Gold 1800+ An Ounce

[JEATON]

[quote]TooHuman wrote:

[quote]JEATON wrote:
For what it is worth, I started a 200% short position on gold using the ETF DZZ.

I’m using $1950 as my stop.

In a deflationary environment stocks and commodities will fall. [/quote]

If you think the Fed will EVER allow deflation before this presidential election, you are in for a rude awakening.
The Fed WILL do QE3, if they’re not already doing it and hiding it. IF they get called out on it some how, they will deny it or lie.[/quote]

Ultimately, the Fed is powerless to stop it. Rates are effectively zero and people are still retiring debt faster than they are accumulating it.

You cannot push a rope.

The Fed, except in very limited cases, does not print money. That is why it is called quantitative easing, not money printing.

Deflation is inevitable.

[Gettnitdone]

[quote]Headhunter wrote:

[quote]TooHuman wrote:

[quote]Headhunter wrote:

[quote]Dijon wrote:
Alright, so what’s the best way to buy Krugerrands? Is that even a good option?[/quote]

Buy the mining stocks, through a good mutual fund. They have not had nearly the run that the metal has had. Don’t hold them long though as they may crash with the market, when the Great Collapse hits. We are now leaving ‘the eye of the Hurricane’ that TARP created; we will now have the collapse. Gold itself should hit anywhere between $10,000 and $18,000 but the gov’t will confiscate it. They can’t confiscate the stocks, though they’ll probably institute a windfall profits tax, in their final desperate grasping at straws. You should get to keep 20 or 30 percent of your wealth; that’s better than most, who’ll be completely stripped of their wealth.[/quote]

Following this line of reasoning, wouldn’t it just be better to buy foreign currency in deposits abroad and leave the country sooner than later?
You could get a job teaching English in Asia or something similar. I mean 20-30% of your wealth +hyperinflation wouldn’t be better than starting over on your career in another country with most of your wealth in tact. That would especially be true if you could reinvest in dividend paying stocks when you get settled abroad.[/quote]

Americans will be TERRIBLY hated, for causing the calamity. Plus, as we pull back our military, foreign governments will feel free to confiscate anything you have w/o protest from Uncle Sam. The only place I’d even consider would be Canada; freedom is pretty intact there.

The order provided by the US military is taken for granted around the world. When we pull back, a lot of the world is going to revert to its more normal state, similar to Darfur, Afghanistan, or Somalia. Far better to stay here – gonna be bad but not as bad as those hellholes.
[/quote]

Dude shut up or calm down. Greece has twice as much debt as you relative to size and they’re still a functioning society.

I agree that no one benefits from a US collapse, which is why it’s not going to happen in your life time.

[Headhunter]

[quote]TooHuman wrote:

[quote]Headhunter wrote:

[quote]TooHuman wrote:

[quote]Headhunter wrote:

[quote]Dijon wrote:
Alright, so what’s the best way to buy Krugerrands? Is that even a good option?[/quote]

Buy the mining stocks, through a good mutual fund. They have not had nearly the run that the metal has had. Don’t hold them long though as they may crash with the market, when the Great Collapse hits. We are now leaving ‘the eye of the Hurricane’ that TARP created; we will now have the collapse. Gold itself should hit anywhere between $10,000 and $18,000 but the gov’t will confiscate it. They can’t confiscate the stocks, though they’ll probably institute a windfall profits tax, in their final desperate grasping at straws. You should get to keep 20 or 30 percent of your wealth; that’s better than most, who’ll be completely stripped of their wealth.[/quote]

Following this line of reasoning, wouldn’t it just be better to buy foreign currency in deposits abroad and leave the country sooner than later?
You could get a job teaching English in Asia or something similar. I mean 20-30% of your wealth +hyperinflation wouldn’t be better than starting over on your career in another country with most of your wealth in tact. That would especially be true if you could reinvest in dividend paying stocks when you get settled abroad.[/quote]

Americans will be TERRIBLY hated, for causing the calamity. Plus, as we pull back our military, foreign governments will feel free to confiscate anything you have w/o protest from Uncle Sam. The only place I’d even consider would be Canada; freedom is pretty intact there.

