On the Edge with Mish Shedlock.
Lots of But if… Here is what I gather:
(1) Dollar will get stronger because China implosion and Eurozone troubles. ie. Dollar Strengthens as its flight to safety.
(2) As a consequence, the US bond market continues to inflate.
(3) However, this provides more liquidity into US without QE.
(4) It will be quite evident that doomsday is not this year or even next and gold and silver will be rangebound as mish says. The long term trends are intact but there is no urgency. The baloon is big, but it still has room to be inflated.
(5) It seems the fed is onto the QE word. To me, it seems they are willing to tolerate some short term deflation?
Here is where things get blurry:
a. Will this drive inflation, i dont think enough to to call it hyper or even elevated
b. Will this lower unemployment – by the way the gov’t measures – yes.
c. Europe can BS for years it seems to hold things together? Even with Nigel Farage calling Van Rompuy a wet towel, it seems the EU will have its way.
d. I like Ron Paul, I think he will win some elections but I dont think he will be the next e. US president. Donald trump will step in to divide up the republican vote. It seems they already have a contingency plan. Obama will get re-elected.
f. Occupy will be a fading fad as the government will use extend and pretend to keep the unemployed appeased. I feel there is enough elasticity to allow for money printing.
- war? I honestly think the Iran/US/Israel tensions are rigged to keep oil prices up and traders happy in london.
- There is talk that the US could become an exporter of oil with all this shale oil revolution. They are building pipelines and if that is the case, that could cause a huge reversal.
- Will China slow down US Treasury purchases or even sell to prop up their economy?
It seems the whole world is debt drive, the thesis for gold bugs, but it also seems there is some time, perhaps a few years before doomsday, which is short term negative for PM’s unless we get a black-swan event that changes everything.
Mish: (China was using enormous sums of commodities, which boosted economies of Australia, Brazil, etc… to build cities in China.. where no one lives!) “…China has the world’s largest mall… with absolutely NO shoppers at all… the biggest roads which no one used, , Wages in China WERE NOT SUFFICIENT to SUPPORT the houses, the malls, and everything else… A doctor in China makes $30,000… that is NOT enough to buy a $500,000 condo in Shanghai…
We’ve seen housing prices in Shanghai plummet 40%…” (and the govt. is going to let those prices continue to fall, which will raise hell for those who’ve been addicted to the CREDIT BUBBLE of past decade)…
BRAVO! THE CHARACTERISTIC of “the American Century” post-WWII, and of “the greatest generation” – was HIGH WAGES in post- WWII America! Conservatives fail to credit UNION SCALE WAGES, BENEFITS, and “govt. socialism” programs like GI BILL, massive construction projects (the US interstate highway system THE BIGGEST construction project in world history) – all of which BOOSTED PRICES for property, and CREATED DEMAND for goods, services.. and the JOBS to provide them.
“LIBERALS” fail to credit the MASSIVE MILITARY EXPANSION of the “Cold War” – the USA built 10,000 nuclear warheads, AND the missles, jets, submarines, bases, and infrastructure to supply them – in 15 years flat after WWII !!! That is A LOT of science, technical, R&D, production, maintenance, and support JOBS – and financed THE COLLEGES and university research departments, which hired more civilians who became part of the upwardly mobile middle class.
It was this DOUBLE DOSE of “liberal, socialism, big govt. spending” AND Conservative, military, high tech Big Govt R&D MASSIVE govt. spending that created a BOOMING LABOR MARKET.
(look at the “Space dividend” from the mighty Apollo moon rocket program, alone!)
Also, with THREAT of Cold War, US economy HAD TO let SOME WEALTH “TRICKLE DOWN” to middle class – otherwise, no one would support the cold war (i.e., the Fed & Big Banks had to behave).
What’s “neat” about this model, is YOU COULD, potentially, RECREATE the post-WWII boom years – WITHOUT a military, ne0-imperial model – IF you wanted to, and could sell the public on the project.
But of course, the Neo-Cons bankers and military-industrial complex types have HIJACKED the late “Democratic” Party, and have mastered the art of using EVERY formerly “liberal” program, as nothing but COVER to GIVE MORE Fed (printed up) money… to the bankers, and f***! everyone else!! (See Fannie & Freddie, & FDIC, being turned into just another “BAILOUTS” slush-fund for bankrupt, leveraged, DERIVATIVES DEBT to infinity bankers)
mish doesn’t think QE has been going on unannounced? i thing it,t ongoing. constant.
