Posted on 03/10/2009 10:40:28 AM PDT by Lorianne
We are now at a point where the world is awashed with U.S. Dollars and the Dollar has become the largest bubble the world has ever seen.
It's a real shame that those who lost most of their money in the stock market and Real Estate bubbles, and are now finally selling out after these markets have already collapsed, are positioning themselves to get wiped out all over again through massive inflation.
We believe both the U.S. stock and housing markets are likely to fall another 30% nominally from these levels. However, priced in Gold, which is real money, they will likely fall 80% or more in the years ahead.
As the inflation being created today starts to work its way through the system, U.S. stocks and Real Estate will eventually start rising in value again, but Gold will rise at a significantly faster rate. Silver, we believe, could eventually start rising at an even faster rate than Gold.
Most of the money that is presently being created by the Federal Reserve is being hoarded during this temporary deflationary phase. As the government continues to bailout every bank in existence and pass larger stimulus's, all of the Dollars being squirreled away around the world will soon come out all at once.
With many retail stores in the U.S. liquidating their inventories and going out of business, there will be a lot less products available for purchase and combined with the storm of Dollars, prices of everything from food to clothing will go through the roof. The government, instead of dealing with the cause of rising prices, will likely institute price controls. This will only exacerbate the problem and lead to empty shelves.
We cannot solve problems that were created by getting into too much debt, by multiplying our deficits and getting into much larger amounts of new debt. It will be impossible to all of the sudden "mop up" the massive amount of Dollars being printed. We are practically guaranteed to see substantially higher interest rates in the future, that will raise the annual interest on our national debt to trillions of Dollars. The United States will have a choice to either default on its debt or create Hyperinflation.
The wealthiest countries in the future will be those who control all of the world's Gold production. The world's largest creditor nations, mostly Asian countries, will have the best chance of accomplishing this. There are some Gold and Silver stocks that could gain by thousands of percent in the years ahead. With GE, formerly the world's largest company, headed towards bankruptcy, companies like Newmont Mining and Barrick Gold could be on their way towards becoming the world's new largest companies of the future.
The only good thing that will come out of the upcoming inflationary crisis for our country: students that were conned into investing hundreds of thousands of Dollars for worthless college degrees will be able to easily pay off their debts. Hopefully they will learn how to become a Gold miner or a farmer, and produce real things for our country, instead of destroying wealth like those on Wall Street and in Congress have done.
ping
~ how I would have written it. ;-]
If this is true, now is the time to borrow to the hilt and buy durable assets, such as land, houses etc.
Personally, I am just planning on hunkering down.
You can’t eat gold.
If you thing the sh!t is going to hit the fan, invest in canned food and ammo.
Already doing that!
“I don’t trust these people that Glenn Beck pushes like buying gold and letting them store it for me?”
....EXACTLY!....the reason to buy gold is to have physical gold as Lucky American says....why buy a piece of paper stating that some guy you never met, in a place you’ve never been, is “storing” gold you’ve never seen for you?
Deflation is poisonous to a consumer driven economy which ours has been forcibly mutated into by the NAFTA/GATT/Wall Street crowd. They realized that post-USSR there was more money in making American into dumbass consumer at national chain retail stores buying Chinese imports than to have him laboring away in manufacturing and agriculture
Deflation kills consumer demand because there is no rush to run out and buy something that will be cheaper next month. Thus deflation ruins "consumer economy" which was immoral anyway. Man was made to work, make families and think about God at least sometimes not be dumbass consumer flocking to malls which is just modern update of worship of the Golden Calf which ended in disaster a few times for the Hebrews
You normally have good analyses and coherent thinking, but you are skipping the biggest culprit, the ubiquitous 900 lbs. gorilla - the government.
From local zoning boards all the way to the Feds, our government has placed the free market and hence individual liberty under attack. You cannot buy what you want, you cannot live where you want, you cannot keep the product of your labor.
90% of what we don't like about free trade, immigration - both legal and illegal, welfare, et al are creatures and creations of government.
We've allowed ourselves to be managed by the most despicable creature God ever made - the politician - who by its very nature is neither hot nor cold, for nor against, but interested in voting your way. That is until you've cast your vote and given it a monopoly.
Then it votes as it wants - self-interest and all that. You know.
This is some interesting stuff. I was wondering about buying a bag of silver coins — cheapest I’ve found is that monex operation — $1k per bag. I’m not so sure about buying into these companies listed on this article — looks too much like a setup.
____________________________
Monex sucks I dealt with them *******25 years ago*******
Check out your local Craig’s list for buyers/sellers of junk (90%) silver coinage. Ebay also had some bargains and better than what APMEX was selling junk silver for
You might find buying junk silver in $100 face value increments locally (Craig’s list) or ebay to work out fine. My local coin dealer was selling junk silver at better prices than APMEX and MONEX is likely the same
Silver dimes and quarters are a good mix and try to lean towards dimes. It might buy a gallon of gasoline someday and you don’t want to have to ask for change
Awashed?
Wow, the most cogent and concise explanation of the deflationary affect on modern economy that I have ever seen.
My hat is off to you sir.
Is that sarcasm or do you really feel that way?
Seriously? I would love to know if I’m freaking out for nothing. I hope that all these doom and gloom predictions are wrong. I sit and go the motions and think “is life going to be the same next year at this time?” and then I wonder if the people in the 1920’s ever really believed they would lose millions. Not all did, but a lot.
Invest in “Carbon Credits”!!!!!! /s
Well said.
I basically agree with you but the Feds and governments at all levels are usually responding to strong business interests. Which can be OK but not when you have very strong business interests in Wall Street who push NAFTA/GATT and who lobbied heavily (CitiBank and American Express) to repeal Glass Steagle
Yeah the lefties and multiKulties can dominate locally like where I live. All depends on the situation
Thank you. We just have to think deflation for the time being and my bet is at least two more years. The deflation psychology for consumers is 180° opposite what the inflation psychology is
With inflation the $100 you stuffed in your mattress is worth 5% less next year. With the current deflation it is worth 5% more 12 months from now
Grocery prices have defied deflation so far but I now see them slowly deflating too
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