Be ready for $ problems

[knkali]

http://www.moneynews.com/MKTNews/Massive-wealth-destruction-economy/2013/06/20/id/511043/?promo_code=13E5C-1&utm_source=taboola

[xsailer]

I sure would like some goods news for a change.

[bob98366]

Concur. In history whenever the central bank (the Fed in our case) has pumped more money into the financial system than the economy's productivity can match, there has been eventual devaluation of that currency (our dollars) and subsequent inflation. This is Econ 101 and no one in power in Washington DC has taken the class, let alone passed it.

For example, the price in dollars for oil from 20 years ago to now

1993: $ 16.75
2013: $103.62

This is inflation, regardless of how the government lies about the cost of living's change each year.

Own your home and those physical assets you need to live and be safe. Have no debt where the interest rate fluctuates (most credit cards). Counting on the future buying power of cash to not go down is a fool's illusion.

[OldLincoln]

True and the setting the price of oil based on oil futures which are set by very large money holders like wealthy Middle East oil barons is stupid in itself. Seems un-American to allow foreigners to determine our monetary value.

[Longitude Zero]

For example, the price in dollars for oil from 20 years ago to now

1993: $ 16.75
2013: $103.62

While true, this is an economic oversimplification as other factors affect the price of oil not just inflation.

[bob98366]

LZ, agree more is involved than just monetary inflation and I'm not an oil expert. I would hazard though that most of the increase is caused by policy makers and governments (not just U.S.) intervening, of which easy money is a major part.

The bottom line is that the purchasing power of a dollar in 10 or 20 years will be less than today, probably a lot less based on history.

[knkali]

LZ, agree more is involved than just monetary inflation and I'm not an oil expert. I would hazard though that most of the increase is caused by policy makers and governments (not just U.S.) intervening, of which easy money is a major part.

The bottom line is that the purchasing power of a dollar in 10 or 20 years will be less than today, probably a lot less based on history.

What will happen when the petro dollar is no longer needed and oil can be bought with other currencies? Open wound pour in salt

[OldLincoln]

In the stock trading business they have identified a move based on the Fibonacci calculations. Avoiding details, stocks generally (not always) move up about a third of the prior move (either direction) then reverse path. I called it a "hitch in the giddyup" (or giddydown). The current market has gone nuts (like 2000 did) and is ripe for a significant reversal. Doesn't mean it will happen but I wouldn't bet against it.

The weakness of the economy hasn't justified the gains much as the dot coms didn't justify the gains. So look back at the market since 2000 as make your own decisions but don't trust a stock broker because his job is to sell not to make you money. I learned that the hard way.

The problem is where do you put your money. Interest is way low so govt bonds suck, gold and silver is high so they suck, foreign investment suck, real estate is very long term so it sucks, cash is loosing value so it sucks, the GDP growth is not only phoney - Obama changed the formula to make it look better - but it sucks anyway. The only thing that looks up is the market and that may be reaching a tipping point.

OMG, the sky really is falling!

[mr surveyor]

the safest investments now seem to be in semi-precious metals and mineral/chemical compounds .... lead, copper, brass, nitro-cellulose ....

[getsome]

I'm no economist nor expert but I agree we are in for a major fall for the obvious reason that our National Debt is over the moon at 17 trillion and climbing and the deficit continues to grow even with all the magic numbers on jobs and unemployment they pull out of their ass hats...Now with Obamacare coming on line we can expect unemployment to rise dramatically and tax revenues to fall which will further add to the debt....

Now recently when Bernanke said the Fed was going to throttle back the Bond buying bananza (which is the reason the Stock Market is at the false high it is now), the market fell several hundred points in one day....They immediately backed off that idea and kept the money presses and bond buying fever going to stabilize and calm the market...Not sure where that decision came from but I'm positive it came from higher up than ole Ben...

Now the Fed says that even with all the money presses going wide open 24/7 our current inflation rate is 1.7% which is total bull hockey...The Gov office that puts out that number apparently doesn't shop at the same grocery store I go to because as I see it prices have gone up for everything across the board by at least somewhere close to 40-50% the last 5 years and my pay check has gone down due to higher taxes and health care costs....

When the Fed finally is forced to stop their money printing binge you will see a market correction with the Dow back under 800 where it should really be at anyway....That combined with the totally inept Obama administration in control of whats left of our destroyed economy will be the beginning of the end....Keep your eyes open and the guns close because things will get bad really fast once it starts....Just this one dumb ole country boy's opinion for what it's worth....

[muggsy]

There are ways to protect yourself from inflation. Investing in commodities is one.

[Armybrat]

Nothin' wrong with the Three Gs - Gold, Guns, & Ground.

This guy sums up nicely what I've been saying on political forums for several years:


"The reason there is no [good] exit strategy is because all exits lead off an economic cliff. When Bernanke started talking about tapering, bond prices slid downhill for almost 4 months in a row, leading interest and mortgage rates to spike (even though rates were still far below historical norms).

