Peter Schiff blasted the idea that inflation is under control during the unprecedented money expansion we're going through. Government court economist Paul Krugman has used the meaningless Consumer Price Index (CPI) and its alleged sub 2.5% increases as proof inflation hasn't been a factor during this period of time.
Most people following the CPI know it's a joke, but most in the financial media continue to use the statistics proffered by the Index as based on reality.
Schiff points out two sectors to confirm this is so.
"However, there is plenty of evidence to suggest that the CPI is essentially meaningless as it woefully under reports rising prices.
"Magazines and newspapers provide a good case in point. The truth has not been exposed through the economic reporting that these outlets provide, but in the prices that are permanently fixed to their covers. For instance, from 1999 to 2002 the Bureau of Labor Statistic's (BLS) "Newspaper and Magazine Index" (a component of the CPI) increased by 37.1%. But a perusal of the cover prices of the 10 most popular newspapers and magazines (WSJ, Washington Post, Time, Sports Illustrated, U.S. News & World Report, Newsweek, People, NY Times, USA Today, and the LA Times) over the same time frame showed an average cover price increase of 131.5% (3.5 times faster than the BLS' stats). This is not even in the same ballpark.
"Another stunning example is found in health insurance costs, which is a major line item for most families. According to the BLS we can all breathe easy on that front because their "Health Insurance Index" increased a mere 4.3% (total) in the four years between 2008 and 2012. Interestingly, over the same time, the Kaiser Survey of Employer Sponsored Health Insurance showed that the cost of family health insurance rose 24.2% (5.5 times faster). But even if the BLS had reported higher costs, it wouldn't have made much of a difference in the CPI itself. Believe it or not, health insurance costs are assigned a weighting of less than one percent of the overall CPI. In contrast, the Kaiser Survey revealed that in 2012 the average total cost for family health insurance coverage was $15,745, or almost one third of the median family income.
"If the inaccuracy of these two components were consistent with the rest of the CPI's components, inflation could now be reported in double-digits!
Not only is this true, but the CPI, over the years, has changed its methodology in order to ensure the majority of prices that would more accurately reflect higher prices are taken out of the equation.
"The newer CPI methodologies are designed to report not just on price movements, but on spending patterns, consumer choices, substitution bias, and product changes. In other words, the metrics have been altered to track not so much the cost of things, but the cost of living (or more accurately, the cost of surviving). But if you simply focus on price, especially on those staple commodity goods and services that haven't radically changed in quality over the years, the under reporting of inflation becomes more apparent."
To highlight how this impacts the reporting of inflation, Schiff did some research on 20 common financial transactions over two different ten-year periods. The focus was on the decades when the monetary policy of the Federal Reserve was loose.
"As reported in our Global Investor Newsletter, we selected BLS price changes for twenty everyday goods and services over two separate ten-year periods, and then compared those changes to the reported changes in the Consumer Price Index (CPI) over the same period. (The twenty items we selected are: eggs, new cars, milk, gasoline, bread, rent of primary residence, coffee, dental services, potatoes, electricity, sugar, airline tickets, butter, store bought beer, apples, public transportation, cereal, tires, beef, and prescription drugs.)
"We know that people do not spend equal amounts on the above items, and we know their share of income devoted to them has changed over the decades. But as we are only interested in how these prices have changed relative to the CPI, those issues don't really matter. We chose to look at the period between 1970 and 1980 and then again between 2002 and 2012, because these time frames both had big deficits and loose monetary policy, and they straddle the time in which the most significant changes to the CPI methodology took effect. And while the CPI rose much faster in the 1970's, the degree to which the prices of our 20 items outpaced the CPI was much higher more recently.
"Between 1970 and 1980 the officially reported CPI rose a whopping 112%, and prices of our basket of goods and services rose by 117%, just 5% faster. In contrast between 2002 and 2012 the CPI rose just 27.5%, but our basket increased by 44.3%, a rate that was 61% faster. And remember, this is using the BLS' own price data, which we have already shown can grossly under-estimate the true rate of increase. The difference can be explained by how CPI is weighted and mixed. The formula used in the 1970's effectively captured the price movements of our twenty everyday products. But in the last ten years it has been quite a different story."
