malvern hills

Interesting time frame. I think it has less than 3 years and I think that's being generous...

We are talking about the total collapse in confidence in the value of paper fiat currency; a currency or system of currencies backed by almost every nation in the world and their hired thugs and propagandists.

If there was a instantaneous realization by the peoples of the world as to the destruction of value going on then perhaps we would get a hyperinflation sooner, but I think it more likely we will get what Belfast says below.

History shows that all 'fiat' monetary systems fail. Though I don't think history has ever shown that monetary failure will result in complete social collapse.

 

I'm thinking there will be a slow adjustment rather than an instant reset. The system will bump along. The majority will slowly see their living standards fall. It will be so subtle that they will simply adjust and get on with life. Most will never realise what has happened. Everyone around them will be in the same situation too. It is already happening. IMO this is just going to be another great depression. My time frame for the adjustment is 2 decades. We are already 5 years into the adjustment that started in 2007.

How do you know 'it ain't gonna happen'?

 

''When they fail because they are essentially credit money systems then credit must fail too. It almost did in 2008. When credit fails the economy ceases to function. What that means is that food doesn’t get delivered to grocery stores; petrol isn’t transported to the gas stations;

even water and natural gas are cut off by the companies responsible for their delivery; the banking system collapses; governments cease to function and anarchy prevails.'' Sound like fun?

 

Ian Gordon-Longwave.

 

I understand with your feelings towards VAT and CGT on silver though. However if you foresee, for eg, Alf Fields' target of 158 (USD) for silver, then what's a little tax now on a bit of silver?

As GF says "when the ponzi promises to deliver an asset they they themselves can print then that is what they will do"

You are saying that when credit fails no one is going to turn up to work.

Think about it for a moment. Everyone who doesn't deliver has a family as well. People will soon realise they will have ( or be coerced)to cooperate with the people in power, ie the ones with the guns and tear gas.

And in any case this is going to take a long time to play out, probably more than 3 decades, if it goes down that road atall.

If in that time I think the poop is getting real I will convert some of the bullion for smaller denominations, and move the bulk into a private rather than bank vault, if I think that is appropriate.

All in all, preparing for and thinking about realistic scenarios is a much better use of my time than for extreme outliers ihmo.

I wouldn't like to be in Amerika with all those guns around though.

I hate the thought of having to pay a 'luxury ' tax to buy silver, and paying CGT, fuggetaboutit.

I've bought my physical abroad and kept it in a bank safe. I'm also not into the buying of small denominations for barter etc. It ain't gonna happen, so why pay an extra?

http://www.telegraph.co.uk/news/politics/8917077/Prepare-for-riots-in-euro-collapse-Foreign-Office-warns.html

OK I get the feeling thy have decided to let the euro go. Why else would they let Italian yields get as ludicrous as 6.7% for three months.

So I think there is going to be chaos soon. What's the consensus to the direction that pm's will take? Will the chaos cause them to soar as safe havens or will they be sold down for liquidity in a deflationary vortex only to go vertical in the ensuing printing frenzy? I have quite a chunk of fiat that I have just come into and want to convert to physical.

You have correctly identified current worldwide economic policy. Same result, different route. Possibly different time line (unknown, in case you ask). Google the maths, google historical comparisons. Weep.

 

Marceau, do you mean the 'compound debt spiral', when you say google the maths?

I'm a bit maths challenged, could you spell out what in the maths makes doom inevitable after a certain point? Is it the reinhardt and rogoff 90% debt to gdp you are referring to?

Yeah, I know what you mean. I read some of it some years ago, but to be honest, not all.

 

That, (amongst other things, not least the IR drop in 2005) convinced me to jump back into the market after STRing a year or two before. STR'd again after NR went down (got out just in time).

 

 

 

Yep. Can't see nominal rises for a long time, unless of course they start lending 100% to everyone at 2.5% (Wouldn't put it past them mind ).

 

But one day, maybe many years yet, the lending will start again. It's their nature.

100 year mortgages anyone?

GF, you and Cg are the reason I and my family looked into pm's and why we are in a much better position now than we could have been.

I thank you for your efforts, and hold your opinion in the highest of regard. Whatever the reason for your posting less, I hope you will remember the many that have been helped by you,and are very grateful.

http://www.positivemoney.org.uk/2011/05/positive-money-podcast-episode-2-professor-mary-mellor/

GF's remark of 'you can't tax deflation' certainly rings true.

