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Post by ATC on Oct 13, 2012 19:43:53 GMT -6
In case you don't know, QE, or Quantitative Easing is when the Federal Reserve essentially "prints" more dollars and uses it to buy debt securities (e.g., mortgage-backed securities, treasuries, bonds, etc). The idea is that the artificially increased demand for debt will hold interest rates low and encourage businesses (and even individuals) to borrow money; thus improving the economy. The problem, however, is that greatly increasing the "money supply" causes high inflation (depreciation of the dollar's value, or "buying power"); some say this harms the economy more than the lower interest rates help. But what do you think? |
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Post by ATC on Oct 13, 2012 19:48:27 GMT -6
Personally, I believe that QE-3 is going to make the economy progressively worse...the same way as QE-1 and QE-2 did before it. It is nothing more than a monetary "bandaid" to make things LOOK better; inflation will cause the dollar to decline against foreign currencies in the FOREX markets, stocks will climb and commodities will surge. The general public will perceive this as an improving economy, especially with low rates. But they will feel the pain every time they have to pay for gas, food, electricity and services. The price of everything will go up... and American wages will remain stagnant and unemployment will stay high. The standard of living will only continue to decrease...
But all the while I will be buying gold and silver futures and selling the dollar in the FOREX markets... at least for me it will be an extremely lucrative and profitable time period lol...
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Post by Bolkonsky on Oct 13, 2012 21:15:29 GMT -6
I bought a bit of silver when it was $12/oz, that's an investment that has more than paid off. I'm only regretting not selling when it was $49/oz. Like you said, the fact of the matter is the more of an empty promise they pump into the economic system the worse the situation becomes. Since the American dollar has nothing backing it (since we were taken off the Gold Standard) it's merely a promise, and with our economic situation and trillion dollar deficits, it's becoming a very weak looking promise. Printing money does one thing - it inflates the system and causes people to buy for a short time, lowering rates. However, a consumer driven market is going nowhere fast, we need industry to get out of this mess. Anyways, QE is a temporary solution, though, because we can only print so much before other nations that have loaned to us start refusing to deal with it because it's worthless. What's gonna end up happening here is the currency is gonna completely crash and have to be rebooted, or radically changed.
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Post by ATC on Oct 13, 2012 21:27:48 GMT -6
What's gonna end up happening here is the currency is gonna completely crash and have to be rebooted, or radically changed. And I can't help but wonder sometimes if that's not exactly what they want...  I had a lot of silver going into 2011... about 56lbs... I sold a little bit around $38 for a little extra cash... the rest was sold in the $43-$46 range. Didn't quite hit the "top" of the chart but that's damn near impossible. All in all it was a good trade, and it's buying season again! |
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Post by Bolkonsky on Oct 13, 2012 21:37:40 GMT -6
And I can't help but wonder sometimes if that's not exactly what they want...  I had a lot of silver going into 2011... about 56lbs... I sold a little bit around $38 for a little extra cash... the rest was sold in the $43-$46 range. Didn't quite hit the "top" of the chart but that's damn near impossible. All in all it was a good trade, and it's buying season again! Yeah you'll never get the best but that's a pretty good time to sell. I'm anxious to see what it will go back up to after the elections, since traditionally commodities are down and the stock market stays a little stronger until after the elections, then depending on who gets elected people start selling.  I've heard from a couple of people though, that if it were to keep pace with gold like it historically does, $200/oz would be reasonable. A man can dream...first thing I'd do was buy a '67 Stingray Corvette... ;D |
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Post by ATC on Oct 13, 2012 22:13:10 GMT -6
Haha, yes indeed! I hear a lot of traders talking about the "ratio trade"; hoping silver and gold will return to their traditional price ratio. But I dunno if I believe in it so much. A lot has changed in the silver and gold mining industry over the last couple hundred years. There are different amounts of above-ground supply for each of them, as well as different amounts of explored mining territory. I think that the current price ratio reflects that fairly well with silver lagging a good bit, but not $170 worth of price lag.
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