This page has been archived and commenting is disabled.
Next Stop: Dow 100,000
We thought that Jeremy Siegel, Laszlo "the Ruler" Birinyi and Jim Altucher were optimistic with their stock market targets. Sadly, with their equal to or less than 20,000 Dow Jones predictions, the three merely come off as rank amateurs, especially when compared to the forecast of BNP's head of fixed income Philippe Gijesels, who sees the stock market at 100,000 at some point over the next 25 years. However, unlike the previous trio who bases its forecasts on misguided expectations of economic growth, Gijesels may actually end up being right, because his estimate is predicated on one simple thing: hyperinflation, or specifically 12.2% inflation each year, which for a country like America is tantamount to the dreaded H-word. The other premise used by Gijesels: too much debt which has to be inflated. And actually, he is spot on. The only problem is that when the Dow hits 100,000 due to money printing, which is his underlying thesis, one will needed scientific notation to express the price of any hard asset (and most certainly gold), because if America falls in a two-decade long Weimar republic phase, the Dow may well be 100,000 or 100 googol - the truth is it won't matter as the money this number translated to would be absolutely meaningless. Just ask the Weimar Germans, who may have had some tremendous monthly increases in their 401(k) statements, but all they really cared about is whether they had the latest and most fashionable wheelbarrow model.
»
- 15577 reads
- Printer-friendly version
- Send to friend
- advertisements -
It could happen way sooner . . . if it is priced in drachmas!
I think it time to hand over nuclear button to Sarah Palin with target coordinates set to DC and Manhattan.
And to think that at this moment in time you can still trade this govt script for gold...
What comes first? Dow 100,000 or Dow 1,000?
Craps. I'm not at the Dow table.
Dow will hit 1,000, prob at parity with gold, before it hits 100,000
Dollar is still safest game in town in the market's eyes (for now)
I agree. Plus if you get hyperinflation, you also have currency destruction. Good freakin bye dollar and US markets.
+1 Bye, Bye Dollar. It is the hidden tax on those who can not invest in anything.
It is equal to Zimbabwe Dollars soon. Capitalism at it's best after the FED bails out everything.
What a Sad joke to be a American. Whoops, I am American. Shit, Dam, Fuk.
Foreigners may send get well cards.
We may be honored to see the fabled megaphone pattern, progressively higher highs and lower lows. This sort of pattern occurs in controls systems when feedback regulation fails to compensate for foreseeable events. This is what the algos and their nanosecond perspective will produce. It hasn't mattered to the algos that Greece wasn't fixed, all they cared about is whether they were going to default in the next hour. So they go all out until the event and momentum carries them beyond. You may have experienced this when you came home drunk and tried to put your key in the lock, each time you try you miss by more than the last time until you give up and sleep on the porch. Faulty controls. It doesn't help any that those in charge of moderating the economy are using flawed theory to do it. If you see it happening you can make a killing on the swings because everyone expects the waves to dampen with time. That is so last century.
Sleeping in a fully covered (ak, 47, riots) porsche will be safer than on the porch in a not so distant future, I guess
I know, the sick thing is that when the gold manipulation (along with silver) is demolished we will wish to be able to buy gold and silver at today's prices. Hyperinflation is coming to american and it will be nasty.
Yep.. at which point it will be at parity with a 1 oz. A.G.E..
Think of it.. whether it's Dow 100K, 10K or 1K, the parity concept makes sense.
Sooner or later digital synthesizations of value will have to reconcile to an absolute.
Now we at least know why mainstream presidential candidate Gingrich wanted to build a moon base. Why, so that the Dow could land somewhere.
So can we assume the next big growth industry will be wheelbarrows? Maybe this is what's going to keep Apple going - a iMacbarrow.
Sounds like I should buy JC Penney's on this dip since a pair of fruit of the loom underwear will be costing $1 million and JCP nominal profits will be skyrocketing right?
The hyperinflationists have a few holes in their logic.
I think the lesson here is buy fruit of the loom and skip JC Penny's. In a hyperinflation scenario, real assets, like clean underwear, will be worth a helluvalot more than JCP.
While stocks are slightly removed from cash, they're only really kept at bay by that contract thing. Once you see hyperinflation, don't think contracts are going to be worth much and profits will become non-existent within the hyperinflating economy. Sure they may have the best hedge in the world: Emerging markets, but they'll still feel the pain of the death of American Consumerism. Just write to our neighbors to the south and find out how they dealt with it in the 80s and 90s.
