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

Hope it doesnt go too high too fast, I got some more stuff I want buy this week.

 

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It would not surprise me to see another pullback of the metals in the near future. It could happen and I think that it will happen. We will see.

 

I do not see silver hitting $50 anytime soon IMO. If it gets close to that level (ex: $49's-range), then it will get smacked down like it did last year. Just my gut feeling speaking to me on this.

 

Oh yeah I definitely agree with you on that! Unless a new crisis hits or the world ends in December like the Mayans think I don't see $50 anytime soon... but if it hits that $40 mark again i'll be selling some of the stash~

 

There are a couple of things you might consider. Central banks don't want hyperinflation. They want the banks to be repaid with currencies that are worth something. So another likely scenario is that the "repression" will be a deflationary one as countries are squeezed to come up with the money to repay the debt. Also, Germany was a special case. They had hyperinflation because they could not borrow and had no other alternative. This situation doesn't exist today since there are national and international entities that stand ready to lend everything needed. As far as possession of gold/silver "never" being a bad idea, tell that to those who held it from 1980 to 2000+ and booked losses while alternative investments such as the stock market were up 10X in price.

 

Whoa! What just happened?!?! I walk away from the computer for an hour and gold is up to $1730! Silver is up to $33.50!! Backed off a little now but DANG!

 

I think somebody spotted some Mayans handing out some sort of pamphlets on Wall Street.

 

Or, lower jobs report means higher likelihood of the Fed interfering again which means greater interest in PMs.

 

Yeah, I just got that WSJ email an hour ago saying job creation was much lower than forecasted for Aug.

 

Now you got me started.

Hyperinflation is indeed only one risk and I do not necessarily speculate with such an occurrence, instead of this I'm more worried about the "good ideas" our politicians can come up with. Let's be real politicians have acted foolish in the past and continue to act as such today and will so in the future and it doesn't matter if it's on national or supranational level happening. The current modus operandi of "rescuing" the Euro is by providing guaranties for bad debt to cover up losses of basically insolvent countries, the guaranties themselves are in return also debt by still solvent countries, and to guarantee the guaranties ever growing guaranties are needed, thus also the solvent countries are endangered of going down the same path.

Debt is the problem and the way to solve it is to generate even more debt -you know what, this is total insane nonsense but this is what has been done so far. Now with Super Mario out in the open, the way for direct monetization is indeed the clear path, and it should be obvious to all, that it will be either solved in this way paraphrased as financial repression (low interest coupled with increased inflation) or the entire EMU (European Monetary Union) will blow up creating a terrible scenario of historic proportions. The bill will be presented one day, with the scenario of financial repression we may not see it immediately, but what is the situation in 10-15 years to come, how will it effect the price structure of real goods how much exactly will it cost? No honest answers, no mention of the dangers and no way to manage it.

Also to add another perspective, did you know that certain political elements (of mainstream parties like the SPD, Grüne) are debating about the potential further financial needs of the state to be covered by a sacrifice of the saving population in the form of another Lastenausgleich* or by emission of forced loans to the government. It's laughable nothing is destroyed all the infrastructure is still standing and the people are doing fine, yet they feel the need to discuss the matter to invoke such last ditch measures, for what exactly???? Our politicians don't even have the guts to outright tell how bad the situation really is. There is no way they can be trusted.

*(Lastenausgleich -german word, combination of burden and compensation/equalization [of debt], a former government scheme after WWII in order to transfer the burden from the poor to the rich)

This situation has strong resemblance what happened in your country, the USA, in the 70s to the 80s. The economists/crooks and politicians of this world tell the story of the ohh so flexible fiat monetary system and how great it is. It is not great at all, the only "flexibility" it provides is the the creation of credit, credit and even more credit aka "print, print, print......" and more debt. A strict limitation and abolishment of fractional reserve banking are a hindrance to all politicians, who only know to promise without a single clue on how to finance it and balance the countries books. On a side note, the hyperinflation of the 30s was caused by shoving away good money with bad money, excessive credit was the problem even back then. The problems the Bernanke(s) of this world have to attend to are the problems they themselves have helped to create.

