Gold price up or down the closer we get to election?

Never say never. No industry stays on top forever, and this applies to the finance industry. In past times it was a sleepy, low margin business [a virtual utility] and someday it will be again. This isn't something to worry about. The fear of higher rates is a case of the threat being stronger than the execution.

 

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You are correct about this, but if anything else, rising rates will force Americans to make sacrifices which they are not used to. I don't pay any attention now to the national elections because they simply don't do anything to address the real issues.

In 2008, after the collapse had started and before the election, I did hear something interesting which certainly turned out to be true. Someone, I don't remember who now, was asked which candidate would fix the economy. His response was that in order do fix the economy the new President would have to ask Americans to make big sacrifices. He said that he didn't see this with either candidate.

So the response to the debt problem we had then, was to create even more debt. The guy was absolutely correct. I do think at some point interest rates will be forced up, but when that happens will be the last ditch effort to save the system. That's when gold & silver investors will need to carefully pay attention to events.

 

I don't disagree with this at all. Americans have been living at a borrowed money standard of living level. We are completely unused to sacrifices, and it will be a hard adjustment, with a lot of drama. Foreign investments and PM are the way I personally am hedging this risk. I would not want to be someone with only US stocks and bonds as investment assets.

Sometimes its helpful to "take a walk out of your skin" at times. My mother told me about one of the richest areas of town when she was growing up. After she passed away last year I was driving around. Even if those houses were new, I would not want to live in them. The size and availability of housing is just one symptom of Americans excessive consumption the last 40 years. It used to be accepted you worked for a few years to get a down payment, then you could buy a small 2 bedroom home. Too many Americans today want to 4 bedroom the day they graduate college. Politically it could be brutal when we are finally forced back to having to actually work for something again.

 

I don't really believe higher interest rates will force Americans to make big sacrifices. They are already making the big sacrifice from low interest rates by forfeiting a return on their savings, delaying retirement which also contributes to higher unemployment, and being kept out of the housing market by artificially high prices [higher prices = larger downpayment which many young people don't have]. There are others.

 

I disagree somewhat Cloud. Americans are predominantly more a borrowing nation rather than a savings one, (something these low interest rates are actually encouraging more). As such, low interest rates in credit cards and mortgages are allowing them to afford a higher standard of living longer than otherwise would be possible. If rates rise, it will have a direct, brutal affect on many peoples standard of living.

For a subset of people, (retirees, etc), you are right, but I simply think more Americans are in the group without savings, so higher rates are a severe negative to them.

Just my opinion.

 

It's just like gun sales, doesn't matter who's running, gun sales always seem to increase come Presidential Election time. It's the markets run by fear of who's gonna get elected and it's just stupidity for the most part. Americans are nothing but a big herd of cows, they'll believe anything from anyone without any credible evidence presented. If I had one wish, that wish would be for people to just simply THINK on their own or for themselves. :yes:

 

Americans have traditionally borrowed only when they expected the future to be much better or when their other investments [e.g., homes] were appreciating faster than the debt accumulated. Now, with super low interest rates to depress the capital base, wages, raises, savings, etc... borrowing is down, not up with the federal government trying to take up the slack. Low mortgage rates only serve to prop up housing prices and keep first time buyers out of the market. With higher mortgage rates and correspondingly lower home prices, the monthly payments would be the same but it would be far easier to come up with the down payment. So I think the negative impact of low rates extends much farther than just one subset of the country.

 

Another view might be that it is only during election years that gun buyers are reminded of the war against the second amendment, and that it is during the off years that they are compalcent in not buying.

 

US consumers with a total revolving debt of over $800 billion paying on average about 12.8% interest kind of tells me we borrow a LOT regardles of our disposition to the economy, or are you saying US consumers are feeling good about the economy right now?

 

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My two cents worth: The Dems will do all they can to improve economic indicators, win the election, then their house of cards will collapse again in spite of every effort of the capitalists. Too much investment in emotions and a pretty facade. Hence, I think PM's will go up.

 

I don't think we've had capitalism for a while now. When the government takes from one class to give to another that's called socialism or communism. When the government gives money to corporations that's called fascism. We have a combination of both, but certainly not free market capitalism. I agree with you for the most part otherwise though, except that I don't see democrats and republicans as being any different.

 

I don't know whether this amount is higher or lower than a few years ago. And I would bet that most of the debt is held by folks who are at the higher rather than lower end of the income scale. But that isn't the point. The 12.8% rate shows that the low interest rates hurt individuals. The spread between what is earned on savings and what is paid on revolving credit is enormous. And the lack of growth in savings, jobs, and income are directly related.