The prof above says that the currency is the reflection of the ability to tax and if this is true, the hoarding of gold by a populace in times of currency devaluation must be a complete nightmare for TPTB. It all starts to make logical sense to keep pm prices suppressed. But how will this end now that Au is being remonetized. I can see trouble ahead but not the end game or what TPTB will do. I can't see that confiscation would work but punitive taxes on PM sales would be possible and a Black market to follow. This may make an exit from PM's tougher than we think.

I know this is off topic but I didnt want to start a new thread for it. What do you make of the story about the IMF chief being charged with sex offenses and now locked up without bail? I suspect there's something going on here, with the Americans punishing him for something other than the sex offense.

Well I'm sure the Amerikans could have made it go away if they so wished,for the next French president no less, so they might be up to something.

Same here. The miners are going to be the last train to leave the station and accordingly many are still way below their 2008 highs.

 

Still numerous 10+ baggers to be had. As an added bonus for those in the UK, most stock on the Canadian exchanges can be put into ISA wrappers, CGT-free!

Any particulars of companies would be gratefully received

Obviously I understand that.

 

The bit I don't understand is why the downtrodden millions put up with it.

I don't know what you will make of this, but I'll say it anyway.

Once a part of society has more, it can exercise its power to make the rest work for it- this is the wielding of pure power, and I believe, part of human nature.

You just can't get away from it, even though many have tried in the failed and failing communist experiments.

It all comes down to individual conscience Ithink. If you believe that you and your tribe are better than another section of society you will be happy to wield power over them, believing it best for the larger society.

If on the other hand you believe that all people should be treated equally(or to put it another way 'treat people as you yourself would wish to be treated') then it will not be possible for you to act as superior to others in a generalised way, although it might be possible in a narrow sense ie. in some area of expertise.

Therefore I think that statistically the majority of people in power are somewhat psychopathic ie.they believe themselves to be superior and that their wants and wishes are the only real concern whilst the vast majority of the masses have no reason to wish to act as lords over other humans, firstly because they don't believe they have any answers that their 'leaders' don't have and secondly it is against their core belief, that to oppress another human is wrong.

The middle classes(professionals) to my mind also believe it is wrong to oppress others, but they also believe themselves superior and therefore they can justify their higher position whilst consoling themselves they have not exploited anyone to gain their higher status but only worked hard themselves, and I believe this position is tenable.

I don't think it possible to overcome human nature, however I think that in the long sweep of history it may change to something more egalitarian; although Darwinism may have to be chucked out to do so.

It has always been this way and probably always will.

Quite!

But how do you think you will feel selling your Au for property- I think it could come as quite a wrench for long term holders . Something for us to prepare for mentally in the years ahead.

200 oz has now been broken very decisively to the downside.

 

(I can't believe how precisely this chart is following my years old arrow. )

 

Well done GF, it is quite an amazing call.

I always wonder what your avatar will change to when the graph gets to the end of the arrow?

Then they could as well make no announcement at all.

This has been pre announced to death hasn't it?

My tuppence worth is that they will not go for 'shock and awe', but a monthly 100BN. This should keep the SM's from crashing while at the same time not allow Au to shoot higher immediately.

Maybe we even get some discount Au eh.. GF ?

edit to add there should be only one Gold thread, and I am a Centurion

QE2 to be announced tonight. If it fails to wow investors, the dollar which looks to have built a base, may rally. Even so, I doubt that will have that much of an impact on the gold price. Looking at the last correction in gold, on the last dollar rally, gold only corrected $100 or so and then went on to strengthen with the dollar.... showing that gold and the dollar are not always inversely correlated.

 

RBA raised their rate to 4.75%. Following China's lead?

 

 

 

Link to previous thread:

 

http://www.greenenergyinvestors.com/index....st&p=190436

Rh ,I thought FOMC (according to Forex factory) meeting is on 3 NOV ,and QE2 to be announced then?

I guess you could apply that model to the UK as well. Whether or not plays a role that the US has the reserve currency - I guess it does in Sinclair's rationale, so maybe he would not apply that model to the UK.

 

http://www.statistics.gov.uk/cci/nugget.asp?id=277

 

The question though is how much of it is external debt. I don't have this exact information. However, this BBC source here implies it could be something £200Bn external debt (potentially more now).

 

Apparently, the UK has 310.3 metric tonnes of gold reserves.

 

This makes the target UK gold price approximately £20,045.11/oz.

Thanks GF.

Commodities can spike on speculation, but if higher prices can't be supported in the real economy they will slump again.