Back to the US: The American Dollar and its standing in the world is your heritage, the thing you will hopefully be able to pass on to your children, it's part of America in every respect and a founding stone of wealth -yet it is threatened. What was the purchasing power of the dollar in 1913 again and what will it be in 2013??? -my bet probably somewhat of one hundredth of its former value. Why is it impossible to have silver circulating coins today anymore, why is the oil price constantly rising, why is gold going up like crazy, why is everything becoming more expensive and the people become more impoverished from year to year, because you and by extension many other people on this planet (exported inflation) are on average purchasing power poorer today than they had been in the past.

...
I could go on and on, I will make a break here.

Gold, Silver, Platinum and Palladium is transferable mobile and distinctively identifiable by every person on this planet in every single country, it has no counter party risk and is the oldest most accepted standard in all of history to store wealth, it's in every respect the definition of money. The day gold flows once again through the financial arteries and veins shall be praised by me. Other countries are reacting including Russia, Saudi Arabia and China, they have huge Forex reserves and have begun to convert it into gold among other things. China is also buying mines, concessions, land and companies.

take a look at this: http://www.boerse.de/langfristchart/Gold/XC0009655157 (long time chart of gold)
Gold became eventually a bubble in 1980 and broke down again, boom and bust, eventually it will be the same this time. For now boom!

 

Just a question. Why does it HAVE to be monetization of the debt? They didn't do that in Greece, the most recent model we have to look at. They basically just stole about 55% of the principal balance from bond holders to restructure the debt. Why is this, our most recent experience, being ignored?

I for one would not want to be holding any form of governmental bond in this environment. I think this scenario could be repeated. Wouldn't such actions be deflationary?

 

Please don't misunderstand I liked your post, that's why I answered in such length.

 

Btw, where the heck are Fatima and Inflexion? I usually don't agree with them, but like reading their opinions.

Not that I am not appreciating your contributions Goldmark.

 

It's simple they can't, Greece still gets money infusions from the EU/IMF they can't just go back to the markets and hope that private lenders will jump in and give money again after they have taken a hit. If debt restructuring is done for Spain, Italy and possibly even France who on this planet is gonna lend them, which other government could substitute for the time being? No one! And they would still need the money, otherwise everything that depends on bonds (insurance, pension funds, banks) in these countries would be broke and the entire functioning would come to a..... stop.

 

Silvers skyrocketing! So is gold

 

Just to be clear, I like gold a lot and expect the bull market to continue. I've posted many times on this forum that my opinion is that there is a 50/50 chance of inflation or deflation, but the needle seems to be tipping toward deflation lately. I also believe the Europeans will blow up their economies because they don't know what they are doing and ignore advice from the US Federal Reserve. For all the criticism the Fed receives, they are very adept at operating a central banking system. As long as the bankers are in charge they will never permit the debt to be inflated away. They will squeeze the national economies and extract repayment through sacrifice. Regarding the US, I don't think the present situation is like the 70s [having lived through the 70s]. The problems are very different, the economy has moved heavily toward the service sector, and the level of debt is much higher now. I expect the next 100 years to be much like the last 100. The dollar will probably remain the reserve currency for longer than most people think because there is no alternative currency that is better. Bankers need the dollar, so the dollar will remain on top. I'm very glad I'm not in Europe.

 

Great point. Deflation and default occur in practice far more than hyperinflation. And recent experience tends to reinforce the default outcome for public sector debt.

 

That I can understand very well, for the moment America and Britain are out of the line of fire and I really hope the situation will overall improve. As an American do you see the threat of something similar happening in the US?

On deflation I totally disagree.

 

Unfortunately, most of the people that make this comment know nothing about farming, the farm bill, how it's distributed, or why the payments happen.

If you happen to be one of the few that does understand, then you know it's an ignorant comment.

Google CRP for more information......

And when you gripe about a farmer, don't talk with your mouth full.

 

A lot of people [particularly on this forum] are convinced that the system will collapse and are preparing. Personally, I don't see this happening in the US. A plan will eventually be needed to resolve the debt level, probably by a default [deflationary] that won't be called a default. This will hurt for awhile and then things will right themselves. Japan and Great Britain would collapse before the US because they are much weaker, so until they implode I'm not too worried.