Yes,to the degree possible.I have a retirement that there is nothing I can do but watch.A few CDs there is little I can do with,but for the most part yes.
There is enough money in the bank for bills,but that is all.
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Stocks, Gold, Silver, and the printing press.
- Thread starter smokingman
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There is enough money in the bank for bills,but that is all.
It also depends how old you are and if you believe that we will continue to operate on the dollar.
I am only 30, so my long term hedge is to stay in my 401k and the currency. When I get closer to retirement, and I have more assets I'll begin to move them towards commodities and annuities and indexed funds.
I am only 30, so my long term hedge is to stay in my 401k and the currency. When I get closer to retirement, and I have more assets I'll begin to move them towards commodities and annuities and indexed funds.
Last week we had Japan and China both move their currencies.The G20 meeting,with no changes or policy to move forward with.It is an epic cluster $%&*
Look at the Commodity index this morning alone.In the last 6 hours the average of the index is probably up 2-4%.
Commodity Futures Online Trading - Bloomberg
Cooper 1.96% up
Oats 4.3% up
Cotton 4.1 up
Gas 2.05 up
Hogs 1.9% up
Just in the last 6 hours.They would be even higher,but many of those are already "limit locked" and can not trade for awhile.
Here is an article on CNN this morning from Goldman saying the FED should print at least 4 TRILLION.Goldman says Fed faces $4 trillion hole - Street Sweep: Fortune's Wall Street Blog
IE print us out of our bad debts.
All Futures point up.Broad based dollar decline.....
CNBC this morning News Headlines
The dollar at risk of becoming "toxic waste".
It looks like what I feared is happening at an ever rapid pace.
October 25,2010
Look at the Commodity index this morning alone.In the last 6 hours the average of the index is probably up 2-4%.
Commodity Futures Online Trading - Bloomberg
Cooper 1.96% up
Oats 4.3% up
Cotton 4.1 up
Gas 2.05 up
Hogs 1.9% up
Just in the last 6 hours.They would be even higher,but many of those are already "limit locked" and can not trade for awhile.
Here is an article on CNN this morning from Goldman saying the FED should print at least 4 TRILLION.Goldman says Fed faces $4 trillion hole - Street Sweep: Fortune's Wall Street Blog
IE print us out of our bad debts.
All Futures point up.Broad based dollar decline.....
CNBC this morning News Headlines
The dollar at risk of becoming "toxic waste".
It looks like what I feared is happening at an ever rapid pace.
October 25,2010
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NEW YORK (CNNMoney.com) -- For the first time ever, the government auctioned off 5-year inflation-indexed Treasuries at a negative yield Monday, as investors bet rising prices will be an issue in the next five years.
Auction at negative yield still draws demand - Oct. 25, 2010
Auction at negative yield still draws demand - Oct. 25, 2010
The article on how inflation will occur is correct in recognizing that the a Keynesian perspective on economics dominates within the Federal Reserve bank leadership, and is thus a valid predictor of how the Fed will act. The author of the article smokingman quoted follows this view as well. I am wondering if anyone else here has come across the polar opposite school of thought, commonly known as "Austrian school of economics" (ASE)? It is an important difference to recognize because the competing schools of thought have exactly opposite opinions about how to resolve the economic problems. If ASE had a wider following sufficient to influence gov't policy, we would not be in this terrible mess.
There are many examples from this article pick from, here is one: "the U.S. economy falling into a deflationary death-spiral". Per ASE, this is a false fear, because deflation cannot destroy that which real wealth consists of. Remember real wealth is the things we actual desire to possess: houses, cars, factories, food, etc,. A decrease in the amount of paper money circulating does not destroy any of these physical items at all. When paper money is destroyed, and thus less available, then prices fall (classic supply and demand). All people maintain some level of a cash balance, not because they want $X in their account, but because they want a certain amount of purchasing power in reserve for the unknown future. As prices fall, the purchasing power of cash balances rises. Thus, people begin trading again at lower prices in deflationary times when they feel prices have fallen enough that their cash balances have more purchasing power than they feel they require in reserve. That is to say, there is an absolute floor to which prices will fall. The spiral does not end in death, but the restoration of trade. That said, deflation will change the distribution of ownership, punishing borrowers, and rewarding savers which is appropriate.
