Peter Schiff 12/29/2008 Video: The New Year & New Optimism
Here is a new Peter Schiff video about his predictions for 2009 and more about the medicine we should be using to cure this crisis. It is the same prescription I have advocated here for months, no more government interference in the markets and let the deflation take place so our asset classes get priced to a sustainable level that we can build real growth off of. Your thoughts?
Video:
Peter Schiff video on the current state of thing 12-17-2008
Peter is right on the money. I personally took his advice back in November and I am also up 20% in my stock trades. We are getting close to the point of no return if we are not already there. You need to prepare and protect yourself now or get run over. At this point I have no faith in our media or officials. They have been wrong up to this point and I believe they will continue to do reationary policies and mis-lead us until it is too late and your options will be very limited. We don’t seem to have any leaders and they seem to keep letting their expert lie to them and tell them what to tell the American public to get them to support bad programs. No real effort has been made to help the average person and we only help people that have money. At this point it is now every person for themselves and their family & friends until we see policies that are truely aimed at the average person and it real pains me to say that but the proof is in the pudding.
Videos:
Part 1
Part 2
Gold may spike to $2,000 per ounce in medium term due to inflation
I know everyone loves to repeat deflation, deflation, deflation and I do agree that sounds attractive for people who are not underwater in debt and have substantial savings. In the short-term we will see deflation because of the immense destruction of credit in the global financial system. The money & credit was needed to support the price level of all the various assets classes. When that is taken away, price levels will fall until they find a proper balance and stabilize. This is based on supply and demand along with other statistics. During this process, production of various goods will be reduced because these companies relied on the money & credit to fund their operations and expansion and the destruction has created a constrained and limited demand market. Also the consumers have their ability to purchase goods & services impaired by the reduction of available credit.
Producers will also bring unprofitable production offline if current prices of different commodities fall below the cost of production itself. This can create a delay if more demand arrives before production can be brought on to meet demand. If the consumers saved portions of their income then they would be able to sustain a certain amount of purchasing power. In high savings rate countries you will lessen the impact of the various slowdowns. In a country with a negative savings rate like the United States, you will see purchasing power fall off quickly when their is a lack of available credit without outside interference (ie: stimulus programs). What we have now is people panicking because prices are falling, without understanding what is causing this phenomina
Longer-term as the economy stabilizes, you will see confidence return and with that, consumers begin to want to spend and expand. Banks will want to capture part of this growth and lending will begin to pickup. During this period, there will be a lag between production coming back online and people using the available resources to gather more and increase the workforce. This is where the inflation creeps in and price rise because we will have limited resources available and increasing demand for those resources. Gold will see this happen like many other resource asset classes. People are ignoring this part of the equation and that is where the real cost of all these social programs, bare their costs.
With all this credit pumped into the economy, that money will have to be invested somewhere and that is no guarantee that another problem might break people confidence again. This whole system is built on trust and if that is broken severely, it takes a long time if ever to fully repair it. We have more debt outstanding than equity worldwide and some people are winners and other are losers. If you look at what should of happened, many large companies should be bankrupt and a major transfer of wealth should of occurred, not by force but by making the wrong decisions and now this is what the consequences are. Instead we are trying to bail out the people who created the problem, just so they can keep their relative advantage over everyone else. A sad system of affairs if you ask me.
Here is a Video of Johann Santer, MD at Superfund Financial Hong Kong talking about inflation & gold
Martin Hennecke - “U.S. may lose its ‘AAA’ credit rating”
I have been reading these rumblings every since we started our massive corporate welfare program that we now call “The Great Bailout“. We have been issuing a massive amount of short-term debt in the form of treasuries to handle all of these bailout facilities.
When you do this, it does raise the question if you will be able to make good on these obligations and even if you do meet them, will you be paying back the debt in a seriously depreciated currency (ie: U.S. Dollar)? Martin Hennecke takes issue with this subject in this CNBC video on the “Worldwide Exchange” show.
James Grant from “Grant’s Interest Rate Observer” on the Bailout
This is a great video with James Grant of “Grant’s Interest Rate Observer” which is a financial periodical. This discussion is about our current financial system bailout that is in progress and the scandal it has caused. James mentions the lack of enforcement of punishment for reckless individuals at the different firms. He wants a defence of Capitalism & Free Markets, I absolutely agree with his assertion. We have throw the free markets aside to bail out firms that should absolutely face the consequences of getting into their current position. Greed took over and now Fear has to be revived.
We need to get the excessive leverage out of the system. Firms that have committed acts that warrant their firms “insolvent”, should be liquidated and forced out of business. Why do we not let firms that have made good decisions prosper? Why not have firms that made bad decisions, suffer the consequences? Why does precedence all a sudden not matter when we deal with market issues? Decisions we are making now will have a long term effect that we are not taking into account if we want a functioning market system.
Bloomberg Video:
Hope you enjoyed this video
Modern Money Mechanics Videos by Tom Schauf CPA
This was an interesting watch, I have read through the manual he mentions that shows the reader how we “create” money in our economy. Here is a link to the manual “Modern Money Mechanics“, by the Federal Reserve Bank of Chicago. It is quite peculiar that we create our curreny through the “Fractional Reserve Banking” along with “Central Banking“. This is a very interesting subject that I will be exploring in more detail when I launch a new forum for this type of discussion.
Jurg Kiener of Swiss Asia Capital talks about paper precious metals market default and gold price spike
This was a good video on CNBC about the Comex futures market and the possibility of some defaults on precious metals futures contracts because of increase physical demand of gold bullion, especially in the retail weights of 1 ounce gold coins and bars. Jurg Kiener of Swiss Asia Capital said if this happens, we should see the spot price of gold to double in very short order, suggesting it would be in under 12 months citing how small the market is compared to other commodities like oil.
Personally, I have talked to a bunch of bullion dealers and they have told me about the huge demand they are seeing and that they are to the point where they are starting to turn certain orders away because they are starting to lack confidence that the other bullion dealers and clearinghouses will be able to deliver as promised. Watch the video and leave your comments below.
Video Link:
Jurg Kiener of Swiss Asia Capital talks about Paper Gold and Comex