The conclusion is the CPI can no longer be trusted or considered a valid measure of real inflation. Many people I talk to on the street know we're in a high inflationary period, as they point to the much higher costs of engaging in transactions and buying needed products and services. They don't know how to describe it in the terms readers here would know and use, but they are very much aware we're living in a significant inflationary economy.
Skewing data using smoke and mirrors can't hide what we pay in real prices.
Source
Showing posts with label Inflation Holocaust. Show all posts
Showing posts with label Inflation Holocaust. Show all posts
Thursday, January 10, 2013
Wednesday, March 17, 2010
Newmont Mining (NYSE: NEM): Gold Going Up!
Newmont Mining Says Confident Gold Prices Going Up
Newmont Mining (NYSE: NEM) is the largest producer of gold based in the United States, and the company recently stated they are "confident" gold prices will continue to rise in 2010.
I agree, as there is little to stand in the way of gold prices increasing, and the surged yesterday on the news from the Federal Reserve interest rates will continue to stay where they're at for now.
But even if interest rates increase near the end of the year, which many analaysts believe will happen, I don't see that having a negative impact on gold prices, as there are many other factors undergirding the price of gold.
This doesn't mean there won't be a correction, just that it won't hold after the initial reaction.
Eventually money will start being borrowed out by banks, and when that happens, inflation will surge as the growing demand for iron ore in China and the steel industry shows.
That's a prelude to how commodity prices in general will perform once demand explodes again, which it will. That means gold will continue to be a major place to put your money to protect against inflation and as a place of safety.
Newmont Mining Says Confident Gold Prices Going Up
Newmont Mining (NYSE: NEM) is the largest producer of gold based in the United States, and the company recently stated they are "confident" gold prices will continue to rise in 2010.
I agree, as there is little to stand in the way of gold prices increasing, and the surged yesterday on the news from the Federal Reserve interest rates will continue to stay where they're at for now.
But even if interest rates increase near the end of the year, which many analaysts believe will happen, I don't see that having a negative impact on gold prices, as there are many other factors undergirding the price of gold.
This doesn't mean there won't be a correction, just that it won't hold after the initial reaction.
Eventually money will start being borrowed out by banks, and when that happens, inflation will surge as the growing demand for iron ore in China and the steel industry shows.
That's a prelude to how commodity prices in general will perform once demand explodes again, which it will. That means gold will continue to be a major place to put your money to protect against inflation and as a place of safety.
Newmont Mining Says Confident Gold Prices Going Up
Monday, March 15, 2010
Gold Prices Surge on Sovereign Debt Worries
Gold and Sovereign Debt
A warning from Moody's today on the sovereign debt risk rating to four major economies, which include the U.S., Britain, Germany and France, caused gold prices to rise as safety was on the minds of investors today.
But before investors leave the gold sector, they need to look closely at the potential consequences of the risk associated with losing their AAA-rating status and why it's a reality.
Look at the plunge in value of the euro in relationship to little Greece to see what could happen if any of these nations were in the same position, which in reality they aren't that far off.
Moody's also said Spain is probably the closest among countries at this time to be at risk of losing their status, and some observers have said if Spain fell the European Union couldn't support them, and the euro experiment, and the Union itself could be over.
As far as the performance of gold prices, this is why even though the U.S. dollar had some strength today gold prices went up with it, as the usual parameters and moving in opposite directions doesn't apply when you start getting into sovereign debt issues.
This is why the idea we're in a gold bubble is ludicrous. The underlying fundamentals for gold, which are as an inflation protection and safety hedge are strong in force, and they are not going to go away any time soon. Consequently, gold prices will continue to rise.
Gold and Sovereign Debt
A warning from Moody's today on the sovereign debt risk rating to four major economies, which include the U.S., Britain, Germany and France, caused gold prices to rise as safety was on the minds of investors today.
