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Yeah, and I've seen just as many that say the opposite. The real question is whether or not the fed can time it's monetary pullback correctly. If inflation takes hold that's more than likely the death knell for the dollars' hegemony.
Oh man, I have a lot of gold I'd like to sell you. Where are you getting this 5% from? Wikipedia? Is that what Goldline told you? 5% markup claim is based on no empirical evidence whatsoever. Boy, you must be an uber sucker if you believe that.
Yeah, and I've seen just as many that say the opposite. The real question is whether or not the fed can time it's monetary pullback correctly. If inflation takes hold that's more than likely the death knell for the dollars' hegemony.
Premature. Core inflation is at its lowest level since the 1960's.
The bigger concern for the moment would seem to be deflation. A panic in Europe could send us on another leg down, causing higher unemployment, leading to weaker demand, leading in turn to declining capital investment, prolonged low interest rates and even tighter credit.
From the vantage of the present, a Japan style "lost decade" looks much likelier than hyperinflation, IFF we can manage to avoid another debt-deflation spiral.
Last edited by Winehole23; 05-22-2010 at 04:42 AM. Reason: glossed
None of which necessarily equates to significantly lower gold prices though, which was the point I was responding to. The dollars weakness might be masked temporarily by the goings on in Europe, but I doubt the printing presses will stop anytime soon. Obama is bent on spending his way out of this. The tab just got started so to speak.
I don't think hyperinflation is an eventual reality either...... inflation yes. There's simply no one out there to foot this bill.
We'll see. The political will for more stimulus seems not to be there and fiscal worries seem to be more pronounced both inside and outside the Obama Administration, and in the broader market.
I hope you're wrong, but you could be right.
I'm more troubled by the Fed's countercyclical measures than Obama, but that's me.
WH, you are right, I fear, about the L shaped reaction to the recession, and the fears of European-based debt debacles has the market going nuts again.
Deflation is once again rearing its head.
People are talking past one another in this forum ( not unusual I know) about the price of gold relative to the value of coins as investment that also happen to be made of gold, but the underlying issue of the economic recovery (or lack thereof) is pretty frightening.
I just want to find that Chinese guy who cursed us all with the "May you live in interesting Times" toast and sock him in the nose.
Yeah, it is. People still act like we're immune, but we're not.
That said, if we start WWIV (or is it WWV?) in Iran, all bets are off.
Last edited by Winehole23; 05-23-2010 at 05:14 AM. Reason: WWV?
If another debt-deflation spiral threatens, the political will to pawn our future again to avert disaster will be even harder to resist, because we have already done it once.From the vantage of the present, a Japan style "lost decade" looks much likelier than hyperinflation, IFF we can manage to avoid another debt-deflation spiral.
If necessary, we gonna roll the dice again.
The mistake was rollin em the first time. JMO.
We in gambling with our chilluns and grandchilrens money now.
If Europe and/or China suc b, we'll go double or nothing, right?
Lost Decade Looming?
May 20, 2010
By PAUL KRUGMAN
Despite a chorus of voices claiming otherwise, we aren’t Greece. We are, however, looking more and more like Japan.
For the past few months, much commentary on the economy — some of it posing as reporting — has had one central theme: policy makers are doing too much. Governments need to stop spending, we’re told. Greece is held up as a cautionary tale, and every uptick in the interest rate on U.S. government bonds is treated as an indication that markets are turning on America over its deficits. Meanwhile, there are continual warnings that inflation is just around the corner, and that the Fed needs to pull back from its efforts to support the economy and get started on its “exit strategy,” tightening credit by selling off assets and raising interest rates.
And what about near-record unemployment, with long-term unemployment worse than at any time since the 1930s? What about the fact that the employment gains of the past few months, although welcome, have, so far, brought back fewer than 500,000 of the more than 8 million jobs lost in the wake of the financial crisis? Hey, worrying about the unemployed is just so 2009.
But the truth is that policy makers aren’t doing too much; they’re doing too little. Recent data don’t suggest that America is heading for a Greece-style collapse of investor confidence. Instead, they suggest that we may be heading for a Japan-style lost decade, trapped in a prolonged era of high unemployment and slow growth.
