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On Gold And The US Debt Trap?

Tyler Durden's picture


Via John Butler of Amphora Commodities,

As with much of the euro area, the US is in a debt trap. All the politicking in DC does not change this economic fact. The federal debt is going to be devalued. Yet even now, amid a new economic slowdown, US consumer price inflation is set to remain positive following a large spike in global food prices. Few things damage economic confidence more than food price inflation. Combined with the escalating financial crises in the euro area and also now in US municipals, the global slowdown already underway is likely to accelerate, leading to a further deterioration of sovereign finances. The debt trap is deepening, with ominous consequences for monetary and price inflation. The dollar and most currencies remain severely overvalued; gold and most commodities, undervalued.



The US is in a debt trap, plain and simple. Yet policymakers refuse to talk about it because to admit that it is a debt trap is to admit policy failure. After all, it is rather difficult to blame a government debt trap on ‘free-markets’. (Not that free markets had much to do with the world’s most regulated industry—finance and banking—blowing itself up in 2008. No, such colossal blowups require vast amounts of government intervention.)


That said, the US is not in the same debt trap as much of the euro-area because its debts can be systematically devalued through monetisation by the national central bank. In the euro-area, this requires some degree of consensus, and the interests of all members are not congruent. Hence the constant back-and-forth between those who want to be bailed out of their debt traps, and those who are being called upon to do the bailing.


The US has no such monetary straightjacket, or any fiscal straightjacket for that matter. President v Congress, Republicans v Democrats, left v right: If there is anything the post-WWII history of US monetary and fiscal policy should teach us, it should be that when it comes to growing the money supply and the federal debt, Washington DC is run by a single branch of government, a single party and a single point on the left-right spectrum. And this branch, the party that controls it and its political orientation is not something that changes with elections. It is a national political pathology.


But remember, the US debt is denominated in dollars. The Fed can assume a growing portion of the debt with incremental monetisation (QE3, 4 … X) and, Vóila! the debt can be devalued to whatever level that branch, that party, deems desirable. While this might imply that government salaries are also being devalued along with the debt, no matter, they can just vote themselves more of those periodic salary increases and all will be well in DC and also some rather nice Virginia and Maryland suburbs.


Those not in a position to vote themselves pay rises should consider buying some gold instead. Diluting dollars are not a store of value. Gold is.

Full report here (pdf):



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Tue, 07/24/2012 - 15:09 | 2646523 I think I need ...
I think I need to buy a gun's picture

I cant wait for fuckin 2013,,,,,,end of times

Tue, 07/24/2012 - 15:21 | 2646551 bdc63
bdc63's picture

It's a 'debt trap' ... it's a suicide rap ...

Tue, 07/24/2012 - 15:22 | 2646564 bigdumbnugly
bigdumbnugly's picture

we gotta get out while we're young...

Tue, 07/24/2012 - 15:35 | 2646616 bdc63
bdc63's picture

who would have ever thought that decades after high school I would still be quoting the boss as a metaphor for my life ...

Tue, 07/24/2012 - 15:46 | 2646654 Pladizow
Pladizow's picture

"I am an enemy to all banks discounting bills or notes for anything but coin. But our whole country is so fascinated by this Jack o’ lantern wealth, that they will not stop short of its total and fatal explosion". Thomas Jefferson

“It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.” – Thomas Jefferson

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner, as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system involved."-  Ludwig Von Mises

"When a government is dependent upon the bankers for money, they and not the leaders of the government control the situation, since the hand that gives is the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain. - Napolean Bonaparte

Tue, 07/24/2012 - 16:37 | 2646874 bankruptcylawyer
bankruptcylawyer's picture

I'll trade quotes with aphorisms.

"to the victor go the spoils" is never fully fleshed out. because to the borrower goes victory. militaries will pay for advanced weapons with borrowed money.  And why would they choose to lose a war without wealth lacking today, when they can fight it with promises their civilians and vassals will pay for in the future ---if only they win the war. 

war---winner take all competition-----explains the long term persistence of bond rollovers for centuries. it explains the european city-state financing mechanisms. It explains a lot. 

