Page 14 of 15 FirstFirst ... 489101112131415 LastLast
Results 131 to 140 of 146

Thread: The Recession..

  1. #131

    Default

    Quote Originally Posted by ynot2k View Post
    I forgot that we were 9 trillion in debt in 2008.
    Pretty $$$ Incredible ^^^ almost $23 Trillion MORE after 15 years.
    And if you believe GDP almost $13 Trillion.
    1835 Andrew Jackson had US debt at ZERO $0
    175 YEARS later .......
    2008 Owebama started at $10 TRILLION, left 2016 at $20 TRILLION
    So from 2008 - 2021 (13 years) added $20 TRILLION

    https://youtu.be/1kuTG19Cu_Q

  2. #132

    Exclamation

    Charles Smith >>> on the REAL 'Recession' >>> https://www.youtube.com/watch?v=0KDer6tiu7c
    x3

  3. #133

    Default

    Quote Originally Posted by silverone View Post
    Charles Smith >>> on the REAL 'Recession' >>> https://www.youtube.com/watch?v=0KDer6tiu7c

    Interesting how many smart people are predicting a significant recession, but some differ on what assets will do best due to their take on what the CB`s will/can do with rates, and their
    outlook on inflation. That is where the 2 views presented in the 2 videos differ.

    This well known guy has some extremely interesting reasons why the recession may already be here or will be very shortly.
    Many of his points have been raised by Kitco members.
    You will need close to an hour to take it all in. I just go on treadmill with these.

    In a nutshell he believes that long bonds and gold and Japanese stocks are the best way to play the imminent recession.
    He believes the Fed will go right back to ultra low rates quickly if significant recession.
    He gives a lot of historical precedent for his views. He also gives a lot of great data backing up his forecast including hours worked and real wage gains ( lack of), a point I harped on earlier.
    He was present, in the business, for the last 4 recessions and very few were calling for one at the time.
    This is starting to happen again as many are thinking will be a soft landing, ie no recession or a very insignificant one, if at all.

    I agree with most of what he says, I am just not sure about the deflation being so significant. I do believe it could be or your video`s take could also happen.

    Hence I limit my long bonds ( in ETF), although I am nibbling away, as they do present a compelling risk/reward trade.
    It is hard to imagine the rates increasing, but I am sure that has been said before, and if you are in a long bond fund, you can definitely be taken to the slaughterhouse if they ever go significantly higher.

    In any case a great discussion, if you have the time.

    https://www.youtube.com/watch?v=nyP0pLZ2sUU

  4. #134

    Default

    Quote Originally Posted by silverone View Post
    Charles Smith >>> on the REAL 'Recession' >>> https://www.youtube.com/watch?v=0KDer6tiu7c
    Thanks silverone for another great post.

    "...you're going to have rising food prices..." yikes, on top of what's already occurred.


    "...4% inflation for 10 years reduces the burden of debt by one half..." I totally do NOT get this and even after a bit of digging on the internet I remained stumped.

    "...we can have an inflationary real economy, that would be wages and prices and supply chains, and have deflation in asset bubbles - real estate, stocks, - assets that were artificially boosted by [inflationary .gov] policies..."

    I saw brutus2's post come in email notification while I have been s-l o-w-l-y replying to this post. I took a glance and looking forward to giving it an actual read.

  5. #135

    Default

    Thinking his logic for the below is as follows;

    "...4% inflation for 10 years reduces the burden of debt by one half..." I totally do NOT get this and even after a bit of digging on the internet I remained stumped."

    If you owe 100,000 today and did not have to pay it back for 10 years and the inflation rate ( depreciating PP of the money) was 4% a year, than you would really only be paying back roughly
    50% of it measured in purchasing power parity ( actually 52%). This assumes no interest to compensate the lender for this.

    That is the main reason why prolific borrowers ( like governments) love inflation, especially if the rates they pay are less than the real depreciation of the currency.


    This is almost always. ( at least for the US) as the government/Fed makes the calculation for what that rate of depreciation is,( no bias here) and also can distort the interest rate that they pay, if necessary, by having their CB just buying up the bonds at a certain rate range.

