Time for Deflation to Return

[HitRed]

I like the beanie babies scenario

[armati]

mookiemcgee

Im not trying to talk you into gold.

If you think that 5%-10% gold is hedging...ok, no big deal.

Kinda like buying insurance would be hedging I suppose, so, I hedge my car, house, life...and wealth.

Does currency devaluation matter to a wal mart greeter, yes it does, big time, and your right, they dont know that.
Should they? absolutely, am I gonna change the system? nope.


Your right about some people can not afford gold, silver is known as poor mans gold.

Bet some of those old wal mart greeters wished they woulda kept those 1964 silver coins they found in their change over the years.

Understanding currency devaluation and PMs would help a wal mart greeter too.
Just an example.

I never heard anyone say gold was a barbarous relic either, on the other hand, Ive never heard anyone talk about PMs.
Other than investing conferences or dealers or a blog of course.

You mention a 100% burn rate of income people have, ya I know, apparently only 39% of americans can come up with $1000 for an emergency, a go banking survey found 7 in 10 americans had $1000 or less in their savings.

A very sad state of affairs,
as well as not being taught about currency depreciation and gold, people were taught that debt was money.

Remember the Flinstones? Wilma and Betty would...."CHARGE IT!"

[armati]

John Maynard Keynes once famously called gold the “barbarous relic,” suggesting that its usefulness and, hence, it’s value, is antiquated.

https://blogs.cfainstitute.org/investor ... lly-worth/

[mookiemcgee]

mookiemcgee

Im not trying to talk you into gold.

If you think that 5%-10% gold is hedging...ok, no big deal.

Kinda like buying insurance would be hedging I suppose, so, I hedge my car, house, life...and wealth.

Does currency devaluation matter to a wal mart greeter, yes it does, big time, and your right, they dont know that.
Should they? absolutely, am I gonna change the system? nope.


Your right about some people can not afford gold, silver is known as poor mans gold.

Bet some of those old wal mart greeters wished they woulda kept those 1964 silver coins they found in their change over the years.

Understanding currency devaluation and PMs would help a wal mart greeter too.
Just an example.

I never heard anyone say gold was a barbarous relic either, on the other hand, Ive never heard anyone talk about PMs.
Other than investing conferences or dealers or a blog of course.

You mention a 100% burn rate of income people have, ya I know, apparently only 39% of americans can come up with $1000 for an emergency, a go banking survey found 7 in 10 americans had $1000 or less in their savings.

A very sad state of affairs,
as well as not being taught about currency depreciation and gold, people were taught that debt was money.

Remember the Flinstones? Wilma and Betty would...."CHARGE IT!"

You seem to be missing my points entirely... In what way does currency devaluation matter in the day to day life of a wal mart greeter? you say it does, but outside of a seemingly random reference to silver coins that might have been in their change you offer no evidence of that. If I make $1000/month and I need to spend $1000 month to survive, how does gold or silver or anything else help me? Does knowing that they are being screwed change their situation in any tangible way? The reason they didn't keep those 1964 coins is because they needed the coins for food/water/shelter in 1965. If they had extra income to keep the 1964 gold coins in 1964, and they invested it in say Goldman sachs (for you Patches) instead they would be better off than keeping the silver... that is my point. Knowing that their currency is slowly being devalued in no way changes their situation or their ability to change it. It does not affect their lives.

Say you make $1000/month, and your employer agrees to pay you in gold. you still have $1000 in expenses and need to pay those expense in 'real time'. So your just gonna have to change the gold out for currency to pay your bills, or find a grocery that will take slivers of gold to pay for milk. So in reality you aren't losing anything.

[armati]

Yes it matters to wal mart greeters and everyone else.
The silver dime ref was just to show pretty much anyone could save a little silver had they known its value.

Yes, in 65 the change was required, but in 75? 85? 95? 05? 15?...people couldnt save a dime?

Well, if thats the case they gonna work till they dead and they better hope to stay strong and healthy or a lottery win, oops, they wouldnt have the coin for a lottery ticket.

