Time for Deflation to Return

[HitRed]

Interestingly with the economy (USA) growing at 4% (ROCK'EN) and the Unemployment Rate at 4% (Amazing) silver is falling. Down to $15 per ounce. Deflation calling?

[armati]

Ya ever listen to John Williams "shadowstats"?
www.shadowstats.com/

Ive listened to some economists that think deflation is coming, Dent for example thinks gold could go to $700, others figure were in for a reversal with gold somewhere between now and about $1150.

I think the argument for deflation is a good one, I just cant see how with the trillions of dollars printed and being printed, eventually those dollars are bound to be worthless.

Others point out we have already had a 98% decline in the U.S. dollar.

All unbacked paper currency, fiat or not, eventually goes to its intrinsic value, which we have seen recntly with the bolivar and looks like we are seeing with the lira. (i use fiats original meaning, government decree.)

People are moving to dollars as they see it as some kind of safety, so it continues upwards compared to other currencies.

Check the PM prices in other than american dollars, PMs have done exactly as they historically have done.

I just bought another condo, prices are down a bit (a little deflation?) Im buying all new furniture for it, prices are up.

I wish I knew the answer, but I own PMS, no way am I selling.

https://www.youtube.com/watch?v=jzk-AAFG-Oo

That link is Jim Rogers, one of the most successful investors of all time.
He is not selling either.
and says if it comes down a bit he'll buy more. Me too.

[patches70]

Hey guys! Back in 2008 we got smashed, economically speaking, and deflation was rampant. Don't you remember? Your 401K's got cut in half, the value of your homes tanked leaving 10's of thousands of people underwater in their mortgages. Those poor bastards couldn't even sell their houses to get financially sound because their mortgages were all of a sudden greater than the value of their house! Stocks nose dived, sales sank, and we were falling head long into a deflationary spiral because of credit contraction.

Now I know it was a long, long time ago, so I can accept ya'll might not remember. But what's more important is what the Fed did to stop the deflationary spiral. They printed money! A whole shitload of it. To the tune of $80 billion a month pumped directly into the stock market. This went on for years and years to stop the deflation.

But the OP isn't talking about this, is he? His question is about a specific commodity, Silver. Oh this isn't deflation, my friend, it's something else all together. And it'll make ya mad! But here goes, one of the biggest hold of physical silver is JP Morgan. I put these fuckers in the same class as Goldman Sachs, and ya'll know how I feel about Goldman Sachs, those no account dirty dog fucktards..... opps, I digress.

Anyway, JP Morgan holds about 675 million ounces of Silver in one of their warehouses. That's a hell of a lot of physical silver. They've been buying the stuff up since April 2011, so they've been at it for a while now. Being the shitbags that JP Morgan is, you can bet they have a plan. You see, JP Morgan sells a boat tun of futures contracts, I mean massive quantities of them, which causes Commex to lower the price of silver obviously. These Silver futures, which are leveraged more than 100to1, act just like physical silver in the market, even though they are just paper contracts. What happens when you dump a massive supply of something on the market all at once? Why that something drops in price of course. JP Morgan then goes around and buys up as much physical silver as they can at a cheaper price (because they depressed the price) They then rinse, repeat and dump more contracts, gather up more Silver. They've been doing this for eight years.

Now, no one, and I mean no one knows why JP Morgan is doing this. They've got six times more physical silver than Warren Buffet and Hunt brothers for Christ's sake and no one knows why JP is doing this. The only thing that is for certain is that no one buys commodities because they think or want the price to stay depressed. We know JP is doing this, they can't hide it, though they did try for a bit. Now, you remember that first paragraph I wrote there up above? About the Fed printing money like crazy (quantitative easing for your pedantic fucks), it stopped the deflationary spiral from the crash. It also raised stock prices, home prices (which went right back into a bubble which is destined to pop one day just like it did in 2008, but that's another story) and commodity prices. Virtually every commodity except Silver. Silver was left behind, which was the strangest thing. That silver getting left behind is what finally got JP Morgan caught at their price fixing, not that anyone could do anything about it though I'm pretty sure JP did have to pay some fines.

