It’s 54:37 long. I think its convincing, interesting, thought-provoking and scary as all hell. To be frank with you, I agree with the grizly prognostications to be found in this film, but it all sounds so terrifying, that I’d like to hear some input from other people on this, preferably knowledgable people, before I jump to any hasty conclusions. Thanks a lot.
Some parts of it are clearly sensationalism - the constant comparisons of price levels with the lowest points they were at during the crisis, when obviously they were low due to lack of confidence and every1 getting into bonds and cash for security, not because there was so much less mony going around then
I saw the whole movie now, including the update they added, and must have missed what you are talking about. At which time in minutes did they do what you say?
George Soros recently said the closest analogy he can think of to the current global financial crisis is the breakup of the Soviet Union. That’s pretty damning. Soros is a shill and a manipulator and disingenuous as hell but when he’s agreeing with Marc Faber and Jim Rogers, I listen to what he’s saying very closely because the man obviously has ridiculous access to inside information in politics and global business.
By the way, I’m about 90% sure gold is in a micro-bubble… beware of buying gold right now. FOX News has gold ads running every other commercial but we’re probably going to be entering one or two quarters of “less bad” news along with public “recession fatigue”, that is, people are getting tired of being told the sky is falling and they’re likely to begin lapsing back into their old “high consumer confidence” spending habits to one degree or another, at least over the course of the summer. This will make the GDP appear to go up which will make Wall St. declare the recession to be “officially over” (cheered on by Bernanke/Obama/et. al.) which could lead to a stampede out of gold and back into the market. That’s the “best-case scenario” for gold buying and something less dramatic than this will likely happen, but I would bet that gold is going to be going down in the near-term.
Mogambo Guru just wrote a piece arguing for buying silver and if I had any spare cash to move into commodities, I would be buying silver, not gold. In fact, my strategy would be in two parts… buy silver immediately and wait for the gold “micro-bubble” to pop. This will bring the gold-silver ratio into more realistic proportion. Then, when people realize there really, really is no good news and gold and silver look like they’re going to start going back up, I’d exchange the silver for gold.
But I’m not putting my money where my mouth is, so do your own research!
Interesting… Could you perhaps give me an approxomate timeline for when this gold bubble will burst and how long it will take to happen, when to switch from silver to gold, and the like?
Though the timeline is a difficult thing to speculate on, I think you are right because the reason the gold/silver ratio is so out of whack (64:1 instead of 16:1) is because JP Morgan Chase is currently in a short position of 30,000 silver contracts (that’s 150,000,000 oz. of silver). However, it is not likely that there is even that much silver to sell, since silver mining in the US does not give us anywhere near that amount of silver per annum, and above-ground silver reserves are dwindling dramatically. The only explanation, then, of how JP Morgan was able to get into such a massive short position was by naked shorting silver - that is, by selling paper silver contracts representing silver that doesn’t physically exist. By naked shorting the silver, they are flooding the market with (fictitious, but believed to be real) silver, causing its price to artificially drop (currently $18 per oz. as compared to gold’s roughly $1,200 per oz.). The problem is, all those investors (mainly foreign ones, interestingly enough) believe that they actually do own the physical silver that their contracts say they own; and with investors all over the globe loosing faith in the US dollar, making it unlikely that it will remain as the world’s reserve currency for very much longer, there willl come a time where they will not be satisfied with holding paper increasingly depreciating in value, but will want the physical precious metal itself. When these investors demand their silver, JP Morgan will have to cover their short position by buying up 150,000,000 oz. of silver. With so much silver being taken off the market so quickly, we are going to see a massive short squeeze of silver, and its price will rise astronomically. If this is true, the resulting default will be a catastrophe of Biblical proportions.
Everyone, get your wheelbarrows ready, because we’re headed for Wiemar!
I think the timing can’t be predicted ahead of time… the best you can do is try to find conditions in the market that you believe represent an ‘inflection point’ or turn-around point. I can’t see there being a huge correction in gold because central banks are currently buying. But we could see a pause in gold buying if central banks start buying into the green-shoots hype and Wall St. investors start dumping their paper gold for stocks and bonds. Remember that central banks consider a lower/lowering gold price to be good news (meaning that central banks could go into a positive-feedback loop where they stop buying because the price is going down, causing the price to go down further, causing central banks to stop buying even more, and so on). And if you look at things from their PoV, it’s easy to see why: lower gold price means that people are accepting the fiat paper-money confidence scheme, higher gold price means they are rejecting it. Like any con game, government money crucially relies on the continued confidence of their victims.