Prolonged wars, such as COLD wars , which result from strategic weapons (nukes) that prevent opponents from winner take all tactics ----result in LONG term expensive arms races which can produce enormous debt burdens on countries. these burdens routinely force inflationary money printing cycles , depriving the populations of their savings and purchasing power in order to 'pay off' the debt , or otherwise eradicate it by simply defaulting on the debt backed currency and redenominating the currency/and bonds as it then becomes worthless. 

SO-----these cycles of 'long war' require persistent inflation and high debt burdens. 

whichever countries go broke first have the disadvantage of being financial targets for looting by solvent countries at large, even 'friendly' nations. However, the countries that go broke second, face the disadvantage of facing enemies that have already consolidated and learned their lessons.  Perhaps, the bigger they are, the harder they fall kind of thing. 


many 'collapse' academics have pointed out that america is far less prepared as a society to deal with the sort of financial collapse that russian society had to deal with in the 90's. I'm not certain how realistic many of their comparisons are. Psychological comparisons aside, their main point, that the United States is so reliant on such an expensive manner of providing oil intensive transportation, that it might find the economic and political whip lash of an oil shock far harder to deal with than Russia. I , however, have faith that the U.S. government can be far more effective at nationlist-fascist organization, than Russia was post collapse. 

It remains to be seen .



Tue, 07/24/2012 - 18:38 | 2647374 duo
duo's picture

give Von Clauswitz his due.

Tue, 07/24/2012 - 21:51 | 2647763 engineertheeconomy
engineertheeconomy's picture

According to Shadow Stats, the M3 is currently $879,357,318,192,692,341,445.13

Wed, 07/25/2012 - 07:19 | 2648356 Thamesford
Thamesford's picture

That's a long "shadow"; the sun must be setting on something.

Tue, 07/24/2012 - 20:37 | 2647634 jerry685
jerry685's picture

Is that you Chris?

Tue, 07/24/2012 - 23:01 | 2647881 dbomb12
dbomb12's picture

How about 10 years after

Everywhere is freaks and hairies
Dykes and fairies, tell me where is sanity
Tax the rich, feed the poor
Till there are no rich no more

I'd love to change the world
But I don't know what to do
So I'll leave it up to you

Population keeps on breeding
Nation bleeding, still more feeding economy
Life is funny, skies are sunny
Bees make honey, who needs money, monopoly

Alvin lee was a visionary


Tue, 07/24/2012 - 15:23 | 2646566 Beastmanager
Beastmanager's picture

When I think of goldfinger I visualize someone buying gold and giving incompetent leaders the finger. What an age of incompetence that force entrepreneurial people to buy gold.

Tue, 07/24/2012 - 15:23 | 2646572 ZerOhead
ZerOhead's picture

... all over the map ...

Tue, 07/24/2012 - 15:28 | 2646591 Stoploss
Stoploss's picture

I believe it is the dollar that is "over valued" simply from a paper assignation standpoint. Rather than gold being "undervalued" in relation to a paper ponzi with assigned values made by school children. How exactly, do you value something that existed before this planet did?

Oh, right..

Tue, 07/24/2012 - 16:25 | 2646866 duo
duo's picture

Where's Admiral Akbar?

Tue, 07/24/2012 - 15:12 | 2646531 Bastiat
Bastiat's picture

Think of the stimulus of the 550M rounds of just .40 cal recently ordered by DHS!  Then there will be the coffins and funeral services.  Pure Keynesian genius.  Krugman must be behind it.

Tue, 07/24/2012 - 15:22 | 2646563 youngman
youngman's picture

That will be a good investment for them ..if they sell it....if they use it..probably not

Tue, 07/24/2012 - 15:25 | 2646576 caconhma
caconhma's picture

The U.S. Army is preparing to suppress the riots

Manual of the U.S. Army Military Police for "Operations in the Civil Disturbances," has recently become known, describes how to use military resources in the country to suppress the rebellion, confiscation of firearms, and even murder of Americans in the United States during the massive civil unrest.

