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Country
1000+ Penny Miser Member
USA
3121 Posts |
 Posted - 07/16/2010 : 20:19:23
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IMHO, the resumption of the bear market in stocks will be a deflationary wave that will wash across PM prices. As worldwide equity markets decline, the momentum is now just beginning, SILVER, GOLD, and COPPER prices will be dragged lower as Wall Street liquidates going down. Mining stocks will take a tumble too. You can see effects of that today as the US stock market tumbled. At this time, the Wall Street elites will sell anything as they put their CASH in Treasuries and MMs earning 0% interest. IMHO, the fall of 2010 will be worse than 2008 for worldwide stock markets. GOLD, as in the last stock market swoon, will probably only go down half as much. Businesses, ordinary people, and banks are all hoarding CASH. Investment seems to be grinding to a halt, despite profligate sovereign deficits. Many are cutting back on expenditures in addition to paying off debt and obligations. To me, that is a recipe for deflation; perhaps a second great depression.
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thogey
1000+ Penny Miser Member
USA
1617 Posts |
Posted - 07/16/2010 : 20:25:47
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| Will it give us more time to buy? |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 07/16/2010 : 20:41:28
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quote:
Originally posted by Country
IMHO, the resumption of the bear market in stocks will be a deflationary wave that will wash across PM prices. As worldwide equity markets decline, the momentum is now just beginning, SILVER, GOLD, and COPPER prices will be dragged lower as Wall Street liquidates going down. Mining stocks will take a tumble too. You can see effects of that today as the US stock market tumbled. At this time, the Wall Street elites will sell anything as they put their CASH in Treasuries and MMs earning 0% interest. IMHO, the fall of 2010 will be worse than 2008 for worldwide stock markets. GOLD, as in the last stock market swoon, will probably only go down half as much. Businesses, ordinary people, and banks are all hoarding CASH. Investment seems to be grinding to a halt, despite profligate sovereign deficits. Many are cutting back on expenditures in addition to paying off debt and obligations. To me, that is a recipe for deflation; perhaps a second great depression.
I have been saying that for months now. My questions are; how low will precious metals go this time and for how long? Will there be a shortage of physical precious metals again? What kind of premiums will physical precious metals be getting then? How long will it be before they stimulus spend all over again? |
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Jangles
Penny Sorter Member
31 Posts |
Posted - 07/17/2010 : 11:39:40
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I've been wondering about this lately too, wondering what to "invest" my FRNs in.
In 2008 prices on PMs and stocks went down, but most food and supplies prices went up. So if this does happen again it seems as if hoarding cash and supplies (food, guns, commonly used items, etc.) would be the best things to focus on. Then when it prices get low enough get back to buying PMs/stocks.
Does this sound correct? Any thoughts on this? |
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fb101
Administrator
USA
2856 Posts |
Posted - 07/17/2010 : 12:54:10
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I am in the deflationary court except for one thing. I only see that deflation will bring serious civil unrest and I don't believe TPTB will allow that to happen. I agree with the whole scenario except I believe they will inflate us out of it because real growth has become virtually impossible and the only thing they can do is inflate us out. Even with military involvement there is not enough manpower to stop what's coming. Are there other answers I'm not seeing?
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Investin Cents
Penny Pincher Member
USA
129 Posts |
Posted - 07/23/2010 : 00:18:36
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So... if someone has cash, sounds like we need to save it & buy essentials now & wait for PM's to crash to buy more.
I know I am very confused between the deflation & inflation camps. I know that no one really knows what to do, so what is a safe alternative that plays both scenarios?
My guess would be face-value nickels (US) & copper cents? That way you get to play the inflation scenario but if that fails then you have cash to spend in the deflation scenario.
Thoughts? Does this make sense (cents)? |
Most recent book I've read: "Meltdown" by Thomas E. Woods Jr. Current book: "I.O.U.: Why Everyone Owes Everyone & No One Can Pay" by John Lanchester |
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AGCoinHunter
Penny Hoarding Member
USA
685 Posts |
Posted - 07/23/2010 : 11:41:17
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quote:
So... if someone has cash, sounds like we need to save it & buy essentials now & wait for PM's to crash to buy more.
