Golden Oxen
Forum Replies Created
-
Posts
-
Phew, Thanks for that theory, have heard it many a time, but didn’t mind hearing it again. The first time I heard it was from a friend of mine who was a student majoring in economics. He was explaining it to me over a 10 cent cup of coffee we were having in a Dunkin Donuts near Harvard Square. Thank God I knew he was a tad touched, nice well intentioned guy, but mad as a hatter
He is currently in that camp of loonies that claim we have had no inflation, because we don’t understand how to adjust things, you know what I mean.That type of meat head that tells you the 24,000 dollar car you are driving that used to be 2100 didn’t go up at all in price , it actually went down because of all the great improvements.
Oh my gosh, I just realized, you are one of those kooks yourself. Sorry, Have a nice day.
Inflation is a monetary event, not an economic event.
Check back and see how the economies of Germany, Argentina, Zimbabwee,
Mexico etc, were performing during their historic inflations.I watch the price of toothpaste and tomatoes, as well as all of life’s necessities, I find they give a more accurate picture of inflation than my pet theories.
You are correct however, the Academics, like yourself. tend to ignore such mundane matters. If your one of the lucky ones that sucks the teats of government for a living, they have no meaning whatsoever.
Quote Ilargi “Too bad we’re too busy counting our pieces of silver and gold.”
Sir, There are the currency vigilantes and the “so called” bond vigilantes. Might I suggest the former are being a bit more Vigilant. Let’s not even mention the stock market vigilantes, that’s a group to be very pissed off at.
@ Ilargi, Sir, I am surprised to see you thought my posting was a question, it was not. You will kindly see that it was just a expanding of the views of Mr Dalio in the article quoted that you omitted.
I certainly have no expectation that you should comment on gold or forecast it’s future price. That is an impossible task for anyone in my view to accomplish correctly.
You do in fact have no problem disparaging gold purchase and caution punishment for those who do so in the short term. What would you call that? My feeling is that clearly it is a forecast of a lower future price. You could quite possibly be correct, but others, including myself, have a different forecast.
I also humbly submit it is one of many helpful tools in getting along to the future.Sir, I would just like to point out that Mr Dalio is strongly recommending the purchase of gold. He claims it is a must to own.
@ Reply Synchro, Sir I believe you are in error about having to move your family
If the world ends in a slow whimper rather than a sudden bang you will not have to go anywhere. However please don’t take my statement to mean you will be able to live off of your 401k, or a stock portfolio my friend.
Riding a bicycle will probably turn out to be the greatest thing for our health, as well as a steady diet of green tea and home grown veggies.
Not what I call heaven either, but it beats hiding out with the polar bears me thinks.
What a great thread this has developed into, lots of good insights.
It would seem that a combination of cash, gold and silver would be the better or safer stash for what lies ahead. Play it safe, diversification has always been the key to wise investing, it will most likely play out as well in a survival stash.
I find Bernanke’s actions depressing, especially after the recent OWS movement. Surely there has to be a better way to try and stimulate the economy and help the hapless souls in misery.
When you ignore your own citizens taking to the streets and protesting, as if they were mere dogs barking, and continue on the same path of padding banksters, you have a real morality as well as financial problem.
I think deflation is what he worries about most. Would I hate to be the person in charge of the economy in a deflationary bust. A sure path to the old Guillotine me thinks.
Why do I sense Lucifer on this thread, spewing out evil, hatred and venom at a wonderful brilliant person that has nothing but good intentions in his heart and mind?
I also get the feeling the Fed is in panic mode.
Something is very rotten in the state of Denmark that we know nothing about.
JP Morgan losses?
Derivative implosion?
Shock at tepid recovery?
Big European Banks under?
Could be anything, but I think I sense fright from the Fed, or maybe desperation is more accurate.
@ Ilargi
Sir, I live in a world where everything is priced in US dollars, not the Euro.
Is that where you deflation argument, or dogmatic view is headed? That you didn’t mean it was to happen in the US?
I have read the articles, they are excellent, well reasoned, and well intentioned. I appreciate your efforts and Stoneleigh’s and wish to take the opportunity to thank both of you.