From this document, released in 2006 and designed for self-study in the military and police schools of the U.S. Army, it becomes clear that the operations described in the manual include CONUS and OCONUS, that is, the continental United States and the territory beyond its borders. The manual describes how military means can be used to "help local and state authorities to restore and maintain law and order" in the event of riots, civil unrest, or the declaration of martial law. Military means will be used mainly to break up unsanctioned meetings and patrolling areas to prevent violations of the unlawful acts, written in the document and stated that during the recovery operations of the order of the military may resort to a show of force, creating roadblocks, breaking up the crowds, to use poison gas for police operations, patrol, use of force or security provisions, and if necessary perform other operations. Guide also describes the procedure for placing prisoners in temporary internment camps under the instruction of the U.S. Army FM 3-19.40 "internment operations / movement" and "re-education" for the internment of 'positive assessment of U.S. policy "with the contents of the camps in the United States. The document contains a list of weapons for use against the rebels or protestors, including the police grenade. It requires the military to carry weapons in a safe position - the psychological tactics of the rebels for a show of force. It also provides non-lethal weapons and water cannons. This guide explains how the military may be involved in espionage and gathering information about dissidents to identify individuals, groups and organizations, particularly threatening or creating a disturbance. Toxic chemicals are also used for the purpose of suppressing the resistance. This suggests the troops and confiscating firearms. "Restrictions on the sale, transfer and storage of critical materials such as gasoline, firearms, ammunition, explosives, police forces will help to minimize some forms of violence" - the document says. In December 2008, "Washington Post" reported on plans to deploy another 20,000 employees of American troops in America, for the purposes of internal security after the September 2011 and expand the militarization of the country by means of Northern Command (NORTHCOM) in preparing for possible civil unrest following the total economic collapse or a massive terrorist attack. Released in the same year, the report of the Institute of Strategic Studies, U.S. Army War College warned that in a series of crises in the country may experience massive civil unrest, called a "strategic shock." "Widespread civil unrest within the U.S. defense establishment to reorient the force priorities in extreme situations to protect the basic domestic order and human security '- according to the report, signed by Lt. Col. Nathan Freyr. He adds that the military may be required to suppress purposeful domestic resistance.

Tue, 07/24/2012 - 15:41 | 2646648 El Oregonian
El Oregonian's picture

Lt. Col. Nathan Freyr???

That light bird better "STAND DOWN!". I'm sure no one wants to see anybody start pigeon hunt'in...

Tue, 07/24/2012 - 15:43 | 2646658 DosZap
DosZap's picture

The U.S. Army is preparing to suppress the riots



No doubt they will, IF the call out is legit.

The Military has a death bound oath,to Protect the Const and the BOR's.(not to obey illegal EO's/PDD's)

IF an illegal order is given, look for mass defections to the peoples side.

They will be in many cases going against their own families, and I for one do not see that coming down.

Tue, 07/24/2012 - 15:47 | 2646674 Bastiat
Bastiat's picture

Immigrants serving a tour to get citizenship would be good candidates for riot suppression.

Tue, 07/24/2012 - 15:57 | 2646713 Temporalist
Temporalist's picture

Holy shit that is an amazingly cynical observation so it is probably exactly what will happen. 

I can see it now.

"If you love America, and want to be an American, you must first shoot those Americans over there who are protesting against your new home."

Tue, 07/24/2012 - 16:05 | 2646753 Bastiat
Bastiat's picture

Noncoms will be drugged up, burned out Iraq/Afghan vets selected for demonstrated sociopathy. 

Tue, 07/24/2012 - 22:31 | 2647827 Bringin It
Bringin It's picture

I read that the armour units squashing people in TienAmen Sq. where from Inner Mongolia - different language, ethnic group, from way out in the boonies, most likely with little education.

