Say Anything Blog

Who is Cimpy McHitler?....

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

From Peter Schiff:

“In the face of what was in reality a horrific March CPI report, Wall Street once again demonstrated its ability to spin economic straw into gold.  The trick to making a 7.5% annualized inflation rate disappear is simply to misdirect attention towards meaningless monthly core numbers instead.

However, Wall Street’s power to make high inflation disappear before our very eyes will not last forever.  If a magician repeats the same trick over and over, his audience is bound to get wise.  The idea that the “core CPI” should trump the actual “headline number” is an example of a lie being repeated often enough that it becomes the truth.  Originally, the emphasis on the core was supposed to smooth out month-to-month volatility.  But putting primary weight on “year-over-year core CPI” is another matter entirely.  Year-over-year changes are not volatility, they are reality!”

Cuts into the purchasing power of those gains a bit.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

Ah that Shiff guys smarter than all the people that aren’t chattering but putting their money where their mouth is.

What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.

Schiff has money in play.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

Follow his advice if you want.  I’m thinking that there’s reasons the market has caused the stock market to rise.

Time will tell.

What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.

I am not sure that the purchasing power is the fundamental we are or should be worried about.

Stronger-than-expected profits from several large companies helped push the stock market to historic heights. But many big corporations, including the Dow components, made a chunk of that money overseas, where economies are growing faster than in the U.S. And many of the same worries that weighed on investors earlier in the year remain: rising energy costs, a slumping housing market and a possible credit crunch…

Wall Street got an additional lift from the Commerce Department’s report on durable goods last month, which showed a gain in orders of business capital goods and reassured investors that demand for U.S. products remains strong. The department also reported that sales of new homes rebounded slightly in March.

About two-thirds of U.S. companies so far have reported earnings that were in line with or higher than analyst expectations, said Jim Herrick, director of equity trading at Baird & Co.

So what does all this mean to me?  That the US companies are profiting off of the good worldwide economy and their foreign subsidiaries continue to put money back into the US Economy and stock market through record earnings.

I know that inflation is always a worry, but the data here is rather interesting:

http://www.bls.gov/news.release/cpi.nr0.htm

The index for energy, which rose 2.9 percent in all of 2006, advanced at a 22.9 percent SAAR in the first quarter of 2007 and accounted for about 41 percent of the first quarter advance in the overall CPI-U.  Petroleum-based energy costs and charges for natural gas and electricity contributed about 29 and 12 percent, respectively. The food index rose at a 7.3 percent SAAR in the first quarter of 2007, accounting for 21 percent of the first quarter advance in the overall CPI-U.  The index for grocery store food prices increased at a 10.0 percent annual rate, reflecting acceleration over the last year in each of the six major groups.  These increases ranged from annual rates of 4.7 percent in the index for cereal and bakery products to 19.3 percent in the index for fruits and vegetables.

Excluding food and energy, the CPI-U advanced at a 2.3 percent SAAR in the first quarter, following a 2.6 percent rise in all of 2006.

I understand that inflation is a major problem, but 41% of the inflation in the US is the cause of higher petroleum products and one can summize that a huge part of the higher food costs is also due to rising transport costs due to higher fuel.  The upside of this is that this problem is not localized to the US.  This is a worldwide problem.  It affects everyone because everyone uses fuel and energy.  Some inflation cannot be controlled and the rising fuel prices are going to take some of the consumer spending away, but at the same time, wages are rising.

http://www.bls.gov/news.release/empsit.nr0.htm

Over the year, average hourly and weekly earnings grew by 4.0 and 4.4 percent, respectively.

Following up on his regular appearance on Larry Kudlow’s CNBC show, economist Don Luskin posted this startling comment regarding 2006 GDP growth, along with charts demonstrating his point,

For the economy ex-housing, every quarter in 2006 was better than any quarter in 2005, and we went out at the highs.

Three months ago, the DJIA took a 400 point single day drubbing (brought on by similar steep decline in the Shanghai stock market when word leaked out that the Chinese government was considering raising taxes on capital).

