Gaucho

The American Crisis and the Case for an Inflationary Depression

The concept that we can get deflation and be unable to do anything about it is totally wrong. The FED can just print money to finance projects and give stimulus packages etc. The deflationary times that occurred during the great depression were a direct result of the FED tight money policies bank reserves. The government saying that we had deflation is a lie. Go to a site called shadow government stats we have been having inflation over 10% for the last few years yet the government has reported 3-4%. It is in the government’s best interest to understate inflation for programs such as Social Security. Inflation and higher interest rates will be the norm no matter what where the government sets the discount rate. The foreigners will not continue to buy us treasuries at the same rate that they have been and cannot buy the ever increasing amounts that the Fed is demanding.

I think gold and other depleted metals are a good inflation hedge since the cost to extract an ever depleted amount from poorer ore with ever increasing fuel costs will drive the prices much higher ‘in the long run’. So it you have a 5 year old, buy him a large silver or palladium bar for $10K and fully fund his college in 15 years. Things are not going to get better.