1. Same story, different day...........year ie more of the same fiat floods the world
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Discussion in 'Topical Discussions (In Depth)' started by Scorpio, Jul 9, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    Is there going to be a crash this year?

    My answer, don't really see it right now. Where is the 'event' that would cause one of significance?

    Housing prices are higher, but only in select markets are they nutz. To me the current price and activity is related to volume of fiat created seeking yield and a parking space.

    Commods have collapsed. Picked up 2 dozen eggs yesterday for .49 a dozen. Good grief for a egg farmer for sure.

    Row crops have been showing some signs of life, but nothing like it was in the late 2000's.

    We have all seen the oils collapsing for now, and really the near future.

    Wages have not gotten out of control. Sure there have been some gains and labor markets are tighter, but, is there really no labor left?

    Had a plumber tell me he hired a young kid, 19 yo. Told the kid, start at 10 bucks and in 4 mos I will put you in the union as a apprentice and making $18/hr with full benefits. The kid didn't last long as he realized plumbers work their a$$es off. Said he was going to go work at macys for 13/hr.

    Gold and silver are surely not signaling a damn thing. Going down even as the USD is retreating. Again with the disconnects.

    Frexit did not go as planned, so the globalists are still in firm control of the zero zone. Nothing of significance coming out of there. Even worse, now we have this 2 bit kid to the north who wants to play on the world stage as a globalist. That isn't helpful.

    Where is the civil war in the us of friggin' a? Ain't a one on the horizon. Seriously, who is going to participate? The snowflake armies? Those that can't even have a food fight without declaring marshmellows as the weapons for fear of getting injured? The women are far more of concern than those panty waist mother@#$@#$@.

    So where is the 'event' coming from?

    Korea? all saber rattling and nothing of significance
    Russia? ohhh please
    The ragheads? They haven't manufactured a proper fall guy yet.
    Mehico'? again, please
    The banks? Where? Their balance sheets are stronger than ever due to the fed providing usurious spreads.
    Energy? Not for awhile realistically.

    Leading up to the 2K crash, it was quite easy to see in advance. Clearly stuff was out of control stupid. So that wasn't hard to buy metals into, almost at a furious pace, because one just knew it was a comin'.

    Then leading up to 2007, again, that was easily seen if you were looking. I sold out of some stuff in '07 and bought some stuff heading for bankruptcy. All the signs were there to ride the storm. Mortgages virtually guaranteed to default, car loans to warm bodies, etc. It was there if you were willing to listen.

    What are you hearing now, as I just am not seeing the same???
     
  2. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    I say no crash. There will be pullbacks, but the markets are manipulated with derivatives to prevent any serious crash like the financial meltdown. Now they are keeping metals down to minimize inflation and maintain the illusion of the $USD.
     
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  3. davycoppitt

    davycoppitt Seeker Seeker

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    Hope you are right Scorp. I gotta be in my house for another year then I hope to sell and get something else. By doing so should be able to pocket enough to be debt free.

    With work we are having huge jobs coming in. Commercial properties are spending. Just got a $800k air handler change out in a building. Projects rolling in all over. Need 3-4 more guys, but cant get them.

    As with your plumber, we have the same problem. Had an apprentice quite two weeks ago. Young kid maybe 24. He was pulling down 24 bucks an hour and within 5 years would be making 150k/year at our company. Work was too hard, so he went back to whatever he was doing.
     
  4. ErrosionOfAccord

    ErrosionOfAccord #1 Global Warmer Gold Chaser Site Supporter ++

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    I think the kids giving up good jobs is just a symptom of kids wanting to be children forever.
     