Tue, 07/24/2012 - 16:43 | 2647002 4horse
4horse's picture


Fast'n'Furious, whose militia is being armed . . .

Tue, 07/24/2012 - 16:22 | 2646845 gnomon
gnomon's picture

The U.S. military would split much sooner and harder than what we saw in Syria.  I guarantee that.

(Smoke that in your pipe anybody who seeks to usurp what is left of LIBERTY via permanent Martial Law such as Chavez has instituted on a de facto basis.  We may look a lot like a Banana Republic, but half of the people are not there yet.  There are a lot of pissed-off Americans at the moment and many of them are military.  This is not a sure deal for ANY future President, not now anyway, maybe in 15 years).

Tue, 07/24/2012 - 16:43 | 2646996 Hobbleknee
Hobbleknee's picture

"IF an illegal order is given, look for mass defections to the peoples side."

That didn't happen when the were ordered to confiscate guns after Katrina.

Tue, 07/24/2012 - 23:16 | 2647921 Joseph Jones
Joseph Jones's picture

Good point.

Obummer used a drone to murder the American citizen, age 16, son of Anwar Al-Awlaki.  Some scum of the earth CIA employee had no problem doing the deed for Obummer.     

Tue, 07/24/2012 - 18:33 | 2647367 grgy
grgy's picture

DosZap, I sure hope you are correct. In that respect, the military would behave differently than the police in Oakland, Anaheim, New York etc.

Tue, 07/24/2012 - 15:50 | 2646687 drivenZ
drivenZ's picture

"From this document, released in 2006"


tell me again how this is relevant? I guarantee thev'ye always had some form of this doc for the past 100 years. means nothing. 


Tue, 07/24/2012 - 22:33 | 2647829 Bringin It
Bringin It's picture

Whiskey Rebelion - 1789?

Tue, 07/24/2012 - 16:44 | 2646981 Hannibal
Hannibal's picture

With the exception of a couple of "nutballs" here and there, Americans are Not going to take up arms and violently rebel against who or whatever (fill in the blanks here) in any significant numbers. NorthCom, DHS etc are grossly misreading the average US citizen who are simply way too nice or too dumb or too asleep or too scared and/or too fucking cowardice, take your pick (no pun intended).


Tue, 07/24/2012 - 17:01 | 2647099 BooMushroom
BooMushroom's picture

Sure, now. But what about when they stop doing SWAT raids for pot and start doing it for "hoarding" food > 7 day supply?

Tue, 07/24/2012 - 22:12 | 2647799 secretargentman
secretargentman's picture

Well why on earth would anyone need more than a seven day supply of food? If people are hoarding, they're starving their neighbors' babies, and should be strung up.  /sarc


You know that's what you'll hear on the noose news, and a lot of people will buy it.

Tue, 07/24/2012 - 15:30 | 2646599 magpie
magpie's picture

'Shovel ready' was promised

Tue, 07/24/2012 - 15:43 | 2646656 I did it by Occident
I did it by Occident's picture

as in any troublemakers will be using the shovels in the re-education camps. 

Tue, 07/24/2012 - 15:38 | 2646637 I did it by Occident
I did it by Occident's picture

Anybody ever read the short story "and all the earth a grave" by MacApp?  Reminds me of that.  Coffins with be the next fashion thing.  Coffin is the new black  :)

Tue, 07/24/2012 - 16:11 | 2646758 gnomon
gnomon's picture

Won't be no coffins and funeral services.  Instead there will be bulldozers and mass graves.  Go big Caterpillar and Bobcat.

Now for myself I am hoping for some friendly ditch out in the middle of nowhere, (after I have done all that I can).

Tue, 07/24/2012 - 18:11 | 2647322 Mesquite
Mesquite's picture

Coffins (plastic) already in stock..Check FEMA camps..

And I thought it was 450 mn rounds of .40 cal (hollow point)...

Now that workers are no longer needed as Big Corporations

moved most jobs offshore...(More n more profits, less environmental regs.)

