pop goes the bubble?

The definition of "recovery" is to return to a state prior to the one you are in now. You just said..

"...the past decade of growth prior to this recession was debt fueled, and you simply cannot sustain economic growth like that."
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So if everything that is being done is to recover to that state, then I think you have your answer to what is going to happen to PMs. The only change to where we were and where we are now is in who is taking on the debt. It was private prior to the the crash at the end of 2008. It's socialized now. The problem is, that in both cases, it's not sustainable. Remember Obama and Co borrowed an additional $T and simply threw it at the economy. One would have hoped there might be some short term effect.

I think that Gold and other PMs are going to continue to rise because they are not burdened by these obligations that directly affects their worth.

 

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You and me both! If silver gets too much higher, I'll be stashing away copper as the next poor man's precious metal.

 

That's quite an extreme statement, that EVERY dealer in Europe is out of gold. Can you verify that? Also, since gold is easily obtainable from multitudes of internet dealers, it is also irrelevent to your argument. Finally, if there was no gold available for sale in Europe, the price would be infinity and the Euro would stand at zero. Since none of this is happening, it would seem that you are incorrect.

 

Totally agree. The news hammers the idea of the economy relying on consumer spending so often, that eventually, nobody questions the logic of it. "It's just the way things are." That reliance is a failure.

I've heard that the economy would need to add 300k jobs a month on into the foreseeable future, to ever have a chance of getting back where we were a few years ago. I don't see that happening. I don't know how it can.

One small example. I know somebody who has a family member who works for a company designing trusses for the past 20 years. (When I was in highschool 12 years ago, this was ran by some of us as a good career.) The place used to employ around 50 designers. All well paid. They laid off everyone except this guy and one other a couple years ago. Kept them on strictly for jobs that needed quick redesign or custom work. The rest of the every day stuff is shipped to India where designers and engineers do the work for .30 cents on the dollar.

Not only are all those people who were in the middle of their careers out of work, but people graduating from highschool/college, no longer have those positions available there as a future prospect. This is just one tiny example of course. But a widespread scenario facing the country.

Yup, it did. And I've heard from various sources that the banks know this thing isn't over yet. So they're taking a large portion of what they were loaned (at ZERO interest from the Fed of course) and purchasing government bonds with the funds! They're making a small but guranteed return or around 3% interest on the loans. But with that much money, that can be significant. They're trying to save up as much cash they can call their own as they can. BTW, the interest they're earning buying those bonds is money the government (taxpayers) owe to them again!! Even though they borrowed the money at zero interest to do it. It's free money on our backs again. Sure. Why not?

Have also heard that if all that bailout money would have been doled out to the public, that inflation (in turn, PMs) would be skyrocketing right now. But since it's tied up in the banks, it's as if it doesn't exist. For now.

 

You are defending yourself with red herring arguments. Of course I can't absolutely prove that EVERY dealer in Europe is out of gold, but anyone that is willing to discuss this reasonably knows what this means. I assume you can go google it up yourself, but since this is a red herring, here one of hundreds of articles about it.

http://uk.ibtimes.com/articles/2358...n-europe-out-of-stock-due-to-panic-buying.htm

Sure people can buy on the internet and this is exactly why your simple argument of supply/demand completely fails when applied to currency including gold bullion. It costs significantly more to buy a coin internationally via the Internet. The entire point of buying gold is to protect one's wealth. You don't do this by paying huge costs to have gold shipped from the USA. This is why it is not happening because supply/demand does not apply to currencies. The events in Europe prove this exactly.

 

supply , demand & availability

Hypotheical ( or fantasy )

If a meteor the size of Sicily landed GENTLY on the border between the USA & Canada , and it turns out to consist mostly of gold , platinum & rhodium; what affects would this sizable new supply of precious metals have on the PM's & currency markets ?

 

Prices would pull back sharply, and it could cause a minor destabilization of the economy. If this was the ancient era, and PM's were the only way to pay for things, you only need look at what happened when Mansa Musa flooded the Egyptian markets with gold during his pilgrimage. Caused a 10-year recession because he decimated the value of gold.

 

I have nothing to defend. I'm just pointing out that your original statement that gold's worth never changes was wrong, and it is. Nothing you have posted supports your thesis. And it is also wrong to state that people can't find gold to buy in Europe and that the USA is the only place to obtain it. But that's okay. It isn't my intent to change your mind. I just want to point it out for others to read and consider so they can make their own decisions.