Problem is with PM's, no one will be willing to sell if it does crash. Selloff at the top, and holding as it drops.
Hard assets are the place to have money. Essentials, guns & ammo, water filtration, TP, alcohol and tobacco, and ect.
I still feel real estate is a ok place to be as long as you didn’t buy at the top with it. If it can provide a steady stream of income for you. Problem is, more and more unemployed will be on the government dole, so you will have a hard time finding employed renters who can cover their monthly rents.
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argent_pur
Penny Sorter Member
78 Posts |
Posted - 07/23/2010 : 12:21:51
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quote:
Originally posted by Investin Cents
So... if someone has cash, sounds like we need to save it & buy essentials now & wait for PM's to crash to buy more.
I know I am very confused between the deflation & inflation camps. I know that no one really knows what to do, so what is a safe alternative that plays both scenarios?
My guess would be face-value nickels (US) & copper cents? That way you get to play the inflation scenario but if that fails then you have cash to spend in the deflation scenario.
Thoughts? Does this make sense (cents)?
The safest asset in both deflationary depressions and hyperinflations (or just run-o-the-mill inflation) is still gold. Silver does extremely well during inflations, but, being an industrial metal, it may not protect you during a deflation. You would have to count on the investing public beginning to view silver as a monetary asset again. I know everyone here does, and I agree, but most of society doesn't.
Gold holds its own during both scenarios...IMHO, gold should be the bedrock of a conservative PM portfolio, with silver playing a secondary role as a means for profit potential. |
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AGCoinHunter
Penny Hoarding Member
USA
685 Posts |
Posted - 07/23/2010 : 12:26:28
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| Remember you need to deversify also. Holding gold and silver exclusively leaves you open to a huge amount of risk. Other hard assets needed for every day living are worthwhile to look at as an investment. |
"All tyranny needs to gain a foothold is for people of good conscience to remain silent."
-Thomas Jefferson
"There is no difference between communism and socialism, except in the means of achieving the same ultimate end: communism proposes to enslave men by force, socialism—by vote. It is merely the difference between murder and suicide." - Ayn Rand
________________________________________________
Lenin: Class-based International Socialism
Hitler: Race-based National Socialism
Obama: Class- and Race-based Post-National Socialism
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stateofmind
Penny Pincher Member
143 Posts |
Posted - 07/23/2010 : 15:27:47
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| AgCoinHunter, advising to diversify and yet still telling members to invest in other "hard assets", is not diversifying at all. All hard assets are in a similar class. A successful portfolio should include the aforementioned "hard assets", and also an assortment of stocks and currency, both domestic(USD), and foreign(EUR,GBP,JPY). |
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theo
Penny Hoarding Member
USA
588 Posts |
Posted - 07/23/2010 : 20:54:14
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quote:
Originally posted by stateofmind
AgCoinHunter, advising to diversify and yet still telling members to invest in other "hard assets", is not diversifying at all. All hard assets are in a similar class. A successful portfolio should include the aforementioned "hard assets", and also an assortment of stocks and currency, both domestic(USD), and foreign(EUR,GBP,JPY).
I disagree. There are plenty of ways to diversify through hard assets. True, gold is the pre-eminent inflation hedge; however the other three PMs (silver, platinum and palladium) have extensive industrial uses.
Copper, to a lesser extent, is also an inflation hedge; however it's industrial uses are so pervasive that it as been nicknamed "Dr. Copper" for its ability to predict future movements in the stock market.
There are also a lot of good investment opportunities in the energy sector with inflation hedges oil and natural gas.
I've even heard that some people hold cash in the form of nickels and copper pennies. . . crazy .
My point is that ,in addition to being inflation hedges, hard assets touch every corner of our economy. That's enough diversifacation for me. |
Edited by - theo on 07/23/2010 21:05:59 |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 07/24/2010 : 05:57:12
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IMHO, diversification should include both inflationary and deflationary hedges since it is still unclear (to me) which way this economy is going to play out. For people with smaller assets that could be as simple as holding both cash and metals. Yes, those crazy base metal coin hoarders might not be so crazy after all.  |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
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The Bear Market in Stocks - A Deflationary Wave
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