Skip to comments.Silver and Gold Prices Delivering Terrible News for America -- Dollar on the edge of free fall.
Posted on 04/11/2011 7:17:35 AM PDT by SeekAndFind
Gold is ultimately dependent upon real rates, which are a function of both inflation expectations and monetary policy. A top in gold prices will only become apparent when the risks of sovereign default are behind us with a clear and successful exit of the stimulus we've seen over the last few years.
I think Soros sees this as his crowning achievement - destroying the currency of the world’s largest economy.
“Also any potential Republican candidate contemplating running for President must forcefully and without hesitation speak out candidly in the bluntest language possible about the future and the devastating action of Obama and the Democrats, all the while doing so without fear of what may be said about him or her in retaliation.”
I hate to say it but the only person doing that right now is Donald Trump.
Is silver ever gonna take a correction/consolidation breather again? I’m beginning to wonder. It blew past $30 and now has blown past $40 and I still see no signs of a letup. I want to buy more physical to add to my long position but hate buying on such a wild upswing. Perhaps if the Fed gives no indication of starting a QE3 after the QE2 is suppose to quit in June, maybe that will cause silver prices to stumble and give me a chance to buy more then. On the other hand, who knows what the price will be by the end of June? A drop back to $40 may be a significant downward correction by then. Sheez! Any thoughts by more seasoned metals investors are always appreciated.
This is one reason I want to see Trump in the debates. He could blow them wide open. He would have nothing to lose but the election.
There's Congressman Ryan and Sarah Palin as well.
The ostrich-like approach of the Obama administration and the Fed to these issues cannot continue much longer.
I give five to one odds they do.
Fear of their reputation being smeared is the one thing that holds back everyone running EXCEPT Trump. And what angers me is the left is going to smear anyone who runs no matter what they say so they may as well speak the truth.
But they are cowards. And maybe for good reason. More people believe the left media and there is no right media. Ross Perot is not the dummy the press made him out to be. Here was a man who, at the time, was one of the richest people on earth. And the press made him out to be some kind of paranoid loony bird who went around drooling all over himself. And there will probably be responses to this post saying he WAS a loony bird because they believed CNN.
“I think Soros sees this as his crowning achievement - destroying the currency of the worlds largest economy.”
With destruction comes chaos. Out of chaos comes order...a new world order. When you are trying to create world government these things have to happen.
ORDO AB CHAO.
The puppetmasters create “disorder” so the people will demand “order”. The price of “order” always entails a handing over of control and loss of freedom on the part of the citizenry. Out of “chaos” comes “order” - THEIR order - their new WORLD order.
Orwell described it as Reality Control.
I’m asking myself the same thing. I’m no expert but I think it will shoot through the roof after the debt increase vote, raise it or not. If I really believe this I’ll be buying some today. So let me say, I half way believe it. However the hell you believe something “half way”.
Soros did not do this. Everyone who participated in the leveraging up of US debt public and private did this. In the total credit market Soros's billions are not a minnow in the ocean.
Earth calling BernekeIdiot and “TurboTax” taxcheat Geithner..... =.=
This has been going on all my adult life, under socialists and under RINOs. They have all had their trotters and snouts in the trough.
They don’t have an ostrich like approach. The inflation resulting from the devaluation we are witnessing is the only salvation, the only cure for the cancerous debt. The devaluation is by design.
Massive spending reductions will lower the slope of the debt growth curve but will do nothing to reduce the outstanding debt. Only inflation and devaluation will do that.
The power of compounded moderate inflation is immense and over a mere five years at 7% can reduce the debt by half merely by devaluation. The trick is to establish a moderate and tolerable rate of 7%
Some think the US$ will be dropped as the reserve and that may very well happen. My view is that many others have a very similar problem and there will be a general relative devaluation and price inflation. Gold and silver are primary indicators the process is in effect.
A good old fashioned major war is about all that can knock the process off track. I don’t discount that possibility.
It is amazing how few people understand gold, including this idiot, who being a New York banker apparently has lost sight of all sense of the fundamentals of an economy, in particular the cost of production. Gold, being a hard to produce commodity of some intrinsic industrial value has a fundamental value the is dependent upon the cost of service, labor, and other commodities that make up that production cost. So, price increases averaged over some period of time reflect increased price levels, i.e. inflation, which affect all factors of production (an old term that our paper chasing elite have long ceased to use).
This fundamental price, the cost of production is based upon hard realities. Now onto that base price is also built premiums based upon perceptions of currency risk (sovereign debt default or further inflationary pressures indicated by the rate of printing money which is indicated by the amount by which market interest rates lie below what are perceived to be natural interest rates that provide a reasonable return on capital). We have seen this before. The fundamental cost of a house is the economic value of the land + labor and materials to build the house. Our paper chasers on wall street have been willing to multiply that value by a large multiple, and when that multiplier began collapsing back towards levels that buyers with credit based upon real earning could actually pay, it began taking our whole credit system with it.
If you want more, average in, and don’t try to time the market.
If you want to buy on the drops, look at the typical percentage pull-backs in recent years, and let that set your realistic plans of when to time your buys. (Don’t wait for a 25% drop off the peak when the norm is 10-15% off the peak before the climb restarts).
Either way I'd be willing to bet that he is hanging around the Treasury right now.