There are many examples from this article pick from, here is one: "the U.S. economy falling into a deflationary death-spiral". Per ASE, this is a false fear, because deflation cannot destroy that which real wealth consists of. Remember real wealth is the things we actual desire to possess: houses, cars, factories, food, etc,. A decrease in the amount of paper money circulating does not destroy any of these physical items at all. When paper money is destroyed, and thus less available, then prices fall (classic supply and demand). All people maintain some level of a cash balance, not because they want $X in their account, but because they want a certain amount of purchasing power in reserve for the unknown future. As prices fall, the purchasing power of cash balances rises. Thus, people begin trading again at lower prices in deflationary times when they feel prices have fallen enough that their cash balances have more purchasing power than they feel they require in reserve. That is to say, there is an absolute floor to which prices will fall. The spiral does not end in death, but the restoration of trade. That said, deflation will change the distribution of ownership, punishing borrowers, and rewarding savers which is appropriate.
I would like to offer some reasons why the hyperinflation should be seen as the most painful option, rather than the least painful option.
First, the wealth that exists comes about because of production, and the diminishing of productivity causes a loss of wealth. For the economy runs on the principle of the division of labour whereby each person can specialize in carrying out some task and exchanging goods and services with others, rather than meeting their multitude of needs by engaging in many different efforts by themselves. Hyperinflation is the destruction of the currency, it is a destruction of the means to exchange with other people forcing all, at best, to barter. For as long as this lastss, individuals must leave their specialized and highly productive roles to engage in less productive tasks. For example, if there is no means for a farmer efficient at making millions of eggs to distribute them through the market place, then many people wanting to have eggs will have to resort to the raising of chickens, who otherwise could be doing better things with their time (by exchanging with the efficient farmer with the fruit of their labor). The complete breakdown of trade that comes with a loss a currency is very, very detrimental.
Second, inflation, and especially hyperinflation destroys bookkeeping and accounting. Business must break even, or make a profit to survive and they only do (in a free market) by supply that which a customer needs from factors of production which are less valuable. If cash income is equal to or exceeds revenue they remain in business, but if they squander physical resources they are out-of-business. But the mass infusion of cash, means the profit-and-loss test is destroyed, and business cannot easily recognize whether or not their efforts are profitable, nor can they easily be destroyed if they are acting wastefully. It is worth noting the dearth of bankrupcies during the 1923 Germany hyperinflation, and the massive number of bankruptcies at its bitter end.
Third, savings is needed to advance an economy, but the problem of hyperinflation is that debtors are rewarded, and savers are punished. This favours consumption of savings, rather than the maintenance of the factors of production thus inhibiting recovery.
Fourth, the rate of interest communicates real information to entrepreneurs about the preferences of consumers for different time-scales of production (see Austrian Theory of the Business Cycle). The misinformation of interest rates due to manipulation of the currency (inflation & hyperinflation) skews the business decisions of entrepreneurs to be out of line with what consumers desires. This is the fundamental cause of the boom-bust cycle, and hyperinflation is simply causing more destruction.
Instead of hyperinflation, most all would be much better off if the currency quantity was held fixed. (Better yet, if fiat-paper were abolished, but I digress). The government will have to default on its debts, and repudiate them. Realize that just printing money out of thin air to fulfill debts is also defaulting and repudiating them. This is bad, but in my opinion the far less of two evils.
There are many of us here who tend toward the Austrian way of thinking. That said, we live in a world full of Keynesian thinkers... So one must bet on it being driven that direction, in spite of what we may think of as the wisest course. Just because I believe that a more Austrian view would lead towards prosperity - I am not convinced that that is what WILL happen. I have to invest based on what I believe WILL happen, not what I believe SHOULD happen...
I fully agree, and likewise follow an investment approach supposing that Keynesian thought will continue to dominate (namely to minimize balances consisting of federal reserve notes - i.e. no bonds or US treasuries). Nevertheless, Austrian ideas are still in general not well known (perhaps this forum excepted), and it would certainly benefit our citizens to be more familiar with them after given the ever increasing destructiveness that the Keynesian are causing. Thus, taking some time to engage a keynesian fallacy is IMHO time well spent, and if I were to learn from the exchange that I was in error, then the time spent was even more worthwhile.
If you haven't seen it, the rap video in the thread below is on topic and quite well done...
https://www.indianagunowners.com/forums/general_political_discussion/74562-rapping_economists.html
Not a rapper myself... but I can appreciate the work in this.
https://www.indianagunowners.com/forums/general_political_discussion/74562-rapping_economists.html
Not a rapper myself... but I can appreciate the work in this.
December 3,2010
Gold 1416.20 Per ounce.A new all time record.
Silver 29.42 Up 70+% in the last 12 months
Cotton 133.3 A new all time record,and double the 2007 high.
