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Just for clarification, when I said "moving to gold" I meant in your portfolio and not as a currency. I'm certainly not in favor of moving back to the gold stan

by weagle2001 15y ago

Just for clarification, when I said "moving to gold" I meant in your portfolio and not as a currency. I'm certainly not in favor of moving back to the gold standard...I think that ship has sailed. As I understand it, an increase in dollar supply can take 1-2 years to cause inflation. A 300% increase has to cause inflation, and they're still printing (paying banks to keep excess cash). The bubbles in real estate, personal debt, and stocks are just the beginning. The government debt and dollar bubbles are coming next. That's why I'm buying precious metals and foreign currencies...I don't see how the recovery will happen before a massive correction occurs.

chalst 15y ago
QE is not printing money, rather it is making lots of very short-term credit available. There is no increase in the narrowest sense of money supply directly coming from QE, and the increase in broader definitions of money vanishes within days of QE being stopped. There are (highly controversial) arguments that QE leads to inflation, but they are about indirect effects of QE's cheap credit. The point of QE is to do with deleveraging, i.e., the reduction of that 350% aggregate debt burden. Deleveraging is inherently deflationary, since money spent on paying off debt is money that is not spent on consumption. QE is supposed to smooth out that process, to allow demand to grow while this deleveraging process goes on. I think there's a case for investing in precious metals, but it is about the worst case scenario: it can't lose all its value, and there are scenarios where it appreciates where practically nothing else does. My investment tip: I think German property is still undervalued, despite over a year of boosterish talk in the financial media. It's fairly volatile, and rents in Germany are low so the value case is long term, but that long-term case is pretty strong. See http://online.wsj.com/article/SB10001424053111904480904576497972650562748.html http://online.wsj.com/article/SB1000142405311190448090457649...

chalst 15y ago

QE is not printing money, rather it is making lots of very short-term credit available. There is no increase in the narrowest sense of money supply directly coming from QE, and the increase in broader definitions of money vanishes within days of QE being stopped. There are (highly controversial) arguments that QE leads to inflation, but they are about indirect effects of QE's cheap credit. The point of QE is to do with deleveraging, i.e., the reduction of that 350% aggregate debt burden. Deleveraging is inherently deflationary, since money spent on paying off debt is money that is not spent on consumption. QE is supposed to smooth out that process, to allow demand to grow while this deleveraging process goes on. I think there's a case for investing in precious metals, but it is about the worst case scenario: it can't lose all its value, and there are scenarios where it appreciates where practically nothing else does. My investment tip: I think German property is still undervalued, despite over a year of boosterish talk in the financial media. It's fairly volatile, and rents in Germany are low so the value case is long term, but that long-term case is pretty strong. See http://online.wsj.com/article/SB10001424053111904480904576497972650562748.html http://online.wsj.com/article/SB1000142405311190448090457649...