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#3716456 - 01/14/10 11:21 AM Re: Gold Price Hits $500/oz. [Re: delekkerste]
kimik Offline
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Registered: 06/11/03
Posts: 14104
Loc: Edmonton, Alberta
 Originally Posted By: delekkerste
 Originally Posted By: ChuckD

Any Comments?



GOLD COULD MORE THAN QUADRUPLE BY 2012
12 January 2010 by TPC



Bring it Dream on!

Fixed that for ya, Ryan. \(thumbs u


lol
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#3718925 - 01/15/10 01:18 PM Re: Gold Price Hits $500/oz. [Re: kimik]
delekkerste Offline

James Bond wears a Rolex...the rest is just product placement.

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Registered: 08/21/02
Posts: 11586
Loc: New York, NY
Richard Russell predicts a deflationary unwind of six decades of inflationary excess

January 14, 2010
-- Section 10. Constitution of the United States: "No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility."

I've been pondering over the following strange situation. The Dow is actually lower today than it was ten years ago. What does this really mean? To me, it means that the market over the last ten years has been discounting "no growth" ahead. When you take an unbiased look at the picture, compared with gold almost everything today is cheaper than it was a few years ago. Since gold is the universal immutable standard around which everything else (including the dollar) fluctuates, this means that the price of literally everything has been going DOWN against the standard which is gold.

This is deflationary. Of course you can say that a loaf of bread costs more now than it did a year ago, and this is inflationary. True, it's inflationary in terms of dollars, but the dollar is lower in terms of gold. So in terms of gold, everything is deflating.

This deflationary trend is continuing, and what's more it's continuing against a veritable ocean of central-bank created currencies. Subscribers know that I believe this bear market will end, as most others have, with stocks selling at extreme great values -- dividends high, price/earnings low. And you ask, "How can this possibly occur?"

This is the question I've asked myself. And the answer I come with is that stocks will be hit by brutal world deflation. That's what the miserable performance of the Dow is telling me. That's what the poor performance of everything else against gold is telling me. I'm not talking about the performance over recent months, but their performance over the years.

Yes, I know that the conventional wisdom is that we're heading for all-out inflation. This forecast is based on the thesis that the only way to handle America's deadly multi-trillion debts is to inflate them out of existence. But suppose the Fed is unable to engineer inflation? Look how hard they've been trying over the last year to restart inflation. And what's happened to housing, the chief object of the Fed's inflation target? Housing prices have gone nowhere, well maybe they're less weak then they were six months ago. But inflation in home prices? It's just not happening.

And now political pressure is on the Fed to cut back on stimulus, money-creation and at the same time raise interest rates. This, if it happens, will definitely be deflationary, and it will hit housing and the economy.

Ever since World War II the Fed has been on the inflation path. Leverage, rising debt, speculation, and higher prices have been the "law" of the land. Now, I believe we have hit the inflection point; we are just entering the huge deflationary spiral that will unwind six decades of leverage and inflation.

In the big picture what I see is that China and Asia will become (they already are) phenomenal producers. The developed nations will not be able to compete with them. The result will be a crushing decline in the price of manufactured goods, which, in turn, will impact on all goods including foodstuffs and services and medical services. In a vain effort to compete with China, India and Asia, currencies will be devalued across the board.

Currencies will sink in the face of competitive devaluations (think Venezuela), and whatever can go bankrupt will go bankrupt. Debt will become a dirty word again, as it was during the 1930s (if you can't pay for it with cash, live without it).

The one item that will withstand this crushing force of deflation will be gold. Whereas most items have been sinking against gold. If the deflation that I foresee arrives, items will be plunging in price against the standard -- gold. This will be the great deflation that nobody foresees and nobody understands and nobody has protected themselves against.

The reason nobody foresees deflation is that for years the world has ignored or failed to understand the real meaning of gold. The world has been thinking in terms of dollars for generations. Let's take an example. You bought a loaf of bread five years ago for a hundredth of an ounce of gold. Today you can buy three loafs of bread for the same hundredth of an ounce of gold. Bread has deflated in terms of gold since now you get far more bread for the very same amount of gold.

When you're willing to agree that gold, not the dollar, is the universal immutable standard, you can see that the forces of deflation are taking over.

For the sake of argument, let's just say that I am correct. Then as the great deflation envelopes the land, all things (merchandise, stocks, currencies) will sink against gold. So gold then becomes the single item that is not declining, because gold is the standard, and the standard can't go down against the standard. In that case, everyone will opt for the safety of gold. Gold will be seen as the final and ultimate protection against deflation.

Question -- Russell, let me play the devil's advocate. Suppose you are dead wrong, and suddenly all the money that the central banks have injected into the system "catches on." Then what?