But Obama and the media are now telling me everything is OK with our economy and we’re in full recovery, there is nothing to see and that I should move on...... lol
One problem is that under the Clinton administration a lot of the debt was issued on short term bills and notes rather than long term bonds to temporarily reduce interest payments and the deficit. We have to continually refinance the debt and will get killed on interest charges when the bond buyers say "1% isn't acceptable in a 7% inflation environment. We demand 10% interest." and you suddenly we have trillion dollar interest payments.
Right now $7.5 trillion of the $9.1 trillion publicly held debt are in bills and notes which mature in less than 10 years. Look at http://www.treasurydirect.gov/govt/reports/pd/mspd/2011/opdm032011.pdf for a breakdown of outstanding debts, their rates and maturity dates.
The ostrich like approach is not looking at debt but they think one can spend out of debt however A good old fashioned major war is about to start.
That chart's been showing up a lot lately, and I was wondering why it only tracked commodities and Fed purchases for two years. Here's the comparison going back four decades:
--apparently the 'marekts' don't really have anything to do with Fed purchases after all.
.....We have to continually refinance the debt and will get killed on interest charges .....
I didn’t say it would be easy or even possible. It seems however to be the consensus course.
It would also reduce real wages by that amount. The Country might owe less, but the citizens will be much poorer. Wages rarely come close to increasing at the same rate as high inflation.
I want to go long but I just can’t pull the trigger.
Everything is at the mercy of forces beyond any market control and until the fed decides about QE we won’t know about that factor either - by then that will be factored in and it will be too late to buy.
I’m sitting this one out, but if I had to choose I would go long again.
Inflating/defaulting is the only way out of this mess.
It's a way to tax everyone without the need for legislation.
As always, the poor and middle-class will be hit the hardest.
(They may revolt though)
Yep, you speak truth. I agree with every word you wrote. The currency devaluation is by design. It is the only politically palatable form of default. We just have no clue if they can navigate the minefield and pull it off per plan. There will be unintended consequences - we just don’t know what they will be whether we lose reserve currency status, initiate hyperinflation, whether it fails and we deflate, or what.
But yes, this is strictly by design. They want 10% inflatino for several years to re-inflate housing prices and to shrink the relative scale of the national debt.
I always thought the threats to disrupt some family event were real, just because they were outrageous enough to be denied and portrayed as paranoia. What better way to take Mr. Perot down? It was a lesson in media perception games, and they've been roundly attacking Sarah Palin and Michelle Bachman and others and trying the same Alinsky tactics on them that were used on Ross.
Now, if people would just pay attention and apply their lessons for a change, maybe this whole mess can be straigntened out with a minimum of blood in the streets.
-——but the citizens will be much poorer———
I will agree to poorer. Much poorer, perhaps not.
Here is Bert’s unified theory of inflation......
The union clamor is for raises. During the period of low/no inflation, the complaint has been “ we get no raises”. Those who excel get raises. Those who plod along do not. The plodders want raises. They will get raises because in addition to dealing with increased material and energy costs, if companies do not provide raises, the good people holding jobs will move. Even in an economy with excess labor, the good and the plodders will be more valuable than the mediocre.
The unions I think welcome inflation because they will claim credit for a breakthrough that finally raises wages albeit across the board.
Then there is the health care problem. I don’t know how it is affected but my gut tells me that inflation will sweep some of the problems under the inflation rug. I don’t know which problems or how, but suspect it will happen.
The same is true for housing in spades. A general inflation will float the underwater loans back to the surface. The inflation might not end the spate of foreclosures, doomed in any event, but it will save many in the areas where prices declined precipitously. At least, the very least it will provide a faint light way down at tunnels end, and believe it or don’t, hope that the situation is improving.
One really terrible problem is state retirement benefits. If they are not inflation adjusted the burden will dissipate and maybe become tolerable. The removal by law of the inflation adjustment factor can be made politically palatable.
Finally, and proof of malice aforethought, those who will lose are the creditors, lets call them the banks. The banks will be the losers as their loans are repaid in $$ that are devalued. Not to worry for the bankrs......... they were compensated before the inflation. They are already whole. The TARP and the stimulus loans took care of them at the outset.
I do not believe there will be national economy killing hyperinflation in the USA. I think there will be a world epidemic and there will be revisions to the current status quo but it will not be terminal.
Yep. They're going to 'break eggs and eat omlettes'.
Unfortunately, the eggs that are getting broken are 'nest eggs'.
Orwell described it as Reality Control.
It only takes a little chaos, really, the 'reality control' is done by the media, which can portray one city block of unrest as an entire city in flames and pipe it into your living room, with full hyperbole about how there is 'widespread unrest', 'looting', and 'lawlessness', and how 'the death toll may reach the thousands' (note: may is the key word, in case anyone considers them liars). Perception is key.
OTOH, if the 'trains keep running on time', no one will believe there is a problem until it is too late.
I've been expecting this for a while.
The only way to meet the numbers pledged in obligations such as Social Security for the Baby Boomers after buying votes wholesale with the welfare teat (and slaughtering 45,000,000 other contributors via abortion) is to inflate the currency so the numbers can be met.
That and a C-note will get you a cup of coffee, soon (maybe).
I keep a quadrillion dollars (Zimbabwe) on my desk as a reminder that currency is only worth what you can get for it.
Maybe when the Caliphate attacks we'll have the war, too. Unfortunately, we're running out of other places to fight it.
True, Soros may glory in it, but it is the political and business powerbrokers of America that are responsible, aided by a foolish electorate.
In a nutshell, we beat ourselves.
An excellent example of reality control is watching the BBC reporter report on the collapse of WTC 7 about 20 minutes BEFORE it collapsed and can see in the video in the background.
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