The order provided by the US military is taken for granted around the world. When we pull back, a lot of the world is going to revert to its more normal state, similar to Darfur, Afghanistan, or Somalia. Far better to stay here – gonna be bad but not as bad as those hellholes.
[/quote]
Huh? Why would a government(like Japan or Australia for example) confiscate the property of a legal resident in the wake of a booming economy through increased purchasing power.
Also, it’s been my impression that Americans are terrible hated as they are right now. Why would the world hate Americans who will be suffering a terrible collapse in living standards while the eastern world(and Canada) see a purchasing power boom?[/quote]

No one is going to ‘boom’ if America has a collapse. We’re just too huge a player in the global economy. And guess who your neighbors in just about any other country are going to vent their anger on? Guess who…

[Headhunter]

[quote]JEATON wrote:

[quote]TooHuman wrote:

[quote]JEATON wrote:
For what it is worth, I started a 200% short position on gold using the ETF DZZ.

I’m using $1950 as my stop.

In a deflationary environment stocks and commodities will fall. [/quote]

If you think the Fed will EVER allow deflation before this presidential election, you are in for a rude awakening.
The Fed WILL do QE3, if they’re not already doing it and hiding it. IF they get called out on it some how, they will deny it or lie.[/quote]

Ultimately, the Fed is powerless to stop it. Rates are effectively zero and people are still retiring debt faster than they are accumulating it.

You cannot push a rope.

The Fed, except in very limited cases, does not print money. That is why it is called quantitative easing, not money printing.

Deflation is inevitable.

[/quote]

Yep. The debt is way more massive than the money supply. There truly is not enough money to service the debts.

Reason: creating that paper money would lead to immediate hyperinflation except for the fact that our money is debt-based – an endless loop. And as you point out, the Fed can create all the debt/money it wants, but it can’t increase the velocity of money. Hence the debt expands faster than the money supply grows, and massive deflation becomes the norm.

[TooHuman]

[quote]Headhunter wrote:

[quote]TooHuman wrote:

[quote]Headhunter wrote:

[quote]TooHuman wrote:

[quote]Headhunter wrote:

[quote]Dijon wrote:
Alright, so what’s the best way to buy Krugerrands? Is that even a good option?[/quote]

Buy the mining stocks, through a good mutual fund. They have not had nearly the run that the metal has had. Don’t hold them long though as they may crash with the market, when the Great Collapse hits. We are now leaving ‘the eye of the Hurricane’ that TARP created; we will now have the collapse. Gold itself should hit anywhere between $10,000 and $18,000 but the gov’t will confiscate it. They can’t confiscate the stocks, though they’ll probably institute a windfall profits tax, in their final desperate grasping at straws. You should get to keep 20 or 30 percent of your wealth; that’s better than most, who’ll be completely stripped of their wealth.[/quote]

Following this line of reasoning, wouldn’t it just be better to buy foreign currency in deposits abroad and leave the country sooner than later?
You could get a job teaching English in Asia or something similar. I mean 20-30% of your wealth +hyperinflation wouldn’t be better than starting over on your career in another country with most of your wealth in tact. That would especially be true if you could reinvest in dividend paying stocks when you get settled abroad.[/quote]

Americans will be TERRIBLY hated, for causing the calamity. Plus, as we pull back our military, foreign governments will feel free to confiscate anything you have w/o protest from Uncle Sam. The only place I’d even consider would be Canada; freedom is pretty intact there.

The order provided by the US military is taken for granted around the world. When we pull back, a lot of the world is going to revert to its more normal state, similar to Darfur, Afghanistan, or Somalia. Far better to stay here – gonna be bad but not as bad as those hellholes.
[/quote]
Huh? Why would a government(like Japan or Australia for example) confiscate the property of a legal resident in the wake of a booming economy through increased purchasing power.
Also, it’s been my impression that Americans are terrible hated as they are right now. Why would the world hate Americans who will be suffering a terrible collapse in living standards while the eastern world(and Canada) see a purchasing power boom?[/quote]

No one is going to ‘boom’ if America has a collapse. We’re just too huge a player in the global economy. And guess who your neighbors in just about any other country are going to vent their anger on? Guess who…
[/quote]