Answer -- In that case gold surges higher. It goes higher because the amount of fiat currency being produced is far greater than the available amount of gold. The sheer amount of new currencies overwhelms the relatively fixed amount of gold.

Question -- Then, Russell, you're saying that gold is the place to be whether inflation or deflation materializes.

Answer -- Yes, that's the way I see it. Gold will be "the last man standing," as it is now in Venezuela and Zimbabwe.

Question -- Russell, if you are correct about deflation, then why is the Dow now pushing higher?

Answer -- The answer is optimism and super-liquidity. But remember, that's the near-term picture. In the big picture, the Dow is still below where it was ten years ago!

Question -- You have often described the stock market as an evil animal who is trying to frustrate us and separate us from our money. What do you think the stock market is doing now?

Answer -- A decade ago everybody was optimistic, and it was good times ahead as far as the eye could see. What happened was that we were facing a decade where nothing went anywhere, and this includes the economy, the nation and the stock market.

Now I believe everybody is thinking in terms of "a return to normal, a higher stock market and big inflation ahead." But few people are prepared for tough times, a rotten stock market, and deflation ahead. What the public (the crowd) is thinking and what it prepares for doesn't' usually happen. If it did, most Americans would now be in good shape and rich, which is certainly not the case.

Ironically, people are still thinking in terms of the stock market. If you invest at all, you must invest in the "right area" of the stock market. But the key to a successful future may not be in the stock market at all. The real key to a successful future may be in the item that very few Americans own. That item is gold (most Americans have never even seen a gold coin).

Last week I went to a local restaurant, and after a meal I pulled out an American Eagle gold coin. I asked the cashier if I could pay the bill with the coin, which I dropped on the counter with a loud clank. The answer was, "Sorry, sir, we only take cash." I took back the coin and paid with a few Federal Reserve notes.

Coincidentally, USA Today has a major article in today's paper entitled, "How do we dig out from under $12 trillion in debt? Hint, in the past it took some sacrifice." Russell Comment -- And what was the sacrifice? Cutting back on government spending and much higher taxes. In 1944 the top bracket tax was 94%. The "solution" according to the article -- The final option is to grow the economy fast enough -- and grow the debt slowly enough -- that debt becomes a smaller portion of GDP."

Russell Comment -- Great solution, but what are the chances that US growth will accelerate and that US debt will slow down? Russell opinion -- The chances of the above are zero or less. The net result if they even try the above solution; there will be deflation.
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#3719211 - 01/15/10 03:24 PM Re: Gold Price Hits $500/oz. [Re: delekkerste]
kimik Offline
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Registered: 06/11/03
Posts: 14104
Loc: Edmonton, Alberta
So, Gene, does this mean that gold is the only place to be?
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#3720056 - 01/15/10 08:33 PM Re: Gold Price Hits $500/oz. [Re: delekkerste]
thirdgreenham Offline
Eleventy millionth person to declare their first year on the boards as the golden age, and the current era to be worthless.
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Registered: 02/16/06
Posts: 19343
 Originally Posted By: delekkerste


I would highly recommend Harry Dent's just released revised edition of "The Great Depression Ahead: How to Prosper in the Debt Crisis of 2010-2012" (only $10.88 on Amazon). While I don't necessarily agree with his numerical targets (it would be almost inconceivable to see the declines of that magnitude in such a short period of time), I think the analysis is interesting and, by and large, very sound.


I have bought this book on your recommendation and I've only just started it. I'd like to read it fairly quickly in order to try to prepare right away. Question- how fast should I finish this book?
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#3720663 - 01/16/10 01:23 AM Re: Gold Price Hits $500/oz. [Re: thirdgreenham]
kimik Offline
TOTAL NEWBIE


Registered: 06/11/03
Posts: 14104
Loc: Edmonton, Alberta
 Originally Posted By: thirdgreenham
 Originally Posted By: delekkerste


I would highly recommend Harry Dent's just released revised edition of "The Great Depression Ahead: How to Prosper in the Debt Crisis of 2010-2012" (only $10.88 on Amazon). While I don't necessarily agree with his numerical targets (it would be almost inconceivable to see the declines of that magnitude in such a short period of time), I think the analysis is interesting and, by and large, very sound.


I have bought this book on your recommendation and I've only just started it. I'd like to read it fairly quickly in order to try to prepare right away. Question- how fast should I finish this book?


If you have to ask, it is already too late - it is now selling for 10% less than what you paid for it thanks to deflation.


Edited by kimik (01/16/10 01:24 AM)
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#3721081 - 01/16/10 11:35 AM Re: Gold Price Hits $500/oz. [Re: FlyingDonut]
CHABSENTIA Offline
I was posting here when you were in diapers.