At the time, the liberal pundits were wailing and gnashing their teeth, telling us that the ride up was over and the sky was falling.  They were wrong.

The economy has been doing far better than it has been given credit for.  So long as earnings growth mirrors GDP growth, the only thing we need worry about is tax increases or the nationalization of the health care industry, both pet projects of Democrats.

“Poverty of goods is easily cured; poverty of the mind is irreparable.”

So long as earnings growth mirrors GDP growth…

This liberal troll is pleased that the markets are doing well but he knows that nothing goes up forever. That we’re closer to the market top than we are to the bottom should go without saying but the investment dollars have to go somewhere and the stock market is the place to be for now.

"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.”
Cicero, 55 BC

MikeA,

I don’t recall that you and I have specifically discussed economics and tax policy, but you should be aware that rather than a “liberal troll” I had you specifically in mind when I wrote earlier that “There are far too many opportunities for serious debate and friendly banter...”

Justin and others will certainly bear me out here, but while stocks may be the place to be for now, the time to have gotten into the market was the day President Bush signed the capital gains and dividend tax cut legislation.  With those taxes set to be increased, one way or another between 2009 and 2010, its doubtful that the stock market, or the bond market for that matter, will offer much opportunity for appreciation in the coming years.  At the moment I’m looking seriously at real estate again, both commercial properties and REITs.

“Poverty of goods is easily cured; poverty of the mind is irreparable.”

The economy is so bad, according the schills on the left.

Check out:
Goon’s North Dakota Red Neck
Goon’s World

Bat One...an investment friendly tax environment is conducive to healthy market returns but it’s not particularly high on my list of variables. Of bigger concern than taxes, IMO of course, is what happens when the easy credit days are behind us. Corporate balance sheets are in excellent shape generally speaking because of low interest rates but as rates gradually rise then my investment return expectations will definitely moderate.

My portfolio has crept above 70% equities again which usually means that the trend should be moderating and probably reversing sooner rather than later...that’s been my experience anyway.

"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.”
Cicero, 55 BC

MikeA,

Unless you are a deliberately aggressive investor, your “trigger,” anecdotal or not, is probably as good as anything else.

“Poverty of goods is easily cured; poverty of the mind is irreparable.”

Unless you are a deliberately aggressive investor, your “trigger,” anecdotal or not, is probably as good as anything else.

I am 32 years old and a deliberately agressive investor.  Of course that will change as my age increases and my wealth increases, but I own two residential properties (my first home and a second investment property in a different market), have all of my 401k in indexed mutuals on the S&P, and have the rest invested in my small businesses.  I only own a few shares of individual stocks because I don’t like picking stocks or trading and low cost mutuals give me all the upside with less risk and lower fees.

There is no sense not being agressive.  I am not a dot.com kind of agressive investor, hence S&P level risks and returns.  I understand that there will be downturns like 2000-2003, but the upside of the stock market--so long as earnings and GDP continues to grow--is too great not to place the majority of my investments aside from my businesses there.

Most average Americans have no real investment strategy and use their 401k and homes as savings accounts or piggy banks.  I look at my 401k balance and stock portfolio every day.  And the balance keeps rising.  I listen to earnings reports and GDP and unemployment and wage reports.  And they are all positive.  We are never closer to the bottom than the top.  That is to say that the entire human existence relies on producing more and consuming more.  Hence why we don’t live as subsistence farmers and why China is moving away from that.  And production continues to increase.

Oil is my only real worry.  And even then, there is plenty, it may just take some pressure to get us to expand our drilling.  If the US lacks raw materials, then we have major risks.

I understand that there will be downturns like 2000-2003, but the upside of the stock market--so long as earnings and GDP continues to grow--is too great not to place the majority of my investments aside from my businesses there.