...Home of the Brave" being transformed into "Land of the Elites, Home of the Insiders.."


Tue, 07/24/2012 - 15:12 | 2646534 zero19451945
zero19451945's picture


Any the rest of the world is going to say "Sure, print trillions of dollars, crank commodity prices to the moon, and cause riots in our own country. Oh, and by the way, please retain reserve currency status!"

There are severe consequences for printing the amount required to inflate the debt away. I'm not saying they won't do it, but you're not going to do all that and be fine at the end.

Tue, 07/24/2012 - 15:32 | 2646598 Ignatius
Ignatius's picture

"...reserve currency status!"

As in, 'Keep sending us free shit while you stack our promises'.  That system works right up until it don't.

Tue, 07/24/2012 - 15:12 | 2646535 SMG
SMG's picture

The article is absolutly true.   Although I wonder if in the next few weeks/months, will we not get some excellent buying opportunities for PM's and even the mining companies.

Tue, 07/24/2012 - 15:30 | 2646600 Northeaster
Northeaster's picture

I asked the same thing last week based on this:

August 6th would technically mean a massive sell off due to margin increases. Will it happen? I don't know, maybe this could be extended 90-Days again. However, like you, I'm looking for a good buy time. With deflation settling in, gold will take a hit, but it's the rise after that I'm looking at. With cash sitting on the sidelines, I'm holding on until August 6th, should a sell off ensue, I'm buying with both hands.

Tue, 07/24/2012 - 15:14 | 2646545 orangedrinkandchips
orangedrinkandchips's picture

"poor man wants to be rich....RICH MAN WANTS TO BE KING..."

Tue, 07/24/2012 - 15:15 | 2646548 hugovanderbubble
hugovanderbubble's picture

Estimated colleague:


With Debt Haircuts Across the world in such private and public debt....

Gold will suffer (short mid term)

Tue, 07/24/2012 - 16:41 | 2646979 johny2
johny2's picture

with all due respect,


the financial system can hardly survive Greece to default on its debt, imagine if the debt haircuts get applied around the world. It is the same result always, default or devaluation, deflation or inflation, the fiat currency will lose against the real stores of the value. Dollar had a good run, and will be sorely missed by many crony unproductive fellow, but its fall is very near.

Tue, 07/24/2012 - 17:21 | 2647180 XitSam
XitSam's picture

I'm ok with the financial system being destroyed as long as no on tries to bail them out.  Will it be a rough patch for everyone? You bet. Will we be better off? You bet.

Tue, 07/24/2012 - 17:10 | 2647121 Black Forest
Black Forest's picture

Perhaps if you nominate bullion in USDEURCHF.... In the medium term (>~ 1 yrs) it will surely help saving value - which was previously accumulated in paper. No chance to eliminate all that paper debt.


Tue, 07/24/2012 - 15:15 | 2646549 Ignatius
Ignatius's picture

"Diluting dollars are not a store of value. Gold is."

Nothing more need really be said.

Tue, 07/24/2012 - 16:31 | 2646885 ZeroHedgeFan
ZeroHedgeFan's picture

I agree that the dollar is being diluted quickly. However gold is also being diluted as well at the slower pace. The new gold being dug out from underground increases the amount of total gold every year. In order for the value of gold to increase in dollar term, the fed has to print dollar faster than the new gold being mined. Correct? I think land is a better investment than gold because the supply will never be increased!

Tue, 07/24/2012 - 17:40 | 2647242 Silver Pullet
Silver Pullet's picture

Land can only be "rented". Don't pay your property taxes and you lose it. Also, land can't be lost in a boating accident and so could be confiscated.

Tue, 07/24/2012 - 19:25 | 2647475 Beam Me Up Scotty
Beam Me Up Scotty's picture

Exactly. They can tax you right out of your property or take it by eminent domain. And it's not very mobile either. Also if you aren't there to defend it it's not yours either. Good luck kicking the squatters out of your lake cabin when TSHTF.