Hint hint: they bought in advance of currency depreciation (we even saw it last year when venezuela or argentina devauled their currency...just before it happened, there was a run up on hard household goods by the masses who won't be fooled again).
Don't we love those bananas ?
What's the price of gold, silver, food and ammunition in this Dow 100,000 scenario?
Here' s a hint. You'll see a lot of superscriptlike this to save on zeros. At Wal-Mart you'll have price cuts like this: Was $1010, now $109
He might be right... only if the system didn't collapse before then. Because before QE3-QE666 are launched and gas costs $25/gal, their heads won't just be rollin' in the streets...
GAME OVER
Thanks for making us smile :)
Just point the mobs to Bernanke and his children when hyperinflation occurs. Like the Czar and his family during the Bolshevik revolution.
and ron pauls silver dime will still buy a gallon.
They always teach Americans math by accident. We learned the metric system from the war on drugs.
I learned the metric system buying drugs. I perfected the metric system it selling drugs. All I had do was buy my own scale. And calibrate it myself.
plus one ounce!!!
http://money.msn.com/personal-finance/article.aspx?post=76bfdc60-43c1-41...
More than a fist full of paper. Add a community on top of that and it becomes home.
An ordinary cup of drinking chocolate costs four million pounds, an immersion heater for the hot-water tank costs over six billion pounds, and a pair of split-crotch panties would be almost unobtainable. A simple rear window de-misting device for an 1100 costs eight thousand million billion pounds and a new element for an electric kettle would cost as much as the entire gross national product of the United States of America from 1770 to the year 2000 and even then they wouldn't be able to afford the small fixing ring which attaches it to the kettle.
piliage, absolutely brilliant, made me spit my whisky lol
I only steal from the best...
http://www.youtube.com/watch?v=kXEgRGvfOwE
Not to worry, by that time, all currency will be digital and BitCoin will solve the need to buy wheelbarrows to haul around all that toliet paper.
Gold will be $10,000 an ounce and silver $100 an ounce. Sorry to bust your bubble but good stocks would outperform inert metals in a 20 year 15% inflation scenario because they would still have REAL growth and reinvestment opportunities and over 20 years the shock of 15% inflation would wear off and get priced in.
Gold and silver only out perform good stocks if Dow goes to 100,000 in 2 years. Unless your gold reproduces.
Btw the people that make out best are the ones that borrow money today and buy stocks.
We assume in your mind those good stocks are hanging out with the Easter Bunny and Santa Claus playing with the nice unicorns.
So you seriously think their are no good companies in the entire market of tens of thousands of companies. I know plenty of names where the P/E multiple is lower then the cash of cash return and you can buy for around book value. And I'm talking good basic easy to understand companies, not high growth super companies where the demand for their services goes away in a bad economy.
Not that that means the market is a buy. I have <$1mm of longs vs $2mm of triple levered shorts. So I'm WAY short, but as the mkt falls I sell my triple levered longs ON THE MARGIN and buy more of my longs. If the mkt goes up I sell the longs ON THE MARGIN and buy more triple levered short ETFs.
BUT PERSONALLY I have different levels of net exposure for different mkt levels. At 666 on SPX you wanted 150%+ net long exposure. At 1,450 you wanted -300% net long exposure. Rinse and repeat.
You now know how to run a hedge fund. I should charge you 2/20 for that! :)
Those good companies still have to compensate employees at a rate equal to or greater than inflation, if they still want people to buy their good products.
As far as I can see, the majority of real wage growth is going to the top floors of good companies.
When the real rate of inflation, not the bogus, hedonically adjusted and substituted CPI hits 20% due to the next overt round of CTRL-P, there aren't going to be enough buyers of products other than food and energy.
It doesn't matter what the paper game does, I'll sell my neighbors a dozen eggs for a pre-'64 dime, and they'll be grateful. Either that, or they can work my land for food and shelter. Have fun scrounging dumpsters with the rest of the financial scalpers.
A monkey could do what you do, no offense intended. Too rote, too much assumed about equalibrium and stability in a time when whole countries are on the brink of financial collapse.
What happens to your model when the markets shut down for weeks or months? Those leveraged etf short funds get frozen and no longer compute ...so they won't be there to hedge your crushed longs.
Like what happened to the fail-safe Titantic when their assumptions failed.
