The coming Gold crash

[Oldun]

Interesting. You say don’t trust Fed numbers but that I should trust you. You see the dilemma I am sure ? Best not to trust anyone when it comes to personal finance and live with ones personal decisions.

I think there will be inflation, deflation and stagflation all at the same time.

 

Edited June 3, 2020 by Oldun

[Oldun]

Ah, would that it were. She is a beauty and I know where she is currently moored after a wondeful life sailing the open seas. Helluva boat, helluva story. I very nearly named my daughter after her.

Edited June 3, 2020 by Oldun

[MancunianStacker]

I think Wonger is talking about the new $ not today’s $. The new $ could well be the equivalent of $50 today making his new $400 target $20,000 in today’s fiat! 💵 

 

[Oldun]

13 minutes ago, Wonger said:

Yes, do not trust anything from the Fed and the deflation were going to be entering is going to be Biblical, the recent Currency creation was a show, whatever happens is completely engineered by the Central Banks and Commercial Banks and we will see currency destruction via debt defaults very soon like never before in history, this will affect us all and not in a good way and this will not just be confined to financial asset pain, we continue to play the game, but soon I fear there will not be a game to play, is that your sailing yacht in picture? 

I think the name of the game is not to lose too much or to try to conserve wealth. The days of “getting ahead” are long gone.

Edited June 3, 2020 by Oldun

[Wonger]

25 minutes ago, Oldun said:

Interesting. You say don’t trust Fed numbers but that I should trust you. You see the dilemma I am sure ? Best not to trust anyone when it comes to personal finance and live with ones personal decisions.

I think there will be inflation, deflation and stagflation all at the same time.

 

I do not see any dilemma, I have not asked you to trust me, Ive stated Im short Gold with a Target of $385 and if anyone doesn't agree it can happen that is their right of opinion, I suggest they keep watching and the lower the Gold price drops the quieter this thread will become with the Chaff long gone and the only posters will be the wheat buying Gold at a 75% reduction in $ price who did not fall for the Vendors buy Gold anytime at any price sales pitches and YouTube sensational attention seeking! 

[HawkHybrid]

1 hour ago, Oldun said:

Would anyone like to comment on this ?

 

 

between 2015-2016 deflation probabilities decreased and gold price also

decreased, so it's inconclusive. not counting the current move we are in, it's

one for and one against.

 

HH

Edited June 3, 2020 by HawkHybrid

[Wonger]

1 hour ago, Oldun said:

Interesting. You say don’t trust Fed numbers but that I should trust you. You see the dilemma I am sure ? Best not to trust anyone when it comes to personal finance and live with ones personal decisions.

I think there will be inflation, deflation and stagflation all at the same time.

 

Deflation is a reduction in the supply of Currency, you can not have Inflation, Deflation and Stagflation at the same time, the Currency supply is either increasing or decreasing via Central and Commercial Bank activity.

Edited June 3, 2020 by Wonger

[Martlet]

8 minutes ago, Wonger said:

Deflation is a reduction in the supply of Currency, you can not have Inflation, Deflation and Stagflation at the same time, the Currency supply is either increasing or decreasing via Central and Commercial Bank activity.

I see other get this wrong, i'd expect an expert to understand the terminology better. Deflation (and inflation) is relating only to prices, not to currency supply. 

[Wonger]

Sold WTI at $38.00 which was purchased at $8 and added to all Tanker longs as per previous

[KDave]

well done on crude, you are expecting another glut of oil? 

[Wonger]

6 minutes ago, Martlet said:

I see other get this wrong, i'd expect an expert to understand the terminology better. Deflation (and inflation) is relating only to prices, not to currency supply. 

Deflation and Inflation definitions are solely either the decrease or increase in the supply of Currency!

[Wonger]

9 minutes ago, KDave said:

well done on crude, you are expecting another glut of oil? 

