huskerbob

It's 'Hammer Time' for Gold

CJJ: Where do you get the idea that gold investors are all expecting the apocalypse? Do you judge all of your investments by "how easily can I exchange this for food if there is a complete breakdown of society"? Your questions are not answered because they're not important to gold investors. Why would I ever trade gold for groceries? Do you expect to trade shares of GM for groceries?
The appeal is that gold will always be worth something. I simply expect (as do most gold investors) to trade gold for fiat which I can use for other things. When I see that gold is very high relative to the price of something I want, I will sell gold and pay for that item in currency. Currency is a medium of exchange which varies in value according to politics, policy, debt, wars, etc.
Money is a store of value. Gold is money. I'm not worried about the apocalypse, I want sound money and the dollar ain't it.
Maybe I should ask you: "Do you expect to exchange those $2 for a gallon of gas in 10 years?"
You mention gold lasts. When was the last time you heard someone say "the almighty dollar"? I don't mean sarcastically.

Silver Remains an Essential Diversification with Extremely Strong Fundamentals

Another point on the cash for scrap - I have read various articles using the ubiquity of cash for scrap advertising and participation to make the point that we are near the top of the pm market. These places are offering to BUY, not sell, and they are not paying full market price. People are rushing to sell jewelry for less than the legitimate scrap value, which is a better indicator of the general sentiment towards precious metals. The buyers are a relatively miniscule segment of the overall investment universe.
At least these companies are waking up more people up to the connection between gold, silver, and money, as opposed to viewing them as merely ornamental.

It's 'Hammer Time' for Gold

More than an indicator of inflation, gold is a measure of confidence in paper money and the economy. Most were lulled into comfort by the performance of the economy after gold's peak, which became the greatest economic expansion in world history.
Now the blinders are off and people are forced to see that the economy has been built on a foundation of sand. Governments have not inspired confidence with their reactions. Gold is a an assurance of something with tangible value. Paper promises have lost the seeming solidity they had in the 90's.
Gold buyers fear inflation, but more so lack confidence in the management of our currency and the promises of the equities market.

$200 Oil Is Coming While We Waste a Perfectly Good Crisis (Part 3)

Another consideration is that in the future, it is very possible that not all oil will be priced in dollars. Iran is working on a bourse which will price oil in other currencies already. The end of dollar hegenomy could lead others to embrace this idea.
This could add some more sticker shock to a peak oil scenario, as we simultaneously have decreased dollar demand and increased demand for foreign currency.

Don't Bet on 'Recovery' Unless You're Willing to Redefine It

Cetin - your comment shows extreme ignorance. Credit is not wealth! Neither are big screens purchased on credit. The middle class has used credit to maintain a standard of living, and now everyone will pay. Health care is already suffering as well. Building an economy on credit will fail in the long run. We need wealth and savings.

Don't Bet on 'Recovery' Unless You're Willing to Redefine It

"the Obama philosophy of limiting volatility and downside risk for the middle/working class even if it means minimizing upside opportunities for the executive/investing upper class"
Those are empty words. Look at the actions of the administration: you have got it completely backwards.
We are limiting the downside risk for Goldman Sachs and friends, and minimizing upside opportunities for the middle/working class.
Actions speak louder than words.
Cetin, please give us some successful examples of trickle-down economics. It hasn't seemed to work here. The rich accumulate more as the middle class shrinks. We need fewer obstacles to small business, not more goodies for the rich.

Clive Crook wants to know: How long before Americans get to learn what VAT is? Excerpt here.

VAT would pretty much destroy what's left of consumer spending. It wouldn't affect me much, as I am not a big consumer, so selfishly I would prefer it to the income tax.
I can't imagine the effects it would have on the many who already struggle to get by. I guess we would be increasing the already 1 in 10 americans who use food stamps.
We won't be seeing this, as they will take the easy way out and print more money.

Bubbles Don't Necessarily Lead to Depressions

Ha! Six degrees of Bacon bubble collapse?

Even More Reasons to Worry About Inflation

Airelon, I can tell you feel pretty strongly about deflation. But don't count the Fed out. As Tony helpfully pointed out, the Fed head strongly believes in inflation. And looking at its long and illustrious history, the Fed was able to devalue the dollar 95%. Furthermore, the working policy of the Fed is to maintain a targeted rate of inflation. Which is not zero.
Don't expect them to be too hasty with any rate hikes.

U.S. Government's Plan for Banks - Ready, Fire, Aim

It's hard to imagine why anyone would expect anything different. Please name all of the projects (and there have been many) where the government spent billions with sound oversight, no corruption, no cost overruns, and effectively achieved their goal. Look at any spending project in the last, say, 20 years. To expect anything different is insane. Like any other big spending project under an ass or an elephant, there will be favoritism, corruption, misuse and misallocation of tax dollars, and all sorts of general asshattery.

Bubbles Don't Necessarily Lead to Depressions

Good article. How many average Americans were really affected when pets.com collapsed?
Most likely not all asset prices will be pushed down. All these new trillions of debt must go somewhere. Unfortunately, to the frustration of the administration, they will mostly avoid reinflating the old bubbles and instead make fleeting new ones. I don't see deflation reflected in the prices of essential goods like energy, food, and money (gold)

The Ever-Expanding FDIC

Qouth Sheila Bair Nixon: If the FDIC does it, it's not illegal.
They really need to get taxpayer dollars to the banks, and it's soooo irritating to get Congressional approval. Especially since they seem to have lost their appetite for bailouts after the first few trillion.
Maybe the misused and abused Office of Thrift Supervision can get into the act next. They helped cause the crash, and it might cheer them up to hand out billions of dollars.

If Stupidity Got Us into This Mess, Why Can't It Get Us Out?

MisterPhi - that idea may not work much better but it would be many billions cheaper and infinitely more satisfying.

Krugman vs. Sachs on PPIP Loopholes

If you think of this as a problem, you're missing the whole point of this plan. It's simply a fig leaf so the banks can foist their toxic or "legacy" debt onto the taxpayers. This has been the plan since the beginning of the bailout, only Geithner came up with a politically more palatable plan. Expect a lot of cheesy fake "outrage" from your appointed political representatives in Washington after the banks safely game the system. Maybe they can trot out AIG execs for another round of excoriation?

Even More Reasons to Worry About Inflation

Yes Cetin, 4% should be adequate to curtail any future inflation. As shown by Volker during our last serious bout with inflation... uh, wait a sec; are you being sarcastic, or did you mean 20%?
If you read the writings of Greenspan or his protege, Bernanke, you will see that they feel it is necessary to stop at nothing to spur spending and inflation. They will purposely destroy people's confidence in the value of the dollar to get them to spend their savings. They explicitly state this in writing! I am assuming that this applies in principle to the massive reserves now held by banks, and the nascent rise of savings among the hoi polloi. Inflation or bust! Or both, more likely.