Gold in hand does not have that problem. Gold in hand did not suddenly become illiquid on the week of 9/11, unlike anything else you can think of (other than cash, which only has a fixed value).
You man not be able to eat gold, but you definitely can't eat a levered ETF. If the shit hits the fan, you can purchase food with PM's, the most you'll be able to do with a levered ETF is wipe your arse. Cause it's only paper and paper is only good for two things, scribbling notes and wiping your vertical crack.
You don't even get paper anymore...electronic digits are not even good for wiping..(though they are easier to wipe away any record of)
That presumes assumptions that can be avoided by buying the gold and silver. First, having the gold and silver, I don't need to take my actual savings out and buy shit I'll need next year today. Next, I don't have to sift through the Russel, DOW, S&P et.al. while holding down a 50 hour a week job (and no, I'm not going to do it on the weekend because I want to also have a fookin' life outdoors while I still can run jump shoot fish detect) and figure out the few companies that aren't going to have significant overseas supply chains, curency risk, etc... that will get hammered by a devaluing dollar. Furthermore, I won't have picked the few winners only to have some pustulating bag of corrupt shit blow up where I have them parked and Corzine them.
Granted, I could take delivery of the paper shares... But they aren't shiny and they could burn.
There's no fucking way the U.S. population puts up with 12.5% inflation in gasoline for 25 years. Same with food. Memo to the retard who came up with this prediction - read a fucking history book, like, say, of the period before the French Revolution.
Seems like as good a place to ask as any. I'm a working class stiff without huge amounts of money to throw into PMs. I have ~240 oz of physical silver, and my big worry is - will that be enough? DOW 100,000... why the fuck not... they can just print their way there.
In that scenario the paper and credit offered becomes more and more valueless, less merchants take the paper which drives the "cost" of something in paper form up.
Problem is when your world population is 7 billion, thermo nuclear and scraping for any resource that we haven't pulled from the ground, sky or water and sipping from the same cup of energy.
100,000k will happen, the algo's will keep trading long after the last human stepped foot on the surface of the planet. Well, until the nuclear plants meltdown from a lack of diesel powering the cooling systems in 80% of the legacy nuclear generation in the US. So no worries, as the saying goes; the operation will be a success but the patient is dead.
Thermo-nuclear doesn't match with 7 billion...
http://en.wikipedia.org/wiki/Samson_Option
Not everyone follows the same rules of conduct. Each country that has a nuclear stock pile all have a breaking point as well. All countries, no one is excluded.
They arn't using the diesel generators in the US to block the in flow of water from the ocean like they did in Japan are they?
No they divert the Colorado river to provide the cooling of the rods. The water is used to generate both the power and the cooling of the rods. I've never had a satisfactory answer if the plants just dump it back into into the river or are they still burying it in the Arizona desert as nuclear waste. There's probably a lake ontario buried in drums, all the fresh water should be potable in 5000 years.
Other location along the Mississippi, aka cancer alley, have been caught dozens of times over the industrialization of the area doing that plus dumping. Got so bad in the 70's the river caught on fire.
In N+1 design with high availability, IT borrowed the idea btw. The nuclear plant powers the grid and the diesel/gas generator run the water pumps because if the cooling stopped because of a severe power outage then the backup is independent of power grid and only needs to be supplied as long as there is labour/fuel to continue the operation of the cooling system.
They were also designed that way to act as a last measure defense during the cold war. If the operators of the plant were all killed then the Nuclear plant would contaminate the surrounding area leaving it uninhabitable for anyone. Remember, this is the cold war, it didn't have to make sense, just sound tough. That shifted in the 70's in nuclear plant design where more options to cool the nuclear systems were built into the system because everyone understood Mutually Assurance Destruction and engineers and sciences were pushing for a less severe outcome if everyone died...modular design, compartmentalized, fail over systems. Believe it that Japan could have been worse. It could have been Chernobyl
Now here we are, running out of options.
Cut back on the burbon Bub.
http://en.wikipedia.org/wiki/Nuclear_reactor_safety_systems
Here read it yourself.
More is always better than less. Keep picking up A.S.E.'s as you can. Consider picking up handfuls of pre-65 silver coins from the coin shop as finances allow. All is good. Two dimes should always be worth at least a gallon of gas. You really want to need a dolly to move your silver around.
Only if all 30 companies happen to be AAPL. lol
"I'm rich.....bitch...."
Gold and Silver my Bitchez......
