Deflationary alarms??
Investors....come in please!
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Deflationary for sure. But the unpredictable part is how global central banks will react. I can't imagine they are just going to sit around and not print the heck out of money. So flip a coin. It's anybody's guess. Buy gold (or anything else) at your own risk right now. Those CD paying 4% are looking pretty good right about now.
Originally Posted By: Drew99GT
Originally Posted By: Pablo
So - when does gold get into buy range?
Gold's reaction to all this has me more confused then ever. Of course all the "analysts" still say gold's going to go up and is still in the midst of a bull market.
Are the analysts the ones that sell gold? Gold is always worth something but I remember when gold was around $850. per oz in the 70s and dropped to $290 or $390 I bet the people who bought it were upset. You take the risk and make or lose money unless you are a big corp that gets bailed out by the tax payers.
Originally Posted By: Pablo
So - when does gold get into buy range?
Gold's reaction to all this has me more confused then ever. Of course all the "analysts" still say gold's going to go up and is still in the midst of a bull market.
Are the analysts the ones that sell gold? Gold is always worth something but I remember when gold was around $850. per oz in the 70s and dropped to $290 or $390 I bet the people who bought it were upset. You take the risk and make or lose money unless you are a big corp that gets bailed out by the tax payers.
Originally Posted By: VeeDubb
Deflationary for sure. But the unpredictable part is how global central banks will react. I can't imagine they are just going to sit around and not print the heck out of money. So flip a coin. It's anybody's guess. Buy gold (or anything else) at your own risk right now. Those CD paying 4% are looking pretty good right about now.
Perhaps the gold market is predicting (or more likely wanting) rate cuts from central banks as the global economy continues to slow. But the prospects of inflation, especially in the US, are precluding that.
All I know is if I bought gold right now, it would drop 10%. If I short gold, it'd jump 20%!
Deflationary for sure. But the unpredictable part is how global central banks will react. I can't imagine they are just going to sit around and not print the heck out of money. So flip a coin. It's anybody's guess. Buy gold (or anything else) at your own risk right now. Those CD paying 4% are looking pretty good right about now.
Perhaps the gold market is predicting (or more likely wanting) rate cuts from central banks as the global economy continues to slow. But the prospects of inflation, especially in the US, are precluding that.
All I know is if I bought gold right now, it would drop 10%. If I short gold, it'd jump 20%!
Originally Posted By: Drew99GT
All I know is if I bought gold right now, it would drop 10%. If I short gold, it'd jump 20%!
Of this, doubt, there is none!
That is the story of my investing life 2007-2008!!
All I know is if I bought gold right now, it would drop 10%. If I short gold, it'd jump 20%!
Of this, doubt, there is none!
That is the story of my investing life 2007-2008!!
http://money.cnn.com/2008/09/10/news/economy/fed_outlook/index.htm?postversion=2008091014
Might be a good move to start looking at commodities again!
Might be a good move to start looking at commodities again!
I sold GOOG 2 years ago at 406. It finally looks like a good move.
Here is an excerpt from a speech given by Bernanke in 2002. Anybody want to place bets on deflation vs inflation?
"What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior).8 Normally, money is injected into the economy through asset purchases by the Federal Reserve. To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys. Alternatively, the Fed could find other ways of injecting money into the system--for example, by making low-interest-rate loans to banks or cooperating with the fiscal authorities. Each method of adding money to the economy has advantages and drawbacks, both technical and economic. One important concern in practice is that calibrating the economic effects of nonstandard means of injecting money may be difficult, given our relative lack of experience with such policies. Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation. "
For full speech, see:
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm
"What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior).8 Normally, money is injected into the economy through asset purchases by the Federal Reserve. To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys. Alternatively, the Fed could find other ways of injecting money into the system--for example, by making low-interest-rate loans to banks or cooperating with the fiscal authorities. Each method of adding money to the economy has advantages and drawbacks, both technical and economic. One important concern in practice is that calibrating the economic effects of nonstandard means of injecting money may be difficult, given our relative lack of experience with such policies. Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation. "
For full speech, see:
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm
Wall street today is a must see. Utter turmoil abounds. You might not see another day like this in your lifetime.
If you think it doesn't affect you, think again.
BTW, oil is down over 5 bucks a barrel. Those nasty oil companies are at it again.
If you think it doesn't affect you, think again.
BTW, oil is down over 5 bucks a barrel. Those nasty oil companies are at it again.
I was thinking today would be a good buy day.
KBE
XLF
PKN
UWM
UVT
FSLBX
That sort of mixed stuff.
KBE
XLF
PKN
UWM
UVT
FSLBX
That sort of mixed stuff.
Darn me for buying and holding a few months ago. All I can hope for is the investing gurus to realize the blue-chips still have gobs of cash and oodles of people buying their necessities from them, even during this time of panic. If I sell now it'd be a nice write-off and throwing good money after bad.