Wed, 07/25/2012 - 05:55 | 2648282 HungrySeagull
HungrySeagull's picture

I have heard that California has begun to confisicate land and kicking people out for living "Too simply" in other words, not handing over money for utilities etc.

Tue, 07/24/2012 - 18:50 | 2647392 Storm Bringer
Storm Bringer's picture

Though I agree with your premise, gold production is termed in millions of ounces and money printing each year has grown to be north of a trillion.  The difference between a million and a trillion is huge.  

Tue, 07/24/2012 - 15:16 | 2646553 mrktwtch2
mrktwtch2's picture

we keep hearing the sky is falling but it doesnt..when they threw out mark to market accting in march of 09..fundamentals ceased to exist and the fed found a usre fire way to move the stock market where ever it sees fit..i just trade each day as a new day..trends dont seem to last more thn 48 hrs..

Tue, 07/24/2012 - 15:23 | 2646559 Solon the Destroyer
Solon the Destroyer's picture

The Tylers havefrequently pointed out how 2012 looks like a copycat of 2011.

Anyone looking at a gold chart of 2011 should be buying gold today.

Gold ramped in the last week of July last year and did not come down for months.

This time, considering the measures that will be taken to save Euroland and "prevent a recession" in the USA, it might never come back down to these levels.

Tue, 07/24/2012 - 15:31 | 2646581 covert
covert's picture

sorry but you are wrong. people who actually understand economics will always turn 100 bagger profits ahead of inflation.


Tue, 07/24/2012 - 15:37 | 2646632 Black Forest
Black Forest's picture

True. And never forget the gold price nominated in EUR:  (one year) (five years)

Tue, 07/24/2012 - 15:23 | 2646567 Everybodys All ...
Everybodys All American's picture

You are likely to see much more downside in the markets before that ever happens in my opinion. Again this will unleash inflation like we have yet to see and it would be recognizable even by the genius Bernanke.

Tue, 07/24/2012 - 15:25 | 2646577 Richard Head
Richard Head's picture

Where's RobotDouche to tell us how CMG and NFLX are better than gold?

Tue, 07/24/2012 - 15:26 | 2646586 Dr. Engali
Dr. Engali's picture

There is no doubt the det will be devalued , but will they try to confiscate our gold first is what I want to know. History suggests they will.

Tue, 07/24/2012 - 15:49 | 2646670 Temporalist
Temporalist's picture

Not true as when they "tried" that the last time people actually owned gold and it was used to back the dollar (and most people ignored the executive order anyway; plus it didn't apply to jewelry).  Now fewer than 2% own it, there is no rationale for them to confiscate something that does not back the dollar, the US has more of it than any single country by vast margins, and Ben Bernasty said it's just "tradition" and not money.


They even screwed themselves into a corner on that front.  Also if the US tries to confiscate who else in the world will abide by "illegal" gold?  So many people will flee the US and only the zombies will be left to run in cicrles and they won't have any gold anyway.

Tue, 07/24/2012 - 15:51 | 2646692 Dr. Engali
Dr. Engali's picture

Fair points. I just don't want to be screwed  by sitting on a bunch of eagles that will get me some jail time if I still have them after the point of devaluation.

Tue, 07/24/2012 - 16:04 | 2646741 youngman
youngman's picture

It does not back the dollar now...but to "SAVE" the dollar as they will say....because the Chinese will have their currency backed by teh astute Politicians in Washington will say that we have to back ours they will either tax it to death...make it illegal..of some other stupid ploy...they won´t just lay down and say you won....a way..they will try to steal it...we will become the NEW 1%ers....

Tue, 07/24/2012 - 15:29 | 2646597 q99x2
q99x2's picture

Hate when markets just sort of die slowly lower. Usually a precedent for a quick spike up.


Tue, 07/24/2012 - 15:33 | 2646615 ParkAveFlasher
ParkAveFlasher's picture

Bitchez?  GOLD.