Too huge a player? We are the biggest debtor. We are the largest BURDEN on the world economy. Why wouldn’t the world boom when governments are no longer draining their citizen’s purchasing power in order to bolster ours? The correction they must make are akin to the corrections the U.S. has to make after WW2. We retooled our factories from building bombs and planes into building consumer goods and had a massive boom. Asian factories will retool their factories from producing goods marketed towards Americans and make goods for themselves. They will have a similar boom.
Further, these countries won’t need to vent nearly as much anger because it will have subsided due to the massively increased living standards of the general population. Economic freedom is the biggest deterrent to violence among a population.
The massive anger you will see will be concentrated in the west when the U.S. and Europe sees a massive drop in their living standards.

[TooHuman]

[quote]Headhunter wrote:

[quote]JEATON wrote:

[quote]TooHuman wrote:

[quote]JEATON wrote:
For what it is worth, I started a 200% short position on gold using the ETF DZZ.

I’m using $1950 as my stop.

In a deflationary environment stocks and commodities will fall. [/quote]

If you think the Fed will EVER allow deflation before this presidential election, you are in for a rude awakening.
The Fed WILL do QE3, if they’re not already doing it and hiding it. IF they get called out on it some how, they will deny it or lie.[/quote]

Ultimately, the Fed is powerless to stop it. Rates are effectively zero and people are still retiring debt faster than they are accumulating it.

You cannot push a rope.

The Fed, except in very limited cases, does not print money. That is why it is called quantitative easing, not money printing.

Deflation is inevitable.

[/quote]

Yep. The debt is way more massive than the money supply. There truly is not enough money to service the debts.

Reason: creating that paper money would lead to immediate hyperinflation except for the fact that our money is debt-based – an endless loop. And as you point out, the Fed can create all the debt/money it wants, but it can’t increase the velocity of money. Hence the debt expands faster than the money supply grows, and massive deflation becomes the norm.
[/quote]

First of all, debt is not being retired faster than it is being accumulated. Individuals and businesses may be retiring debt faster than accumulating it. The Federal/state/local governments are DWARFING that with net accumulation. The Fed can and will indefinitely finance the government debt at a rate faster than it is retired in the private market. You will simultaneously see a massive contraction of available credit in the private market and massive increase in nominal payments to individuals employed/living off the government.
In other words, massive unemployment AND massive inflation.

[Headhunter]

[quote]TooHuman wrote:
Further, these countries won’t need to vent nearly as much anger because it will have subsided due to the massively increased living standards of the general population. Economic freedom is the biggest deterrent to violence among a population.
The massive anger you will see will be concentrated in the west when the U.S. and Europe sees a massive drop in their living standards.[/quote]

The USA is the biggest customer the world has. If you owned a business, what would happen to you if your biggest customer went tits up?

And then there’s the ‘order’ issue: the USA polices the globe. Without the ‘police’, the globe suddenly looks like London recently. Care to go for a stroll btw through that while wearing a big t-shirt with the US flag on the shirt?

[JEATON]

[quote]TooHuman wrote:

[quote]Headhunter wrote:

[quote]JEATON wrote:

[quote]TooHuman wrote:

[quote]JEATON wrote:
For what it is worth, I started a 200% short position on gold using the ETF DZZ.

I’m using $1950 as my stop.

In a deflationary environment stocks and commodities will fall. [/quote]

If you think the Fed will EVER allow deflation before this presidential election, you are in for a rude awakening.
The Fed WILL do QE3, if they’re not already doing it and hiding it. IF they get called out on it some how, they will deny it or lie.[/quote]

Ultimately, the Fed is powerless to stop it. Rates are effectively zero and people are still retiring debt faster than they are accumulating it.

You cannot push a rope.

The Fed, except in very limited cases, does not print money. That is why it is called quantitative easing, not money printing.

Deflation is inevitable.

[/quote]

Yep. The debt is way more massive than the money supply. There truly is not enough money to service the debts.