So there you have it, OP, the Silver depressed prices are not a sign of coming deflation, it's just market manipulation by a bad actor. JP Morgan has also been shorting Silver along this time, while they are depressing the price! It's basically fraud, but there is one last thing I forgot to mention.

You might ask "How the hell do they get away with this fuckery!???" The answer is simple, they made a deal with the US government. So the story goes. JP Morgan got a 10 year deal where they'd get immunity against regulatory oversight in the Silver and Gold markets. Guess what suckers? That 10 years is almost up! Let's see, JP Morgan acquire Bear Sterns in March of 2008. Before Bear Sterns went defunct they were the biggest short seller of Silver, hence the reason they got defunct. Since JP took over, JP Morgan has had that distinction for the last ten years. So at some point after March, 2008, to maybe the middle of 2009, JP made this deal with the CFTC.

So the story goes, but that's all back room no one knows the details about it. However, if such a deal is in place, then we can logically understand exactly what is going to happen when the ten year period is over, can't we? I'll leave that for some of you to step in and enlighten everyone else what happens at that point.

Anyway, one can just google "JP Morgan silver manipulation" and go deep down the rabbit hole.

[armati]

"If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content." Lyndon B. Johnson

380 - Remarks at the Signing of the Coinage Act
July 23, 1965

http://www.presidency.ucsb.edu/ws/?pid=27108

I agree JP Morgan,the fed and the rest of the banks are scum bags(but thats capitalism), in any case the manipulation of silver is legal and has been legal since 1965 (i believe)

Guess ya could say at least he was honust about screwing the people.
Most times the government keeps it a secret.

[HitRed]

Silver dropped 60 cents today. That's a lot. Now $14.40

[armati]

I noticed.

I have lots more than I can even carry, Im not selling an once. I could be wrong.

I kinda wonder when the dealers will stop selling, First Majestic is now taking losses mining silver, eventually prices will drop low enough to put mines on care and maintenance.

No supply and the price should increase, except that the copper price is moving up and a big byproduct of copper mines is silver.

They dont care how low the price goes. hmmm

[HitRed]

I'm likely out of my league when it comes to investing in currencies. Yesterday I watched a posted video where the Billionaire thought Indian currency would be a good bet. He also said might have said the USA didn't have an agreement with India. So Russian could invest but Americans couldn't. All counties need these agreements? Is that true?

[mookiemcgee]

Just curious... some of you say you hedge with gold (or silver). This seems predicated on the idea that not only will the US economy/markets crash, but rather the USD will become 'worthless'. Personally i just don't see this happening, but I do see another market crash on the horizon in the next two years. I cam across an ETF that wouldn't do much if the USD suddenly became worthless but might be an absolute gold mine(pardon the pun) of a hedge if a crash come. It's one of the craziest charts I've ever come across and if nothing else it's just kinda fun to take a look at:

ProShares UltraShort Financials (ETF)

[armati]

no idea, I dont invest in currencies, far too dangerous for me.

Only currencies I like are gold/silver. And I keep them balanced to my portfolio.
Im probobly overweight silver tho.

Silver is supposedly the most undervalued asset there is right now.

[armati]

mookiemcgee

Im not actually "hedging" anything.
I own gold for its purposes.
It has no counter party risk etc

Silver because it is undervalued.

There is a short s&p pro shares too.

[HitRed]

I have silver bars, junk 90% silver USA coins, silver Canadian coins and gold (coins and jewelry). All of these have no neusmatic value. It's a store of wealth play and maybe monetary collapse play.

Investments

I'm investing BIG in the Browning of America. Super heavy in silver Mexican coins. This is a silver AND neusmatic play. The coin shows in Mexico (young population) are packed. Americans are noticing they can make $$$. Mexicans in the USA are going to college and have extra income to spend. They want some history. The I'm right on this one.

HitRed

[armati]

For me its preservation of purchasing power.

Silver could really move up I guess, Im not sure as Ive been reading the reasons for years and it still hasnt happened.
As far back as the Hunts the thinking has been the same, heck, in 64 they said they stopped making silver coins as they needed the silver.

