I mentioned in an earlier Post that this year is the end of the Government Bailouts! You know why? Because it is coming down to either the Banks, GE and AIG go under or the Federal Government goes under! It is coming to that.
The Big Banks, those that are too big to fail hold about $200 Trillion in Toxic Derivatives, CMO's CDO's and CDS's. Last time I looked, they were estimated to be worth anywhere from 50% down to 5% of the value noted on the bank's balance sheets. There is simply not enough money in the world to keep these cash sucking vampire zombies and their blood thirsty management afloat, period.
Look at this. I fully expect the employment numbers to be released on Friday to be north of 700,000, maybe not when they are released, but perhaps when they are "revised" next month when even worse figures will make them look not so bad.
It is official, the stock market has now lost 50% of its value since 10 '07 meaning that 10-12 years worth of accumulated wealth, over 5 Trillions in asset values have been destroyed.
Where will the Dow end up? I predicted in Oct Nov when it was about 10,000 that it would hit 5000 in the next 6 months, and it looks right on target. After that? Below 3,000 is likely. Why?
Corporate profits, the driver of stock prices are down 61% that is the biggest drop in 141 years and they are going lower. Assisting will be a default rate of at least 10% in corporate bonds which will ripple through the bank's asset valuations.
They say that 1 in 5 mortgaged homes is underwater, the owners owe more than the property is worth with prices down about 30% since the peak and since there was only a 25% equity cushion to begin with... With prices slated to go down another 15% this year, that will mean between 25 and 30% of mortgaged homes will be underwater. What was that sound? Jingle Mail, the sound of keys being mailed to the banks! They won't have to bother to foreclose.
10% of mortgages are delinquent, about 4x normal.
Let's see, total consumer debt is is closing in on 350% of GDP, and that GDP is an inflated number! We'll see a record level of credit card defaults as the debt bloated consumers flatulate their way back to normal debt and spending levels.
Where does that leave you, and me? Relying on the Internet to generate cash flow. This is the only out for the Middle Class to become the Internet Class. High paying jobs, like Master's degrees will be nostalgic relics of a time long ago before this century is out.
The only train out of here? Not the feeble pokes the Obama team is making at the problems, with Rush and the Kno Nothings cowering them into feebility.
Precious metals will be the only antidote to the Ultimate Solution to the problem, probably though in Obama's first term, will be precious metals as they have always been in times of chaos and hyper inflation.
Stay tuned as I fleshout these options.
Showing posts with label hyperinflation. Show all posts
Showing posts with label hyperinflation. Show all posts
Wednesday, March 4, 2009
Monday, December 22, 2008
Why is the Price of Silver Down?
Silver and gold were caught in the downdraft of panic selling this summer and fell along with virtually all other commodities.
Look at oil, down 73%, wheat, 64%, nickel, 73% they all got hit badly. In the rush to liquidate positions to honor redemptions or to raise capital, the baby was thrown out with the bath water. Then, deflation set in and depressed everything further.
Although silver is down 45%, one thing to keep in mind is that you should not just look at silver's price in US dollars. By comparing it to other assets, the Dow, oil, and certainly real estate, you see that silver has not lost much. As far as the future, here is what David Martin, one of the most astute and successful precious metal experts has to say about future silver pricing:
"I believe that the supply of silver is so small relative to the population base that it won't take much new buying to carry silver far, far higher. You have to remember that silver hit $50 an ounce in 1980 and there was roughly four times more silver available above ground than now. Also, the money supply was about one-seventh the size that it is now. So if you use those facts--that the silver supply, instead of being 2 billion ounces of fine bullion, is less than 500,000 ounces and that the money supply, M1, is about six or seven times greater--that shows you a high, high potential that silver could certainly go up."
Anyway, you know that to be a successful investor, you must buy when the price is low if you expect to be able to sell when it is high, the exact opposite of what the public does. Now is the time to start building your silver nest egg at very reasonable prices before they skyrocket. (After all the money supply has DOUBLED since last summer! Although locked securely in bank vaults right now, you know that money will come out like a Tsunami at some point and send inflation and silver prices through the roof!)
You can check out this site to get started accumulating silver. It is where I got started in a small way buying silver coins: http://SilverSnowball.com/964 The coins are in such short supply that there are few places you can buy small quantities of them. Let me know if you want to buy larger quantities. Bill Young 646-961-3818
Look at oil, down 73%, wheat, 64%, nickel, 73% they all got hit badly. In the rush to liquidate positions to honor redemptions or to raise capital, the baby was thrown out with the bath water. Then, deflation set in and depressed everything further.
Although silver is down 45%, one thing to keep in mind is that you should not just look at silver's price in US dollars. By comparing it to other assets, the Dow, oil, and certainly real estate, you see that silver has not lost much. As far as the future, here is what David Martin, one of the most astute and successful precious metal experts has to say about future silver pricing:
"I believe that the supply of silver is so small relative to the population base that it won't take much new buying to carry silver far, far higher. You have to remember that silver hit $50 an ounce in 1980 and there was roughly four times more silver available above ground than now. Also, the money supply was about one-seventh the size that it is now. So if you use those facts--that the silver supply, instead of being 2 billion ounces of fine bullion, is less than 500,000 ounces and that the money supply, M1, is about six or seven times greater--that shows you a high, high potential that silver could certainly go up."
