let's have a discussion on this

so I got the below mentioned posting from the kitco forums from a poster and thought it would be a good idea to dissect this and see what's true and cut through the bs to get to it...

one part I was wondering about that intrigues me is the in bold part...you guys think it's a possibility that it's really going on?


""So I just saw a story on cnn about our debt, gold/silver should go up if you get bad news right?

We are expected to hit the debt ceiling by Monday! So its either a default or more printing and the fact that the comex is so aggressively pushing pm down tells me one thing, the manipulation is true and he is doing it to try and save the dollar.

We will be 14.3 trillion obama said it will cost 1 trillion per year just to pay interest and the gdp wont even cover that, also we are going into the baby boomer bomb 55trillion in ssn Medicare and also 16 trillion in pensions that is 85 trillion in debt but we are still in Afghanistan spending not to mention all the other world events and disasters that come up like clock work. people are loosing jobs still and costs of goods are going up! People this is it! The moment we’ve all been waiting for . from now till 2015 the ssn bomb and pension bomb will start going off your gold and silver will be more valuable than you can imagine! don’t worry about the up and down fluctuations from a pm that is sitting idly waiting to go into the stealth phase

I don’t now about you but another thing i've noticed is that every were I go to buy is out of silver or has very little. some precious metals dealers are out of eagles and are having trouble delivering in a timely manner yet it looks as if every one is selling?? Then where is all the available physical silver? Yet another reason I know this is happening. The amount of paper silver is 100 oz to 1 real ounce that means if the comex gets exposed your gold and silver would have to be worth at least 100 times more and the dollar would tank making it worth even even more.

Bubble? Lmao people just regurgitate crap and know nothing about what they are saying people thought gold at 300 was a bubble then 600 but the thing is we ARE ABOUT TO GO INTO A WORLD DISASTER WHEN THE DOLLAR DIES!!! Our debt speaks for its self all the history around the world from 407 because fiat currency has never worked even early America had hyperinflation the fed is a private bank with share holders they will ruin the dollar and my friends that silver and gold you have will be the heart of the new money and your government will give you eternal wealth for it you can prosper from for many generations.


DON’T SELL""

 

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I don't think there is much to it. The nation has hit the debt ceiling before and the Treasury always magically finds additional reserves to spend while Congress debates. It is no secret that the Fed manipulates the gold price to control interest rates. Larry Summers wrote a paper "Gibsons Paradox and the Gold Standard" which explained how this could be done.

 

What SHOULD happen and what actually DOES happen usually end up being very different things. I was always taught not to put all my eggs in one basket.

 

There gonna stretch this thing out as long as they possibly can. I'm starting to think that silver bugs, myself included are getting way ahead of themselves. In then end we want the governments of the world to fix the monetary problems, I don't want a hyperinflation even though my PMs will go way up, my family and friends will be in trouble. I agree with LostDutch don't put all your eggs in one basket. And I'm not selling.

 

The Boston Red Sox were predicted by a majority of baseball experts to have the best team in the American League this year. They are far from it. After the devastating hurricane season of 2005, we were told we were in for a 10-20 year cycle of above average hurricane seasons. We haven't seen 1 since 2005. This list could go on and on. My point is this: this is no one alive we know of who can consistently predict the future. Given this, people who try to tell us what is GOING to happen are pretty much just jacking their jaws or fingers, as the case may be. As the saying goes, opinions are like a**holes....everybody has 1 and they all stink. As some have already posted here, diversification makes the most sense.

 

I agree on the diversification. I just doubt the government can rein in its spending and printing money will just be too tempting. That's why I try to have 5-10% of my assets in silver/gold.

 

I'm not a big fan of diversification when it comes to equity-type investments like stocks or PMs. What I have always done instead is invest a smaller amount of available cash than advised by traditional asset allocation theory and concentrate it in my two or three best ideas.

 

The Red Sox may just end up being the best team by the end of the year. Let's reconvene in October. TC

 

Of which year?