Reason: creating that paper money would lead to immediate hyperinflation except for the fact that our money is debt-based – an endless loop. And as you point out, the Fed can create all the debt/money it wants, but it can’t increase the velocity of money. Hence the debt expands faster than the money supply grows, and massive deflation becomes the norm.
[/quote]
First of all, debt is not being retired faster than it is being accumulated. Individuals and businesses may be retiring debt faster than accumulating it. The Federal/state/local governments are DWARFING that with net accumulation. The Fed can and will indefinitely finance the government debt at a rate faster than it is retired in the private market. You will simultaneously see a massive contraction of available credit in the private market and massive increase in nominal payments to individuals employed/living off the government.
In other words, massive unemployment AND massive inflation.[/quote]

This is why I said “people are retiring debt…” instead of “gov’t is retiring debt…”

Gov’t can only borrow for so long.

Do a little reading on the Fed. Some of their recent actions suggest that they are becoming far from free and breezy with their credit.

And to say that “the Fed can and will indefinitely finance the government debt at a rate faster than it is retired in the private market” is just nonsense.

[TooHuman]

[quote]JEATON wrote:

[quote]TooHuman wrote:

[quote]Headhunter wrote:

[quote]JEATON wrote:

[quote]TooHuman wrote:

[quote]JEATON wrote:
For what it is worth, I started a 200% short position on gold using the ETF DZZ.

I’m using $1950 as my stop.

In a deflationary environment stocks and commodities will fall. [/quote]

If you think the Fed will EVER allow deflation before this presidential election, you are in for a rude awakening.
The Fed WILL do QE3, if they’re not already doing it and hiding it. IF they get called out on it some how, they will deny it or lie.[/quote]

Ultimately, the Fed is powerless to stop it. Rates are effectively zero and people are still retiring debt faster than they are accumulating it.

You cannot push a rope.

The Fed, except in very limited cases, does not print money. That is why it is called quantitative easing, not money printing.

Deflation is inevitable.

[/quote]

Yep. The debt is way more massive than the money supply. There truly is not enough money to service the debts.

Reason: creating that paper money would lead to immediate hyperinflation except for the fact that our money is debt-based – an endless loop. And as you point out, the Fed can create all the debt/money it wants, but it can’t increase the velocity of money. Hence the debt expands faster than the money supply grows, and massive deflation becomes the norm.
[/quote]
First of all, debt is not being retired faster than it is being accumulated. Individuals and businesses may be retiring debt faster than accumulating it. The Federal/state/local governments are DWARFING that with net accumulation. The Fed can and will indefinitely finance the government debt at a rate faster than it is retired in the private market. You will simultaneously see a massive contraction of available credit in the private market and massive increase in nominal payments to individuals employed/living off the government.
In other words, massive unemployment AND massive inflation.[/quote]

This is why I said “people are retiring debt…” instead of “gov’t is retiring debt…”

Gov’t can only borrow for so long.

Do a little reading on the Fed. Some of their recent actions suggest that they are becoming far from free and breezy with their credit.

And to say that “the Fed can and will indefinitely finance the government debt at a rate faster than it is retired in the private market” is just nonsense.
[/quote]
Gov’t can only borrow for so long? That’s right they can borrow until the Fed stops buying treasuries or the dollar goes to zero.

Reading on the Fed? Far from free and breezy? What recent actions. They have said they are keeping interest rates zero at least until mid 2013. Further, Bernanke has stated that the current rate of inflation is below their target rate and that he would continue to keep interest rates at zero until unemployment came down.
He also stated previously that among the things he could do to keep yields on treasuries from rising, making a statement ensuring the Fed would keep target rates low.
In other words, the Bernanke has done exactly what he promised to do and will continue to do so indefinitely.
As I said before there will be(or already is) QE3.
The Fed is a politically tied organization. The Fed will NEVER allow for deflation. They will continue to expand the debt of the government at any level until there is a crisis of inflation that forces the government to stop reduce the rate of growth of spending and borrowing.

Are you serious about “is just nonsense”? That’s your argument?

[TooHuman]

[quote]Headhunter wrote:

[quote]TooHuman wrote:
Further, these countries won’t need to vent nearly as much anger because it will have subsided due to the massively increased living standards of the general population. Economic freedom is the biggest deterrent to violence among a population.
The massive anger you will see will be concentrated in the west when the U.S. and Europe sees a massive drop in their living standards.[/quote]

The USA is the biggest customer the world has. If you owned a business, what would happen to you if your biggest customer went tits up?

