Wag
04-22-2011, 10:50 AM
What the hell. I'm cross posting. Don't shoot me! LOL Original post is in 73. Go over there if you want to flame me REAL bad. :flipoff
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A taste of what I read every morning. I linked to a handful of articles below, a few that I culled out of the nearly fifty that I actually read every day. Yes, this is what I like to do, actually! Boring, I know, but what the hell? :dunno :lmao
I was going to post this in the Money section but there are some political reference here which I thought made it a better post for this section. Maybe I'll cross post it over there anyway. :)
Even if you don't understand everything here (hell, I sure don't!), it should give some good insight to the market right now. Of major import: I'm NOT saying it's time to invest a crapload of money in Gold or Silver at this point. There's no telling how high everything is going to go yet or when it's going to decline again. It bears watching, though.
Inflation hasn't hit us very hard yet but I think it's getting closer to fucking us all in the ass. For several months (two years, I think!), I've been wondering what is taking it so long but the answer is pretty clear, actually: even though the Fed has printed a ton of money, it hasn't made it into circulation yet. Why? Banks are not lending it out. It sits in their vaults and doesn't make it out into the wilds of our economy. For the moment, that helps our grocery bill but hurts our economy. What's going to happen, however, is that the economy WILL start to heat up eventually, the banks will start lending, the dollars they have will hit the streets, inflation will rise (more) and the Fed will start to increase interest rates.
That will make the prices of Silver and Gold, et al, rise even further than they already have. Not to mention, the prices of our milk and cookies.
The bond market will crash. Most likely, oil will continue to rise but there are so many variable in the price of THAT commodity that it's always tricky to say with any certainty what it will actually do. Note, however, that generally speaking, when the value of the dollar declines, the price of oil goes up.
Another element, which is much less predictable, are the large corporations. Many of them are sitting on huge stockpiles of cash and if THEY suddenly get the idea that it's time to put money out there into the economy, it will push inflation even higher. It's only a possibility and as I say, much less predictable than what the government will do. However, if they decide that the value of their capital investments will pay off in significant returns, they could easily jump into the economy with both feet.
Getting into debt right now is actually an attractive proposition, if you have the cash to back it up. Think about it. You get into debt now which does two things: locks in an interest rate at the currently low levels and locks in the value of the dollars you spend buying that car or house or stereo. Inflation hits and the new dollars which are very much cheaper, go much farther to paying off that debt you incurred with the high value dollars. It's like paying $0.50 for $1.00 of cash. Of course there is always the risk that your income will not appreciate enough to get that debt paid off and you are still paying interest, no matter what. Still, it's a thought worth considering. If you have the cash to back up your new debts, you can keep that money circulating into higher-earning investments and bail yourself out if you have a problem going forward. Something to think about if you're smart and do it right. Bear in mind, this thought assumes that inflation will hit us hard AND that it's going to happen very soon.
Some links.
Silver and Gold vs the value of the dollar. The comments about lumber (yes, LUMBER) are somewhat intriguing. Also, note the complicity of a major investment institution (J.P. Morgan) having ripped off local governments across the nation.
http://seekingalpha.com/article/264975-investors-pile-into-precious-metals-price-of-lumber-plummets?source=marketwatch
The reduction in the credit rating of the United States and its effect on lots of stuff.
http://wallstcheatsheet.com/stocks/heres-what-the-sp-downgrade-of-us-credit-really-means.html
Interesting info on rising inflation, which drives the price of the dollar down and the price of Gold and Silver up.
http://seekingalpha.com/article/264904-3-etfs-to-dodge-damage-from-the-coming-bond-market-collapse?source=marketwatch
A little article on the differences between today's silver rally and the Hunt brothers' market manipulation in the 80's. The two are not remotely similar. Well, sorta. Um, no, not really. :D
http://seekingalpha.com/article/264802-the-price-of-silver-is-rising-and-this-time-there-are-no-scapegoats?source=marketwatch
Interesting article but nothing really new. Note that the gold/silver ratio chart at the bottom shows a downward trend which in this case, is a good thing, more or less, depending on the motion of the price of gold.
http://seekingalpha.com/article/264860-the-truly-remarkable-run-of-silver?source=marketwatch
Lots of info there and somewhat overwhelming. If you don't care to read it all, don't overburden yourself but I found it somewhat insightful.
As always, take everything in the articles and all of mine and others' comments with a grain of salt. It isn't possible to understand every minute detail and variable which has an influence on our economy and you can't always predict what will happen, especially long term. Indeed, with all of the writers out there, you find that some are preaching one gospel and some are preaching the opposite. (The middle-of-the-road preachers won't take a stand and can be ignored.) One side of the fence is going to be right but it won't be solely because they are necessarily brilliant, it will be largely because they happened to catch the details that mattered most and focused on those items.
Regardless of who is right or wrong, cautious optimism can only be attained by study and preparation.
If you do buy gold or silver (or anything else), use an ETF so you can use stop losses to save yourself from disaster. The investors of the Hunt era didn't have that luxury and I bet they are STILL sitting on silver bullion in their home safes!