So what will Snickers Bars cost at that point?
DOW = 100,000
Bread = 1,000,000
Steel wheelbarrow to carry paper cash to buy the Bread = 100,000,000
AK 47 and 3k rounds of ammo charged to master card..............priceless
Cash deals only.. Fuck master card.
Put it on your Mastercard and then dont pay.
Then they will know where to go when it's confiscation time.
Yep about 100,000,000 addresses.
Er, that's what the AK is for..................
Don't forget at those levels:
Bread = 10- .22
2 - .308 (steel case of course)
1 - Liberty dime
$1 in pre 2014 US nickels
a shot of single malt
1/4 gallon of gasoline
5 pounds of apples
glass of wine or beer
15 smashed aluminum cans
$1 pre 1982 pennies,
$3 in 1982 - 2014 Cu plated Zn
quart of milk
1/4 ream of clean white paper
5 ink pens
afternoon of detector borrowing with 10% value return on finds additional.
A keeper trout
bucket of crawdads
ad infinitum...
It could happen! In my great-grandson's lifetime.
But, it's going to pay a visit to DOW 8,000, first.
The fed price targets the S&P only. Anything below 1200 opens up the QE-infinity floodgates.
'1,200' how do you know? I say they do the opposite of what everyone expects...give it to em with no lube this time.
Explain your reasoning , please .
'Explain my reasoning' that I do not believe for 1 second that everyones got figured out and front ran what Bernank plans to do and that theyll just deliver what everyone expects? Do I really need to??
It will be earlier or later but guaranteed not not the date Goldman says to expect.
Also theyve got to have the chaos and panic first....a few -60 point days wont do it we'll have to see a couple of those -1,000 pointers first.
There is no frikken way they will allow 1000 point days before the election. They will keep walking this thing down and hammering commodities. A couple negative statements will have them begging for QE. When they can find a way to plug the 1.3 billion dollar deficit then I'll believe QE is through.
"There is no frikken way they will allow 1000 point days before the election."
Do you mean the ruling party always controls the stock market? Stock Market fell in 2008 if you remember.
Delete. My comment was so good I posted it twice.
The banks control the markets and they got their guy in.
1.3 billion deficit? Would that be this afternoons deficit, that accrued between 3:30 and 5:30 PM?
Oops. I meant trillion ... Happy hour you know.
A chart of the S&P with QEs penciled in. First 1.1K, Second 1.2K, so QE3 may actually be at 1.3K but I don't think much below 1.2K. Bernanke cares only about the stock market. That's all he's ever cared about. Housing isn't coming back, jobs aren't coming back, the stock market is all he has and if the market goes down he will be considered a failure by everyone.
Welcome to Bernanke's America - where everyone will soon be a billionaire!
in the future everyone will be a billionaire for five minutes...
And the bastards in congress would continue to avoid indexing the Alternative Minimum Tax which would still kick in at $110k.
And, still no cost of living adjustments to Social (In)Security...
Why adjust when the CPI is still 1.6%?
http://1.bp.blogspot.com/_IveFNaXc6Mo/SL4TqT0L7yI/AAAAAAAADR4/vTdyKbBUrI...
(I wish I knew how to embed pictures)
You have to be a contributor to post pics.
I cover you there :)
http://www.tomchao.com/eu/yugo2fx.jpg
well if the dollar is worthless...then gold could be like....50,000 an ounce on tueday...on wednesday 100,000 an ounce, and then they just kill you and take it, if they can.
or take it first and then bring you to the showers
Yep $5 million an oz gold....of course the dollar is totaly worthless anyway, so it matters not.
and goldbugs become quadrillionaires...fuckin A !
Gold will be sold in Yuans (where the factories are) 50,000 Yuans per ounce or Juans (for housekeeping) 2000 Juans per ounce. Based on supply and demand. Based on BLS emploment figures (to be ammended (transitory)).
Don't inflate the debt, destroy it. Saves us the time and headache of having to go through revolutions and lynchings of those responsible.
Just remember that capital gains taxation is not in "real" dollars. So the IRS will use this opportunity to fleece Americans for making so much money. If this does actually happen, watch out not only for sky rocketing asset prices...but also for sky rocketing capital gains tax increases that will be in excess of 50%.
During dot.com when everyone was handing out stock options at some value...I'm think of an example at Nortel. Employees receive their stock at a 140 dollar strike price. Then come tax time and one hell of a beating it was all considered capital gains. Wrecked alot of people.
