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.
Price matters.
How much gold is produced every year?
What is the average break even cost to mine an ounce of gold?
Then do the math.
Right under the "How to Get Started" headline.
Choose secure delivery to your home or storage with an independent third party facility (storage not available in all states).
Thanks for the link. As of Today it looks like 90% silver coins are worth 9 x face value. Think this is a better speculation than gold at this time as well as having some practical spending value for when things go bump in the night.
Sure they can overshoot. But this whole "oh god, it is so bad there must be inflation" story is incoherent nonsense. If they got prices to rise even a third, the whole thing would be over like that.
Was that you peaking in my window? ;-]
Stupid just sounds so mean. Most are ignorant and justly so. We have a system in which we delegate much - both out of need and convenience. That they've been fooled by government and insiders is not stupidity.
Letting them do it again and again is.
The deadbeats are on mainstreet and they are not victims. Stop flattering them just because they can vote. They are idiots, they bought houses they couldn't afford, they signed binding contracts they then walked away from, they whine and moan and cheat, they trash property that belongs to other and better men, they stick you and me with the losses, and then they pretend in high dudgeon that it is all someone else's fault, bay for blood, and elect Obama to give them things at gunpoint.
I am sick and tired of men making excuses for mountebanks and deadbeats.
If the world is crashing down around many people's ears, it is because they very richly deserve it.
But who cares? I certainly don't. I'd much rather my neighbor did well despite being a worthless scumbag than that he get his deserts. A long succession of wholely unmerited triumphs is what I wish for them. I just will not flatter them, nor suffer fools with a smile.
Good thing the world is awash with dollars. During the coming depression, I’ll be able to put those dollars to good use if we run out of toilet paper.
My logic it that people will buy in advance in an inflation and the buying is to some degree manic
Deflations are depressive in economic activity and psychology. People and consumers return to sobriety. You get the opposite of a buying mania
On top of that psychology everything is getting cheaper. You have a dis-incentive to stockpile
Therefore deflation is the enemy of the much hyped “consumer economy” of the last 20 years. Deflation means people get of the consumerism treadmill. Temples to consumerism (malls) become empty and stores go under
Rejoice your USD is sound same as it was in the 1930s. It is suitable for framing not wiping your nether regions
Posting at 2AM (Central Time) and I haven’t read through all the responses, so this may be redundant.
Whenever I hear of someone who wants to sell me gold and/or silver because of upcoming doom and gloom it always begs the question:
Why do you want my worthless dollars for this valuable gold and silver? Do you have so much of it that you can’t pay the storage fees? Or maybe you heard of me from a mutual friend, and out of the goodness of your heart you want to bear the brunt of the imminent and certain financial loss that I would incur by holding on to my dollars?
Or maybe, just for the heck of it, you want to make a losing sale, just to see how it feels?
Screw gold.
Buy Confederate money.
I still say that if there is such a thing as inflation psychology then there is a deflation psychology. To ignore this can cost you money and me too
I just heard that in FL people are making a real effort to pay down credit cards. My explanation is paying down debt with today’s dollars is cheaper than paying it later with more expensive dollars.
Credit cards charge 18% interest. It is always vastly more expensive to carry a CC balance than to defer a purchase. The more expensive or less expensive future dollars are 1% a year price decline or 3% a year price increase, and are utterly dwarfed by the interest difference. Similarly for savers.
When rates on savings are near zero and prices are increasing 4% a year, there is some incentive to spend now. Even in those cases, there are always forms of investment paying much more than riskless savings, and the real incentive of prices and rates is to take some risks on the savings side, not to consume.
You might as readily say since savers lost money last year there is no incentive to save and everyone should be consuming instead, because money saved in riskier forms (the vast bulk of it) buys less today than it did last year. But in fact the effect is the opposite. The savings rate rises (from 0 to 5% so far) as people avoid spending because the present value of their wealth appears to have declined so much. (It has, some, but much less than the nominal swing, most of which is a change in the capitalization rate on their future earnings and will reverse when risk spreads normalize etc).
People's alternative to spending on consumption is not keeping wads of dollars bills stuffed in a suitcase returning 0. It is saving at interest or in riskier investment on the one hand, or borrowing less at even higher rates on the other hand. There is always a large and permanent standing offer, that anyone can consume more in the future if they defer purchases now. It is not specific to deflations, and it is very far from being destructive in itself. On the contrary, it is the incentive for capital accumulation which in the long run is the primary means of advancing living standards for everyone.
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