2009: BUY GOLD. NOW.

Originally Posted by Dey Know Yayo

China, Iran, Japan, all these HUGE CREDITOR NATIONS are STOCKPILING GOLD. They're buying tons upon tons as fast as they can't without changing prices too much. As fast as they can.

I don't know about you, but I think China is a little more well-versed on precious metals and inflation risk than Ben Baller's family.
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that's just the thing. it's really interesting when you think about it. of course the countries won't come out and say it, but actionsspeak louder than words.

i really have to acquire 'some' supply of gold...
 
Originally Posted by Destination Kicks

Ben's not taking the bet. Let's get back to the intellectual financial discussion at hand.
Click to expand...

Word up. I'm tired of being broke.
ohwell.gif
 
Originally Posted by Dey Know Yayo

China, Iran, Japan, all these HUGE CREDITOR NATIONS are STOCKPILING GOLD. They're buying tons upon tons as fast as they can't without changing prices too much. As fast as they can.
Click to expand...

While most commodities have taken large hits lately, Gold has kept it's ground. Technically Gold hasn't moved up recently but relative to all othercommodities and most markets, it has. Looking at it from that perspective, gold's price has increased.

It's clear that the world's central banks are working in concert. The US is the catalyst for the current economic implosion but all those that chose tomaintain and develop their economies through US overconsumption are falling off the cliff along with us. Most every country in the world is in this together.Realistically, the current condition as far worse, politically, for Russia and China than it is for the US.

The problem I have with your theory is that it hinges on the notion that (mainly) China, Japan, and certain ME nations will be , what amounts to, declaringeconomic warfare on the US by ceasing to finance American debt. There are 2 problems with this. One, the US military industrial complex is always up for a warand they're pretty good at it. Secondly, in order for these nations to decouple from the US they would have to be certain that they can maintain andsustain their economies, especially in the short term. Realistically, that cannot happen. China needs the US consumption in order to drive their economy anddeter social unrest. Japan needs US consumption to drive their exports. The ME needs the US to be friendly, prop up their corrupt regimes, and not occupy theiroil fields (why do folks think the US supports Israel the way it does? Israel is a hedge if the ME governments decide to stop playing the US's game)..

On the other hand I do think it is likely that there will be (eventually) a purposeful devaluation of the USD but that won't necessarily result inabsurdly high inflation.

All the money that the Fed is printing is not reaching US consumers. There is no demand for it. Folks are either losing their jobs or afraid of losing theirjobs while getting their wages cut or not receiving increases.
The US consumer doesn't want to borrow more money. American's are literally seeing that they can't afford it any longer.

The Feds will try to substitute that with fiscal spending insanity but it won't be nearly enough to offset the demand and price destruction that isongoing.
 
nicefro- i would.
wawaweewa- there is no more demand for us debt. i understand creditor nations may not cause a run on the dollar, but that is irrelevant. the devaluation of theUSD has to occur. but remember we have fiat currency. we can't just say, oh well we're devaluing the dollar by 70%. you have to do it against an assetby allowing excess liquidity to pump up an asset's nominal price. that will occur in gold. the fed has already created so much more wealth than has been orwill be destroyed. insolvent banks are getting huuuuge liquidity. in the form of T BILLS. they'er passing all of the bank's mortgage default risk ontothe taxpayers. in the form of INFLATION. the fed won't allow any insurers to go under-- it would literally ruin the economy. but in order for htat tooccur, a ton of excess liquidity has to (and already is) be added to the system. that's inflationary.
lurkin2long- i have a blackberry. not gonna constantly check it for replies on a thread every two mintues.
dc sounds- price depreciation in real terms is going to be worse than mortgage benefits, but 2010 i agree would be a good time to invest in real estate.
cjmoney- inflation is expansion of moving liquid monetary supply. 35% is definitely a possibility. price inflation =/= inflation. we had inflation with thedot-com bubble and real estate and commodity bubbles.
 
gold is at january 08 levels, oil is at less than half its january 08 levels. that's relative strength right there.
 
taken from http://seekingalpha.com/article/112379-prophet-bernanke-plans-for-inflationhttp://seekingalpha.com/a...nanke-plans-for-inflation

This are Ben Bernanke's own words:

About Preventing Deflation


As I have already emphasized, deflation is generally the result of low and falling aggregate demand. The basic prescription for preventing deflation istherefore straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending, in a manner as nearly consistent aspossible with full utilization of economic resources and low and stable inflation.