Let’s talk first about those interest rates. On several occasions over the past year, we’ve been told, after some modest rise in rates, that the bond vigilantes had arrived, that America had better slash its deficit right away or else. Each time, rates soon slid back down. Most recently, in March, there was much ado about the interest rate on U.S. 10-year bonds, which had risen from 3.6 percent to almost 4 percent. “Debt fears send rates up” was the headline at The Wall Street Journal, although there wasn’t actually any evidence that debt fears were responsible.
Since then, however, rates have retraced that rise and then some. As of Thursday, the 10-year rate was below 3.3 percent. I wish I could say that falling interest rates reflect a surge of optimism about U.S. federal finances. What they actually reflect, however, is a surge of pessimism about the prospects for economic recovery, pessimism that has sent investors fleeing out of anything that looks risky — hence, the plunge in the stock market — into the perceived safety of U.S. government debt.
What’s behind this new pessimism? It partly reflects the troubles in Europe, which have less to do with government debt than you’ve heard; the real problem is that by creating the euro, Europe’s leaders imposed a single currency on economies that weren’t ready for such a move. But there are also warning signs at home, most recently Wednesday’s report on consumer prices, which showed a key measure of inflation falling below 1 percent, bringing it to a 44-year low.
This isn’t really surprising: you expect inflation to fall in the face of mass unemployment and excess capacity. But it is nonetheless really bad news. Low inflation, or worse yet deflation, tends to perpetuate an economic slump, because it encourages people to hoard cash rather than spend, which keeps the economy depressed, which leads to more deflation. That vicious circle isn’t hypothetical: just ask the Japanese, who entered a deflationary trap in the 1990s and, despite occasional episodes of growth, still can’t get out. And it could happen here.
So what we should really be asking right now isn’t whether we’re about to turn into Greece. We should, instead, be asking what we’re doing to avoid turning Japanese. And the answer is, nothing.
It’s not that nobody understands the risk. I strongly suspect that some officials at the Fed see the Japan parallels all too clearly and wish they could do more to support the economy. But in practice it’s all they can do to contain the tightening impulses of their colleagues, who (like central bankers in the 1930s) remain desperately afraid of inflation despite the absence of any evidence of rising prices. I also suspect that Obama administration economists would very much like to see another stimulus plan. But they know that such a plan would have no chance of getting through a Congress that has been spooked by the deficit hawks.
In short, fear of imaginary threats has prevented any effective response to the real danger facing our economy.
Will the worst happen? Not necessarily. Maybe the economic measures already taken will end up doing the trick, jump-starting a self-sustaining recovery. Certainly, that’s what we’re all hoping. But hope is not a plan.
===============
The Repugs and conservatives, as articulated by RL, want the Dems to fail at stimulating the economy and jobs, knowing that in a bad economy, people vote out the in bents. So their deficits hawks have been creating a paranoid hysteria, much like the gun-nut dumb s creating a guns'n'ammo hysteria, about the dubya's-wars-stoked/tax-cuts-for-wealthy deficit, to stop the counter-cyclical investing that could get the (non-banker) real economy going again, with an increase in consumption (even it's mostly greedy, unsustainable consumption of unneeded that ends up rotting in storage) and velocity of money, both of which would increase tax revenues to pay down the deficit (as Clinton did in the 90s economic expansion).
Last edited by boutons_deux; 05-22-2010 at 05:47 PM.
But the bottom line is that we don't HAVE a plan. Not really.
It is arguably the best thing that ever happened to the Republican party that Democrats took this debacle off their hands.
Reality is that no matter who wins in November, this is not gonna get better any time soon.
I agree. It will be bad if the Republicans take control, but worse if the Democrats maintain control.
It's simple. Look at the selling price and compare it to the daily gold price. Use non-collector 1 oz American Eagles. It is the most common used, and part of their pricing is by availability.
I almost didn't bother responding, because all the good points I brought up were completely ignored by you. If you are going to dismiss facts, then you will never believe the truth. My God. I point out their bullion list form the 18 coins included collector proofs. Of course that's going to increase the average % markup.
Why didn't the article give a breakdown by coin? Could it be you would see the Eagles at a 5% markup?
Looking at the last ten years -- , the last thirty! -- I see no good reason to think that.
With the possible exception of GHWB, but he's a loser, right? Not a real conservative.
The plan is to muddle through somehow.
But yeah, I agree.
That's a very good point, but it presupposes a level of political stability that might not be warranted by the cir stances.
I hope I'm wrong about that.
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