mharley

U.S. Dollar Strength and Implications for Gold

I am not nearly as sophisticated an investor as most of you, but it seems to me that owning gold is a no-brainer right now. If we do have massive deflation, the price per oz will go down, but the amount of goods and services that an oz of gold will purchase will remain roughly the same as it is today. On the other hand, if we have massive inflation once all this FED money makes its way into the system, the price of gold will go up. But I expect the price to rise faster than the rate of inflation due to a larger number of buyers trying hedge.

So worst case, gold retains its purchasing power even though the number of FRNs per oz falls. Or it increases its purchasing power as investors rush to buy into it because of inflation.

With 75bp Cut, Fed Becomes the Most Aggressive Central Bank

Admittedly, I am very much a "beginner" when it comes to some of the advanced economic topics ya'll are discussing. But one thing is clear to me as a small business owner - a lot of the banks do HAvE money to lend. They just do not have any qualified borrowers. That is, the folks that want to borrow right now, should not be allowed to because of their high risk, The folks that are a good risk, do not want anything to do with debt.

It seems to me (in my limited view of the world), that the American people are FINALLY starting to do what they should have been doing for the past 30 years - living within our means and not borrowing to support a lifestyle we cannot afford. So, the reaction of the Fed and the government, is to take over and centralize the stupidity of our generation.

It has taken the American people 30 years tot realize that it is stupid to pi$$ away money they do not have. So, now the government and the Fed have stepped up to the plate to be the stupid ones for the whole country!