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How does an average guy like me....
- Thread starter tosugrad
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Start a crystal meth lab. People will always have the cash to buy drugs no matter how bad the economy is.
open a bar. That's what i'm working on.
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- 18 July 2005
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So then go short the indexes. Go long commodities.
Yah, titty bar.:wink:
The Dow and Gold are going to meet at some point soon...it always happens in serious downturns....so take your money out of stocks and put it in gold, when they meet...my guess is somewhere around 6k, sell the gold and put it back in stocks and ride that wave back up too.
Good luck
JZ
Good luck
JZ
With a few zero's off the gold, I assume.....
The last two times it was about a 3:1 ratio average, so 6k for the dow, 2k for gold.
If you've been watching the metal markets you've probably noticed that physical gold and silver and paper gold and silver have now separated. The gold and silver ETFs are going to crash and the physical gold and silver will skyrocket.
Look at ebay. Silver is at $11 spot, and on ebay you can't get it for less than $16. I can't find a store locally to sell me silver or gold, all local shops are out.
My dealer who went to Socal a few weeks back to get his supplies for us couldn't get anything. Look at Apmex or kitco. They are sold out, but silver is at $11 lol.
It cost more than $11 to pull an ounce of silver out of the ground in todays inflated dollars.
If you've been watching the metal markets you've probably noticed that physical gold and silver and paper gold and silver have now separated. The gold and silver ETFs are going to crash and the physical gold and silver will skyrocket.
Look at ebay. Silver is at $11 spot, and on ebay you can't get it for less than $16. I can't find a store locally to sell me silver or gold, all local shops are out.
My dealer who went to Socal a few weeks back to get his supplies for us couldn't get anything. Look at Apmex or kitco. They are sold out, but silver is at $11 lol.
It cost more than $11 to pull an ounce of silver out of the ground in todays inflated dollars.
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and toilet paper.:wink::biggrin:
So in short....no, same zeros...checkout 1980 on that chart, exactly the same.
Now that's assuming it's going to get as ugly as 1980 was....but it looks pretty damn ugly to me.
JZ
Already met the S&P. The Dow is not very important.
This is a deflationary contraction, not inflationary. Gold will not reach those levels unless the entire context of our situation changes 180 degrees. Roughly 30% of the current price is strictly through fear.
If gold hits 1400-1500 I am a seller.
If you don't know how to trade I say cash really. Anything in the market is going to go down and remember you can get back in anytime. I have had 3 trades in the past 2 weeks and 0 this week. I have no edge so I stay out.
I personally think the 200+ billion a day in Fed money is going to lead to an extremely inflationary situation. The current downturn might be deflationary but the long term fundamentals all point toward inflation.
What long term fundamentals point towards inflation? You'll get a Pulitzer if you can convince me we have are going to have widespread inflation.
Wages are DOWN and FALLING, asset prices are DOWN and FALLING OFF A CLIFF, credit availability is DOWN and FALLING. You might see certain commodities increase in value due to supply constrictions but what do you think all "feds" are doing? They are literally all doing the same things, this morning at the exact same time! Do you think they'd be slashing rates all at the same time when they are already at historical lows if they thought inflation was a problem? That was just to calm people's nerves about oil and food prices (gas under $3 T-minus one week).
They can run the printing presses 24/7/365, if credit is constricted like now it won't matter. Commercial banks create ten times the money the fed does, and the treasury is the real "fed" in this since. Other nations that have been buying our debt are not overly enthusiastic about increasing their purchase volume or frequency.
I hope you are right and we do see inflation. Then all I have to do is buy gold.
While I agree that short term (1-5 years) will be deflationary, how do you feel about the $50 + trillion in unfunded liabilities (mostly social security and Medicare) that are coming up in the next decade or two? Not to mention the reliance on government as a whole is shooting through the roof. The only answer to that problem is that they will either default on the liabilities, or pay for them with the printing press. These liabilities are not credit based, but direct payments to the people.
I personally don't think that our government is good for the money, but I also don't believe that they are going to tell the people that they are SOL, so what do they do? Inflate the currency and keep reporting inflation fraudulently and magically the government liabilities have been reduced in terms of actual worth.
I agree. It seems inevitable that we'll have inflation in nominal incomes and a concurrent loss of real buying power. Median household income might jump to $100k, but if a happy meal costs $40 we won't be better off. Similar to stagflation of the 70s, except the biggest shock to the economy (likely) won't be the cost of oil. The government will have to dilute the debt it's choosing to back. And through it all I strongly suspect the middle class will continue to shrink. A few will become rich. Many will become poor.
#1. Pay off your debt
#2. Buy into the stock market when it's low and scary.
Personally, I think the market has factored in just about all the news at this point. The market is going to end higher today, and this may very well be the bottom. We'll see.
I'm really debating with myself if this is a 1929 type crash(-90%) or a 1987 type crash(-30%). I'm still not sure, and kind of scared to get back in myself. I might buy back in friday though...
#2. Buy into the stock market when it's low and scary.
Personally, I think the market has factored in just about all the news at this point. The market is going to end higher today, and this may very well be the bottom. We'll see.
I'm really debating with myself if this is a 1929 type crash(-90%) or a 1987 type crash(-30%). I'm still not sure, and kind of scared to get back in myself. I might buy back in friday though...
that's still a lot of money for a bbq with wheels and a speedometer.
Sign me up!
Things are seriously f'ed up in the markets gents. Yesterday the bond market started selling off at the same time the market was... THAT ISN'T SUPPOSED TO HAPPEN.
The LIBOR and TED spread actually widened... that is the OPPOSITE of what was supposed to happen after the bailout.
The LIBOR and TED spread actually widened... that is the OPPOSITE of what was supposed to happen after the bailout.
Doesn't sound much like inflation does it steve. Where we are in two decades is somewhat irrelavent if the next decade goes in a completely opposite direction. Eearly is still wrong. Ask anyone who was shorting financials in 2004.
There is not enough information pointing in a single direction to justify what sort of economic environment we will be in several decades from now (not very useful regardless) because we don't even know where we will be 6 months from now.
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