The Gold Lining


#1

The Gold Lining

We are inundated with negative economic news: the government is insolvent, it is bankrupt ; the taxpayer, including his children and grandchildren, will be paying for the bailouts of mismanaged financial institutions, the automotive industry, the airlines, the mortgage delinquents, etc., etc

Our central bank, The Federal Reserve, is printing fiat paper dollars 24/7, which action devalues the purchasing power of our money. Credit is not available. Unemployment is rampant and increasing. Words such as deflation, inflation, recession, and depression are common. The newest


#2

I agree with the sentiment and the conclusion. However, I do not think that the situation is as bad as 1978-1982, much less 1929. You likely remember the 1970’s. For those of you who do not:

  • The Soviet Union was on the march in Africa, Afghanistan, Central America & South America, the US was retreating everywhere and we were quite worried about The Day After;

  • Our intel agencies were riddled with Soviet spies;

  • The unemployment rate was much higher than now (and in my opinion, higher than we are likley to go now, barring major, major screw-ups);

  • Inflation and interest rates were in the high double-digits;

  • We had a hollow military that had been removed from Vietnam, humiliated by the North Koreans and failed miserably in the Iranian desert;

  • Congress had just crippled the Presidency in the aftermath of Watergate;

  • The liberal mainstream media had no counterweight on the radio or on the internet;

  • By any rational measure, oil prices were much higher than they are right now

I’m sure I could think of more given time. Yes, this recession is serious by the standards of the last 25 years - b/c the recessions of the last 25 years were quite mild. We’ve been through worse and will get through this one. I do agree that the gold lining is there, do not be so pessimistic as to fail to seize it. Steady onward!


#3

I think I suffer from poster


#4

Bernd, I sincerely hope that I am proved wrong as this


#5

Good for some and not so good for others.

Shawn, of course you see reality as it is.


#6

WARNING: This post is opinionated as heck and contains little information directly pertinent to MH investing. If it ain


#7

Bernd,

I really appreciate your accurate and concise points of view. I get so tired of the “talking heads”. This crisis, to anyone who will search their gut, knows it is the worst of our lifetime.

We have spent more as a nation in the last three months than for decades before. Our new national motto is pay off debt with more debit “AKA Bailouts a go-go”. If you can fog a mirror your “to big to fail”.

We have a nuclear Iran, terrorism like never before, and fincial debt that is astronomical! to compare this to anytime other than the 1929-1939 is pure nonsense and wishfull thinking. I prefer to be optimistic, but will never sacrifice truth for false optimism.

The constitution is all but dead, socialism is our new prefered government and we all see it. We just dont want to admit it…yet. We will soon see it as a nation, but by then we will be the “boiling frog” nice and warm.

All fiat currencys have failed and all will. Look at the Roman Empire, John Law, Weimar Republic, Argentina, Zimbabwe…ect. We are arrogant and spoiled, because we have the reserve currency of the world. Why is it China just announced it is selling some of its “treasuries” to buy another 5600 tons of gold? Concidence, I think not, folks we can be the ostrich as long as we want, but it changes nothing, above the sand the events continue regardless of false optimism below the sand.

When was the last time (in history) Social Security and medicare owed 50 trillion dollars? Not to mention the fact we have (Aborted) 50 million tax payers since 1973. Has that happened before? NO! When Have we spent 7 trillion as a nation to pay off debit(bailouts), with more borrowed money? Never! To act as if this is all somehow ok and will have no repercussions is foolish to say the least!

We will see Inflation like never before!!! Its a no-brainer, if you use common sense. Increase of currency, is the basic definition of inflation. What do you think, has the dollar been diluted? Dont listen to CNBC, use your “common sense gut feel” its worth more than any BS or PHD.

As Obama put it he will redistribute wealth. Amity Shlaes has a great book out, I recommend it to all Americans its called “The forgotten man”. It’s a great story about our last great redistributer, FDR. Here we go again, is about all I can say on that subject. Who is John Gault?

We are heading into historical times, I have spent many hours getting my Sons to understand that they are living in days that will be asked about, by the next generations. I have spent many hours discussing what got us here and why life is going to be different in the future. To think America can continue its glutinous consumerism at the worlds expense is foolish.

Back when we were advanced in technology, beyond the rest of the world, we had the upper hand (think Auto’s, Aircraft, Computers ect…) not any more. We now have equals on this planet, but our pride still abounds, GM is a great example, with the UAW they recieve $78 in wages and compensations, compared to the foreign manufactures which average $38 for each employee. Arrogance!!! the proud must fall, before the can become competitive again.

As a former Marine I see our military stretched like never before. Between Iraq and Afganistan we are extending soldiers tours of duty, to compensate, (not seen since vietnam). Recently we have called apon a battalion(20k) of soldiers to serve inside the US!! Why is this? I have NEVER heard of a time in the past where American Soldiers have had to serve and guard American streets. Can we Say “Posse comitatus”. Again go with your gut “not the fancy talkers”. Folks, a respected elder once told me, never trust a person more educated than you, when their telling you everything will be fine, rather trust your own self and history, Books and professors are the cause of alot of America’s issues.

These are my opinions and can be read an dismissed with no objection from me whatsoever. I have been wrong before, and honestly I hope I am here as well. Is it better to over prepare or under prepare? Extra food an Precious metals? How bad will they hurt you if I am wrong?? What if I am right?? Best wishes to all, Scott St.Aubin


#8

Great post Scott.

I had a big post written up but I fear sharing my options may not be appropriate here.

O well.

These post have been a good read, thanks for sharing guys

Briton (IN)


#9

Scott,

I’m not so sure about the "inflation no brainer. " In order to have inflation you need more money chasing fewer goods. Yes the Gov. is pumping money into the economy but bottom line is the consumer has no money plus has zero confidence in the economy and doesn’t feel a need to buy as prices are going down and not up. What we have is dweflation that is feeding on itself and it could be very possible that despite Gov’s intent to “re-inflate” it will continue to deflate. Everything so far points heavily in this direction. Lost jobs, weak corporate earnings,crashing home prices, crashing stock market,tight lending…on and on and on.

How will it effect this business. One theory might be that all assets will devalue. Rents could also be effected and pushed lower. This would be a result of the glut of houses on the market and many bought cheap (need less rent to cash flow) in foreclosure.Evictions could go up as unimplyment sky rockets.

On the otherhand with the horrible job market,we will have more people that need affordable housing. Plus our baby boomers wealth has been smashed and I’m sure this has pushed many of them into possible MH candidates.

When and if the deflation subsides,then I think your inflation scenario will be valid. But I think the real question is how long and how severe the deflation will be.