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Exactly. The Fed and government have been trying for over a decade to generate some inflation and decrease the value of the dollar. It's proven nigh impossibl

Exactly. The Fed and government have been trying for over a decade to generate some inflation and decrease the value of the dollar. It's proven nigh impossible, because the American economy is, relatively, too strong, and the demand for USD too great. What is going to change that? The US may be printing money, but so is every other country on the planet.

discobean 7y ago
You could say it is the least worst, they have that going for them :)
deleted 7y ago
[deleted]
BubRoss 7y ago
No inflation? Asset prices are a lot higher than they were.
- nl 7y ago
  That's not what inflation means. And if the OP is trying to protect (?) against rising asset prices, then they should invest in the assets that are appreciating not in silver which isn't really correlated with asset prices.
  - BubRoss 7y ago
    If you look at the money supply graphs, there is a tremendous amount of money that has been making its way through the world in the last decade. You can probably redefine inflation until you get something that hasn't increased in the last decade but you have to at least say what that is. https://fred.stlouisfed.org/series/MBCURRCIR https://fred.stlouisfed.org/series/MBCURRCIR (Also saying something 'is going up' is a prediction of the future. You only know that something went up in the past tense).
    - nl 7y ago
      Money supply isn't inflation. I'm using the standard economics definition of inflation: changes in value of a standardised bucket of goods and services.
      - nybble41 7y ago
        The "standard" definition preferred by political economists (for the obvious reasons) is useless for making accurate predictions. The economic effects of inflation are all due to the changes in the money supply; the changes in prices are an side effect of this and many other factors, not a cause.
        AnimalMuppet 7y ago
        You can't just look at the money supply. Let's say that we hold the money supply perfectly constant. Then one dollar becomes worth, not a fixed amount, but a fixed fraction of the economy (assuming velocity remains constant). For example, let's say that there are 1000 dollars in circulation, and the velocity is 2 - on average, each dollar changes hands twice in a year. So the GDP is $2000. Ten years pass. We learn to be more efficient. The economy produces 20% more than it did ten years ago. But the GDP is still $2000, because that's how much money there is. That seems unreasonable to me. If I saved a dollar, why does that dollar give me a claim, not just to what the dollar would have bought when I saved it, but also a claim on a part of all the growth since I saved it?
        nybble41 7y ago
        > The economy produces 20% more than it did ten years ago. But the GDP is still $2000, because that's how much money there is. More or less, yes. The improved efficiency is reflected in the fact that prices are now 20% lower, so the same GDP buys more goods. I'm not saying that prices shouldn't be considered. Prices are an important economic metric—which is exactly why it's a bad idea to conflate natural price signals with the noise caused by artificial changes in the money supply. > If I saved a dollar, why does that dollar give me a claim, not just to what the dollar would have bought when I saved it, but also a claim on a part of all the growth since I saved it? Because the improved efficiency and growth are in part due to the fact you chose to save that dollar, meaning that during that time there were $1 worth of extra goods and services available for other people to invest or consume. You created a surplus and essentially loaned it to everyone else by choosing to consume $1 less than you produced. The drop in prices is the interest on that loan. Of course, it could go the other way too. If people choose to consume capital rather than invest in the future then the economy could shrink, resulting in rising prices. The general rate of return represented by deflation or inflation (in the absence of interference with the money supply) represents the baseline level of return a venture needs to offer in order to be worth investing in, not just for the individual—who would be looking for the best rate of return in any case—but for the economy as a whole. If you can't find anything better to invest in than the real-valued return you would get from stuffing your money in a mattress and waiting, we're all better off if you do just that and avoid taking resources away from actually beneficial investments. An inflationary economy incentivises people to invest more, but if the inflation is artificial then the result is a lot of malinvestment from people simply looking for a safe haven for their money, even if it's still losing real value over time.
- BallyBrain 7y ago
  In reply to nl. Actual inflation is the expansion of the money supply and there has been a vast expansion in it since 2008. Where that extra money supply ends up going, is where the inflation is.
  - nl 7y ago
    "Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. It is the constant rise in the general level of prices where a unit of currency buys less than it did in prior periods" https://www.investopedia.com/terms/i/inflation.asp https://www.investopedia.com/terms/i/inflation.asp If you think he's using some alternative definition then you'll need to explain how silver protects against it.
sfj 7y ago
The demand for USD being too great is not because the American economy is strong, but rather because there is $12 Trillion in dollar denominated debt owed by the rest of the world. At 2% interest this is $240 Billion worth of USD that has to be paid out every year. And now because of the world economy shutting down, those dollars aren't being fed back into the markets outside of the US, meaning that no one can generate the cash to repay their loans. This is why cash is so high priced right now, even while the Fed is desperately trying to lower it. It's also why gold and silver are taking a beating. In order to raise cash not to default, foreign corporations and governments have no choice but to sell everything they own, including gold and silver (as well as cryptocurrencies).
- pontifier 7y ago
  This explains a lot about what I'm seeing right now. It's probably the most terrifying thing I've read since this whole thing started.
  - aguyfromnb 7y ago
    >It's probably the most terrifying thing I've read since this whole thing started Now you can see why being able to print money is a feature of a modern economy, not a bug (a la Bitcoin).
    - sfj 7y ago
      I wonder how stable printing money is, though. It seems the Fed never seems to be able to return to where it was, regarding its balance sheet.
- aguyfromnb 7y ago
  >The demand for USD being too great is not because the American economy is strong, but rather because there is $12 Trillion in dollar denominated debt owed by the rest of the world. Why does the rest of the world deal in dollars, and not Yuan or Rubles? Hint: not because the US is a weak, unstable economy.