But before investors leave the gold sector, they need to look closely at the potential consequences of the risk associated with losing their AAA-rating status and why it's a reality.
Look at the plunge in value of the euro in relationship to little Greece to see what could happen if any of these nations were in the same position, which in reality they aren't that far off.
Moody's also said Spain is probably the closest among countries at this time to be at risk of losing their status, and some observers have said if Spain fell the European Union couldn't support them, and the euro experiment, and the Union itself could be over.
As far as the performance of gold prices, this is why even though the U.S. dollar had some strength today gold prices went up with it, as the usual parameters and moving in opposite directions doesn't apply when you start getting into sovereign debt issues.
This is why the idea we're in a gold bubble is ludicrous. The underlying fundamentals for gold, which are as an inflation protection and safety hedge are strong in force, and they are not going to go away any time soon. Consequently, gold prices will continue to rise.
Gold and Sovereign Debt
Wednesday, February 17, 2010
Gold Bull Market Over?
Gold Bull Market
I find it hilarious when clueless people attempt to make assertions like those I've been hearing lately that the bull market in gold is over.
The primary ignorance of some of those making these assertions is that the recent increase in gold prices has been because of gold bugs, rather than market forces, or in this case: lack of force in the market.
For some reason, people seem to resent or reject the fact that gold performs strongly when adverse economic and world conditions are uncertain, and we have been in that situation for several years, and will continue to be for many more.
Anyone who asserts gold bugs are behind the run up in gold prices understands nothing about historical responses to tough economic circumstances, the extreme printing of money, and the inevitable inflation that follows.
Add to that the sovereign risk associated with a growing number of countries, along with rising inflation, and you have a perfect economic storm for the rise in gold prices to continue, and they will.
What about the so-called gold bubble some think we're in? There's no evidence of it, on the contrary, for the most part institutional investors are the primary investors in gold, and until the general population enters into the sector, there will not be, neither can there be, a gold bubble.
Gold has a great future over the next several years, and possibly longer, depending on the rate of inflation and how long it'll take to realize we are still in the middle of a recession.
Once that happens, we'll see gold surge even higher, and those positioned to take advantage of that should enjoy strong profits from gold investing for a number of years to come.
Gold Bull Market
I find it hilarious when clueless people attempt to make assertions like those I've been hearing lately that the bull market in gold is over.
The primary ignorance of some of those making these assertions is that the recent increase in gold prices has been because of gold bugs, rather than market forces, or in this case: lack of force in the market.
For some reason, people seem to resent or reject the fact that gold performs strongly when adverse economic and world conditions are uncertain, and we have been in that situation for several years, and will continue to be for many more.
Anyone who asserts gold bugs are behind the run up in gold prices understands nothing about historical responses to tough economic circumstances, the extreme printing of money, and the inevitable inflation that follows.
Add to that the sovereign risk associated with a growing number of countries, along with rising inflation, and you have a perfect economic storm for the rise in gold prices to continue, and they will.
What about the so-called gold bubble some think we're in? There's no evidence of it, on the contrary, for the most part institutional investors are the primary investors in gold, and until the general population enters into the sector, there will not be, neither can there be, a gold bubble.
Gold has a great future over the next several years, and possibly longer, depending on the rate of inflation and how long it'll take to realize we are still in the middle of a recession.
Once that happens, we'll see gold surge even higher, and those positioned to take advantage of that should enjoy strong profits from gold investing for a number of years to come.
Gold Bull Market
Friday, January 22, 2010
Commodity Prices Rise Hong Kong
Commodity Prices Rise in Hong Kong
Confirming what a number of investors and economists already know, the consumer price index in Hong Kong rose in December, primarily driven by rising food prices and other commodity prices.
The composite consumer price index in December increased 1.3% year over year. That followed on the footsteps of price increases of 0.5% in November, giving rise to fears inflation could continue growing for some time, something many have been concerned about after central banks around the world continued to run their money printing presses.