I’ve got a comb that Mish can borrow if he needs one.
did Mish say, if china lets the property market bottom out and lets the economy take the hit. It is a worse place to invest than the US where they will and have done everything to stop the bubble form bursting and then try to re-inflate another bubble?
golds been going up 10 years in a row, in a week it’ll be 11.
QE: As long as its not official, it will continue without affecting the markets. Markets, etc are as much physcology and politics as raw math. eventually raw math wins, but politics and media tricks, (press release and BS) can keep the game going for a lot longer than we think. The eventual fall will be very dramatic. I think people in power know this and they are doing all they can to kick the can down the road and keep up the facade. Quite honestly, the masses are too stupid to see this and its easier to buy into the illusion than have to to “think” how to deal with the blatant manipulation. Unless there is another Lehman moment, its going to be more of this muddling along, one EU meeting to the next, month by month. I think the next Lehman is going to be avoided because they know what it looks like and they can stem it off.
I am working with organizing Ron Paul in my state. I like him, promote him, but lets be real. Fox and CNN decide who wins. Trump can step in and divide up the vote, keep status quo with Obama. Obama is not really a bad guy, he just has been hijacked and coerced. The things he is doing are so out of character, I am surprised the alternative media is not trying to rescue him instead of throwing him under the bus. You can see the frustration on his face. I dont think he wants to intrude on our lives, I dont think he wanted to keep gitmo, i dont think he wants war with Iran. I think he has a gun to his head by the same people doing the MF Global scam, the same people who get unelected people into power in europe, etc.
If you want to see silver go up, Max and Stacy, your gonna have to develop technology, iphone apps whatever that can assay, weight and assign value to unknown pieces of silver and offer these machines to shops so they can use them in trade. Once people are able to use their bullion to buy groceries and they see the bullion buys the same groceries week after week, then you have something… Until then, its a fad and eventually people will get doom and fatigue- bunker mentality boredom and find a different hobby.
If Japan can inflate their debt to 250% GDP and stay afloat after an earthquake, no telling what the US and EU can do with coordinated efforts and the media on their side.
“(4) It will be quite evident that doomsday is not this year or even next and gold and silver will be rangebound as mish says.” – Skippy
This fits the claim that holding metals for 5-10 more years is a good thing. There will probably be a lot of doomsday parties this year. More MF Global like failures will occur from which to confiscate wealth and keep the economy/ponzi going on a ‘smooth’ glide path … down.
Yeah, silver isn’t also a form of money yet somehow it’s always there just like the guy with the great voice you frequently have to step over on your way to and fro. Gold really is unique, isn’t it? Floating on a sea of misery. It never really quite works out that way.
the term of 2011 ( Q E ) The term of 2012 ( back stopping )
There is also the ratings game. by downgrading european AAA, they are forcing fund managers to park cash in Treasuries, thereby postponing QE. We are really going to need to see food inflation or some sort of inflation even to give gold a push. As long as they have mild inflation and inflows into treauries out from the eurozone, emerging markets etc, they can delay QE and gold will tumble as people dont see doomsday. People get weary after a while and tired from bunker mentality. As long as the general population those with IQ less than 110 believe in greenbacks, they system can go a long time. They raised the debt ceiling by a trillion bucks thru 2012 and markets didnt even flinch. I agree, there is a problem, math is on teh side of keiser and the gold bugs, but now were in this elastic zone of press releases and bullshit which can delay things.
Looks like Mush just shat in every silver bugs Christmas stocking. Bah. Humbug!!
This was a good conversation but one thing that was left out was as the fraud and corruption factor. Let’s add fraud and corruption to the list of peeks we have hit. Gerald Celente has a pretty good track record too, but he has different picture for the next year. What are the odds of these guys continuing having a positive track record year after year. Isn’t it like Goldman Sash’s batting a 1000 for 3 months in a row. And let’s add Russia to the list of countries coming unscrewed. There are riots going on in Moscow this weekend and again, that is being swept under the rug. The people there have reached peek Putin.
Thanks Max… This was my Christmas Gift… Sad? I don’t think so! I’ve been listening to mish’s interviews since yesterday and let me tell you I very much prefer this to a bottle of Royal Crown that I got last year… Once again thank you and happy new year to you and dear Stacy