A number of questions have come in about the precious metals and real estate along side the stock market. Precious metals have their place. As long as you trade them and not turn them into some conspiracy, they are a tradable market and you can buy or sell. It is just when people preach nonsense that cause others to lose their shirt with no regard for what they are saying. That is wrong. The metals will rally when it is time.
Keep in mind that there are different types of inflation. What we are seeing in the high-end real estate and stocks is the demand-inflation driven by several forces:
(1) People trying to get off the grid fearing banks
(2) Pension funds underwater having no choice but to run into equities especially when interest rates are poised to go negative. These morons in government cannot even think about what negative rates will do to pensions.
We should see the precious metals rally as well. But that comes when the ECM turns down and people once again begin to question government. Will gold go to $50,000? That depends upon the currency for that is NOT real nominal value – just fictional. Saying this implies gold will rise to that value and you become rich. That is not true. Gold will rise as a hedge against government and that requires the decline in confidence. That is why gold rallied with the decline in the ECM after 2007.
Currency-Inflation takes place when the currency value declines on a wholesale basis and that produces advances in prices in EVERYTHING across the board. That is distinct from cost-push inflation like beef caused by shortages, or demand-inflation that is a rush into particular sectors because people perceive (a) rising prices or (b) better alternative.
Some have asked are Europeans better just taking the 10% haircut rather than running into real estate? I seriously doubt that 10% is going to fix anything and this will be an on-going problem. It is probably less risky to just get-off-the-grid for ultimately we will see all currencies reset.
That reset will come only when there are ZERO options left and we have to default on national debts. We will see. The IRS is targeting frequent-flyer points, bonuses or any kind, and eventually the healthcare Obama tax. These people will tax everything possible. They follow the same pattern regardless of what century, culture, race, creed, or politician persuasion.
Diocletian restricted movement until you paid your taxes during the reorganization of Rome. The IRS has done the very same thing. You cannot leave the USA if you owe $50,000 in taxes. See – history repeats because the GREED of those in government never changes regardless of the century. What took place before, will take place again. I need not express my personal opinions nor get involved in conspiracy theories. I look only at the facts – have they done this one before? What happens? And what comes next?