It has retained its purchasing power tho, gas in 64 was...? 30 cents,
a quarter bought just about a gallon, today that quarter is..? 2.50?
a california gallon is $3 I hear, other states less, so, its about the same purchasing power.

I find it funny people cant figure that out.
paper devalues at 50% every 35 years.

I have more than any other kid on my block now so I figure I have loads.

I think the way to go is with bullion over coins (junk) if the world actually got to a shtf scenario, silvers not gonna do much for ya.
Clean the water I guess.

canadian pre 1920 is .925 american is .900

[HitRed]

Rounds, bars and junk silver coins can only go up if silver goes up. That's it. If you can find a silver play with collector interest BOOM. My 1 peso beautiful coin worth 90 cents in silver sells from $9 to $15. I paid $1.10 for it.
Even after shipping and any fees that's like $5.75 to $11.39 in pure profit! And still a silver play if needed for backup. This week I made $8.80 profit and got back my investment of $1.10 I paid for the coin. 800% return. Try that on a 1 oz. bar.

When I got into silver the rule was NO ROUNDS. It has to have a date, be from a government mint and be silver. Great looking silver coins near melt value is what I wanted. So Canadian and Mexican.

The math on a 1 oz. bar (or round) doesn't work out to good. Silver is $14.40 an ounce but the store wants a $2 profit so $16.40. When you sell it back to the store they want $2 less so they can make a profit again. So for you to make $2 yourself the price has to go up to $20.40. An increase of 41.6% would be an earthquake. $20.40 / $14.40

Now I believe the Mexican market is still under developed. What if in a few years my peso was worth $18.50? Wow, $14.00 in profit after shipping and fees.

I only sell a few coins a month so it isn't overnight. Any you CAN NOT over pay. That is critical.

[mookiemcgee]

For me its preservation of purchasing power.

Silver could really move up I guess, Im not sure as Ive been reading the reasons for years and it still hasnt happened.
As far back as the Hunts the thinking has been the same, heck, in 64 they said they stopped making silver coins as they needed the silver.

It has retained its purchasing power tho, gas in 64 was...? 30 cents,
a quarter bought just about a gallon, today that quarter is..? 2.50?
a california gallon is $3 I hear, other states less, so, its about the same purchasing power.

I find it funny people cant figure that out.
paper devalues at 50% every 35 years.

I have more than any other kid on my block now so I figure I have loads.

I think the way to go is with bullion over coins (junk) if the world actually got to a shtf scenario, silvers not gonna do much for ya.
Clean the water I guess.

canadian pre 1920 is .925 american is .900

I dunno man, in theoretical terms I understand the store of value argument... I just don't think if your doomsday predictions come true that holding hard gold is gonna do much for you. In a doomsday scenari, for a joe blow gold ain't gonna help you protect your home from looting. It ain't gonna protect your kids from being kidnapped and raped by militia gangs. And if there are no stores with anything in them, whats gold gonna buy you? Maybe a way out of the country? But what stops them 'coyotes' from robbing you. I guess what I'm trying to say is if things get really bad, and institutions large and small collapse gold will not be your saving grace. You might think you have value, but the ground level reality is gold will be as useless to you as paper money. You can't eat it, you can't build with it, and if you wana trade with it you have to carry it around with you and it's a very easy thing to steal from an average joe.

re:paper money... it's invest-able. Sure it might devalue 50% in 35 years, but my investments in the last 5 years are up well over 50% so I'm beating the hell out of gold and far far outpacing any currency devaluation no?

Sure, during the short term there are pitfalls to investing, but over the long terms it going to dramatically outpace the currency devaluation. Again this is just me taking the point of view of whats best for me and my family. If i put 10k of my paper money into gold is say 2013 ( 5 years ago), vs say the nasdaq 100? Let's just say July 2013 gold was roughly 1250 usd per oz. Now it's what like 1150? Nasdaq 100 was roughly 4k now it's almost 8k. So if that 8k is really only worth 7.5k because of currency deval what do I care? Now I'm sure you could point to certain times where this isn't true, and I could point to times where it's a much more dramatic swing to my side. guess my question is if you aren't using these commodities as a hedge, and you are 99% invested in them you are basically 99% invested in no ROI (outside of perhaps a 50% increase over 35 years) and are ok with that? I mean it's basically saying I'm not even gonna try and increase my value, but I'm not gonna lose value either.... am i wrong?