 

There has to be either increasing real demand, or a depreciating currency to maintain higher prices.

 

imo it is only investors who, for primarily ideological reasons [monetarism/ money printing etc], see the currency depreciating. The bulk of the population is valuing the currency more as they pay down debt and/ or save.... this is motivated by the reality of debt.

RH did you read the Express story?

The general population is being explicitly told in a tabloid that if you put your savings in a bank you are eroding your wealth in real terms.

I agree that the bulk will be paying down debt however the bulk of the wealth held is held by the extreme minority(2-3%) of the populace and they will be the ones speculating to keep their wealth intact.

Secondly QE2,3,4 and so on will be required to keep asset prices steady or the banks will once again be insolvent, leading inevitably towards currency crises in indebted countries.

John Williams at shadowstats seems to be of a similar view and I for one am coming round to the HI conclusion.

http://www.theenergyreport.com/pub/na/7005

TER: We no longer really have the option of expanding the debt and it's doubtful that even short-term stimulus will have much impact. Looking at this next leg down against that backdrop, what projections would you make about unemployment, housing prices, GDP as we look through the end of 2010 and into '11?

JW: Unemployment will be a lot worse than most people expect. Housing will continue to suffer in terms of weak demand. But in this crazy, almost perverse circumstance, the renewed weakness to a large extent will help push us into higher inflation. Real estate tends to do better with higher inflation, but it's not going to be a happy circumstance for anyone.

The government is effectively bankrupt. Using GAAP accounting principles, the annual deficit is running in the range of $4 trillion to $5 trillion. That's beyond containment. The government can't cover it with taxes. They'd still be in deficit if they took 100% of personal income and corporate profits. They'd also still be in deficit if they cut every penny of government spending except for Social Security and Medicare. Washington lacks the will to slash its social programs severely, to change its approach to ever bigger government. The only option left going forward is for the government eventually to print the money for the obligations it cannot otherwise cover, which sets up a hyperinflation.

All of what I just described was already in place when the systemic solvency crisis broke. Before this crisis the government was effectively bankrupt. In response to the crisis, the government may have gone beyond what it had to do, but you err on the side of conservatism when you're trying to prevent a systemic collapse. That was a real risk. It still is. Irrespective of the politics of big government spending, quantitative easing, renewed bailing out of banks, whatever is involved, I'd argue that the government still will do whatever it takes to prevent a systemic collapse. That last series of actions had the effect of rapidly exploding the deficit. In just a year, we went from something under $500 billion in official reporting, on a cash basis as opposed to GAAP basis, to something close to $1.5 trillion.

The sheeple are being stampeded into speculation.

I think this and the other story today about Buffett positioning for inflation ,are indicating to me that money velocity is about to take off.

You mean a payment in one of those paper currencies that were the fashion for many years?

to convert into shiny stuff and add to my core position, yup

Ok ,so when its goes above all time highs ,how do we set targets for corrections/consolidations.

Yes I know we should not be trading ,but I have a fortuitous spreadbet in profit and would like to try to actually get a payment from them.

Halfway through the K-winter in the west since it began in 2000 and K-winters last around 20 years. So the K-spring cannot start again before private debt has been purged by either writing it off and/or paying it down. I don't see huge public debt as being so much of a problem because once an economy starts to turn around it can grow it's way out of this huge debt with the assistance of rising inflation. That's what I think will happen with Japan.

 

A very interesting piece recently from MSW in MoneyWeek about Japan - I do still think they are at the beginning of a new K-spring and this just confirms it even more IMO.

 

http://www.moneyweek.com/investment-advice...cade-47404.aspx

Catflap I find your posts most interesting and intriguing .Thank you.

'a close friend and economic advisor of Prime Minister Tony Blair and Chancellor of

the Exchequer, Gordon Brown'

erm, this rumour is from 1999

What is the "mean", please? The HPC liny thingy is some sort of exponential regression, they call it "trend". You could come up with almost anything for such a line. It is meaningless because it it is mere stats that ignores the fundamentals behind this move.

Yes thanks GF- I didn't notice the 2.9% yearly increase for the exponential line on the HPC graph

It's uncanny the way it's tracking the classic bubble to burst lifecycle, eh? We're very lucky to be living through this time, I only hope we have an equivalent of Galbraith to document it properly in years to come.

Can someone explain why on the graph at HPC the price is already at the mean while on this classic bubble graph it way further down?

Is it just the way they are drawn or are we going to see prices stabilize at higher levels than we think?

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