Now think AAPL employees...Facebook employees...believe me when you are given your options on your options excerising date, the tax man puts that value as the value and you are liable for all the tax on it.
But what happens when it drops? Say the strike price is 600 as given on the day of X and you sell on day Y for 450. You are still liable in terms of taxes for the full 600 dollar price. In essence, your bosses turn you into bag holders and you hold on tight to those equities. Every wonder why Nortel didn't blow away nearly instantly? The employees were hold the stock price at X after the blood bath and their media died down, all it took was a very soft 2008 market to finish off the company.
Don't be that person. If you are in a sell position, take it and worry about moving around capital gains until next year. Better to have the money in your hand than locked in the market.
Best to have your wheelbarrow mount and .50cal ready. Gotta protect the stash.
An ounce of silver fits in a pocket.
With a debit card, who needs a wheelbarrow?
Shit BNP is down 3% today...
Over there, they dream they print some Euro's all night long.
Reggie is long for sure, hey Reggie?
LOL I love this shit! I call DOW 150,000....I guess that gets me a spot on CNBC tomorrow morning too!
All guests of CNBC preshow stay at the Milford Plaza, the Lullabye of Broadway with low, low stays starting at $49 per night and a complimentry free city paper and Bed bugs.
WiFi build on the most advanced form of sneakernet, 1's and 0's hand delivered upon request.
Oh, yeah, one more thing. Buy your wheelbarrow at JC Penny's... while it lasts.
This is the one I just ordered (MADE IN CHINA)
http://aaron.manufacturer.globalsources.com/si/6008841434239/pdtl/Wheelb...
LMAO! It's more like DOW 100,000 dead banksters, with a market cap of 500,000 banksters on the chopping block.
The executioners "axe" will be forged in Gold/& Silver, with a titanium handle!
Well, at least he's not making this call purely based on a prediction of "growth."
Now lets get the answer using 'inflation adjusted dollars'.
Yeah if you price the SnP in inflation adjusted terms it's actually incredibly depressing. I think it's up 10x since 1929.
I'm calling it right here right now boys...
Dow 1,000,000. That's right you heard it here first.
Who has the biggest fucking balls in the room now?
Your "right nut" is big enough to feed every Greek for 25 years, Dr. Engali!
DOW 666,666.07
Why did you stop? Tyler gives infinate space for replies. Why not use it? .... Dow 100,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000
Damn it! I'm yesterday's news already.
I thought Dow 100K was scheduled for late October.
IF YOU STILL BELIEVE IN THE UNITED STATES...end of argument...
for many europeans the usa is still santa claus....you better be good, you better be nice....santa claus is coming tonight...
Mandy Candy lookin good. BTW have all the Dow 6,000 callers been weeded out from any media outlet? Or has everyone come to the conclusion that Bonkers Ben and his central bank ilk have locked the printing presses into turbo and we will never see the '08 lows ever again?
It's probably the latter, which means that if everyone is thinking it can't happen...
If the market hits 100k, the Zimbabwean currency will have stiff competition.
2012-2015 A Dow Odyssey
http://www.wnd.com/2012/05/mark-this-date-for-potential-disaster/
(starring)
Hal 100.000
http://www.youtube.com/watch?v=-2KiPIgB9Qs
He said the bear market began in 2000? Technically, I agree, but the extend-and-pretend pump through 2007 (which doubled private sector debt between 2002-2007) was the top. So let's shift that over to the right by 7 years.
I'm still shooting for Dow to bottom around 2021 @ ~4000, then bottom-bounce til around 2023, then the next bull comes into play. Given a lifespan of about 15-20 years, that puts it somewhere between 2023-2040ish. Given the lower starting point of Dow 4000, at his annualized clip of 12.2% that'll put the Dow around 71,100 by the time shit gets real ugly again.
But hey, opinions and assholes, right?
I thought the headline read "10,000" and I was about to agree, if 12k snaps.
Yet I can't disagree with the hyperinflation scenario driving all asset prices up, as fiat is faith based and has no intrinsic value, so anything can happen.
It's a mad world, after all.
hyperinflation isnt in the cards for this country. not going to happen.
Great logic. Not going to happen, because...just because. Not going to happen.
Thanks for the laugh.