 

This economy is turning around and it will continue to as long as the government continues to create jobs by spending, since the private sector isn't (in this country). After Regan & Bush Sr. tripled the debt, Clinton reversed it. Bush Jr. quadrupled the debt, along with several other economy damning actions, so it's going to take longer to recover.

 

Clinton hardly "reversed" the debt. It's growth merely slowed down on his watch. In fact, all your numbers seem wrong. Bush did not quadruple the debt. As fiscally horrible as his terms were, the debt increased from 5.6 trillion to around 10 trillion.

 

PM's will slowly rise. They will try not to make it so noticeable perhaps. But I would not be suprised if that fella who predicted the 8 dollar one day jump, was in reality double that. I think THAT is the kind of jump we'll see. Something huge. It will just hit. No use in trying to predict when, just knowing eventually sometime silver will break the chains its been kept in.

 

Silver is not being hindered in any way. It is just that silver speculators do not want to pay full price to hold it, they want to play with 10x the value by using margin. Also , even if "end of the dollar" crowd don't want to admit it, the USD is doing fairly well, 75+ whereas most expected it in the mid 60s.There is more inflation in China than the US, and commodities as a whole are in sad shape from some of the above ( although some may get better because of the flooding). Silver may have a leg or so left in it, but I think it will be more from increased demand ( which although touted by bullion sites, silver sites, etc. has not seemed to occur (yet). Even though oil has been hit lately, I still think it has a greater chance of gains, along with copper and gold than silver. I would be hesitant to build a position at this time, until things such as gold ad oil stabilize more in the world. IMO.

Jim

 

The government doesn't create jobs by spending since they either run up more debt or extract money from the private sector. The best they can do is kill a job in the private sector and create one in the public sector. It's a zero sum game - all smoke and mirrors. And as long as your mind is trapped in the mode of thinking that republicans are better than democrates or that liberals are better than conservatives, you will never be able to understnd the game that is being played and that you are losing because you don't know you are in it and you don't understand the rules.

 

That's because the wars weren't factored in. With the wars, the debt was quadrupled. And, remember the Clinton surplus was the catalist for Bush's tax cuts.

 

It would be sort of a zero sum game if the private sector wasn't moving jobs offshore.

 

I don't know about oil having much potential in the short run. Anyone see the Congressional hearings yesterday? Aside from the oil subsidies, the speculation on Wall St., has added about $1 to $1.50/gal to the cost of gas. The Senate and the President are taking action to stop the speculation. The big “IF” is can they get it through the house. If they do, we should see $2.50 to $2.75/gal gas soon.

 

That is correct. But it would be incorrect to put the government in the role of helping and companies in the role of hurting. Companies move jobs offshore because of economic incentives from the government to do so. Keep in mind that neither business nor government is doing anything to help you, and you'll begin to understand the depth of the problem.

 

Let's review what these "subsidies" are all about.

The largest is the "Domestic Manufacturing Deduction." This was passed in 2004 to get companies to manufacture in the US and hire people here at home. Most companies can deduct 9% of net income using this deduction, but oil and gas companies can only deduct 6%.

Then there is the Domestic Drilling subsidy passed in 1913 to encourage domestic energy production. It allows oil and gas producers to deduct the costs of preparing a site for drilling, such as clearing trees and pouring concrete - normal business expenses in the eyes of many. Small companies can deduct 100% and the majors can deduct 70% with the rest being capitalized. So it is merely a timing difference, and not a permanent subsidy.

Finally there is the 1926 depreciation rule that permits smaller companies to deduct 15% of a well's revenue annually as a depreciation expense to simplify the tax code so that companies don't have to guess how long a well will last. This provision was eliminated for the majors in 1975 and now Congress wants to take it away frome the independents.

This is what Congress is doing to "protect" you from the evil oil companies. They only earn 5% net income on revenue - below average. But the business of providing energy to the world is enormous - second only to food production. So the resulting numbers appear larger than they really are.

 

The oil companies are just a target of opportunity. Distract the public from the real problems.

The sad thing is, if they lose their tax breaks, they will just pass it on to the consumer as a new cost and nothing will change.