The Demon

You're going to have to repeat that. If I correctly understood you, I've lost 58% investing in gold and silver. Is this what you're saying?

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The Demon

Once again, everybody already ignores you. Your notoriety for making shit up, getting called out, and then running away like a bitch, is apparently on the rise. Now please, to save yourself further embarrassment, quit typing.

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The Demon

Yup yup. This is what moronic companies don't understand. Outsourcing undermines our economy.

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TheDoc

Correct, hyperinflation isn't happening.... our eco deflated 3% last year, that's with some inflation in other areas. To me if you want the rich to be richer and the poor to be really poor, you super deflate everything. Making my house, car, tv's, everything worth nothing - that's class separation - when nothing I have is worth anything.

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wig

No, what I am saying is that based on your statement that commodities is the way to go, the CRB Index, which is a basket of commodities has lost the %'s I cited since 2008.

Don't get me wrong, I have invested heavily in metals in the past and still own some physical, and I am on record as far back as 1999 calling for decline in the dollar and a rise in gold. That was when gold was under $300.

What I am really challenging, is the idea that inflation is the existing threat and trend vs. deflation.

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The Demon

You haven't made any points. You made an outrageous claim without backing it up. Shall I provide you the historical charts of gold and silver from 2008 compared to now? Next thing you're going to do is lecture me about inflation regarding precious metals. Aka LOL

The doomsday scenario predicted by Schiff and Paul is inevitable. It's the government intervention that's delaying it and making it worse when it does happen. Everything that has happened, Schiff had predicted in 2008 and was ridiculed. I'm not sure you understand the concept of dollar demise. It's lost 96% of its value, and Bernanke is desperately trying to hold inflation at bay without raising rates. However, he WILL have to raise interest rates within the next year which will increase inflation. I'm not sure where the deflation theorists are coming from because that is NOT what's going to happen, unless someone can give me a viable scenario. However, both sides of the spectrum both agree that the market WILL crash, which is why I'm short and have been for a while although I've taken some losses. I have some investments in a few triple leveraged etfs that will make a fortune if we should retest the March lows(6000), which I'm confident we will.

Finally, hyperinflation is what us "doom and gloom" theorists think is going to be the end game, and it's slowly manifesting itself. I believe pretty soon, the US dollar will cease to be the reserve currency. That will cause billions of treasury securities to come back and flood America, and there's the end game.

The only "losses" I've taken was predicting we'd be under 10,000 in December, so I was about 2 months off. Right now it's rallying a day at a time but it's finally going downhill.

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spazlabz

I didn't know he wasn't in the biz but even taking that into consideration it does not matter much to me. While politics plays a role in our business (say good bye to net neutrality thank you Supreme Court), this is more of a pure political discussion and I'll listen to anyone in that case. Last night certainly was enjoyable for me and I like to think I learned a little

Oh hell yeah I saw that, it is awesome that StuartD created that and made it available for everyone. He's the man. However, in the past I put people on iggy but found my own curiosity kept me un-ignoring them more often then not. So I now if I don't want to read something I just scroll down past it

First the stimulus. I think that it helped the financial markets somewhat stable and move up from the record lows. IMHO it helped to give some confidence to investors which prevented a total collapse and I am speaking globally here. It was done completely wrong, zero regulations, zero oversight, just a HUGE dumping of cash at people who have proven track records of not being worthy of that level of trust.

The banks learned nothing, the stimulus was intended to free up lending, so banks could help out home owners bent over and getting banged and small/medium sized businesses grow and increase employment. They chose to use the money the same way they have been using money, by gambling on high risk ventures. No one stopped them and even though a lot of the banks have paid back or are in the process of paying back the money they received, without the regulation and oversight it is only a matter of time before we face the same problem again.

The problem is that this could have been fixed, it could have been done right OR Congress could catch their breath and make meaningful reforms. I hate to beat this dead horse some more but the Supreme Court decision entitling corporations to have the same rights as individuals has made the prospect or reform almost laughable. Corporations will not allow anything with teeth to be passed.

About the general population of GFY I have to say I disagree. Lots of very smart people here, it is ironic that a webmaster board called 'gofuckyourself' could have so many bright, friendly and helpful people, but I find that it does.

If a college degree or even attendance was required I would find my happy ass outside staring in. Im a high school grad and that was barely


spaz

wig

Yep... Cash is king during deflation.

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The Demon

What I am really challenging, is the idea that inflation is the existing threat and trend vs. deflation.[/QUOTE]

Perhaps I should have clarified then because when I say commodities, I USUALLY speak of the precious metals. Inflation is still the existing threat, how can it not be? Please explain the trend of deflation that you think is more prevalent than inflation.

