IF governments are going to "monetize" debt...

IF governments are going to "monetize" debt...

WIKI:
"Excessive debt monetization can be inflationary, which in some eyes can be seen as a flat tax because the ultimate result is that the government acquires additional funds and the currency decreases in value."


I can remember that during the HUGE inflation of the mid to late 1970's, you could actually buy stuff, use it and then sell it later for what you paid for it.
My father-in-law bought a new travel trailer, used it a couple of years and "broke even" on a dollar basis, when he sold it.

Wouldn't a person be wise to borrow as much money as possible now and buy "stuff."
Re-finance your house and buy gold, or rental property, farm land, used tools and machinery, jewelry, classic cars, spam or something which would retain it's value as the dollar loses it's value?

Then pray we don't get more of a deflationary depression.

Edited by Rogerdodger, 15 February 2009 - 05:02 PM.

IF governments are going to "monetize" debt...

WIKI:
"Excessive debt monetization can be inflationary, which in some eyes can be seen as a flat tax because the ultimate result is that the government acquires additional funds and the currency decreases in value."


I can remember that during the HUGE inflation of the mid to late 1970's, you could actually buy stuff, use it and then sell it later for what you paid for it.
My father-in-law bought a new travel trailer, used it a couple of years and "broke even" on a dollar basis, when he sold it.

Wouldn't a person be wise to borrow as much money as possible now and buy "stuff."
Re-finance your house and buy gold, or rental property, farm land, used tools and machinery, jewelry, classic cars, spam or something which would retain it's value as the dollar loses it's value?

Then pray we don't get more of a deflationary depression.

my speedster is moving up in price! so is my timex

I am looking at cars now and was thinking of paying cash. But I am re-thinking the cash part. Maybe a loan on the car (cheap interest rates) and buy used scrap jewelry with the cash. My wife loves both. She still wears the 7+ct tennis bracelet bought for under 2K. And the 1Ct ring bought for $125. (I still have my GIA diploma.) Maybe the government won't confiscate the gold jewelry, just the bars and coins?

Edited by Rogerdodger, 15 February 2009 - 04:54 PM.

IF governments are going to "monetize" debt...

WIKI:
"Excessive debt monetization can be inflationary, which in some eyes can be seen as a flat tax because the ultimate result is that the government acquires additional funds and the currency decreases in value."


I can remember that during the HUGE inflation of the mid to late 1970's, you could actually buy stuff, use it and then sell it later for what you paid for it.
My father-in-law bought a new travel trailer, used it a couple of years and "broke even" on a dollar basis, when he sold it.

Wouldn't a person be wise to borrow as much money as possible now and buy "stuff."
Re-finance your house and buy gold, or rental property, farm land, used tools and machinery, jewelry, classic cars, spam or something which would retain it's value as the dollar loses it's value?

Then pray we don't get more of a deflationary depression.

Last time I looks dollah was going up, no?

I am looking at cars now and was thinking of paying cash.
But I am re-thinking the cash part.

Maybe a loan on the car (cheap interest rates) and buy used scrap jewelry with the cash.
My wife loves both.
She still wears the 7+ct tennis bracelet bought for under 2K.
And the 1Ct ring bought for $125.
(I still have my GIA diploma.)

Maybe the government won't confiscate the gold jewelry, just the bars and coins?

The govt has a history of not confiscating collector type silver and gold coins. And It's probably a good idea to not order over the internet as to leave a record. It would be better to buy local and not give them your name and address.
After all, the gov did get pretty "high-handed" in the 1930s before it was all over.

"All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S." - President F.D. Roosevelt, 1933

I don't think that government officials know what they're doing. If they did, they would slash budgets, curb imports, impose tariffs and start indexing wages and prices. Instead they're just trying to maintain price floor on tens of trillions of worthless assets that are stashed somewhere in the Milky Way. Any meaningful government solution would eventually require currency devaluation; introduction of gold backed currency and raising of credit standards. This way the system could restart credit expansion for another 80-90 years; but, nothing is going to happen until current debt is purged.

Last time I looks dollah was going up, no?

Compared to Gold?
http://stockcharts.com/c-sc/sc?s=$USD:$GOLD&p=M&st=2001-01-01&i=p37020204254&a=134672652&r=4904.png

Inflation will occur after the credit deflation completes. Right now, we are still in a credit deflationary cycle. This means as the Fed pumps, it is helping part of the deflation but the credit bubble is so huge that it will take some time for inflation to grab hold. I anticipate first signs of inflationary ugly head to pop up in food prices later this year. This doesn't by far mean deflation has ended there. Food will be the front runner but manufactured goods will take time before their inflation takes hold.. All part of the cycles of crap.