About Zero Interest Rate Policy

But suppose that, despite all precautions, deflation were to take hold in the U.S. economy and, moreover, that the Fed's policy instrument--the federalfunds rate--were to fall to zero. What then?

As I have mentioned, some observers have concluded that when the central bank's policy rate falls to zero--its practical minimum--monetary policy loses itsability to further stimulate aggregate demand and the economy. At a broad conceptual level, and in my view in practice as well, this conclusion is clearlymistaken.


About Printing Money ASAP


Indeed, under a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able togenerate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.

We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of moneywill ultimately always reverse a deflation.


About Quantitative Easing

A more direct method, which I personally prefer, would be for the Fed to begin announcing explicit ceilings for yields on longer-maturity Treasury debt (say,bonds maturing within the next two years). The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities up to twoyears from maturity at prices consistent with the targeted yields. If this program were successful, not only would yields on medium-term Treasury securitiesfall, but (because of links operating through expectations of future interest rates) yields on longer-term public and private debt (such as mortgages) wouldlikely fall as well.
 
Originally Posted by Dey Know Yayo


wawaweewa- there is no more demand for us debt. i understand creditor nations may not cause a run on the dollar, but that is irrelevant. the devaluation of the USD has to occur. but remember we have fiat currency. we can't just say, oh well we're devaluing the dollar by 70%. you have to do it against an asset by allowing excess liquidity to pump up an asset's nominal price. that will occur in gold. the fed has already created so much more wealth than has been or will be destroyed. insolvent banks are getting huuuuge liquidity. in the form of T BILLS. they'er passing all of the bank's mortgage default risk onto the taxpayers. in the form of INFLATION. the fed won't allow any insurers to go under-- it would literally ruin the economy. but in order for htat to occur, a ton of excess liquidity has to (and already is) be added to the system. that's inflationary.
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It's not making it into the system and it doesn't have to make it into the system in the US.
The USD has global demand even if, at present, creditor nations do not want to accept new dollars. Those dollars willnot be dumped in the US. They may, and prob. will, be dumped on foreigners.

That excess liquidity is there for for foreigners, not for US consumers.

This economic implosion will hurt a few major currencies more than it will hurt the USD. That is what the Fed is banking on.
The Yen will get demolished this year. The Chinese will not let the Renminbi appreciate substantially (they've said so) and in fact if there is socialunrest in China their currency will move downward as well.

The Chinese talking about a 'basket of currencies' for global trade is bogus. If one wants 'globalization' than one needs a single worldreseerve currency. It's simply much more efficient that way.
Whether we like it or not there has been throughout history and will be single world reserve currencies.

The thing is that even in such a crummy position as we are in, the US is still better off when everyone is imploding as well.

The Chinese don't have an ounce of technological innovation or high tech industries. A nation cannot learn that overnight. It takes decades.
The Japanese do have high tech and innovation but they don't have any natural resources to fall back in tough times. They either need consumers outside ofJapan or they need an empire and colonies to extract resources.
Russia is neither here nor there. They ahve the potential but the Soviet system set them back, economic development wise, decades.
Europe can be a competitor but they're too fractured and aren't ruthless capitalists. Globalization needs ruthless capitalists save for Britain (notsaying it's optimal but that's what globalization needs).

The US has high tech, has innovation (even if that quickly gets outsourced. But the brains are there), has natural resources, and has the history of bothruthless capitalists and not so ruthless entrepreneurial public (that ahs been diminished ove the years but it's still there).

The rest of the world is hanstrung in what it can do when they realied on US overconsumption for decades.

