lol at this thread: http://www.thewolfweb.com/message_topic.aspx?topic=579908

Glad I got into the PM game when I did.

2/24/2011 6:24:50 PM

http://www.google.com//finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1298591487735&chddm=130594&chls=IntervalBasedLine&cmpto=INDEXDJX:.DJI&cmptdms=0&q=NYSE:GDX&ntsp=0

note the starting day is when you started the thread

2/24/2011 6:54:28 PM

Miners? Yeah, right. That's like the riskiest kind of PM stock you can get. I'm talking about straight bullion, son. Silver is still cheap, better pick some up while you can.

2/24/2011 6:57:29 PM

They are tied together. As of late, gold has been anything but stable, and compared to indexes, really not that profitable, given risk.

[Edited on February 24, 2011 at 7:05 PM. Reason : ]

2/24/2011 7:05:39 PM

http://www.stansberryresearch.com/pro/1011PSISBBVD/PPSIM278/PR

here is a video that will explain what is happening.

no one can argue that this is truth.

2/24/2011 7:14:47 PM

Nor can anyone prey on idiots and sell them newsletters with scare tactics.

GG.

2/24/2011 7:32:43 PM

I didn't say buy the newsletter I said watch the video so you'll understand what's going on

2/24/2011 8:13:47 PM

Watch the video selling the newsletter, you mean.

2/24/2011 11:15:28 PM

Apparently that guy got sued by the SEC for fraud.

2/24/2011 11:16:19 PM

Christ, there is nothing worse than 5 minutes of self aggrandizing to start an informative video.

[Edited on February 25, 2011 at 6:26 AM. Reason : fucking hell dude...make that 10 minutes? Did you really post this shit?]

Once our creditors figure out whats happening? You don't think they already know? Who the shit is this guy?

[Edited on February 25, 2011 at 6:32 AM. Reason : .]

2/25/2011 6:23:37 AM

Civil revolt is currently spreading across the Arab world. What began in Tunisia has now metastasized into Bahrain, Egypt and Libya. Though two dictators have been ousted, the chances that these regimes will fundamentally transform from autocracy to a system of free markets and property rights are also up in the air. An important question is whether or not Saudi Arabia will eventually get into the mix; and, if so, whether the current struggle in Libya would morph into a proxy war between Saudi Arabia (Sunni Muslims) and Iran (Shiite Muslims). It remains to be seen whether the new regime in Egypt—whatever form it ends up taking – will allow Iran to use the Suez Canal to parade warships across the Mediterranean Sea and into Syria. If so, what would Israel’s reaction to such a perceived provocation be?

There are many unknowns, but what is known is that the turmoil has had an immediate and significant impact on the price of oil. WTI is now trading just below $100 a barrel and Brent Crude is already well above the century mark. If the unrest does indeed spread to Saudi Arabia – which produces 12 million barrels of oil per day and is the second largest producer in the world – mainstream analysts have made some wild predictions about how high the oil price could reach. Rising energy prices will further cripple the third world, which has already been placed under extreme pressure from skyrocketing food costs.

The United Nations announced in early February that global food prices were at an all-time high. The USDA indicated this week that 2011 corn inventories will be the lowest since 1974. Despite the fact that farmers have boosted the output of wheat, rice, and feed grain by 16% since 2000, demand has outstripped supply by 4 percentage points. Corn is up 95% and wheat has increased 70% since their year-ago levels. Overall, global food costs have jumped by 25% YoY since January 2009.

It is evident that global consumers continue to get pummeled by rising food and energy prices. Meanwhile, in addition to coping with rising inflation rates, the US consumer is also being hurt by the continued contraction in the price of houses – which are typically their primary assets. S&P/Case-Shiller indicated on Tuesday that their National Index dropped 4.1% from Q4 2009 thru Q4 2010. Home values have now dropped for 6 consecutive quarters and clearly indicate the real estate sector is suffering a double dip. The ramifications of all the above data are foreboding for US GDP growth. Most importantly, anemic economic growth will worsen our debt-to-GDP ratio and thereby place further pressure on our already damaged balance sheet.