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The Demon

I appreciate that but don't worry, nobody takes him seriously.

This confidence is misplaced. The government keeps misrepresenting the position of our economy and people are slowly starting to catch on. The confidence overseas is slowly waining because they've started to catch on a well. They're seeing the tremendous deficit spending Obama and Bernanke are engaging in and are slowly pulling out of the dollar.

The banks actually increased lending to consumers for a period last year, and decreased lending to small businesses, which increases our capital investments. What that means is, they're morons.

I don't think it could have been fixed. We've dug ourselves into this hole that we won't get out of without a collapse and a reinvention of our system. I think it could have been done more efficiently and postponed a collapse for a few decades.

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Loch

So you are advocation for the exact thing that would spill blood in the streets and take the system down, smart

Dont live in fear........

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TheDoc

I love to talk politics....and have on here for years. But when you prove him wrong, when you shut him down. He is going to attack you, 100% of the time - with the same attacks, every single time.

Sure the boy can talk some repeated politics, but he can't handle the truth.


I use it more to clean out bullshit threads... you can block sig's and avatars you don't like as well. I also use image-show-hide and flash block. It's more about having a better experience with using gfy than it is filtering out his stupidity.

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TheDoc

Bump for your money....

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The Demon

Spaz, you'll have to excuse the Doc. He's been owned so many times that he's completely delusional now. You'll never see a thread ANYWHERE involving TheDoc proving me or anybody wrong. What usually happens is he pulls some data out of his ass, I call him on it with concrete evidence, then he pretends he was playing stupid. Then other people start calling him out and ridiculing him, at which point he disappears for a few hours or days only to resurface and start the process again. This is why most of the time, people ignore his posts. I'm positive I, who makes fun of this industry most of the time, command more respect than this tool.

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wig

No, that won't be necessary. I started in investment banking in 1985. I held my series 3, 7, 24 and 27, and I owned and was a financial operations principal of an NASD broker dealer. I also owned a commodities firm prior to co-founding WTS in 1997.

I made the point that deflation is at play, not hyperinflation. I supported that point by showing that the CRB has collapsed in conjunction with other asset classes. And, that since the original post in this thread, the US dollar has rallied substantially.

Oh, I understand it perfectly well. In fact, I made this post: http://www.gfy.com/showpost.php?p=16365437&postcount=79

Here is the pertinent part in case you missed it: "A reduction in the aggregate value of dollar-denominated debt is deflation, which is what we have going on now. At some point, the value of credit will contract to where it can be sustained by new production. When this happens, your scenario will be real."

It could happen. I'm not saying it won't happen. See above

I made no comment about you having any losses, so don't get your panties in a twist. I was pointing out, in a general sense, backed by supporting data, the threat we are currently facing which is Deflation.

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wig

To reiterate:

The reason is that there exists staggeringly more dollar denominated debt than cash dollars (about a 50 Trillion dollar difference). This enormous amount of debt, as it implodes, is killing the ability to inflate -- despite the FED's efforts.

A reduction in the aggregate value of dollar-denominated debt is deflation, which is what we have going on now.

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spazlabz

I adore the topic of Unions and I have to say I agree that;

1) they are necessary
2) they are bloated

But Union leaders and rank and file are definitely not stupid, some are while others like the local representing Ford Motor understood that the company they were completely Dependant on was facing failure. That Union made concessions to management in order to for Ford to regain its balance, Ford upper management took pay cuts and gave up 'bonuses' and golden parachutes and it worked. The company, while certainly not the auto manufacturers golden boy has done very well all things considered. It is a healthy company that is looking to innovate. This is the way I think American companies need to move forward. Management and the work force need to work together in a sincere effort to make their companies profitable. But that profit needs to benefit everyone in the company. The days of the view from management that "you are benefitting by having a job asshole now shut up and get back on the line" should be over, it does not work out well like that.

Example. I worked for HAM (Honda of America Manufacturing in both their East Liberty and Marysville plants in Ohio. Their pay was the equivilant of a UAW rate in their plants because right down the road in Springfield is 3 UAW plants (International). I was fortunate to be employed by HAM first and International later... I kept this job until I got into adult. Honda treated their people like shit. They gave the usual corporate lip service to how much they cared about their associates, they explained the insane work pase by calling us 'industrial athletes' For the first 6 months of working there I was in really good shape and I had to get a automatic transmission car because it was so difficult to lift my leg to press down on the clutch. Let me tell you that is tired and sore right there

International had an us versus them attitude the while time I was there. Management would fuck you over in a heartbeat and vice versa. There were times when sitting was the norm. I worked in an area called the buck, we created the cab of the truck, I mean a floorpan rolled into the buck and a couple minutes later out rolled a shell of a cab ready for the rest of the line to start adding shit. Sometimes we would finish fast as fuck, by lunch we would have our 53 units and we were done. Everyone else would sit down and talk while the rest of the line caught up. 53 units in a shift...that was it. We could not build any more as we were not allowed. I would clock out and go home, pissed my wife off but the others sat. That is a good example of Unions limiting workforce. But at the same time Unions have fought hard to get every little thing they get.