Fact is that the world needs the US more than the US needs the world. If the world implodes not too many nations can get by on their own.
In order to get by a nation must need natural resources, brains, ability to use to brains and apply it to tech, and a public willing to go it on their own.Very few nations in the world have that be it through their own shortcomings, historical situations, or through no fault of their own (ie. not having naturalresources).
 
the US is the best off, i agree. but there is no demand for USD. real interest rates are negative. all the excess liquidity is only temporarily trapped rightnow, behind debt time expiration and behind the fed's manipulations. like i said, it liquified banks via monetized t-bills. that explains your"liquidity trap" right there.

there are more USDs being produced than any other major currency in the world. all that excess liquidity is going to be funneled into precious metals. the fedwill jumpstart that by abandoning its support for comex short positions (which occurred, evidenced by backwardation) and with nominal rates at 0. other centralbanks will follow suit with rate cuts. keeping money in fiat currency is ******ed at this point.

the world is worse off than theUSA. but that is just relative talk. the USA is still very bad off, or at least its taxpayers are. its financial strucutre andbanks will be fine, because of bernankes ruthless monetary expansion. but its citizenry will pay the consequences. just like has happened all through history.the entire system of fiat currency faces huuuuge headwinds here.
 
Originally Posted by Dey Know Yayo


http://www.sfgate.com/cgi-bin/object/article?f=/c/a/2008/11/26/MNVN14C8QR.DTL&o=0http://www.sfgate.com/cgi-bin/object/article?f=/c/a/2008/11/26/MNVN14C8QR.DTL&o=0http://www.sfgate.com/cgi...26/MNVN14C8QR.DTL&o=0

deflation? what deflation?

interest rates are at 0. the fed is already resorting to MASSIVE quantitative easing. the fed's liabilities are soooo much greater than any recessionary wealth destruction. it is bernanke's policy to issue inflation so that all wealth destruction risk is passed on to the taxpayer.
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That is his policy but he cannot win.
Deflation is a public mindset. Unless the Feds can mind control Americans ( and their mind control has withered away the past 6 months as more Americans seethe central bank for the fraud that it is) they cannot win.

Bernanke cannot win against deflation. Only slow it down and prolong it over time.
 
Originally Posted by Dey Know Yayo

the US is the best off, i agree. but there is no demand for USD. real interest rates are negative. all the excess liquidity is only temporarily trapped right now, behind debt time expiration and behind the fed's manipulations. like i said, it liquified banks via monetized t-bills. that explains your "liquidity trap" right there.

there are more USDs being produced than any other major currency in the world. all that excess liquidity is going to be funneled into precious metals. the fed will jumpstart that by abandoning its support for comex short positions (which occurred, evidenced by backwardation) and with nominal rates at 0. other central banks will follow suit with rate cuts. keeping money in fiat currency is ******ed at this point.

the world is worse off than theUSA. but that is just relative talk. the USA is still very bad off, or at least its taxpayers are. its financial strucutre and banks will be fine, because of bernankes ruthless monetary expansion. but its citizenry will pay the consequences. just like has happened all through history. the entire system of fiat currency faces huuuuge headwinds here.
Click to expand...
The American people will pay the price through inflation but they bankers aren't stupid. They don't want a revolution on their hands.
I just don't think it will be 20 or 30+ inflation.

They'll try to keep it under 10.

Also, we had plenty of inflation from 2003-2007. It was hidden as you stated in real estate. However, did the average person feel it to the point where itreally hurt? It hurt but it didn't really hurt.
The destruction of this fiat currency is unprecedented. Commercial real estate is the next to go and that will be even worse than residential. If residentialdestroyed 8 trillion in wealth commercial may very well exceed that.
 
The United States Federal Reserve is a PONZI SCHEME. Positive feedback. Have you seen the expansion of the Fed's credit? Look at its balance sheet and tryto tell me you're deflationist with a straight face. Why has gold reached backwardation if the Fed is still supporting COMEX shorts?

The Fed has been hiding its monetary expansion with temporary liquidity traps, which are pure manipulation. I've mentioned tons of them, but here'sanother one-- the Fed has on its balance sheet a category called "Reserve balances with Federal Reserve Banks" which has increased from $7B to $600Bfrom september to november. the fed gave banks liquidity, and the banks redposited it in the fed to trap liquidity temporarily to stave off inflationarythought among the public and foreign creditor nations. this is pure manipulation with behind the scenes bank/fed agreements. deflation is the false monster thefed wants the public to believe in so it can "fight" it and look like a hero with inflation. inflation is a tax. never forget that.
 
The average person didn't feel the hurt of inflation in equity bubbles because their fake wealth was increasing. Now the inflation will occur throughdestruction of the dollar through inflation in precious metals. Finally, wealth destruction will occur, not through capital destruction, but value destructionin what their capital is denominated in.

