romans holiday

I am 30% gold, 30% silver and the rest in cash. Hope it performs. The world will become a better place... for you and for me and the entire human race [damn have no music key on the board]

I would be worried if most people in the western world did agree with me. It is good news because a fundamentally unsound and unjust debt-based economic system is in the process of collapse. Most people in the western world were becoming little better than serfs trapped in a lifetime of debt. Like yourself, I consider people capable of rising to the occasion.... stiff upper lip and all that. A bit of hardship will test the mettle of our character and old virtues will be rediscovered. A collapse of the financial system would undoubtedly bring some hardship and suffering, but I doubt it will bring the madmax fantasies of paranoids.

That was the good news! "The current debt-based, fiat-money global economy is in the process of collapse"

With all the nationalization going on, the talking heads are getting nervous . "Hyper-inflation" and the "printing of money" was mentioned by the regular anchors today on CNBC.

This may lead to further dollar strength with panicked investors and hedge funds flying even faster to "quality" . Absurd isn't it! For those with dry powder, it could be an excellent buying op. The decline of the dollar may be left waiting in the wings for a few more months. Then the fun will really begin.

Who said that man was not an animal to be farmed? An economic collapse would also be a regeneration of ourselves.

Lehman and WaMu are on the edge. Will the Fed step up to the plate? Or let them fail? Double post.

Well, this may be the first time that I have ever traded gold [aready heavily invested ] The Indian festival Diwali arrives soon and gold always moves up in this period. I am thinking of a reverse fishing line.... buy a few ounces on this dip [perhaps around 700] then sell on the coming rise [i wonder if I will be able to bring myself to sell]. I have enough in gold at the moment but find it hard to resist at these prices.

In an overly-civilized world, maybe a bit of barbarism is a good thing.

I think you have hit on something significant here. Economic growth has become the rationale for social organisation. Perish the thought that we will have a recession! I suspect it has something to do with the creation of debt money and keeping the general populace well disciplined, productive and devoid of leisure for thinking.

Yes, I see your point. I believe the word "bubble" is being overused today. Where no one saw any bubbles a few years back, now they are suddenly everywhere! The new buzz word. In my opinion there has not been a lot of genuine bubbles in history. They are relatively few and far between and wreak economic havoc. "Speculative froth" involves something far more common than a genuine bubble. For example, oil at $150 involved speculative froth but only the talking heads thought it was in a bubble. Hmmm... once again we are getting down to the definition of words. Important nevertheless

It is ludicrous to say gold was in a bubble. A bubble involves a manic phase where everyone is certain it is a sure bet. Anyone who could, and many did due to easy credit, bought houses without even bothering to ask what the real value of them were. People were "panicked" into buying and lost sight of fundamentals. A bubble does not form when some see something as a sure bet, but when most do. This is what causes prices to become over-inflated. The general public know next to nothing about gold. When they do, maybe then you could talk of a bubble. Anyone who did their homework on gold should not too concerned with the volatilty we have seen. Rather, it was to be expected. We will continue to have a deflationary period which will most probably be followed by an inflationary period after the election.

WM, you do a disservice to yourself. This comment is hardly worth a reply and is the sort of thing you hear from the talking heads on CNBC. Now if you asked what it would take to attract hot money needed to form new highs....

Whenever are you going to get it? The reason that some here just "politely move on" is that they do not take a dollar-centric view towards their investments. Comprendo?

Many think that in a global depression cash would be good. Due to fears of [global] recession, many investors seem to be going into cash now. The problem is that last time round, in the 30's, cash was backed by gold... by real solid stuff with a sound history of value. This time round, no such luck. It is best to go straight to the source and hold a portion of your worth in gold and silver. If there is a depression all paper assets, including the dollar, would deflate. Edit to add: Dollar deflation would have an inflationary effect in prices.