Thanks, yes I expect we will see not only front Month WTI Futures negative but the entire 12 Months negative in the not so distant future and feel capital deployed in the Tanker stocks here is a better option than short WTI Futures purely because the recent carnage in the negative WTI Futures pricing even though holding WTI shorts down from $32 was enough to add to stress levels which I can do without. 

Edited June 3, 2020 by Wonger

[KDave]

Oil and gold both negative you are predicting deflation, gold price that low would require enormous deflationary pressures, or one enormous recession.

I have seen the consumer debt figures for April and May people are paying off record amounts of debt. I have not worked out how deflationary this is on aggregate given that many businesses and governments are borrowing at the lower interest rates, but my feeling in regards to the deflationary effects are "very". Especially if this continues once lockdown is over, which I imagine it will given most are expecting more uncertainty/second wave, the government will have to step in but likely will be following the curve rather than setting it.

[dga00]

 

5 minutes ago, Wonger said:

Deflation and Inflation definitions are solely either the decrease or increase in the supply of Currency!

That's not completely true. Prices can go up(inflation) or down(deflation) based on supply and demand.

Fed is printing a lot of money, so we are certainly dealing with an increase in money supply, but here there are 2 scenarios:

1. If the increased money supply is somewhat divided between the different classes, people will have money to spend, driving the demand and prices up.

2. But if the bulk of the money supply flows towards the 1% or the 0.1% of population(the wealthy), most people will not have money to spend, demand will go down and prices will stagnate or even go down.

25 minutes ago, Wonger said:

Deflation is a reduction in the supply of Currency, you can not have Inflation, Deflation and Stagflation at the same time, the Currency supply is either increasing or decreasing via Central and Commercial Bank activity.

Here I have to disagree with you again. Just to make things clear, stagflation means that wages are stagnating and prices are going up.

For the short to medium term, I think very few people will get significant wage increases, very few will argue that.

All we need now is to have:
1. Inflation in necessities(food, rent, utilities, property taxes)

2. Deflation in all other areas/assests(starting with commodities - precious metals, oil)

 

So your prediction of gold reaching $400 might happen somewhere in the near future, but it will be a grim future, because people will have to spend every cent they have on things far more important, like putting food in their belly and keeping a roof over their head.

[pyperb]

On 28/05/2020 at 10:21, pyperb said:

think there will be a dip start of June, if so buy buy buy

think I called it correct currently at £1365, possibly the last time to buy before it goes higher

[dga00]

5 minutes ago, KDave said:

I have seen the consumer debt figures for April and May people are paying off record amounts of debt.

I have not seen them. Interesting to check the source of this information. It may be propaganda.

Or they could actually be true. But most of the people that are paying down their debts in this period are those who:
1, did not lost their job; they continued working because they were deemed essential or they could do their work from home
2. received stimulus checks
3. reduced their spending because of the lock down; and this is important, because people that are accustomed to be in debt, and having different shortages through the years, have used the remaining cash, saved because of the lock down, to indulge in some of their long time wants... not paying extra on their loans.

[Martlet]

40 minutes ago, Wonger said:

Deflation and Inflation definitions are solely either the decrease or increase in the supply of Currency!

You have a link to such a definition? 

Economics Help says :

"Deflation is defined as a decrease in the general price level."

Investopedia says:

"Deflation is a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy ... Deflation causes the nominal costs of capital, labor, goods, and services to fall."

Too much weight is placed on the association with money supply, that can be a cause of, not the defining characteristic, deflation or inflation. 

[KDave]

16 minutes ago, dga00 said:

I have not seen them. Interesting to check the source of this information. It may be propaganda.

Or they could actually be true. But most of the people that are paying down their debts in this period are those who:
1, did not lost their job; they continued working because they were deemed essential or they could do their work from home
2. received stimulus checks
3. reduced their spending because of the lock down; and this is important, because people that are accustomed to be in debt, and having different shortages through the years, have used the remaining cash, saved because of the lock down, to indulge in some of their long time wants... not paying extra on their loans.