And then there’s the ‘order’ issue: the USA polices the globe. Without the ‘police’, the globe suddenly looks like London recently. Care to go for a stroll btw through that while wearing a big t-shirt with the US flag on the shirt? [/quote]

The us is not a “customer” we are being vendor financed by our creditors.
Business and my biggest customer stopped buying, I would have to find another customer. This would not be a problem in the case of china and others because the metaphorical owners/employees of the business would EASILY find replacement demand from their other customers(and their own employees) who are no longer lending all of their savings to the formerly biggest customer.

Further, the U.S. “policing” of the world is nothing more than an empire having to perpetually maintain a military presence in areas that they had previously destabilized through espionage or economic sabotage.
Like I said before, the alleviation of poverty will reduce the popular anger towards the newly impoverished U.S. There will be instability for some time in areas like the middle east where American intervention has been the most volatile. Otherwise the public political “correction” that will occur are going to be trivial compared to those in debtor nations like the U.S.
Also, I’d like to point out that I will not be wearing U.S. flag shirts and I’ve already been learning Japanese for about a year.
Those not willing to learn the language and culture of an Asian nation should look towards Canada or Australia/New Zealand.

[Menthol]

Gold is one of those investments that I dislike seeing going up. It means people are loosing faith in government(s). And with the way our leadership in the west has handled affairs, there is little doubt why precious metals have done well. Not sure if this is the big, final run up to gold. But as an investors in the yellow metal I’m pleased, somewhat.

“Storm Warnings”
http://blogs.the-american-interest.com/wrm/2011/08/15/storm-warnings/

snippet:

“World Bank president Robert Zoellick warns that a new recession is likely if world leaders don?t act fast.
Unless the economic leadership gets ahead of the problem in its different dimensions, you?ll see the lack of confidence?spread.
We are entering a ?new danger zone?, he said. What we need is cooperation. This sentiment is echoed in an op-ed coauthored by the finance ministers of England, Singapore, Canada, South Africa and Australia in the FT today. They write:
The more serious malaise today is the lack of confidence in efforts by governments to address the structural problems that underpin weak growth, high unemployment and unsustainable fiscal balance sheets. Global co-ordination in the recovery is inevitably harder than co-ordinated reflation at the peak of the crisis because the necessary reforms are more difficult to achieve and sustain. But the biggest barriers are political, not economic, so what is needed is political leadership and courage.
Banking systems must be strengthened and financial regulation co-ordinated at a global level. Structural reforms to improve economic performance in developed economies must be accompanied by progress on global trade negotiations. Getting public finances back on to a sustainable trajectory is central. Nobody should underestimate the political difficulties inherent in the task, but it first requires a collective sense of reality.
The odds are uncomfortably high that cooperation won?t come. When times are good, it?s easy for countries to cooperate. When times are bad, cooperation is more important to have ? and harder to get. Leaders around the world are preoccupied with domestic problems ? riots in the UK and China, US downgrade and unemployment, the EU crisis, Indian inflation ? and don?t have much room to maneuver.
At Via Meadia, our confidence in world leaders is not high ? not because the current crop is all that much worse than the normal mediocre mix but because the problems are so unusually tough. Fingers crossed, hatches battened, we are watching the storm.”

[orion]

[quote]Headhunter wrote:

[quote]TooHuman wrote:
Further, these countries won’t need to vent nearly as much anger because it will have subsided due to the massively increased living standards of the general population. Economic freedom is the biggest deterrent to violence among a population.
The massive anger you will see will be concentrated in the west when the U.S. and Europe sees a massive drop in their living standards.[/quote]

The USA is the biggest customer the world has. If you owned a business, what would happen to you if your biggest customer went tits up?

And then there’s the ‘order’ issue: the USA polices the globe. Without the ‘police’, the globe suddenly looks like London recently. Care to go for a stroll btw through that while wearing a big t-shirt with the US flag on the shirt? [/quote]

When I have to lend money that that customer constantly I might be better off.

Also, I think we will do fine without a world police.

[majicka]

I’d be hesitant about investing in gold right now, yes in nominal terms it has some way to go before it reaches its early 80’s levels but commodities are notoriously difficult to value, more so than companies. Gold, like other commodities can fall in value more quickly than equities, for example.