He''s right. It's in the cards. The psychic median with the tarot cards at 3am on channel 114 said it was so.
kito is a well known flat earther around here. Why? Well.....just.....because.
right bay of pigs, a flat earther. lets look at my flat earth views to date...NO QE3 until after elections--so far, check. gold WILL SUFFER AND NOT REACH 2000 without said qe3, so far, check........there will be no war with iran, so far, check......should i go on? i suppose the fact that deflationary forces are kicking the crap out of silver, gold, oil, etc this year, WITHOUT QE3, is a flat earth view??????.........just wait till the masssive credit unwind happens. there will be no time for hyperinflation.....learn......
Check. Check. Check. No, don't go on. Please, just STFU and let it play out before you pat yourself on the back kito.
right, you hyperinflationistas are right because its always going to happen. ive heard this since 2008. still waiting.........
Thanks for putting words in my mouth. Ive never said hyperinflation once on this blog.
does every statement have to be backed up with an overt expression of "logic", when the statement itself is inherently logical?
Statements of opinion are never "inherently" logical. You have to prove your logic. You litterally need a sound proof. Otherwise all you have is an opinion, and guess what Kito, everyone has an opinion.
It couldn't possibly happen here Mr Lennon Hendrix...
/Hopium
my expectations of a massive unwind in the system crushing all asset classes except cold hard cash is hardly made of hopium.
That is the most solid argument I've read against hyper inflation. You've convinced me to sell all my gold, silver, and lead. I'll put the money to work in the market right away. Thank you . :->
What do you mean "not going to happen"? It's happened before here... it could and most likely will happen again.
When given the choice of cutting back or printing money the answer is always printing money.
Same as it ever was.
I think hyperinflation is not going to happen, because everyones broke. Simply cant pay for hyperinflation.
And for those who bring up 'Weimar' or 'Zimbabwe' examples, remember in those cases the people had the money. Today only the banks have the money.
/sarc-on
What? You're using that "money multiplier" thingy? Whuddya mean money has to "move" in order for hyperinflation to take hold?
/sarc-off
You're right. Debt-based money can only expand if new debt is created. Everyone stares at the US public debt, but doesn't seem to ever look at the private deleveraging that's been happening since 2008...
$15.8T is a fun and cute number. But $42T in private sector debt, seems more impressive.
Oh and yes I'm aware of the unfunded liabilities. They simply won't be paid. Why? Because they simply cannot be paid. They could print I suppose, but I highly doubt it. Besides, when it comes time to look out for "the little guy", the government has never had an issue saying, "NO BAILOUT FOR YOU".
The Weimar hyperinflation was triggered by the government defaulting on its debt obligations to foreign creditors. Those pictures of people walking around with wheelbarrows full of money weren't taken until long after everyone holding cash was completely destitute and whoring themselves out for bread.
If I speculate on dow 100000 then it wont happen
Apparently I suck as a speculator
I put the odds of Dow at $100,000 happening inside 2 years. This worldwide fiat ponzi can't last a hole lot longer before hyperinflation kicks in.
I need to get back in the 2/20 game. If DOW goes from 10,000 to 100,000 And I have $100mm of OPM in it, then I get 20% of $900mm = $180mm plus 2% of $100mm in year 1 and 2% of $1bbn in year 20 - or an average of $11mm a year for 20 years.
This is the thin NONE of the PM bugs think about. Hedge fund managers with 0 Alpha will CRUSH your pathetic gains in PMs in an inflationary scenario, so you still won't be able to afford a house in the Hamptons. You are much better off buying TZA and praying for deflation.
If DOW goes from 10,000 to 100,000
This is the thin NONE of the PM bugs think about. Hedge fund managers with 0 Alpha will CRUSH your pathetic gains in PMs in an inflationary scenario
*************
Ummm the topic described 100K DOW as hyper-inflation-
You mix it up when you talk about an "inflationary" scenario-they're not the same at all and "nothing" does better than gold in hyper-inflation and for that matter in deflation-
Why is it you people think that because someone has an investment in gold-which has outperformed every asset class in the past 20 years- that they are too stupid to hedge or have other investments ?
I never could never figure that one out-maybe you can enlighten me?
Gold does hold up better than other assets in a deflationary environment. But not as good as one asset...cash. But if one wanted to hedge against deflation with cash, I'd recommend actual cash, not digital cash. Currency in cirrculation...$1.1T. M2...almost $10T. That's a lot of loans'n'such. Add in derivatives and other non-Mx figures and WHEWWWW!!
