2009: BUY GOLD. NOW.

[finnns2003]

wow, found a great local spot that sells precious metals. because the perth mint is based in australia, it's a lot easier to look at their distributor listand go from there.

 

[dey know yayo]

you're right, we'll see. gold prices should start surging spectacularly in late jan/early feb.

 

[mrmossyman84]

wow DKY i dont have any $ to invest or anything but I do have to say I am impressed with how you got involved with investments and the economy...stay on yourgrind.

 

[dey know yayo]

wawaweewa- you say the dollar has to be devalued, how can that occur in deflation which u say is inevitable?

there's a lot of artificial weath that needs to be purged. how can you say that there will be capital destruction (deflation) rather than purchasing powerdestruction (inflation) for this wealth to be purged when you say the dollar has to be devalued (purchasing power destruction)?

and devalued against what? other fiat currencies that are going to tank as well? what else but precious metals?

 

[dey know yayo]

This is a great chart showing the "Supplemental Financing Account" in the Fed financed by the Treasury.

The Treasury borrowed money, decreasing the money supply in circulation. This money was put into this hidden stealth account in the Fed for use in bailoutsand such (including the reverse repurchase agreements I referred to). The Treasury has borrowed over $1 trillion since October, compared to the $400 billiondeficit for the year 2008. The Treasury has borrowed more than double the government's spending needs and deposited the excess liquidity into the Fed. Whenthe Treasury is done with this funding activity is when these sequestered dollars will come rushing out of the Federal Reserve in the form of CURRENCY.

This is a HUGE pool of excess liquidity that has to go SOMEWHERE.

 

[dey know yayo]

The US Treasury borrowed $1 trillion as the government's deficit went to $400 billion. The extra $600 billion is for future spending. Who bought all ofthese Treasuries? The Federal Reserve. With what? PRINTED MONEY. It's only a matter of time before all of this excess liquidity comes rushing into thesystem.

 

[dey know yayo]

Where's China going to get its $585 billion for its economic stimulus? You guessed it-- selling US Treasuries.

No one is left to loan money to the Treasury except for the Fed. The Fed has said it will buy US Treasuries and has already bought massive amounts of T-bills.The Fed's balance sheet shows an obvious disparity between liabilities and assets (which are mostly all toxic debt), so how will the Fed pay for this? Withprinted money.

All of this excess liquidity will come of out of sequestration in a rush of inflation and surging gold prices.

Next year's deficit may reach $2 trillion, with the other half of TARP funds and Obama's record deficit spending initiatives. Who is going to fundthat? Foreigners? You think foreign nations are going to buy US debt as their current account surpluses collapse with commodity prices? You think they haveenough dollars to even PAY for NEGATIVE YIELD TREASURIES? In 2005, foreigners bought $1 trillion of our financial assets (equities, bonds, agencies,treasuries), and in 2006 they bought $1.3 trillion. But the huge ascent of the last two decades stopped in 2007, when they bought $800 billion. 2008 probablyshowed much much bigger declines, especially in Japan. The UK has been showing a lot of "artificial" purchases, simply for Middle Eastern oil, andwith commodity prices this low, that is going to collapse.

Currency has barely grown year over year. More than half of all Fed liabilities are in "depository institutions" (banks) and the "supplementaryfinancing account" (Fed's Treasury holdings). This is money that will dramatically increase velocity once it is unseqeuestered. This is the realproblem. The Fed's liabilities haven't reached the system yet. Deflationists say the money has reached the system but is being withheld fromcirculation. No. The money hasn't reached the system to be circulated yet in the first place. Once the Treasury is done funding this coming year'sgovernment deficit (it needs to do this now so it can borrow at low rates, NEGATIVE in fact), then these dollars will allowed to be sent out and gold willskyrocket.

 

[dey know yayo]

The excess/required reserve ratio is above 700% right now. The Fed is PAYING THE FED FUNDS RATE ON DEPOSITS. The Fed is taking deposits from its own memberbanks for lending later. This more TRAPPED MONEEY. Not trapped due to a traditional "liquidity trap" but rather as teh Fed manipulates to STALL andBUY TIME. All that it is waiting for is the Treasury to finish its funding activities. This is unprecedented. During the 1930s, the excess/required reserveratio was around 100% and the Fed definitely wasn't PAYING INTEREST on deposits.

