Maybe Im starting to seriously think owning phisical gold is the way to go!

[SASKFARMER3]

I agree cotton its 1979. This time we have countries printing money like their is no tomorrow.

[liberty]

Gold prices started falling back in 1980 when central banks starting jacking up interest rates. There's absolutely no sign of that happening now, and no chance of it happening in the foreseeable future. Even a small rise in interest rates would instantly bankrupt the U.S. government as almost all of their current spending would have to be diverted to service their debt. Central bank strategy will center on keeping interest rates ultra low and on hoping that people don't realize how much their purchasing power is being eroded over time by a supposedly "moderate" amount of inflation.

[ado089]

All you inflation bulls keep forgetting about the other side of the money balance sheet. Money printing isn't keeping up with corporate debt paydown and an overall decline in borrowing. Paying off and reducing debt is the exact opposite of QE.

[errolanderson]

wedino . . . agree that under more
normal economic circumstances it would
be inflation bigtime with this excessive
money printing. But (IMO) QE3 is a
colossal flop and will be dismantled.
It's not working as to U.S. Fed plan.

Where's the inflation considering how
much money is printed? Yes, land prices
have rocketed over the past year. But
will this land inflation remain when the
reality of lower grain prices hits us
all by next fall?

To me, precious metal markets may be
unsettled commodities for many months
ahead. There is no inflation to jack
gold and silver prices up and there is
no risk of interest rates rising to jack
them up either. Precious metals are now
caught between a rock 'n a hard spot.

Also, personally believe Obama does not
escape his term without a major
disturbance in the equity world.

To me, this is just the beginning of a
leg lower in gold and silver and copper
markets for that matter. Copper is a key
commodity indicator for global economic
health.

The rebound of the past week in gold and
silver may be no more than a 'dead cat
bounce'. And listening to so many gold
bulls on the internet talking up their
own position stories, just pisses me off
more.

I'm sorry, but can't buy into the
inflation story that the majority are
praying as a savior for an overspending
past. The prospect of deflation is flat
out nasty and means all of us will have
a lower standard of living ahead.

Guess that is why nobody wants 'talk-
the-walk' or 'walk-the-walk'.

[cottonpicken]

Not trying to be a smart ass serious question.

Do you believe the debt will be paid back?

Do you believe governments will be able to balance?

Will society be able to handle the austerity that needs
to happen?

[cottonpicken]

If the answer is yes to all 3 questions,in your mind
and what will end up happening,then it is deflation
and you end up being correct.

if the answer is no,then it is inflation,the bad kind,the
cost push kind.

[ado089]

Private and corporate debt is being paid
down quite aggressively and borrowing
has come to a screeching halt. The
velocity of money is still painfully
slow. Since government debt is so
incestuous and no one government isn't
in significantly better shape I believe
alot of it will simply be written off.

If I'm wrong I own land and sell
commodities so I'm set up pretty good to
weather inflation.

[jensend]

Seems to me that the kind of inflation
you talk about is generally short and
sharp and then things collapse. We've
already had inflation in the housing,
equity, commodity and land markets. The
economy shows no meaningful growth.
Wages are dropping in real terms so I
don't know how much more inflation there
can be before demand collapses. My
guess is that we're close to the tipping
point. As the guy from Florida said on
the CBC piece it's all bubbles with no
value to justify prices and likely no
good end.

[errolanderson]

jensend . . . your comments are right on
the money

[Kodiak]

I understand the deflation scenario. Except for one question I can't foreseen and outcome to. And that is the world's central bankers will fight it with evryting they've got. They are muc more worried about deflation than inflation-as evidenced by their actions. I think they have a lot more arrows in their quivers. I agree that at the moment the QE is all going to Wall Street and back to the Fed at a premium. Bankers are making a killing. If the Fed decides they want QE to go to Main Street instead, they have the ability to make that happen to. I sense they are watching that now (Bernanke hinted at this during his last testimony befor congress). As th old saying goes, "don't fight the Fed." In the end they have more bullets than anyone and if they want inflation, they can create it. We are not in a normal market nor have we been in these waters before. Everything is being manipulated- money supply, equity markets, interest rates - and will continue to be IMHO. With markets being manipulated, how can normal adjustments occur? Central banks have a tiger by the tail. They can't let go.
I believe the results of this kind of action will debase the currency.

[jensend]

they have been fighting the deflation with everything they've got. the problem is that qe has quit working. they have reflated the equity markets and commodities have inflated but people are still too indebted to have the spending capacity to spur growth. to me the economy is balancing right on the edge of the cliff and the central bankers are doing all they can to keep it from rolling the next inch. europe isn't helping with their enforced austerity which, i think, should be more focussed and less severe. high unemployment is not a good thing. in order to avoid deflation there has to be a return to growth but so much of the growth of the past forty years was debt financed that we have run out of the capacity to spur more growth. we've actually had qe for four decades now and it has become a drag on the economy instead of a stimulus. i think in agriculture you have to ask what happens when there is a generally good crop around the world.

[jensend]

http://www.telegraph.co.uk/finance/financialcrisis/10028967/Eurozone-risks-Japan-style-trap-as-deflation-grinds-closer.html

an opinion column on the lack of growth in the eu and mentions that antagonism within the eu isn't helping.

[cottonpicken]

Inflation happens when things are not going so well.

A few bubbles popping doesnt mean deflation.

A soverign debt default,does not equal a rise in
purchasing power.

[Hopperbin]

Not sure inflation and interest rates go hand in hand I thought so. Years ago when the liberals were in power we had high interest rates and inflation cause the economy was supposedly going nuts and needed to be slowed according to them.

[Hopperbin]

According to my thinking inflation happens when things go very well for most.