Is Hyperinflation coming ? Should we buy silver / gold or whatelse ?
- Thread starter testudo
- Start date
Hyperinflation?? Canada's annual inflation (1.8%) is still below Bank of Canada's target (2%) and US is very close to disinflation (annual rate 0.6%) and the Federal reserve is trying everything to avoid a deflationary spiral.
Right now Silver is undervalued: the average historic Gold:Silver ratio is 16:1. Gold is hovering around 1400$ that means Silver should be around 85$ yet right now the price is 30$. But remember to buy real Silver (bars & coins) as there is a real chance that entities issuing paper Silver (contract to give you silver in the future) might default in the coming months. As an added bonus buying real Silver will result in JP Morgan collapsing but that is another story altogether ...
Right now Silver is undervalued: the average historic Gold:Silver ratio is 16:1. Gold is hovering around 1400$ that means Silver should be around 85$ yet right now the price is 30$. But remember to buy real Silver (bars & coins) as there is a real chance that entities issuing paper Silver (contract to give you silver in the future) might default in the coming months. As an added bonus buying real Silver will result in JP Morgan collapsing but that is another story altogether ...
You can purchase both gold and silver at any large bank branch...one that comes immediatly to mind is the scotia bank on the Stephen Ave mall...it is past the tellers near the mall entrance....the bullet proof glass gives it away....on a side note...if you do purchase bullion through a financial institution you pay a premium as you dont buy it at the current market price.....you pay slightly more...another option is independant bullion dealers such as Albern coins as well as coin shops...options are stuff like Maple leafs both gold and silver/American double eagles as well as south african krugerands...again you will pay a premium compared to market but slightly less than the banks....the same premium applies when you sell....you are NOT going to get market value as these bullion dealers take a slice for basically being a secure storehouse of precious metals....of course if you had bought say 40 ounces of gold 5-6 years ago when it was less than $300 an ounce you would take little slice off the top and be loving it as gold is well above $1300 right now.
On a funny note...for shits and giggles...you can allways call for one of those "cash for gold kits" and send them some spray painted rocks and value them at $50,000.....you wont get any money but you may get a funny letter from them....and you dont evn have to pay for postage LOL
Hope this helps
SR
anyone who thinks hyperinflation is a concern really doesn't understand economics all that well. The far greater concern is deflation.
I'd be curious to hear the argument for hyper inflation given the current unemployment rate.
I'd be curious to hear the argument for hyper inflation given the current unemployment rate.
For inflation, there has to be demand which won't come from a household were at least one breadwinner is unemployed at the moment. Also central bankers know how to combat inflation (they just raise interest rates; see Volcker in early 80s). On the other hand there is no sure way of combating deflation (Japan is an example where they still have deflation/disinflation).
One good point about the current financial crisis was that at least the intellectual debate was settled decidedly in favor Neo-Keynesians (Paul Krugman being the most prominent one).
No PeaceGuy (clever name btw) has military company shares and this is his attempt at pushing the stock prices up.
As Nobel laureate Milton Friedman has written extensively, inflation is purely a monetary phenomenon. The way the US has been expanding the money supply would suggest that inflation will have to rear its ugly head sooner or later.
I would suggest that most serious economists do not subscribe to Keynesian theory at all, be it classical, neo, post or whatever prefix you wish to append to it, and the recession if anything further discredits it. The biggest problems currently facing the world's economies are spending and debt.
I would suggest that most serious economists do not subscribe to Keynesian theory at all, be it classical, neo, post or whatever prefix you wish to append to it, and the recession if anything further discredits it. The biggest problems currently facing the world's economies are spending and debt.
The Federal reserve fund rate has been between 0% and 0.25% for two years now in the meantime the Fed's balance sheet has swollen to over 2 trillion dollars, yet the inflation is falling. The core CPI has been 0.7% annually (data released today).
Please explain how the current recession discredits the Keynesians.
Even if you purchase a lot of gold and silver bars/bullion, you can't really go out and use them to purchase goods if/when people stop accepting "legal tender".
If you have a brick of gold, how are you gonna buy bread? "Well... umm.... I'll just scrape a bit off of this gold bar... that should be worth 3 loaves of bread..."
The best recommendation is having larger gold as your storage of wealth, and then have silver coins (pre-1967 Canadian, and pre-1964 American) and small bullions for regular transactions.
If you have a brick of gold, how are you gonna buy bread? "Well... umm.... I'll just scrape a bit off of this gold bar... that should be worth 3 loaves of bread..."
The best recommendation is having larger gold as your storage of wealth, and then have silver coins (pre-1967 Canadian, and pre-1964 American) and small bullions for regular transactions.
There really isn't inflation in the money supply, it's just that some assume there is by the fact the Fed's introduced a QE2 policy to buy 600B in bonds. But inflation itself is well under control and to a large extent this is designed to ensure a double dip recession doesn't occur and something potentially worse, deflation.
Not sure if you caught the 60 minute program about 2 weeks ago with Ben Bernanke, but I thought he really articulated well what the Fed's were doing and why they were doing it.
Given the above coupled with a massive supply of counterfit money masquerading as legal tender, I'd have to say we're only seeing the leading edge of the iceburg that's about to sink the ship. Honestly that's a primary reason why I'm actively looking for a liveaboard. It's going to be a very good time to know who your friends are.
Believe or not...it is hard to buy the 10oz bars and it seems like a huge demand for real silver buildup recently ( delay for delivery shown up in a few websites for their online orders )... silver is so afforable to own and hold at the current price. Even the chances of hyperinflation are rare especially in Canada..but it is no harm to have your investment in silver ...just finished watching the whole series of crash courses in youtube ..http://www.youtube.com/watch?v=YDNvr82gqd0...enjoy
All I can say is that when the likes of Glenn Beck start peddling gold, and who knows who else, with their informercials, it's time to get out !!!!!!!
Monetarism was discredited in the 80s after Thatcher and Reagan had their turns at destroying their economies.
Keynesian theory is still the main presctiption today, like it or not . Prices and wages are slow to adjust after any economic shock, we don't have several quarters to wait for adjustment to happen on its own; the most practical alternative is to have government act to return the economy to full-employment (a la Keynes).
As for gold, rises in price are linked to: 1) low rate of return on interest-bearing assets (e.g. bonds, cash), and 2) expectations of future inflation. Low interest rates for the past several periods have fueled gold's rise; an inevitable rise in rates in the next quarter or so will likely push its price back down or keep it stable.