Geithner is the new Sec of Treasury. He is Bernanke's minion. Bernanke has been managing most of the bailout funds through the New York Fed, which Geithnerwas head of. Hmmm....

Banks will have to draw down on their excess reserves eventually. The Fed will have to monetize Treasury debt. This is actual MONEY. Liquid money beinginjected into the system.

You think banks have a liquidity trap? They have 7 times the money their reserve requirements require DEPOSITED IN THE FED. Wait till they are forced towithdraw this money. Wait til their losses due to write downs and lack of lending overwhelms the interest they get on their deposits (fed funds rate). Theywill withdraw this HUGE POOL of money and rush it into the system as liquidity.

The Fed doesn't want this excess liquidity going into consumer goods. That's hyperinflationary. So it will abandon its support of naked Comex shorts(already occurred) which will spur huge incentive to throw money into gold. That soaks up huge excess liquidity into a non-consumer good that has littleutility outside of store of value.

All the stars are aligned. If you can refute this, let me know. Otherwise, buy gold.

 

[dey know yayo]

Silver and nickel are also good investments here. Oil is most likely putting in a bottom.

 

[dey know yayo]

http://www.bloomberg.com/apps/data?pid=avimage&iid=i0YrUuvkygWshttp://www.bloomberg.com/...mage&iid=i0YrUuvkygWs

$7.4 trillion committed by the government to stave off this crisis. And that is as of mid November. I don't have an estimate on the current commitedgovernment funds, but it is a lot more than the $6.3 trillion in wealth destruction ($700 billion in credit losses + $2 trillion in derivatives + $1 trillionin hedge fund losses + $1 trillion in equity declines + $1.6 trillion in house value declines).

 

[withapassion]

This is all blowing me away but I would still not take a career in any kind of finance. I think having money distracts the mind more then making money soI'l just survive above living satisfied. It's great that you are on the way to becoming a corporate lawyer Yayo and I've been spreading the idea of"natural resources being the backbone of human existence" since forever but obviously theres more to it. Really want to see you win this side of thebet only because of the gold my family has invested in but I'm honestly scared to death of gold skyrocketing to that extent.

 

[dey know yayo]

Originally Posted by withapassion

This is all blowing me away but I would still not take a career in any kind of finance. I think having money distracts the mind more then making money so I'l just survive above living satisfied. It's great that you are on the way to becoming a corporate lawyer Yayo and I've been spreading the idea of "natural resources being the backbone of human existence" since forever but obviously theres more to it. Really want to see you win this side of the bet only because of the gold my family has invested in but I'm honestly scared to death of gold skyrocketing to that extent.

Don't even get me started on that.

But besides that little line, I appreciate the support.

 

[lurkin2long]

guy is no joke.......ill get caught up later.

 

[wallyhopp]

interesting info the last couple of days/pages. i need to NOT sleep like this guy, as hes been at it for 5-6 hours.. id have no regard for anything with a fewextra grand on a friday night to be doing ANYTHING but staying online and educating the NT faithful. for that, i guess i thank you. lol

 

[knightngale]

thanks for the heads up

 

[superantigen]

"Introduce a lil anarchy--upset the established order and everything becomes chaos. I'm an agent of chaos--and you know the thing aboutchaos--it's fair"

 

[wawaweewa]

Originally Posted by Dey Know Yayo

wawaweewa- you say the dollar has to be devalued, how can that occur in deflation which u say is inevitable?

there's a lot of artificial weath that needs to be purged. how can you say that there will be capital destruction (deflation) rather than purchasing power destruction (inflation) for this wealth to be purged when you say the dollar has to be devalued (purchasing power destruction)?

and devalued against what? other fiat currencies that are going to tank as well? what else but precious metals?

Deflation that is occurring is a natural economic correction. Devaluation will not be a 'natural' occurrence.
Eventually, if all of these 'plans' don't work they'll will devalue the USD as a last resort. Thiswill be a big mistake but they'll do it if they have to. I'm not saying that it should happen but it will ifall of their other plans won't work (those plans being to stave of deflation).

That artificial wealth will be purged by deflation and it's already being purged. Housing prices (ongoing), commercial prices (ongoing), wages (ongoing),commodities (ongoing), foodstuffs (ongoing), tech goods, etc.

