Mike maloney event in Sydney or melbourne, Did anybody go?

According to that graph, and the assumption that high GDP to bank assets causes financial problems, the USA should have been the best performing country.

 

Interesting thing for me were a few things:
1 - Mike last night was BIG on freedom and liberty and spent alot of time on these issues. Very Ron Paulesque
2 - China property bubble is the biggest bubble in history. Mike showed this video:

https://www.youtube.com/watch?v=ei0FpwI1dqg

3 - the next part was the notion of the "I, Pencil"... look it up but basically it covers the chain/web of transactions necessary for even the most simple of objects to be created. Then apply this to building a house. What Mike then proposed was that with the advent of the first home buyers grant, people who were considering purchasing their first home down the track, bought in earlier than planned to cash in on the grant. This brought forward the chain/web of transactions that were supposed to have happend in the future. So we've had the burst/boom of transactions but now the inevitable lull.
4 - In the 1980's (l think that's what was on the chart he presented), only 5% of our exports went to China. Today 30%. When China's exports to EU and US are reduced: When the "biggest property bubble in human history" bursts: Australia is "pretty much stuffed".
5 - Mike then went back through alot of the history of the price of gold and silver as per his previous presentations
6 - A quick look at the average distribution of investments conducted by superannuation funds does not bode well for people not in control of their own super
7 - Mike then took some questions and made himself very available to the audience for a meet and greet afterwards

I would love to hear from others at the seminar on their thoughts

 

Is there an asset that is NOT in the biggest bubble in history?


p.s. thanks for the reports folks. Very interesting thoughts herein.

 

It's probably safe to say Dutch Tulips are no longer in a bubble. Not sure if they're strictly an 'asset'?

 

Deflation was covered, and he still believes that the only reason why we arent seeing it is because of all the money printing thats going on.

 

Here's a good interview of what Mike thinks will happen during possible deflation
[youtube]http://www.youtube.com/watch?v=ZiQgEZfge5I[/youtube]

 

The things we pay by borrowing -------> price will go down
The things we pay by cash ------------> price will go up

That's the missing ingredient with all these inflation vs deflation gurus.

Both will happen at the same time.

This being said,

AT LAST one guy stands up and tells it like it is: The price is irrelevant, it's all about the purchasing power!

kudos to him for spreading that!

 

Hence money and credit are not the same.

 

in this system, money is debt alright. It's just there's a difference between deflation and deleveraging. The banksters are pumping money in some assets to make it look like deleveraging is not happening.

At the end the velocity of money will vary depending on the assets. Food=more expensive. Houses=cheaper. You just can't load up on debt forever.

anyways, to go back to Maloney, I like the guy because some stuff he brings up, others won't cover. So he actually adding value, unlike an army of others.

 

Yes, I am not sure where he got his 10x GDP figure from last night but it was so out of whack with other economies I was a little dubious about its accuracy.

But he was a very nice guy and stopped to have a chat with me and a property developer called Adam while he was walking past. We discussed the RBA's Committed Liquidity Facility and how it put the taxpayer on the hook for any banking mal-investments in Australia:
http://www.theaustralian.com.au/bus...n-banking-review/story-e6frg926-1226607138424

He did put a lot of time into laying the groundwork for gold being the foundation of a free and fair society by working through the definitions of freedom, free market economics, the time value of money (he called it economic energy). And he referenced EconomicFreedom.org as a source of these ideas:
http://www.economicfreedom.org/

and also the I, Pencil video as a depiction of the free market at work:
[youtube]http://www.youtube.com/watch?v=IYO3tOqDISE[/youtube]

He then went on to describe how central planners are the most dangerous people on earth as they can distort the effects and outcomes of the free market interactions and transactions by forcing their policies on the individuals that make up the society, to control them, their resources and the resources of the common wealth. He cited the Great Leap Forward of Mao Zedong which enforced policies that resulted in the Great Famine as an example of this.
[youtube]http://www.youtube.com/watch?v=YXAnwTwdBlc[/youtube]

That was all precursor to the statistics on Gold and Silver.

