I bet the title got your attention I was lurking on the Kitco forums and a relatively new poster has provided some very interesting points about an imminent deflation: https://www.kitcomm.com/showpost.php?p=1892447&postcount=21 https://www.kitcomm.com/showpost.php?p=1892477&postcount=24 https://www.kitcomm.com/showpost.php?p=1892696&postcount=61 Here is a link to the the entire thread: https://www.kitcomm.com/showthread.php?t=113758 Apologies for the doom and gloom posts over the last few days but it is important to hear both sides of the PM argument! It just goes to show that one can create an argument for any scenario. Only time will reveal who is right.
those links arent working for me I thought we had inflation not deflation problems america printing too much money
Yeah the Kitco forum just went down- every here is probably clicking the links at the same time. Should be back up soon.
This point has been on my mind for a while. I have a good mate living in his homeland in remote PNG whome I recently visited again. He has a good job - and gets paid AU$1.00 per hour, and is able to support a wife & 2 kids, and is currently building a home for his family. It got me thinking about the widely publicised historical price of labour of 1/4oz silver per day. This is what my mate earns - AU$8 (about 1/4oz silver) per day - the historical rate. Now, most people I know here in Oz earn around AU$30 per hour, or 8 oz's silver per day. This is around 30 times more per day in Aus. The disparity must be economically unsustainable? So, if (and that is a big "if") things are to revert to their historical mean as measured in silver for labour, then The AU$ value must plunge to around 1/30 th of it's current value, making the price of silver skyrocket to around AU$900. These numbers seem a little too far out there? Can anyone see where my logic is wrong?
we have and will have inflation for resources and deflation of what made of these resources ... the only resource that will not inflate are human beings (unless we have war) I think I don't need to explain why )
Good points wrcmad ^^^ Roman soldiers also got paid in salt I believe, thats where the word salary comes from.
Deflation in the macro economical terminology? Who cares? I don't. If all prices drop 50%, and silver drops 50%, what changes to my purchasing power? Deflation in the local market terminology? Around $30, I'm not a weak hand. Rather the contrary. I'm looking to buy more instead. End 2011 I saw on the Kitco forum many topics about 'deflation', and '2008 is coming back' and blablabla. Instead, I bought more silver. So far, I didn't see reason to regret it. I took a silver position around $30. And I will hold it. And come on. Deflation? That is a system-killer. In a macro economical deflation cycle, banks and governments will default. Since their system is designed for rising prices, and the opposite would make them the big loser every day, month and year. That means that if I would return to a bank account, that deflation implies the risk of a total-loss of it. Fiatmoney in cash form under my pillow? Lol, I think stacking silver is wiser than stacking paper. The Kitco forum has many people that go like this: 1) They sell. 2) They sit ready to buy back in. 3) They encourage other people to sell after them. 4) When enough did, they all mass-rush back in. EEK. What just happened? Some gave away their position in the buying order.
You're forgetting productivity. Just as an experienced tradesman is worth more than an inexperienced tradesman or a man with a backhoe is worth more than a man with a shovel, the average Australian worker is worth significantly more than the average PNG worker with much of that value arising because of education, health and capital equipment.
Productivity is the key element in the whole of the inflation/deflation/crisis/depression story. If that average worker (essentially it's a population part) in the next years/decade fails to increase productivity at the same rate as the one at which new fiatmoney adds to the amount circulating, the self-reinforcing mechanism will put their circulation to a halt. This means that in real terms we should see factories spitting out equally more % production at the same production cost. This is what happened during the century after Keynes and Fisher brought the present system into place. If you look at the monetary base and thus the new fiatmoney spending level, you notice that every decade it is lifted to a threefold. So, we should see backhoes that are that rate times bigger than todays 1000 tonnes shovels. And, companies that produce the same with that rate lesser workers than today. And, efficiency that is that rate better than todays. What did we see during the past century/decades? Fast transport. Highways. Mass production. Shift labor. Analog and digital instruments/devices. Computers. Automation. New technologies. These elements compensated for the central planning thieves and the parasiting interest groups behind them. The new technology in the World War 2 story provided the last Depressions main exit. Computers provided the 80's main exit. What will it be now? I had and still have a hard time finding one. And that's why I after a couple decades bank saving, became a silver stacker (of the more careful kind) with also a stock of common stuff/spares good for a couple decades and a bank account that looks like the one of the debt club. Because without it, I'd become yet another slave of Keynes and Fisher, with choices limited to poverty / bend / prison. Unlike what the topics references suggest, the marketwide deflation cycle passed in 2008. The central planning parasites took measures to avoid a repeat (simply because it would mean their end) I know what is next. The convergence point. Where these two major longterm trends finally stumble into eachother, to enter a short highway to depression and conflict. It already passed on several places in the world. You just have to realize when you are watching the news, that it is showing you the consequences of it. Your goal is to be able to buy the same value you produced and saved. In order to achieve it, it's gonna need more than blind belief of any claims and careless buying. Because this easy way deadstops at a traffic sign, and it says 'Loser'.
Deflation is a highly possible scenario. If it happens, it will happen in the US and might be boosted by the euro crisis. Silver might go way below 26 $, way below 20 $, if deflation occurs. Many are predicting gold price decrease, but then that will drag silver down as well.
Not bloody likely here Pirocco! I'd love my mortgages, insurances, rates, electricity bill, water bill, duopoly grocery bill, car rego, etc. (I go on all night) to drop by 50%. Bet my left nut that'll never happen in Oz.
I agree with this. My mate is a services industry employee in a hotel doing exactly the same job with the same productivity as the same guy doing his job here in Oz. This kind of job does not produce anything material, but instead gives paying customers the service they want and expect. Only difference is he gets paid 30 times less than the Australian guy.
I see it also as unlikely. That's why I bought silver despite the already tripled price. A general prices drop is like inverting the system to work in the opposite direction. It would start to work against the governments and their interest groups. Their entire theft system floats on the gradual increasing of prices, the reason why they target a certain inflation rate (just look at the Euro monetary base trend, it was from the beginning of the Eu(ro like a straight curve towards 2008, which is signalling a specific macro economical central planning model (see http://seekingalpha.com/article/258120-is-the-ecb-actually-targeting-the-monetary-base?source=feed for an article about it). I think this topic is confusing. It should distinguish between the kinds of deflation. 2008 was no marketwide deflation. The only markets that went down where some debtdriven ones (alike the US house market) and some derivatives markets where price represented lotsa paper-buying. It was just a HFT market shock phenomenon, not a trend/longer term in the real economy. Yet, some people sold real assets (alike silver) in the highdays of the phenomenom. A bad idea, as was proved afterwards. I think on forums about precious metals/with alot vested interest, some like to talk about deflation to scare people, so that they would sell in the hope to buy back in lower. Small detail: their selling price could easily be close to the buy back in price of.... the very same that talk about deflation, and the lower price the scared sellers expected, never arrived. I can look at myself here, I'm sitting ready since early december to buy 6-7 kilo silver, I only need enough weak hands. And so far, I was unable to find them. Just too many sit, just like me, ready to buy. But I don't bother much, since I already have more ounces silver than euro's. And I buy other stuff that I'm sure of can use in the future. Today I spent 300 euro on two such things, a compact petrol heater and a pair reserve shoes. Hell, silver isn't my goal, it's just a step towards it, and if I can already buy goals now, why would I bother waiting for lower prices to buy silver? However, for those that hold alot fiat, well, waiting for much lower prices could make them ending up paying even higher prices instead. That's what I saw and still see happening. Recently I saw some guy bidding 20 euro's on the very same coins he sold me last summer for 18 euro. I think this says enough.