So, I think all the signs say that silver is currently a bargain, gold is probably peaking short-term (3 months… 6 months?). Calling a short-term gold peak is dangerous since the long-term trend of gold is definitely upward and gold is definitely supported from below. But I think it makes sense to buy silver immediately and hold that until you think gold has reached a trough (maybe it will go all the way down to $1100, though I feel confident saying it will never again go below $1000) and then exchange your silver for gold. If you buy silver at 64:1 and then silver:gold corrects to, say, 32:1, you will have doubled the amount of gold you can purchase with the dollars you are currently holding. It’s a no-lose strategy.
Gold is nowhere near a bubble. In real terms, it’s still what, 40 - 50% below its all time high. The percentage of people that own gold in many countries, particularly the US, is extremely low. It’s not in a frenzy and the majority of advertisements related to gold are asking people to sell their gold with steep discounts to spot price. The recent gold consolidation has been due to broad asset liquidations (last week along with silver and nearly everything except US government debt), liquidating long positions by hedge funds, and swaps with the BIS/commercial banks. The fundamentals of gold are sound which demonstrate it is not a bubble.
Silver is a better value investment right now, but if you’re like me and believe there is going to be a major international panic and that equities will tank silver will go down with them. It may test its support in the $14-$15 range if such a scenario occurs; in which case it would be an even more attractice buy. Many commodities are cheaper than precious metals, particularly agriculture.
The last 5 mins where they offered “solutions” such as “20% of Americans raising to a higher standard”, “buy American and not Chinese/Walmart”, “eat organic local meat and not McDonalds”.
This Gerald Celente (Trends Research) guy (who is he, btw?) presented as an equal to Faber, Rogers, Schiff, and Paul – talking non-sense most of the time (The “solutions” at the end were all his). The motive for this is uncovered at the very end with an actual plug for his newsletter at the end of the video.
Other than that, most of the video (the first 50 out of the 55 mins) made compelling arguments for some scary outcomes down the road.
There’s a reason why the gold/silver ratio keeps trending up. Gold is (for the most part) a financial asset, while silver contains a significant industrial component (like, say, copper) which exposes it to economic booms/busts. You can look at silver as a combination of gold (financial) + SP500 (industrial) components. The attractiveness of gold vs. silver is that it offers an upside and protection in: (1)inflation (“all is good, just kicked the can down the road”), (2)deflation (“collapse”), and (3)hyper-inflation (“melt-up”) scenarios. Silver is sub-par to gold in scenarios (2) and (3) because its industrial component will be the stone around its neck slowing it down relative to gold. In scenarios (2) and (3), everyone would be getting into a wealth preservation mode as trade and industry shrink on a global scale. Gold would be the perfect and pure play for such outcomes.
This is why the gold/silver ratio should not be compared to past values, and why it is as high as it is right now. It is reflecting the market’s perception for the probability of outcomes (2) and (3).
I agree with your criticisms, as the solutions were just yet another rehashing of the same old, oft-refuted-but-never-completely-squelched mercantilist nonsense about having a “favorable balance of trade,” favoring exports over imports (wouldn’t that lead to MORE inflation?), and buying only domestic products since not doing so lands a blow onto domestic industries and helps those damn foreginers at our expense. Don’t get me wrong, I think the US SERIOUSLY needs to step it up in the export market - as Hazlitt said, the only reason we should export goods is to pay for our imports, which we’re clearly doing only on borrowed and/or printed money, if at all - but it is certaily possible to get carried away in the heat of the moment and overstate things, as I think Celente did. As for who Gerald Celente is: well, he’s a financial analyst who’s made some shockingly accurate predictions - such as predicting the Dot Com bubble, the collapse of the Soviet Union, the 1987 stock market crash known as ‘Black Monday’ and the recent housing bubble in the US in 2008, as well as some other things - so I don’t think it’s fair to simply dimiss him out of hand as you have done. If he’s been spot-on about so many things, he must be doing something right.
The way I see it, Gerald Celente is very good at predictions, but his economic reasoning is not the best. He isn’t an Austrian.
Buy only American is totally ridiculous, of course. As Mises likes to say so often, it is the kind of thinking that will bring back the Stone Age.
As for imports and exports, it’s all really just trading things, like any other trade. Nobody thinks, “Hmm this week I imported more into my house than I exported.” The current problem, says Peter Schiff, is that we are not trading things for things, but taking things and paying with paper dollars, which means either the Chinese will one day come and scoop up whatever they want, atrillion dollars worth, or else will tire of taking useless dollars and stop trading. And the govt has regulated and taxed our economy to the point where it’s not possible for us to make our own stuff.
“And the govt has regulated and taxed our economy to the point where it’s not possible for us to make our own stuff.”
