An Inflation Moment

[mini]

In regards to Gouchobobs comments about the dollars buying power and what it can buy in Argentina since his infamous comments in 2007 and 2008 about keeping your savings in dollars most who listened to him have lost over 40 percent of their purchasing power since then . Buying food, clothing, cars, sustainable land, gold , silver have increased in value in Argentina by over 50 percent in dollar terms from 2007.

I don't understand how you come to this conclusion. Food, clothing and cars are not assets and have become more expensive no matter what currency you use due to inflation in Argentina.

 

[perry]

I don't understand how you come to this conclusion. Food, clothing and cars are not assets and have become more expensive no matter what currency you use due to inflation in Argentina.

Do you understand economics? In Argentina inflation has normally been offset by a weaker currency but in dollar terms prices have increased incredibly since 2007 . There is not one item today that is not at least 40 percent dearer in dollars the so called (stable currency ) since 2007 .

 

[SaraSara]

Gold is only worth something in its physical form not shares which are also a worthless asset in a crisis.

Perry, shares may be a useless asset in a crisis, but they are what companies issue to raise capital and produce goods and services.

If no one buys shares, how do you expect those companies to go on providing you with the necessities of life? I mean small things like flour, soap, electricity, blankets, toilet paper, clothing, vegetables, heating oil, shoes, phone lines, etc. Can you do without them?

It would be difficult to enjoy the benefits of a gold hoard without all those unimportant things.

 

[perry]

Perry, shares may be a useless asset in a crisis, but they are what companies issue to raise capital and produce goods and services.

If no one buys shares, how do you expect those companies to go on providing you with the necessities of life? I mean small things like flour, soap, electricity, blankets, toilet paper, clothing, vegetables, heating oil, shoes, phone lines, etc.

Can you do without all that?

Perry, shares may be a useless asset in a crisis, but they are what companies issue to raise capital and produce goods and services.

If no one buys shares, how do you expect those companies to go on providing you with the necessities of life? I mean small things like flour, soap, electricity, blankets, toilet paper, clothing, vegetables, heating oil, shoes, phone lines, etc.

We are in a worldwide crisis atm and one that is starting to get legs and will topple the USA in the coming years . How can one put faith in a stock market that is so manipulated that it is a joke is beyond me .

Food is a important commodity and if you can afford this having a large supply of perishable goods is paramount. There are signs that food prices will be at least double in the next years.

All I am saying be prepared and those of us lucky to live in Argentina will be much less affected than people from the Northern hemisphere.

 

[steveinbsas]

Perry, shares may be a useless asset in a crisis, but they are what companies issue to raise capital and produce goods and services.

If no one buys shares, how do you expect those companies to go on providing you with the necessities of life? I mean small things like flour, soap, electricity, blankets, toilet paper, clothing, vegetables, heating oil, shoes, phone lines, etc.

Can you do without all that?

Holding physical gold is different from owning shares in gold funds or futures (paper gold). Shares in gold funds are traded like stock and profits and losses depend on traders betting for or against the future price of gold (a commodity). Gold futures aren't the same thing as corporate shares that are sold to raise capital to produce consumer goods and services, but shares of stock are indeed sold by companies who actually produce (mine) gold (for a profit). If there is a crisis and the price of gold skyrockets, having piles (perhaps bales) of dollars when one sells the shares won't be nearly as desirable as having the gold itself.

 

[SaraSara]

We are in a worldwide crisis atm and one that is starting to get legs and will topple the USA in the coming years . How can one put faith in a stock market that is so manipulated that it is a joke is beyond me .

Food is a important commodity and if you can afford this having a large supply of perishable goods is paramount. There are signs that food prices will be at least double in the next years.

All I am saying be prepared and those of us lucky to live in Argentina will be much less affected than people from the Northern hemisphere.

I have lived through four stockmarket meltdowns, and every time our portfolio recovered and ended up even higher than before. With enough staying power, the stockmarket is a good bet.

People have been forecasting the downfall of the US ever since I remember. But, as Mark Twain put it: "The news of my demise are greatly exaggerated".

In spite of its problems, it is unlikely the US will implode, and thank God for that. Should it fail, it would take the whole world down with it.

The global economy means we are all together in this crisis. There are no safe harbors such as hoarding gold, getting a farm and producing your own food, or hiding in a fortified home in Montana.

 

[French jurist]

Perry, shares may be a useless asset in a crisis, but they are what companies issue to raise capital and produce goods and services.

If no one buys shares, how do you expect those companies to go on providing you with the necessities of life? I mean small things like flour, soap, electricity, blankets, toilet paper, clothing, vegetables, heating oil, shoes, phone lines, etc.

Can you do without all that?

Perry was talking about "paper gold" or whatever it's called, opposed to physical gold. It's too late as well to buy gold companies shares.

Nevertheless, the gold will keep rising. It's far from it's top prices reached 35 or 40 years ago (if you take into account inflation).

It's true that gold has always been a "safe" and it always will be, but gold is very special : being a commodity but not being really a commodity, being a currency but not being really a currency, and so on...

Gold, for people owning +200,000 or 300,000 usd, should be some kind of ultimate insurance.

Actors on the gold market are very powerful, therefore if the crisis starts again and this time for an historic plundge : DJ at 2000 or below,CAC 40 below 1000, ..., States will go bankrupt (not the US, many States on earth) (monetary tools are limited now that leading interest rates have reached values close to 0, and since the 2008 crisis States are now the ones "too big to fail"... You know what's next).
And because of those "big boys" on the gold market, once the crisis is close to be over (let's be sincere, after many years), gold prices will fall down all of a sudden (risk).

The whole system is doomed : Central banks lending money to banks who themselves lend 10 or 50 times this amount of money (money that is not backed by anything : Ponzi scheme).
Governments can inject all the "money" they want in the system, and as Sara said about gold, people are sparing at record levels.

Too, we talk a lot about inflation, but there's worse : deflation

Hyperinflation followed by a deflation ?

Nightmare doesn't end here : I bet that top nations or top groups of nations will close themselves, while far-right political movements will gain more and more power (it's a reflex already noticable).

Orwell had predicted it all (read his letters & articles written right after WW2 = I am afraid he was right again).

Sorry to sound like a conspirationist bozo btw

***

Maybe the solution, during the 2007-2008 crisis, would have been for the banks & others to face their responsabilities (go bankrupt with all the consequences).

Plus dure sera la chute (harder will be the fall)

 

[mini]

Do you understand economics? In Argentina inflation has normally been offset by a weaker currency but in dollar terms prices have increased incredibly since 2007 . There is not one item today that is not at least 40 percent dearer in dollars the so called (stable currency ) since 2007 .

I know enough about economics to know what are assets and what are not assets.

I also know enough about economics to know that all currencies go up and down and that the Swiss Franc is doing really well.

There are a few other things I know as well. But I'll keep them to myself.

 

[mini]

Perry, shares may be a useless asset in a crisis, but they are what companies issue to raise capital and produce goods and services.

If no one buys shares, how do you expect those companies to go on providing you with the necessities of life? I mean small things like flour, soap, electricity, blankets, toilet paper, clothing, vegetables, heating oil, shoes, phone lines, etc. Can you do without them?

It would be difficult to enjoy the benefits of a gold hoard without all those unimportant things.

He's going to learn to make all that stuff by himself.

 

[perry]

I know enough about economics to know what are assets and what are not assets.

I also know enough about economics to know that all currencies go up and down and that the Swiss Franc is doing really well.

There are a few other things I know as well. But I'll keep them to myself.

Please tell Mini we are all waiting in suspense