Precious Metals New Thread 2.0

Ummmmm with 0% rates they are saying don't save your money, spend it and grow the economy. But I guess your way sounds better with a tinfoil hat on.

 

Please expound on these statements. Especially the first.

 

Pretty sure he's still searching around for a YouTube video....

 

What? 0% rate means the account is not interest bearing. By your rationale, all money in chequing accounts are "worth nothing"? Wrote many undergrad monetary policy papers on ZIRP and to summarize, it's a method to increase the velocity of money by discouraging saving and allow for more capital investment thru lower borrowing rates.

The downside is it weakens your currency on the forex as investors move their money to countries offering a higher real yield, which may end up increasing import costs.

 

Someone lay a tarp around Stevie before he reads this! His head is gonna explode!

 

That sound real fancy, right out of a text book....
Unfortunately our money doesn't live in a book...
Bottom line, they can't afford their debt and it punishes responsible people.......
Part of Financial repression, aka stealing..............

How are they going to pay the debt mr econ expert?????
They are going to inflate it away and use as much invisible tax as they can, that's how....
Why do you think they put a positive spin on ZIRP, because they knew this was happening when they wrote the text books....
ZIRP is good short term for gov and bad in the end for everyone.....
ZIRP is one of the last tool in the tool box then you go back gold, but they don't teach that because they want to convince you what a good idea it is....

The good news is if you need a loan get one now, while rates are low and they are still lending.....

 

The Pitfalls of the Federal Reserve’s Zero Interest Rate Policy
By holding rates near zero for almost seven years, the Fed has driven up the price of risky assets, increased leverage and created a pseudo wealth effect, which will be reversed once rates return to normal. Asset prices cannot continuously outpace real economic growth. When the bubbles in the stock and bond markets burst, as interest rates begin to rise toward their natural, long-term equilibrium, the Fed’s unconventional wisdom will be called into question.

Central banks throughout history have been used to finance government debt, and the Fed is no exception. The ultra-low interest rates on Treasury debt, with the three-month T-Bill rate now at zero, have allowed the federal government to act as if deficit financing is a free lunch. Those who hold that debt, however, face the risk of rising rates and falling prices, especially on longer-term debt. Consequently, foreign central banks are beginning to unload their holdings of U.S. debt at a record pace, with net sales reaching US$ 123 billion for the 12-month period ending in July.

The Fed’s ZIRP has also harmed savers who basically get nothing on their money-market funds and saving-account balances. Indeed, after inflation and taxes, real rates on those instruments are negative. Monetary policy has therefore not only misallocated credit, it has redistributed wealth from Main Street to Wall Street. The lost interest income is a permanent loss of wealth.

It is ironic that Fed Chairwoman Janet Yellen has criticized the increase in inequality of income and wealth since the financial crisis, but ignores the role of the Fed in promoting such inequality.

 

From ZIRP to NIRP: What's the Fed's next move?
http://www.cnbc.com/2016/02/09/from-zirp-to-nirp-whats-the-feds-next-move.html

 

No one knows when they will pull the plug and go back to the gold standard thats been used throughout history.

I find it very dissapointing how the leaders sold their country out to those who wanted to use it for evil and their advantage.

BINGO!

The sad truth is almost everyone on this thread completely is ignorant of the things you speak.

If they had a remote clue about history they wouldn't even be arguing with the words we've been saying. It's completely obvious they haven't done any research and speak out of their rear ends.

Here's where one of the downfalls occurred in the U.S.A. speaking in our monetary system. This quote is from President Woodrow Wilson after a few years signing the Federal Reserve Act:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activites are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men"

 

Oh yeah I can't wait till we go back to the gold standard in, oh wait, never. You guys are idiots....

 

Hahaha you two idiots are hilarious! Yeah I've been ignorant here piling up my cash in this inflated stock and bond market. Please tell me again how all this money I've been making is "fake"?

 

Financial Repression is not stealing, it's exactly what I said earlier... it's method of discouraging saving and encourage borrowing to increase investment of capital. When you disagree then use a term that actually concurs with my explanation, I'm unsure whether you misunderstand the use of the term or just simply think words can be used however you like.

To say zero interest rate is only "good in the short term" shows a fundamental ignorance of money markets. Interest rate policy in it's entirety is only a useful monetary instrument in the short terms. Any change in the reserve rate has an immediate market effect and the rate can change on a monthly basis. And there's just zero relationship between Interest Rates and a move back to the gold standard, the former is a tool to control the velocity of money and the latter is a method of backing a currency's value.

The debt is a separate issue. As someone who is always expounding nonsense about the BRICS, I'm surprised you would have such a doom and gloom view of countries that inflate their way out of debt. But then again I think you use arguments that are convenient to your narrow view of the world.

The national debt is a problem, and while inflation would be one solution it's simply unpalatable given the alternatives. The solution to the National Debt (this is not a fact, but my opinion. I'm stating tho unsure whether you understand the difference) is not a matter of monetary policy but of fiscal responsibility and a need for the House to move away from entrenched political dichotomy and into a desire of cooperation to properly balance a budget (increase taxes, decrease spending). But the last thing anyone wants to pay is more taxes.

