Ok, this is actually a good thing for all of us, but does it signal that the government is finally going to let the market correct itself? If so, I have a problem. I was banking on some inflation and invested in gold, so my investment could go down the drain (at least temporarily since inflation will kick in, this has been the natural order of things with the existence of the fed, so I’m not too worried about the long-term). However, it would be nice to have some of that money I have invested.
Produce real things. Conduct trade and commerce. Speculation is gambling. If you speculate, you better get ready to get wiped out.
So what? They are still getting a bailout. The government will continue to guarantee warrantees and will merge Chrysler finanical business with GMAC.
Keep on to your gold, when the dollar collapses you’ll be thankful.
Chrysler will be split between unions and Italian semigovernment automaker FIAT. Here every single news outlet, even the hardcore leftist, are litterally frantic over the thing. I would like to know a few things though:
- Where is FIAT getting the money to carry out the operation? They have enormous debts themselves and would have gone under three years ago if it weren’t for bank and government largesse.
- OK, Chrysler will get small FIAT cars to be rebranded and sold in the US. But what will FIAT get in return?
- The FIAT sales and assistance network is possibly the worst around. How will US consumers react if they’ll be treated in the same way as we are?
- Medias here litterally glorify every single small action FIAT takes. Who cares about starvation in Africa, war in Asia or civil unrest in South America? FIAT has given us a new model! Will the US citizen be subject to the same barrage of surreal propaganda?
- Will we see a supernational British Leyland? What are the political and economical implications? How much will this cost to taxpayers both sides of the Atlantic?
fiat?
Italian automaker, nothing to do with fiat money.
i was glibly answering your question
The government will never allow Chrysler or GM to enter Chapter 7 Bankruptcy which is what they should have done a long time ago.
Instead, they will use Ch.11 bankruptcy and the government will pay off their debts and both companies will continue to exist and continue to lose money, hurting us all.
This does not signal much of anything in terms of inflation or deflation.
Hee hee.
Is Fiat supported by the Italian government? If that’s the case then we’re not really moving forward, are we…
Do you hold dollars? You are speculating that they will continue to retain their value. You may be wiped out as well as a result.
The goverment pays the debt and gives the company to the union 55%, it can never end well.
No. And I do as little speculation as possible. People who think gold and silver are investments, and not hedges, are just gambling.
I repeat,
“Produce real things. Conduct trade and commerce.”
If they were allowed to actually go under, the government wouldn’t acquire 10% of the company.
We now all own a nice little piece of a failing company… hooray…
[N]
These companies (GM and Crysler) should have gone under long ago. Instead they amassed huge debts, used OUR money to get themselves together and they still failed.
The M1 is up 20% since August. I think you’ve got nothing to worry about, if inflation is what you’re hoping for.
The Rev
That’s absurd. Gambling is purely about luck. To say that buyers of gold and silver since 2001 have just been lucky or that stockholders have been unlucky for the past 18 months is ridiculous. Speculation, unlike gambling, involves forecasting of future conditions through analysis of present and past conditions.
Last year, many speculators were able, through analysis, to see that banks were insolvent and so they sold banking stocks short and made incredible profits. Their profits were a reward for correctly identifying banks as being priced above equilibrium price.
Granted, there is always uncertainty, but a successful speculator is not determined purely by luck as in gambling.
Furthermore, your alternative of “producing real things” always involves an element of speculation - for what if no one wants to consume what you produce? Any producer must speculate as to whether his product will actually sell in the market.
Speculators should not be looked down upon as the risk they keeps actual prices closer to equilbrium prices.
kudos to you!
When Nassim Nicholas Taleb says it is gambling, I listen.
The only reason Americans are fanatically obsessed with investment mania is because there has been an inflationary boom. Europeans, Asians do not look at investing the same way. It’s a very American phenomenon to buy into the get rich quick or get rich without working or win the lottery type of mental state.
I don’t care if you don’t like what I am saying. The odds are stacked against you. A failure to understand that means you are operating on faith, not reason. And faith (in business at least, maybe love too) is for suckers.
Your first lesson in entrepreneurship. You don’t make stuff until you find out what people want, what they will pay for it, and whether you can afford to procure it. Don’t compare trade to speculation. One is a science, the other is a religion.
I’m not looking down on professional traders who are essentially market makers. I’m talking about the layman who has listened to a few Peter Schiff videos, and now wants to rant at me about buying gold.
Here is what no one tells you. In 1979/80 gold was around $850. Did the monetary base expand or contract over the next 19 years as gold fell to $270-ish?
The game is rigged.
Seen the Chinese stock markets recently (07-08)?
OK. Starting out your argument with an appeal to authority.
You really believe that the stock market falling, gold rising, or real estate prices falling have only to do with luck and odds?
Many, many people correctly identified the housing bubble while it was happening and foresaw the decline in house prices. It was not “luck.” It like came from analysis of economic conditions combined with data on the amount of debt in the US, and the knowledge that subprime mortgages were being used among other things.
Bwahaha. So Bill Gates knew we all wanted to use his software when he was working in his parents’ garage? And IBM always knew the PC would eventually be used by everybody? And Apple knew the Ipod was was going to be demanded by millions? Also, why did Coke, an incredibly profitable business up to that point, flop with New Coke? Why did Toshiba bother to produce HD DVD at all?
You’re living in a dreamworld if you believe that entrepreneurship does not involve a large amount of speculation.
Let’s say I told you today that I wanted a loaf of bread two weeks from now. You then produce a loaf of bread in the next two weeks through harvesting., baking, and what not. You come to me with the bread two weeks later and I tell you that I don’t want bread as I now believe it is unhealthy.
You speculated that I would still buy the bread two weeks from when I told you I would. I since have changed my value scale.
To make it even more obvious, I could produce the bread myself, and, halfway through, I might find out that bread is unhealthy and halt further production of bread. Even a single person cannot know their future wants precisely and “scientifically.”
There always must be speculation involved in production as you can never be certain that peoples’ value scales will not change during the period of production.
Speculation involves more than just looking at the money supply. Whichever speculators only used money supply to gauge the price of gold were neglecting to take in other information about stocks, bonds, interest rates, the economy, etc. Using scientific principles and equations such as increased money supply = increased price of gold are doomed to fail because we live in a world with thousands, possibly millions of variables. Isolating any single variable and using it to predict future prices is foolish.
Believing that “the game is rigged” because gold prices don’t always rise with increases in the money supply shows a lack of understanding of Austrian economics. Yes, all other things equal, the price of gold should have risen with an increase in money supply, but of course, all other things were and are not equal in reality. As I said before, thousands of other variables were operating as well.