Wednesday, April 1, 2009

PALMERJOE GIVES YOU THE FACTS

FED is printing money like there is no tomorrow and chinese and rest of the world are uneasy about our currency. Excessive dependence and reliance on one currency the US dollar, (which is not backed by gold and is being debased as never before), is not prudent in a globalised world with emerging economic powers. Should the dollar resume its bear market in the coming months, which seems likely, energy and food prices will surge in value again and the world will feel the effects of it.
My assessment is we will continue with ASSET Deflation + Hyper-Inflation for essential goods including food until 2012 and from 2012 to 2014 then we switch to real deflationary depression. This yr is the yr of so-called re-inflationary period since FED is throwing the kitchen sink at the problem. Market's overall trend is probably up till summer and then real downturn starts again. hyper-inflation seems entirely possible, even if mere inflation does not.. Hyperinflation will arrive when The Government decides that fiscal stimulus alone cannot ever get us out of debt, given the vast sums of debt that need to be inflated away. No, only a hyperinflation could do the job, albeit at a price that presently seems much too high. Creditors and savers would be wiped out, life insurance policies would become worthless, pension funds would be devastated, and all of the institutional conduits of lending, including the bond markets, would cease to function for a generation.

If Gold prices remain between 850 & 950 in the short term, that should give clear signal that market is thinking currency troubles and inflationary pressure ahead. The current charts still shows strong support for Gold at 880.

4 comments:

  1. I have read several non gold bugs using 880 as an entry. Several of the sites I subscribe both in Asia and the US have been pushing gold the past 2 weeks. Many are expecting the Chinese to start hoarding gold.

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  2. Im counting on them temo to push it down to 880.....hope so

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  3. Any way to get your thoughts on what will happen if Eastern European countries default on their debt, I hear they own a lot to Western Europe, what kind of an effect it will have on the Financials, and how soon will this scenario play out?

    Thanks

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  4. The following should answer your question:

    http://knowledge.wharton.upenn.edu/article.cfm?articleid=2174

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