So, thats what you figure is going to happen to 70% of the american population?

Your guess is as good as mine but geez, talk about pessemistic.

Miss your point about currency devaluation?

ok, another example,
save say $45 in bills from 1971, what they worth now, whats it buy? save 1 once of gold, whats it worth, whats it buy?

1971 was good times for most people,(white people anyway) the economy was humming so maybe a poor person couldnt save $45 but lets assume that someone could.

So, which would that person be better off leaving their grand kids?

Thats one effect of currency devaluation that affects anyone that could save $45 in 1971

It affects retirement saving huge,
but as you say, if a person is so poor they're eating grass, what dif does it make.

Guess I was speaking to people a bit more stable.

[mookiemcgee]

Yes it matters to wal mart greeters and everyone else.
The silver dime ref was just to show pretty much anyone could save a little silver had they known its value.

Yes, in 65 the change was required, but in 75? 85? 95? 05? 15?...people couldnt save a dime?

Well, if thats the case they gonna work till they dead and they better hope to stay strong and healthy or a lottery win, oops, they wouldnt have the coin for a lottery ticket.

So, thats what you figure is going to happen to 70% of the american population?

Your guess is as good as mine but geez, talk about pessemistic.

Miss your point about currency devaluation?

ok, another example,
save say $45 in bills from 1971, what they worth now, whats it buy? save 1 once of gold, whats it worth, whats it buy?

1971 was good times for most people,(white people anyway) the economy was humming so maybe a poor person couldnt save $45 but lets assume that someone could.

So, which would that person be better off leaving their grand kids?

Thats one effect of currency devaluation that affects anyone that could save $45 in 1971

It affects retirement saving huge,
but as you say, if a person is so poor they're eating grass, what dif does it make.

Guess I was speaking to people a bit more stable.

You keep missing my point... NO ONE HOLDS $45 IN CASH FOR 50 YEARS!!!! NO ONE HOLDS THEIR RETIREMENT SAVINGS IN CASH FOR 50 YEARS!!! Show me one news article about the epidemic of people burying cash in the back yards for 50 years! If I have $45 in cash in 1970 I am going to do something with it. Either invest it in markets for gain, or spend it because I need to. I am not going to hide it under the bed for my eventual retirement, NO ONE DOES THIS!

If I had my choice of my parent's buying a silver coins for me in 1971 or investing it in the stock market, 100 times out of 100 I would have wanted them to buy stocks.

[patches70]

If I make $1000/month and I need to spend $1000 month to survive, how does gold or silver or anything else help me?

It doesn't. A person in that scenario isn't making enough or/and is spending too much.

Does knowing that they are being screwed change their situation in any tangible way?

Yes. It can. I makes you aware of how money works and hopefully, if one is wise, can make changes in their lifestyle so as to provide for the future. I'm sure you'll agree, living paycheck to paycheck is unwise, dangerous and a recipe for disaster. I know, a large segment of the population is living paycheck to paycheck, but they don't have to and they shouldn't. Virtually any income bracket can make serious plans, stick to them and in the end when it comes to retirement, they'll be set. If they can budget correctly and stick to that budget. But it means lifestyle changes, which people often resist.

and they invested it in say Goldman sachs (for you Patches) instead they would be better off than keeping the silver...

Maybe. Investing is always a gamble, there is risk. High risk means high reward but also greater chances you'll lose your investment, your savings. Hindsight in stock picking is great, but irrelevant, because you don't have hindsight. That's where precious metals come in, they are low risk. Where as stocks you are invested in can plummet to zero overnight, precious metals never go to zero. Bonds are low risk, provided they aren't bonds from Zimbabwe for instance, but they are low yield, hence the low risk, low rewards. They often don't keep up with inflation. Silver is nice because it's cheap, more easily to obtain than, say, gold.

Knowing that their currency is slowly being devalued in no way changes their situation or their ability to change it. It does not affect their lives.