The Fed’s reaction will be as predictable as ever.

We already know that Chairman Bernanke exculpates the Fed for any blame in creating inflation either domestically or abroad. In fact, he refuses to even consider rising food and energy prices in his definition of inflation. Americans could be paying $50/pound for ground beef, but as long as their houses are still losing value, Bernanke doesn't see an inflation problem. Meanwhile, they're eating squirrel for protein while making payments on a mortgage twice as expensive as the house.

The truth is that Bernanke doesn’t know what causes inflation, so he can’t be expected to spot it, much less do something about it. Using the Fed’s own history as a guide, Bernanke will view rising commodity prices as a threat to GDP growth and a sign of pending deflation. That’s because the Fed is caught up in a 'Phillips curve' philosophy that only equates economic growth and prosperity with inflation. In short, Bernanke believes that slow growth and rising unemployment rates equate to deflation, despite plentiful contrary examples in history.

Since he believes rising commodity prices are deflationary and have nothing to do with his own loose monetary policy, the Fed is likely to expand its balance sheet to a greater degree. The fact that the Fed’s massive money printing effort is the progenitor of global food riots completely escapes him. As more damage is done, the Fed will use the resulting contraction in GDP to justify a third round of quantitative easing – further harming the GDP.

Unfortunately, the vicious cycle of stagflation will grow more acute with each iteration of the Fed’s love affair with counterfeiting. Countries that make the mistake of continuing to peg their currencies to the US dollar will suffer more inflation and more destabilization. Since it will be hardest for the US to ditch the dollar, our hopes are dimmer.


--------------------------------------------------------------------------------
-Michael Pento


Also this is a terrific article complete with charts
http://www.europac.net/commentaries/cause_and_evidence_inflation

[Edited on February 26, 2011 at 1:55 AM. Reason : addd]

2/26/2011 1:53:20 AM

so you've picked an even less educated snake oil salesman to parrot now?

2/26/2011 2:44:40 AM

This article is easy enough for even you to understand Kris

http://www.financialsense.com/contributors/d-sherman-okst/part-2-economy-flight-666-our-one-way-ticket-to-zimbabwe

2/26/2011 2:47:23 AM

Do you bother to seek out other sources that would question this oncoming hyperinflationary storm? Or do you just seek the ones that confirm the view you already have?

2/26/2011 9:30:16 AM

What other view is there that is grounded in reality? The momentum for inflation is too strong.

People like to think of economics as this great unknowable land but in reality it's very easy to understand long term structural imbalances.

Financial markets on the other hand are much more difficult because they involve timing which means you have to predict when the catalysts will occur. But long term economic forecasting is actually quite easy pertaining to bubbles whether it be south sea, tulips, housing, or debt.


And yes 90% of the articles I read are pure drivel and say things like "Bernanke can stop QE anytime he wants" or "We have to spend exorbitant amounts of money we dont have or our economy will suffer" or "It cant happen to us because we can just print more money" or "if we grow the economy the budget will balance itself".

I just don't bother to post those. I block out the noise and immerse myself in truth so that I can be prepared for our currency crisis.

[Edited on February 26, 2011 at 11:12 AM. Reason : a]

2/26/2011 11:08:12 AM

so here's a bit of truth you might be interested in

as inflation rises, debt shrinks

2/26/2011 11:18:39 AM

Not necessarily true. As inflation rises, so does the interest on the debt.

2/26/2011 12:24:26 PM

actually that is always true, as inflation increases, the debt decreases

[Edited on February 26, 2011 at 12:53 PM. Reason : ]

2/26/2011 12:52:06 PM

^ How many times do I have to explain this?

If we had long term debt then yes inflation would be a way to solve it.

But our debt is predominantly short term debt that must be perpetually rolled over.

If you have inflation then rates rise which makes it MORE expensive to roll the debt.