Included in the handouts were:
1) Printing Money Price of Gold Preservation of Wealth, by Ergon von Greyerz
http://www.jsmineset.com/2012/10/09/printing-money-price-of-gold-preservation-of-wealth/

2) A four page excert from Atlas Shrugged, by Ayn Rand

3) The Text of the "I, Pencil" essay by Leonard E. Read.
http://www.econlib.org/library/Essays/rdPncl1.html#I, Pencil

4) A copy of the essay, Gold and Economic Freedom, by Alan Greenspan
http://www.freerepublic.com/focus/f-news/1299126/posts

In a platonic appeal, he charged everyone to wake people up!
[youtube]http://www.youtube.com/watch?v=N6LUptADIww[/youtube]

 

^ assets to GDP ratio... define 'asset'

Even the RBA chart has a nifty asterisk.

"Oh, assets are reserves". Imagine that one.

Of course they probably mean that assets are all loans, reserves, etc. But so what?

IMO comparing anything to GDP is a joke because GDP itself is a joke.

Edit: Thanks for posting the I, Pencil movie too, it's good. I'd read the essay before, but I'd never seen the movie.

 

Bump & thanks

 

I didn't mention debt. Both credit and cash can be an asset and a liability - it just depends who owes who.

Credit and money (cash) are not the same.

The things we pay by borrowing -------> price will go down Credit deflation/debt default - i.e., M3 goes down
The things we pay by cash ------------> price will go up Cash inflation/"money printing"/QE - i.e., currency goes up

 

I think we may have different definitions of monetary inflation/deflation, price inflation/deflation, cash, money, debt, credit, price, currency, cash inflation (I don't know what that is), and their relationship.

lets go back to the topic, which is Mike Maloney.

cheers,

 

People in cyprus at the moment aren't talking about gold and silver from what i can tell, they are trying to work out where to put the money.


I think people will choose real estate before gold and silver. While you might increase your purchasing power holding gold, real estate is the easiest investment for most people to understand.



I was working with a guy from Zimbabwe who lived through the hyperinflation, and he said gold and silver go great, but real estate does too. He kept saying over and over to me gold and silver all the way. Zimbabwe had the benefit of being able to switch to the US dollar however, and real estate prices just changed to being valued in US dollars rather than zimbabwe currency.

He told me this story how they had to melt the families savings down to a gold tow ball paint it black and drive across the border, then put it in the bank over there.


Thought that was quite a cool story i'd never heard anything like that before. Generally though he said even the people that bought gold and silver ended up using it for food so you want to make sure you have plenty of that.

 

"The more acute stockjobbers imagined justly that prices could not continue to rise for ever. Bourdon and La Richardire, renowned for their extensive operations in the funds, quietly and in small quantities at a time, converted their notes into specie, and sent it away to foreign countries.

They also bought as much as they could conveniently carry of plate and expensive jewellery, and sent it secretly away to England or to Holland.

Vermalet, a jobber, who sniffed the coming storm, procured gold and silver coin to the amount of nearly a million of livres, which he packed in a farmer's cart, and covered over with hay and cow-dung. He then disguised himself in the dirty smock-frock, or blouse, of a peasant, and drove his precious load in safety into Belgium. From thence he soon found means to transport it to Amsterdam."

- MEMOIRS OF EXTRAORDINARY POPULAR DELUSIONS AND THE MADNESS OF CROWDS, The Mississipi Scheme, p.29

Free download of the book

 

It's a good story and quite relevant.

I dispute though that real estate will maintain relatively high pricing during such a transition to a cash-based society. Sure, they were probably already cash-based to a degree, but when your economy is about to tank (killing the sacred cow of Cyprus - the financial sector), are real estate prices really going hold up?

Sure, when the dust settles they'll probably plateau and become a stable place to park money, but where do you put your money during that transition? Cash probably.

I'm sure Zimbabweans who put their $$ into real estate did a lot better than those who put it into cash (no contest!), but that doesn't imply that real estate prices continued to rise at the same pace as monetary debasement.

Cyprus is different, because it uses the Euro. So i'd say cash is probably king at the moment.

 

+100

 

Im not sure i believe the towball story. Its too soft to take the shear force of braking & accelerating

 

Check the history of land ownership and confiscation in Zimbabwe over the last 30 years.