Tue, 07/24/2012 - 15:57 | 2646716 gjp
gjp's picture

Read it earlier today.  This woman is just another Keynesian tool.  I had to stop when she said she had a weakness for the Laffer Curve.

Tue, 07/24/2012 - 15:41 | 2646649 Super Marco
Super Marco's picture

And now I conform to buying Gold, Female dogzzz

Tue, 07/24/2012 - 15:42 | 2646652 Benjamin Glutton
Benjamin Glutton's picture

As I recall way back in 1971 France sent a warship to N.Y.,N.Y. to retrieve their(lol) gold. Fiat forever baby!

Tue, 07/24/2012 - 15:44 | 2646666 Seasmoke
Seasmoke's picture

i have $100,000 in fiats and yet i still cant pull the trigger to go all in on gold.....please help !

Tue, 07/24/2012 - 15:48 | 2646676 Temporalist
Temporalist's picture

Okay go half in on gold and half in on silver.  Problem solved.  Or you can in on gold and a double bear gold index and if your physical gold ever plummets you'll be paper rich but still own the shiney.

Tue, 07/24/2012 - 15:50 | 2646686 Seasmoke
Seasmoke's picture

i already did the 50% silver, but lost it all on the boat ride home......the gold buy isnt coming as easy.......price scared ?????

Tue, 07/24/2012 - 16:49 | 2647039 johny2
johny2's picture

buy silver with $30000, and keep your mouth shut about it. use the rest of the fiats to buy something else that has traditionally kept its value. don't need to go 100% in one thing.

Wed, 07/25/2012 - 05:57 | 2648283 HungrySeagull
HungrySeagull's picture

That damn silver at 30,000 = two monster boxes.

It's nice to have 100K and don't know what to do with it.....

Tue, 07/24/2012 - 17:15 | 2647154 fnordfnordfnord
fnordfnordfnord's picture

PMs are not so much an investment as they are an insurance policy. Put 10%-25% in PMs and hope it never pays off.

Tue, 07/24/2012 - 18:18 | 2647336 cristo
cristo's picture

don't go all in buy a Kg and keep some cash on hand for potential sales or emergency's.

Tue, 07/24/2012 - 15:45 | 2646667 jimmyjames
jimmyjames's picture

I wouldn't count on the (busloans) chart as being inflationary-

Where is there any deployment of this cash into the economy from these loans- last i looked-businesses were downsizing-

The last time this happened it was because business could recognize the risk in the market and maxed out credit lines in case of another credit lock up-



Corporate "Cash" - Cheering the Asset and Ignoring the Liability

Tue, 07/24/2012 - 15:57 | 2646715 GlomarHabu
GlomarHabu's picture

I suggest Au/Ag and lot's of hot Pb ... keep the Au/Ag and use the Pb to return to the Bill of Rights et. al.

Tue, 07/24/2012 - 15:57 | 2646720 youngman
youngman's picture

And here comes the fed leak from the WSJ......QE rally

Tue, 07/24/2012 - 16:10 | 2646781 Bansters-in-my-...
Bansters-in-my- feces's picture

I see the terrorist hammered silver down.

FUCKING banking terrorism with the USA Goverment blessing,and encouragement.

Fuck yous,all involved...

Tue, 07/24/2012 - 16:19 | 2646836 Quinvarius
Quinvarius's picture

Silver will take care of itself.  Total COMEX inventory + total SLV claimed inventory continues to sink.  And I don't think SLV really has any left to steal  and add to the CME warehouses in London.  They lost 10%, and I think that was all they had to work with.  So we should start to see total CME inventory of silver go into the terminal decline soon.

Tue, 07/24/2012 - 17:36 | 2647229 XitSam
XitSam's picture

China is supposed to be sucking up silver as well as gold now.

Tue, 07/24/2012 - 16:24 | 2646856 AchtungAffen
AchtungAffen's picture

"(Not that free markets had much to do with the world’s most regulated industry—finance and banking—blowing itself up in 2008. No, such colossal blowups require vast amounts of government intervention.)"

