Not sure why increased government spending is touted as a good thing. Sure it helps the economy from spiralling into a depression, but shouldn't there be some limit on it? Its not like we have any savings. We're just borrowing from foreigners who are happy to send us back their surplus-export-dollars in order to keep their currencies in check to prevent their exports from decreasing. At some point we might become like Japan, with a debt that's nearly 200% of GDP!
Bull Market In Bureaucracy
According the interesting guys at Agora Finance, the all industry thats in a bull market is government employment!
Not sure why increased government spending is touted as a good thing. Sure it helps the economy from spiralling into a depression, but shouldn't there be some limit on it? Its not like we have any savings. We're just borrowing from foreigners who are happy to send us back their surplus-export-dollars in order to keep their currencies in check to prevent their exports from decreasing. At some point we might become like Japan, with a debt that's nearly 200% of GDP!
Not sure why increased government spending is touted as a good thing. Sure it helps the economy from spiralling into a depression, but shouldn't there be some limit on it? Its not like we have any savings. We're just borrowing from foreigners who are happy to send us back their surplus-export-dollars in order to keep their currencies in check to prevent their exports from decreasing. At some point we might become like Japan, with a debt that's nearly 200% of GDP!
Fed + Treasury = Inflation
I read an interesting article today from a commodities trader:
The following comments come from a Merrill Lynch publication today.
“To repeat our Mantra:
1) Whatever MUST happen, WILL happen.
2) In a debt crisis, inflation is the ONLY solution.
3) The FED + US Treasury can create inflation.
4) As such, there WILL be Inflation.In this light, we will remind you that whenever you hear someone whisper to you that “It is different this time,” we urge you to grab your wallet and run. It is never truly different, only the flavor and the timing have been altered. Concurrently, we will note that “Pigs can fly, when shot out of a large enough cannon”.
As such, the ability of the FED+US Government to simultaneously print money and lower interest rates can only end in tears. If this were NOT the case, then Zimbabwe would be a paradise and the Weimar Republic would still exist.”
Commodities like gold and silver have been historic stores of wealth. Rich people understand this and use them protect themselves against inflation. You may not get rich buying gold and silver, but you will definitely retain your buying power. Investments in real estate should also do well - eventually, although its likely to do poorly in the short term.
Is Gold Too Expensive?
Last week, gold prices hit nearly $1,200/oz. Most people think that this is a bubble and that gold prices are due to drop. I'm really not sure what to make of this, but I feel that in the long run (3-5 years), gold prices will keep going higher. But let me quote someone who's credibility and investing prowess far exceeds my own, Richard Russell, 85-year-old author of the Dow Theory Letters. He said:
What do you guys think?
If I had to make a recommendation today, I'd rather buy silver than gold - but I'm still holding on to my gold coins right now.
There’s still loads of scepticism about the rising price of gold and the bull market in gold. It’s been so long since the US public (since 1971) realized gold was real Constitutional money that they don’t know what to make of the gold action. They think gold near $1,200 an ounce is expensive and they’d rather have dollar bills.
I’ve coined the phrase, ‘dollar-bugs’ for these ignorant Americans. I guess they’ll have to get educated the hard way, which means holding on to their fading Federal Reserve Notes, no matter what. As far as I’m concerned, it’s an amazing example of mass brainwashing. ‘Hey, I’d rather have junk paper turned out by the Fed than the real thing - gold.’ Pathetic. And the happy thought is that you can (legally) still swap your junk fiat paper for gold.
What do you guys think?
If I had to make a recommendation today, I'd rather buy silver than gold - but I'm still holding on to my gold coins right now.
What Grows Faster Than Than Inflation?
If we knew what would grow faster than inflation, we all could just plonk our retirement money in it and be assured of safe leisurely life in our old age. So what has been proven to grow faster than inflation over the past century without fail?
Government Spending! According to the Privateer, "In 1909, the US federal government had an annual budget of $US 0.8 Billion. With this it governed a population of just over 90 million people. The cost of government was about $9 per capita. In 2009, the US federal government has an annual budget of $US 3,550 Billion. With this it governs a population of just over 300 million people. That's a cost of about $11,675 per capita."
Now if there was only some way to invest in government spending, we'd all be rich!
Another fact is that you could buy an ounce of silver for a dollar. Now it'll cost you over $17! Are you going to wait until its over $50/ounce before you start buying? For an interesting read check out Why $1,000 Gold is Now Significant
Government Spending! According to the Privateer, "In 1909, the US federal government had an annual budget of $US 0.8 Billion. With this it governed a population of just over 90 million people. The cost of government was about $9 per capita. In 2009, the US federal government has an annual budget of $US 3,550 Billion. With this it governs a population of just over 300 million people. That's a cost of about $11,675 per capita."
Now if there was only some way to invest in government spending, we'd all be rich!
Another fact is that you could buy an ounce of silver for a dollar. Now it'll cost you over $17! Are you going to wait until its over $50/ounce before you start buying? For an interesting read check out Why $1,000 Gold is Now Significant
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