That is sort of my opinion as well since I’m comfortable investing with a long time horizon in mind. That being said, there have been periods in time when the markets return little more than zero...and I’m talking periods in terms of 10 years and more. It makes little sense adding to equity positions near the top of the secular cycle and it makes perfect sense to maximise equity positions as the cycle nears its bottom...of course identifying the tops and bottoms before they happen is much easier said than done.

"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.”
Cicero, 55 BC

It makes little sense adding to equity positions near the top of the secular cycle and it makes perfect sense to maximise equity positions as the cycle nears its bottom...of course identifying the tops and bottoms before they happen is much easier said than done.

Just a quick quote:

As you can see below, an investment in the S&P 500 Index from 1971-2005 would have yielded an average annual total return of 11.43%. But missing just the 10 best days in this 35-year period would have reduced that annual return to 9.86%. If you had missed the top 50 days in these years, your average annual total return would have dropped to just over 6.03%.

Hence why I don’t play around with timing the market.  I have at least 15 years before I retire, but depending on the success of my own business, may take my assets out of the market sooner and invest them into my own business if the return is higher (which it almost certainly will be unless I am incompetent).  The downturns are minor in a market that continues on a stable path upward.  And if this is a long term downturn or a downturn that we never recover from, we are all screwed anyway.  No sense worrying about that possibility because if the market heads to the bottom, the economy of the world basically ends.

From Richard Daughty:

But somebody is still buying things; like the Fed, for instance, which bought up $1.4 billion in government debt last week! Hahaha! In fact, the Federal Reserve (which is, if you recall, just a private bank that, in an almost-deserted Congress on an infamous Christmas Eve in 1913, was given extraordinary powers to create debt and money), now admits to owning $782 billion in U.S. government securities! So, it looks like the Federal Reserve created more credit in the banking system, which they themselves borrowed to buy government debt for themselves! Hahaha! What a scam!

But this little Fed flimflam aside (which is hard to say five times quickly!), without new money coming into the system through the banks, the only way that the stock market, or the bond market, or the housing market, or any market, can go up, is for the new buyers to get the money by selling something else - or if some other country’s central bank is supplying the new money. Either way, this is definitely not how to achieve “economic nirvana”

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

From Nick Barisheff:

Many investors and their advisors subscribe to the buy-and-hold strategy, believing that equities always go up.  They like to refer to the past twenty years as proof that this is the case.  However, if you look further back and examine more than just the last cycle, you will likely develop a different viewpoint.  Imagine that you were 60 years old in 1968, and quite content with your buy-and-hold philosophy; the previous 20 years were good ones for equities and bonds.  But if you stayed with that same strategy for the next 20 years, you would have had a difficult retirement.  You would have lost money in bonds, and it would have taken 17 years for your equities just to break even.  After taking into account the eroding effects of inflation, the purchasing power of your investments would have suffered substantially.  Although eventually the buy-and-hold strategy would have worked, you likely didn’t live long enough to make up your losses in the next cycle.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

Well, Troy’s still dumb, but at least he’s not plagiarizing any more.

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.

-- Thomas Jefferson

Rob’s recently listened-to songs:

I am dumb… heheeh.. How much is your retirement nest egg gonna be in 40 years.
$1,000,000.00. Good luck making that last.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

Yeah, and which 8 businesses do you own again retard?

What’s that?  You’re a lying twit who still lives in mommy’s basement?

Thought so.

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.

-- Thomas Jefferson

Rob’s recently listened-to songs:

How long will these earnings continue with the American consumer debt load escalating? What will they refi so they may run to the mall and buy an iPod? Do Americans make iPods? Toyota just passed GM. China is now Japans #1 trading partner.
India and China are not standing still. They are churning out engineers and PHDs faster than the US.
The sweating Asians are becoming less reliant on American consumers but American consumers are becoming more reliant on them.
If you look at where the profits are you will see it is outside the US market.
What will happen when Asia doesn’t need our $$$ anymore?

