I don't know if you are old enough to remember the 70s, but that was actual inflation and it didn't look anything like what we are experiencing today. Interest rates were in the 15% range, the cost of everyday goods was rising steadily, real estate was crazy, people were getting 10% raises twice a year just to stay even with the new college grads. There was enough growth that people/companies were willing to borrow capital at those rates just to get in the game. No-one was interested in commodities because there were too many other places to invest.

What we have today is just the opposite, the only thing moving is commodities and that is due to a combination of speculation and people hiding their money there to get some type of decent return. Actual inflation is something like 1%, but it is difficult to even get that in a safe investment. The folks who are fear mongering about inflation either are trying to sell something (like gold coins) or they have no idea what they are talking about.

It's just a smaller bubble, if you think you can time the market and get out in time you might have a shot. Personally, I'll pass.

Edit: did you notice that the video referred to the price in 1980? That bubble resulted in some criminal prosecutions as I recall. The even showed the graph with the price of silver spiking and then dropping like a rock.

From my reading the price of gold should be dropping since demand is way down and supply is way up. I'll buy when its below $1k an oz.

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Good Book:
http://www.amazon.com/Forgotten-Man-History-Great-Depression/dp/0060936428/ref=sr_1_2?ie=UTF8&qid=1293945155&sr=8-2

Good fun:
http://www.youtube.com/watch?v=pc0mxOXbWIU

The youtube silver clip is an infomercial. I'm old enough
to remember the Hunt bros from the 1980's. makes me a little
skeptical.

The 1st investment everyone should make is $16.5K/year
in their 401K. If you still have some money after that go
ahead, have some fun and buy some stock in a silver mine.

The 70's I remember my parents buying items in bulk, beacuse the prices would rise so quickly. I had a job at $1.50 per hour. (1975) gas was 40¢ a gallon milk was $1.19 a gallon. hershey candy bars a dime.

The inflation has just very recently started. It will take off with a vegence later this year, like it did in the 70's.

The differences
1) Back then the US was a Creditor nation, today USA is a debtor nation.
2) Back then there was alot more above ground silver available then today

there are more dif's but they don't come to mind.

IMHO the reason commodities are taking off is because QE QE lite QEII were poured into the equities because a strong stock market is an indicator of a healthy economy. The Plunge Protection team has been very very busy in 2010. And the market is realizing this. P/E ratios are out of this world. check out http://market-ticker.org/

And China's economy is growing robustly, so they need metals. China has a gazzillion USD's and want to spend them. Like you stated earlier, the USD is heading down, so it would make sense that with alot of dollars in the foreign markets, and commodities in need in China, commodities are going to go through the roof. I can see $6 a lb copper this year, maybe even $10 a lb. if the fit hits the shan. only time will tell.

deflation in housing in the US will continue You cannot buy a house if you are unemployed. And with "real" unemployment at 23% that's alot fo houses people cannot buy.

china needs metal. US doesn't need metal. China need food. china needs Cotton. where do you think China is going to get the raw materials she needs? From the US.

Now here's the most important part. Since inflation - by definition - is an expansion of the money supply. What's going to happen when China repatriots her USD reserves? (translation : China spends her USD buying raw materials from the US i.e. cotton, wheat, corn, silver, gold, copper) Answer: Prices will rise.

I've followed PMs and the dollar and I noticed that the USD would go down, causing the Price Of Gold naturally to go up as it's priced in dollars. Then the dollar would rebound, but the POG would remain steady. rense repeat several times and POG is 1400+ dollar still around 80. Until 12/31/10 that is when the dollar started plunging cause Gold to finish at a daily high, weekly, monthly, yearly and all time high.

Legend has it that the Hunt Brothers wanted to give Texas "Real money" i.e. silver & gold so that Texas could cecede from the union.

when Comex kept increasing margin requirements, they were able to break the Hunt brothers stroghold.

Now more recently, Comex increased margin requirements on silver 3 times within a week (if I remember correctly) and this did nothing to the long term trend.

I'm sorry if this is a little long winded, but there is so much info that in and of itself seems trivial, but put together,,,

If you haven't ever read harveyorgan's blog I would highly recommend starting to read it.

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Here's some youtube video's that I've watched:


Drill your own water well
http://www.youtube.com/watch?v=XGq0ETzZP0E

and now this is funny, and it is a MUST WATCH to understand how you are being controlled everyday
http://www.youtube.com/watch?v=_hGmnKOg9BY

and Max is kinda funny strange at times but econmical forcast genius
http://www.youtube.com/watch?v=k5WcxJXnBG4

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You know, the people you are listening to are really on the fringe, they are either trying to sell something through fear or they are just nut-balls. Legitimate economists do not believe this is a risk. The economy has normal cycles, there is nothing dramatic going on at the moment; just a weak dollar, slow growth, some frustrated investors, fairly large debt, and a giant gold bubble. If you want to spend your time preparing for the end of civilization, have a ball. Personally, I am very comfortable with my currency and my investments.