Cotton price chart, 2000-2010
The Federal Reserve is making plans already for QE3.Friday after the jobs report came in much worse than expected congressman Jerry Costello of Illinois called for a new stimulus package while debating tax breaks and unemployment.He was dismissed quickly,but there will be a new stimulus package probably in January maybe as late as February.They are going to do anything in there power to keep the illusion things are better.
Stocks closed up.The dollar closed down.If they do not manage to get the tax breaks passed before congress goes on vacation things will get ugly very quickly.The stock market will collapse,not from real reasons such as inflation or unemployment.The reason will be the 5% tax increase in 2011 if they do not pass the tax cuts.You will have billions if not trillions in money pulled to keep from paying an extra 5%.It will be chaos.
If you have money left in the market,get it out now. We are at 2 year highs.With the unemployment rate guaranteed to now hit over 10% again even inflation will not be able to prop up the markets.
Prep.Do NOT hold very much cash.Precious metals,food,and items you NEED.
I am not sure where we are going,but sadly I think I am correct about how we are getting there.
Gold 1416.20 Per ounce.A new all time record.
Silver 29.42 Up 70+% in the last 12 months
Cotton 133.3 A new all time record,and double the 2007 high.
Cotton price chart, 2000-2010
The Federal Reserve is making plans already for QE3.Friday after the jobs report came in much worse than expected congressman Jerry Costello of Illinois called for a new stimulus package while debating tax breaks and unemployment.He was dismissed quickly,but there will be a new stimulus package probably in January maybe as late as February.They are going to do anything in there power to keep the illusion things are better.
Stocks closed up.The dollar closed down.If they do not manage to get the tax breaks passed before congress goes on vacation things will get ugly very quickly.The stock market will collapse,not from real reasons such as inflation or unemployment.The reason will be the 5% tax increase in 2011 if they do not pass the tax cuts.You will have billions if not trillions in money pulled to keep from paying an extra 5%.It will be chaos.
If you have money left in the market,get it out now. We are at 2 year highs.With the unemployment rate guaranteed to now hit over 10% again even inflation will not be able to prop up the markets.
Prep.Do NOT hold very much cash.Precious metals,food,and items you NEED.
I am not sure where we are going,but sadly I think I am correct about how we are getting there.
SavageEagle
Grandmaster
- Apr 27, 2008
- 19,568
- 38
I'm not doubting you, but I need to know for sure and need some facts. My dad's a smart man, but I talked with him and he doesn't believe it's getting worse. He thinks things are turning around and I don't have the knowledge or facts to prove otherwise. He's got his entire retirement in the markets and thinks it's going to increase from here. I don't know what to tell him.
Ben Bernanke on 60 Minutes: Doesn't rule out QE3 - Dec. 3, 2010 (Friday)
Commodities index
Commodity Futures Online Trading - Bloomberg
Dollar index(Mind you the Euro is near collapse as well,but still gaining against the dollar).Japan is printing money like crazy to try and devalue their currency and still keep gaining ground.
Major World Currencies: Exchange Rates & Values - Bloomberg
U6 unemployment rate official government rate.17%
Table A-15. Alternative measures of labor underutilization
This number is going to get MUCH worse.The jobs report Friday was an epic number for many reasons.The most important of which was the number of new jobs created.Just over 10k and 160k need to be created a month just to maintain the current unemployment rate...ie that is why the official U2 unemployment went from 9.6 to 9.8.
Bond rates.What the USA is paying to borrow money.
U.S. Government Bonds, Treasury & Municipal Bond Yields - Bloomberg
The world is getting worried.The printing of trillions has devalued our currency.No one wants the bonds because we are still printing money(to buy our own bonds since no one else wants them).So the cost to just maintain our debt is going to skyrocket.Expect the rates to skyrocket even higher as the dollar loses value.
Even the official debt committee know we are in for a very rough landing.
Debt commission: Federal debt commission warns of fiscal 'reckoning' - latimes.com (I hate to quote that rag....but it was the first to pop up when I googled). It is also worthy to note the commission called for letting all tax breaks expire,doing away with the home mortgage credit,and we would still be adding to the deficit every year.There is no way any elected official will agree to any of those,so the debt is set to blow up in our face in the very near future.
There is plenty more bad news,but my point is not to panic it is to let people know to prepare.
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He's right... it is going to increase.
I don't believe the world's coming to an end...
Stocks have already gone back up significantly.
The Bubba Effect
Grandmaster
It's the word "entire" that I object to. At some point everybody has to make their own bet and hope they're right.
I just hate to see people with everything in the market.
Less than 2 months prior to the 1929 crash, the DJIA hit a record high. You're going to need a little bit more than high/rising DJ numbers to make me feel better.