Attempting to downplay the price increases in commodities and food, the Chinese government stated this: "As the economic recovery, both locally and globally, is still at the early stage, the prevailing excess capacity on the supply side should help to contain the upward pressures on costs and prices."
Some Chinese economists disagreed with the official party line, saying increases in energy and food prices, and possibly other commodities could push consumer prices even higher than they're growing now.
Estimates are prices could increase by 3.7 percent in 2010 based on what was already said plus rental increases.
Commodity Prices Rise in Hong Kong
Confirming what a number of investors and economists already know, the consumer price index in Hong Kong rose in December, primarily driven by rising food prices and other commodity prices.
The composite consumer price index in December increased 1.3% year over year. That followed on the footsteps of price increases of 0.5% in November, giving rise to fears inflation could continue growing for some time, something many have been concerned about after central banks around the world continued to run their money printing presses.
Attempting to downplay the price increases in commodities and food, the Chinese government stated this: "As the economic recovery, both locally and globally, is still at the early stage, the prevailing excess capacity on the supply side should help to contain the upward pressures on costs and prices."
Some Chinese economists disagreed with the official party line, saying increases in energy and food prices, and possibly other commodities could push consumer prices even higher than they're growing now.
Estimates are prices could increase by 3.7 percent in 2010 based on what was already said plus rental increases.
Commodity Prices Rise in Hong Kong
Saturday, January 16, 2010
Jim Rogers | Inflation Already Here
Jim Rogers and Inflation
Inflation is a surety says Jim Rogers, and in fact we're already experiencing inflation, even though some governments are lying about it.
Rogers cites a couple of issues confirming inflation is already here and will continue on for some time. First, he points us in the direction of shortage around the world in almost everything. Consequently, in that environment prices will continue to rise.
Second, countries haven't stopped printing money, and printing money always brings with it the consequences of inflation.
Not only are those things happening now, but they'll continue to happen in the future.
Again, this is why commodities will be such a good place to be, although we do need to keep track of which individual commodities are at their top prices, and which ones are suppressed.
AS of this writing, commodities like silver and agriculture are at good prices, and so are something to watch carefully.
Jim Rogers and Inflation
Inflation is a surety says Jim Rogers, and in fact we're already experiencing inflation, even though some governments are lying about it.
Rogers cites a couple of issues confirming inflation is already here and will continue on for some time. First, he points us in the direction of shortage around the world in almost everything. Consequently, in that environment prices will continue to rise.
Second, countries haven't stopped printing money, and printing money always brings with it the consequences of inflation.
Not only are those things happening now, but they'll continue to happen in the future.
Again, this is why commodities will be such a good place to be, although we do need to keep track of which individual commodities are at their top prices, and which ones are suppressed.
AS of this writing, commodities like silver and agriculture are at good prices, and so are something to watch carefully.
Jim Rogers and Inflation
Sunday, December 14, 2008
Tuesday, November 4, 2008
Commodities: Jim Rogers - America is bankrupt
Commodities will increase in price as last bubble - US Treasury Bonds - bursts!
America is bankrupt, according to investment legend Jim Rogers. "The American government bonds are the world’s last bubble and the price of commodities has to increase."
Charismatic
The famous and charismatic investor, guru if you will, Jim Rogers, visited ABN Amro Netherlands last Friday. RTL Z was at ABN headquarters as well and recorded a number of statements, investment tips and opinions about the world economy.
Rogers
During the seventies Jim Rogers (66) managed a successful hedge fund with George Soros. After that, he traveled and went into commodities.
Last Friday Rogers went at it in front of a roomful of ABN private banking clients. We had an exclusive 15-minute interview with Rogers.
The most important points:
America is bankrupt. American government bonds are extremely overvalued. "The world’s last bubble." America is in debt for over 13.000 billion (13 trillion) dollar and adds a 1.000 billion dollar debt each year. According to Rogers this can not continue for long. Therefore, he went short in long-term US goverment bonds. “These bonds have peaked.” By the way: Rogers owns Dutch government bonds. “They are safe.”