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  5. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    nothing is better news for me,

    as for the trades, people don't realize how hard the guys work in any of the trades. They earn their money compared to these pencil pushin' keyboard tappin' sunsaguns.

    to me, the relative easiest trade is/are the sparkies. They virtually need someone to light their cigs, dig their trenches, etc. Excepting the linesmen of course, those fellas flat put it out there every day.

    ma'am, you wants an outlet right there do ya? Well, that is going to be tough 'cause I need to do this, and I need to do that, and then there isn't space in your main panel to handle it and that other circuit over there is already overloaded 'cause we skimped on the original install. Not forgetting the time it takes to hook up a come-along and pull that wire tight as a piano string. Girl, this is a gonna hurt you more than it is me.............
     
  6. Joe King

    Joe King Gold Member Gold Chaser

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    One possibility is what you posted here. http://www.goldismoney2.com/threads/the-coming-carmageddon.149173/
    ....and followed up with,

    If what you've heard is true, that without increased car sales the economy would have been flat to negative, and you severely reduce those sales going forwards, doesn't that have the potential to bring on the next downturn? Add to that the growing subprimes and it seems there is at least a fuse there begging to be lit.


    Also, is there any truth in this chart? If so, seems to me not to be the best of signs. We all know that new loans are the life blood of our debt based monetary system.
    170525OPYuskoimage1.png
     
  7. Cigarlover

    Cigarlover Gold Member Gold Chaser

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    I had a tree fall on my lines Friday night. Was without power until yesterday. No biggie. These guys come come in with some serious trucks and equipment. At first it looks like they are milking it but in fact are just assessing the situation. Then all of a sudden they all get moving and 2 hrs later my power is back on. Their pay is worth every penny.

    Anyway, back on track, I don't see a collapse either. Not even a crisis. In fact what I see is a whole lot of people wanting to start businesses. I even had a guy contact me last week wanting to start something up.. Met with him yesterday and looks like we are on the same page.. He's been a friend for about 2 years now and he's a good guy.. I wasn't really looking to do anything so any money we make will go into vacations or something.
     
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  8. Flight2gold

    Flight2gold Silver Member Silver Miner Site Supporter ++

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    Putting a date to anything that fluid is tough.
    Two things come to mind when thinking about the economy lately.
    The first is that the latest generation of young people don't seem to want to work too hard for success.
    I was having a cup of coffee in Waffle House this morning. The manager announced to all the workers, all young people, that,
    "If anyone leaves work until the end of your shift your fired."
    She then looked at me and asked if I needed anything.
    I said, "I love you, your gonna make this the best Waffle House in the South."

    The second is that the hard right and Democrats appear willing to cripple an American president to serve ideological purity and win political advantage — even at the risk of plunging the global economy into yet another massive crisis.
    Nothing new I guess in politics.
     
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  9. Thecrensh

    Thecrensh Gold Member Gold Chaser

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    "...like a thief in the night".
     
  10. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Corn, soy beans & cattle, etc. are catching bids (real economy) while the financial economy "APPEARS" to be stabilizing creating lower volatility ... underneath the ETF & index facades many equities are weakening while bond yields remain somewhat stable & range bound.

    Oil, AU, AG & Dr Copper are possibly pointing to a future disinflationary credit based recession. Recessionary disinflation & deflation tend to increase "real" commod prices & bonds while depressing "real" financial based indicators such as energy, gold, silver, & copper.

    The olde indicative dynamics have been skewed by the CB policies including CB bond & equity buying, robo trading, ETF's, private, soveteign & CB sponsored net foreign inflows & outflows.

    I dont foresee a pending crash or collapse, but rather a slow "predictable" easing & blood letting. This can be seen thru the Feds communications with the markets concerning the FFR policy, the co-ordinated various sovereign & CB bond & equity buying & most importantly the attained results of lowering global market volatility which essentially circumvents fear, hence provides the appearance of control & stability.