Higher rates make us a larger credit risk which makes rates even higher which makes us an even larger credit risk which will make rates even higher.

It's a viscious cycle.

It's over.

2/27/2011 3:50:42 PM

Rates only rise if you still borrow. What keeps many entities from over leveraging is that as their credit goes down, their cost of borrowing increases discouraging them from borrowing.

2/27/2011 4:43:53 PM

I'm not even sure what you are implying now.... are you saying they'll just default on the debt instead?

2/27/2011 8:43:05 PM

I should have expected you to have trouble with it as it requires a certain level of grounding and rational thought. Imagine the United States as a completely rational market player (I know you disagree with that assumption, but stay with me). He has been getting very cheap loans, despite your opinion, he has quite godly credit. Now suppose that his credit begins to get worse as he begins to over-leverage himself, his loans will become more expensive. Assuming his demand for loans is normal, as the price increases, his demand will decrease. I'm sure you disagree with several parts of that, I'm also sure I already know your problems with it, but this is the point I wished to convey with my earlier statement.

2/27/2011 10:20:33 PM

Quote :

"Rates only rise if you still borrow."

Not true. Rolling over the debt requires borrowing.

2/27/2011 10:37:02 PM

I knew you meant that I just wanted you to write it all down so you could see how dumb it sounds.

A lot of terrible assumptions went into crafting that post.


Do you think our elected politicians cater their spending to interest rates?

This is not an individual looking to purchase a car or home. This is an out of control spending problem using other people's money.

Beyond that almost none of the spending is discretionary.

You are implying that 70 year olds will agree to cut medicare because interest rates are rising.

Be serious man.

[Edited on February 27, 2011 at 10:40 PM. Reason : a]

2/27/2011 10:39:34 PM

Quote :

"Not true. Rolling over the debt requires borrowing."

The debt could be reduced to level interest rates

Quote :

"You are implying that 70 year olds will agree to cut medicare because interest rates are rising."

It's happened in Europe, people get upset about it, but life does go on.

2/27/2011 11:02:14 PM

Look. The rest of the world's appetite for treasuries has been quenched.

We are already having trouble financing the debt now hence the need for QE 2.

Ben is buying treasuries to keep the music playing and rates are still rising anyway. Can you imagine what would happen if he said he wasn't going to do QE 3...?

2/27/2011 11:36:36 PM

A great assessment.

Quote :

"The Federal Reserve’s balance sheet has expanded almost $225bn over the past 16 weeks. International (global central bank) “reserve assets” have jumped $1.5 TN in 12 months. In just two years, “reserve assets” have ballooned an incredible $2.6 TN, or about 40%, to $9.3 TN (reserves were about $3.0 TN to begin 2004). There’s been nothing comparable to this in the history of central banking – in the history of “money.” The resulting liquidity onslaught has inflated global securities and commodity prices, distorted market perceptions of risk and liquidity, depressed global yields and fomented speculative excess in any market that trades. I have referred to this backdrop as one of “Monetary Disorder.” Monetary Disorder can certainly fester for some time under the façade of a seemingly healthy environment. As we have witnessed, global equities prices have been a prime beneficiary of global reflationary dynamics. And there is nothing like the tonic of inflating stock prices to bolster confidence and embolden the risk-takers. Ebullient markets, then, lead economic expansion and provide seeming confirmation of the bullish point of view. Yet there is no escaping the instability lurking just beneath the fragile surface. It is said that hedge fund assets (and leverage!) have returned to pre-crisis levels. Surely, global sovereign wealth funds have grown only more gigantic. And it is worth noting that China’s “reserve assets” have jumped 46% in only two years to an incredible $2.847 TN. The world is awash in liquidity/”purchasing power” like never before. This is all worth keeping in mind as we contemplate the likelihood of ongoing unrest in the Middle East and potential supply and price shocks. The Goldman Sachs Commodities Index ended the day at the highest level since August 2008. The global liquidity and speculation backdrop ensures that any important commodity facing potential supply constraint enjoys a propensity for spectacular price inflation – a dynamic now appreciated by companies, speculators and policymakers alike. This inflationary manifestation was really taking hold back in 2008 before the onset of the global Credit crisis. Of late, it has returned with a vengeance throughout the agriculture commodities and food complex. Yet, with stock markets booming and confidence running high, most have been content to disregard this troubling inflation dynamic. The markets this week abruptly turned somewhat less complacent (at least for a few sessions). The Middle East crisis took a decided turn for the worst this week with the eruption of violence and chaos throughout Libya. The markets now confront great uncertainty as to how developments will unfold throughout the region. Recent events certainly increase the probability for potentially problematic energy supply disruptions and resulting price shocks. A fragile global recovery and inflated markets create a susceptible backdrop, especially with optimism and speculative zeal having become so prominent throughout global markets. With crude (West Texas Intermediate) surpassing $100 this week – and with prospects high that Middle East instability won’t be dissipating anytime soon – analysts are scurrying to fashion views as to the impact surging energy prices will have on corporate profits, consumer spending, inflation and global growth. To say that unfolding circumstances create extreme uncertainty is no overstatement."