"The fact that the dollar is gaining rapidly is only temporary", Rogers says. “All hedge funds were short on the dollar and because of the appreciation of the dollar there is a short squeeze for the dollar. Managers have to close thier positions and they have to buy dollars instead.” “This is temporary, within a year you have to get rid of the dollar. Fundamentally it is a drama.”
Commodities
Last year we spoke Rogers as well. At that time he advised us to invest blindly in commodities and agriculture. That was a bad advice, because Rogers’ commodities index (Rici) has fallen around 40 per cent last year, while ABN’s African Commodities Certificate dropped even from 11 euros to 5 euros during that time.
Oil
Rogers: "Whether oil costs 45 or 145 dollars, it doesn’t really matter. What does matter is that with oil, like with many other commodities, supply is decreasing while demand is increasing. In the long run this will result in a considerable increase in prices."
"The question is not if the price of a barrel of oil will increase again, but how expensive a barrel of oil will be eventually?"
"The oil supply will fall with 6 to 9 per cent each year, according to the IAE. The demand for oil will increase in China and developing countries. This has nothing to do with economy, the market is simple. It is simply the law of supply and demand."
High inflation
Rogers has been telling his commodity-story for a few years now. On Friday he sighed while saying: "People don’t understand that the commodity-market will be bullish, this will lead to high inflation."
Commodity prices will be a lot higher in the future than they are now.
"The world is going to change, there is no way around it. If you don’t understand that and you don’t adapt you will be suffering in five years. The Chinese see on TV how we live in the West. They want that too! That generates an enormous demand for products and materials."
"All countries in the world have been printing money, the United States in particular. That created a huge amount of money, resulting in the icing on the cake for commodity prices. But fundamentally you have to look at supply and demand."
The United States
Rogers has been negative about the United States for a long time. "You should be worried, America is out of control". The enemies of the United States are currently looking into how to profit from the weaknesses of the United States. When we asked him: Obama or McCain? he answered: "Neither of them. They are both turkeys, they take the wrong decicions."
Bernanke or Trichet?
Rogers is not a big fan of Bernanke, the president of the Federal Reserve. With a big smile Rogers tells us: "Bernanke will continue to print money until there are no trees left in America."
He is more positive about Trichet of the ECB. At least he knows what he is doing and what it’s all about.""
Banks
Rogers is fiercely against bailing out the banks. "That has never worked. Let them go bankrupt. Right now bad-managed banks are saved with money from good banks and from you and me. After that, the failing but nationalized banks are going to compete with the well-managed banks and they gain their market share. Ridiculous. The Bail-out plan is a disaster. In 1929 we had a recession but after the government interfered, it became a depression. You should not interfere."
Stocks
Rogers: "You can make good money with stock-picking, perhaps even more than with commodities, but only if you pick the right equity at the right moment. The stockmarket in the west is still too expensive. But the market is extremely volatile. In the five years to come you can earn money with trading ranges".
China and Russia
"Do know know what the problem is? When at work, the Chinese people ask when they can work and what they can do. We ask how day's off we have. That’s a big difference."
Rogers has bought Chinese equities in the last few weeks. "I don’t know if we have reached the bottom, but the market is low. I am a bad timer, by the way."
"My daughter is five years old and she speaks Mandarin fluently. After the dollar has collapsed as a world currency, there is only one currency that could take over that role: the renminbi. That could happen in 15 to 20 years. Other currencies cannot take over the role of the dollar, including the euro."
Russia
The former Soviet Union will be split up in even more smaller countries. And with that, there will be some wars."
"In Russia you are lucky if they kill you right away. You are unlucky if they first arrest you, then keep you in prisson for 15 years, torture you and kill you after that". He joked.
"What you see therby is that the Russians take their capital abroad, while the Chinese take it home."
City or countryside?
According to Rogers farmers have a bright future. "within a few years farmers will drive Maserati’s and all stockbrokers will be cabdrivers."
