Gold over $1700 again~ Silver touching $33/oz!

Maybe this is the beginning to something huge! The price of gold really moved on up and the price of silver movin' on up as well. Good thing for coin collectors!! And wouldn't you know it, I just sold some junk silver! Arghhh!!


http://www.coinnews.net/2012/09/08/...k-as-silver-soars-7-1-us-bullion-coins-solid/

 

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Not nitpick but what makes you think UK will collapse before US their budget deficit are projected to drop significantly in the coming years.

 

For all of its faults, the US is a far more powerful economy with less regulation and a culture that has shown the ability to bounce back from economic adversity. The US has more in the way of natural resources and food production. The UK is farther down the road of destroying their middle class and of government control of everything, and is more sensitive to problems with European bankig.

 

I've had other fish to fry.

 

So do you have a take on the latest surge? I am kind of bummed since I was having some fun buying up "junk" coins. This latest price surge has sent me back to ancient and book buying only.

 

My opinion is that I think the traditional summer is over, the idiot dog & pony show political conventions are over (what a GD pain that was from one living in Charlotte), Europe is back from it's very long vacation, and therefore western world back to realizing that it's still SNAFU. The governments will be back to heavy fiat creation and gold will continue to rise as a result.

We are entering the traditional period where gold rises. It will run from now to sometime in October, with another burst or so after the election. Gold will reset from ~$1650 to ~$1850 give or take. The real question is how high will it go. Silver, I have no idea. It may crash back to $19 for all I know. Anyone who regularly reads my posts should know that it is not driven by physical demand and doesn't move on fiat creation. The stock market is a complete farce. It's moving on very low volume and the money being printed by the banks ends up there. If we were in a real productive economy it simply couldn't move as it is now.

So in general I say that for gold this is a natural occurrence as it has been for the last 12 years. Silver, it's a crap shoot.

 

I would agree that physical demand is only a small portion of the overall price movement, but it is increasingly becoming a factor. Big timers are now paying over spot for 90% US coinage for the first time that I've ever seen, and delays being exceedingly long for requesting delivery. Silver has been up $6/oz now over the last couple weeks on talks of money printing by the Fed and the ECB. To say it doesn't move on fiat creation is not accurate. Silver is a dual role industrial AND monetary metal whether or not people want to believe it. With economies around the world in contraction, there isn't really any other explanation besides physical supply shortages. It has to be one or the other, so to say it is neither doesn't jive.

 

The key difference between us and Greece is who the bondholders are. If we haircut our bonds it's the Fed who takes the hit. They can just print more money and offload that burden to savers. In the end we still pay for it, not the market participants who get bailed out and never actually incur any risk. Yes a haircut would be deflationary, but default has much wider reaching impacts than simply depressed asset prices which would cause bank balance sheets to go underwater, incite more people to hoard, stall the already weak economy, and undermine the credibility of US debt promises.

 

And the alternative is hyperinflation that has just as many negative side effects, if not more. Especially with the current euphoria in Washington it seems to want to punish the rich, forcing a "haircut" on the "rich" people would probably seem attractive. Its not poor people who hold these bonds, its the Fed but also rich people, corporations, and foreign entities that hold these. Those groups might seem prime targets to balance the budget deficit on.

Just pointing out there IS a very real alternative possibility to monetization of any debt issues. If you are counting on hyperinflation in your investment strategy, you should realize that.

 

The wealthy are paying the least taxes, as a percentage of income, on average, since what? The '30's? They paid something like 65% taxes under Eisenhower, and while I don't advocate a return to those rates, I think 40%-45% is fair for those grossing north of $1m per year. Sorry, they're not gonna be able to buy as many coins or as many cars, or maybe they'll have to take out student loans to put their kids through college like the rest of us, but that's life.

Sincerely,
Dude who's parents and future in-laws both fall into the category of upper class.

 

Trying to stay apolitical, but with over half the country paying ZERO taxes you say how its "fair" to greatly increase the tax rate on those who actually do? Was it "fair" I had to work my way through college while losers got drunk and puked every night? Was it "fair" I drove a 15 year old car for half a decade to put myself through graduate school while other losers ignored their education and bought new cars instead?

We all make our choices in life, and now you have a large group of Americans who simply wish to steal from those who actually worked hard and got ahead. Its the ants and the caterpillars all over again. And no, I am not mega rich, in fact came from lower middle class background and paid for everything in life I have ever got, from my first car to my college education. I owe no man anything, but you think you should take more from me to make everything "fair".

And you wonder why more Americans have voluntarily left this nation more in the last 4 years than in the history of this country....

Btw, we were coming out of WWII when we had high tax rate like you quoted. What excuse for them are there now? To pay for greater and greater unwed mothers, ex felon jobs, and beaureucratic overpayments?

Sorry, end of rant.

 

The question isn't whether the wealthy should be paying more tax. It's a fake premise.

The question is what will be down to downsize government spending so that it's not necessary to raise taxes on anyone and in fact reduce taxation for everyone.

 

This is why democracies fail. The founding fathers explained it in the discussions about why they chose to form a republic instead. It isn't fair, or sustainable, or smart, but Americans just might be pursuaded by politicians and the media to kill the goose that lays the golden eggs. Things are on a razor's edge and could go either way.

 

It will probably take a big cut to military spending, ending the wars, elimination of farm and oil subsidies, tariffs, playing with the social security and medicare eligibility ages and restoring the FICA tax to where it was until the baby boomers die. Once we are gone, the system will be okay again for a long time.

 

I am not supporter of our current tax system but i want to point out there is no one in USA paying zero taxes (unless maybe you are living in middle of woods and buy everything from amazon) unless you meant zero income tax. A flat tax of 15% on income earned (replacing all other taxes) would in fact have no impact on bottom 50% due to other taxes they pay.

 

Very true, but it would lessen the power of the political elite, (both sides), so therefor is almost guaranteed to not happen.

 

But so many get money BACK from the income tax system it more than offsets any other type of taxes they may pay, netting out they pay no taxes overall to support the government. Think about how much danger a democracy is in when a substantial percent of the population makes its living off of the government or pays nothing in support of the government.

I believe this is the razor's edge Cloud is referring to. This country can go one of two directions from here, and will have vastly different outcomes long term depending on that decision.

 

It all boils down to degradation of the middle class. If you look back to the '70's, we had a large, booming middle class that paid taxes... that base was eroded by the elimination of manufacturing jobs and the elimination of unions to the point where we are at today... Where the middle class is a fraction of what it used to be, and the majority of individuals that hold jobs that would have once been considered middle-class jobs, are now considered lower-class jobs.

Rebuild industrial manufacturing, rebuild the middle class, then you can tax more fairly. I have just one little thing to show you...



That graph shows, when boiled down to it, that the wealthy are taking home more money than ever before, while paying less taxes (graph doesn't show this, but we know it's true...) than they have in decades.

 

The political elite always want to turn people's attention to taxes and who should pay and away from spending. But the only real solution is to radically cut government spending. A trillion dollar federal budget with a 500 million dollar deficit is preferable to a three trillion dollar budget that is in balance. IMO.

 

And don't leave out immigration. The US reached zero population growth back in the late 70s and virtually all of the population growth since then is from immigration - legal and illegal.