But not as good as one asset...cash.
***************
Cash is good in deflation and i do hold cash-the risk is a currency crises erupting in some major that further weakens all of them-but nothing beats gold-
The charts are a few years behind but the trend is still intact and if we go back into deflation-they'll turn up sharply
http://www.marketoracle.co.uk/images/2010/Apr/DOW-JONES-GOLD.png
http://www.marketoracle.co.uk/images/2010/Apr/S-P-GOLD.png
http://www.marketoracle.co.uk/images/2010/Apr/NEW-HOME-SALES-GOLD.png
http://www.marketoracle.co.uk/images/2010/Apr/FOOD-GOLD.png
http://www.marketoracle.co.uk/images/2010/Apr/CAR-GOLD.png
I recall a similar thesis in 1999 that predicted an astonishing number for the dow based on the premise that no risk premium should be incorporated into stock discount rates (I guess JPM would now be an exception). Only problem is, what becomes of the "risk free" rate when U.S. debt is soon to be rated BBB?
Blood's in the water mates.
Saturday Night Live flashback to Dieter from Sprockets " Yah, virst you pump it up, und zen you dump it all off und make a glockenspiel of money, ja, zat is how it is done, bitchez ! "
The year is 2037. The ( WTI/ Brent)markets have merged. China has 20 Nuclear Aircraft carriers. Ferrari has taken a major "stake" in "Rickshaw" manufacturing.
Congress doesn't exist. (The U.N. & I.M.F.), voted congress out. A loaf of bread costs 50 Deutchyuan. Some nuclear psysicist has figured out how to pound one ( Toz), of XAU into a " Solyndra Sail" the size of a soccer stadium. "The planet of the Apes is Real"
John Corzine has still not been convicted, and Rupert Merdoch's ghost is still being " postumously indicted"!
I pull CNBS up on my tin foil laptop, and the markets are still overbought!
lol...
So this clip has never been more relevant
http://www.youtube.com/watch?v=jTmXHvGZiSY
12.2% annual inflation isn't hyperinflation, what silliness. We had higher inflation (14%+) under Jimmy Carter and the world didn't end.
Hyperinflation is when your bus ticket to work is $5 in the morning, and in the evening to return home, your ticket is $50. The next morning your ticket is $250. Everybody throws around the term Weimar Republic, it seems many who do haven't actually studied it.
In 1992 a financial writer predicted DOW 10,000 by year 2000. Laughter all round. Until he turned out to be right. DOW 100,000 in 25 years is nothing spectacular. That's less than an eightfold increase in 25 years. People often fall into the trap of believing bad times will never end, and there will never be future booms. Talk to people who are working in high-tech research, the advancements to come and their incredible effects on society and our economies are staggering. The population demographic will return to boom effect by 2025.
Change is immutable. Bad now, good later. Good now, bad later.
Plan for a difficult economic time for 7-10 years. This is when fortunes are made, booms are when those on the bottom temporarily do better but large fortunes are often lost by staying too long at the party.
We can inflate away the our sovereign debt problem with 3.8% annualized inflation. This will remove about 45% of everyone's wealth over the next ten years. Then things get better. There will be no societal collapse unless there is a huge natural black swan event or a nuclear war. Fortunes are being made right now. Things look good if you know who to place yourself and your resources. That assumes you have resources. If not, you are screwed, as it has been throughout history. I suggest acquiring resources through whatever legal means you can, like good smart work for starters. The State will not save you. You must save yourself.
LOL! Watch out Robert Brusca you've got stiff competition out there!
LOL
Fortunes are being made right now? LOL... Oh yeah, Facebook and other social media... That'll solve all our problems. As if there isn't already a hundred thousand ways to already stay in contact with family and friends so we need some more. Nevermind Japan and all the other centrally planned failures of the last century. You're a real genius.
Its really funny the way he just keeps going on and on and gets faster and faster.
J Berni 'I told you so'
http://youtu.be/sBCvQCS8UBI
The world is so interconnected today, that it's hard to imagine hyperinflation or steep inflation at this point.
Wages haven't moved in years for US or europe. Move to automation over last 10-20 years has reduced the number of jobs out there. With so many unemployed at the moment, wages can remain low (Supply + demand of jobs). All those college grads need to work somewhere, even if it is McDonalds. It's hard to pass off price increases onto consumers.
Much easier outcome is depression and DOW 1000.