 

You are correct. GM received a large chunk. But the vast majority of recipients were banks and financial instituitons. Here is a list.

http://www.usatoday.com/money/economy/tarp-chart.htm

 

I already am

 

None, because the meteor landed on the Canadian, US border.......which means that this will go into litigation for the next 20-30 years while each country complains it belongs to them.

 

they would first be afraid then it was god sent . but it would make no differ.
in hand is one thing. in paper i wont answer that. wait till someone asks for the paper delivery of gold. lol

 

The price relative to the $ would fall because of the exact reasons I gave above in the reverse situation. Of course this isn't going to happen.

One of the intrinsic qualities of gold in terms of it being a currency is that efforts to change the supply relative to what is already out there is very difficult and expensive. This is quite different than the Federal Reserve hitting a few keys on a keyboard and increasing the number of $s out there by substantial amounts. This is again why the price of gold is dictated by the worth of the paper money used to buy it. The value of gold itself doesn't change that much.

 

I think I sort of understand what you are saying but , there are other precious or rare minerals like diamonds versus emeralds , where the diamonds are not truly "rare" but the monopoly artificially inflates them to a price higher than emeralds which are actually more rare in nature. Hasn't the same thing actually happened with gold ( in reverse ) ? We have pretty much mined all the big veins of gold available in the developed regions of the world and so what we have in circulation is just about all there is. It seems that gold should already be over $3000.00 per ounce , if my assumption about the lack of remaining large natural deposits is correct. It is as if the paper money controllers have or are suppressing the true value of precious metals.

 

where to store all of it, hum???

 

Man , you got me thinking about my plan about saving the 1959-1982 cents in bank boxes. Storage would definitely be a problem. The other thing I didn't consider was weight. If a box of 95% copper cents weighs
17.1409lbs & you stacked them 4x8 boxes per layer and stacked them 5 layers high , that total stack would weigh 2742.544 pounds. I certainly wouldn't be storing them on anything but the ground floor!

 

It's easier to understand once you realize that diamonds and emeralds do not qualify as currency. They are valuable assets, but they are not currency. They fail the currency must be divisible qualification. Gold for example can be divided into smaller amounts and it's still worth the same. Oz of gold is worth X. 1/2 Oz = X/2. Same for paper currency. You can exchange a $100 bill for five $20s etc. $ is the same regardless of the note it is printed on.

On the other hand, a diamond's worth is not divisible. i.e. a 4 carat diamond is worth X, a 1 carat diamond is not worth X/4. This means the currency discussion we are having isn't relevant to it because 4 carat diamonds are very rare and are directly subject to supply/demand constraints.

You are however correct on the true worth of gold, but keep in mind that because of the way our money system works, and the fact that central banks hold 1000s of tons of gold, the price of gold has been supressed by governments to make their paper currencies seem worth more. How this is accomplished is beyond the scope of this discussion, but their ability to do this has been lessening in the past few years. There are currently some big banks under investigation now for this. (at least in the silver market)

 

My money's on Unobtainium......

 

Gold is priced on the world markets in US dollars. The value of the US dollar has fallen appreciably over the last 5 years compared to more stable monetary units (from whatever country). I live in Canada, but receive all my retired pay in US dollars that I must convert to Canadian dollars every moth to live up here. The value of the US dollar compared to the Canadian dollar has dropped almost 60% since I moved up here because Uncle Sam kept the printing presses max'd out.

I used to get $1.60 Canadian for each US dollar and now it is near par ... I'm losing 60 cents on every US dollar. The actual decrease has only been 38% (60/160) but still significant. The price of gold has risen appreciably in terms of the US dollar, but much much less in terms of a more stable currency. The price of gold, as a commodity itself, is controlled by supply and demand ... and that is controlled by the mining companies, just like DeBeers and diamonds. If the price is low, they decrease production so it cuts down the supply. Then demand catches up to supply and the price stabilizes and then rises. The gold mining companies know how to play both ends against the middle, so it's not how much gold is left in the earth, but how much the companies want to remove depending upon the market. The mining companies know what the "break-even" point is and are never going to produce as much as they are capable of producing. The more that doomsday prophets fan the flames about $3000 an ounce gold, the more the compaies will choke down supply to make it rise further.

Cut the budgert deficit .. or better yet reduce the total debt (the deficit is just how fast the debt is growing) ... get more jobs so more people are paying taxes and companies are as well and the GNP and economy will pick up. The US dollar will strengthen on the world market and gold will appear to "lose" value, but it's still the same gold and the same market ... the only thing that changes is the currency value that it is priced in.

 

All my relatives missed that line in "Avatar"