Posted on 09/26/2012 4:28:02 PM PDT by blam
This, confused, seems to be a standard state of affairs for me as well.
Gold is an exit in an inflationary spiral.
The very mixed signals we've been seeing since 2008 are the result of massive stimulus applied unevenly. Where the stimulus has reached, prices have increased. Where it has not, deflation reigns.
Stimulus has reached sources of presumed return on investment. Things that have a reliable demand. Even so, there have been spikes and crashes even there. Uncertainty makes for scared money and volatility. Speculation does, too.
People on the whole are deleveraging, meaning they're shedding debt. Some by choice, some out of necessity. Virtually interest free mortgages have barely nudged real estate in most of the country. Prices in free fall seem to have slowed if not abated, with pockets of slight appreciation in areas of traditionally tight supply.
I wouldn't turn my nose up at precious metals as a hedge against disastrous inflation, but I wouldn't bet the farm on it either.
Like I posted before, capitalism isn’t a “system”. It is, like gravity, a physical law. Even under Marxism, or any other “ism” folks are still under it’s influence. They have just traded one thing for another. Just like trading money for carrots they have traded freedom for “security”. Like Ben said, they deserve what they get.
+1
Deflation is not uniform. What we have now is inflation for essential items (food, energy), but flat prices in discretionary, non essential items. We have massive wealth destruction right now because of reduced economic growth caused by government interference- high taxes, regulation, and government overspending with misallocation of resources displacing the private sector.
The best model that fits our situation is the stagflation of the late 70s and 80s.
Bartering is ineffective. You have to find someone who both has what you want, and wants what you have. Those usually are not the same person. That’s why people invented money 5,000 or so years ago, and have been using it ever since.
Before the WWII all-out assault on the Japanese mainland, residents hoarded gold. Of course with enough gold they could buy anything they needed or wanted. NOT. A lot of people had a lot of gold - worthless, as there was nothing to buy (and what little there was, was of course more valuable than gold then).
Some will have their gold, others will have food and supplies. After a few days the former will trade a great deal for a little of the latter.
The purpose of gold in a crash is to hold value through to the recovery.
That’s right “fraud”, phony NON-collateral phony “securities”.
“We are about to see a variation of [the Great Depression], except this time it will be worse because this time sovereign monetary defaults will accompany the defaulting of debt and the contracting of credit. This time money itself will be a victim. Fiat paper money systems have always ended in failure. This time is no exception.
QE3 is the beginning of the bankers monetary death march. Central banks in Japan, the US and Europe are now openly engaged in massive monetary debasement, printing more and more money in the futile hope they can reverse the deflationary collapse now in motion. They can’t.
They can, however, in trying to do so, instead destroy the currency system. “
They’re not counting on default. They, and those involved in the 08 failed bailout are going to attempt to secure their obligations by Extorting it, Extortion-Care.
They’ll ratchet up the mandate amounts incrementally, any way they can get in others pockets, attempting to pacify others and stay distant, through threatening edicts called “legislation.”
ping
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