--Wag--
----------------------
A taste of what I read every morning. I linked to a handful of articles below, a few that I culled out of the nearly fifty that I actually read every day. Yes, this is what I like to do, actually! Boring, I know, but what the hell? :dunno :lmao
I was going to post this in the Money section but there are some political reference here which I thought made it a better post for this section. Maybe I'll cross post it over there anyway. :)
Even if you don't understand everything here (hell, I sure don't!), it should give some good insight to the market right now. Of major import: I'm NOT saying it's time to invest a crapload of money in Gold or Silver at this point. There's no telling how high everything is going to go yet or when it's going to decline again. It bears watching, though.
Inflation hasn't hit us very hard yet but I think it's getting closer to fucking us all in the ass. For several months (two years, I think!), I've been wondering what is taking it so long but the answer is pretty clear, actually: even though the Fed has printed a ton of money, it hasn't made it into circulation yet. Why? Banks are not lending it out. It sits in their vaults and doesn't make it out into the wilds of our economy. For the moment, that helps our grocery bill but hurts our economy. What's going to happen, however, is that the economy WILL start to heat up eventually, the banks will start lending, the dollars they have will hit the streets, inflation will rise (more) and the Fed will start to increase interest rates.
That will make the prices of Silver and Gold, et al, rise even further than they already have. Not to mention, the prices of our milk and cookies.
The bond market will crash. Most likely, oil will continue to rise but there are so many variable in the price of THAT commodity that it's always tricky to say with any certainty what it will actually do. Note, however, that generally speaking, when the value of the dollar declines, the price of oil goes up.
Another element, which is much less predictable, are the large corporations. Many of them are sitting on huge stockpiles of cash and if THEY suddenly get the idea that it's time to put money out there into the economy, it will push inflation even higher. It's only a possibility and as I say, much less predictable than what the government will do. However, if they decide that the value of their capital investments will pay off in significant returns, they could easily jump into the economy with both feet.
Getting into debt right now is actually an attractive proposition, if you have the cash to back it up. Think about it. You get into debt now which does two things: locks in an interest rate at the currently low levels and locks in the value of the dollars you spend buying that car or house or stereo. Inflation hits and the new dollars which are very much cheaper, go much farther to paying off that debt you incurred with the high value dollars. It's like paying $0.50 for $1.00 of cash. Of course there is always the risk that your income will not appreciate enough to get that debt paid off and you are still paying interest, no matter what. Still, it's a thought worth considering. If you have the cash to back up your new debts, you can keep that money circulating into higher-earning investments and bail yourself out if you have a problem going forward. Something to think about if you're smart and do it right. Bear in mind, this thought assumes that inflation will hit us hard AND that it's going to happen very soon.
Some links.
Silver and Gold vs the value of the dollar. The comments about lumber (yes, LUMBER) are somewhat intriguing. Also, note the complicity of a major investment institution (J.P. Morgan) having ripped off local governments across the nation.
http://seekingalpha.com/article/264975-investors-pile-into-precious-metals-price-of-lumber-plummets?source=marketwatch
The reduction in the credit rating of the United States and its effect on lots of stuff.
http://wallstcheatsheet.com/stocks/heres-what-the-sp-downgrade-of-us-credit-really-means.html
Interesting info on rising inflation, which drives the price of the dollar down and the price of Gold and Silver up.
http://seekingalpha.com/article/264904-3-etfs-to-dodge-damage-from-the-coming-bond-market-collapse?source=marketwatch
A little article on the differences between today's silver rally and the Hunt brothers' market manipulation in the 80's. The two are not remotely similar. Well, sorta. Um, no, not really. :D
http://seekingalpha.com/article/264802-the-price-of-silver-is-rising-and-this-time-there-are-no-scapegoats?source=marketwatch
Interesting article but nothing really new. Note that the gold/silver ratio chart at the bottom shows a downward trend which in this case, is a good thing, more or less, depending on the motion of the price of gold.
http://seekingalpha.com/article/264860-the-truly-remarkable-run-of-silver?source=marketwatch
Lots of info there and somewhat overwhelming. If you don't care to read it all, don't overburden yourself but I found it somewhat insightful.
As always, take everything in the articles and all of mine and others' comments with a grain of salt. It isn't possible to understand every minute detail and variable which has an influence on our economy and you can't always predict what will happen, especially long term. Indeed, with all of the writers out there, you find that some are preaching one gospel and some are preaching the opposite. (The middle-of-the-road preachers won't take a stand and can be ignored.) One side of the fence is going to be right but it won't be solely because they are necessarily brilliant, it will be largely because they happened to catch the details that mattered most and focused on those items.
Regardless of who is right or wrong, cautious optimism can only be attained by study and preparation.
If you do buy gold or silver (or anything else), use an ETF so you can use stop losses to save yourself from disaster. The investors of the Hunt era didn't have that luxury and I bet they are STILL sitting on silver bullion in their home safes!
--Wag--