    It must be noted that the concerns over such events as the Puerto Rican bond defaults have been minimized thru various defacto financial deals & activities. I dont expect this trend to change as the bond holders themselves cannot force sanctions on the various several states & their political subdivisions (municipalities, counties & utility districts,etc.) such as Illinois without incurring major losses. Hence they are forced into negotiations & concessions or face full defaults. Thus hypothetically it seems that any state, municipal & utility district, etc. financial distress will most likely be remedied thru negotiated unconventional debtor/lender activities & nonsequitor events.

    A crash or collapse requires a major tipping point of some kind. I dont see one developing any time soon, this doesnt mean that there isnt a off-radar screen tipping point that is developing or has already developed. We can only speculate on the future using knowns or implied knowns....

    Caveat Emptor
     
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  11. Alton

    Alton Gold Member Gold Chaser

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    Scorp, you make a lot of sound observations and arguments. By all that can be seen, read about, researched plus a big dose of experience I would have to agree, NO crash this year.

    However, you knew that was coming, right? However, everywhere you look there is coagulation...a thickening, a bunching up, a failure to flow in any meaningful quantity, of money , goods and services. Yes, cars are being sold. Yes, wages are NOT falling...save by the all-too-usual inflation, real estate IS moving albeit slowly and more than ever dependent on local market conditions more so than national market conditions. People ARE buying goods but much more slowly and after much more consideration and they are looking for best possible quality/price ratios and their NEED rather than want of such goods. To me a very telling number is the drop in sales of alcohol - whiskey, wine and beer. Yes, there has been a trendy or fashionable uptick in the sale of DIY equipment to brew one's own beer and ale. Even so, this alone does NOT account for the overall drop in alcohol sales. I also tend to think that "the opioid crisis"/broad, near libertine prescription of opioid based pain killers does play a role here. Not sure about other areas but the local governments here are spending lots of tax dollars on "not-so-much bread but plenty of circuses". Locally there is some band playing in some park or public space, with both production services (guys like me) and band paid by the town happening 4 out of 7 days a week. And this has become steady this year. I can't help but think of the band on the deck of the Titanic...

    Then, on top of this economic/financial coagulation we are in the summer doldrums. Locally we have the RV industry and like it's big brother, the auto industry, summer is the time to change over to the new model year. Many people have a week or three off, unpaid, while the manufacturers receive new materials and get set up for production of the new models. Those who can afford use this time for vacations, working through the "honey-do" list, remodeling their house and so on. Such activity has been unusually limited this year. You've already pointed out what's happening, or not, on the national scene and it all can best be described as a coagulation.

    Yeah, it's sort of rough. Yeah, there's jsut nothing to shout or whisper "Collapse this year!". We are getting by. Adrift on a still sea. There are storms seen on the horizon but neither they or we seem to be moving any too quickly and in no particular direction This is almost the perfect setup to see and be affected by a black swan. Of course, such possibilities always exist. Like the Monty Python sketch, "No one expects the Spanish Inquisition!", such stuff just happens and always at the most inconvenient time like flatulence in a public gathering. Yet black swan events are merely one of many risks that are ever-present and you can't stop life or plan around mere possibilities.

    So, as a "safe" answer I would say NO collapse this year. Then again, I am aware of other forces and processes at work that are sound enough to cause me to say "but" and these carry enough "weight" to cause me to take action in "hedging my bets". But that's just me and these are the risks that I am willing to take...DYODD still applies as always. I have some confidence in making it through this year but not so much to breathe easy as it were.
     
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  12. Treasure Searcher

    Treasure Searcher Gold Chaser Platinum Bling

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    Before saying that wages are too high, when workers need good pay and benefits to house, cloth and feed their families, see how high corporate executive/management salaries, benefits (corporate jet, etc.) and stock options are?

    Worker needs a housing to house their family. Corporate executives and management do not need a second vacation home.
     
  13. Usury

    Usury Gold Chaser Platinum Bling

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    I guess define "crash".