I guess I'm just of the opinion I'd rather play the game right in front of me (and win at it), rather then preparing for something that may be inevitable but the result of which are far to unpredictable to properly prepare for (and may never come).

Anyway I'm certainly no economist, and Patches will likely shred me on this post... but I still think doomsday-ism is bad strategy, cus if you wrong you are wasting the now for a 'probably better off than others' then.

[mookiemcgee]

I'm gonna try on of these cus they are cute...

tl/dr... If you want a store of value in case of shtf, buy weapons and ammo.

[HitRed]

mookiemcgee,

I totally understand an agree. I'm really an investor looking for a profit.

Patrick

[HitRed]

If you want a store of value in case of shtf, buy weapons and ammo.

Once liked a Jewish girl. Super nice. Her dad one night told me about their family history in WW2. 14 relatives went to the camps. Later in the evening I asked if he owned a gun and he looked at me puzzled and said, "No, why?" Your post made me think of that.

[patches70]

For me its preservation of purchasing power.

Silver could really move up I guess, Im not sure as Ive been reading the reasons for years and it still hasnt happened.
As far back as the Hunts the thinking has been the same, heck, in 64 they said they stopped making silver coins as they needed the silver.

It has retained its purchasing power tho, gas in 64 was...? 30 cents,
a quarter bought just about a gallon, today that quarter is..? 2.50?
a california gallon is $3 I hear, other states less, so, its about the same purchasing power.

I find it funny people cant figure that out.
paper devalues at 50% every 35 years.

I have more than any other kid on my block now so I figure I have loads.

I think the way to go is with bullion over coins (junk) if the world actually got to a shtf scenario, silvers not gonna do much for ya.
Clean the water I guess.

canadian pre 1920 is .925 american is .900

I dunno man, in theoretical terms I understand the store of value argument... I just don't think if your doomsday predictions come true that holding hard gold is gonna do much for you. In a doomsday scenari, for a joe blow gold ain't gonna help you protect your home from looting. It ain't gonna protect your kids from being kidnapped and raped by militia gangs. And if there are no stores with anything in them, whats gold gonna buy you? Maybe a way out of the country? But what stops them 'coyotes' from robbing you. I guess what I'm trying to say is if things get really bad, and institutions large and small collapse gold will not be your saving grace. You might think you have value, but the ground level reality is gold will be as useless to you as paper money. You can't eat it, you can't build with it, and if you wana trade with it you have to carry it around with you and it's a very easy thing to steal from an average joe.

re:paper money... it's invest-able. Sure it might devalue 50% in 35 years, but my investments in the last 5 years are up well over 50% so I'm beating the hell out of gold and far far outpacing any currency devaluation no?

Sure, during the short term there are pitfalls to investing, but over the long terms it going to dramatically outpace the currency devaluation. Again this is just me taking the point of view of whats best for me and my family. If i put 10k of my paper money into gold is say 2013 ( 5 years ago), vs say the nasdaq 100? Let's just say July 2013 gold was roughly 1250 usd per oz. Now it's what like 1150? Nasdaq 100 was roughly 4k now it's almost 8k. So if that 8k is really only worth 7.5k because of currency deval what do I care? Now I'm sure you could point to certain times where this isn't true, and I could point to times where it's a much more dramatic swing to my side. guess my question is if you aren't using these commodities as a hedge, and you are 99% invested in them you are basically 99% invested in no ROI (outside of perhaps a 50% increase over 35 years) and are ok with that? I mean it's basically saying I'm not even gonna try and increase my value, but I'm not gonna lose value either.... am i wrong?

I guess I'm just of the opinion I'd rather play the game right in front of me (and win at it), rather then preparing for something that may be inevitable but the result of which are far to unpredictable to properly prepare for (and may never come).

Anyway I'm certainly no economist, and Patches will likely shred me on this post... but I still think doomsday-ism is bad strategy, cus if you wrong you are wasting the now for a 'probably better off than others' then.

