O.k so the SHTF scenario is still quite relevant.....Its just going to be a looong drawn out slow process.
There is a huge difference between daily spendings and saved capital. For daily spendings, inflation is irrelevant (or it would need serious endphase hyper), this topic is about the central banks money production, inflation. Your 'cash is king' statement wasn't about daily spendings, but savings. And even in case daily spendings, cash isn't that needed, due to electronic pay cards and normal (not saving) accounts at banks, just a wire transfer. If you interprete a bank account and pay cards also as cash (some seem to do that), then cash isn't king, because in a crisis they can limit/block/office day off your bank money. And real cash (banknotes, coins) they put transaction limits on. Suppose you did the "Cash is King" move, with underpillow/home safe banknotes, then what? Gonna visit a precious metal dealer and tell him that you want to purchase pm's for $100,000, he's not allowed by the govt. And the govt is smarter than just a per transaction limit, they accumulate it (see Cyprus, x a week). That 'Cash is King', ceases to work on exactly the moment people intended to. There are plenty articles out there that show how those Cash is King end, both daily regular news and historical. Nothing is the best in any situation, even not assets, and a King that has major dependencies, isn't a King at all.
Pirroco do you seriously think ANY business is going to knock back cash, let alone abide by the fiscal controls mandated by a government that caused a crisis in the first place? I've never known a business to knock back cash. Under the counter is off the books. If anything, Cyprus proved "Cash is King"
Yep, that is where it is all about. Independence. Managing your own things. Not delegating it to third parties that prove year after year, decade after decade, that they used your money in their interest at expense of yours. If you don't, bet that when property prices tank, that they make sure that you won't be the one picking up the cheapo's. Their entire macro+micro (read: along numerous ways) economical/financial system is geared towards giving you no chance to steal back what they stole from you.
Do you seriously think they wouldn't? In my country, last week, plenty individuals and businesses reported their 'black money' as to evade much higher (40 instead of 10%) penalty costs, as indicated by record high inflows to the tax department. And this happened repeatedly over the past years. So yes, those businesses gonna knock back cash. Because the cost (anti fraud / tax evasion) to not knock cash back, is much higher. I assume you do know what was 'special' about the country Cyprus? It was a wellknown tax evasion place. If Cyprus' story has to prove one thing, then it is that cash is NOT king. Just ask all those that stood in queues, waiting hours for their daily / weekly 'what government allowed them'. Only assets, proveable as your ownership, are king.
That's exactly what i'm waiting for.... the property bubble crash..... if I can hold enough cash and pms and hold out for a few more years..... I reckon I will pick up at least one property for half price of what they are now........Its just a matter of .........TIME!
I would not be suprised to see property not crashing as expected....not for a while anyway.....capital is on the move around the world out of Yen, Euro, Muni bonds, US bonds, European bonds, Pound etc....and some is finding its way into real estate. It will be possible to have high unemployment, high inflation, high interest rates and ....wait for it.....expensive housing. It will not make much sense to a lot of people but the ones buying the houses are looking to put their money into tangible goods. Just as some will find its way into the gold market and create the bull market we are all waiting for. Overseas buying is what to watch. I too thought about the jump eventually from precious metals to real estate but things may not turn out as we expect. It may be that land prices will move up at the same time as gold.
The dealer will stop supplying the addict when the addict stops demanding his fix, that is, when the addict is dead. Unless the dealer actually wants the addict dead, in which case he will simply stop supplying.
Ye I understand all that..... I have plenty of time to wait though.....prices will crash or at least retract one day......eventually..
Remember that prices mean nothing. Say prices crash but your bank savings are unavailable thanks to a bail-in. Or prices crash but your savings are in PM's which have just devalued significantly. Maybe purchasing power is a better way to think of it.
