Finance/Investing ITT

[nando]

420? :p

realistically, since I have neither a stockpile of guns, nor a stockpile of gold/silver, I'll probably be dead. But i'll take the risk that our current economic system, although it might change, isn't going to disappear that easily.

[rwh11385]

Don't worry, when the end comes, if ya'll need a place to escape to and use the code word, I'll need help plowing.

That's what scabbbies said too, but I dunno if he was talking about farming...


In the mean time, assuming your cows poop and have other organic waste: http://www.small-farm-permaculture-a...generator.html

[nando]

I have a giant pile of horse poop actually. But fortunately (unfortunately?) we're getting rid of the horses and simplifying our lives with a smaller, newer, cheaper house.

too bad, in the coming apocalypse, I could have traded horse poop for food. :p

[Farbin Kaiber]

That's what scabbbies said too, but I dunno if he was talking about farming...


In the mean time, assuming your cows poop and have other organic waste: http://www.small-farm-permaculture-a...generator.html

I have a new pile of those exact green barrels on the video on that page. I think I'll have to look into that, thanks for the link.

[Farbin Kaiber]

too bad, in the coming apocalypse, I could have traded horse poop for food. :p

^ I think that makes a successful derail. And a good sig.

[87e30]

Would read end of world banter again

[nmlss2006]

I was going to stay out of this but I will say one thing: read up on subjects before making pronouncements. Silver has industrial uses, gold has almost none. Not that I'm advising either (or advising anything, actually), but at least be familiar with basic facts. It helps financial health enormously.

[nando]

surely it has uses, but it still can't possibly explain the huge spike in price appreciation over the last couple years.

[Kruzen]

surely it has uses, but it still can't possibly explain the huge spike in price appreciation over the last couple years.

Of course not, that's thanks to QE1 and QE2

[nando]

maybe because of people's psyche's (anticipated inflation), but there hasn't been a 500% increase in monetary supply, nor anywhere near that much inflation, and other commodities have not followed suit.

[Kruzen]

maybe because of people's psyche's (anticipated inflation), but there hasn't been a 500% increase in monetary supply, nor anywhere near that much inflation, and other commodities have not followed suit.

Gold is historically stable as a basis for currency. It's merits as a currency speak for itself.

http://markets.ft.com/markets/commodities.asp

edit: I will be the first to say the value of gold is artificially inflated because people are investing in it like mad. But I wouldn't be surprised if in 10 years gold is valued at what it currently is or higher with the fed's behavior.

[rwh11385]

Gold is historically stable as a basis for currency. It's merits as a currency speak for itself.


http://markets.ft.com/markets/commodities.asp

Gold can't be taken directly as people are speculating using it. Same reason why oil and corn are higher than if they weren't being used to generate profits while trading. Jut look how retarded that chart looks... bubble.

http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html

And the monetary base is trying to bring back the monetary supply since banks have stopped multiplying because of not having as much leverage.






But then again, if you completely ignore the concept fractional-reserve banking and the changes in banks in recent years... then I guess you can simply look at monetary base between finger painting and playing on the playground.

[rwh11385]

The Fed is trying to counteract the great decrease in money supply so that the economy can keep running. Deflation slows GDP, or at least limits its growth.


wish i could have found a better chart but meh.


Look at M3 and the monetary base. When they were greatly boosting the base while M3 was decreasing, there was deflation through most of 2009. Simply pointing to monetary base and ignoring the bank multiplier is pretty simplistic.

In fact, there was a 6-year or so trend from 01 to 08 where the inflation grew and it looked as if the monetary base slowed. Banks were leveraging more and more and speculation (in oil, corn, etc.) drove up prices. Pointing to MB is not very telling

[Kruzen]

I prefer TMS to CPI for measuring inflation. the CPI is a result of inflation/deflation and not a measure of it.



Banks are holding onto the majority of the fiat money made available through the bailouts instead of loaning it out and back into the economy like the fed intended for them to do.

The Fed has tripled the money supply and reduced interest rates to zero.

A stronger economy is trying to get off the ground but can't because all the newly created money is being retained by the banks in reserve.

Eventually the banks will start lending again, and the velocity of money will increase.

When that occurs, inflation will begin to show signs that even Bernanke can't ignore, and he will respond by raising rates.

Eventually, increased velocity, inflation, high oil prices, and interest rates will conspire to crash the market again. And we start the whole thing over again — if we can.

[rwh11385]

Banks are holding onto the majority of the fiat money made available through the bailouts instead of loaning it out and back into the economy like the fed intended for them to do.

The Fed has tripled the money supply and reduced interest rates to zero.

A stronger economy is trying to get off the ground but can't because all the newly created money is being retained by the banks in reserve.

Eventually the banks will start lending again, and the velocity of money will increase.
When that occurs, inflation will begin to show signs that even Bernanke can't ignore, and he will respond by raising rates.

Eventually, increased velocity, inflation, high oil prices, and interest rates will conspire to crash the market again. And we start the whole thing over again — if we can.

Wow. Thanks for pointing out yourself that:
a) you have no idea what you are talking about
b) you are relying on someone else's opinion rather than your own and are unable to be critical of their reasoning

"holding onto the money" and "start lending again"... lol

Banks are in fact loaning money, just not at the leverage they were previously. (which I mentioned earlier) It will be a while or never until banks use as much leverage as they were using.

The Fed cannot control the money supply totally, but only the base and interest rates. It is up to our banks how much they want to loan out per money they have, which determines our effective money supply. Even if they tripled the base, it does not mean M3 is larger than it was in 08, etc. (It's actually still smaller which charts show clearly)

Velocity is based on spending habits and transaction rate. The velocity of money will not increase much greater than it is compared to recent changes over the past 10 years, besides perhaps recovering. Velocity of money is a factor in money supply equation but with online transactions and transfers already pretty mainstream, there won't be a great leap compared to recent I would say. If more transactions happen, it's more likely to recover GDP than go to raise price level. Anyone who refers to banks controlling the velocity instead of referring to this as leverage is a moron.

M * V = P * Y
Money supply * Velocity of transactions = Price Level * Y (Output aka GDP)


Bernanke will be able to see when M3 reaches a healty level again and adjust interest rates to curb inflation to the healthy, ideal level (2%).