It can change their lives, that understanding. But the people who don't have the "ability to change it" I.E. their economic situation, are in error in that regard. One can change their economic situation, at least in the US, if they are willing to take a serious look at their spending, their lifestyle and their needs balanced against their incomes. Hard choices are often needed, the kind of choices people don't like making.

The reason that inflation is so bad, or currency devaluation, is that it punishes the savers and rewards the debtors. Inflation is great if you are in debt, but if you are a saver then inflation is a killer. The devaluation of the dollar correlates with the rise in people living paycheck to paycheck. The opposite is true about deflation. Deflation rewards the saver but destroys the debtor. Which is why the USG and the Fed fear deflation so much. People in debt have their worth tied up in property and assets like stocks and such, which are inflated in price. When deflation hits their properties that were worth "X" one day and the next worth "X-Y%" but they'll still have the same debt level. For savers, deflation is like getting a dividend on your cash, on your savings.

This type of living, this type of system that punishes savers while rewarding debtors contributes to over consumption, malinvestment and wasted resources because the debtor is spending future earning today. This one facet affects so much more. You are worried about climate change? Doesn't it make more sense to conserve (i.e. save)? Concerned about the ever expanding wellfare state? Doesn't it make more sense to save than to go into debt to the point where you need assistance from the State? Worried about over consumption? Doesn't it make sense to save for what you want and get it then rather than to go into debt to get those things now?

We weren't always like this, Americans, we were savers once. Not anymore. There is no point to it if you don't think about the future. People gotta have that new gizmo today, eat out instead of being bothered to cook at home, to busy working to plant their own gardens.

For the people who don't save, who live paycheck to paycheck, gold isn't going to help them. Nor is any other investment. They'll always lose ground financially which leads to all kinds of other problems and stresses. Worried about people killing themselves? Financial struggles being one of the biggest reasons people off themselves. You can imagine how the list grows of all of societies ills when you understand that in our current system you are punished for saving and rewarded for being in debt. But such a model is not sustainable. If you care about rising health costs or rising tuitions then you should be advocating for sound money principles instead of expanding credit and money supplies (our current system). That only exacerbates the problem. Throwing money at things only causes those things to increase in price.

The solutions often proposed by politicians and people with ulterior motives almost always advocate more spending, more debt, more burden that always hits those who can least afford it. A person living paycheck to paycheck isn't going to be helped paying a carbon tax for instance. They have enough problems in their lives without having to try and save the Earth. You can say they'll have a cleaner, better planet but they are still just one disaster away from destitution, which is what they really fear, is it not? And people fall for this stuff because they don't understand how throwing money at problems only increases the price of those things.

Our whole economy is built on people buying stuff they don't need with money they don't have. The #1 American export is financial instruments. Our reserve status allows us to export inflation. America used to produce things, things have value. Now we get everyone else in the world to produce things and we buy those things on credit. It's insanity, IMO.

But you are correct, the poor saps who don't have enough money to pay for all their expenses, none of this matters. Not because it's immaterial though, but because they either don't have the wisdom. the skills or the resolve to change their situation where they can finally think about investing in themselves for the future. You can lead a horse to water as the saying goes, and I think that's what Armati is trying to do in a way. At least I hope so, though he may be a little clumsy at it, he probably means well.
Knowing something is useless though without action. There is no magic plan, there is no perfect solution, there are only trade offs. Don't ever believe anyone who says they can fix all your problems. No politician, no President, no ideology, no preacher, no one has the magic wand to wave and fix everyone's problems, financial or otherwise. That power resides solely in the individual and maybe a little bit of luck. Some bad luck can be truly devastating, but that's the universe for ya' I suppose. It just doesn't give a shit about any of us in the end. IMO

[warmonger1981]

I hear copper is basically tied to construction or Manufacturing. So if it goes up that means me telling me is doing well. just what I hear. don't know much more than that I like shiny things.

[HitRed]

I think the best way to make money is to creat something. This year the BigMac turns 50 years old. Ponder that!