Silver getting crushed today

I think for the apacolypse crowd it is considered an investment, because then they feel it will be worth multitudes while others have to eat their toenails.

 

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Under some circumstances it probably will be worth multitudes. But only because bread also costs multitudes.

 

I don't quite understand that "insurance" reference that
1 - PMs are insurance, and
2 - "home insurance properties"

Insurance is some form of compensation value after a trigger event.
Generally, you cannot "cash in" insurance contractual face values.

PMs always has a value as it is purchased at at spot+some value. And that value varies whether above or below initial purchase, whereas an insurance value generally stays steady based on face value.

But, everyone has their own perception of various definitions and how one handles and perceives certain assets.

But I do count my Life Insurance as an Asset on my balance sheet, and certain insurances are used to obtain credit (ie, mortgage ins, car loan gap ins, etc) and expire after some point that leaves no value even with large premium payments. But those have no value unless a trigger event occurs.

Actually, I just refused some Supplemental Life Insurance at work because it really had no added value if I died, and considered it a poor short term 1 year "investment" as my gross debt is well below my current insurance payouts and below my net worth. I can do other stuff with $26/mth for term insurance and I have no plan on dying this year.

 

Ahhh! An optimist!

 

Actually, we do know a good many things. For one, we know that the Federal Reserve doesn't have the authority to "prosecute" anyone. We also know that the idea that a stout return on essentially no-risk savings was counter to the public interest and the mandates put by the Congress onto the Federal Reserve, INCLUDING promoting full employment, but NOT INCLUDING making sure savers get paid well. Annnnd we don't have to wait for our kids to be shafted by owning real estate. That's already been happening for 17 years now. I have an ex-wife (and mother of my son) who was driven into bankruptcy because she bought into the "myth" of home ownership as an investment. She's now 5 years post-bankruptcy and the house she bought in 2000 is STILL "under water" compared to what she paid for it.

Yes, she DID buy in at the very peak of the biggest residential real-estate bubble of my lifetime.

 

Zero percent savings accounts are also not in the public interest. It forces people to trust their money with leeches at wall street to get any kind of return and hope the bottom doesn't drop out right before they retire. While real estate isn't a perfect investment at least it's a tangible asset that will never be woruthless like Enon. While it may not appreciate over time in some cases tenants pay the bills and mortgage.

 

Actually, yes, yes it was in the public interest. That's different than saying it was in the savers' interest. The fact is that the majority of people effectively have no savings whatsoever. Wages have gotten that static. The average American household cannot even handle a $500 emergency cash need.

 

We're living in a world of entitled people paying for food delivery. Toothless people paying hundreds of dollars for NFL tickets. People requiring the newest model of a smart phone that they pay nearly $1000 for. People paying to exercise. And no one supporting higher taxes for more social services because they foolishly believe they will one day strike it rich and think those lower taxes will benefit them.

People's spending habits really upset me.

 

I guess it depends on what level of banking is being discussed. If it's personal banking, just a generation ago people could put savings in an account with a bank, which the bank would wisely invest, and pay out dividends via interest that far outperformed inflation. This was a low-risk model that benefited everyone.

Then a combination of bad investments by banks, with the realization that people would be willing to 'loan' that same savings simply for the security and convenience that banks provide for a negligible return took hold. This has forced the public to take risks with savings they would not otherwise have taken, to be 'pessimistic' of 'savings' in general, and to look for other investment vehicles that would outperform inflation at the minimum. I think this has spurred some of the interest in PM's as well, unwisely, if it's from a profit/return perspective.

For me the loss of that original model has done more damage than anything else. But maybe, from a 'macro' perspective, it inhibited growth or was not long-term sustainable.

 

DING! DING! DING! Correctomundo!

 

Somehow this has turned into an all inclusive investing thread. Actually it's all good and I wish we had more of them besides all the PM ones. Anyways, the market is up another 175 points today. Who thinks it is too frothy?

 

All savers and potential savers are members of the public who do not benefit from 0.10 % savings. Why would anyone put money in the bank and wat h it become less valuable everyday? The whole to big to fail argument resulted in the fleecing of America. Most of the public would have been just fine if the financial companies responsible for the 2008 crash went belly up. Could of purged some of the scum along the way.

As to stagnant wages, see previous post about wall street.

I've seen the state about the lack of savings before and it is sad. I wonder how many people with less than $500 in the bank pay $200 a month for cell phones and drive new cars.

 

Liquidity and security. My mattress is designed to keep my back secure, not my cash.

Hogwash! We were already 3/4 down the rathole of a "credit freeze" near the end of 2008, where even the MOST creditworthy people were unable to get credit because there were no lendable funds available due to cascading failures. We were headed for a situation MUCH WORSE, BY A MILE, than the Great Depression of the 1930's, until the Federal Reserve intervened. The only fault I'll lay on the Fed is NOT going to negative interest rates.

There SHOULD HAVE BEEN legal consequences for "banksters", but not by the Fed. The Fed did its job. The Justice Department did not, neither did Congress.

 

Speaking as a lifelong Philadelphia Eagles fan, we resemble that remark.

 

Anyone hear that 401K's might be raided by Uncle Sam like Social Security? I don't know if that is conspiracy stuff or not but I wanted to throw it out there.

 

Since it's been tax-sheltered by Congressional edict, I suppose it can be unsheltered too. Ross IRA's are done with post-tax contributions. That said, such a move would certainly create ex post facto claims in court. Changing tax treatment going FORWARD is always possible, though.

 

Yeah, I am putting a lot into my 401K right now and got slightly worried when someone said this at work. It sounded like conspiracy theory anti-Goverment stuff but looks like it could be possible.

 

Hard to address this without politics at the moment. There is discussion, by nobody in particular, of limiting pretax 401k contributions to $2400 to force people into roth IRAs instead as part of a hypothetical tax reform.

 

The old "banks aggregate savings and invest them in the community as loans" model is all It's a Wonderful Life and all, but it's fictitious. Every depositor retains the unfettered right to withdraw his deposits, right? (Unlike in the famous scene in the movie.) That's because ALL lent money is newly created money, otherwise there'd HAVE TO BE a freeze on withdrawals of deposits, right? Everyday common neighborhood banks literally create new money every day, they don't need the Fed to do it.

The Fed merely exists to "cover" whatever withdrawals are demanded on an essentially instantaneous basis.

 

Not at all, unless one believes what you believe. Banking DOES NOT HAVE TO BE, AND IS DESIGNED NOT TO BE political at all. YOU make it so.