I do not think the world is going to end either.I do think we are going to have massive inflation.How could we not? The Fed has loaned out 9 TRILLION dollars in 2008(we do not know how much in 2009 and 2010,the new finance law gives them 2 years before they have to report)and has over 2 TRILLION on there balance sheet.There is no way to not have a huge inflation spike.
Stocks are only up because the dollar is worth less. A company worth 1 million in 2007 is now worth almost 2 million.Here is a chart from the FED showing the doubling of dollars in circulation since 2008. Look at M1 or M2,both have doubled.There is no way to double the currency in circulation and not have massive inflation. This does not even count lending from the Fed,which thanks to the report they released last week we know that in 2008 they lent over 9 Trillion to US and foreign banks.
FRB: H.6 Release--Money Stock and Debt Measures--December 2, 2010
Just a simple chart that explains what I mean...
Chart of The US Money Supply 1917-2009 | Charting Stocks
Now with unemployment rising to double figures again,there is almost no way inflation alone can keep the markets on the upswing.As in my original post here back in September said they will print more money and try a new stimulus,but they will call it something else.QE3 is also already in the works.
QE Explained
QE=the FED printing money to buy the US debt or printing money to buy non performing assets in bulk dollar per dollar from banks.Either way it is a very bad idea.
I guess time will tell,but if you look at the last 3 months of my posts on this thread I have been dead on.
There is no way I would have money in stocks right now 2007-08 are going to look like a walk in the park very soon.
Would that be just high rates of inflation or hyperinflation? Inquiring minds and all that.
Watch for the collapse of the Euro. That will be your biggest SHTF warning light.
We're standing on top of the heads of failing countries in order to stay afloat ourselves.
In essence, we're using our debt to finance theirs, because our debt is worth more than their debt. Does that make sense?
The only reason our money has value is because the Euro doesn't have value, and thus they're buying our money, giving it value. Once they stop buying our money, it will cease to have value.
China has already stopped buying our money, which is why our Federal Reserve is buying our money.
Without the collapse of European countries, and their fallback onto the dollar through the IMF, we would have seen a very large drop in the value of the dollar.
Once the Euro fails, we will see MASSIVE hyperinflation practically overnight as the value of our currency plummets with little or no demand for it. The only way to fix that would be for the Federal Reserve and US government to begin eliminating huge quantities of debt from the books, contracting the money supply in the market. This will amount to huge reductions in fiat wealth, sending a massive ripple through the US economy, driving unemployment higher, and causing severe hardship to many, but it will save the currency.
The opposite will happen though. The government will continue to pump more and more money into the system in an every failing attempt to buoy it will worthless credit.
There will be no pieces to pick up. We'll just have to melt and re-pour at that time.
We're standing on top of the heads of failing countries in order to stay afloat ourselves.
In essence, we're using our debt to finance theirs, because our debt is worth more than their debt. Does that make sense?
The only reason our money has value is because the Euro doesn't have value, and thus they're buying our money, giving it value. Once they stop buying our money, it will cease to have value.
China has already stopped buying our money, which is why our Federal Reserve is buying our money.
Without the collapse of European countries, and their fallback onto the dollar through the IMF, we would have seen a very large drop in the value of the dollar.
Once the Euro fails, we will see MASSIVE hyperinflation practically overnight as the value of our currency plummets with little or no demand for it. The only way to fix that would be for the Federal Reserve and US government to begin eliminating huge quantities of debt from the books, contracting the money supply in the market. This will amount to huge reductions in fiat wealth, sending a massive ripple through the US economy, driving unemployment higher, and causing severe hardship to many, but it will save the currency.
The opposite will happen though. The government will continue to pump more and more money into the system in an every failing attempt to buoy it will worthless credit.
There will be no pieces to pick up. We'll just have to melt and re-pour at that time.
Would that be just high rates of inflation or hyperinflation? Inquiring minds and all that.
For now it will be high inflation.There will not be hyperinflation while the Euro is in chaos,it will also take a catalyst or major market event to spark hyperinflation.
Dec 06,2010
Gold $1429.40 A new all time record.
Silver $30.35(after hours spike it closed at $29.73) New 30 year highs.
All markets closed down slightly,most commodities where up for the day.
Oil at $89.38 a two year high.
Gold Futures Jump to Record $1,429.40 on Demand for Currency Alternative - Bloomberg
spearheadersarge
Expert
These signs are ever increasing! You are really bringing it into focus. This really gives me a pause as I am coming late to the prepping game. I am not financially able to make huge purchases or mass quantities on short notice. What suggestions other than beans n bullets and debt reduction would you make? Or is it really too late for some of us? Inquiring minds want to know!
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