I'm not gonna shred ya. There are lots of things to invest in, one should be well diversified. Gold should be a part of one's portfolio. Silver as well, any precious metals, but you probably shouldn't be fully invested in just precious metal. Stocks, bonds, money market accounts, you name it, the list is long indeed. Do your due diligence and proceed however you think is right for you.
But you see yourself, gold is far superior to currency. as a store of value. You said you'd be better off converting your currency to stocks, and you would be. If you put $5k in currency under your pillow and put $5k worth of gold under your pillow and just leave them there for 5 years, which is going to be better? The gold of course, because it holds it's value much better than currency, making it a far superior store of value than currency. Fiat currency especially. For currency you have to put it to work to surpass gold.
Currency is really only good when you convert it into things, it's the things that are valuable, the currency is just a tool to get those things. Gold you can bury in the ground and in times of need you can dig it up and it'll be a great help. That's not such a good idea with currency though.

As for the doomsdayism, it isn't necessarily a bad strategy. So long as you are rational about it. I'm not sure spending all your savings trying to build a doomsday bunker stocked with 20 years worth of food is a good way. But on the other hand one should definitely prepare for bad times. It is prudent and wise to have water stored, non perishable food, guns, ammo and other such things. It's also not a bad idea having a go bag, just in case you gotta get the f*ck out of where ever you are when something really bad is coming at ya. There are certainly a lot of New Orleans people who had wished they'd been a little better prepared.

People tend to invest and prepare for the future with the idea that to make that future better for themselves and their family. As someone once told me, "Patches, ya gotta live every day like it's your last!" I, of course, had to reply with "Well, if this is my last day then I'm buying a corvette on credit and heading to Las Vegas! Hookers, cocaine and gambling baby, it's my last day on Earth!" It kinda puts into perspective one's outlook on the future. To me, the future looks bright not just for myself, but for humanity. Sure, there are pitfalls ahead, there will be setbacks, but such is life. The doom and gloomers make my eyes squint. Black swans are gonna happen, none of us is guaranteed to see tomorrow's sunrise, but life ain't worth living if ya worry and fret about tomorrow. Today has plenty of it's own hurdles to get over.

God, in His infinite Wisdom put death at the end of life, so until that day then by all means live and forgive yourself for thinking you'll be alive tomorrow. And just do whatever it is you think is best for you and your family. That's about all anyone can really do anyway.

[armati]

mookiemcgee

I own gold for its unique attributes.
Your thinking about it wrongly, I in no way said "sell your house buy gold"

5-10% of INVESTABLE income is about right for about 95% of people.

AFTER all expenses are paid, lets say you have $1000 remaining for investment, $50-$100 should be gold.
That leaves $900-$950 for your "up 50% investments", new companys or maybe silver (which is a different beast than gold) or what ever the heck you invest in,

I dont have a doomsday shtf scenario, preppers are the people to get info from for that.


Gold should be bought on the same day every month and the price is no consideration, price is irrelevant, onces are what counts.

I understand tho, most people dont understand it, especially americans.
They have been taught since 1971 that gold is a barbarous relic.

Everyone else in the world knows what gold is and the american gov likes the world to think they have 8000 tons stored.

[riskllama]

well, what are they keeping in Ft. Knox then? beanie babies???

[warmonger1981]

well, what are they keeping in Ft. Knox then? beanie babies???

I know.

[2dimes]

If you read the Wikipedia page (yes, I know) on the bullion depository by Fort Knox, it claims there is still a lot of gold there, a little over 2% of the world's known refined supply but...

Back in the 1930s when people were in soup lines or trying to grow gardens in the drought it was very valuable.

Later in the 1960s when people were prospering, you could buy a new car for $5000 it was still a big deal.

Now it seems a bit less impressive compared to the GDP of the United States. So even if it's still full, if the US dollar fell like Zimbabwe, what good would it do for a regular person trying to pay the electrical bill and buy some groceries?

It looks kind of like, If someone was paying bills of several thousands of dollars a month, then lost their job and a child said, "It's ok dad, you can have my piggy bank. It has two dollars and eighteen cents in it."

You young guys might not know what a piggy bank is, sorry.