Lives have been lost and a lot of blood spilled. I think Unions and companies need to adapt and be flexible. But corporations have to keep in mind that if their workforce is motivated and producing for them that they need to take care of that work force. American workers may be 'fat, lazy and illiterate' (no I dont believe that) but when an American worker is appreciated and treated well by a company, they are a force to be reckoned with and extremely productive


spaz

TheDoc

Damn I wish I was investing back in 1985... hell I wish I knew what investing was then.

At least I knew to put my money into WTS many many many years ago

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spazlabz

I sincerely hope you are wrong, I dont want my kids to have to live through a "collapse and a reinvention of our system"

thats to scary to think about


spaz

spazlabz

Watch as I wisely not step in between the two pitbulls


spaz

for the record, there are two people on GFY that make my mouth hang open with disbelief at almost everything they say, and it is not either of you LOL

The Demon

How about how much value the dollar has lost in 2 years?


I've been into economics for a while and perhaps I misread this, but please explain how a reduction in dollar denominated debt is deflation? If anything, it is inflation reduces the value of the dollar and really, the debt related to the dollar.


Yea, you'll need to explain this because I'm not buying it.

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The Demon

Oh that's a promise. We are passing our enormous debt off to our kids. Their standards of living are going to suck.

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wig

We appreciate your business!

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spazlabz

wanna hear something funny? I remember driving with my oldest son in my rusted out 76 camaro with doors flapping and a back seat that slid forward if I hit the brakes too hard. At the time he was under a year old and the radio was advertising for investors in this new company/idea. For 10G large you could get in on the ground floor of this thing called Satellite TV that did not use Volkswagen sized dishes and was more reliable then cable TV. I remember everything about that moment and thinking that if I had the money I would jump and hump that oppurtunity like crazy. but 10 thou might as well have been 10 mill at the time. I was digging ditches for a company called Stackhouse Inc and making minimum wage. I still shake my head at the loss of that


spaz

spazlabz

Oh you old optimist you!

wig

I'm not sure how much help this is, but if you look at the last 2 years, here is what the dollar index has done:

March 2008 to March 2009 (this is during the meltdown) US Dollar index rallied from 71 to 89

March 2009 to Dec 2009 (this is during the recovery period in equities and commodities) US Dollar index fell from 89 to 74.

Dec 2009 to date US Dollar index rallied from 74 to 81


Seriously? I'll be happy to explain it, but perhaps you should investigate this a bit more.

Well, I'm not sure what more I can explain. Commodity prices on the whole have collapsed from their highs. I mentioned that Gold and Sugar were exceptions in that they exceed their 2008 highs. If hyperinflation and US dollar demise was real today, then commodities priced in dollars would be in bull markets.

This is not the case and it is not solely my opinion. I used the CRB to illustrate, but go look at the charts of individual commodities.

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MaDalton

i really start to wish you all had voted for Palin/McCain just to stop this whining about Obama

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The Demon

Indexed, you're right. I'm looking it as a value against gold, which it has done the exact opposite. Unfortunately the USDX doesn't include gold.




No, I understand that debt defaults are causing underlying assets to crash. What i'm saying is, soon there will be a treasury default, which will cause the dollar to crash. Obama and Bernanke are going more into debt to support the current asset prices, but there will be a tipping point where the dollar takes a hit.

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wig

Well, I don't dispute that. However, that is not necessarily evidence for inflation (let alone hyperinflation). It is merely to say that the price of gold has risen.

On the flip side, if inflation were truly a threat, you would see the results in commodities across the board -- which we do not. What we see is that commodities were also part of an asset bubble that has collapsed from their highs.


It could come to pass, but... look what happened when the global financial system witnessed the largest credit crisis ever. The dollar soared and global investors rushed to put there money where?? Treasuries.

I'm sorry, but the outrageous claims with little supporting data are not coming from me.

And remember, I stated early on what would need to take place for your scenario to be realized and that at that point the threat would be more on the inflationary front.

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dyna mo

i am confident we will get past the current economic crisis, just like we've done many many time over thousands of years.

