ZH Plenty of data to be released over the next few days that are indicators of the current state of the global economy; Business Insider
It might not be as sensational as reading or listening to where Peter Schiff or Jim Sinclair believe PMs are going, but I certainly take more notice of macroeconomic data when it comes to stacking PMs
Reading all that brings an unwanted sense of foreboding. Interesting to see all these indicators as clear as day, yet the mainstream media has chosen to focus on only the good news (like Dow smashing records etc.). I hope we all survive a financial crisis if it does happen. Might have to rethink my plan to go overseas. Even in Singapore, the employment landscape doesn't look good. Could be prudent to just stay here until all this blows over. Just a question to ask, if a financial crisis does occur, does that mean the prices of PM will crash as well? Together with every else? Property prices etc.
The thing is, the entire list is a moment-view. I watch economic situation since just a couple years, and despite that I've seen a dozen of these moment-views, that yoyo between heaven and doom. And not only in articles/media but in real world. Example a company that in the first 3 months of 2012 put its personell in an unemployed regime sponsored by state 1 week work/3 weeks not, but less than a year later, doubled its amount employees. So I became wary of all the macro economical claims. They just change too wildly. That's a question that goes about a trade-off risk choice. The risk of holding your worth on a bank account versus the risk of holding your worth in stuff like PM. What will pose the biggest risk in a financial crisis? That's the question behind your question, haha.
PMs were sold off during the GFC because gold had (and still has) a 50% book discount as a reserve asset i.e. a bank holding a million dollars worth of gold was only allowed to record it as being $500k worth of Tier 1 capital (equivalent to cash). Everyone who needed to boost the book value of their capital sold their gold (for, say, a million dollars) and suddenly had a million dollars worth of Tier 1 capital - twice the amount they had when they were holding gold. If gold's risk weighting as a reserve asset changes before another financial crisis, the outcome will likely be very different to what it would be if there is no change.
Didn't the weighting of gold change for US or euro banks last year? I could swear I read something about that happening.
boyracer, if this is what you are referring: Are we allowed to link to kitco without fear of a "bitchslap"? http://www.kitco.com/ind/Radomski/20130116.html I don't even think any of the fundamental Basel III recommendations have even begun. They are all in the "designing the template stage" at the moment. Please correct me if I'm wrong.
I personally know a few oldies that went through the last " great depression" here in Australia as young kids at around ten-fifteen years old and the main story I get from them is the absolute lack of food and much hunger. Mind you this is from an age when people were much less reliant upon shopping and were used to providing at least the basics for themselves and when most people at the least had a small garden in their backyard to supplement what they could afford to buy from the shops. It was also at a time when the population was a quarter of what it is today. Fast forward to today when the vast majority are reliant upon everything they consume, the population is at least four fold and the majority live from pay day to pay day to provide the necessity's of basic survival. With many reliant upon some form of government payment just to pay the rent or keep the lights on and no other options. Most are absolutely fubard just without power or the local supermarket after a week. Things have become so finely balanced all over that it will only take a little extra weight or pressure here or there to send the whole lot over the edge of the precipice. Back in the thirty's we did not have the population of whole a country living in a single city, whole country's reliant upon satellite networks or power grids, global finance balanced on the failure of a single bank, pandemics able to travel the globe in a few days, or the lack of an iceberg lettuce at the local supermarket being able to ruin an entire salad for the evenings meal. What would you eat next month if the shops couldn't open to sell you it ?
There's no question that the global economy is going to collapse. The only question is when. However, reading all these "gurus" and "experts" is somewhat tiring. There are a lot of indicators that are pointing upwards in the short and medium term. My professional opinion is that we're going to experience another boom, amplifying the current credit bubble, inevitable leading to a complete financial meltdown. Banks are going to go bust at an alarming rate, and sovereigns will stop paying their domestic and external creditors. There's no more firepower or political and public willingness to bail them out again. Inflation is going to set in, thus worsening the effects of the crisis. As the savings evaporates, the inflation rate is going to fall dramatically and we'll all be in deep shit. Well, not us of course, but that's another story. In other words: the collapse is not imminent, but it is inevitable. These people have been crying wolf for years now, and it's yet to happen. Things need to get worse before the ridiculously expansive monetary policy is going to become ineffective.
the collapse of the real economy in the West has already taken place, you're just not paying attention.
Hmm, I guess that is a valid point. Thing is during the Asian Financial Crisis, I don't recall any of the large banks in Singapore collapsing, or reading about people who were unable to withdraw their cash. I suppose times might have changed, but I'm hoping that our banks have healthy cash reserves on hand.
Unemployment rates would have been a lot higher in the great depression of 29/30 if women had been in the workforce. Double that figure in 29/30 for a better comparason. Regards Errol 43
Well, they don't want much cash in hands of people. Because they can't control cash. In order to control general price increasings rate, they want to be able to sterilize / destroy existing money when they produce new money. It's harder to destroy cash because they have to show their ugly fascist/marxist nature to people. So your hope goes abit against the central planners strategy. Aside of this, a central bank / government is abusing the word 'reserve'. Because they produce representations of buying power, not buying power itself. So the real question here is what production will do in the coming years. Will they be able to produce more without having to drive up their prices? If not, then we reached the end of a supercycle, culminating in either the bankruptcy of the central planning, either a new depression, that will last until the same happens. If I look at the behaviour of the central planning post 2008, it looks like the delayed scenario, meaning some ugly years maybe even decades, until entire population parts start to meet the central planners definitions of 'terrorist', and current production areas that became abandoned ghost places. Because you can't sponsor a part of the production if the other part ceased to exist. My place on the planet. Eighth uninterrupted months in a row, sets a new record company failures. All except 4 months since september 2011 set such new record. Official economical figures make crazy moves, only a couple months ago they showed again a whole list of numbers indicating the crisis finally ended. A couple days ago, positive figures dropped, and negative figures increased, at a rate never seen before. I remember early 2011 the very same (old record figures then haha). It culminated in the euroside crash end september 2011. These extreme situation swings are typical for a process that is going beyond the power / ability of its regulation devices. But it's a huge process, and things there happen on year and even decade time frames. We all know that the sun will run out of fission elements, but its not relevant for our time horizon. But I think we reached the single decade time frame with the economy. Of course, otherwise I wouldnt be here on this forum.
