"Death By Debt"

[Slaphot]

Here is a great blog where Chris Martenson really breaks down what is going on today. I found this over on coinflation. Enjoy!


http://www.chrismartenson.com/blog/death-debt/58941

[Mossy]

Commodities are supposed to lose value compared to the dollar when QE II ends. I don't understand why the dollar does not lose value compared to commodities instead.

[Slaphot]

If there is no QE3 then that will be considered bullish for the USD and bearish for everything else. The market acts like a heroin addict, it needs injections of new money, because interest rates are kept low by the Fed and old money does not flow through the economy when banks are not lending.

[avidbrandy]

yea for the short term commodities would drop with everything else as investors flee.

[Sheikh_yer_Bu'Tay]

Thanks, Slapshot. This is a good read. This guy articulated what most of us have a hard time accepting.

Yet, I don't get how commodities will fall (as they are doing now) when more "thin air money" is going to be printed. Someone help me out. Why are commodities falling??

Knowing a collapse is out there just over the horizon, I have no stomach for any investments except real, hard assets held by myself. That being land, PM's, base metals and natural gas wells (IF I could ever get up enough FRN's to buy one!) Why on earth would anyone buy any paper assets??!

There is one thing I would like to add to his work. All through American history there have been booms and busts. The losers always bought in on the boom and the smart guys always cleaned up during the busts for "pennies on the dollar". The smart money will wait for the next big bust to buy. That is how defaults are wiped clean.

The greater the deception, the harder the correction.

[68Camaro]

Thinking out loud...

To state the obvious, commodity prices will fall, in general, when the economy is slowing or going negative. The competing factors tending to raise prices are inflation, currency devaluation, and the desire for people to invest in physical things when other investing mechanisms aren't trusted.

The problem you sense is that people won't necessarily pull straight out of other investments and put them into commodities, so for a while commodity prices can go down (investors will pull out of even them) even as investors pull out of other markets. Where does the money go? That's the trillion dollar question. In some cases the money (which is made of thin air) will just disappear as values go down. Some of it converted to FRNs or FRN equivalents. But the balance will be put somewhere. Where will value actually transferred to; where will it move? I wish I could predict that.

Not all commodities will be created equal. If the economy tanks far enough, some commodities may not be worth much at all, or anything. Whereas other commodities will eventually become more desirable and after a time will go up. There is also "money" to be made during the in-between, but that has to be a time of great caution. I wish I knew which thing to buy when. I don't know either, so I'm being conservative.

I am mentally (and physically, by hoarding other things as well as PMs) preparing myself for a possible time (hopefully not seen, or brief) when my physical PM will be worth much less in FRNs. But even if that happens I believe PMs (and some other commodities) will then recover and skyrocket in value.

What is the end point? That's the most important thing. Regardless of all the in-between possibilities that have endless permutations, in the end fiat currency will become worthless and only physical things will retain value. Not all physical things will be of equal value, and a major short-term issue will be that not all things will be easily convertible to other things.

[shinnosuke]

68, I like your thinking -- outloud and otherwise. Since we can't know which commodities will be of the most value, forming an association of like-minded folks has got to be the best way to survive and prosper. You ain't got some of that? That's OK because Thurston does.

[68Camaro]

68, I like your thinking -- outloud and otherwise. Since we can't know which commodities will be of the most value, forming an association of like-minded folks has got to be the best way to survive and prosper. You ain't got some of that? That's OK because Thurston does.

Yep, agree.

If the internet remains up (so as not to assume too much), and shipping companies stay in business (another assumption) and don't charge an arm and a leg (a third), then higher-value, higher-density stuff could be traded here.

For stuff that is lower value per unit weight/volume (produce, meat, dairy, etc), we all need to make sure we have a tight network of like-minded local friends.

[John_doe]

Thanks, Slapshot. This is a good read. This guy articulated what most of us have a hard time accepting.

Yet, I don't get how commodities will fall (as they are doing now) when more "thin air money" is going to be printed. Someone help me out. Why are commodities falling??

Knowing a collapse is out there just over the horizon, I have no stomach for any investments except real, hard assets held by myself. That being land, PM's, base metals and natural gas wells (IF I could ever get up enough FRN's to buy one!) Why on earth would anyone buy any paper assets??!

There is one thing I would like to add to his work. All through American history there have been booms and busts. The losers always bought in on the boom and the smart guys always cleaned up during the busts for "pennies on the dollar". The smart money will wait for the next big bust to buy. That is how defaults are wiped clean.

The greater the deception, the harder the correction.

I play some short term paper stocks, but I sink all capital into real assets for long term investment. I try to keep my paper time frame within one year, to minimize risk of losing any large amounts of position.

[Mossy]

The international version of the 1099 form is alive and well, and playing havoc with US international trade.

http://biggovernment.com/dmitchell/2011 ... set-crowd/