So you think PMs and Cash both wont retain purchasing power. What will ? Im thinking alcohol is a good medium of exchange
This is the game, isn't it? Keep in mind that you and I are not meant to win the game. I'd love to be able to answer your question. Fundamentally Gold will retain purchasing power, but manipulation throws a spanner in that. Cash clearly doesn't retain purchasing power. Alcohol may well be good, but are you going to store your entire life savings in booze in the hope that you can offload it easily and buy a house with the increase in purchasing power? :/
Euro and yen and US dollar may crash but many other currencies won't. The Aussie will not suffer the same fate. We will have the opposite problem.....a currency that is too strong which will destroy what little manufacturing we have left. The movement of capital out of riskier assets will find its way to the least riskiest and eventually tangibles..oil, copper, wheat, rice etc.....we have a resource rich country but that does not mean we will have a boom like 6 years ago....no, no, no.....oil is going to skyrocket, as too will gold and silver in the rush for tangibles....this is going to send inflation up all around the world.....we will not have it as bad due to the rising aus dollar but the high oil price will impact on mining profits..........we are going to have stagflation just like the 70's.....the aus dollar was still set by the reserve bank in those days and it got up as high as about $1.46 US and it will get back there again soon. The pattern forming is so similar to the 70's that it is quite unbeleivable....gold took a rest in the mid 70's and pulled back to nearly a half of its peak and then turned and went 8 fold over the following 4 years.....this is why I am waiting for the pull back to around the $1000 mark. We will have high unemployment, high interest rates, possibly high house prices ( due to overseas money looking to escape riskier assets), high currency, high stockmarket ( wait for the inevitable bust in the US dollar and US bonds, then you will really see capital fleeing to the next safe thing which will be the tangibles and the safety of private companies with dividends ) and for the most part none of our newspaper economists will have a clue as they don't understand the impact of capital flow. They only understand relationships which have proved wrong again and again but still they sprout the same thing. There will always be a market and the skill is to understand where the market is before it rises. This is the hard part. Thinking that all currencies are going to crash will blind you to the possibilities which exist. Forget manipulation etc etc etc....it is only by the prophets of doom. Sure things are going to be tough for some....but not all..........it is impossible, regardless of what you have read over and over again, that the world is controlled by a small group of people who manipulate economies and markets to extract all our money. No way Jose......there is short term profiteering on a massive scale that is true but this will not stop the inevitable.
Tolly........If we are going to see a high AUD price and high inflation in this country would it be smart to hold cash in the bank and earn lots of interest on it then.....while also holding 'some' pms?
I see alot indications that this happens though. "Macro economics", is a job performed by a group that received their privileges from government. The question then is: do governments / central banks work together worldwide? If I see what all happens, how they cooperate worldwide to fight tax evasion and manipulate exchange rates and block bankruptcies, one can only conclude that a group of people manipulates the worlds population (including economies/markets) in order to "extract the money wherever it is". As an organisation, in an organized fashion. Nazi Germany was a very visible control since it openly just forced it all. The former Eastern Bloc was abit less visible control. The former Western Bloc was least visible. But regardless how openly the control happened, it all resulted in the same: a drain from a producing population part to a parasiting population part. Efficiency of theft has the same requirements as any other efficiency: it requires organisation and thus a tree structure of power of whose top is bound to be a small group. Let's pick the worlds affecting parameters: What is the size of the group that decides LIBOR? What is the size of the group that decides how much dollars, euros, yuan to create? What is the size of the group that decides about currency swaps? What is the size of the group that decides tax rates? Because that "profiteering on a massive scale", starts exactly at aboves parameters. Without organized purchasing power losses on fiatmoney, the big mass depositors would not try other markets, and the money for nothing clubbers would have nobody to frontrun. And thus, the latter is a consequence of the former. It all starts with aboves decision makers. Not that the size of the group in control matters. Whether it's performed by 0.1% or 60%, theft is theft and the situation of the economy as a whole, is a function of the amount that is stolen, not the amount thieves.
In time , the capital flows out of Europe and Japan into the U.S. dollar will retreat into stock markets and tangibles in an attempt to gain any kind of dividend or value . Being a low debt, resource rich nation, we will benefit to some degree in the sense as our currency will be looked upon as by stable and will be speculated upon accordingly. As gold rises, so too will oil and every other commodity and all will feed into inflation, especially oil which impacts its effect into everything. The rate of inflation here will not be as bad as the U.S because of our currency strength but we will still get it. This will be on top of the rapid rise in interest rates as banks fail and restructure and sovereign debt tanks. We will be facing stagflation as unemployment will rise as the mining boom will not produce the dividends of 6 years ago due to inflationary offsets. We may also see high housing prices staying stubbornly high as capital flees into housing and land from overseas. W are heading for confusing times. The key is the final high in the U.S. dollar which will surprise nearly everyone. This will signal the end of the rush out of Europe and Japan and the new rush out of the last currency to fall. The movement out of the U.S. dollar and bonds is what will send gold and silver to new highs so we are quite a few years away from this.....maybe 4 at a rough guess....then in the few short years after this, gold and silver will probably blow off, just like the 70s.......it's going to be a rough ride