Since people secretly keeping gold aside for it's value are not saying how much they have, is it possible there is more gold hidden by people, maybe even just in the US, than there is in the bullion depository?

[armati]

In the U.S. gold is stored at Fort Knox, the Denver Mint,West Point and the New York Federal Reserve.
We dont know how much as the last audit was supposedly 1986, but not all. Only Fort Knox.
Ron Paul would ask for an audit regularly without success.

The issue of golds value being so low is a point "gold bugs" make, they feel gold should be in the thousands per once, how much depends on the math.
Some people think the reason the price is so low is so china can acquire the amount it needs without causing kanipshons.

There is alot of mystery around gold, but we do know that Russia,China,India are buying huge amounts as well as other countries.
Iran sells oil for gold for example.
Venezuala,Turkey, Argentina and a few others wish they had gold hoards about now.

Gold historically moves to where it is treated best and as everyone knows the golden rule..he who owns the gold makes the rules.

Only a huge majority of americans and some westerners dont understand gold, thats a big thanks to the governments,the fed, removing the education of it from schools etc.
Heck, its not even taught at university level economics anymore, but the rest of the world understands it big time.

Check the Koran, Dinar and Dirham, thats alot of people that understand PMs, the word silver and money are even the same in 14 languages.

Meanwhile, the west sells off its hoards to the east at rock bottom prices, Browns bottom was 1999-2002 and sold for an average of 282 an once.
Canada (doing as it was told) sold off theirs too.
Ya, our governments do whats best for their people.

2000.. $300 today $1100.... thats retaining purchasing power, as it always has for 5000 years.

If you calculate how much the east has been buying, which is way over the planets production, ya gotta wonder where they get it from, some say the U.S., thus the secrecy of how much they still hold.

In 1944 the american dollar became the world reserve due to the amount of gold they had, when de gaul figured out the U.S. was printing way too much paper to cover their obligations Nixon(the U.S.) defaulted, reneged, broke their word, (nutin new) and the world was no longer on a gold standard.

So, the creation of the petro dollar, a brilliant move then, but now, the world is dropping the dollar in the oil trade.

Time for a world reserve change, and the west has little if any gold.

Maybe it doesnt matter, maybe currencies go crypto.

[mookiemcgee]

mookiemcgee

I own gold for its unique attributes.
Your thinking about it wrongly, I in no way said "sell your house buy gold"

5-10% of INVESTABLE income is about right for about 95% of people.

AFTER all expenses are paid, lets say you have $1000 remaining for investment, $50-$100 should be gold.
That leaves $900-$950 for your "up 50% investments", new companys or maybe silver (which is a different beast than gold) or what ever the heck you invest in,

I dont have a doomsday shtf scenario, preppers are the people to get info from for that.


Gold should be bought on the same day every month and the price is no consideration, price is irrelevant, onces are what counts.

I understand tho, most people dont understand it, especially americans.
They have been taught since 1971 that gold is a barbarous relic.

Everyone else in the world knows what gold is and the american gov likes the world to think they have 8000 tons stored.

I feel like you are contradicting yourself now. Diversifying is essentially hedging. If you invest 10% in gold you are hedging against your other investments... but you said you don't buy it as a hedge which implies you are fully invested in precious metals. so which is it?

I also take issue with you posting all over this site that Americans, or people in general 'dont know' that currency devalues over time. I would argue the people that don't know, don't need to know because they don't have enough money today to buy gold for tomorrow. I guess you could argue that them knowing means they could try and change the system with their vote, but the political parties are of one mind on this subject so even that is a red herring.

The people that do need to know, either do know or use advisors who diversify for them and generally have some piece of their investment in precious metals.

Does it matter to wal mart door greeter that their $42 bank account value is only gonna be worth $30 in 20 years? It really doesn't there is zero chance they are gonna hold that $42 in paper money for long enough for it to matter.

Beyond all that, I've never heard anyone in USA call Gold a barbarous relic... its just that people in the US are more likely to put their money to work today at todays value either buying products, paying down dept, or investing. No one burries cash in the USA, unless it's drug money. Gold doesn't offer much in the way of unique attributes to people who operate their lives at 100% burn rate on income.