The Economist had an interesting article last week comparing gold’s value over the past 30 years against different measures, rather than just using inflation, they included things like GDP growth. Gold’s relative valuation varies wildly depending on what you’re using.

At this point in time, I’d say invest in good, solid companies trading at a low p/e with a good, reliable dividend but the way the markets are, they could fall even further…

[Headhunter]

[quote]Menthol wrote:
Gold is one of those investments that I dislike seeing going up. It means people are loosing faith in government(s).
[/quote]

Government is, by definition, legalized thuggery. Our government used to be very minimal, the thuggery being heavily restrained by our Constitution. But then we traded all of that away for unemployment benefits and free dentures.

[Headhunter]

[quote]orion wrote:

[quote]Headhunter wrote:

[quote]TooHuman wrote:
Further, these countries won’t need to vent nearly as much anger because it will have subsided due to the massively increased living standards of the general population. Economic freedom is the biggest deterrent to violence among a population.
The massive anger you will see will be concentrated in the west when the U.S. and Europe sees a massive drop in their living standards.[/quote]

The USA is the biggest customer the world has. If you owned a business, what would happen to you if your biggest customer went tits up?

And then there’s the ‘order’ issue: the USA polices the globe. Without the ‘police’, the globe suddenly looks like London recently. Care to go for a stroll btw through that while wearing a big t-shirt with the US flag on the shirt? [/quote]

When I have to lend money that that customer constantly I might be better off.

Also, I think we will do fine without a world police. [/quote]

China has to create about 15 million new jobs per year just to stay even. They also have to control 1.2 billion people who’ll get mighty pissed if they’re starving. Why do you think they lent us all those trillions?

Where would Germany be without exports? Care to re-live ‘Seig Heil’ and all that?

Who keeps shipping lanes open for oil to flow around the world? Multiply the Somali pirates by a factor of about 10,000 and watch what happens.

[TooHuman]

[quote]Headhunter wrote:

[quote]orion wrote:

[quote]Headhunter wrote:

[quote]TooHuman wrote:
Further, these countries won’t need to vent nearly as much anger because it will have subsided due to the massively increased living standards of the general population. Economic freedom is the biggest deterrent to violence among a population.
The massive anger you will see will be concentrated in the west when the U.S. and Europe sees a massive drop in their living standards.[/quote]

The USA is the biggest customer the world has. If you owned a business, what would happen to you if your biggest customer went tits up?

And then there’s the ‘order’ issue: the USA polices the globe. Without the ‘police’, the globe suddenly looks like London recently. Care to go for a stroll btw through that while wearing a big t-shirt with the US flag on the shirt? [/quote]

When I have to lend money that that customer constantly I might be better off.

Also, I think we will do fine without a world police. [/quote]

China has to create about 15 million new jobs per year just to stay even. They also have to control 1.2 billion people who’ll get mighty pissed if they’re starving. Why do you think they lent us all those trillions?

Where would Germany be without exports? Care to re-live ‘Seig Heil’ and all that?

Who keeps shipping lanes open for oil to flow around the world? Multiply the Somali pirates by a factor of about 10,000 and watch what happens.[/quote]
You’ve got China’s public motivation backwards there. People are in an uproar and starving because of inflation in China. The Government is stalling because the large export companies have the same entrenched government partnerships that lobbying groups do in the U.S.
The Chinese government is pissing off it’s public more and more because they refuse to let the companies who export take loses or fail to free up(restructure) capital for domestic consumption.
In fact, the chief reason the Chinese government has been recommending their citizens buy gold with their savings is because they know they are going to continue devaluing their own currency in order to postpone the political backlash from Chinese exporters.
As far as Germany goes, the same problem exists. They need a correction that will restructure their production towards non-U.S. customers.
In Switzerland you ARE actually seeing the political problems you described with unemployment due to export loss. However, the fact that their currency is regaining value, means that the effective pain of unemployment is buffered by significantly lower cost of living.
The corrections in export heavy countries are inevitable. The governments that attempt to re-inflate the least will have the smoothest correction and the shortest interim unemployment.