As many of my comments have made clear I think you were early and underestimated the ability of Central Banks to print; a common error of the deflation camp. Regards, GO@bluebird, Sure that is possible, in my opinion a very bad move on his behalf to instill confidence. Note that was a local run on thrifts not a national run on all bank deposits.
In our most recent crisis of bank distrust the government increased the limit of FDIC insurance from 100 to 250 thousand per account and reassured the public they meant it. It was their response to a national crisis, not local as your example, but in either case there was no consideration of not honoring the deposit insurance.
It is still my opinion the Federal government will print all the funds needed to guarantee the sanctity of the FDIC insurance.
@skipbreakfast, My dear pupil, have you forgetting that bank loans have collateral behind them and that the major component of of a banks reserves are in government bonds which soar in value in deflation and they keep fueling the rally with new purchases from new deposits.
Also keep in mind your wizardry that temporary bank losses are not bank failures nor are they depositors runs on the bank. It is hard to understand these matters when you are trying to figure out which wave we are in with your Captain of the waves and road maps directing you but they do matter my dear Eliot Wave Scholar. I am talking about the fifth of the fifth major wave, but it could be a minor c if it fails in length and time to surpass sub wave b. Hopefully that clears it up for you.Hi Steve, It is a very complex question with many possible outcomes.
My answer as to the deflation scenario you speak of is probably going to startle you, but I have thought about it for quite some time and have to disagree with you
In a deflation, I picture crashing stock markets and corporate bond markets, with everyone selling and placing the proceeds in government bonds and FDIC insured bank deposits for their implicit government guarantee of safety. I realize it is a minority view but it is my opinion nonetheless. Your conclusion of many bank failures in a deflation is in error in my view.
There will of course be many who choose to hold cash, as they will trust no one, but I think they will be a minority, and fear of robbery and such will place a natural limit on hoarding too much cash.
Of course our savings in the US are insured by the FDIC. It would seem the Fed would have to step in and provide funding if the FDIC ran out of funds.
I can think of no greater act to create mayhem, revolution, and total financial chaos than the the US government allowing depositors to go clean in Federally insured saving institutions. They realize this for sure and would print what was needed to pay.
The purchasing power of the paid out money is however, a totally different topic which has to be considered in this topic.
@ skipbreakfast Mail me a check for $495.00, and I will mail you my current insights. You seem to be already familiar with my earlier correct masterworks of market insights. That is a 6 month subscription by the way, not refundable. I will also accept 1 dozen silver eagles as payment which is a discounted price for real money. Disclaimer, Golden Oxen’s past insights while totally correct are no guarantee that they will be so in the future. Past performance is no guarantee of future performance and a genius such as GO has been known to be decades Too Early in his usually correct forecasts.
Speak for yourself skip, more insights than you have for sure, but not me. Should find yourself a hero that it isn’t a double talking con artist that points at road maps for idiots he calls waves. It would also be preferable that he had more than one correct call about market direction in thirty years. Especially where it can only move two ways. Try Jim Grant, Jim Sinclair, Richard Russell, James Turk, Alan Newman, to name just a few.
They admit mistakes and move ahead.Reply@ skipbreakfast, I know, he is just thirty years too early. It is the line they all use rather than admit they were conned. You are correct about one thing however; he will be right some day.
Robert Prechter, You must be joking skipbreakfast. Gold was supposed to be under 200 now, according to that mystic, and we entered a deflationary bust about 1980 according to him and his silly waves. Please come up with someone that has given the correct time of day sometime in the last few decades. Thanks
@ pipefit A good strong bout of hyperinflation would probably end the entire fairy tale rather quickly. Just one of many possibilities; that peaceful loving Middle East area comes to mind quickly, as well as the financial horror that Japan has become. It is a long list of possibles, very long.
Any plan that purports to keep Greece, Portugal and Spain in the Euro is sheer lunacy. We are going from the idiotic idea of the Euro in the first place into the realm of stark raving madness.
Yes, Europe sure could use a real statesman, in the absence of such a savior; someone arising that is at least sane would be most welcome.
Quote Ilargi “I see people saying three months; don’t they always? It’s usually measured in days, this one might be a bit bigger, but the question remains the same: what happened to the debt? Well, nothing happened to it, it’s still there, and they’re adding more.”
