Thread: U.S. Inflation to Approach Zimbabwe Level, Faber Says (Update2)

^I still wonder what your opinion is of the US Federal Govt. printing $1 for every two it spends in the year to date and what the results will be.

Do you believe that this can carry on with no effect for another 3-months, six? Maybe a year or two?

Originally Posted by sabang

the stock market has gone up. Turnover is starting to come back in property markets. None of this is being paid for by government money, rather private investment.

But, but....How can this be, it's the end I tell you!

Originally Posted by Panda

Yes, those same modern economic tools of today seem to have delivered the world into what is widely accepted as the worst financial collapse since the 1930s.

that's the paradox actually, the safer we have made our "investments", the more risk we take. It's like driving a car, the safer the car, the more risk the driver takes with that car.

Originally Posted by Panda

Bottom line is that despite all the fiddling round the edges by these modern financial geniuses, -- you spend more than you earn and you are going to go broke sooner or later.

I don't disagree here, and yes there were abuses. It's always the abuses that raise the problems, not the system itself, no matter how you make it perfect. Again, it's part of the learning experience, we just got hit by a massive iceberg, we found the leak, and now we are fixing the leak. Will it work ? yes it should but in reality we can't be sure 100% it will for the long term, we could hit another iceberg if we don't pay attention again, but that shouldn't stop us from sailing.

Originally Posted by Norton

What other realistic options were there- do you think the US would be in better shape without Citi, GM, AIG, all of the major money centre banks, probably Goldman Sachs too? I doubt it.

yes, no doing anything like some were advocating would have lead us the way of the 1930s, not a good option. Some still think the economy can fix itself, it doesn't like it has been proved many times in the past.

Originally Posted by Butterfly

Originally Posted by Panda

Yes, those same modern economic tools of today seem to have delivered the world into what is widely accepted as the worst financial collapse since the 1930s.

that's the paradox actually, the safer we have made our "investments", the more risk we take. It's like driving a car, the safer the car, the more risk the driver takes with that car.

Originally Posted by Panda

Bottom line is that despite all the fiddling round the edges by these modern financial geniuses, -- you spend more than you earn and you are going to go broke sooner or later.

I don't disagree here, and yes there were abuses. It's always the abuses that raise the problems, not the system itself, no matter how you make it perfect. Again, it's part of the learning experience, we just got hit by a massive iceberg, we found the leak, and now we are fixing the leak. Will it work ? yes it should but in reality we can't be sure 100% it will for the long term, we could hit another iceberg if we don't pay attention again, but that shouldn't stop us from sailing.

Its a leak alright! A leak of funds from the productive world to the USA via the US hegemony. And Obama (same as Bush) is doing everything he can to get the most out of it before they wake up and the leak is closed off.

Originally Posted by sabang

What other realistic options were there- do you think the US would be in better shape without Citi, GM, AIG, all of the major money centre banks, probably Goldman Sachs too? I doubt it.

The US would a LOT better off without the Wall Street financial firms. Wall Street's main contribution to the American government has been to corrupt its politicians and bankrupt its treasury. Wall Street's main contribution to the American economy has been to send it over a cliff.

These couple of threads about the US and World economy are really interesting for me to read, I don't know to much about these things.

Robuzo, Panda, Sabang, Butterfly, Milkman and Passengers the posters I just remember really makes it well worth ones time to follow the debates.

There is strong disagreement, the posters following different schools of thought.

This makes a parallel to the different economic gurus we have been seeing on tv during this crisis, from the ones preaching total collapse and riots in the streets, to the ones who weekly during the last year have told the crisis was over, following any of these two extreme opposite points of view religiously would probably have seen you loose a lot of money.

Most of us humans have positive and negative feelings/thoughts inside and normally the positive is much stronger to the point of self delusion.

In an European country they made a sort of statistical test to show this human trait, People who buy a lotto they do it because they some place inside really do believe that they will have a chance of winning next Sunday, when Sunday comes closer they often start daydreaming about what they will do with the money aso. the odds in this case is many many millions to one.

Now in this particular European country they found that it was 7 times more likely that you would be killed in your car next time you went for a drive, than it was you winning the big one, but nobody says ahhh today I'll probably die in my car when they turn the key and start to daydream about proceedings at the mortuary?

So my question is how big an effect do this strong will to think positive effect the economics? I am sure many will say, no this does not effect my opinions I am ice-cold when I analyse the situation, but I believe that most subconsciously are affected by this, you really don't want things to be bad.

So some of the things being done by Governments battling the crisis is maybe driven by an overly optimistic view, and the weekly "everything is ok now" gurus is pulling peoples legs big time. The thing being that this thing is much more serious for the US economy and people than they want to believe?

I stopped dreaming about winning the lottery about 25 years ago. Though I still sometimes think about the possibility as the (Thai) wife buys about $60 worth of tickets a week.

As to the effects of optimism/pessimism on peoples perception of the economic outlook, -- I think that is mostly generated by the media rather than individual personalities. A change in the situation is always what makes the news.
You always see headlines announcing change for the better or worse. You never see headlines saying everything is pretty much the same as yesterday. Its just the nature of news.

National leaders can have a profound effect on their countries economic position simply by the way they present things in the media. We tend to believe what our politicians say even though we know we shouldn't.

Originally Posted by GooMaiRoo

The US would a LOT better off without the Wall Street financial firms. Wall Street's main contribution to the American government has been to corrupt its politicians and bankrupt its treasury. Wall Street's main contribution to the American economy has been to send it over a cliff.

