Gold & Silver Prices

So... a new post after years of being quiet... but I can't let this go without warning some of you who are really aware of things going on around you. If you have heard the adds espousing gold and silver as the hedge to the collapsing dollar...  saying when the stock market starts falling... everything will go into chaos.

An econ 101 lesson.  Investors put their money where it brings the best return.  So lets look at this from that logic and see what we come up with about this whole issue.

Currently the FED is holding off on raising interest because the economy is not rolling at a fast enough rate to sustain an expanding economy.  When I look at the numbers coming in, it reminds me of an old John Deere spitting and sputtering.  It acts like it wants to go, but fails and crashes every once in a while. Sometimes catching it's breath and actually giving numbers that show improvement,  makes one wonder if those numbers are real because the next thing you know, it is failing again.

What happens if the FED raises interest rates?  The doomsayers would have you believe they have to eventually and the markets will crash at that time. If they are going to actually pay interest on money, people will take their money out of the risk markets and put it in less risky investments paying interest. Stock market investors will be sellers looking to take their money and run... yes that will cause it to come crashing down.

Think about this... in the world market, the dollar is the safest currency and if they are actually paying a reasonable interest rate, world money will come running... creating a demand for dollars.  What you say?  Creating a demand... won't that make the dollar go up?  Of course it will.  The Dollar will appreciate over other currencies.

How do these two things effect metal and commodity prices?  Commodities are priced in dollars, meaning if the metal price is not in demand, stable prices, they will start depreciating because the dollar buys more of them because it is appreciating.  If commodities are depreciating, money will run from them instead of to them, and the supply demand will shift to greater supply than demand and depreciation will accelerate.

I am not on the computer that has my photo editing program on it, or I would post some monthly charts showing how dollar value effects metal prices over many years.  I will add those as soon as I get to that machine.

This is not investment advise nor should it be construed as such.  It is a warning only to look at what is happening from all angles.  If something is happening that you don't understand, it may be because there are other things you have not considered influencing the market.  Do not listen to adds on the radio or TV for investment advice.  If something is in demand and going to appreciate in value... do you think they would be wanting to sell it?  NO! Something is happening they are not telling you about and they don't want it on inventory.

Going over the cliff!

Go ahead!  Go on over.   It will be a rough ride down.... think we will survive?

So what is the real picture?  We are told that this situation couldn't get any worse.... but I think it can get seriously worse and we still won't be over the cliff.  The problem is it is being made into a serious fundamental problem of eppic proportions and the fix is something that is going to be worse than the problem.  Do you think anyone in this administration really understands and cares?  I don't see any evidence of it.... taking off to Hawaii again.... on a 4 plus million holiday vacation.  How is that serious in the middle of a serious problem.  An empty White House reminds me of the empty chair.

Don't fall for it... the solution is worse than the problem.  Do we have a problem?  OF COURSE we do... but it is not because someone isn't paying enough.  We are all paying more than we should have to.  But the politician's in Washington want you to believe we need to spend more.  Folks, the government is spending more to take care of this country than this country can produce in product to pay for the government we are receiving.  Doesn't that sound like a problem?  A simple problem in reality... we are receiving too much GOVERNMENT! 

Someone needs to be man enough or woman enough to stand up and shout it from the roof tops.  How about an adult?  Can someone just say it... we need to stop the bleeding, shut it down. How about this revelation, before we turn the light switch on in the first office tomorrow, the government has run out of money for the day.  The contract obligations, social security, medicare, interest on debt, are greater than we can afford.  That is before we get started with one employee.

OWE BOMB wants to increase taxes, but not cut spending till some unspecified time in the future.  This sounds exactly like what they did to Reagan.  Give us these increases here and we will give you these cuts over here... but oh they forgot to tell him they were for 1, 2, 5 years down the road and plenty of time for them to be x'd out of the budget and forgotten.... but who cares... they got the increases they wanted. So with the tax cuts he got through, the economy exploded and expanded to increase the flow of money to the treasury by almost twice.... while the congress controlled by the demorats, increased spending by three times as much.

So.... where do we start the cutting?  How about just stopping the increasing.  Every year the government is suppose to grow it's spending by x number of dollars.  WHY?  Everyone else has to get by on less money.  Why can't the government? In Washington, a cut is spending less than the increase allowed.  If we spent 100 dollars this year and next year we are suppose to spend 110, and someone says we should only spend 100, we are cutting the spending by 10%.  Only in Washington is that considered a cut.... only by a politician would a steady budget be considered a cut.... because that would mean he doesn't get his pay increase.

Freeze the government!  Stop the bleeding, stop the nonsense, send them home for the next 9 months and leave us alone so we can recover from the current decimation of our society.  We can't take it any more... so just leave us alone.