Sir, A catch 22 for sure, add more debt, to pay off older debt, in a system burdened and ruined by debt.
Is there not however a lessening in the Real value of the older debt by the inflationary impact of creating the new to purchase the old?
It may not boost any economies, but they sure are creating a torrent of something, debt, currencies, digital money, whatever type of fiat we wish to call it.
We all know what happens in the long run, but they have kept the ship from sinking in the short run, and it is most difficult to pin point it’s ending. My feeling is we need a US or German bond collapse, or a very powerful outbreak of inflation to stop it.Reality isn’t allowed anymore. It is not politically correct. We must protect “The Children” from it the little dears.
Pictures of 9/11 are in bad taste. Scary for the kids
No pictures of soldiers coming home in caskets allowed. Bad for the children.
No more grades in school, hurts the c and d kids feelings.
We are all the same. People are all good. The government will protect us from all harm. One big happy Sesame Street forever.
I certainly am. Are you leaving out food and oil in your calculations like the government ? Please do not forget to figure in the shrinking of all contents in packages by anywhere from 30% to 50%. 5oz Tuna can instead of nine and the new 11.5 oz pound of coffee. John Williams at Shadow Stats is an expert in these matters and his inflation figure is nearer to 10%. Whatever the government figures are absurd and believed by only the simple.
I like the reference to Noah. He never questioned God and was guided by his faith. When ridiculed by onlookers and derided as a fool he did only one thing. He thanked God for giving him more time to prepare for the disaster.
Rather than complain that the financial world did not collapse yesterday or today, we should thank God for giving us more time to prepare.
Reply@ Professorlocknload, Enjoyed your posting immensely Prof, amazing how you have to be an old timer to understand inflation properly.
Agree also that deflation is not an option, it will have to happen sooner or later as TAE correctly points out, but you can count on TPTB to do everything imaginable to prevent it.
Regards GO“What Happened to the Debt”?
It is being inflated away, it most always has been historically.
Will it work?
What would you say if I told you I used to pay a nickel for a good cup of coffee in a doughnut shop and my first brand new Dodge car cost 2,000 dollars.
No, I am not 100 years old, talking about 50 years ago.
Gasoline was around two bits a gallon, yes, 25 cents 5 gallons for a buck in periodic price wars. Somehow I think that is why it isn’t going to work this time, but I am hardly sure of that. I just cannot imagine a functioning world with 30 dollar gas and 300 dollar a barrel oil, but I would have considered the situation that exists today impossible twenty years also, let alone fifty.
Hi Ashvin, If China does truly implode it would no doubt cause a total and horrific collapse in all commodity prices, including oil.
At first blush that would appear to be extremely negative for world wide economies and stock markets. Having second thoughts about that however as I ponder what a sharp drop in oil prices as well as the other commodities and it’s resultant deflationary impact would have on the Western economies. Could it possibly be construed as bullish for them as it takes the strain off the western consumer and simultaneously allows the Fed and ECB to crank up the stimulus much more than is now possible? I realize it would seem an unlikely outcome, but the US stock market, manipulation by the Fed and all that, has been acting very well, remarkably so, when one considers the background music such as China and the European mess.
Your informative and superbly written comments are missed by many of us at the Diner, and we hope to hear from you again soon. Regards, GO
What an informative article, it was quite an education for me.
I have totally forgotten all the Wall Street hype about the great India growth story. This article has put that pipe dream to rest factually and most convincingly!
It has become impossible to hide in the financial system of today without cash only.
That creates the problem of being caught with it and having to explain to the authorities why you have it, and that you are not a drug dealer or terrorist. You will be reported to the authorities by law if you try to get more than five thousand in cash, so that is not an option for people with substantial assets. You also have the inflation problem with hoarding cash to deal with. Gold and silver solve that problem but leave you open to the same intrusion of your rights and liberty as the hoarding of cash.We are screwed, most of it was our own doing by letting the corruption get out of hand,as well as the power of the Government. Accept it, There is No Place to Hide, we reap what we sow.
The gold bugs warned you and you laughed and still do.
stoneleigh post=4567 wrote: Golden Oxen,
Yes, look to interest rates for a clear picture of where the fear is and where the fear is not.