1] The housing and banking crises are deflationary. Due to a credit boom, asset prices were over-inflated. They are now deflating due to a credit crisis. 2] Inflation comes from the "other end". It is primarily a problem with the currency. As many posters here have pointed out the money supply is increasing. An increasing amount of dollars circulating, competing for the same amount of goods/commodities, leads to higher prices. Another way of looking at this is that the dollar is deflating [in terms of purchasing power]. I imagine the dollar will further deflate when creditor countries downgrade the credit worthiness of the states [thinking F&F] 3] The dollar will most probably return to its long term trend of decline against other currencies [unless these also decline at the same rate which would then lead to a "race to the bottom" albeit at a snails pace] 4] The dollar will devalue against other assets such as currencies/gold etc when the market realises it is over-valued [i guess this is where inflation pyschology takes hold]. Edit to add: A time line needs to be kept in mind in order to see these phases play themselves out.

From Reminiscences: Without faith in his own judgement no man can go very far in this game. That is about all I have learnt- to study general conditions, to take a position and stick to it. I can wait without a twinge of impatience. I can see a setback without being shaken, knowing that it is only temporary....... I have been short... and have seen a big rally coming... making a difference of one million dollars in my paper profits. And I have nevertheless stood pat and seen half my paper profit wiped out, without once considering the advisability..... of covering. I knew that if I did I might lose my position and with it the certainty of a big killing. It is the big swing that makes the big money for you.

The quandary I face at the moment is that I was not planning to buy any more gold; got a large proportion of my worth in gold already and was hoping to top up some cash reserves [sorry Steve ]. But at these prices, it is hard to resist the allure of the shiny stuff. Edit: A dip to $700 [not saying it will] would force my hand.

Not sure about the link. Quark previously posted this from Faber's latest article: We shouldn’t dismiss entirely the possibility that all the bailouts fail to revive credit growth and that a deflationary secondary depression is now under way," writes Dr.Marc Faber in the latest edition of his highly respected Gloom, Boom & Doom Report. "The sharp deceleration in credit growth, with rising default rates across the board, could suggest that debt liquidation is now occurring...[but] Ben [bernanke of the US Fed] and Hank [Paulson of the Treasury] may replace private debt with government debt in order to bail out the system. "That such a bailout will diminish the purchasing power of the Dollar even more (it should be highly inflationary) is clear... "Under this scenario, renewed US Dollar weakness and strength in commodities – in particular, in Gold – should reappear."w Personally, I agree with Faber's view here. The market is in the midst of a deflation scare [prime cause being the credit crisis]. It is only a matter of time before investors realise the dollar is also devaluing... for all the inflationary reasons we know so well. Edit to add: Over and above money supply issues, now that F&F are on the Treasury's books, it certainly makes the dollar a less attractive investment for the players abroad. Could F&F be the trojan horse?

I think the US Govt will nationalize the car industry.... to balance out their portfolio.

This period of a deflationary scare involves investors getting out of assets and into cash. Think of all that cash on the side lines being held by nervous investors. Where do you think they are going to go when the inflationary scare [dollar deflation/devaluation] hits?

Such a helpful guy. I thought Faber was fumbling on the CWR podcast the other week. He kept talking in the past tense... and seemed a bit clueless about the near future. Edit: but on reading the following quote of his latest view, have to say he is getting it right by my book. He sees a deflationary period ahead followed by a period when inflationary pressures start to kick in.

Yes, I see a fall in currency value [good choice of words] on the horizon. Deflationary for the value of the dollar and inflationary for prices. Of course this will affect all prices [even assets] which may end up extremely volatile and range bound. I imagine it will be very hard for investors to find meaningful trends in asset prices as the deflation of these prices may be negated by a weakening currency [opposing inflationary force]. Gonna keep my eyes on value and ratios. Edited.

Well, if gold did happen to go to that price, I would not be confident that the dollar would not sink at a later date against gold. Therefore would definitely not buy dollars with my gold.

OJ, what currency are you in? Are you confident with it? If not, why not think of gold and silver as alternative currencies. Then you could split your "worth" between say four currencies; two natural and then two..... not so natural.