Don’t worry, just a little bump - $70 is just around the corner. Short traders just keep making those margin calls, mortgage the house if you have to. Fortunes await you! PO is for pansies and doomers. At $70 short some more ..... it is going back to $22 .... the world is awash with oil ........ reality has nothing to do with it, its all in those charts!!!!!!!!!!
Joined: Sep 14, 2004 Posts: 6090 Location: Rural Virginia
Posted: Tue Apr 22, 2008 7:51 am Post subject: Get Rid of Yer Dollars While Ye Can: Hyperinflation Coming
Howard Ruff is kinda kooky, but the guy he's quoting isn't. (That "Shadow Stats" newsletter looks interesting.)
Hyperinflation created the Nazis and the biggest war the world has ever seen. God knows what it'll do today.
After much hesitation, I am seriously, seriously considering liquidating my 401(k) and converting it to precious metals or land. 10% early withdrawal penalty be damned.
Joined: Oct 15, 2004 Posts: 2081 Location: Arkansas
Posted: Tue Apr 22, 2008 8:15 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
Heineken,
I agree that, over the long term, the massive entitlement and other spending programs the U.S. has effectively box U.S. options. With all the baby boomers now getting on Social Security, Medicare, the prescription drug plan, Medicaid etc., the U.S. will be forced to keep spending on these programs which will destroy or continue to weaken the dollar. I'm thinking three to five years out, and could almost care less about the daily fluctuations in the dollar or gold today. Long term, I don't have a lot of faith in the continued purchasing power of the dollar.
Posted: Tue Apr 22, 2008 8:47 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
As a non-amercian I find it hard to understand the system you guys have over there.
Could someone explain to me how medi-care and other entitlements translate into a 4-trillion per year defict? Is 4 trillion the actual government spending per year or does it represent a calculation of the required investment now to meet future obligations? I find it hard to believe the US is bankrupt because of these entitlements when socialist Europe is not.
In terms of money supply growth, I think we will see a reversal of the recent trend. Banks are going to get very selective about who they lend to and the destruction and writing of debt is going to destroy lots of dollars. This would definately have a deflationary impact.
Interesting times.
Oh and Heineken I would cash your 401k in a heart beat.
Split it between a few things.
Say:
25% arable land
30% precious metal
20% oil options
10% Euro bonds
15% Cash
Joined: Apr 27, 2007 Posts: 4262 Location: The Great Sonoran Desert
Posted: Tue Apr 22, 2008 8:50 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
mkwin wrote:
Interesting times.
Oh and Heineken I would cash your 401k in a heart beat.
Split it between a few things.
Say:
25% arable land
30% precious metal
20% oil options
10% Euro bonds
15% Cash
don't forget to short the wall street pigmen...ETF _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
Posted: Tue Apr 22, 2008 9:03 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
Thanks for the heads up Heineken. Definitely an article worth reading.
Quote:
...You could find yourself unable to buy essential commodities,
when you want them, and gold and silver will be valued, not in the
tens or hundreds of dollars per ounce, but in the thousands!
...“Again, the current circumstance will evolve into a hyperinflationary
depression, then a great depression. Although such is not likely much
before 2010, or after 2018, the financial end game for the current
markets will tend to come sooner rather than later and will break with
surprising speed when it hits.”
Posted: Tue Apr 22, 2008 10:27 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
Anarky,
The U.S. backs the trillions in loans by Freddie, Fannie and FHA. Do you believe the US will default on those obligations or pay up on them?
If the U.S. defaults on them, the dollar crashes, as the U.S. economy crashes and foreigners quit buying bonds which supports the value of the dollar.
If the U.S. pays them, its hyperinflationary.
Same is true of all the entitlement programs like Social Security, the prescription drug plan etc. If the US walks away from them, first, practically, there would be riots. Further, defaulting on these obligations crashes the economic system and the dollar (foreigners quit buying bonds). If the US funds these outrageous obligations, it becomes hyperinflationary.
Posted: Tue Apr 22, 2008 10:30 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
My personal fear is that we'll go into increased sectoral hyperinflation and large-scale deflation. For example, the upper-middle and rich classes clawing over land and commodities while most other people are struggling to buy a loaf of bread. Mega-stagflation.
The wealth won't disappear... it'll just go elsewhere until it has been depleted through environmental degradation or over use. _________________ Dismantle globally, renew locally!
Posted: Tue Apr 22, 2008 10:59 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
seahorse2 wrote:
Anarky,
The U.S. backs the trillions in loans by Freddie, Fannie and FHA. Do you believe the US will default on those obligations or pay up on them?