    If you mean A large Dow or S&P downward movement, then IMO Stocks are priced higher than any time in history. I have not looked at historical P/E ratios, but I suspect we're breaking records there also...which is not good. That alone has many nervous, including myself. Most have a huge chunk if not all their eggs in that basket. Pretty much all pension plans and public investments are there. And anyone saving up a large sum ($1 mil or more) starts to feel like they have to invest in paper markets...you can only store so much metal and buy so much land. And both are NOT cash flow generators...in fact quite the opposite. Plus if you're participating in employer matching 401k plans, that's likely your only option.

    Now you might say my arguments would be one in favor of continued rising equity prices...and perhaps so. However I'm also starting to see lenders act stupid again. One large lending firm has hired a sales manager that is 25 years old to push stated income loans again. This kid wasn't even old enough to drive when the last housing crash hit....he just doesn't get it.

    Plus we gots more debt (public and private) than ever before...even before the housing crash.

    We're also starting to see mixed employment data and with the looming car apocalypse and likely layoffs, that may well definitely take a dive.

    Retail also appears to be in a downward spiral.

    It's about jobs IMO. If nobody can work then more companies go under and/or post losses as their customers can't afford their goods and services. Which of course pushes those P/E numbers higher. At some point the fundamentals overrule the exuberance and STHTF.

    I just can't help but think it's looming. In fact I think if Hitlerly had gotten the vote then we'd already be in or have seen a strong market correction.

    These things can become self-fulfilling also, so if enough folks get too nervous, WATCH OUT!!!

    But you may be right. For myself I have my 401k in 1/3 stocks, 1/3 bonds and 1/3 in "cash" on the sidelines to see what happens. At this point nothing would surprise me.
     
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  14. 917601

    917601 Mother Lode Found Mother Lode

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    ...the pastor of our church today mentioned Trump has been polling pastors across America....no need for details, but with a President checking the US's spiritual pulse, I see many blessings ahead for a believing America....non believers, you can thank us later.
     
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  15. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    I hear ya Usury,

    but that same tripe has been spewed for 30 years non stop. As a gold bug, heard it all.

    Non stop chatter. PE's were outrageous when the SP was at 1000 or the Dow at 10,000. Nothing new there. The metrics of PE's have been completely ruined by the fiat machinations.

    It is about volume of fiat created and seeking yield. Has nothing to do with company fundamentals any longer. The system have morphed. Usual relationships no longer exist. Used to be if X went up, Y went down like clockwork. Now they move in tandems. Crazy shit we are seeing.

    I have no doubt that one day this system coughs up a hairball, none.

    The rise of shitcoin is yet another symptom of this. It wouldn't even exist if it wasn't for this whored out monetary system masquerading as plausible.
     
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  16. hammerhead

    hammerhead Not just a screen name Gold Chaser

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    What could possibly go wrong? I know little about markets but my take on it is that it is all reliant on credit. The stock market is being run by computer trading which to me makes it appear to have no real worth. And what is thing they call 'money'?
     
  17. Goldhedge

    Goldhedge Moderator Site Mgr Site Supporter

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    I had a guy ask me today where would I put my money?

    Not sure. Certainly not the market. It's rigged worse than a 7 masted schooner....


    I'm going fly fishing up in Montana...
     
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  18. skychief

    skychief enthusiastic stacker Silver Miner

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    I woulda told him to buy silver. These prices cant be suppressed for much longer.
     
  19. Thecrensh

    Thecrensh Gold Member Gold Chaser

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    The required shock can happen any day now. All it would take is for the creditors of the United States to stop purchasing our treasuries. As soon as they don't raise the debt on our national credit card, we're **cked.
     
  20. gliddenralston

    gliddenralston Gold Member Gold Chaser

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    After reading this thread its time to put the defense accelerator to the floor, herd mentality is always wrong.
     
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  21. Cigarlover

    Cigarlover Gold Member Gold Chaser

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    Silver is still over valued by 30%.
    in 1964 a gallon of gas was 3 silver dimes. Today 3 silver dimes is 3.33 and gas is 2.25. 10 dollar silver seems about right.
     