In Holland you could have a farm with a lot of land at the moment. “Agriculture has been out of vogue for 30 years, but now it will be hot because the demand for food will increase greatly."
“The stupidest thing you can do right now is to sell your farm and buy a house in the city instead. The housing market is in decline."
War
And finally: "If a war breaks out, it will begin in the Middle East. Amsterdam will be last. I would love to live here if the weather was any better... Amsterdam should have been 600 miles further to the south!"
The Treasury bond market continues to look like it's about to burst, and commodities will be the only place of safety left for investors.
America is bankrupt, according to investment legend Jim Rogers. "The American government bonds are the world’s last bubble and the price of commodities has to increase."
Charismatic
The famous and charismatic investor, guru if you will, Jim Rogers, visited ABN Amro Netherlands last Friday. RTL Z was at ABN headquarters as well and recorded a number of statements, investment tips and opinions about the world economy.
Rogers
During the seventies Jim Rogers (66) managed a successful hedge fund with George Soros. After that, he traveled and went into commodities.
Last Friday Rogers went at it in front of a roomful of ABN private banking clients. We had an exclusive 15-minute interview with Rogers.
The most important points:
America is bankrupt. American government bonds are extremely overvalued. "The world’s last bubble." America is in debt for over 13.000 billion (13 trillion) dollar and adds a 1.000 billion dollar debt each year. According to Rogers this can not continue for long. Therefore, he went short in long-term US goverment bonds. “These bonds have peaked.” By the way: Rogers owns Dutch government bonds. “They are safe.”
"The fact that the dollar is gaining rapidly is only temporary", Rogers says. “All hedge funds were short on the dollar and because of the appreciation of the dollar there is a short squeeze for the dollar. Managers have to close thier positions and they have to buy dollars instead.” “This is temporary, within a year you have to get rid of the dollar. Fundamentally it is a drama.”
Commodities
Last year we spoke Rogers as well. At that time he advised us to invest blindly in commodities and agriculture. That was a bad advice, because Rogers’ commodities index (Rici) has fallen around 40 per cent last year, while ABN’s African Commodities Certificate dropped even from 11 euros to 5 euros during that time.
Oil
Rogers: "Whether oil costs 45 or 145 dollars, it doesn’t really matter. What does matter is that with oil, like with many other commodities, supply is decreasing while demand is increasing. In the long run this will result in a considerable increase in prices."
"The question is not if the price of a barrel of oil will increase again, but how expensive a barrel of oil will be eventually?"
"The oil supply will fall with 6 to 9 per cent each year, according to the IAE. The demand for oil will increase in China and developing countries. This has nothing to do with economy, the market is simple. It is simply the law of supply and demand."
High inflation
Rogers has been telling his commodity-story for a few years now. On Friday he sighed while saying: "People don’t understand that the commodity-market will be bullish, this will lead to high inflation."
Commodity prices will be a lot higher in the future than they are now.
"The world is going to change, there is no way around it. If you don’t understand that and you don’t adapt you will be suffering in five years. The Chinese see on TV how we live in the West. They want that too! That generates an enormous demand for products and materials."
"All countries in the world have been printing money, the United States in particular. That created a huge amount of money, resulting in the icing on the cake for commodity prices. But fundamentally you have to look at supply and demand."
The United States
Rogers has been negative about the United States for a long time. "You should be worried, America is out of control". The enemies of the United States are currently looking into how to profit from the weaknesses of the United States. When we asked him: Obama or McCain? he answered: "Neither of them. They are both turkeys, they take the wrong decicions."
Bernanke or Trichet?
Rogers is not a big fan of Bernanke, the president of the Federal Reserve. With a big smile Rogers tells us: "Bernanke will continue to print money until there are no trees left in America."
He is more positive about Trichet of the ECB. At least he knows what he is doing and what it’s all about.""
