If Bond Prices Collapse, Will Gold Takeoff? [View article]
Post Bretton-Woods the dollar has been linked to oil. The dollar is the world's reserve currency only because of the petrodollar and our military's ability to defend OPEC at all costs. This era is coming to an end. Japan and China no longer buying our debt, and for good reason. Fed bought 61% of US securities in 2011. In 2012 the Primary Dealers have been scooping up treasuries and leveraging them in the repo markets, propping up equities with the govt's approval, and a tacit tax-payer guarantee. When treasuries are auctioned the Primary Dealers will bid, because they have to, and because they can use the securities for collateral. In the end our debt is intrinsically tied to the health of the S&P and bank's balance sheets. If the ship sinks, we all go down together.
"At some point, the Federal Government will not be there as the buyer of last resort, artificially driving up Treasury prices and driving down yields."
They will monetize before they unwind. Look at Japan, they can't even think about unwinding.
How will Japan stay solvent without monetizing their debt? At this time 50% of all revenue would be required to pay the INTEREST on servicing their debt. With the demographic picture in Japan, and the population for the first time in decades actually de-saving, I just don't see how you can be unworried about a hyperinflation scenario unfolding with monetization.
Currency War - Are There Ever Any Winners? [View article]
The post Bretton-Woods era is ending quickly. Hopefully the currency wars will not spark military wars (see Senkaku/Diaoyu islands). As the purpose of establishing a global reserve currency in the first place was to help mitigate war.
This is all heading towards Global hyperinflation, and then a Global Central bank and Global fiat currency. That much centralized power will certainly lead to abuse causing Precious Metals and black market currencies to thrive.
Deep Dive: Financial Repression Reconsidered [View article]
Financial Repression occurs when the federal government, through its central bank, secures for itself a purchasing power advantage over it's people at the expense of the people. Government is supposed to use OUR money, not vice versa. Article 1 section 10. Government is supposed to be dependent on our productivity; we are not supposed to be dependent on the government spending fiat currency notes into existence. Interest rate manipulation that favors monetization distorts the price discovery mechanism for capital, causes malinvestment, and gives unfair advantages to debtors over creditors, thereby giving actors incentive to spend immediatley rather than save for later. If money were a commodity the incentive for saving vs spending would better reflect supply and demand.
Gold Breakout In Process, Thanks To Germany [View article]
Granted. If you're an active trader, gold may not be the best investment for you. If you're a sideliner like me and just want to safely preserve purchase power, gold is enticing.
Gold Breakout In Process, Thanks To Germany [View article]
Macro, I will dumb this down for you. I said the following,"SPY value and gold have performed similarly (both just about doubled in purchase power) over the past 100 years." This is true.
You're describing a compounding phenomenon. Of course if you continuously reinvested your dividends back into either S&P or gold the numbers would be much higher. I'm talking about parity. If you bought 1 dollar of gold vs 1 dollar broadly across the S&P they would have performed similarly. This is what $/oz/CPI attempts to measure. When you divide $ by CPI you are in essence just measuring gold's purchase power; this is if you accept the govt's measure of CPI in the first place which is suspect.
Gold Breakout In Process, Thanks To Germany [View article]
SPY value and gold have performed similarly (both just about doubled in purchase power) over the past 100 years. Gold, IMO, is a safer bet for my kid's piggybank.
If Bond Prices Collapse, Will Gold Takeoff? [View article]
The Treasury Run [View article]
They will monetize before they unwind. Look at Japan, they can't even think about unwinding.
Don't Worry About Currency Wars [View article]
Currency War - Are There Ever Any Winners? [View article]
This is all heading towards Global hyperinflation, and then a Global Central bank and Global fiat currency. That much centralized power will certainly lead to abuse causing Precious Metals and black market currencies to thrive.
Currency Wars: U.S. Attack [View article]
Deep Dive: Financial Repression Reconsidered [View article]
Gold Breakout In Process, Thanks To Germany [View article]
You know what. Never mind.
Gold Breakout In Process, Thanks To Germany [View article]
Gold Breakout In Process, Thanks To Germany [View article]
I will dumb this down for you.
I said the following,"SPY value and gold have performed similarly (both just about doubled in purchase power) over the past 100 years." This is true.
You're describing a compounding phenomenon. Of course if you continuously reinvested your dividends back into either S&P or gold the numbers would be much higher. I'm talking about parity. If you bought 1 dollar of gold vs 1 dollar broadly across the S&P they would have performed similarly. This is what $/oz/CPI attempts to measure. When you divide $ by CPI you are in essence just measuring gold's purchase power; this is if you accept the govt's measure of CPI in the first place which is suspect.
Gold Breakout In Process, Thanks To Germany [View article]
http://seekingalpha.co...
Gold Breakout In Process, Thanks To Germany [View article]
http://bit.ly/Ptos8Q
Gold Breakout In Process, Thanks To Germany [View article]
Gold Breakout In Process, Thanks To Germany [View article]
Gold Breakout In Process, Thanks To Germany [View article]
Deep Dive: Financial Repression Reconsidered [View article]