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  22. Usury

    Usury Gold Chaser Platinum Bling

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    Except it seems like this herd is heading in all different directions.
     
  23. Mujahideen

    Mujahideen Black Member Midas Member

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    Feds say nothing to worry about...

    [​IMG]

    Federal Reserve Chair Janet Yellen recently predicted that, thanks to the regulations implemented after the 2008 market meltdown, America would not experience another economic crisis “in our lifetimes.” Yellen’s statement should send shivers down our spines, as there are few more reliable signals of an impending recession, or worse, than when so-called "experts" proclaim that we are in an era of unending prosperity.

    For instance, in the years leading up to the 2008 market meltdown, then-Fed Chair Ben Bernanke repeatedly denied the existence of a housing bubble. In February 2007, Bernanke not only denied that “sluggishness” in the housing market would affect the general economy, but predicted that the economy would expand in 2007 and 2008. Of course, instead of years of economic growth, 2007 and 2008 were marked by a market meltdown whose effects are still being felt.

    http://ronpaulinstitute.org/archive.../10/janet-yellen-false-prophet-of-prosperity/
     
  24. mtnman

    mtnman Gold Member Gold Chaser Site Supporter ++

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    Or you could just do it yourself... Oh, don't know how? Pay the piper. There's nothing easy about being an electrician.
     
  25. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    sorry mtn,

    done a whole lot of electric over the years,

    resi isn't squat, really only becomes difficult when you get into the heavy stuff,

    and yeah, I actually do it to code rather than backwoods shit that you see
     
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  26. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    Someone that works for one of the HUGE banksters I trust 100% with my life told me they were told by the company within 12 months.

    If markets are manipulated (they are) and we are nothing more than sheep to be fleeced (and most are) they are setting the trap. Housing, cars, credit and those that don't learn from history WILL repeate it. There are always a few exceptions so think herd mentaility here.

    Those people:
    < 0 - 40 years old are broke
    > 40 but < 65 vary, lots broke, kids won't / can't move out, parents becoming a burden, ZIRP is not letting their safe investments grow and is forcing ageing people trying to do the right thing to take care of themselves so they panic & get in the market
    (like leading sheep to slaughter) all the while their wages are stagnant, inflation is running away unchecked & healthcare is draining any savings.
    > 65 are on fixed income or the last generation that is enjoying pensions.

    So if this is a sheep shearing that is coming. The deep state is pushing people to do what is not in their best interest, young are broke & already have school debt for jobs that don't exist or pay what is needed to offset said investment & will probably always be. Young can't afford a house and reality dictates they need to be mobile for employment opportunities & they spend $150 mo for a phone. They won't get any inheritance because savings was eaten by, divorce, auto's, phones & internet, cable, inflation & paying for health care.

    So where does that put us? Right where they want us. In debt, wage slaves, exasperated & wanting a new version of "hope & change". All I can say is midterm elections baby 2018 & they have multi-generational wealth so they can wait everyone else out.

    They hate Trump.
    Remember when McCain said something about the market & they crashed it two weeks later in 2008 to force the kenyan oil room massage boy on us by cheating all over with vote counts?
    My guess is midterms are 15 months away........ so my guess is a few months before that to increase the level of pain. That means they need to keep the snowflake crowd going another year then it's time for the UGLYTRUTH!
     
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  27. Cigarlover

    Cigarlover Gold Member Gold Chaser

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    Any chance you can ask him to get the price of silver to single digits just for a couple days?
     
  28. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    There in no such thing as a traditional economy any longer based upon supply & demand fundamentals technically creating a price system.

    Economy has been replaced with a global business model.... The equities & bond markets are operated no differently than the global fiat commercial credit system.... which is no surprise, as equities & bonds are credit based claims. Secondly these markets are playing dual roles, one as collateral & another as a electronic globally traded monetary currency substitute that can be traded almost anywhere in the civilised conquered world at the speed of light! A stock and/or bond crash today is the yesteryear equivalent of a currency crash.
     
