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Sol Palha is the head financial analyst at Tactical Investor. He is a self-taught Student of the Markets, having widely read conventional and non-conventional texts on all aspects of technical analysis, Mass Psychology and philosophy (as he believes it can be quite useful in terms of market... More
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  • Inflate or die trying the central bankers new motto  2 comments
    May 11, 2010 2:31 PM

    Among those whom I like or admire, I can find no common denominator, but among those whom I love, I can: all of them make me laugh.
    W. H. Auden 1907-1973, Anglo-American Poet
    Many a naysayer, many of which fall under the newsletter writers camp keep pumping the nonsense that all paper money will cease to exist and that everyone will revert to the gold and silver standard in the not too distant future. First of all they are about 1000 years too late and second of all they are in sore need of a mental check up. They forget to take mass psychology into consideration and one must understand that the biggest driving force anywhere is mass behaviour also known as Mass psychology. 
    Nobody in hell including yours truly wants to run around with a heavy sack of gold or silver coins strapped to their necks. It just not convenient anymore and since we live in an instant demand and instant gratification society this line of thought will remain a dream. Another reason why this will never take place in the near future is that 90% of the current generation is brain dead when it comes to understanding the true function of gold. In fact one can state that they don’t even understand the true function of money. In certain aspects this generation has received what amounts to a frontal lobotomy when it comes to understanding the concept of money backed by hard assets (Hard assets are gold, silver, palladium, antiques, collectibles, timber etc)
    What might unfold one day is that certain governments will decide its time to back their money with a basket of commodities say oil, gold, silver, palladium etc. It does not necessarily have to rotate around one commodity; this will give investors all over the world the confidence to change their money into this country’s currency. 3 nations are in a position to do this United States (but they have embarked on the “we are the toughest and we know it all mission” and hence the chances of them implementing it are at the moment slim at best). The other two nations are China and Russia; Russia is technically in a better position when one looks at things from a resource perspective but when one takes a strategic look at things the main country that comes to mind is China. In approximately 20 years they have achieved more then most nations have in 90 years and they continue to progress at a rapid fire rate. They understand the fact that true democracy is nothing but a fallacy whereby idiots are elected into power and these idiots then have cater to the morons that elected them in the first place. Thus a perfectly prosperous country slowly but surely becomes nothing but one huge welfare state. 
    Thus our advice to our subscribers is not to worry about this nonsense when there are very little facts to support these assumptions. A full generation would have to be financially wiped out before this concept becomes embedded in the mental psyche of the masses. Until then the best way to preserve ones wealth is to invest in assets that inflate at a faster rate then the governments are inflating the money supply. One way to do this is to make sure you have a portion of you money in Gold and or Silver bullion. We personally cast a more favourable eye on silver also know as the poor man’s Gold. 
    In the end,  the only option left is to take the "who cares if the governments are inflating the money supply" attitude (as in realty there is very little one can do to stop them and if one cannot do anything to stop them then why worry over nonsense); the only thing we care as investors is that we do not want to catch a falling dagger. There is a secret benefit to inflation; certain assets over compensate for the rate of inflation by a huge factor. Thus for example the government might inflate the money supply say by 10% a year but certain assets could rise by say 30%-100% a year. 
    The problem we have now is that most central bankers have embarked on the concept of inflate or die as they compete to make their products the most affordable in the world markets. The best thing would be for them to all sit on the same table and decide on a fixed rate of inflation. As the true definition of inflation is an increase in the supply of money; they could all decide to say inflate their respective money supplies at the same rate. However such a simple concept is (even though it is a form of theft) beyond the foresight of most central bankers. Instead of milking the Cow, they would rather bleed it to death. Make sure you have some insurance and the best way to do this is to own a bit of Silver and or Gold bullion
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  • cynthiat
    , contributor
    Comment (1) | Send Message
    what can we expect from individuals exposed to unlimited power, Would any of us act in a different manner if we had the chance to make billions of dollars at the expense of our brothers.
    11 May 2010, 03:48 PM Reply Like
  • Prune
    , contributor
    Comments (94) | Send Message
    George Washington was offered position as King but turned it down.
    31 May 2010, 10:06 AM Reply Like
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