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Is Qe3 Really Qefizzle?

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Pillar of the Community

United States
1590 Posts
 Posted 10/24/2012  8:28 pm Show Profile   Bookmark this topic Add jmkendall to your friends list Get a Link to this Message Number of Subscribers
When we had expectations of QE3 we saw PM prices soar like homesick Angles. Then when QEinfinity was announced the prices went up....and bounced off the $1800 limit, hard.

Now the FOMC says they will keep on printing money and the market is saying..."huh? oh, you, yeah, thats nice...." and prices went up, by a few pennies and dollars.

So my question is, do you think that QE is now part of the background noise? Nothing special. Just something that the Fed is doing that has no real impact on the day to day of the average investor. Considering it part of the day to day?
Bedrock of the Community
IndianGoldEagle's Avatar
United States
36832 Posts
 Posted 10/24/2012  9:03 pm  Show Profile   Bookmark this reply Add IndianGoldEagle to your friends list Get a Link to this Reply
QE3 is open ended, they can just keep printing with nothing to back it. This is going to be like a ship hitting the rocks sooner than we believe. Inflation is already here but under reported. The Fed thinks they can control inflation but will find out they can't. If you think the price of things are high today, wait until next year at this time.

The metals markets are heavily manipulated by bankers using naked shorts to keep them artificially low. There will soon be a squeeze in the physical metals markets. Paper contracts are estimated to be about 100 times the amount of actual metals available to back them. Hold your physical bullion and be patient, higher prices in the future are guaranteed.
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hockingzig's Avatar
United States
1450 Posts
 Posted 10/24/2012  9:26 pm  Show Profile   Bookmark this reply Add hockingzig to your friends list Get a Link to this Reply
The next few months will test PM owners wills. Those that are looking for quick profit from metals will sell as we see deflation kick in. Only those that really understand that metals are a store of wealth to get us through the rough spots and out the other side will hold on to physical metals with both hands(and probably buy when the panic selling starts). Many on this forum will lose heart and sell as prices drop but if we hold on we will be rewarded as inflation takes over and drives all prices higher. I think deflation is coming,at least for a short period. It may be induced to free up more metal for the big boys,I don't know for sure but I feel it coming on and chaos will ensue. Take heart,and be courageous,metals will be the way to go.
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silvercoinrn's Avatar
United States
863 Posts
 Posted 10/24/2012  9:34 pm  Show Profile   Bookmark this reply Add silvercoinrn to your friends list Get a Link to this Reply
This whole economy is masked. How is it possible to even function when the whole world is in debt.
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hockingzig's Avatar
United States
1450 Posts
 Posted 10/24/2012  9:59 pm  Show Profile   Bookmark this reply Add hockingzig to your friends list Get a Link to this Reply
I think that deleveraging at ALL levels will be the deflationary catalyst. Austerity programs around the globe,corporations sitting on piles of cash and buying back stocks,individuals paying off debt,and on and on. Nobody is spending significantly and with jobs reductions tied to austerity,spending will come to a screeching halt. Prices will drop in spite of the money being added to the system and there will be bargains to be had if you have stockpiled cash. Commodities will be cheap for a while but as more money is poured into the system buying will start with a vengance because prices will take off and interest rates will have to rise rapidly and who knows what happens after that. I fear it will get ugly quickly but we will come out of it with less debt for everyone who wisely pays off debt instead of consuming. Be prepared and take care of those you love because nobody else will.
Pillar of the Community
Fat Freddy's Avatar
United States
1200 Posts
 Posted 10/24/2012  10:19 pm  Show Profile   Bookmark this reply Add Fat Freddy to your friends list Get a Link to this Reply
The fed can't keep printing unlimited amounts of unbacked paper money forever. They're trying to drown us with flood tides of increasingly devalued paper money, and the final outcome of that effort will be the total devaluation and final collapse of the American dollar. The inevitable ultimate consequences of the ineptitude, incompetence and mismanagement that have characterized Washington (Republicans and Democrats - liberals and conservatives - ALL of them) for many years now horrify me. I'm afraid the America my grandchildren and great-grandchildren will grow up in will be a nightmare when compared to our world today. It could well get that way a whole lot sooner than that, too.

One of these years the Au, Ag, Pt & Pd stacks that all us stacking maniacs are piling up these days are going to be worth universes more than the chump change values they command today. That time may get here a whole lot sooner than any of us presently think, too. I intend to keep on stacking until I can't afford to put another penny into it without giving up buying food.

Like the old song goes.... "Enjoy yourself - it's later than you think!"
Bedrock of the Community
basebal21's Avatar
13014 Posts
 Posted 10/24/2012  10:36 pm  Show Profile   Bookmark this reply Add basebal21 to your friends list Get a Link to this Reply
Jm you hit it right on the head. As far as the average investor is concerned the initial reaction to QE has come and gone. People react when they hear it then see the world didnt end and stop caring. Weve done QE before, its not the greatest idea but you can do it a few times and not sink the ship. Theres always some kind of oh no this is it moment that can drive investments and usually you see very little long term effects from it. Like I mentioned in another thread, you can only cry wolf so many times before people just get sick of hearing it
Pillar of the Community
Ed_B's Avatar
United States
4008 Posts
 Posted 10/25/2012  12:53 pm  Show Profile   Bookmark this reply Add Ed_B to your friends list Get a Link to this Reply

Quote:
So my question is, do you think that QE is now part of the background noise?