What? Finance and banking the most regulated? Sure?

Tue, 07/24/2012 - 16:53 | 2647050 sgorem
sgorem's picture

fuck it, my ass is going to take some mortician classes online from Phoenix. looks like that's where the jobs are going to be in the "Change We Can Believe In" world of the delusional, psychopathic ObummerLanders".( a little true sarcasm for the illiterate trollers).

Wed, 07/25/2012 - 05:58 | 2648284 HungrySeagull
HungrySeagull's picture

It's going to be quite simple. Toss the body into a Norfolk Class Coffin and shove it all into the Crematory.

Tue, 07/24/2012 - 17:02 | 2647112 fnordfnordfnord
fnordfnordfnord's picture

"World's most regulated industry" my ass. The regulations don't mean shit if they're never enforced.

Tue, 07/24/2012 - 17:14 | 2647150 GlomarHabu
GlomarHabu's picture

From a slightly more oblique angle it would seem that if regulations aren't enforced then they are prime bull shit.

Tue, 07/24/2012 - 17:16 | 2647160 richard007
richard007's picture

Yes, the US Debt Trap is set with no escape.

Bible Prophecy indicates that the trap will be sprung and the trip wire is the Iran War.

Iran will take peace from the earth (Revelation 6:4) very soon.

China and other US Creditors will suddenly wake up and make the US tremble (Habakkuk 2:7).

Ready? Or Not?




Tue, 07/24/2012 - 17:32 | 2647216 OutLookingIn
OutLookingIn's picture

You have to ask yourself one question...

(Dirty Harry Act 1:2 Scene)

Tue, 07/24/2012 - 19:02 | 2647415 mt paul
mt paul's picture

economic cleansing

nobody gets out alive...

Tue, 07/24/2012 - 21:43 | 2647751 Bizaro World
Bizaro World's picture

Such discussions make me grieve for our country an its law abiding citizens, however, the realist in me says store value in sound assets PM's, and wait to buy property at fire sale prices. Property values will greatly outpace any perceived fall in PM value....once the manipulation stops, PMs will sky rocket against an accurately valued currency. Study Argentina circa 2001.

Wed, 07/25/2012 - 00:14 | 2648037 Monk
Monk's picture

Gold is not a "store of value" as it has little practical use. It was used as money only because it was difficult to obtain, cannot be consumed, and is durable. Paper money was used to represent it only because it was more convenient, if not safer, to use paper money. The catch is that in time, with a gold standard, more began to have their paper money redeemed, which is why the standard was dropped altogether.

Now, it will be used only as long as people still believe in the use of money (this time, in the form of gold) for trading things around. But after that....


Wed, 07/25/2012 - 16:53 | 2650775 Amagnonx
Amagnonx's picture

Gold IS a store of value - because you can dig up a 1oz gold coin 2,000 yrs after it was minted, and it is unchanged in weight and purity.  Gold is durable.


Gold has value, not because of any conventional 'practical' use - it has value because of its monetary characteristics.  Divisible, durable, scarce, recognizable and acceptable - it also has the bonus of being beautiful.


There is no need for a gold standard, because it is far more beneficial to use gold AS the standard.  While goods are scarce, and people need to trade and exchange - which is basically going to be until human beings evolve into something else entirely - then we will need money - and for now, and probably a long time to come - gold is the standard by which any money is judged.

Fri, 08/31/2012 - 07:48 | 2751919 AmeliaV
AmeliaV's picture

I have never thought that America will have so many debts. Everywhere we take a look we see the debt: consumer debt, federal government, student loans, mortgages and etc. Our economy is debt based, there too much of opportunities for borrowing. So what do we want from consumers who live through payday advances if our government have trillions of dollars of debt? Nobody knows if this will ever over. On one hand, it's not bad that we have lots of opportunities, but on other hand, debt shouldn't be so huge and we should learn more aboutliving within our means. We are really in a debt-trap.

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