Registered: 07/19/07
Posts: 3409
Loc: Florida
This is one date that I could not tell you for sure as I do not have any Credit card debt. I knew that the new laws took effecr in February and for some reason the 10th stuck but I will take your word for the 22nd. I do knw that this Legislation was passed several months ago is not a year. This gave the Banks plenty of time to adjust their rates etc. At least one Bank raised their rates to 29.99 percent on annual interest.

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#3721084 - 01/16/10 11:37 AM Re: Gold Price Hits $500/oz. [Re: CHABSENTIA]
FlyingDonut Offline

I sold the first CGC book ever on eBay and all I got was this stinking title.

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Registered: 08/02/02
Posts: 31923
Loc: Chicagoan Abroad
 Originally Posted By: CHABSENTIA
This is one date that I could not tell you for sure as I do not have any Credit card debt. I knew that the new laws took effecr in February and for some reason the 10th stuck but I will take your word for the 22nd. I do knw that this Legislation was passed several months ago is not a year. This gave the Banks plenty of time to adjust their rates etc. At least one Bank raised their rates to 29.99 percent on annual interest.


It was nine months from the date it was signed. The reason given at the time was to "allow for financial institutions to get their accounts updated", which in reality means screw the consumer.
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#3721091 - 01/16/10 11:40 AM Re: Gold Price Hits $500/oz. [Re: ChuckD]
CHABSENTIA Offline
I was posting here when you were in diapers.


Registered: 07/19/07
Posts: 3409
Loc: Florida
 Originally Posted By: ChuckD

Any Comments?



GOLD COULD MORE THAN QUADRUPLE BY 2012
12 January 2010 by TPC

Robert McEwen, chairman of U.S. Gold Corp. says gold prices will more than quadruple to $5,000 by 2012 (see more here on the potential gold super spike). He says investors will reallocate capital to real money as the dollar loses its viability and money printing causes money to move into gold.

http://pragcap.com/gold-could-more-than-quadruple-by-2012




This has been commented on many times before. We are in a Deflationary economy because of excess capacity, high unemployment , and low demand. Even the most rosiest of economists sees this continuing for at least two more years so how does Gold quadruple in the next two years in a deflationary economy? Not very probable.

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#3721101 - 01/16/10 11:50 AM Re: Gold Price Hits $500/oz. [Re: FlyingDonut]
CHABSENTIA Offline
I was posting here when you were in diapers.


Registered: 07/19/07
Posts: 3409
Loc: Florida
 Originally Posted By: FlyingDonut
 Originally Posted By: CHABSENTIA
This is one date that I could not tell you for sure as I do not have any Credit card debt. I knew that the new laws took effecr in February and for some reason the 10th stuck but I will take your word for the 22nd. I do knw that this Legislation was passed several months ago is not a year. This gave the Banks plenty of time to adjuskeeoingt their rates etc. At least one Bank raised their rates to 29.99 percent on annual interest.


It was nine months from the date it was signed. The reason given at the time was to "allow for financial institutions to get their accounts updated", which in reality means screw the consumer.


Exactly. Screw the consumer. I knew a person who had a small credit card balance and took out one of those zero interest loans that didnt have any interest for a year etc/ He couldnt understand why his balance went down but not as much was applied to it. It turns out that the payments that were made were first applied to reducing the balance on the zero interest loan while not reducing the balance on the higher interest rate loan thereby keeping it artificially higher.


Edited by CHABSENTIA (01/16/10 11:51 AM)

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#3721272 - 01/16/10 01:37 PM Re: Gold Price Hits $500/oz. [Re: kimik]
thirdgreenham Offline
Eleventy millionth person to declare their first year on the boards as the golden age, and the current era to be worthless.
TOTAL NEWBIE


Registered: 02/16/06
Posts: 19343
 Originally Posted By: kimik
 Originally Posted By: thirdgreenham
 Originally Posted By: delekkerste


I would highly recommend Harry Dent's just released revised edition of "The Great Depression Ahead: How to Prosper in the Debt Crisis of 2010-2012" (only $10.88 on Amazon). While I don't necessarily agree with his numerical targets (it would be almost inconceivable to see the declines of that magnitude in such a short period of time), I think the analysis is interesting and, by and large, very sound.


I have bought this book on your recommendation and I've only just started it. I'd like to read it fairly quickly in order to try to prepare right away. Question- how fast should I finish this book?


If you have to ask, it is already too late - it is now selling for 10% less than what you paid for it thanks to deflation.


doh\!
_________________________
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what goes around comes around...oh yeah, and respect your parents

forestcitycoins is my eBay store, click if you like. \(thumbs u




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