Anybody see the carnage being wrought? Down 325 points an hour into the session. Yeeowch!
Anybody see the carnage being wrought? Down 325 points an hour into the session. Yeeowch!
The Blue Chips are under turmoil cause their getting raked! Airlines, banks, oil companies, and my goodness, insurance and financial services companies.
But like you sciphi, I put the plug in and went into the bigger banks and financials about 3 weeks ago, thinking we are somewhere near the bottom. OOOOOPS!!!
They're still very undervalued historically so there is room for market cap growth, but it's gonna take a LOOOOOOOOOOOONG while...
My dad just started working for AIG about 3 weeks ago - he says he's getting nothing today - zip zilch, notta as far as information on what to do. He is getting all these stupid letters from management [censored] and whining about generally accepted accounting principles in which you have to mark down and expense investments even though they're not being sold. aka, AIG has a ton of exposure to CDO and MBSs, along with insurance contracts on them, and they're worthless! But management is saying to the employees it doesn't matter cause it's all on paper and they still have a ton of cash.
I'm an accountant. I almost fell over laughing after reading that! The dumb [censored] that run AIG are probably packing their golden parachutes as I type...
But like you sciphi, I put the plug in and went into the bigger banks and financials about 3 weeks ago, thinking we are somewhere near the bottom. OOOOOPS!!!
They're still very undervalued historically so there is room for market cap growth, but it's gonna take a LOOOOOOOOOOOONG while...
My dad just started working for AIG about 3 weeks ago - he says he's getting nothing today - zip zilch, notta as far as information on what to do. He is getting all these stupid letters from management [censored] and whining about generally accepted accounting principles in which you have to mark down and expense investments even though they're not being sold. aka, AIG has a ton of exposure to CDO and MBSs, along with insurance contracts on them, and they're worthless! But management is saying to the employees it doesn't matter cause it's all on paper and they still have a ton of cash.
I'm an accountant. I almost fell over laughing after reading that! The dumb [censored] that run AIG are probably packing their golden parachutes as I type...
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Drew, you are an accountant ??!! It's ALL your fault.
No, it's the fault of management of big companies who don't follow accounting principles and defraud everyone! That in and of itself is a large part of why all this de-leveraging is coming to ahead in a rapid manner as of now - companies are finally spilling the beans as to the actual extent of CDO, MBO, and other securities losses.
There's been plenty of CPAs and financial analysts who have done their homework during the past decade who told the truth contrary to what audited financial statements were saying, but you think wall street and especially the financial media would report that to a legitimate amount???
Well, the mortgage industry will hopefully be regulated in a legitimate manner now. Lets take bets in the next bubble that will burst!
There's been plenty of CPAs and financial analysts who have done their homework during the past decade who told the truth contrary to what audited financial statements were saying, but you think wall street and especially the financial media would report that to a legitimate amount???
Well, the mortgage industry will hopefully be regulated in a legitimate manner now. Lets take bets in the next bubble that will burst!
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I meant more manufacturing and conglomerate blue chips such as GE. They've taken a beating via their financial services arm, even though other divisions are having a really good time of it.
I thought weak dollar meant it was time to get into manufacturing a bit more. Silly rabbit, manufacturing is tied hand-and-foot to finance.
I thought weak dollar meant it was time to get into manufacturing a bit more. Silly rabbit, manufacturing is tied hand-and-foot to finance.
Originally Posted By: sciphi
I thought weak dollar meant it was time to get into manufacturing a bit more.
It does - well, to export manufacturing. Problem is, the dollar has rebounded almost 20% in the past month!
I thought weak dollar meant it was time to get into manufacturing a bit more.
It does - well, to export manufacturing. Problem is, the dollar has rebounded almost 20% in the past month!
As I understand the Fed widened the set of assets eligible as collateral for loans of Treasuries to include all investment grade paper, and raised the size of these Treasury loans to $200bn. In other words the Fed widened the set of a toxic waste that can be accepted as collateral. And it also suspended rules that prohibit banks from using deposits to fund their investment banking subsidiaries.
After such decisions I would start worry about any amount in the bank. Especially, when AIG is waiting for its fate and WaMu already took a place in the queue. FDIC may not be able to help because its reserves are quite limited.
After such decisions I would start worry about any amount in the bank. Especially, when AIG is waiting for its fate and WaMu already took a place in the queue. FDIC may not be able to help because its reserves are quite limited.
Went on a buying spree today. Hold on to your groinal area.
"FDIC may not be able to help because its reserves are quite limited."
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The taxpayers have the reserves, even if the money's worthless. Sheesh.
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The taxpayers have the reserves, even if the money's worthless. Sheesh.
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Originally Posted By: Papa Bear
Drew, you are an accountant ??!! It's ALL your fault.
We need more men peddling bears. If I were a woman, I would want to bear your cubs.
Drew, you are an accountant ??!! It's ALL your fault.
We need more men peddling bears. If I were a woman, I would want to bear your cubs.
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