Utterly, utterly wrong. But nonetheless, lets take Wall st out of the equation (which means goldmans, merrill, first boston, lehmans & bear sterns at the big end.)

So would the US be better off without AIG, Citi, Gm, Chrysler & the money center Banks?

Originally Posted by Norton

Originally Posted by sabang

the stock market has gone up. Turnover is starting to come back in property markets. None of this is being paid for by government money, rather private investment.

But, but....How can this be, it's the end I tell you!

But what did you expect the effect (and/or the expectation of) of severe inflation would be on the value of assets? You two seem 3-4 steps behind the curve here.

Originally Posted by sabang

So would the US be better off without AIG, Citi, Gm, Chrysler & the money center Banks?

If the alternative had been staid, boring banks that simply took deposits and lent money to businesses and individuals, I would say that, with the benefit of hindsight, most Americans (and most other people around the world) would say that the answer was yes.

Originally Posted by passengers

Originally Posted by sabang

So would the US be better off without AIG, Citi, Gm, Chrysler & the money center Banks?

If the alternative had been staid, boring banks that simply took deposits and lent money to businesses and individuals, I would say that, with the benefit of hindsight, most Americans (and most other people around the world) would say that the answer was yes.

A lot of people would say yes now that everything has landed in a big pile of shit.
But while the feeding frenzy was on I think most people would have said greed is good.

Look, I am no longer an investment adviser, or a director of an investment company. Note what i said in your diary, and look again in twelve months time. i will either be right or wrong- and it's your money that you are investing.

This is not an investment forum and I doubt anyone would go investing large chunks of their lifes savings on the basis of debate here.
Anyone here could cop out of an argument by saying come back in 12 months time and see if I am right. And indeed we will be here in 12 months time, but by that time most people will not remember who said what, and of course a lot of peoples opinions will have changed as the financial situation unfolds.

I believe a lot of investment advisers did very well during the boom years when just about everything was turning into gold. Doubt too many are raking in the money these days though.

Stage 9 is upon us:

https://teakdoor.com/us-domestic-issu...ml#post1070050

If you believe in the inflationery scenario, you might consider base metals.
i am a very boring investor (granted) but they are underpinned by a tangible value.

^You are correct. I am only about 15% in gold (physical). The rest of my assets are now in tangible assets, including copper and oil. I have held these positions and posted here as such for about 6-months now. I am even thinking about getting back into property (shock/horror), which I sold out of in 2006.

My belief is that gold will have a big high when the $US collapses simply because its the next best place for money to run too. Then when things even out and the worlds economy starts working again, money will desert the safe havens like gold and currency, and start going back into productive industry again. Oil and minerals have got to be a safe long term bet.
Wouldn't count on making any big money in the next couple of years though till this mess sorts itself out. Oil and mineral exploration and development have suffered big cuts in funding since the price has dropped and there is going to be a time lag before they catch up in production again when demand finally picks up.

The Chinese are buying up copper and aluminum in big quantities right now. Thats helping to keep their prices up. Probably not a bad idea to stockpile valuable minerals while prices are down and they have an excess of paper money to burn off before it expires.

China’s Copper, Aluminum Imports Climb to Record (Update3) - Bloomberg.com

Originally Posted by Panda

This is not an investment forum and I doubt anyone would go investing large chunks of their lifes savings on the basis of debate here.

Discussing Macro-Economics has nothing to do with Investments, I hope you are not confusing the two. Plenty of investors can doing very well with their investments during hard times, doesn't explain though why the rest of the world is in the shit in real terms.

Originally Posted by passengers

Stage 9 is upon us:

Originally Posted by passengers

The rest of my assets are now in tangible assets, including copper and oil

I think the word you are looking for is "commodities". Tangible Assets are machinery, plants, Inventory etc... stop using big words you have no clue about.

Originally Posted by larvidchr

This makes a parallel to the different economic gurus we have been seeing on tv during this crisis, from the ones preaching total collapse and riots in the streets, to the ones who weekly during the last year have told the crisis was over, following any of these two extreme opposite points of view religiously would probably have seen you loose a lot of money.

The real economic gurus don't come on TV, or come publicly, unless it's a congressional hearing or some other very important shit. The real economic experts are usually economics professors at big universities, and even though they might have slightly different explanation for the cause of things or how to fix things, they usually share the same consensus on the effects of things to come.

Only the lunatics come on TV to share their extreme view that this is the end of the world, just because it makes a nice story and they have an audience. In that regard, the blogsphere is particularly active, competiting with each other for the most daring scenario to gain an audience. They have nothing to lose, and everything to gain by making those bold predictions. If they fail, they just shutdown their blog, and open a new one, reputation is saved. A bit like retiring a moniker on a forum and creating a new one when you have been exposed as a troll and a fraud

^and^^

If I have meant commodoties, I would have said that. I didn't say it so I don't mean it.

It is ironic (perhaps moronic) that Butterfly spent over a year denying the credit and banking collapse that BKKandrew detailed (despite the fact that it was happening around him), for him to now start denying the bond market collapse and the onset of severe inflation when this is upon us. He will no doubt deny it wildly and repeatedly whilst wondering why prices are doubling every month.

Perhaps just true to form actually, Butterfly has been two years behind the reality of the situation consistantly. His realisation that we have arrived at Sgate 9 should be no different.