It seems that way at times. So much of the pricing in the market today has to do with expectations of a complex and ever-changing future, rather than more conventional things like fundamentals. Eventually, though, fundamentals matter and will exert their influence over price. This is probably being delayed now by a number of things, including investor exhaustion. Many investors feel as if they have been hit on the head from so many different directions that they are just physically and mentally numb... and indifferent to further hits. That said, PM prices likely will rise and overcome this at some point, just not so far.

I think that the thing that bothers me most about QE-whatever is that it is as if the Fed is saying that the economy cannot function without their meddling in it. In fact, both the Fed and the gov are distorting the market with policies that seem marginally effective at best. This leads to a crisis of confidence in investors who do not understand these complex policies. Does anyone? Apparently not the US Congress because they seem to pass bills without reading them, "so they can find out what's in them". Did that seem to anyone else like writing a check but keeping the amount blank so someone else could fill it in later? We WILL find out the amount, just not right now... so sign here.

I read an article on the net last night wherein it was stated that rising gold prices with increasing money supply was a myth and that there was "no evidence to support this"? Huh? Somehow, the author seemed not fully conversant with economic history or the root cause of inflation.
Valued Member
United States
117 Posts
 Posted 10/25/2012  2:00 pm  Show Profile   Bookmark this reply Add Eupion to your friends list Get a Link to this Reply
At this point, everything is weird to me. Economy is dying, yet with the holidays coming, so it's suppose to improve it. Housing is improving, yet people are still losing homes. The housing market is recovering, yet the only people buying them are foreigners. Unemployment is improving, says the government, yet I see more people losing their jobs. Ford and Dow Chemicals are firing thousands, and magicly, unemployment gets better when the government introduces a few hundred jobs.

I really don't understand how things are suppose to go. I don't know who to believe. Scarey times, if you believe everything you hear. :P
Bedrock of the Community
basebal21's Avatar
13014 Posts
 Posted 10/25/2012  3:23 pm  Show Profile   Bookmark this reply Add basebal21 to your friends list Get a Link to this Reply

Quote:
Unemployment is improving, says the government, yet I see more people losing their jobs.


Thats the biggest scam of them all. Its not improving theyve just stopped counting a significant amount of people because they maxed out the 99 weeks.

We wont see a real improvement until something gives people faith or a new begging so to speak. To many people are down on the economy and housing ect and until something gets those attitudes to change itll be more of the same
Valued Member
GRR's Avatar
United States
310 Posts
 Posted 10/25/2012  9:17 pm  Show Profile   Bookmark this reply Add GRR to your friends list Get a Link to this Reply
The problem with QE is , YES, it's doing what we all know, but until the rest of the world's governments call us on it, we can continue to print till our heart is content. China holds a lot of our debt true...That debt is payable in US dollars so they have some interest in NOT calling us on it. They don't want to devalue what they are owed. Pretty much the same boat with other countries that own our debt. They could care less how much we print as long as the value stays relativly the same.
Valued Member
everything's Avatar
United States
493 Posts
 Posted 10/26/2012  8:41 pm  Show Profile   Bookmark this reply Add everything to your friends list Get a Link to this Reply
Unless expert.. Here are two good sites to keep up on, collapse, deflation, or inflation.
http://theautomaticearth.com/
http://dollarcollapse.com/

As far as 40B MBS a month, to me it appears the fed is backstopping the housing market instead of bailing banks direct, but still investors would use that money for speculation in buying RE for rentals, or building rentals, or building more houses. I feel government investment should only be for owner occupied, or the government should just start fixing the houses up themselves, like habitat for humanity, stop trying to make a profit out of it, all they are doing is feeding the banks, via force feeding the consumer the bankers poison, to me, it's an endless loop of stupidity.
Edited by everything
10/26/2012 9:26 pm
Pillar of the Community
Ed_B's Avatar
United States
4008 Posts
 Posted 11/02/2012  3:28 pm  Show Profile   Bookmark this reply Add Ed_B to your friends list Get a Link to this Reply

Quote:
The Fed thinks they can control inflation but will find out they can't.

Actually, the Fed CAN control inflation but they have to be willing to use Draconian methods to do it. Paul Volcker broke the back of inflation back in the mid-1980s but he had to use a 21% US prime interest rate to do it. That caused a brief but deep recession. It was nasty tasting medicine but it was also the only thing that would work to control runaway inflation.

The part that gets me is that they had LESS inflation back then than we have now, yet reacted quickly and powerfully to end it. There has been nothing done to curb US inflation in at least the past several years.

As was stated, inflation is under-reported now and by a considerable amount; by a factor of about 3-4 to 1. John Williams at Shadow Government Statistics is showing inflation at about 10.5%. He is using the old way of calculating this that the US gov itself used prior to about 1994. The gov and the Fed are clearly cooking the books on both inflation and unemployment just to make them and their failing policies look better. Apparently, looking better and being better is the same to them.
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