Anyway, you know that to be a successful investor, you must buy when the price is low if you expect to be able to sell when it is high, the exact opposite of what the public does. Now is the time to start building your silver nest egg at very reasonable prices before they skyrocket. (After all the money supply has DOUBLED since last summer! Although locked securely in bank vaults right now, you know that money will come out like a Tsunami at some point and send inflation and silver prices through the roof!)
You can check out this site to get started accumulating silver. It is where I got started in a small way buying silver coins: http://SilverSnowball.com/964 The coins are in such short supply that there are few places you can buy small quantities of them. Let me know if you want to buy larger quantities. Bill Young 646-961-3818
Monday, December 15, 2008
Deflation Is HERE!
Last week, the US Govt released a report that revealed a monumental destruction of wealth in America that sent chills up the spines of economists worldwide.
Just in the third quarter alone, U.S. households lost:
$647 billion in real estate
$922 billion in stocks
$523 billion in mutual funds
$653 billion in life insurance and pension fund reserves
$128 billion in private business interests.
Total destruction of household wealth in the third quarter: $2.8 trillion, the worst in recorded history.
That's 4X more than the government's entire $700 billion bailout package (TARP).
Total destruction of household wealth in the last year: $7.2 trillion or over TEN times more than the $700 billion TARP package.
You see how feeble and impotent the government's actions have been in the face of Massive deflationary pressures that are accelerating as time goes on.
We don't know how long or how deep the Deflation will be, but it is not a joke to say the un-sayable, The Greatest Depression may be around the corner. The only thing that is certain is that the cure is very likely to be Hyperinflation to get the economy moving again.
This sequence of events, deep deflation followed by hyperinflation is the stuff that great fortunes are made of. Look at the prices of gold and silver, they, like all the other assets are down considerably, 30 and 40% respectively and may go down lower as they are also the subject of massive market manipulation by several major banks.
These precious metals will always maintain their intrinsic value, no matter how low their price goes, as history proves.
This makes the vital task of spotting assets with good fundamentals that have been beaten down in the general deflation, easy. These are the ones that are a real buy now, and should be purchased even as they go lower under the sagging weight of the deflation and possible manipulation, as they will rebound into the stratosphere once the devaluation of the currency or inflation kicks into high gear.
In order for the world's debt to be repaid, the dollar will have to be skinned alive, devalued to the tune of 5 or even 10 new dollars for every one of the present ones.
This means that gold and silver will then sell for 5-10 times what they are selling for now!
I know that many of my clients are regular, middle class folk, who do not have the wherewithal to pump 10's of thousands of dollars into precious metals, as much as they should or would like to.
The easiest, cheapest way to accumulate silver, the more affordable of the two metals is to buy silver coins, American Silver Eagles, Canadian Silver Maple Leafs.
We have joined an innovative system that rewards you, in silver for referrals you make who purchase silver coins in the ratio of a free coin to you for every 2 purchased by your referrals. Check them out here: http://SilverSnowball.com/964
This is an inexpensive way to start accumulating silver and who knows, if you know a lot of people, it could put a lot of free silver in your pocket!
Check it out: http://SilverSnowball.com/964
Just in the third quarter alone, U.S. households lost:
$647 billion in real estate
$922 billion in stocks
$523 billion in mutual funds
$653 billion in life insurance and pension fund reserves
$128 billion in private business interests.
Total destruction of household wealth in the third quarter: $2.8 trillion, the worst in recorded history.
That's 4X more than the government's entire $700 billion bailout package (TARP).
Total destruction of household wealth in the last year: $7.2 trillion or over TEN times more than the $700 billion TARP package.
You see how feeble and impotent the government's actions have been in the face of Massive deflationary pressures that are accelerating as time goes on.
We don't know how long or how deep the Deflation will be, but it is not a joke to say the un-sayable, The Greatest Depression may be around the corner. The only thing that is certain is that the cure is very likely to be Hyperinflation to get the economy moving again.
This sequence of events, deep deflation followed by hyperinflation is the stuff that great fortunes are made of. Look at the prices of gold and silver, they, like all the other assets are down considerably, 30 and 40% respectively and may go down lower as they are also the subject of massive market manipulation by several major banks.
These precious metals will always maintain their intrinsic value, no matter how low their price goes, as history proves.
This makes the vital task of spotting assets with good fundamentals that have been beaten down in the general deflation, easy. These are the ones that are a real buy now, and should be purchased even as they go lower under the sagging weight of the deflation and possible manipulation, as they will rebound into the stratosphere once the devaluation of the currency or inflation kicks into high gear.
In order for the world's debt to be repaid, the dollar will have to be skinned alive, devalued to the tune of 5 or even 10 new dollars for every one of the present ones.
This means that gold and silver will then sell for 5-10 times what they are selling for now!
I know that many of my clients are regular, middle class folk, who do not have the wherewithal to pump 10's of thousands of dollars into precious metals, as much as they should or would like to.
The easiest, cheapest way to accumulate silver, the more affordable of the two metals is to buy silver coins, American Silver Eagles, Canadian Silver Maple Leafs.
We have joined an innovative system that rewards you, in silver for referrals you make who purchase silver coins in the ratio of a free coin to you for every 2 purchased by your referrals. Check them out here: http://SilverSnowball.com/964
This is an inexpensive way to start accumulating silver and who knows, if you know a lot of people, it could put a lot of free silver in your pocket!
Check it out: http://SilverSnowball.com/964
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