I agree that we are probably going to see a continued decline in commodity prices especially PMs. However, given the increases in the monetary supply I forsee this trend reversing. When the trend reverses, which isn’t going to happen immediately because we are headed towards a major recession, with unemployment rising, and more likely interest rates as well, inflation will be severe.
The Money Supply graphs are frightening. Once that money goes into the system I wouldn’t be surprised if we start to see hyperinflation. For all of our sakes I don’t want that to happen.
As for investing in PMs I think there are two types of people who purchase them. The first is the speculator, and the other the long term purchaser regardless of price. (I’m leaving out purchasers for industry and jewelry). As much as I don’t like to see the value in relation to fiat currency of my PMs decline my intent on owning them is for more of the oh shit situation. Throughout time gold, and silver to a lesser degree have held up as a store of value. They aren’t going to be worthless as can a paper currency backed by nothing. Politicians and those involved in the government don’t like PMs as they aren’t easily created. Having a currency backed by a scarce resource means that they have to control spending as they can’t print money to pay for various expenditures.
So, why gold and silver? What happens if the fiat currency fails? All of a sudden you and I have a bunch of roman numerals in our bank accounts. Sure we can go get paper currency, but it is better to use as heat. If this happens chaos will ensue until another solution is created or we go back to a currency backed by PMs. I doubt the latter case would occur as bureaucrats aren’t going to want that option.
My other concern is war with Iran, which is looking more and more likely. In this scenario gold and oil will skyrocket. Oil will also be much harder to obtain and the government will probably institute a rationing scheme instead of letting the price rise. I’d rather pay $50.00 a gallon for gas then not be able to get it or to have to wait in line for days. I presume many of you don’t agree, but gas or no gas you pick! Would I drive much NO… however, if I needed to go somewhere I could get the fuel I needed.
Lastely, beyond Gold and Oil we all need food and water. Don’t forget food.
I agree that we are probably going to see a continued decline in commodity prices especially PMs. However, given the increases in the monetary supply I forsee this trend reversing. When the trend reverses, which isn’t going to happen immediately because we are headed towards a major recession, with unemployment rising, and more likely interest rates as well, inflation will be severe.
The Money Supply graphs are frightening. Once that money goes into the system I wouldn’t be surprised if we start to see hyperinflation. For all of our sakes I don’t want that to happen.
As for investing in PMs I think there are two types of people who purchase them. The first is the speculator, and the other the long term purchaser regardless of price. (I’m leaving out purchasers for industry and jewelry). As much as I don’t like to see the value in relation to fiat currency of my PMs decline my intent on owning them is for more of the oh shit situation. Throughout time gold, and silver to a lesser degree have held up as a store of value. They aren’t going to be worthless as can a paper currency backed by nothing. Politicians and those involved in the government don’t like PMs as they aren’t easily created. Having a currency backed by a scarce resource means that they have to control spending as they can’t print money to pay for various expenditures.
So, why gold and silver? What happens if the fiat currency fails? All of a sudden you and I have a bunch of roman numerals in our bank accounts. Sure we can go get paper currency, but it is better to use as heat. If this happens chaos will ensue until another solution is created or we go back to a currency backed by PMs. I doubt the latter case would occur as bureaucrats aren’t going to want that option.
My other concern is war with Iran, which is looking more and more likely. In this scenario gold and oil will skyrocket. Oil will also be much harder to obtain and the government will probably institute a rationing scheme instead of letting the price rise. I’d rather pay $50.00 a gallon for gas then not be able to get it or to have to wait in line for days. I presume many of you don’t agree, but gas or no gas you pick! Would I drive much NO… however, if I needed to go somewhere I could get the fuel I needed.
Lastely, beyond Gold and Oil we all need food and water. Don’t forget food.
-T