Comments on: Fed Begins Buying U.S. Treasuries http://dailyreckoning.com/fed-begins-buying-us-treasuries/ Entertaining Ideas on the Economy, Markets, Gold, Oil and Investing Strategies. Sat, 11 Feb 2012 01:59:47 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: lost&found http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3463 lost&found Thu, 26 Mar 2009 20:52:52 +0000 http://dailyreckoning.com/?p=13859#comment-3463 Hey, Jeff, I have a riddle for you. There will be lots and lots and lots of inflation but prices won`t rise. How come? Hey, Jeff, I have a riddle for you. There will be lots and lots and lots of inflation but prices won`t rise. How come?

]]> By: Jeff http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3446 Jeff Thu, 26 Mar 2009 18:08:14 +0000 http://dailyreckoning.com/?p=13859#comment-3446 As Mr. Bonner hints, there are major differnces between Japan and the US in its current predicament. Japan is/was a net creditor, whereas the US is the world's largest net debtor. For foreign creditors, buying dollar demoninated dollars may become more and more dis-tasteful and they may even begin selling dollar debt (see the latest TIC report...). Unfortunately, as the dollar looses favor around the world, there is only one place where people are forced to use dollars as legal tender; the United States. This would cause prices to domestic prices to rise as more dollars compete for limited goods and import prices to rise as the dollar looses relative value. If/when that occurs we may finally get what a sane monetary system would have caused a long time ago. We will find foreign goods more expensive for us to purchase and will be forced to look for more cost effective alternatives at home. In the meantime, as the dollar declines, precious metals will do a better job of holding their value. Our elected and appointed government officials can try to fight this outcome, but as Mr. Bonner points out, "that which must happen will happen". Of course, the world is a complicated system and things could work out differently. Other nations might not take kindly to seeing their currencies appreciate against the dollar and may try to fight that tide. In such cases, citizens of these countries will benefit from holding some of their wealth in precious metals. In short, the future cannot be predicted with any great certainty, so why not hedge and hold some precious metal in your portfolio? Just in case. As Mr. Bonner hints, there are major differnces between Japan and the US in its current predicament. Japan is/was a net creditor, whereas the US is the world’s largest net debtor. For foreign creditors, buying dollar demoninated dollars may become more and more dis-tasteful and they may even begin selling dollar debt (see the latest TIC report…). Unfortunately, as the dollar looses favor around the world, there is only one place where people are forced to use dollars as legal tender; the United States. This would cause prices to domestic prices to rise as more dollars compete for limited goods and import prices to rise as the dollar looses relative value. If/when that occurs we may finally get what a sane monetary system would have caused a long time ago. We will find foreign goods more expensive for us to purchase and will be forced to look for more cost effective alternatives at home. In the meantime, as the dollar declines, precious metals will do a better job of holding their value. Our elected and appointed government officials can try to fight this outcome, but as Mr. Bonner points out, “that which must happen will happen”.

Of course, the world is a complicated system and things could work out differently. Other nations might not take kindly to seeing their currencies appreciate against the dollar and may try to fight that tide. In such cases, citizens of these countries will benefit from holding some of their wealth in precious metals.

In short, the future cannot be predicted with any great certainty, so why not hedge and hold some precious metal in your portfolio? Just in case.

]]> By: StingingNettle http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3435 StingingNettle Thu, 26 Mar 2009 16:14:02 +0000 http://dailyreckoning.com/?p=13859#comment-3435 One good thing if gold somehow goes to $600, is that its still at least worth $600. ;) One good thing if gold somehow goes to $600, is that its still at least worth $600. ;)

]]> By: lainvestorgirl http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3432 lainvestorgirl Thu, 26 Mar 2009 15:41:58 +0000 http://dailyreckoning.com/?p=13859#comment-3432 Well I guess they're not going to bomb LA because they're buying up all our foreclosed real estate. Well I guess they’re not going to bomb LA because they’re buying up all our foreclosed real estate.