[Edited on February 28, 2011 at 1:40 AM. Reason : a]

2/28/2011 1:40:22 AM

Quote :

"Can you imagine what would happen if he said he wasn't going to do QE 3...?"

We'll likely find out March 15th at the next FOMC and I'm going to wager he doesn't. And it will likely cause a mini crash in the market as risk players expecting the Fed to print into infinity stampede for the door when they announce that they aren't. We'll get a similar pull back as last April. Deflation will be the new hip thing again. Rates will go back down, sentiment will reset, and provide for a the next spring board higher in the markets. The Fed and treasury takes advantage of the reduced short term interest rate to roll some of the debt.

The game that has been going on for decades will continue to be played for longer than you think.

2/28/2011 6:04:55 AM

This is a Fed president? Holy fuck...Rally is right, we are screwed

http://classic.cnbc.com/id/15840232?video=1822195718&play=1

World rates are low...so the returns are low (except if you're a bank)

Fuck these assholes.

If this shit doesn't piss you off, you're probably a communist or a Keynesian clown

[Edited on February 28, 2011 at 6:14 PM. Reason : .]

2/28/2011 6:11:18 PM

I think you missed the point he was trying to make. He's saying that they chose to make an investment knowing the rates, but it wasn't as if US rates were drastically lower than anywhere else in the world. Also kudos on again writing off anyone who disagrees with you as a "Keynesian clown", but a communist? A bit cliché, don't you think?

2/28/2011 7:27:59 PM

The rates are being held artificially low. And the minute rates began to rise they did QE to try to maintain the rates. And the minute rates began to rise again they did QE2 to try to keep rates low.

That being said many of these people have been way too conservative with their capital. There are many out there who were 100% cash or damn near close to it... there were plenty of stable dividend companies, utilities, etc where they could have received a higher dividend payout and enjoyed significant capital gains.

The problem is the Fed is destroying savings. That is their entire mission right now. And most people aren't smart enough to see that. They think they are "protecting their principal" but in reality they are putting their principal in the most dangerous place of all cash and treasuries.

I've said this since late 2008-early 2009. Cash is just fucking dangerous. I have $16k in cash right now and honestly I have trouble sleeping at night because of it. Everyday I watch the fucking ticker like a hawk thinking someone is going to steal my money.

I don't say this to brag about a measly $16k, I say it because thats legitimately about 6 months living expenses for me(typically the recommended amount by financial advisors to keep in cash)... I NEVER keep more than 1-2 months living expenses in cash just so I can sleep soundly at night.

[Edited on February 28, 2011 at 9:48 PM. Reason : a]

2/28/2011 9:47:15 PM

^^ I didn't miss his point at all.

On a related note, China is dumping securities yoy

http://finance.yahoo.com/news/Chinas-holdings-of-US-debt-apf-3118302220.html?x=0

and by dumping, I mean accumulating

3/1/2011 6:36:50 AM

Yes china has become a net seller of treasuries but don't let that worry you because kris says they still want our debt.


