REASONS FOR STACKING WITH CONFIDENCE

[Byrnsy]

Ever hear the saying believe nothing you hear and half of what you see and you might find the truth. Well, I want to hear your thoughts for and against PM's. I will start with some thing's I believe point to GOLD/SILVER being the world standard within 15 years.

1)The Federal Reserve starting just over a year ago are now adding paper gold and silver ETF's to the market out of thin air.The PM does not exist. Ask yourself if they control the supply don't they control the price?

2) The Federal reserve is expanding the U.S money base in the minimum by 85 TRILLION per month even though much of that is being spread throughout the world due to reserve currency status. Considering JAPAN plans on doubling the Yen's monetary base over the next 2 years. It makes you question how much is everyone else printing? Because we both know it's everyone everywhere doing the same thing.

3) With current debt's around the world. The Federal Reserve is holding interest rates at all time lows of 0%. That means we have 0% interest on the US 17 TRILLION debt like other countries it's the same thing. What happens when they raise it again. Lets say the average of the last 50 years (4%). The US would be paying 700 BILLION in interest a year alone. The government only takes in 1.2 TRILLION. It's only a matter of time before the US dollar is inflated to a point of no return.

3) With current known deposits, Silver is estimated to be completely mined by 2028, with Africa estimating to have 15 MILLION cell phones by 2015 among other growing 3rd world countries. It's just a matter of time before it's gone.

4) Unlike copper which is the complete opposite of Silver. 80% of Silver used in industrial application's is NEVER RECOVERED!

5) Energy is the biggest factor in all this. What happens if energy prices rise? Currently the average cost to mine SILVER is $18 per ounce. With inflation running a muck as well as current tensions with some of the largest oil producer's in the world. Remember it was only the 80's when the US had a gas shortage.

6) There are a lot of Evil F**K's out there trying to destroy fairness and justice on this planet. They seem to win more then lose.


If you have anything else let's hear it

 

[DanielM]

2) The Federal reserve is expanding the U.S money base in the minimum by 85 TRILLION per month even though much of that is being spread throughout the world due to reserve currency status. Considering JAPAN plans on doubling the Yen's monetary base over the next 2 years. It makes you question how much is everyone else printing? Because we both know it's everyone everywhere doing the same thing.

That's alot of cash,85billion sounds a little better though

 

[Byrnsy]

Typo. 85 Billion is right, sounds wrong

 

[JulieW]

7. The Banking system in Europe is now just a sham and revealed as a wealth transfer tool and everyone knows it.
8. Julia Gillard congratulated the IMF on the most majestic mismanagement and hubris since Marie Antoinette suggested cake as a replacement for bread.
9. Central Banks are stacking gold in record amounts
10. You've bought all the 'stuff' you could ever need and the necessities of life will be affordable in gold and silver for a lot longer than paper promises.
11. It's shiny and feels nice.

 

[Nugget]

10. You've bought all the 'stuff' you could ever need

Quoted for truth and I'm stealing it for a sig for a while

 

[House]

12. There are $10.8trillion on deposit in US banks. The Deposit Insurance Fund of FDIC has only $33bn... In smaller numbers, that's like insuring $10,800 worth of risk with $33!

13. The US Debt in 2008 was $10trillion, it is now $17trillion and somehow "everything is all okay"

 

[finicky]

1)The Federal Reserve starting just over a year ago are now adding paper gold and silver ETF's to the market out of thin air.The PM does not exist. Ask yourself if they control the supply don't they control the price?

Agree with your sentiments but I don't understand the above at all.

*/
I always remember some commentator saying that the climax will arrive as a global currency crisis. A collapse of confidence in every fiat currency means that money will seek out any viable alternative, and silver arguably has a deeper history as money than gold.

But thing is - how long will it take? My patience has worn thin over 10 years - we're subject to insect time while caught within a much bigger and slower process. If I were in Europe right now though, I would be a hell of a lot happier with something in silver and gold. It's a simple idea that you'd think would catch on.

 

[Stick Framer]

The system is broken and 2008 didn't fix it, so it just keeps rolling on until we can no longer avoid it

Problem is that the finance system is addicted to credit and they see it as the only way forward

Not so long ago Australia was told to save, save, save
now it's starting to happen business confidence has fallen and now we are told to spend, spend, sell your mother to buy that new shiny thing

 

[Matthew 26:14]

Well, what value would you put on gold silver in 15 years time? Gold would have to be $US3,750/oz and silver $US67/oz for it to compete with other investments.