If inflation does get high the Fed can take steps to
slow inflation, like raising the prime rate. Out of control
inflation is not inevitable.

Most economist say that low 3% inflation is ideal.
It is a popular misconception that any inflation is bad.
Probably because so many of us can remember the 70's
compared to the 30's.

I wish growth would get up to 3%, it's closer to 1% at the moment. This low growth is part of what is driving the commodities market, because cash has no place else to go. The second that the market starts looking healthy, everyone will dump the commodities and get back into the market... bye, bye bubble.

Stable prices (a fed mandate) is zero inflation.

Max Keiser yes on the fringe, but very accurate, predicting Icelands problems 2 years before they occurred. All documented on youtube as far as the date of the video.

Karl Denninger - He is a very down to earth, this is right that is wrong and here's why kinda guy. I respect his opinions immensly. He feels commodities are in a bubble, but he doesn't reveal when the bubble might burst.

Others worth watching are
Peter Schiff
Marc Faber

Here's a video of Max Keiser and Karl Denninger
http://www.youtube.com/watch?v=k5WcxJXnBG4&feature=player_embedded#at=115

If you so chose, please tell me what Karl says that you disagree with.

732002 - The fed only wishes that they could increase interest rates. In this economy they CANNOT increase rates. RE prices are falling and any rate increase will accelerate this fall.

Remember Ben said "I can increase interest rates in 15 minutes" also said "Sub-Prime is contained" and "there is no housing bubble" and "I can print my way out of any depression" (last two quotes may not be accurate)

Also any raise in rates will be catastophic to the US budget defecit. It is so complex that it's a wonder the FRN is still alive. You MUST realize that the FRN is the longest lasting fiat currency in the world to date. When the cards come tumbling down, i.e. China spends her dollars, JPM goes bankrupt from shorting 10 years worth of silver production, oil reaches $150-$200 a barrel 9again)

SIDE NOTE: I am of the opinion that the trigger for the housing bubble was $4.00 a gallon gasoline. The US population was used to paying $20 to fill up their tank went to $50.

when foreclosuregate reaches litigation stages,

for those of you who have heard the term "robosigners" but not know what it means, it is fraud and perjury commited on the courts by the bankster mortgage holder. Read Karl denninger at market-ticker.org for full detail, but the jist of it is bankers went so far as to use a dead and buried (literally several years) notary public's signature for some mortgage documents. AND NO ONE IS IN JAIL.

When inflation hits, in the next few months there will be riots in the streets across the US.

I tell you this so that you can prepare yourself and your family. The Dollar Bubble is about to burst and the US is about to become (actually by definition, already is) a Banana republic.

God knows I hope I'm wrong, but never in the history of mankind has there been such a massive increase in the money supply worldwide. And it's a debt oriented, meaning there is always more money owed to the bankers then there is in circulation, so it can NEVER all be repaid.

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Actual GDP is minus 1% when you take into account inflation.

The market was looking healthy in Decemeber, about a 600 point gain in the last 40 days but the P/E ratios are hysterical because commodity prices are rising. So future profits for companies is dwindling because it's hard to raise prices in such a pitiful economy.

The second the market starts looking healthy, is when silver will start to shine, as it is an industrial metal that is consumed in such minute quantities in your Ipod and your flat screen, but in such enormous quantities (millions of Ipods, flat screens, cell phones etc) is basically cost neutral (2¢ of silver in a $100 item) that "To Da Moon" is not out of the question.

Can you tell I'm a silver bull?

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Sorry, but I'm not buying any of this. It's a combination of fringe economic theory, conspiracy theory, and lots of con artists (gold salesmen) posting nonsense on the internet.

The reality is that growth will slowly get back to normal (about 3%), interest rates will rise accordingly (maybe 5%), the housing market will recover over the next 5 years (once all the foreclosures are cleared out), commercial real estate will take longer to recover, unemployment will eventually find it's way back to normal (about 5%), and the debt will remain too high for longer (maybe 10-15 years, depending on what happens in china). All of this will have very little affect on you or I, unless we happen to be unemployed. By 2020, this little blip will be mostly forgotten. Not very dramatic, but much more credible.

Yep, but the gold and gun salesmen won't get to make money.


They drove firearms into a massive bubble last year which is well popped now causing prices to fall and a bunch of manufactures to go under.

__________________
2006 CL500
1969 280SE
2023 Ram 1500
2026 Genesis GV70
2007 Tiara 3200

Without a massive increase in employment there is no chance of the housing market recovering.

- Peter.

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Formerly...
2000 GMC Sonoma
1981 240D 4spd stick. 347000 miles. Deceased Feb 14 2021
2002 Kia Rio. Worst crap on four wheels
1981 240D 4spd stick. 389000 miles.
1984 123 200
1979 116 280S
1972 Cadillac Sedan DeVille
1971 108 280S

Hattie- has the price of ammo gone down? If so please tell me where you are getting it from as I haven't noticed any drop in price. Which manufacturers have gone under?

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