Message:

<p>[QUOTE=&quot;Bluesboy65, post: 1082651, member: 23329&quot;]Hey Cloudsweeper, you were responding to me, not anyone else.&nbsp; So whether or not I think I know more that the Fed and investment professionals your condescension was directed toward me and it was patently condescending.&nbsp; Your retort was illogical but at least you did not deny the offense.&nbsp; Fatima did a good job of covering it but I also wonder why you even bother with PM’s.&nbsp; But enough about you lets talk about the Fed (this does tie in to Zep’s question about the price of silver).&nbsp; The Fed is in a very tight spot because for several decades we have run budget deficits that have annually contributed to our national debt (currently 14 trillion).&nbsp; As everyone knows much of our treasury debt is purchased by Japan and China.&nbsp; Since we cannot pay back our debt, the Feds unofficial policy is create a moderate amount of inflation (so that our dollars are worth less) so that we can pay back those dollars with cheaper ones.&nbsp; However our economy is very sensitive to investor confidence in the market and few things shake confidence like inflation.&nbsp; So the Fed must inflate it’s way out of this problem to have any hope of repaying the debt but it must also conceal the real inflation numbers from the front pages.&nbsp; The Fed made 4 significant changes to the calculation to inflation statistics right around 1980.&nbsp; They have removed 1) Food and 2) Fuel from the core numbers because they’re “too volatile” (don’t see why they don’t just use a 90 moving average or something) they started making a 3) Geometric adjustment and a 4) Hedonic&nbsp; adjustment.&nbsp; Geometric adjustment says that “if steak goes up 20%, then buy bologna - see there no inflation”.&nbsp; Hedonic adjustment says “Oh the price of computers went up by&nbsp; 20%, well its 50% faster and will enable greater productivity so hey no inflation there either”.&nbsp; The official inflation statistics indicate we had an average inflation rate of about 2% in 2010.&nbsp; When you add back in the 4 inflation adjustments (the new math), inflation averaged about 6% in 2010; that’s a staggering 200% increase over the official Core inflation numbers.&nbsp; So bottom line, Bernanke has little choice but to continue the failed policies of his predecessors or risk having the whole thing blow-up on his watch.&nbsp; Market forces will eventually force a stern correction and I believe we are at a tipping point.&nbsp; I also believe the future run-up in PM prices will not be responding to normal supply/demand cycles but to the inevitable correction we will experience in the value of our abused dollar.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in