“We have a dollar that’s adjusting and I am for a strong dollar.....
Our dollar doesn’t buy as many barrels of oil as it used to and so therefore it’s more expensive for the American people”..... Bush 3/12/08

Justin...I hear what you’re saying and I don’t disagree with the idea of placing a portion of one’s portfolio in index funds provided one is holding for the long term. Missing the best days in any given investment period will be costly but my point is that money invested in the indices can be dead money for a long time. Look at this chart and pretend that you invested in October/61...see where the DJI is in 1966, 1971, 1981, etc.

The markets enjoyed a nice bull run from 1982 until 2000 and we’ve now cleared that high seven years later. If you look at the long term chart then it isn’t hard to visualise another significant leg down...of course when is the big question. As i say, some money in index funds is fine but to ignore active management seems risky to me.

"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.”
Cicero, 55 BC

Well that link didn’t work so well did it...try this.

"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.”
Cicero, 55 BC

Grrr...enter ^DJI on the chart and hit the max button on the lower right for the time frame.

"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.”
Cicero, 55 BC

TP...anybody who quotes the Mogambo Guru is okay in my books. He’s definitely a righty but he’s darned hilarious.

"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.”
Cicero, 55 BC

Toyota just passed GM.

Mark D, when did this happen I missed. Toyota is the worlds largest automaker?

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

Troy

On the 24th

“We have a dollar that’s adjusting and I am for a strong dollar.....
Our dollar doesn’t buy as many barrels of oil as it used to and so therefore it’s more expensive for the American people”..... Bush 3/12/08

anybody who quotes the Mogambo Guru

I like him, but I wish he would cut out all the BS in his articles.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

How much is your retirement nest egg gonna be in 40 years. $1,000,000.00. Good luck making that last.

Conservative investment can get you close to that mark. [I write from experience]

You don’t seem to know very much about investing, Troy.

You don’t have to be a moron to be a liberal Democrat but it sure helps.

Toyota is the worlds largest automaker?

Big deal!!  They make most of the cars they sell in this country here.  Who and what companies make doesn’t mean squat.  Where they invest their earnings means much more.

As long as the USA is the largest consumer, they will be in the forefront.  I had a Chinese national tell me that no way would China destroy their trade relationship with the USA because if we stopped buying their goods, the economy would collapse.

You don’t have to be a moron to be a liberal Democrat but it sure helps.

The Barisheff article Troy quoted from has some good stuff in it.

"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.”
Cicero, 55 BC

Conservative investment can get you close to that mark.

I agree. What I disagree with is far a million bucks will go in 40 years.  In 40 years a person is going to need a much larger nest egg.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

In 40 years a person is going to need a much larger nest egg.

How much larger?  Of course, you don’t know but investment opportunities generally keep up with inflation.  Again from experience - in the 1960s one could have retired quite well on $100,000 and there were only a few millionaires.  Today there orders of magnitude more millionaires because retirement costs are more expensive and there are more investment opportunities.

You don’t have to be a moron to be a liberal Democrat but it sure helps.

DD

if we stopped buying their goods, the economy would collapse

And if they stopped selling their goods, our economy would collapse.
The tables are turning.

Can we make one of these guys?
Geminoid HI-1

He doesn’t like to be touched

No....but we got investors.

“We have a dollar that’s adjusting and I am for a strong dollar.....
Our dollar doesn’t buy as many barrels of oil as it used to and so therefore it’s more expensive for the American people”..... Bush 3/12/08

Again from experience - in the 1960s one could have retired quite well on $100,000

In the 1960’s was your goal to have $100,000 for retirement in the 2000’s?  100k would not go far today just as in 40 years 1 mil will not go far.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

markets up so it’s time to pay off a loan secured by these equities.

Pick some losers to unload.

Broker wants to sell all the funds at the bottom. I don’t think so.

And if they stopped selling their goods, our economy would collapse.

This is absolutely false.  As a demand economy, all we need is demand; price is determined by supply.  We can generate our own supply, if necessary, but the ChiComs can’t manufacture their own demand.  Big difference.