Commercial real estate is the next to go but I highly highly doubt there are more than one or two bankruptcies declared in the next year. The Fed won'tallow it. With its printing press, it literally has unlimited power. Power it is able and willing to yield.
 
Originally Posted by Dey Know Yayo

The United States Federal Reserve is a PONZI SCHEME. Positive feedback. Have you seen the expansion of the Fed's credit? Look at its balance sheet and try to tell me you're deflationist with a straight face. Why has gold reached backwardation if the Fed is still supporting COMEX shorts?

The Fed has been hiding its monetary expansion with temporary liquidity traps, which are pure manipulation. I've mentioned tons of them, but here's another one-- the Fed has on its balance sheet a category called "Reserve balances with Federal Reserve Banks" which has increased from $7B to $600B from september to november. the fed gave banks liquidity, and the banks redposited it in the fed to trap liquidity temporarily to stave off inflationary thought among the public and foreign creditor nations. this is pure manipulation with behind the scenes bank/fed agreements. deflation is the false monster the fed wants the public to believe in so it can "fight" it and look like a hero with inflation. inflation is a tax. never forget that.
Click to expand...

Of course the Fed is a ponzi scheme. Most, if not all, Central Banks are.
I agree that the Fed is printing money and I posted that chart from the St. Louis fed on "Reserve balances with Federal Reserve Banks".

However, if the money has no velocity and it doesn't reach the bottom inflation is far off.

In essence, the FED is transferring wealth from the bottom up. Not that they haven't been doing all along but it's of enormous proportions now.

This year there'll be many stories of wage cuts, 4 day work weeks, forced furloughs, etc. Americans will get poorer in real terms while the banks getwealthier.
 
Originally Posted by Dey Know Yayo

The average person didn't feel the hurt of inflation in equity bubbles because their fake wealth was increasing. Now the inflation will occur through destruction of the dollar through inflation in precious metals. Finally, wealth destruction will occur, not through capital destruction, but value destruction in what their capital is denominated in.

Commercial real estate is the next to go but I highly highly doubt there are more than one or two bankruptcies declared in the next year. The Fed won't allow it. With its printing press, it literally has unlimited power. Power it is able and willing to yield.
Click to expand...
The Fed won't allow big bankruptcies (banks, insurers, aka their cronies) but it will allow the average joe to go bankrupt and evenlongstanding business.

Big retailers wnat bailouts too but they won't get it because......... they don't matter. In fact, their destruction is good because it mitigatesinflation while the banks get pumped full of cash.
Retaielr A is worth 4b and goes down .Now the Fed can pump 4b into a bank and not worry about inflation.
100,000 average joe business collapse. Worth? 1t. Now the Fed can pump 1t into banks and not worry about increasing the money supply.

It's a huge transfer of wealth scheme because globally, the banks are all that matter.

Someone put it best. They are presiding over a controlled demolition of the economy.
 
that demolition is in the form OF INFLATION.

the Fed wants to trap the new dollars until the treasury has finished its funding so it can borrow at low rates. when that is completed, watch the sequestereddollars rush into the system, much of it into precious metals.
 
Originally Posted by Dey Know Yayo

that demolition is in the form OF INFLATION.

the Fed wants to trap the new dollars until the treasury has finished its funding so it can borrow at low rates. when that is completed, watch the sequestered dollars rush into the system, much of it into precious metals.
Click to expand...
I disagree.
We'll see, it shouldn't be much longer. End of '09 it should be clear what direction we're heading in.
 
to take ur pyramid example..

the fed issues the "top" money. the top exchanges it with the bottom for wealth. the bottom gets the money but loses the wealth. purchasing powerdestruction. inflation.
 
Originally Posted by Dey Know Yayo

to take ur pyramid example..

the fed issues the "top" money. the top exchanges it with the bottom for wealth. the bottom gets the money but loses the wealth. purchasing power destruction. inflation.
Click to expand...

The bottom will never see the money. Why do they have to see it?
The politicians want them to see it for political points bu the bankers don't work like that. They can give 2 $@**% about political points.

That is a good article but the manipulators have THREE weapons.

Central Banks. The Comex.
and

"Laws"/"Regulations" which give them the ability to really do whatever the +!#$ they want and, mostimportantly, prevent you from doing what you want.
IF they can't do it one way, they'll do it another.
 
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