M1 is far different than M3. M3 can be inflated without it having enormous effect on consumer inflation. As long as that money never makes it to the groundlevel there won't be massive inflation.

The USD, if it is devalued, will be devalued against another currency or 2. The US needs to become mor export oriented (and it will) and devaluation/manipualtion of the USD will be in order to accodomodate export growth.

 

[wawaweewa]

Originally Posted by Dey Know Yayo

This is a great chart showing the "Supplemental Financing Account" in the Fed financed by the Treasury.

The Treasury borrowed money, decreasing the money supply in circulation. This money was put into this hidden stealth account in the Fed for use in bailouts and such (including the reverse repurchase agreements I referred to). The Treasury has borrowed over $1 trillion since October, compared to the $400 billion deficit for the year 2008. The Treasury has borrowed more than double the government's spending needs and deposited the excess liquidity into the Fed. When the Treasury is done with this funding activity is when these sequestered dollars will come rushing out of the Federal Reserve in the form of CURRENCY.

This is a HUGE pool of excess liquidity that has to go SOMEWHERE.

Why do you assume that any money has to be let back into the system? Is there a omnipotent beingpresiding over the FED/Treasury that will force them to let all those USD rush in and create high inflation?
They do what they want to do. I think that's become pretty clear.

They can and will keep that money lodged with the banks. It is, literally, a transfer of wealth. The Banks have become a division of the treasury for allintents and purposes. The banks will not do anything as long as the FED/Treasury don't sign off.
They're letting everything collapse but the banks because the banks is where their power lies.

 

[wawaweewa]

Originally Posted by Dey Know Yayo

Silver and nickel are also good investments here. Oil is most likely putting in a bottom.

If anything silver must edge higher because it is off in its historical correlation to the price of Gold.

 

[dey know yayo]

banks have 7x their reserve requirements deposited at the fed. banks WILL lend, with fed oversight, because they CAN and eventually it will be more profitableto lend from their excess reserves than to keep it deposite and collect interest.

This excess liquidity in the banks will be funelled into precious metals.

 

[dey know yayo]

there is no benefit in just hoarding cash. banks will have huge cash pools much bigger than their writedowns and obligations but that capital will have to beused in lending otherwise it serves no purpose.

 

[dey know yayo]

bernanke can and will do anything to prevent deflation. i think the facts suggest he is setting up a huge inflationary measure to be completed once thetreasury is finished with its funding activities. i think the facts suggest he is backing out of support of naked comex shorts to funnel much of this excessliquidity into precious metals.

 

[onhollowedground821]

Wow 17 pages and it has nothing to do with a Girl or Jay-z?..........

 

[wawaweewa]

Originally Posted by Dey Know Yayo

there is no benefit in just hoarding cash. banks will have huge cash pools much bigger than their writedowns and obligations but that capital will have to be used in lending otherwise it serves no purpose.

It's not their money.
All the Fed talk about 'we want banks to lend' is for the public. If they wanted banks to lend, banks would lend. Look at what BofA CEO said when heinitially refused the FED extortion.
It's a dog and pony show with this "we want banks to lend but they're not listening". It's horse @$*!. They want everything around tocrash so that they can use that destroyed capital and liquefy the banks and not worry about high inflation.

This is not the banks money to lend. It's not their choice. Just as quickly as they have 'injected', they can be withdrawn. This money is literallythere to save the banks . No one else.
Value is relative. When everything else in the economy is devalued and repriced, banks will be at their pre crash levels. They will still be the ones on top.They don't need to be at 200 , 300, or 700% pre crash levels. All they need is to be exactly at or a little below pre crash levels and they'll havegained value relative to all others.

Gold will move up not because of high inflation but because there are very few assets worth investing in. If an investment holds steady than it has relativelygained value as everything else around it devalues.
Gold isn't a bad investment at all. I hold some bullion and stocks. I'm not looking for more than 1500/oz though. Gold prob. won't break 1300/oz.

 

[dey know yayo]

banks are liquified well past levels of current and future write downs. there is tons of EXCESS liquidity out there that serves no purpose staying hoarded.

it is the fed's policy to allow for wealth destruction and purging not through CAPITAL destruction, but PURCHASING POWER destruction.