Stock markets on average double every 10 years. This has been historically true for the past 113 years (going back to 1900).

So going by that, gold/silver would need to rise by 150% over the next 15 years just to equal stock market returns.

 

[Nugget]

Well, what value would you put on gold silver in 15 years time? Gold would have to be $US3,750/oz and silver $US67/oz for it to compete with other investments.

Stock markets on average double every 10 years. This has been historically true for the past 113 years (going back to 1900).

So going by that, gold/silver would need to rise by 150% over the next 15 years just to equal stock market returns.

I have one name for you because i can not be bothered to articulate a decent argument - BOND CORP

 

[Pirocco]

"Fed adding "paper" gold/silver to ETF's?"
Wot?
Which ETF(s)?
ETF managers buy/sell delivered (it enters their depots) silver from/on the market in order to make their shares value track the silver price, otherwise they wouldn't be able to skew money out of the silver market.

"The Federal reserve is expanding the U.S money base in the minimum by 85 TRILLION per month even though much of that is being spread throughout the world due to reserve currency status"
As excess reserves balances at the FED (and other central banks) show: these new dollars do not add to circulation. At 'best' all they do is replacing existing dollars that aren't spent (ie dollars that people save instead of spend).
That's the reason that general prices rose way less than the dollarcreation suggests.
Does your bread cost 3 times its 2008 price?
Your car?
Your house?
Your pet food?

Rising interest rates typically happens when general prices rise so much that people with bank savings start to spend / swap them to other things. They don't. See, printing isn't spending. If I would print 500 billion dollars, and I store these in my garden house, do they affect the economy? No they don't. At least not in real terms. Some people may anticipate on the eventual spending of this 500 billion dollars, and drive certain prices up, but expectations themselves don't make reality.
And if I later on burn that 500 billion dollars, what did net change? Nothing.
Is it possible that the Fed over some time will destroy the excess reserves?
Well, in 2001 the excess reserves balance shows an uptrend of 18 billion, and a year later they were destroyed.
Will this also happen to the 1500 billion added since 2008? I don't know. But what does the Fed need to NOT destroy them?
Take for ex the EU situation at present time:
This is the BASE money:
2013Mar 1428842 E
2013Feb 1534126 E
2013Jan 1630913 E
2012Dec 1630969 E
2012Nov 1675264 E
2012Oct 1736211 E
2012Sep 1766244 E
2012Aug 1750966 E
2012Jul 1774568 E
2012Jun 1762300 E
2012May 1754619 E
2012Apr 1752124 E
2012Mar 1598632 E
2012Feb 1467124 E
2012Jan 1495303 E
2011Dec 1335315 E
2011Nov 1274846 E
2011Oct 1232234 E
2011Sep 1184512 E
2011Aug 1122369 E
2011Jul 1086629 E
This is the Excess Reserves money:
2013Mar 297341 A
2013Feb 360807 A
2013Jan 382990 A
2012Dec 403527 A
2012Nov 422720 A
2012Oct 431095 A
2012Sep 432898 A
2012Aug 403239 A
2012Jul 4616 A
2012Jun 4206 A
2012May 5275 A
2012Apr 4282 A
2012Mar 4570 A
2012Feb 4728 A
2012Jan 5290 A
2011Dec 4469 A
2011Nov 2754 A
2011Oct 2578 A
2011Sep 2509 A
2011Aug 2659 A
2011Jul 3135 A
Both BASE and Excess Reserves are dropping, meaning euro's being destroyed.
BASE dropped 337,4 billion since its peak.
Excess Reserves dropped 135,6 billion since its peak.
So as you see, money created, never spent, money destroyed.
Considering silvers price already tripled due to demand that assumed spending that didn't happen, I think silver stackers should be very cautious when picking out moments to buy.

My own supposed inflation hedge now works 2 years against me, if I would sell back to dealer now, I would receive 20% euro's less than I paid, equaling 4 years working without wage. Mostly due to tax not due to silver market though.
Nevertheless, my understanding (right or wrong) of economy tells me to not sell and to buy more instead. I started buying with a 900 euro per kilo target price. A year later I changed it to 800 euro per kilo. And if I see reasons to drop that once again, I will. I try to concentrate purchases when most of the paperclubs pump&dump side dumped.
For the rest I'm dependent on other stackers. But I rather prefer that than along a bank savings account depending again on governments/banks/parasites.