All too true. But isn’t it sad that the result of seeing economic panics, collapses, recessions and other assorted maladies of that nature will be a call for MORE regulation? The economic illiterates in power think the poison is the cure, and so they dig their own graves. Except that isn’t the worst of it: they’re not only digging their own graves (which I would have no qulams or perturbations about on its own), but they’re digging OURS as well, whether we asked to have them dug or not. This sort of thing infuriates me beyond words; for all the leftist rhetoric about “social justice,” THAT particular injustice is blithely ignored, and instead, meaningless, mindless shibboleths are conjured up about how our economic situation is the result “corporate greed,” voracious and antisocial - meanwhile, all corporate profits combined make up only 5 or 6 percent of the national income, a percentage that, due to the boundless philanthropy and munificence of the omnibenevolent and perfect geniuses in our government, is dropping as we speak. Or even better, “unfettered capitalism” is made the scapegoat for the bile, envy and self-indulgent emotionalism of our largely laughable class of intellectuals and our clueless and useless politicians - and all this, when anyone whose economic education has exceeded that of learning the most basic truths should understand that the only way to have unfettered free markets would be to take from the government the power of coining and issuing money. The mere existence of the Federal Reserve should serve as proof that we don’t have a genuine free market. It is because bank credit - artificially expanded due to Federal Reserve interest rates being below their time-preference levels, as well as other examples of general bureacratic bungling - is used to finance unreliable, hare-brained schemes that we ultimately have depressions and panics. This is not something intrinsic to capitalism; it happens because the government has the power to issue money.
This information is out there, accessible and certainly understandable, provided one invests sufficient energy into the task. How is it that I, an 18 year-old who has yet to enter college, have attained to a higher level of economic understanding than so many of our most respected and lauded intellects - many of whom have PhDs?
I was only commenting on what he said in the video, and not on his life’s opus, as I’ve never heard of him before. As for his predictions, the # of his correct predictions needs to be compared to the # of his predictions that never happened, for a proper statistical evaluation. I could easily predict about 50 “heads” by consistently predicting “heads” during a 100 coin-flip trial. Judging from his website’s presentation, my bet would be that those statistics would not be too stellar. If they were, he would be rich enough to not have to be running an advisory business today. The saying: “Those that can, do – those that can’t, teach” seems to be a consistent and robust winner.
I had to suggest this as an answer because it’s extremely well thought and put together.
The only part I partly disagree with is about “recession fatigue”. I say partly because I am not very familiar to the US situation. While I agree 100% about high consumer confidence coming through sheer fatigue disposable income in the EU is actually declining for the first time since the advent of the euro. If official data (most likely doctored already) show a contraction the situation must be very serious indeed. People may be confident but if they haven’t got money they cannot spend it… and Europeans aren’t as ready as Americans to mortgage their own future (I’ll give that, though personal debt in countries like France is starting to become an issue). There are already signs that consumer confidence may be on its way down for a long time and some markets are actually getting worse as people is forced to cut expenses to make ends.
I was considering buying more physical gold in the past few weeks but after a bit of research I decided to opt for silver instead because all signs indicate a slight but significant (don’t expect huge drops because there won’t be) drop in the value of gold is nigh. Lowest in gold may come around August-September, while people is still high on “vacation optimism” and before real bad data will start coming in.
This isn’t 1980 so I don’t care about the all-time high, it’s of zero use in determining where gold is going. Also note that I am not claiming gold is a bubble, I think it is in a micro-bubble because I think there are a lot of “non-believers” who are buying for reasons they don’t themselves understand. These people don’t understand the difference between commodity money and a hole in the ground… they will be easily spooked out of gold if the price takes a moderate hit for a few months. The gold-price manipulation cartel knows this and will be eager to drive out fair-weather gold investors at the first opportunity.
I’m not giving strategic advice here, only tactical advice. Yes, buy gold but buy it smart. Silver is also a monetary commodity and will rise against paper-money inflation.
The so-called “fundamentals” of gold are about 49% mass psychology and 49% political manipulation. The remaining 2% is divided between mining and industrial use.
Agreed, ag is a good buy. Oil is not too bad when measured in price against other real commodities.
I agree with you that we’ve only seen Act I of the depression and Act II has yet to hit. However, I think it’s not really possible to speculate about manipulated events unless you are one of the insiders. So, I can “know” that something’s coming but I can’t really justify any specific course of action based on that “knowledge.” Secondly, I believe this will be a global inflationary event so silver will rise not only in proportion to its value as a commodity metal but it will also rise due to its status as a shadow-money alongside gold. Yes, gold gets all the attention right now but silver has always been a substitute for gold when the price of gold has become too dear. In a worst-case scenario, physical paper currency will be more valuable on the street than either gold or silver (there are only $200 billion physical, paper dollars in existence). Silver, because of its lower scarcity might be more useful in street trading than gold, so you could have a situation where silver is more useful than gold.