I believe people are using furlough money to pay off their debt. It could be propaganda but if you are basically unemployed (furlough) and have no promise of a job in a few months time you are not going to be living large, you would want to reduce your liabilities. I said a few months ago that the stimulus checks were not inflationary because they are at best replacing what liquidity has been lost, it looks now in reality that they are being used to further reduce liquidity as people pay off debt - destroying currency - and not spending the money like they did their normal wages - this is very deflationary.

[Wonger]

18 minutes ago, dga00 said:

 

That's not completely true. Prices can go up(inflation) or down(deflation) based on supply and demand.

Fed is printing a lot of money, so we are certainly dealing with an increase in money supply, but here there are 2 scenarios:

1. If the increased money supply is somewhat divided between the different classes, people will have money to spend, driving the demand and prices up.

2. But if the bulk of the money supply flows towards the 1% or the 0.1% of population(the wealthy), most people will not have money to spend, demand will go down and prices will stagnate or even go down.

Here I have to disagree with you again. Just to make things clear, stagflation means that wages are stagnating and prices are going up.

For the short to medium term, I think very few people will get significant wage increases, very few will argue that.

All we need now is to have:
1. Inflation in necessities(food, rent, utilities, property taxes)

2. Deflation in all other areas/assests(starting with commodities - precious metals, oil)

 

So your prediction of gold reaching $400 might happen somewhere in the near future, but it will be a grim future, because people will have to spend every cent they have on things far more important, like putting food in their belly and keeping a roof over their head.

You can disagree with me, feel free, but the supply of Currency by Central Banks and Commercial Banks determines Inflation or Deflation and that is defined by an increasing Currency supply or a decreasing Currency supply, individual local markets, goods or service prices may or may not rise or fall however these always offset each other when looking at the Whole and the reason is because the Whole can only be inflated or deflated via increases or decreases in the Currency supply.  

[sixgun]

1 hour ago, Wonger said:

Deflation and Inflation definitions are solely either the decrease or increase in the supply of Currency!

Wrong - if the economy expands inline with the money supply there is no inflation.

[Wonger]

9 minutes ago, Martlet said:

You have a link to such a definition? 

Economics Help says :

"Deflation is defined as a decrease in the general price level."

Investopedia says:

"Deflation is a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy ... Deflation causes the nominal costs of capital, labor, goods, and services to fall."

Too much weight is placed on the association with money supply, that can be a cause of, not the defining characteristic, deflation or inflation. 

Are you seriously trying to tell me that as a whole prices can Increase without being first proceeded by an increase of the supply of Currency? If so can you explain where the extra Currency comes from to drive the purchase cost of the whole higher?

[sixgun]

2 minutes ago, Wonger said:

Are you seriously trying to tell me that as a whole prices can Increase without being first proceeded by an increase of the supply of Currency? If so can you explain where the extra Currency comes from to drive the purchase cost of the whole higher?

The wheat crop fails - there is only chaff. The price of wheat quadruples. The farmer increases the price b/c the supply of wheat decreases. 
Do farmers have to get permission from the banks to put up prices?

[Wonger]

2 minutes ago, sixgun said:

Wrong - if the economy expands inline with the money supply there is no inflation.

The Currency supply determines the Economic expansion/contraction, try buying something without any Currency!

[sixgun]

1 minute ago, Wonger said:

The Currency supply determines the Economic expansion/contraction, try buying something without any Currency!

I'll pay with gold then - or BTC.

[Wonger]

2 minutes ago, sixgun said:

The wheat crop fails - there is only chaff. The price of wheat quadruples. The farmer increases the price b/c the supply of wheat decreases. 
Do farmers have to get permission from the banks to put up prices?

No they do not, but without a corresponding increase in the Currency supply then any increase in the price of the wheat is offset by a decreasing price in another good or service!