his latest is that all the us gov spending is being financed not by printing presses but by loans from other governments and individual investors, and that is taking money from the world economy and hence is deflationary/depression that will last 10 years, and therefore gold will crash. --my thinking is that the us gov has to pay that money back at some point, and will have to run the printing presses therefore hyperinflationary. Am I missing something? does he have a valid arguement in short term or long term?
I've been wrong plenty, but I was right on gold. I'm not mad, to the contrary, I'm happy... I sold after I bought near the bottom last fall. I've watched gold go to $1000 3 times over the last 18 months. I sold it when it made it there the second time, now it's back again. If I had held it, I would be where I was months ago... instead I've taken advantage of the overall market. Recently I've gone short the market, admittedly I've been early, but that's my conviction. I'm not short gold, and won't be... my point is time goes by and gold is range bound. I'll buy gold again if it corrects, or if it breaks out on holds above $1033. Gold does not have a history of running off and leaving others behind, you can get in when you want to without being married to the idea. Watch the dollar, another trade that's all one sided. If it corrects, which I think it will, it will take gold and the market down hard. I'll be a buyer of both then, if I'm wrong I miss some of it.
Gold has moved no where in over a year... fact, can't dispute it. Trading back and forth isn't making anyone but traders money... like me. When I stop hearing about gold, seeing gold on commercials 100 times a day, then maybe I'll take a look at it. You own it here, I'll buy when everyone leaves the ship.
What... the bond market has been rallying (interest rates going down), indicating they see no inflation, deflation is a bigger worry. The Fed is doing everything they can to start inflation... one problem, can't have inflation without demand.
the something you could be missing is the fact the US government does not HAVE to pay the money back, but will. We know China doesn't want the dollar to crash, they hold or are owed too many of them for them to really want that. On the other hand China doesn't want to fund us through buying our treasuries anymore either. That leaves the Fed having to orchestrate a controlled equities and commodities crash so money will flow to treasuries so we can fund more of our own debt while we hopefully work our way out of this funk we are in. The government will then try (try) to work down the deficit via recovery and inflation which they will try (try) to keep in check with interest rates increases from the virtually zero starting rate.
Bingo... they have all the juice, debt doesn't worry us because we let other countries float it. What are they going to do outside of starting a war? If that happens problem solved anyway... WWII did wonders to get the world out of depression. As long as the Fed has the money, they pull the strings... this is why gold is less than half of what is was worth in 1980's, that's a fact, but bugs never want to hear that.
No, he is wrong, we face an Inflationary Depression. The seeds for inflation have been sown. Inflation is the increase of the paper money supply. Foreigners hold more USDollars than we hold here in America, unless those dollars come back to us in the form of investments in America, the Dollar is doomed. The process is already underway and the Dollar has lost 14% since March 2009. In my view this should continue until the Dollars ultimately losses another 50-75% of its value over the next couple years, although it could happen at any moment the Chinese Decide!!! Anyway i can go on and on, but you are right, Hyper-Inflation in the double digits will visit us like a storm in the coming months-years. anyone running to the USDollar is running toward the explosion, in my view. Have a nice day.....
>> Foreigners hold more USDollars than we hold here in America, unless those dollars come back to us in the form of investments in America, the Dollar is doomed.
foreigners holding dollars is neither inflationary nor deflationary.
the fact is that deflation is happening before our eyes and the only thing you hear are inflation talking points. nobody seems to understand that prices are coming down, now including food prices (see bloomberg article on kroger earnings) and once that starts it creates further deflationary pressure. there isn't a single THING on earth whose price is going up (http://www.usinflationcalculator.com/inflation/current-inflation-rates/).
it doesn't matter how you define inflation (money supply, etc.)..., if prices don't go up, nobody cares, and prices are not likely to be going up for a long long time given that they are already headed down and it looks like personal incomes are going to go down for the next 5 years or more.
You're assuming that other currencies are any better than ours... if I hear one more person say the "Chinese" will decide I think I'll puke. They won't decide anything, we're the smartest guy's in the room... we made sure that the rest of the world needs us more than we need them. Our worse case scenario is we go back to our old ways of mfg our own shit... we know we can do that. Think China can sustain it's population domestically without selling their crap to us? LOL.
"We're the deciders"... LOL.