100 million people digging up gold all around the world? maybe. and when so, they would be doing much more good than 100 million fractional bankers could ever, and the proof will be when this sorry episode ends in zero-state monetary system reset, inevitably and inexorably.
maurice just spoke up about gold again, along with nouriel. we are blessed.
just in in-tray
player 1:
From The Business Insider, Oct, 23, 2009:
Nouriel Roubini believes that a "wall of liquidity" is chasing all kinds of assets, yet once the economy disappoints expectations, it will all come crashing down.
Yet for Dr. Doom, gold isn't the answer.
According to him, despite the temporarily asset bubbles right now, we're still in a deflationary world and we'll realize it soon enough once growth stagnates and all kinds of inflated asset categories come falling down.
IndexUniverse: Roubini: I don’t believe in gold. Gold can go up for only two reasons. [One is] inflation, and we are in a world where there are massive amounts of deflation because of a glut of capacity, and demand is weak, and there’s slack in the labor markets with unemployment peeking above 10 percent in all the advanced economies. So there’s no inflation, and there’s not going to be for the time being.
The only other case in which gold can go higher with deflation is if you have Armageddon, if you have another depression. But we’ve avoided that tail risk as well. So all the gold bugs who say gold is going to go to $1,500, $2,000, they’re just speaking nonsense. Without inflation, or without a depression, there’s nowhere for gold to go. Yeah, it can go above $1,000, but it can’t move up 20-30 percent unless we end up in a world of inflation or another depression. I don’t see either of those being likely for the time being. Maybe three or four years from now, yes. But not anytime soon.
COMMENT by player 1: err....we have 'avoided this tail risk'? how does he know, pray tell? around this time in 1930, one year after the crash, no-one thought the economy could get any worse either...in fact, it looked in some respects a little bit worse than today's economy, and in some respects a little bit better, but all in all not much different....Yeah, it can go above $1,000 (check, has already happened, so yes, it can).
as to whether there is or isn't inflation - depends on your definition. the central banks had no problem producing massive money supply inflation until August, in spite of low capacity utilization, high unemployment and private sector debt repayment. they have pulled back a bit now, but there's nothing that says they won't open the spigot again when occasion demands. so far the collapsing private sector credit bubble has been aptly replaced with a public sector one.
the notion that all you need to avoid inflation is a weak economy is simply wrong - should it not have been laid to rest in the 70's? or perhaps by Zimbabwe's calamity? (its economy was so weak as to almost not exist anymore - joblessness at 80% and so forth....and yet, it had an inflation rate of some 60 sextillion percent in the end). it is true that the private sector's economic contraction produces deflationary pressures - whenever more credit is paid pack than extended, the money supply perforce shrinks. however, the central banks counter-act this by monetizing massive amounts of debt, both public and private. in the end, it is a political decision whether we have inflation. it's a fiat money system - there is no restriction on the supply of fiat money as long as there is paper and ink (or these days, a functioning computer network).
COMMENT by tobagojack: overly complicated nouriel has spoken about simple gold, that which he owns none and so obviously knows nothing about; and so our faith shall be rewarded. amen.
the reporter should have asked nouriel, "sir, what would the genetically-coded officialdoms do when the unexpected-by-you fifth iteration of galaxy-wide quantitative easing fails to do the dirty trick? do the words inexorable and inevitable mean anything to you?"
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