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The problem with GDP as a measure of economic growth is that it simply tallies up all the spending going on in the economy, with no regard as to whether it is useful or not. By useful, I mean investment on plant and equipment that increases the division of labor. Much of the reason for current GDP growth is simply because governments of all stripes are on an unprecedented borrowing spree. Most of the borrowing, however, will be spent on the equivalent of paying some people to dig holes and other people to fill them in.
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Bloodbath in precious metals today. Gold back down to $1,800? Nasty margin calls triggering ‘git me out now’ selling today. USD appears oversold.
Rout like this will shake the gold bulls for a spell. Classic commodity washout . . . .
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Originally posted by Austrian Economics View PostThe problem with GDP as a measure of economic growth is that it simply tallies up all the spending going on in the economy, with no regard as to whether it is useful or not. By useful, I mean investment on plant and equipment that increases the division of labor. Much of the reason for current GDP growth is simply because governments of all stripes are on an unprecedented borrowing spree. Most of the borrowing, however, will be spent on the equivalent of paying some people to dig holes and other people to fill them in.
Yes, it measures dollars, not goods, devalue the home currency and voila, GDP is up, doesn't matter the country, they all measure the same. So if goods are static but currency devalues, it appears "something" is happening. I refuse to bet against the US till there's a new high in their dollar or at very least a second attempt at 160. They can't measure inflation/ deflation ..... the models are broken,people so my best bet is FED over does it. We are in for a real rodeo of up and down in everything and it'll get extreme. See the metals. I thought sub $1200 was still in play but that might be 1362~ wait and see. Need to raise the entry point.
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Originally posted by farming101 View PostOI! I'll wait and see if 1760 holds first
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Get ready for a nasty 2008 style market correction. The commercial banks have it all tee'd up they've been loading up on bonds for some time. They've been tightening credit standards to near all time levels. Without credit real estate and the general market will crater. They want to implode the market. You may say well why do they want to do that? They know the feds hand ahead of time. The fed will slash rates causing the banks bonds to go up in value significantly, debtors will be bailed out. Gold tanks near term but the Fed's quick response of 0% interest rates and QE5 will drive it right back up. The USD will rally while the market is near an all time net short. Its all set up just like the pre 2008 financial crisis.
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Originally posted by biglentil View PostGet ready for a nasty 2008 style market correction. The commercial banks have it all tee'd up they've been loading up on bonds for some time. They've been tightening credit standards to near all time levels. Without credit real estate and the general market will crater. They want to implode the market. You may say well why do they want to do that? They know the feds hand ahead of time. The fed will slash rates causing the banks bonds to go up in value significantly, debtors will be bailed out. Gold tanks near term but the Fed's quick response of 0% interest rates and QE5 will drive it right back up. The USD will rally while the market is near an all time net short. Its all set up just like the pre 2008 financial crisis.
A money printing rally in a failing economy just doesn’t cut it. Precious metals may become extremely unpredictable. Rallies, followed by disapointnent. No real inflationary undertone except fake money-printing that already has an expired shelflife for any extended impact.
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Errol how much and what is the effect of companies doing massive buy backs? Less stocks available due to the buy backs have raised rhe stock price but in reality doesn’t this make the stock market value raises a fake? There isn’t actually any more value in these companies as the stock market raises have eluded to. Just less shares at a higher price.
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Originally posted by the big wheel View PostErrol how much and what is the effect of companies doing massive buy backs? Less stocks available due to the buy backs have raised rhe stock price but in reality doesn’t this make the stock market value raises a fake? There isn’t actually any more value in these companies as the stock market raises have eluded to. Just less shares at a higher price.
Gold prices have been crushed more than $200 per oz in the past 18 hours with the spot breaking below $1.865 per oz overnight. This is a margin call washout forcing long liquidation. Futures are extremely dangerous. Stick to options, if sticking-a-toe in precious metals.
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Guys, you are looking at this wrong. Whatever your throughts on our financial system, it doesnt really make sense to go against it.
I imagine some $20T was printed up over the world and went right into markets and supporting people. Thats inflationary and will land somewhere in regular assets eventually. The stock market is already seeing it. The US GDP is jsut starting its recovery and the S&P is at pre pandemic levels. In a years time that index will be 5,000.
I understand the allure of gold but if our system was reset against it and it jumped to $15k an oz or something, we would be in a secular depression. Are you going to risk taking your gold wafers into town to barter?
Farmland is 10x the hedge that gold is and already there are accelerating sales all around me. Sub 2% interest rates with a huge dose of inflation tells me all these are going up, probably even commodities this time.
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