Most of those points you wrote in this topic, are pump points, being points from people that suggest to buy silver regardless price, saying that the ounces matter, not the dollars. That you receive less ounces for your dollars instead by doing that, they carefully walk around. Are they stupid? Or are they after your money?
If they were stupid, they wouldn't repeat everytime this bullshit after every pump & dump cycle. They would have learnt instead. So the second explanation is the inconvenient answer.
I'm not saying that it's stupid to buy silver now, but at least do it based on true instead of bogus stories.

 

[valuecreator]

Well, what value would you put on gold silver in 15 years time? Gold would have to be $US3,750/oz and silver $US67/oz for it to compete with other investments.

Stock markets on average double every 10 years. This has been historically true for the past 113 years (going back to 1900).

So going by that, gold/silver would need to rise by 150% over the next 15 years just to equal stock market returns.

In 15 years time I would be very surprised if anybody priced Silver in U.S. currency (besides Americans).

 

[Matthew 26:14]

^ This all might be true, but if your investment strategy is essentially betting that the global financial system will collapse then I'd suggest the odds are heavily stacked against you.

 

[Pirocco]

^ This all might be true, but if your investment strategy is essentially betting that the global financial system will collapse then I'd suggest the odds are heavily stacked against you.

In some times on some places, people stood in queues to buy rationized chunks, and the financial system up all the time.
I'd rather buy the stuff before. I grabbed 1/3 of the silver I would have grabbed in 2008. And 80% of the silver I would have grabbed now. See, the problem is that I'm not alone in the grab. A big lot people, got out of stocks/bonds/whatever with fast loss risk. In my country, the amount euros on deposits sets a new record every year. Despite the very low interest rates. Banks refrain from granting >30 years termed loans, because they know that intrest rates won't remain on these lows. And that in turn implies a next inflation wave.
Some claim that a crisis only causes an inflation wave with corresponding debt erasal, and then proceed the old way for another 'business cycle'. However, will the producing population part be able to improve themselves, once again, upto tripled production rates? The industrial/technological/scientific and scale-of-operation improvements were the reasons for past inflation waves to proceed after crisis&inflation wave. I fail to see how todays production methods/tools/scales can again be lifted to a much higher level. Do you see anything that can cause this? For ex, in the eighties the introduction of computers and the consequential automatisation provided such a lift. Earlier in the century, mass production provided such a lift (cars for average Joe!). New materials provided such a lift (plastics). What is at present day promising such an economic-wide improvement?
Without an answer on this, any 'investment strategy' is better than holding systems papers of any kind.
The only remaining potential for gain is not anoverall gain, but the gain that is a shift. Until there is nothing left to shift. Every year, people with bank deposits as value storage, built up again losses in serious degrees. It has never been else. The sooner you get out of this, the better, at least if you avoid to buy in uptrends caused by short term profit seekers / systemicals with sterilisation purposes. How much of silvers uptrend, upto todays price level, since 2008 is due to short term profit seekers? Todays Comex position sits (once again) even lower than 2008's middle-of-panic bottom. Silver ETF's stayed largely stagnant since almost 2 years, so it wasn't ETF silver demand that held todays price level. It was people like me, that didn't bail out, or at most only sold when the Comex Club drove up the price, to buy back more silver later, after the Comex Club dumped again.
Despite I now see a 20% unmaterialized loss, I still buy all the silver I can buy. But I don't make the silver story, I'm just a small character in it. The question now is how much of those stackers will sell at and below todays price level. To then be replaced by paper clubbers. Apparently, and so far, these stackers managed to continue snooping up the new mined/recycled silver, despite and unlike 2008-april 2011 they had little to no help from ETF's.
If todays price level holds, I will have added 12 kilo silver till years end. If todays price level doesnt hold, it will be more. That is my simple take on this.

 

[valuecreator]

^ This all might be true, but if your investment strategy is essentially betting that the global financial system will collapse then I'd suggest the odds are heavily stacked against you.

It's already happening, didn't you get the memo?