  29. 917601

    917601 Mother Lode Found Mother Lode

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    If you have not noticed, world currencies are declining and Many countries weak and in mayhem, with so many cash rich countries supporting Trump ( the US) and with no other place to park their money, I see no USD " crash" soon. We really are the world's last hope, Like it or not, in more ways than one....when the crash did not occur on Nobama's watch, I really, really doubt it will happen unexpectedly under Trump....much going on behind the scenes. I re- evaluate in November, until then, take advantage of the super cheap PM......keeping in mind, PMs are tied to the price of oil.....low oil, low PM.
     
    Last edited: Jul 10, 2017
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  30. Irons

    Irons Deep Sixed Site Supporter Mother Lode

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    Y'all got 10 or so years to stack cheap Gold and that other crap metal. After that run all bets are off, most of us will be dead before the following run starts.
    Precious metals runs are like having a dog your whole life. You only have enough time for a few.


    gold_all_data_o_usd.png
     
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  31. OverOver

    OverOver Silver Member Silver Miner Site Supporter

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    There is something that will cause gold and the pgms to go zoom.

    Anybody paying attention to South Africa? A complete deterioration into total, racial mayhem
    causing a shut down of mines could give gold a major boost. I'm trying to keep up with the situation
    on YouTube and anything else I come across.
     
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  32. Crockett

    Crockett Seeker

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    If that's called a bull run it was a yawner. Look a the inflation adjusted chart - impressive not.
     
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  33. mtnman

    mtnman Gold Member Gold Chaser Site Supporter ++

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    Maybe I should have been more specific. I worked maintenance at the Shipyard for 10 years and worked side by side with the electricians. So, there's nothing easy about being an Industrial Electrician. We work to American Bureau of Shipping Code.
     
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  34. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    Yep, as stated, that is a whole different level compared to the coddled smucks I am speaking to
     
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  35. Goldhedge

    Goldhedge Moderator Site Mgr Site Supporter

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    Puts a lot of folks on their knees begging the government to help them.
     
  36. smooth

    smooth Gold Member Gold Chaser

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    If yer gonna be an electrician hire into an oil refinery. I've waited half a day for 2 sparkies to jack in a 4160 motor. And they are the highest paid craft in the facility.
     
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  37. Cigarlover

    Cigarlover Gold Member Gold Chaser

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    The problem with gold is governments and bankers hold most of it. In addition to the paper market they could dump tonnes of it on the market at any time and drive the price to whatever they want.
    With all the money out there floating around you have to wonder why some big investor hasn't loaded up on silver. So easy to move yet it sits year after year.
     
  38. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    I think we fail to realize & recognize that all systems over time tend to organically become more specialzed & complex with new discoveries & growing technological advancements.

    For instance the current fiat commercial credit system with its complex derivatives & system of collateral could not exist as a global trading & clearing platform 30 yrs ago & only exists today due to high speed computer processing units & the ability to transmit the info 24/7 anywhere on the planet.

    One of the great problems associated with physical gold & silver employed as money & credit collateral was/is the bulk storage & security fees of holding the noble metals which is somewhere around 1.5 - 2% per annum. Even back in the halcyon banner days of the metallic specie system paper claims were specifically traded to prevent the settlement transfers of the metals to avoid the burdens of transportation, storage, insurance & security expenses, all of which are the burden borne of the new possessor/owner. Generally the metals were only called upon for physical delivery when the "real" market price had risen & exceeded between 2% to 3%. This is one of the major drawbacks to a monetary & economic system based upon specie & bullion that the accolytes & supporters of metallic systems fail to speak to, namely the burdens & costs associated with the storage, insurance & transortation. Secondly these same supporters fail to realize, recognize and/or inform their followers that PM's & commodities have been "paper" traded in a credit & claims system for hundreds of years.

