by LP. @ 18:37 pm.
Thanks for your insight and links.
It’s amazing how few GET it.
Too big a vested interest in juniors me thinks.
Wanka great to have you back.
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You have a massive deflationay backdrop because of massive debt of all kinds. You have massive dollar inflation to fight it off. In the end you are left with massive stagflation. JS has had it right all along. Separately, you have the issue of how the currency is handled in this environmet. In the 29 period, paper currency was tied to Gold so it was “as good as Gold” so it was sought to hold. Today, like in the late 70’s it is not so nobody wants the dollars and is getting rid of them for anything that will hold value. Thus, the dollars are not being “hoarded” because their value is falling like rocks- the exact opposite of the deflationary 29 period. As “real things” are inflated in price due to the dollar inflation (and every other paper currency in the world will accelerate, also), the price inflation will spread. Only one place to protect your savings…..Gold and Silver, but with the Dollar going to nothingness investors will not flee to hoarding Dollars so they will opt for paper claims on Gold and Silver in the ground- PM stocks.
Stagflation rules as the massive deflationary backdrop will guarantee that the Dollar inflation will continue to accelerate (along with all the other countries’ currencies) AND that real rates will remain extremely low. Separately, the Fed is crapping on the citizens by playing the “tainted CPI card” which helps to keep wage inflation, especially fixed income, artificially in check.
The one area they cannot “affect” is the Oil sector since it is dominated by countries who definitely do not want dollars (any paper currency), in fact, will only sell Oil based on buying Gold. IMO, as long as the Dollar is falling- oil will be rising due to the wants of the major producers in terms of how they view “money.”
Everything else is just a distraction………..a little smoke, here…….a little mirror, there…… The stock market is going down even while it is supported by the falling Dollar as our stock market is priced in Dollars. Yet, just what percent is it down to date? Remember the 70’s? In the 70’s the Dow only dropped about 40%, but was really down 90% against constant Gold- the same as in the 29 period.
Rather than to try to lump all of the different parts of many beasts together like the hot dog, why not separate out the different components to try to use each in a way that can positively affect your life. The financial stocks are being revalued to their real value. Gold and Silver are in the process of being revalued to their real value in terms of the paper currencies. Ditto Oil. The Fed can print all the Dollars they want and they can do whatever they want to with them as there is no honesty in this world, today. They can buy all of the US debt- monetization- as long as they claim to be some other entity. They can trade bonds with themselves like Enron did with paper energy……as if that was not the govy. There simply are no rules - just paper echoes flying around.
Stagflation……………..This is it!…………LOL.
GR
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