Media uncovers more Palin stories in one weekend than Obama stories in two years. Still no bias detected

Obama: more experienced than Bristol Palin

We can generate our own supply, if necessary, but the ChiComs can’t manufacture their own demand.  Big difference.

Mark D,

One of the central pieces of Adam Smith’s philosophy is that increases in the ability to produce goods A. creates its own demand because suppliers will do almost anything to sell their goods that they produce and B. it is this process of continuing increases in production efficiency that builds a nation’s wealth by creating an abundance of goods, lower prices, and freeing others up to produce new goods.  Increasing purchasing power is created by suppliers producing things more efficiently and creating an abundance which constantly puts downward pressure on prices and creates its own demand.  The suppliers rely on demand or else they will simply stop being able to produce anything because they end up getting more and more efficient and end up with large inventories they cannot sell.

China cannot produce enough domestic demand, Robert is right.  They are building their economy by producing lower and lower cost products for external consumption.  And even at their lower costs, their own people cannot afford to buy many/most of the products they make for export.  China’s production efficiencies actually LEAD TO US GETTING WEALTHIER.  I know that doesn’t make sense, but the very advent of Walmart and China’s production capacity producing goods are lower costs than American production frees American up to do higher end production work.  Lower cost goods increase the purchasing power of Americans, allowing costs to drop and increasing our purchasing power.  Wealth is not determined by the monetary system so much as it is determined by increasing purchasing power of consumers and a larger and larger abundance of goods.

Ever read about the Pin Maker?  I won’t rehash it here, simply read The Wealth of Nations.  Add it to your list after you finish your required Chomsky and Marx reading.

There are severe long term implications of the downward pressure of prices because of Walmart and China if we stop increasing efficiency and can’t compete.  Hence the problem with auto manufacturing and the labor unions.  But if things were so dire, the falling dollar and trade imbalance would lead to American goods no longer being competitive and American’s being unemployed.  They used to say Japan was going to put Americans out of work.  That hasn’t happened, except in limited industries.  Quite the opposite.  Japanese production innovations have crept into American manufacturing forcing us to be more efficient and produce better quality goods at lower costs.  While this puts downward pressure on production costs, as long as we improve efficiency, this should not affect wages.  Again, blame the unions, not China.

JustinB: Great post, with one quibble.  Demand creates supply, not the other way around.  Think about it: no matter how many buggy whips you make, there is only so much demand for them.  The good thing is that, with private ownership and control of capital, it simply moves to where it gets the most return.  China lacks both of those: private ownership of capital, and the resulting mobility.  A demand system will always respond more quickly and efficiently than a command system.

Media uncovers more Palin stories in one weekend than Obama stories in two years. Still no bias detected

Obama: more experienced than Bristol Palin

But if things were so dire, the falling dollar and trade imbalance would lead to American goods no longer being competitive and American’s being unemployed.

Sorry another quibble.

The falling dollar would make our exports more affordable on the world market and imports more expensive.

That would lead to a lower standard of living since we couldn’t buy cheap stuff made overseas, but probably not unemployment.

What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.

The falling dollar would make our exports more affordable on the world market and imports more expensive.

That would lead to a lower standard of living since we couldn’t buy cheap stuff made overseas, but probably not unemployment.

You are right.  Falling dollar is good for exports, bad for imports.  My bad.

Justin
A falling USD also raises our interest rates which in a consumer based economy is certainly not a good thing.
A falling USD along with a weak 1.3% GDP, record trade deficits, budget deficits and a massive debt load both federal and consumer is nothing to take lightly. Not to mention an unfunded war with no exit strategy and no idea how we will pay for it.
With more Euros in circulation than USDs it won’t be long before oil is priced in Euros putting even more pressure on the greenback.
You may believe that we are still a super power and the rest of the world needs us more than we need them but IMO it is the opposite. We are not the only consumers in the world and they realize it.