Also heard an interesting point last night that china has been the great deflator by producing cheap goods the last 20 years.

Now with the input costs going up so rapidly they are exporting inflation to us. What a dramatic tectonic shift that will be

3/1/2011 8:48:39 AM

^^^ while I agree with and understand the general sentiment of your post, I think you are causing yourself way too much stress if you can't sleep at night over keeping 6 months worth of living expenses in cash.

3/1/2011 10:20:02 AM

Quote :

"That being said many of these people have been way too conservative with their capital. There are many out there who were 100% cash or damn near close to it... there were plenty of stable dividend companies, utilities, etc where they could have received a higher dividend payout and enjoyed significant capital gains."

It wasn't just people, it was companies too. That's what a recession is.

Quote :

"The problem is the Fed is destroying savings. That is their entire mission right now. And most people aren't smart enough to see that. They think they are "protecting their principal" but in reality they are putting their principal in the most dangerous place of all cash and treasuries."

Didn't you just explain why we should be encouraging people not to hold cash and short term reserves? Aren't they doing what they're supposed to in order to encourage them to put their money in such holdings?

Quote :

"because kris says they still want our debt"

I didn't say that. They could begin to put their money elsewhere at any time, they would likely do so in a fairly orderly manner in order to maintain the value of the debt they already own.

3/1/2011 11:36:35 AM

No the fed should not be telling or forcing people into any asset class. That is how you blow bubbles, create capital misallocation, and distort the economy even further.

And your entire argument against the currency collapse is that people want our debt

I think you're coming around but don't want to admit it yet

3/1/2011 1:38:35 PM

I wonder how long the dow will stay above 12k, 11k, 10k when these ever increasing gas prices makes everyone's disposable income evaporate away.

3/1/2011 1:50:20 PM

Quote :

"No the fed should not be telling or forcing people into any asset class."

The fed is not telling or forcing you to do anything directly, they are merely selling their debt at a rate and managing the supply of the money they make. How people respond to that is up to them.

Quote :

"And your entire argument against the currency collapse is that people want our debt"

The time frame you stated may not have translated with the quote. I never said that people will still want to buy it, at least at the level they do now, they may want more, they may want less, I don't know. But it is undeniable that people want our debt right now, that is why it is still being bought.

Quote :

"when these ever increasing gas prices makes everyone's disposable income evaporate away"

Luckily disposable income is rising as well.

3/1/2011 2:24:01 PM

Yours maybe.

3/1/2011 7:44:54 PM

are you nuts?

Disposable income is rising?

Incomes have barely budged the last couple of years and rising food/fuel costs have completely wiped out income growth (im not making this up i saw the chart yesterday for gods sake).


Secondly, the savings rate is up fairly dramatically (though its still well under what it needs to be) so any income gain is more than erased by savings gains.


Discretionary income is certainly not up. You realize the unemployed population has been rising steadily for ~4 years now right?

Quote :

"The fed is not telling or forcing you to do anything directly, they are merely selling their debt at a rate and managing the supply of the money they make. How people respond to that is up to them."

This just proves you know very little.

A) The fed is selling "their" debt? When has the fed ever sold debt? Perhaps you are confusing the "Fed" a private group of bankers with the "United States Government"

B) "managing the supply of money"? The supply of money has exploded at unprecedented levels in the past 3 years. That's not managing, that's printing.

C) How they respond is up to them? They can either take it up the ass or get into risk assets, period. That's easy for me to do at age 28 because I don't need income. 80 year olds do. Forgive them for not being able to comprehend the assault the Fed is putting on their life savings. They aren't good with techonology and don't understand the current dynamic. They've never lived through a dollar crisis like this and they may have dementia or alzheimers.

They did their fucking part they saved. Why are they being punished by baby boomers who stole their money via wall-street shennanigans, mortgage fraud, etc?

