed, IRS and politicians will make it as hard as possible to trade in PMs, but middlemen will always be there to do it for us.
The Fed in particular uses their power to produce fake deflation, namely the lowering of interest rates to ridiculous depths compared to the prevalence of inflation, the risks of default, and the declining value of underlying securing assets (e.g. real estate). A minimal market rate for mortgage interest (e.g. if I were to loan my money to someone to buy real estate) would probably be 10-15%. The fact that my money is not in demand at that rate is not a sign of deflation but of an entirely corrupted market.
The other consequence of the Fed's stupidity is a giant movement of wealth from productive long term investments to speculation. The resulting economic decline is not deflation, but forced stagnation. Similarly the reluctance to buy goods does not represent deflation psychology but economic realism.
Finally, PMs are not an investment now and are never an investment, but merely a store of value. There is no difference between your putting dollars in a mattress which you would do if you truly believed in deflation and my gold in my mattress. Your substitute (U.S. government bonds) is mostly the same and that you believe in coercion.
That's not what we're seeing right now - and haven't seen for quite some time. Citizens of other countries absolutely love US dollars, which is a big reason why the Fed has to put so many into circulation. These people know that the US has the greatest possibility of "making good" on the claims of their future labor.
"The Fed in particular uses their power to produce fake deflation..."
And inflation...
"if I were to loan my money to someone to buy real estate) would probably be 10-15%. The fact that my money is not in demand at that rate is not a sign of deflation but of an entirely corrupted market.
We agree on the corruption of the market. This is why people should be very careful investing heavily in the stock market. It's operating on extremely low volume, with most of that being High Frequency Trading.
"The resulting economic decline is not deflation, but forced stagnation."
A reduction in the overall money supply against a level of goods and services IS deflation - by definition. Yes, we have economic deflation - forced on us by the large banks (Primary Dealers).
"Similarly the reluctance to buy goods does not represent deflation psychology but economic realism."
The reluctance to buy goods is a byproduct of deflation. Credit is harder to get, wages are going down, unemployment is high. The only real "credit" growth is in Federal deficit spending - namely student loans.
"Finally, PMs are not an investment now and are never an investment, but merely a store of value. There is no difference between your putting dollars in a mattress which you would do if you truly believed in deflation and my gold in my mattress. Your substitute (U.S. government bonds) is mostly the same and that you believe in coercion."
Your "store of value" is only valued against what it is backed by - currency. I am not, and never have been, a proponent of debt-based money like you infer. I very clearly advocate a currency that is based on the completion of labor, versus a claim on the promise of future labor. Gold and silver have nothing to do with that idea - which is why people so strongly advocating precious metals are so wrong in their understanding of monetary theory.
Which countries do you favor?
I am totally confused and scared.
Which countries do you favor?
I am totally confused.