Posted on 09/09/2009 6:04:52 AM PDT by SeekAndFind
How significant is gold's break through $1,000 on Tuesday? We have been here before, most recently in February, but each time the yellow metal has failed to hold the line.
Flagging industrial and jewellery demand has ultimately overwhelmed the gold bugs' desire to push the price through what feels like an important psychological barrier (even if it's really just round numbers).
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... the unprecedented monetary stimulus with which the authorities fended off Great Depression 2 is very likely to lead to a serious inflation problem down the track. And that gold and other real assets will be a profitable way of playing that outcome. Having been in short trousers when runaway prices last wreaked havoc with the global economy, I also defer to his first-hand experience.
The credit bubble, as we all know, is being unwound. There are two ways this can happen: either we pay off the debt (that is to say deflate) or we borrow even more (in other words inflate). For an individual, only the first option is available, and a painful period of living frugally is the unavoidable consequence of a bout of profligate spending. For a government, however, especially one that knows that 70pc of economic growth comes from consumer spending, the temptation to adopt the less prudent path is simply too great.
Inflating out of financial crises is what countries have always done and I see no reason why this episode should be any different.
On both sides of the Atlantic the talk is turning to exit strategies and a clear message is emerging. Faced with a choice between moving too soon or too late, governments will prefer to delay. Inflation may return by accident – in a bid to avoid the mistake of the 1930s when policy was tightened too quickly
(Excerpt) Read more at telegraph.co.uk ...
Be careful here folks.
1. We are in a massive deflationary credit implosion.
2. If you think hyper inflation is coming - buy lots of houses using as much leverage as you can. It is by far the best thing you can do in hyperinflation.
3. All of these “invest in gold” TV/Radio/Internet advertisements run constantly. One sure sign that you are late to the party.
There really is no where to go.
Bwahahaha! It will usher in Great Depression 2!
There is a floor under the gold price as the Chinese are trying to move slowly out of dollars into metals.
One more bit of really bad financial news and gold will really fly.
Lots of talk worldwide about leaving the dollar. Most recently China, Japn & the UN. Things could be different this time. People like myself are buying & holding for “insurance” purposes. Historically, an ounce of gold remains the best “inflation resistant” instrument. We cannot sustain this MASSIVE debt load. Something’s gotta give somewhere, eventually, IMHO. (read: bottom falls out)
Ammo.
Wishfull thinking, but completely ignoring what happened to gold prices during Great depression # one, especially after Roosevelt's Gold Confiscation order Of April 5, 1933, which was: "An Act to provide relief in the existing national emergency in banking, and for other purposes".
This of course, caused the price of gold to fall to $20.67/oz, which is what the people were paid as they were forced to hand over their gold.
Afterwards, The price of gold from the treasury for international transactions was thereafter raised to $35 an ounce; which is how Roosevelt swindled the American citizens of all their money to pay for his socialist ideas.
Considering the dilema Obama is facing, I wouldn't be suprized if he tried the exact same thing. So if anyone wants to buy gold, consider that the price will be forced down, then it will be stolen from you.
Even if you bury it, it will be useless to you. If caught trying to barter with it, you could go to jail for 10 years, or pay a ten thousand dollar fine. (at least that was the penalty in 1933) And later ther price of gold will fall anyways.
Absolutely right. And there are some real good auctions going on everywhere. You can snap up good houses cheap. Real cheap, 1970's prices in some places.
Keep your powder dry.
Gold will be the next bubble. Humans have an affinity for bubbles, too bad about 90 percent loss money.
Buy cans of Spam if you truly believe we are at the end times. That currency has value.
The issue I have with real estate is that state governments can soak you with property taxes until you are underwater.
Current Bubble; cash/money market; US Govt. Securities. Best guess, potentially the largest and most explosive bubbles in mankind’s economic history.
“2. If you think hyper inflation is coming - buy lots of houses using as much leverage as you can. It is by far the best thing you can do in hyperinflation”
Just don’t do it with an ARM.
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