The Demon

Well, it's what I have my money in, I truly believe it's going to happen because it HAS to happen. There's no other way to go about it. The deficit spending will lead to the dollar being removed from being the reserve currency, and the treasuries being flooded back here.
Furthermore, what you're saying isn't evidence of what you're claiming. For some reason, and nobody can understand why, when people fear our economy is in the shitters, they throw their money into the dollar, mainly bonds. When they decide to be greedy, they sell off the dollar for foreign investments. Again, I don't know why that happens, but this isn't an indication that the dollar is getting stronger. It's an indication that fear and greed dominate our economy and when shit starts hitting the fan, people act irrationally.

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The Demon

No offense dude but this is the blind optimism that most Americans have, without any logic or proof behind it. There's no real awy for us to get "past" this, seeing as how we've digged ourselves this huge hole for 30+ years and it's getting worse.

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dyna mo

you and i have already been through this eh. your blind faith for disaster is not based on logic any more than my hopeful enthusiasm for the future.

at least my view is based on historical data- fact is, human nature has an uncanny way of getting ourselves out of shit.

The Demon

Actually, my blind faith for disaster is based on concrete facts. Your optimism is based on faith.

Historical data? You mean the 20 year deflationary Japanese recession? The 17 year Great Depression that on some levels, wasn't as bad as what we have now? Sure, you're right, eventually we'll get through it. But certain things happen for us to get through it. We had a collapse in 29, we'll have one again, and we'll start over.

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wig

I think we agree on many things that might not be apparent.

I agree that long term, there will likely be pressure on the dollar and that bonds will decline (higher rates). I agree that gold in the long term will likely move much higher. I agree that fear and greed dominate. I would add that ppl act irrationally whether the shit is hitting the fan or not.

But contrary to one thing you said, I think there are people who understand why deflation occurs and what the results are during deflation.

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dyna mo

see, you are an optimist at heart!

The Demon

I understand why deflation occurs, I'm just not believing it's occurring now and if it is, it's going to be a very short ride. I virtually have no dollar denominated assets either as I'm preparing for the dollar to crash. I'm interested in your investments.

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wig

Do you not see the contraction in the volume of money and credit relative to available goods?

I agree it will be a short ride. Deflations usually are short and brutal. And when it is over, I think your scenario will have longer legs and I will be prepared to shift asset classes when the time comes.

As I mentioned earlier, I invested a lot in precious metals. I got out in 2007 a bit early and then back in near the low in 2008 and then back out when we hit 1070 (we are currently 1094/GCJ10). I still own the physical I have because it is not as liquid, and to go in and out of physical is a pain.

If you exclude the above and futures accounts, I am invested 99% in T-bills. I believe it is the safest place to be (save certain other short-term foreign gov't debt). For reasons I won't elaborate on, I also have some non-futures position geared towards natural gas.

I am under no delusions that I could be wrong on the future, but I think it is pretty clear we are in a deflationary environment currently.

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The Demon

What I have seen the past year has been a credit contraction for small businesses, while a credit expansion to consumers. I certainly do NOT see any kind of contraction in the money in supply, perhaps maybe a small contraction in the velocity of money.

Good, good.

T-Bills? I certainly hope my scenario doesn't pan out, because you'd be royally screwed. But I know some people with your school of thought that do the same thing, so we'll see. I have positions on natural gas and agriculture as well.

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wig

These are open to argument.

Consumer credit has declined precipitously since 2007.

M3 + credit peaked in 2007 and turned negative in 2009 and is declining. This is not inflationary. see chart at: http://www.nowandfutures.com/key_stats.html


Yes, if the US Gov't defaults on its' debt I will be royally screwed. I won't be alone. Of course, this is unlikely to happen overnight if at all.

In my scenario, cash is king. Short-term T-bills are cash equivalents. I'm confident I'll receive the cash at maturity. I'll continue to roll them over. I'll do something different with that cash once we have run the course (to an extent more in alignment with where you are now). I'll also be buying certain stocks at this point as my scenario would place them at extreme discounts.

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The Demon

Interesting, I was unaware of specific numbers for M3 since the government removed that from reporting. However, I AM looking at fed/treasury total money and that is undoubtedly rising. Meanwhile, you're speaking of deflation while it seems like it's pretty much disinflation, which this graph states. Deflation would be taking it to the extreme.




Overnight? No. But I'm looking at that as the most likely scenario from all of this deficit spending.

Interesting. For me, gold and silver are king. Betting against fiat currency has huge advantages, especially in a double dip recession/depression.

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BradM

Captain
Jean Luc Picard
of the U.S.S
Enterprise