discobean 7y ago

You could say it is the least worst, they have that going for them :)

deleted 7y ago

[deleted]

BubRoss 7y ago

No inflation? Asset prices are a lot higher than they were.

nl 7y ago
That's not what inflation means. And if the OP is trying to protect (?) against rising asset prices, then they should invest in the assets that are appreciating not in silver which isn't really correlated with asset prices.
- BubRoss 7y ago
  If you look at the money supply graphs, there is a tremendous amount of money that has been making its way through the world in the last decade. You can probably redefine inflation until you get something that hasn't increased in the last decade but you have to at least say what that is. https://fred.stlouisfed.org/series/MBCURRCIR https://fred.stlouisfed.org/series/MBCURRCIR (Also saying something 'is going up' is a prediction of the future. You only know that something went up in the past tense).
  - nl 7y ago
    Money supply isn't inflation. I'm using the standard economics definition of inflation: changes in value of a standardised bucket of goods and services.
    - nybble41 7y ago
      The "standard" definition preferred by political economists (for the obvious reasons) is useless for making accurate predictions. The economic effects of inflation are all due to the changes in the money supply; the changes in prices are an side effect of this and many other factors, not a cause.
      - AnimalMuppet 7y ago
        You can't just look at the money supply. Let's say that we hold the money supply perfectly constant. Then one dollar becomes worth, not a fixed amount, but a fixed fraction of the economy (assuming velocity remains constant). For example, let's say that there are 1000 dollars in circulation, and the velocity is 2 - on average, each dollar changes hands twice in a year. So the GDP is $2000. Ten years pass. We learn to be more efficient. The economy produces 20% more than it did ten years ago. But the GDP is still $2000, because that's how much money there is. That seems unreasonable to me. If I saved a dollar, why does that dollar give me a claim, not just to what the dollar would have bought when I saved it, but also a claim on a part of all the growth since I saved it?
        nybble41 7y ago
        > The economy produces 20% more than it did ten years ago. But the GDP is still $2000, because that's how much money there is. More or less, yes. The improved efficiency is reflected in the fact that prices are now 20% lower, so the same GDP buys more goods. I'm not saying that prices shouldn't be considered. Prices are an important economic metric—which is exactly why it's a bad idea to conflate natural price signals with the noise caused by artificial changes in the money supply. > If I saved a dollar, why does that dollar give me a claim, not just to what the dollar would have bought when I saved it, but also a claim on a part of all the growth since I saved it? Because the improved efficiency and growth are in part due to the fact you chose to save that dollar, meaning that during that time there were $1 worth of extra goods and services available for other people to invest or consume. You created a surplus and essentially loaned it to everyone else by choosing to consume $1 less than you produced. The drop in prices is the interest on that loan. Of course, it could go the other way too. If people choose to consume capital rather than invest in the future then the economy could shrink, resulting in rising prices. The general rate of return represented by deflation or inflation (in the absence of interference with the money supply) represents the baseline level of return a venture needs to offer in order to be worth investing in, not just for the individual—who would be looking for the best rate of return in any case—but for the economy as a whole. If you can't find anything better to invest in than the real-valued return you would get from stuffing your money in a mattress and waiting, we're all better off if you do just that and avoid taking resources away from actually beneficial investments. An inflationary economy incentivises people to invest more, but if the inflation is artificial then the result is a lot of malinvestment from people simply looking for a safe haven for their money, even if it's still losing real value over time.
BallyBrain 7y ago
In reply to nl. Actual inflation is the expansion of the money supply and there has been a vast expansion in it since 2008. Where that extra money supply ends up going, is where the inflation is.
- nl 7y ago
  "Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. It is the constant rise in the general level of prices where a unit of currency buys less than it did in prior periods" https://www.investopedia.com/terms/i/inflation.asp https://www.investopedia.com/terms/i/inflation.asp If you think he's using some alternative definition then you'll need to explain how silver protects against it.

sfj 7y ago

The demand for USD being too great is not because the American economy is strong, but rather because there is $12 Trillion in dollar denominated debt owed by the rest of the world. At 2% interest this is $240 Billion worth of USD that has to be paid out every year. And now because of the world economy shutting down, those dollars aren't being fed back into the markets outside of the US, meaning that no one can generate the cash to repay their loans. This is why cash is so high priced right now, even while the Fed is desperately trying to lower it. It's also why gold and silver are taking a beating. In order to raise cash not to default, foreign corporations and governments have no choice but to sell everything they own, including gold and silver (as well as cryptocurrencies).

pontifier 7y ago
This explains a lot about what I'm seeing right now. It's probably the most terrifying thing I've read since this whole thing started.
- aguyfromnb 7y ago
  >It's probably the most terrifying thing I've read since this whole thing started Now you can see why being able to print money is a feature of a modern economy, not a bug (a la Bitcoin).
  - sfj 7y ago
    I wonder how stable printing money is, though. It seems the Fed never seems to be able to return to where it was, regarding its balance sheet.
aguyfromnb 7y ago
>The demand for USD being too great is not because the American economy is strong, but rather because there is $12 Trillion in dollar denominated debt owed by the rest of the world. Why does the rest of the world deal in dollars, and not Yuan or Rubles? Hint: not because the US is a weak, unstable economy.