Friday, Feb 22, 2008
No limits to US tax rebate money creation
Safe Haven: Why Inflation Will Trump Deflation (Reasons 1-2)
No limits to US tax rebate money creation.
Posted by sold 2 rent 1 @ 03:28 PM (575 views) Add Comment
9 Comments
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1. rocket robbie said...
S2r1
Thanks for the good advice on buying gold i have done alright over the past couple of months. From your previous posts you have mentioned that you think Gold is due a short term correction, do you think this is still the case and if so do you sell your positions or just hold out to the price goes back up??
Also i bought a US gold stock and even though im up on paper by the time i transfer dollars back to Sterling iv hardly made anything!! Are these postions worth holding onto because i am worried the dollar will deprecate further
Sorry for the questions
2. stillthinking said...
All the US is doing with their reflationary policies is bringing consumption forward in time, the people who spend their rebate today are spending the savings of others essentially, and cutting the amount they can spend tomorrow. As this obviously leads to a completely worthless currency there must be limits to the government actions. Presumably recession is preferable to complete dollar collapse.
Also, Japan was not namby pamby at all, the Japanese government has effectively become a proxy spender and has spent vast sums of borrowed money. There is a reason why Japan got credit rated lower than Gambia (or whichever broke little country it was). Bernanke must realise that he is playing with fire and at some point the loss in future consumption will be greater than the increase in current consumption, effectively crippling the US in the future.
3. Vincenti said...
My understanding is that ther Japanese central banks did everything in their power to prevent deflation in the early 90's. Not only did they reduce interest rates to 0%, but they dramatically increased the money supply, and also dramatically increased public expenditure building, with public money, "bridges going to nowhere", etc.
This did NOT prevent defaltion in Japan.
By all means correct me if I am wrong, but that is my current understanding.
Best wishes.
4. harold said...
S2R1
Well, I was right about the attempted take-down around 2pm! However, it looks as thought the bulls fought back.
http://www.bullionvault.com/gold-price-chart.do
Happy trading.
5. Debtfree said...
S2R1
Sit back and hold.
Gold will probably become more volatile as the price goes up, so trying to read when to buy will be difficult. Maybe best to buy at a steady pace every month and you'll average out ok.
6. Vincenti said...
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7. planning4acrash said...
Still thinking, I believe that S2R suggested Canadian gold stocks. Gold is a hedge against sterling and dollar at the moment, so it is peverse to have any dollar holdings at all! Tho, I am not as bear about dollar in the long term as many others, I see inflation taking over and dollar shooting up as soon as they have to increase interest rates. I see that happening within the next yr or two. May be wrong, tho.
8. sold 2 rent 1 said...
I still think there could be a correction down to 870. This is where the 50dma is.
If this happens it will be good news as it will prolong this whole upleg since mid August.
The 200 dma is at 745 and needs to get to 850-900 at the peak of this boom for my top end target of 1400-1500 to be hit by May/June.
As for stocks, many mining stocks are duel listed on Toronto and US exchanges in different currencies. The stock price always takes into account its underlying currency so it makes no difference which exchange for any investor, whether UK, US or Canadian.
What is important is the liquidity of the exchange, the quality of the brokerage, and the trusworthiness of the government.
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