]]> By: Dennis http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3431 Dennis Thu, 26 Mar 2009 15:29:18 +0000 http://dailyreckoning.com/?p=13859#comment-3431 Neither do I I.girl...Only it can be the fastest way to get out of this unprecedented mess. And yes, that war can be (mainly) between the US and China...Many good (or bad!) reasons for that. Without war this depression can easily go on for 20 years. Neither do I I.girl…Only it can be the fastest way to get out of this unprecedented mess. And yes, that war can be (mainly) between the US and China…Many good (or bad!) reasons for that.
Without war this depression can easily go on for 20 years.

]]> By: lainvestorgirl http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3427 lainvestorgirl Thu, 26 Mar 2009 14:57:47 +0000 http://dailyreckoning.com/?p=13859#comment-3427 Dennis... I definitely don't want to see a war. But China has been acting very weird, possibly over this currency situation. Their ships were harassing ours a few weeks ago, now N. Korea is threatening to launch a rocket, and they don't do anything without China's approval. I think this is just the beginning, eventually they take Taiwan and we can't stop them now. Our profligate spending has become a national security issue. Dennis…

I definitely don’t want to see a war. But China has been acting very weird, possibly over this currency situation. Their ships were harassing ours a few weeks ago, now N. Korea is threatening to launch a rocket, and they don’t do anything without China’s approval. I think this is just the beginning, eventually they take Taiwan and we can’t stop them now. Our profligate spending has become a national security issue.

]]> By: lost&found http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3415 lost&found Thu, 26 Mar 2009 13:24:51 +0000 http://dailyreckoning.com/?p=13859#comment-3415 @lainvestorgirl: you may hand over your metals to me with no inflation to me or with inflation in exchange for a couple of kisses... might give it a thinkie... @lainvestorgirl:

you may hand over your metals to me with no inflation to me or with inflation in exchange for a couple of kisses… might give it a thinkie…

]]> By: pat http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3405 pat Thu, 26 Mar 2009 11:01:59 +0000 http://dailyreckoning.com/?p=13859#comment-3405 You have great deal of knowlege worth knowing & truths in the financal world. Q. Could you reshape the format your future articles as follows (possilby?): subejct review Problem Info / data / story/ etc Solutions people can take Any other business You have great deal of knowlege worth knowing & truths in the financal world.

Q. Could you reshape the format your future articles as follows (possilby?):

subejct review
Problem
Info / data / story/ etc
Solutions people can take
Any other business

]]> By: larry whitfield http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3404 larry whitfield Thu, 26 Mar 2009 11:01:29 +0000 http://dailyreckoning.com/?p=13859#comment-3404 Wasn' the credit bubble itself hyperinflationary (borrowed dollars chasing houses, oil and goods)? Has the money creation yet approached the massive size of the financial products bubble? Wouldn't this explain why we have not seen inflation hedges on the move? YET? Wasn’ the credit bubble itself hyperinflationary (borrowed dollars chasing houses, oil and goods)? Has the money creation yet approached the massive size of the financial products bubble? Wouldn’t this explain why we have not seen inflation hedges on the move? YET?

]]> By: Dennis http://dailyreckoning.com/fed-begins-buying-us-treasuries/#comment-3400 Dennis Thu, 26 Mar 2009 10:04:15 +0000 http://dailyreckoning.com/?p=13859#comment-3400 An open mind is one of the best qualities some people have, even if they st seem to be genius. And yes mr.Bill, you seem to be like that. Our global economy is dynamic, with thousands of parameters, so, far too complicated for men to understand - like playing chess. So, about the outcome of this all...no men can know. But for me two things are sure: 1. There will be social chaos in the end, probably cicil wars. 2. The best way to come out of this crisis will be another Worldwar. Not funny of course, but the best way to make free the road to the future, with less people on earth (best is if about 3 0r 4 billion can be wiped out). An open mind is one of the best qualities some people have, even if they st seem to be genius.
And yes mr.Bill, you seem to be like that. Our global economy is dynamic, with thousands of parameters, so, far too complicated for men to understand – like playing chess.
So, about the outcome of this all…no men can know. But for me two things are sure: 1. There will be social chaos in the end, probably cicil wars.
2. The best way to come out of this crisis will be another Worldwar. Not funny of course, but the best way to make free the road to the future, with less people on earth (best is if about 3 0r 4 billion can be wiped out).

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