“We have a dollar that’s adjusting and I am for a strong dollar.....
Our dollar doesn’t buy as many barrels of oil as it used to and so therefore it’s more expensive for the American people”..... Bush 3/12/08

Well Mark you’ve got some good points, but I don’t think the dollar is in free fall. 

As it floats it will find it’s natural balance point.

Frankly you don’t want the dollar too high or too low.

What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.

Also from Peter Schiff today:

As the Dow burst through the 13,000 milestone this week, few understood the hollowness of the achievement. Measured against the rising dollar-denominated prices of just about everything else on the planet, the Dow has actually lost value over the past seven years. Measured against the truest benchmark, the price of gold, the record high for the Dow was set back in January of 2000 when its price equaled approximately 43 ounces of gold.  Today it is only worth about 19 ounces.

To better appreciate just how much of stock gains can be attributed to inflation, consider that the record high for the Dow in 1929 of approximately 380 also equated to 19 ounces of gold.  So despite all of the hoopla and a thirty-fold increase in stock prices, the Dow has actually gained no real value during the past eighty years.  The entire rise from 360 to 13,000 has been an illusion made possible by the magic of inflation.  So much for the concept of stocks being a “can’t lose” long term investment—unless you feel that eighty years is not quite a long enough time horizon!

Read the whole thing.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

Troy a better measure would be the appreciation of the stock market to inflation, not gold.

What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.

Gold is the best measure of inflation.

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

The price of gold has more than doubled since 2001.

Clearly the cost of living hasn’t increased that much.

What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.

Lets see what has massively increased since 2001:

Eggs
Zinc
Corn
Iron/Steel
Rent/Home Prices
Gas
Rice
Concrete
Flour
Nickel
Healthcare
Copper
Tomatoes
Silver
Tortillas
Onions
Stainless Steel

"All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams

Golly are you implying that some commodities change their prices outside of the inflation rate?

Weird, what a concept.

What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.

Gold is the best measure of inflation.

Really.  Funny but between 1979 and 2000 Gold dropped from almost $700 per ounce to $300.

How exactly does the gold market work?  Clearly there is supply and demand for gold.  Rappers need Grillz, electronics need gold, all kinds of fun uses.

Is it possible that gold production fell almost off the charts due to low prices in the 1980’s and 1990’s and that prices are rising now due to depleting the supply of gold for use?  Or is gold just kept in a bank somewhere in Ft. Knox?

You may as well be measuring inflation in pork bellies or frozen concentrate orange juice or cattle futures.  Gold has not a damned thing to do with the world monetary market for the last 30 years and is now a commodity for use rather than a currency standard.

Don’t tell Troy but I think there’s a lot of things going on in the gold market.

For one thing I think the Russians sold a lot of their gold depressing the price.

I wouldn’t be surprised if the Chinese people with their new found affluence aren’t buying up a fair bit.

Gold is more of a hedge for those worried about total melt down of society.

What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.

For one thing I think the Russians sold a lot of their gold depressing the price… Gold is more of a hedge for those worried about total melt down of society.

Ironically, the Russians sold all of their gold BECAUSE OF THE MELTDOWN OF THEIR SOCIETY.

http://www.goldsheetlinks.com/production.htm

Ever heard of heap leaching versus traditional milling and extraction?  Ever seen massive heap leaching operations or open pit gold mines versus traditional underground mines?  I worked in underground gold mines from when I was 15 until about 20 when my grandfather abandoned gold mining because the numbers just wouldn’t work.  Because the Russians and South Africans flooded the market and the price was too low to even worry about producing gold.  But with new uses for gold, demand has risen and as expected, mines are reopening to supply gold because of the higher prices.

I don’t claim to know it all, but I know a thing or two about gold mining, milling, and the gold market.  And not a damned thing about it has to do with inflation or the value of money.  It is all supply and demand for a commodity.

Gold is the best measure of inflation.

Troy, where did you get that misinformation.  To make that statement, one could surmise that you have never been in the gold market.

You don’t have to be a moron to be a liberal Democrat but it sure helps.