Mortgage refis and housing starts started slowing down immediately. There is three-fold problem if the Fed allows rates to return to normal levels (i.e. roughly twice as high as they are now)...

1. The housing markets will get killed and other business/economic activity will slow significantly, which will upset the already tepid recovery.
2. The value of Treasuries held by major banks will fall significantly, which will affect their capital requirements.
3. The budget deficit will explode even higher as the interest expense on the massive (and still growing) federal debt increases.

So basically the Fed has no good option other than to keep up the charade... Uncle Sam will keep issuing debt, and the Fed will keep taking it off the market and hiding it ASAP. And while rates stay low, asset prices (stock market, housing, etc.) will continue inflating and inflating... until one day they don't anymore.

It's like the nation is addicted to morphine and any reduction in the dose will cause great pain. If the morphine ever runs out... "

[OldLincoln]

Hey Muggsy, that's what I do now. I go to Costco a couple times a month and "invest" $100 or so. Problem with commodities is something called consumption. :)

Of course I'm just funnin with you but it is truth nonetheless.

[downtownv]

What will happen when the petro dollar is no longer needed and oil can be bought with other currencies? Open wound pour in salt
That day is coming......:40:

[JohnR]

I've been saying for a while now, get ready for Dark Ages II.

[bob98366]

$100 extra per month at Costco or wherever is a wise thing and doesn't break the bank to build up food/water storage. Go heavy on no cook or little cook stuff. Just don't advertise it to your neighbors or they will come around unwanted if/when the the balloon pops.

[Bawanna]

I'm no economist nor expert but I agree we are in for a major fall for the obvious reason that our National Debt is over the moon at 17 trillion and climbing and the deficit continues to grow even with all the magic numbers on jobs and unemployment they pull out of their ass hats...Now with Obamacare coming on line we can expect unemployment to rise dramatically and tax revenues to fall which will further add to the debt....

Now recently when Bernanke said the Fed was going to throttle back the Bond buying bananza (which is the reason the Stock Market is at the false high it is now), the market fell several hundred points in one day....They immediately backed off that idea and kept the money presses and bond buying fever going to stabilize and calm the market...Not sure where that decision came from but I'm positive it came from higher up than ole Ben...

Now the Fed says that even with all the money presses going wide open 24/7 our current inflation rate is 1.7% which is total bull hockey...The Gov office that puts out that number apparently doesn't shop at the same grocery store I go to because as I see it prices have gone up for everything across the board by at least somewhere close to 40-50% the last 5 years and my pay check has gone down due to higher taxes and health care costs....

When the Fed finally is forced to stop their money printing binge you will see a market correction with the Dow back under 800 where it should really be at anyway....That combined with the totally inept Obama administration in control of whats left of our destroyed economy will be the beginning of the end....Keep your eyes open and the guns close because things will get bad really fast once it starts....Just this one dumb ole country boy's opinion for what it's worth....

Smarter than me, I read this 3 times and I have no idea what you said. Completely clueless.

[getsome]

Means we're screwed....I'm just glad I am old enough to have a paid off house, enough to eat and a little left over every month and that I'll be heading over the river soon enough to where the livin is good and easy....I do feel sorry for our children who will never have it anywhere near as good as people our age did and that's a damn shame...:(

[Barth]

I thought this thread was about buying too many firearms?!?!?

[AIRret]

And Pelosi had the nerve to say that Obummer cut the deficit in half in 4 years 3 months!!!!! I heard that yesterday on FOX.

Yes, we are done.........it's just a matter of how soon.

Where will we take our last stand???

[muggsy]

As soon as this ammo shortage ends I'm investing in heavy metals like copper, brass and lead. :)

[JohnR]

$100 extra per month at Costco or wherever is a wise thing and doesn't break the bank to build up food/water storage. Go heavy on no cook or little cook stuff. Just don't advertise it to your neighbors or they will come around unwanted if/when the the balloon pops.

There's a guy selling a book on the internet about how he learned the hard way in Egypt about how NOT to prep. He was caught up in the Arab spring stuff and stuck in a house of an Egyptian who thought he was well prepared because his house had high walls and he had a stock of food and ammo. One day after the rabble-rousers' food ran out this guy started cooking a lamb in the courtyard. The smell attracted the mob, who scaled the walls like madmen, took the food, followed the homeowner to his safe room, dragged him out and killed him. The guy telling the story fled next door to another prepper's house who had the total opposite strategy - the house was nothing special, but he succeeded by not drawing attention to it. They lived in relative calm for two weeks there. Anyway, the moral is that if you pay this guy about a hundred bucks, he'll tell you how to do it, too. ;)

[Longitude Zero]

No need to pay anybody as that info is freely available on he internet. A little bit of common sense also goes a long way.