    The organic outgrowth of the legislated global fiat system & the move away from specie & bullion is related to removing the high costs & security risks (theft, ships sinking, war, etc.) associated with moving physical assets. A 1.5% - 2% annual cost of storage & insurance for a hoarding term of 30 yrs equates to a gross loss of 60% (@ 2%) .... ergo the real price of PM's in a monetary system must inflate or increase by at least the cost of holding or it must be lent into the markets at a interest rate that covers the 1.5% - 2% plus all associated risk premiums (1.5% - 2%) plus a profit (1.5% - 2%). Thus we can observe that under a monetary system of specie & bullion the real rates of interest must average between 4.5% & 6%. This is verified by the U.S. long term average interest rate which is reportedly 4.58%.

    https://ycharts.com/indicators/us_longterm_interest_rates

    Once specie & bullion have been removed along with the inherent costs & expenses as collateral from the monetary & credit system, authorities may at their pleasure regulate rates much lower than the previous long term mean average. The electronic trading & settlement system has reduced the costs & risks of transportation, insurance, storage, etc. by 2.5+% or more, compensation for transportation "float" is obsolete. These factors are most important to understand when comparing the "olde traditional" economy to the new "business" model economy.

    This begs the ?, what is the "fair" market interest rate that investors may anticipate receiving? Based upon the above, the wholesale credit lender (depositor, bond holder, etc.) relieved of all of the previous burdens & risks of commodity money would now receive 1.5% - 3% annual ROI. This does factor into the equation the credit inflation that they themselves will create & produce bu & thru THEIR investment activities. Namely to receive their wholesale interest rate compensation, their assets must be levered into new credit flotations that create price inflation & loss of PPP.

    These are important & major factors when considering the stability of the system & the inherent risks of crash or collapse. For instance the traditional & historical fair market value PE (Price / Earnings) ratio average has been 16.

    http://www.investorsfriend.com/djia-valuation/

    Once the tethers to commod money & the related expenses are removed, the PE ratio can move higher as the cost of money diminishes.... Hence olde assumptions concerning fair value in this respect have become obsolete.


    There are many more examples that can be provided that exhibit added complexity, technology & the communications networks have & are reorganizing both the real & financial economies. Of great interest and prolly for the first time in recorded history, computerization, robotics & AI complexity are "reducing" energy inputs, not expanding or increasing them. One must consider both the long & short term gains created by complexity creating conservation. Is it any wonder that the POO & natty, etc. have & are disinflating as tech, research, discovery & innovation use energy in the aggragate much more efficiently???

    There is much to consider & ponder upon when considering the big picture. Todays so called economy doesnt resemble the economy my father used.... and it will comtinue to DEVELOPE & become even more EFFICIENT as tech expands....

    More later....





     
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  39. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    BB,

    one could argue that the move to fiat has also lowered the overall cost of money for all,

    in that any banker working with metals or with fiat is going to demand a profit to exist.

    using your metrics, the cost of a metal based money would be 2 to 3 points higher than current fiat values,

    so is this really a case for the lower interest rates of today also? Is this why Japan has been able to exist for 40 odd years now in a depressed yield environment?

    maybe the whole fantasy of interest rates spiking to 10% or whatever is nothing but a illusion and will only be accompanied by a massive dislocation, ie trouble.
     
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  40. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    Black Swan. Who knows... a large meteorite impact? An assassination? A chatostrophic earthquake? A solar flare?

    I personally see the economy improving. Around me people are selling homes in a matter of days... above asking price! Jobs are plentiful, with major companies moving away from traditional recruitment to head hunting because the pool is dry. Consumer goods prices are falling. Investment portfolios are steadily climbing. People are starting to loosen up the purse strings and have a little fun. It took 10 years, but I think the Great Recession is behind us.
     
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