Why aren't they being paid on their savings? They are giving you money so you can finance your lifestyle. Why are they the ones going broke?

Clown.

3/1/2011 8:02:44 PM

Quote :

"Disposable income is rising?"

Yes, it is.

http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

Quote :

"The supply of money has exploded at unprecedented levels in the past 3 years."

Seems that would be a normal response an economic downturn.

Quote :

"hey can either take it up the ass or get into risk assets, period."

Ok, then put it into risk assets like we said. It is not the US government's job to supply you with somewhere to invest your money, you can put it into the private sector, or you can take what the government offers.

3/1/2011 8:36:11 PM

Quote :

"It is not the US government's job to supply you with somewhere to invest your money"

Weird, so you're for communism, but only when it benefits the rich?

3/1/2011 9:29:52 PM

I am for communism in a way that you won't bother to read should I explain it, so what's the point?

[Edited on March 1, 2011 at 9:32 PM. Reason : ]

3/1/2011 9:32:24 PM

Look, in one thread you argue that we should give more stimulus type money to the middle class because of MPC and then in this thread you're basically saying "sorry middle class that you have to play stock market casino".

I'm guessing somewhere in your explanation of this you're going to work around to the idea that the ever prescient government, always improving and learning from its past mistakes, somehow has the right path planned out that will eventually let these people earn a reasonable return on their savings without having to play Wall Street lotto.

And you're something right. I simply don't care to have a discussion with a guy who is a bonafide troll.

3/1/2011 9:54:53 PM

Quote :

"Look, in one thread you argue that we should give more stimulus type money to the middle class because of MPC and then in this thread you're basically saying "sorry middle class that you have to play stock market casino"."

It doesn't get around economics. As the demand for risk averse investments goes up, their yield decreases, the US government can't help that, either live with the low yield or rethink your investment strategy and move to something that provides a better yield.

Quote :

"a guy who is a bonafide troll"

Oh this again, yeah, I've been posting here for almost ten years all to provide the ruse to troll you.

3/1/2011 10:09:33 PM

I'm pretty sure that is exactly what you do. The fact you've been doing it for 10 years is what makes it even sadder.


Edit...

Case in point, I'm going to point this out

Quote :

"As the demand for risk averse investments goes up, their yield decreases, the US government can't help that"

and say that the Fed sets the funds rate which is why savers have steadily been getting boned more and more for 3 decades and rather than just admit you are dead fucking wrong, you'll find some dumb gay angle to either argue your point in a different way or have some stupid semantics debate. Anything to avoid admitting you lost an internet argument.

If you aren't purposefully trolling, then you're just a lame ass faggot. And I mean that in the nicest way possible.

[Edited on March 1, 2011 at 10:14 PM. Reason : .]

3/1/2011 10:11:18 PM

So you're suggesting that I've done great deal of research into a political stance that I am insincere of all in order to keep up a ruse for almost 10 years in order to trick gullible people into arguing with me? When would that get to be funny? When would I win? That's ridiculous.

Quote :

"If you aren't purposefully trolling, then you're just a lame ass faggot. And I mean that in the nicest way possible."

There's the classic Chance butthurt you love to do!

[Edited on March 1, 2011 at 10:16 PM. Reason : ]

3/1/2011 10:15:48 PM

Quote :

"I am insincere of all in order to keep up a ruse for almost 10 years in order to trick gullible people into arguing with me? When would that get to be funny? When would I win?"

Well, you keep the rest of us laughing every day at your antics.

3/2/2011 2:06:01 AM

^^ I'm not at all surprised you had nothing to say about the Fed funds rate. And yes, you do seem like the type of guy that would take an interest in something that has failed over and over again in history and study it intently for the express purpose of trolling message boards. It would be like me going to the UNC boards and telling their fans that despite our shitty record and their great record, we are in fact the better team.

3/2/2011 6:16:18 AM

the fact that you said disposable income is rising and then maintained your position after i told you it was incorrect is certainly trollesque don't you think?

3/2/2011 7:47:50 AM