Banks
Rogers is fiercely against bailing out the banks. "That has never worked. Let them go bankrupt. Right now bad-managed banks are saved with money from good banks and from you and me. After that, the failing but nationalized banks are going to compete with the well-managed banks and they gain their market share. Ridiculous. The Bail-out plan is a disaster. In 1929 we had a recession but after the government interfered, it became a depression. You should not interfere."
Stocks
Rogers: "You can make good money with stock-picking, perhaps even more than with commodities, but only if you pick the right equity at the right moment. The stockmarket in the west is still too expensive. But the market is extremely volatile. In the five years to come you can earn money with trading ranges".
China and Russia
"Do know know what the problem is? When at work, the Chinese people ask when they can work and what they can do. We ask how day's off we have. That’s a big difference."
Rogers has bought Chinese equities in the last few weeks. "I don’t know if we have reached the bottom, but the market is low. I am a bad timer, by the way."
"My daughter is five years old and she speaks Mandarin fluently. After the dollar has collapsed as a world currency, there is only one currency that could take over that role: the renminbi. That could happen in 15 to 20 years. Other currencies cannot take over the role of the dollar, including the euro."
Russia
The former Soviet Union will be split up in even more smaller countries. And with that, there will be some wars."
"In Russia you are lucky if they kill you right away. You are unlucky if they first arrest you, then keep you in prisson for 15 years, torture you and kill you after that". He joked.
"What you see therby is that the Russians take their capital abroad, while the Chinese take it home."
City or countryside?
According to Rogers farmers have a bright future. "within a few years farmers will drive Maserati’s and all stockbrokers will be cabdrivers."
In Holland you could have a farm with a lot of land at the moment. “Agriculture has been out of vogue for 30 years, but now it will be hot because the demand for food will increase greatly."
“The stupidest thing you can do right now is to sell your farm and buy a house in the city instead. The housing market is in decline."
War
And finally: "If a war breaks out, it will begin in the Middle East. Amsterdam will be last. I would love to live here if the weather was any better... Amsterdam should have been 600 miles further to the south!"
The Treasury bond market continues to look like it's about to burst, and commodities will be the only place of safety left for investors.
Friday, October 10, 2008
Commodities: Where Jim Rogers is Putting His Money
The commodity Jim Rogers considers important: currencies
Last post we talked about Jim Rogers' view on the interference by governments which will inevitably lead to inflation. In this case Rogers is calling it an "inflation holocaust."
So what is Jim Rogers doing at this time to make some money? He's continuing with a couple of his favorite currencies. Rogers is investing his large amount of cash in the Swiss franc and Japanese yen. He also said he's continuing to invest in agricultural products.
![[Most Recent Exchange Rate from www.kitco.com]](http://www.weblinks247.com/exrate/24hr-chf-small.gif)
Agricultural products have also participated in the reason plunge in commodities, as demand across the world has fallen because of economic concerns and some of the high prices in connection with the former demand.
![[Most Recent Exchange Rate from www.kitco.com]](http://www.weblinks247.com/exrate/24hr-jpy-small.gif)
This will probably change around fairly soon as no matter what happens with metals and other commodities unrelated to gold or food, agricultural products, as well as gold, will continue to rise in price in the months ahead, as inflation rises in response to the misguided attempts by the U.S. government and others around the globe that continue to interfere with the markets.
Last post we talked about Jim Rogers' view on the interference by governments which will inevitably lead to inflation. In this case Rogers is calling it an "inflation holocaust."
So what is Jim Rogers doing at this time to make some money? He's continuing with a couple of his favorite currencies. Rogers is investing his large amount of cash in the Swiss franc and Japanese yen. He also said he's continuing to invest in agricultural products.
Agricultural products have also participated in the reason plunge in commodities, as demand across the world has fallen because of economic concerns and some of the high prices in connection with the former demand.
This will probably change around fairly soon as no matter what happens with metals and other commodities unrelated to gold or food, agricultural products, as well as gold, will continue to rise in price in the months ahead, as inflation rises in response to the misguided attempts by the U.S. government and others around the globe that continue to interfere with the markets.