  6. #136

    Default

    Quote Originally Posted by brutus2 View Post
    Thinking his logic for the below is as follows;

    "...4% inflation for 10 years reduces the burden of debt by one half..." I totally do NOT get this and even after a bit of digging on the internet I remained stumped."

    If you owe 100,000 today and did not have to pay it back for 10 years and the inflation rate ( depreciating PP of the money) was 4% a year, than you would really only be paying back roughly
    50% of it measured in purchasing power parity ( actually 52%). This assumes no interest to compensate the lender for this.

    That is the main reason why prolific borrowers ( like governments) love inflation, especially if the rates they pay are less than the real depreciation of the currency.


    This is almost always. ( at least for the US) as the government/Fed makes the calculation for what that rate of depreciation is,( no bias here) and also can distort the interest rate that they pay, if necessary, by having their CB just buying up the bonds at a certain rate range.

    Thanks brutus2. Although I always have struggled with wrapping my head around the real effects of inflation on my pocket book you have made a small opening in the veil that obstructs my vision. It causes me to be very short term minded and to not see the longer term affects.

    As an example I can point to redrum's purchase of short term treasuries. He smartly puts his money to work for say 5 or 13 weeks. So he loans them $986.28 and in 13 weeks they give him back $1000. My brain (unwisely) says "ok, great, $13.72 gain, $1 a week... how is that a big deal?"

    The part I miss is truly knowing - or maybe better yet, truly feeling - that in 13 weeks my $986.28 will only have the purchasing power of $970.97 while redrums $1000 (amount received) will have the purchasing power of (I guess?) $986.28.

    Three more cycles of this through the year and m held in cash $986.28 will have the purchasing power of $946.83.

    Redrum loans the $1000 to them again and is paid back $1013.90 then uses that amount changing it into $1028 and finally sitting with $1042.28, which now has the purchasing power of $1000.xx

    So at the end of a year (4 iterations) I'm still sitting with $986.28 but if I want or need to spend it I can only buy $946.xx worth of stuff. Redrum has $1042. and, if wants/needs to, can buy about $1000. worth of stuff.

    So in real (i.e. called nominal?) terms I've lost ~$42 and redrum has gained ~13.xx.

    And if the scale was 100 or 200 times more capital then it becomes a bit more substantial amount... loss of $4200 or $8400 hundred vs. a gain of $1300 or $2600.

    brutus2 is any of that close or is my math way off?

  7. #137

    Default

    Quote Originally Posted by ynot2k View Post
    Thanks brutus2. Although I always have struggled with wrapping my head around the real effects of inflation on my pocket book you have made a small opening in the veil that obstructs my vision. It causes me to be very short term minded and to not see the longer term affects.

    As an example I can point to redrum's purchase of short term treasuries. He smartly puts his money to work for say 5 or 13 weeks. So he loans them $986.28 and in 13 weeks they give him back $1000. My brain (unwisely) says "ok, great, $13.72 gain, $1 a week... how is that a big deal?"

    The part I miss is truly knowing - or maybe better yet, truly feeling - that in 13 weeks my $986.28 will only have the purchasing power of $970.97 while redrums $1000 (amount received) will have the purchasing power of (I guess?) $986.28.

    Three more cycles of this through the year and m held in cash $986.28 will have the purchasing power of $946.83.

    Redrum loans the $1000 to them again and is paid back $1013.90 then uses that amount changing it into $1028 and finally sitting with $1042.28, which now has the purchasing power of $1000.xx

    So at the end of a year (4 iterations) I'm still sitting with $986.28 but if I want or need to spend it I can only buy $946.xx worth of stuff. Redrum has $1042. and, if wants/needs to, can buy about $1000. worth of stuff.

    So in real (i.e. called nominal?) terms I've lost ~$42 and redrum has gained ~13.xx.

    And if the scale was 100 or 200 times more capital then it becomes a bit more substantial amount... loss of $4200 or $8400 hundred vs. a gain of $1300 or $2600.

    brutus2 is any of that close or is my math way off?
    An easier way to look at the above is this.