.
Why would all these trillion default? There have been defaults but these defaults and the fall in house prices is what has driven the $300b loss in the financial system.
I think a deflationary depression is a strong possibility also. The FED can lower the funds rate all it wants bank however, the gatekeepers to credit growth, will not lend and debt is being destroyed pretty rapidly. Before Japan went into its deflationary depression the CPI hit 7%.
Paradoxically, these recent economic problems have strengthened the demand for government bonds as investors want safety. They are now getting a negative real return and there is more demand and certainly no sign of investors both domestic and international dumping them.
Joined: Sep 03, 2007 Posts: 597 Location: Sunny Virginia, USA
Posted: Tue Apr 22, 2008 11:31 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
mkwin wrote:
As a non-amercian I find it hard to understand the system you guys have over there.
Could someone explain to me how medi-care and other entitlements translate into a 4-trillion per year defict? Is 4 trillion the actual government spending per year or does it represent a calculation of the required investment now to meet future obligations? I find it hard to believe the US is bankrupt because of these entitlements when socialist Europe is not.
Great question, but you have some misconceptions. First, it's not a 4 trillion deficit. The deficit, which is how much the US puts on its credit card every year, usually runs several hundred billion a year. The deficit is not caused by just medicare and medicaid but by all government spending. If you blamed ALL social spending on the debt, it would account for about 6 Trillion dollars.
About 2/3 of US government spending is non-discretionary or "must pay" items. In our terms it would be mortgage, credit cards, food, and transportation. For the US gov that is interest on the national debt, Social Security, retirement accounts, etc. These things are considered "locked in" for now (note: I said "for now").
The national debt, which is what the country owes in total, is the real bugger, is closing in on 10 Trillion (that's a T) and climbing rapidly. Interest payments must be approaching 1 Trillion by now (thus the reason the US has an over 3 Trillion for the budget).
Eventually, should this trend continue, the dollar will become worthless, the US economy will crash, the world economy will crash and in general there will be a lot of shouting and pointing of fingers.
The reason the dollar and the US economy will crash is obvious is because nobody can run up a debt beyond their means to pay and not have to face the piper. The reason I say the world economy will crash is because y'all have mortgaged your futures by buying up our soon-to-be worthless securities. You may say, well we will just demand payment in another way and that will save us.
All I have to say is "good luck on that." If it happens (more likely when, but hey, miracles happen), then we're all sunk and this great experiment will probably end for a lot of people.
So how soon? That's the 64,000 Euro question! _________________ When somebody makes a statement you don't understand, don't tell him he's crazy. Ask him what he means. -- Otto Harkaman, Space Viking
Joined: Sep 14, 2004 Posts: 6090 Location: Rural Virginia
Posted: Tue Apr 22, 2008 11:39 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
mkwin wrote:
seahorse2 wrote:
Anarky,
The U.S. backs the trillions in loans by Freddie, Fannie and FHA. Do you believe the US will default on those obligations or pay up on them?
.
Why would all these trillion default? There have been defaults but these defaults and the fall in house prices is what has driven the $300b loss in the financial system.
I think a deflationary depression is a strong possibility also. The FED can lower the funds rate all it wants bank however, the gatekeepers to credit growth, will not lend and debt is being destroyed pretty rapidly. Before Japan went into its deflationary depression the CPI hit 7%.
Paradoxically, these recent economic problems have strengthened the demand for government bonds as investors want safety. They are now getting a negative real return and there is more demand and certainly no sign of investors both domestic and international dumping them.
There will not be deflation because the demand side has exploded exponentially, and much of that demand is inelastic. Also because real wealth, which I view as natural resources (in their more refined state, commodities), is in a state of serious and irreversible erosion.
Sustained demand plus a deteriorating resource base plus ongoing population gains equals inflation. Yes, inflation could be curbed but it will take a world-changing, doomer-style depression to do it.
It is a mistake to view the economy only in classical economic terms, without factoring in environmental deterioration, global warming, resource depletion, etc. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Posted: Tue Apr 22, 2008 11:54 am Post subject: Re: Get Rid of Yer Dollars While Ye Can: Hyperinflation Com
jdumars wrote:
My personal fear is that we'll go into increased sectoral hyperinflation and large-scale deflation. For example, the upper-middle and rich classes clawing over land and commodities while most other people are struggling to buy a loaf of bread. Mega-stagflation.
The wealth won't disappear... it'll just go elsewhere until it has been depleted through environmental degradation or over use.
That's how I see it going if govts don't step in and do something about rampant speculation in the only game left in town.
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