Capital Flight, Capital Controls, Capital Fear (https://theautomaticearth.com/Finance/capital-flight-capital-controls-capital-panic.html)
Stoneleigh, Have you forgotten about The Man Behind the Curtain, named Helicopter Ben, that buys his own debt when not enough buyers show at his auctions? He pledges to keep rates this long until about 2015 latest I heard. You wish me to use that rate as an indicator of market forces? Did you not hear of his latest dance “The Twist”? Good luck with that number.
stoneleigh post=4560 wrote: G-minor,
I disagree with most of that article. The US dollar is in no danger. It bottomed more than a year ago and has quite a way to go still to the upside. The flight to safety is quite real. Under deflationary conditions, the real rate of interest is always higher than the nominal rate. Those low nominal rates exist because no one is asking for a higher risk premium. Investors are prioritizing capital preservation.
With all due respect may I voice my objection to both your erroneous assumptions?
The dollar bottomed against what the Euro? Is that really a bottom signaling deflation and a rise in purchasing power for the dollar? Absolutely not!
As to looking for guidance from interest rates, the most manipulated and artificial rate that exists, that would be just plain foolish.
william post=4537 wrote: I started to see the debt light about 5 years ago. Once assets around the world are connecting to debt and there are no assets not connected to debt you run into a repayment problem. It becomes physically impossible to repay the interest on the debt without the use of fraud. We have surpassed the worlds assets in debt and now live in a Ponzi scheme to pay it back. We have no choice but to obtain new debt, lie about making returns, and use the new debt to pay out returns to old debtors.
The truth is that capitalism has run its course and is unrepairable and needs to not be returned to. When there is ultimately a severe shortage of resources society needs better planning. Unfortunately this will hamper our freedoms but not choosing will set into play martial law and dictatorship.
This is what gold is all about. It is honest debt free money. Until we go back to it and tell the banksters we are done with their corrupt dishonest fiat we will suffer the consequences.
The amount seems rather large to me, but who knows, it could be more I suppose. Whatever the case exaggerated figure or not the deflation argument has just gotten a lot weaker in my view.
This rant brought to mind the famous book and made into movie “In Cold Blood”, written by Truman Capote.
I had the good fortune to listen to an interview with Capote in which he described his years of study of the famous Starkweather murders and the two perpetrators of the heinous crime.
Mr Capote spent endless amounts of time and energy interviewing the two murderers and become convinced of the innocence of one of them and tried desperately to save his life. Of the barbaric one he felt was guilty and led the other into the crime he had the following to say. I cannot quote it but it was to the effect he was convinced there was something missing in his head. He said people like that had something cut from their brain like it was a sponge. They had no pity, feelings , remorse, conscience, moral compass, nothing. He said they had a big void or hole in their head and that any redemption for them or understanding for them was impossible.
His solution for that type was one I remembered vividly. He thought as soon as it became apparent a person was one of them they should be placed in a large barb wired guarded city with others of the same affliction where they could perform their maniacal vicious deeds on one another without harm to the general population.
It is a most interesting book and movie for anyone desiring an in depth view of the senseless, mindless, depraved killer type.My interpretation of Bernanke’s remarks is to take him at his word. He stands ready to act if needed. It will be needed, or we are clueless as to the economy and it’s current and future state.
Feel quite sure it will be called by a new name however, QE3 has become a most boring dull tag for what will be needed.
What difference does the timing of his move make unless you are a stock market or commodity speculator?
Another poignant reminder that austerity and deflation are not an option for our problems, not in this day and age.
Give me inflation over this for sure, but please, not a hyperinflation. Perhaps it will not work, but it is worth a try. Anarchy, murder, and mayhem aren’t going to solve anything.
Nothing worse than a guru that is not humbled by forecasts made that are just plain wrong.
The MSM as usual is a major contributor to this ridiculous guru problem. Someone makes a correct call on something, they fawn over him and build him up on a pulpit of wisdom and infinite knowledge, and it continues for decades. Quotes of every utterance become blaring headlines trumpeted everywhere!Soros Says!
Buffett Says!
Roubini Says!
Abby Cohen Says!
The fact that their last ten or twenty forecasts could have been totally wrong and missed the mark considerably means nothing to their worshipers, and the madness can go on for decades once they have been canonized GURU by the MSM.