    Lets say Redrum can invest in 13 week treasuries at a 5.5% annual yield. He does so 4 times in a row. ( there is no guarantee that this will be so). Lets say there are no transaction costs, which I believe is the case.
    Lets say the inflation rate ( money depreciation) we accept is 5% annual.
    Lets say you just hold cash for the year.

    Nominal is the actual amount of fiat unadjusted for depreciation
    Real is the adjusted for depreciation of purchasing power.

    So if you started with 1000 then Redrum would have 1,055$ in nominal and 1,005 $ in real
    and you would have 1,000 in nominal and 950 in real.

    But there is another catch - taxes. Redrum would have to pay some of that gain to the government, either now or in the future ( if in a deferred tax account), you did not make anything so you would not.

    So even though Redrum is better off than you, he still would not beat the purchasing power loss net of taxes.

    Just another reason why the government loves inflation, the more the merrier, up until the point the natives get restless.

  8. #138

    Default

    Thanks brutus2 that is a simpler way to see it.

    I've been, for a couple of days, looking at swpcayman.com as a storage vault to use and today noticed they have another business that involves borrowing cash on ones own metal stored with them and also a way to be the entity that loans money to the borrowers. Casey recommends them as one option for vault storage but I don't know anything else about them. I would never be interested in the borrowing part (part of your stored metals is the collateral) but the lending side I am wanting to know more. They currently have one opportunity available that returns 7%. That number starts to get my attention a bit. It is interesting but I just can't get myself to move that fast on new information even if it is promoted by someone like Casey. I bet it is funded pretty quickly.

  9. #139

    Default

    Quote Originally Posted by ynot2k View Post
    Thanks brutus2. Although I always have struggled with wrapping my head around the real effects of inflation on my pocket book you have made a small opening in the veil that obstructs my vision. It causes me to be very short term minded and to not see the longer term affects.

    As an example I can point to redrum's purchase of short term treasuries. He smartly puts his money to work for say 5 or 13 weeks. So he loans them $986.28 and in 13 weeks they give him back $1000. My brain (unwisely) says "ok, great, $13.72 gain, $1 a week... how is that a big deal?"

    The part I miss is truly knowing - or maybe better yet, truly feeling - that in 13 weeks my $986.28 will only have the purchasing power of $970.97 while redrums $1000 (amount received) will have the purchasing power of (I guess?) $986.28.

    Three more cycles of this through the year and m held in cash $986.28 will have the purchasing power of $946.83.

    Redrum loans the $1000 to them again and is paid back $1013.90 then uses that amount changing it into $1028 and finally sitting with $1042.28, which now has the purchasing power of $1000.xx

    So at the end of a year (4 iterations) I'm still sitting with $986.28 but if I want or need to spend it I can only buy $946.xx worth of stuff. Redrum has $1042. and, if wants/needs to, can buy about $1000. worth of stuff.

    So in real (i.e. called nominal?) terms I've lost ~$42 and redrum has gained ~13.xx.

    And if the scale was 100 or 200 times more capital then it becomes a bit more substantial amount... loss of $4200 or $8400 hundred vs. a gain of $1300 or $2600.

    brutus2 is any of that close or is my math way off?
    That sounds like a lot of work for low return. Boring too. My strategy to beat inflation is to buy appreciating assets...things I like and need.

    Inflation is not just a hidden tax, its government sanctioned thievery.
    Politicians and diapers must be changed often, and for the same reason. -Mark Twain

    The purpose of life is to matter, to be productive, to have it make some difference that you lived at all. -Leo Rosten

  10. #140

    Default

    Quote Originally Posted by High Chaparral View Post
    Pretty $$$ Incredible ^^^ almost $23 Trillion MORE after 15 years.
    And if you believe GDP almost $13 Trillion.
    The debt deal just passed will add at least $5T more to that debt. Numbers of that size that can't even be imaged by normal people. It take a real genius in politics to understand how that makes any sense. Maybe Lindsay Graham will get to the bottom of it and explain it all to us dumb folks. AOC can maybe tell us how that's going to save the planet too. Idiots on the right, idiots on the left, perhaps we might be in trouble? More taxes is always the solution to these morons.

    https://www.youtube.com/watch?v=YNlffZb1pLU
    American Legion Preamble: https://www.legion.org/preamble

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •