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 Replies: 26 / Views: 3,631 |
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Valued Member
Canada
442 Posts |
Very well thoughtout post carmykle.
Just to play devil's advocate, what would have to be done in order for PM's to drop in price? like you mentioned, it will definitely be a long time before the debt is going to even decrease, let alone be paid off. Stronger economy?
I must say it is interesting times. I'm north of the USA, and its strange to see our dollar higher above parity to the greenbacks.
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Pillar of the Community
Canada
834 Posts |
Vinnycoin,
I am also north and as weird as it seems to many, it was expected. The Canadian economy is just outperforming. Our banks are a role model to the world, oil sand research is progressing daily, inflation is low and we have the lowest debt out of the G8. I can't complain on paying almost $1.50 lower on silver and $50 on gold. Let's just hope the people of Canada are smart enough to vote in a conservative majority or else I believe the greenback will regain some strength.
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Valued Member
United States
244 Posts |
It's definitely a good time to be Canadian.
What's frustrating isn't so much that we've gotten ourselves into this mess, but that the political leadership in Washington appears to be happy to keep us there. The Dems believe that a government shutdown is good, because most people will blame the Republicans; the Republicans, on the other hand, can't simply do nothing, as the only reason they control even the house is due to the Tea Party, who demands action on spending.
My fear is that the same calculus will exist when it comes to extending the debt ceiling. The Democrats will act to ensure the ceiling does not get raised, so as to blame the Republicans, and the Republicans will not budge on their insistence that any raise is coupled with meaningful, legitimate spending cuts.
Meanwhile, the white house continues to apply political pressure on the Fed to keep printing money, since the only way Obama gets reelected is if the economy strengthens, and it doesn't matter if the economy is living on borrowed time, so long as he continues his grip on power.
Almost 200 years ago, de Tocqueville predicted democracy would be unstable once one group of people realizes they can simply vote themselves the wealth of another group. I can't help but think his ghost is now saying "I told you so".
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Pillar of the Community
United States
642 Posts |
George Washington warned in his farewell address about 'pure' democracy. If I can post links to text later I will.
Also, I'd recommend 'The Creature from Jekyll Island: A second look at the Federal Reserve' Although the author seems a little eccentric, it's very well sourced, and explains well the reasons behind the leaders keeping us in debt.
It explains, the average income of US citizens, if converted to current spot price of an ounce of gold has only risen 1 percent per year since 1920. Which is only attributed to technological increases (cars get you there quicker, planes, computers, etc)
Real value of Gold does not inflate or deflate. At least it hasn't for the last 2000 years
Edited by rjkingston
04/07/2011 1:28 pm
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Valued Member
United States
244 Posts |
But the real value of gold does inflate and deflate. The average income of Americans (however you care to measure it) has barely budged in the last 10 years. But gold has increased by over a factor of 5.
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Pillar of the Community
United States
642 Posts |
Wei Fun: The Dollar value of gold has inflated not the Real value of gold. Primarily because the value of a dollar is going down, not that real gold value going up....
In the short term some prices (food, gasoline, etc) have been padded so you don't see as big of jump now, but it's coming. It's been artificially padded by government subsidies. These prices historically lag behind real value, but only a few years.
Still, the average income of the US is barely 1 percent higher per year since 1920 when measured in ounces of Gold.
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Valued Member
United States
244 Posts |
Except that the value of the dollar hasn't dropped all that much. The value of dollars is fairly well understood, and there are dollar indexes with different weightings to track. GDP is also well understood, and generally measured in Purchasing Power Parity, which factors out currency fluctuations.
The point is, the move in gold over the last 7-8 years can't be explained by moves in the dollar, in GDP, or in personal income.
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Pillar of the Community
United States
642 Posts |
 The last few years are hard to explain for PM. I'd suspect it has something to do with the fastest raise of the debt ceiling over the same time period. A lot of Dollar indexes are measuring against other currencies often suffering just as much as the Dollar, making these indexes appear as though the Dollar is stable. As far as Precious Metals, could also be a victim of speculators? Like Morgans and $48 silver in the 80's? Who knows. I just know if you artificially pump trillions more dollars into the system as has been done recently each dollar is no longer worth as much. If other major index economies artificially pump (pounds, euros, etc) money at about the same rate....we all fall relatively the same and it seems to us we're all doing ok. If we all jump out of the plane together, everything feels fine until we reach the ground. |
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Pillar of the Community
United States
3670 Posts |
On this ceiling thing, I just watched this interview with Trump, and him and the reporter debate back an forth on this so called...."Partial closing of the gov tom" (which would have direct correlation to the ceiling situation in late May, is that a correct assumption?). Could some of you wiser bus minds/economic political minds please explain to my simple brain what that means exactly in lame"man" terms, in ref to what parts of the gov exactly are closing down? http://news.yahoo.com/s/yblog_thecu...irther-issueEdited by Silverhawk74
04/07/2011 3:03 pm
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Valued Member
United States
244 Posts |
@rjkingston I think speculation is a part of it. I think another part is fear - while I'd like to dismiss those who believe our govt is going to collapse as crackpots, sadly, their position is looking more and more defensible. Finally, a part is globalization. Certain former third-world countries have what I'll call for lack of a better term a "jewelry culture" That is, jewelry isn't just for decoration, but how one holds wealth. Now that they are becoming wealthy, they want more gold.
@silverhawk74 no, the debt ceiling and shutdown are two very different things. The debt ceiling has to be raised periodically because our govt can't spend within its means. Failure to do so will prevent the borrowing of additional money beyond the limit. The shutdown is due to the fact that the Democrats were a pack of cowards last year, and never passed a budget. Never even submitted a budget bill for consideration. So our government is running on short term "continuing resolutions" until the next budget year.
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Pillar of the Community
United States
3670 Posts |
Thanks for clearing that up a bit Wei, it is a mess any way you look at it, and it is gonna take some organized smart economic minded people working together to turn it around one would think....
From what I have heard on the radio an read, it looks like much cuts, like military not getting paid, late send outs on tax returns, and many others affected, many of which will never get paid at all....
Your point about the "jewelry culture" makes much sense and is something new to figure into the equation, as I recall some other members talking in a thread about many new middle class forming over the next twenty years, in many different parts seems like....
Edited by Silverhawk74
04/07/2011 5:45 pm
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Replies: 26 / Views: 3,631 |
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Posted 04/06/2011 11:21 am
