Posted on 08/12/2010 9:07:23 AM PDT by blam
>>...additionally, the fed must weaken the dollar to pay off our debt with cheaper dollars.<<
when the gov. owes money to its own citizens, that is a very easy thing to do. When it owes the money to other countries, that is a challenge and there is a risk: The risk of war.
Our gov is between a rock and a hard place on this thing. And our situation is not a US phenomenon. It is international.
not sure if we can uses Japan as a predictor or not
here’s gold price in Yen
(scroll to bottom for longer time windows)
http://goldprice.org/gold-price-japan.html
Could not disagree more. We are ehaded into a gtpeinflationary depression.
Could not disagree more. We are ehaded into a hypeinflationary depression.
“OK, so how come everything I go to buy at the store, food, clothes, beer, etc, is so much more expensive?”
While gasoline is still pretty high, many food items where I live (Fort Worth, Texas) are now less expensive than they’ve been in a very long time. An Aldi store recently opened nearby, and a few days ago I bought eggs there for 49 cents a dozen and milk for $1.28 a gallon. Walmart and other stores have also dropped prices on staple items, although not as low as Aldi.
Deflation won't hurt them much - they'll go short and make billions. It will hurt the 401K holder who doesn't have any option but "all long equities, all the time".
Mike
now..having said that...the price will go down....but...the premium you pay over listed price will skyrocket!
I confidently predict one or the other, commencing at some undetermined time and for some indeterminate period of time. Further, I predict both, eventually.
I'm not mocking you but wondering what value this advice is to the average shmo investor. Me, for instance.
What happened to gold in the disinflationary early 80s?
“Today, I can buy a 46 inch LCD Hi-Def TV for 1600 dollars. But next month, I should be able to get one for 1500 dollars. I think Ill hold off purchasing one right now.
This concept, while true, is not introducing any new deflationary pressure into the mixture. People are accustomed to the fact that electronic items are continually becoming cheaper (priced) and with better features. Eventually customers reach a point where they don’t want to wait any longer, so they go ahead and purchase the items they want. The idea that your house is becoming worth less and less every month, that is a new, very serious deflationary pressure.
Well, your car is always worth less now than it was 2 years ago, unless it is a cherry ‘57 Chevy Bel Aire 2 Door.
House? Not sure. Real Estate market says so. County taxing authority doesn’t seem to agree. :-(
If I remember correctly, gold was over $700/oz in '79, and came down dramatically in the early 80's.
Heh! Reminds me of what a frustrated Harry Truman reportedly said, “Would somebody please get me a one-handed economist.”
If we get real deflation, the reaction might be stronger. Or maybe this time it's different?
It seemed to do well in the 1930's.
If Truman didn't say it then I'm glad someone did.
My comment wasn't to deride anything but to question the value of the advice. It's good as topic of discussion but of questionable value. If I took the advice to sell stocks and buy bonds then I'd likely be so far behind the curve as to be selling the stock low to buy the bond high.
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