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MadMarketScientist

Gold’s Ascent Is Fuelled by Dollars Decline, but How High Can Gold Go?

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The US should be spending way more to get the economy going... not less.

 

The Teaparty may have started out as well meaning, but was quickly highjacked by Corporatism driven SuperPacs and Dominionist groups.

 

When the Teapublicans stated number one goal "is to get Obama out of office", then you can understand why Congress does nothing to help and everything they can to crash the global economy. "Our biggest priority is jobs", so let's vote on abortion....

 

S&P downgraded US Bonds to AA+ because of the potential for default. How can that be? If US Bonds only obligation is to repay in US Dollars, and the US Government via the Fed, can create as many US Dollars as needed, then how is it possible for the US to default?

 

One way is for the Congress to be taken over by terrorists whose "number one priority is to get Obama out of office". Even if it means we don't pay our bonds and crash the global economy.

 

Austrian economics is founded on dis-proven hypothesis and now based solely on ideological wishes. There is no Invisible Hand; God is not going to fix this.

 

Oh by the way.... the Bubble in Gold is being driven by China and India. As their economy's turn down, Gold will follow.

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The US should be spending way more to get the economy going... not less.........

 

Oh you mean do exactly what we did to get us into this mess.

 

Funny a fat person doesn't doesn't loss weight by eating a sh*!|oad more.

 

BTW Adam Smith's invisible hand is the marketplace, not god.

 

You've got the Tea Party confused with the religious conservatives but that is ok because from your statements you are confused about a helluva lot more than just that.

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Hi SunTrader... sorry if I confused ya... ;)

 

Government spending did not cause the recession/depression. In fact, the US deficit spending and the national debt are not anywhere near crisis level. Check out the US CIA world factbook.... I think this a great list to show how silly this fear mongering about the debt is:

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

 

So,,,, the US is worse off than Singapore? Japan? Canada? No, we're just fine.

 

I think the problems spawned more from something like 26 trillion in PRIVATE SECTOR debt... which first became apparent in the US housing market but quickly showed itself in collateralized securities and credit default spreads.

 

 

There are 100's of recent examples of Keynesian types of economic stimulus that have been very successful in moving stalled economies back into growth. There are ZERO examples of AUSTERITY helping a nation move from deep debt and deficit spending back to growth. (Except maybe Sweden, but they had oil exports which pretty much changed the equation).

 

The US isn't overweight, it is pretty darn slim, and a diet would be a disaster. Yes, I think we need to eat more!!

 

Great you've hear of Adam Smith. Indeed when I referred to "the invisible hand of the market", I fully intended to bash the conservative myth of the "free market". Economies do not obey the laws of Newtonian Physics, there is no mechanism to move things to equilibrium. Economies are complex adaptive systems, and complexity theory offers a much more scientific assessment than archaic economic schools of thought that, unfortunately, are still part of the national political dialog.

 

Let's have a real discussion, and you and I can move beyond the nonsense we get from Washington and get the world back on track, (oh and maybe figure out how we can make some $$ in this crazy market!)

 

Speaking of the market... I think this thread was about gold... Apologies to all that we've gotten so off topic, I'm digging up some charts to post now :)

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Back to the thread topic :cool:

 

Gold used to correlate to the US Dollar, and a proxy for that is Inflation, or the CPI. But look at the chart below and what happened around 10 years ago.

 

 

And then look at China recently...

 

China and India are top buyers. When their economies slow, will they buy more or less?

cpi_gold1.png.44beffb44d865fd162a09d7e14cac215.png

cpi_gold3.png.ef2184117403b823170720204832c1c1.png

IndiaGold.gif.9d5bf952bcad8d3df5412789be1ac4ac.gif

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Hi SunTrader... sorry if I confused ya... ;)

 

Government spending did not cause the recession/depression. In fact, the US deficit Speaking of the market... I think this thread was about gold...

 

Apologies to all that we've gotten so off topic, I'm digging up some charts to post now :)

1) Oh so the game is, we are not in debt up to our eyeballs because look at how much more Country "X" is.

 

2) Debt is debt. Whether private citizens or the govmint is the instigator of it.