 

You sir are a gentleman and a scholar, thanks for bringing this thread back on track.

 

Appreciate the feedback, but think we're a long way from back on track. I came to these PM threads curious about investing in palladium as I know very little of PM investing outside of gold, not a fill of poorly stated gov't conspiracy theories and currency demise stories. If I wanted that, I'd go back to the bitcoin thread.

 

I wish I could figure out how to respond to each section of your response. Alas, I cannot.

"I'm unsure whether you misunderstand the use of the term or just simply think words can be used however you like."
The issue is that he COMPLETELY misunderstands the use of the term, because his whole response is copy and pasted from one website which "sort of" aligns with what he thinks.

"And there's just zero relationship between Interest Rates and a move back to the gold standard, the former is a tool to control the velocity of money and the latter is a method of backing a currency's value"

Indeed. However, this does not support his objective, the progression of PMs, and the regression of the dollar. Oil money, as he calls it.

"But then again I think you use arguments that are convenient to your narrow view of the world."

This is not just him, but anyone that hops on the bandwagon he's a passenger upon. It's impossible to try and argue regardless of the facts or knowledge you bring to the table because there is ALWAYS a response of, "you're a sheep" "you know only what THEY wrote in text books" "keep preaching what THEY want you to believe". It's just not worth looking at this thread for anything but entertainment value.

"The solution to the National Debt (this is not a fact, but my opinion. I'm stating tho unsure whether you understand the difference) is not a matter of monetary policy but of fiscal responsibility and a need for the House to move away from entrenched political dichotomy and into a desire of cooperation to properly balance a budget (increase taxes, decrease spending). But the last thing anyone wants to pay is more taxes."

Well said. The part I bolded is something that his websites he copy and pastes from should really add into their rants.

Unfortunately OP is impossible to reason with. He is, obviously, the most intelligent man in the world. If we were to know HALF of what he knew, we'd all be rich.

That or working a parts counter.


As my grandfather (an alcoholic rancher) once told my father (an alcoholic rancher's son, turned successful businessman), "It must be real f**king hard to know absolutely everything. I bet it pains you to deal with us f**king idiots."

 

ZIRP is what you are explaining....
Financial repression is policies designed to reduce the value of the currency to help pay the debt....
They are going to reduce the value of the dollar to repay debt or just not pay the debt at all...
That's why I like PMs, the dollar will go down and PMs will go up, it won't be the end of the world just inflation...

It is good for short term, but when you never fix the problems that got you there, it's just bad news in the long run and the road to NIRP...

It's not doom and gloom it's competition, China won't replace the dollar but compete... They have already been added to the SDR and that will mean other countries will use less dollars, China is demanded less use of dollars and the middle east is sick of using the dollar... Yeah it's bad news but not my fault.....

I agree, this is what I keep saying, the problem is they are not doing 1 thing to balance the budget or reduce debt just manage it....
We would need drastic reduction in GOV spending, no amount of tax can pay of this debt...

These guys keep putting words in my mouth just to discourage any from getting PMs.....
I show demand, supply, reduced mining, increased mining cost, loss of stock piles, charts, pricing and some guys just keep talking nonsense.......
Some of these guys never add to the conversation just add BS and troll.........

This thread is right on track we can talk about other reason to get PMs, but every time we try the nonsense crew jumps in to disrupt things...

 

I'm new to this thread but I'm afraid that the statement "there is no point in arguing with them..." seems to have been ignored. Anyway I have been buying PM's in the form of 1oz coins for about the last 4 years, mostly AE, ML, Libs and I even scored a few Pandas at an estate sale. I'm about 8 years away from retirement and would like to diversify some of my retirement sAvings. Generally speaking is buying a pound of silver and an ounce or two of gold per year a good idea for this purpose? The price of PMs seems to be pretty low and it looks like a good time to buy. Also is there any advantage to buying coins versus flats or rounds? I apologize for the lame questions, I have a limited amount of money to spend towards retirement and I want to get the most bang for my buck.

 

http://www.kitcosilver.com/charts/24hoursspot.html

Silver is moving... almost up to its 400 day moving avg.

 

A few things to consider. First off adding PMs to any portfolio makes sense in moderation but given it's recent run up I'd caution you to add no more than 5-10% of your investable assets. You also mention planning for retirement and quite frankly PMs are not a very good strategy to do so. Coins are not very liquid and would be very difficult to create the income you need when you stop working. You should look at building a portfolio of high quality dividend players that show consistent dividend growth and strong balance sheets.

Take a look at these stocks: MO, RAI, PRU, VZ, LB, CVX, BP, RDS'A, ABT and HSY

 

Thanks for the advice. I like the idea of investing 5-10% in PMs, basically what I have been doing over the past few years. My wife and I have always lived below our means, own our house and have little in the way of debt. We are not rich by any means but have worked hard to build decent retirement 401k/IRA. I was looking at the PMs just to throw into the mix. Ill take a look at the stocks you have mentioned above, thanks once more for your advice.