 

[Pirocco]

^ This all might be true, but if your investment strategy is essentially betting that the global financial system will collapse then I'd suggest the odds are heavily stacked against you.

It's already happening, didn't you get the memo?

Without the political global working together to take out alternatives, half of the worlds map would have looked red on the systems health meters.
And this global working together is something new (on the century time scale). There are no historical examples to serve as indicators of what is next.
I thought alot about this, and my take is that we are at a perma-recession that will last until conflict. See, we focus here on monetary aspects (financial system) but this monetary aspect is, in its whole, just 1 method to steal. Rules and selectiveness form another method. Tax forms yet another method. Does it matter if you lose 10% due to inflation or due to tax? I would say no. And that's why I stack with confidence. The more that do it, the harder govt will have it to steal any way. Because it is extremely hard to control transactions that do not involve computer/network/fiatmoney. Govt will be forced to take control of production, and that itself typically destroys production, and also causes the price mechanisms to work 'local', if you get what I mean.

 

[southerncross]

Pirocco wrote:

As excess reserves balances at the FED (and other central banks) show: these new dollars do not add to circulation. At 'best' all they do is replacing existing dollars that aren't spent (ie dollars that people save instead of spend).
That's the reason that general prices rose way less than the dollarcreation suggests.
Does your bread cost 3 times its 2008 price?
Your car?
Your house?
Your pet food?

What is the true level of inflation ?

14: Derivatives Bitchez.....

A derivative is a financial instrument which derives its value from the value of underlying entities such as an asset, index, or interest rate. "A derivative is a financial contract whose value is derived from the performance of underlying market factors, such as interest rates, currency exchange rates, and commodity, credit, and equity prices. Derivative transactions include an assortment of financial contracts, including structured debt obligations and deposits, swaps, futures, options, caps, floors, collars, forwards, and various combinations thereof."[1]

https://en.wikipedia.org/wiki/Derivative_(finance)

Forget about the lies and cons that we are aware of, the really scary stuff is behind the scenes. It (derivatives) is the main reason desperate measures such as Cyprus are being placed on the table for all to see, why they don't even bother hiding the manipulation of markets anymore and why they are all so shit scared.

The world's scariest story: trading in derivatives

Bad as these scandals are and vast as the money involved in them is by any normal standard, they are mere blips on the screen, compared to the risk that is still staring us in the face: the lack of transparency in derivative trading that now totals in notional amount more than $700 trillion. That is more than ten times the size of the entire world economy. Yet incredibly, we have little information about it or its implications for the financial strength of any of the big banks.

Moreover the derivatives market is steadily growing. "The total notional value, or face value, of the global derivatives market when the housing bubble popped in 2007 stood at around $500 trillion The Over-The-Counter derivatives market alone had grown to a notional value of at least $648 trillion as of the end of 2011 the market is likely worth closer to $707 trillion and perhaps more," writes analyst Jenny Walsh in The Paper Boat.

"The market has grown so unfathomably vast, the global economy is at risk of massive damage should even a small percentage of contracts go sour. Its size and potential influence are difficult just to comprehend, let alone assess."

http://www.forbes.com/sites/stevede...ltdown-the-water-is-still-full-of-big-sharks/

The value of Wells Fargo's shares is now the highest of any U.S. bank: $173 billion as of early December 2012.
"snip"
The benignly labeled activity "customer accommodations" has derivatives on its books with notional risk of $2 trillion. That number, assuming it is accurate, can make any particular trading loss appear minuscule.

http://www.forbes.com/sites/stevede...ltdown-the-water-is-still-full-of-big-sharks/



Everything we see, hear, read is a lie when it comes to the economy.
The only thing you can trust is yourself and those you choose to place trust in, ANYTHING you do not hold is not yours. I personally choose to not trust being able to buy food from my local supermarket on a regular basis so plan accordingly, media, banks, politicians, the law, local govmint, police, fiat...... the system as a whole.

None of these things have a stake in my or my family's lives, I dip in and out as it suits and benefits us but I place no trust in them whatsoever.

 

[AngloSaxon]

2) The Federal reserve is expanding the U.S money base in the minimum by 85 BILLION per month even though much of that is being spread throughout the world due to reserve currency status.

Is that $85B spread really through the world??

Not much is said about the consequences of this policy, beyond contributing to present and future inflation.