 

3) Finland not Sweden is the one with the lionshare of the North Sea oil.

 

4) Sure there are lots of examples of Keynesian growth and then subsequent larger deficits in the future. Next politician will deal with that and the one after until .........

 

+ + +

 

Back to Gold

 

As I have said many times, many places Gold is following Silver's lead. As the world economies grow, or lack thereof nowadays, price will head. Which ever since the highs last fall has been down. No reason to see a change anytime soon.

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There are 100's of recent examples of Keynesian types of economic stimulus that have been very successful in moving stalled economies back into growth. There are ZERO examples of AUSTERITY helping a nation move from deep debt and deficit spending back to growth. (Except maybe Sweden, but they had oil exports which pretty much changed the equation).

 

 

Name 5 examples.

 

The US cut government spending in 1920 and after the second world war. Both times the economy improved greatly. Just because the government has rarely tried cutting spending does not mean it is not effective. Think about the record stimulus spending Obama just did and its effect on the economy. There are still 15 million Americans who used to have jobs who still don't and there are many progressives who have made a lot of money off this spending. I think the desired effect of the stimulus HAS been accomplished.

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Back to the thread topic :cool:

 

Gold used to correlate to the US Dollar, and a proxy for that is Inflation, or the CPI. But look at the chart below and what happened around 10 years ago.

 

 

And then look at China recently...

 

China and India are top buyers. When their economies slow, will they buy more or less?

 

It looks to me that gold is probably a better reflective of inflation, It doesn't look like the CPI is a good measure of inflation. The CPI is supposed to measure inflation, but it doesn't really measure a constant basket of consumer goods.

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Name 5 examples.

 

The US cut government spending in 1920 and after the second world war. Both times the economy improved greatly. Just because the government has rarely tried cutting spending does not mean it is not effective. Think about the record stimulus spending Obama just did and its effect on the economy. There are still 15 million Americans who used to have jobs who still don't and there are many progressives who have made a lot of money off this spending. I think the desired effect of the stimulus HAS been accomplished.

 

;-) Ok, well I can see this is a black hole of productivity! (that'll teach me to get all opinionated!)

 

1920 we went into a recession... and 1945, end of WWII,,,, also short recession with the decrease in Govt spending. Hmmm.. I was thinking more of what helps during the recession...

 

So, Govt intervention in the economy....

2008, too small tax cuts and spending in US, at least stopped the bleeding but not enough. (Obama stimulus, 30% tax, other State help, and @$150B per year in stimulus for three years - some economist like Krugman called for $1.5T in stimulus)

2008, big spending in China, huge GDP growth

2008, spending in Australia, (did this work? maybe a good place for vacation?)

2001, 1981, 1975, 1964, various spending, tax cuts, and monetary policy

 

I'm not exactly Keynesian, more MMT, and I see a Tax Cut and Govt Spending as having the exact same affect. Both increase the money supply.

 

So, in a down economy, Govt can make a difference and help citizens by increasing the Money supply, (Oh i mean national Debt). 'cause, in the long run, we're all dead.

 

So let's Spend More and Lower Taxes! I'm not saying we need a bigger govt,, just big enough, (certainly bigger than the largest corporation, since I want to live in a democracy not a plutocracy).

 

What would you guys do? Just fire a lot of teachers, policeman, firemen, etc.? (all the recent job declines in US have been public sector, Private sector continues to see gains).

 

Would you cut a bloated military (US military spending = the next 29 largest nations combined, oh, and 28 are allies)? would you cut social programs like welfare ( a whopping 1.5% of budget)? Increase taxes? (look out Grover we are headed over the cliff!) Reduce regulations on the financial sector? Maybe PFG could start back up!

 

Again, there isn't a federal Debt crisis in the US. No one is trying to foreclose on the US. US debt is not causing the economy to stall. US debt is not crowding out private sector borrowing. There is no real inflation. There are no bond vigilantes.

 

So if the problem is unemployment,,, then how about a Job Guarantee program? We could put those 3m people to work, all that non-productive labor back into the economy, no more minimum wage laws, and no more unemployment insurance, what do ya think?

cheers!

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