I've started to formulate a theory on this. $85 Billion every month is buying mortgage backed securities. But what does that mean? Means the banks are buying the subprime mortgage backed securities that spread as swaps/derivaties and poorly understood investment vehicles through the economy and prompted the 2008 crisis. So many of these loans are foreclosed so the banks own the property but not the liabilities due to credit default swaps and bailouts etc. But the banks don't want to own devalued property - they want to own loans. So rather than write down all the loans to nothing and take a loss that may be greater than the banks' book value, the government steps in to buy the rights to the loan. I may be wrong there, if I am please someone point it out!

By buying the securities is the government either 1) paying off the mortgages instead of the original lendees with the bank still owning the property, 2) the government is paying off the loans on interest only, paying the banks passive income for the rest of time, or 3) paying off the mortgage with the end state of the government owning the land.

As discussed, banks don't want to own property so 1) is least likely. 2) is possible but the banks know they are experiencing less purchasing power through the inflation of this policy so will want to still divest themselves of the assets.

So is 3) the end state of this policy? The government buying $85b worth of land every month? We look at the pictures in the US of falling down homes, abandoned, all over the country. No one is in the newspapers lamenting that they own this useless land that city councils are busy demolishing all structures off (eg Detroit). Someone still owns that land. If it is the bank, they'll want to get rid of it. And I believe QE3 is taking it off them, with the US government rapidly becoming a major land owner.

And what are the consequences of that land ownership? Governments are not good at managing real assets, with the exceptions of fighter jets and even then there are caveats. All the money sucked into the property market in the US is gone, property prices are going to be permanently deflated and what happens when the government tries to put that land back on the market? Real estate property continues its' deflation and even more private land will be financially underwater, replicating the cycle. And in the mean time all of America is falling down, or succumbing to lost hope, unemployment, drug abuse and cultural breakdown. Another flash mob this week rioted in a shopping centre, I saw on Youtube - hundreds rioting, Police managed 22 arrests they were overwhelmed. How many people on food stamps in America today? 45 million people? Or the land is to be given away to intergenerational welfare clients or worse.

And we're talking about the worlds' biggest consumer and producer here. If they are not producing what we need or consuming what we produce, well then theres trouble until a new economic model or hegemony arises. These are the things I think about instead of sleeping in ignorant bliss.

And that's why I stack.

 

[Pirocco]

What is the true level of inflation ?

I think the prices I pay for pet food and other products I want, all together, do reflect true inflation. At least for my measurement of it, since I don't buy every product that is out there.
See, it's what I pay.
Also, and aside of this, I take into account the products lifecycle too. In some past, if you bought a pair of worksocks at $5, and they survived a year, then the price of socks that year was $5.
However, if I buy a next pair of socks at $5, and they survive 6 months instead, due to cheaper material/lower quality, then the price of socks that year effectively became $10.

About general inflation in its birth phase, being the creation of new dollars, as long as these do not add to circulation, next life stages of it do not happen. The bold tagged part is crucial. Because what is happening: the newly created dollars are spent in the economy, but another part of the population got concerned about crisis/future, and saved instead. Well, those savings are moved towards the bank systems excess reserves. In other words: the new dollars that are spent get neutralized by existing dollars that are sterilized. This works as long as people are able to save a part of their income. It stops working when the basic consumption level is reached and thus cannot save anymore. Then inflation quickly becomes worser until its speed combined with market latencies brings the control of the central planning to an end.
So here is the question then: when will the basic consumption level be reached?
The best indicators for this are prices of food / energy / water / ? essentials relative to income. Not Fed creation and derivatives numbers.

 

[Byrnsy]

7 out of 10 homes purchased in Los Angeles county last quarter were purchased by Chinese foreign nationals.

You can be a speculator all you want, but to say that the 85 Billion digitally added to the US each month doesn't extend beyond the U.S is absurd!

Why do you think CHINA, BRAZIL, IRAN, RUSSIA and many more countries are signing direct deals to deal with each other in there native currencies? Because the US is using pretend money at this point. Any dollar added in any form adds to inflation because there is no commodity to back it up.

Look at history. Let's take the cold war vs Russia. We only won because we had the ability to print money non-stop (RESERVE CURRENCY). Russia inflated itself into Hyperinflation turning the country into a dump. US wins!