Commodities: Jim Rogers on "Inflation Holocaust"
Talking on CNBC Friday, billionaire investor Jim Rogers, CEO of Rogers Holdings and commodities expert, said we are facing an "inflation holocaust" because of government interference in the markets. He's right of course, as governments will have to issue more debt and print more money in an attempt to not allow the market to clean itself out as it has for a "few thousand years."
It is amazing to see the government to take these unprecidented steps in order to make it look like it has some value to the market. It's main and really only purpose in this arena should be to enforce contracts. Nothing else.
But as Rogers and many others are pointing out, this is in reality setting us up for an inflation disaster as the artificial propping up of poorly run companies will make us all pay a lot more for goods and services in the long run. The government and politians are counting on the general population to forget this as this go ahead in time.
Rogers added that we should simply allow businesses and people to go bankrupt in order to clean out the excesses and unhealthiness in the markets. That is how it's always been done in the past, and each time things start over again with many helpful lessons learned from the mistakes made.
In a desperate attempt to make prove they have relevancy to the general populations across the world, governments and politicians are scrambling to interfere and tread in places they have no idea of the consequences of their actions.
There is nothing more short-term in thinking than what is being wrongly foisted on people in American and across the world at this time. As Jim Rogers says, we are setting ourselves up for an inflation holocaust that will happen based solely on the actions of the U.S. governement, and other governments at this time.
Since when don't human beings have to go through failures and mistakes? When have we designated taxpayer dollars of responsible people to be used to bailout finance and business leaders for the poor decisions they've made?
As Rogers concluded concerning the upcoming G7 meeting where government leaders of the stronger economies are getting together in order to attempt of figure out a solution, "What they (G7 leaders) need to do is go down the bar and leave the rest of us alone."
Referring again to the usual solution by governments, printing more money and offering more debt will do more harm than anything else. It simply needs to be allowed to play out as it usually is. There's nothing the G7 countries will be able to do other than that.
These are markets made up of billions of actors and consumers. Nobody, no matter how much they try to convince us, is able to centrally plan or salvage this mess. Socialism has already proven itself a failure, and this is nothing more than corporate socialism.
As many people know in their individual lives, when they live in excess they will have to go through some real pain in order to overcome those excesses. For someone to interfere with that isn't kindness, but a form of hate, as they enable the person to continue on in their folly.
It's no different with government interference in the marketplace. To shore up poor management and irresponsible decisions isn't a form of help, it's only reinforcing terrible choices and behavior, and possibly setting the rest of us up for more and more significant pain in the near future.
See Video Here
Rogers maintains commodities will continue to be a good place to put your money. We're simply on pause for the time being.
It is amazing to see the government to take these unprecidented steps in order to make it look like it has some value to the market. It's main and really only purpose in this arena should be to enforce contracts. Nothing else.
But as Rogers and many others are pointing out, this is in reality setting us up for an inflation disaster as the artificial propping up of poorly run companies will make us all pay a lot more for goods and services in the long run. The government and politians are counting on the general population to forget this as this go ahead in time.
Rogers added that we should simply allow businesses and people to go bankrupt in order to clean out the excesses and unhealthiness in the markets. That is how it's always been done in the past, and each time things start over again with many helpful lessons learned from the mistakes made.
In a desperate attempt to make prove they have relevancy to the general populations across the world, governments and politicians are scrambling to interfere and tread in places they have no idea of the consequences of their actions.
There is nothing more short-term in thinking than what is being wrongly foisted on people in American and across the world at this time. As Jim Rogers says, we are setting ourselves up for an inflation holocaust that will happen based solely on the actions of the U.S. governement, and other governments at this time.
Since when don't human beings have to go through failures and mistakes? When have we designated taxpayer dollars of responsible people to be used to bailout finance and business leaders for the poor decisions they've made?
As Rogers concluded concerning the upcoming G7 meeting where government leaders of the stronger economies are getting together in order to attempt of figure out a solution, "What they (G7 leaders) need to do is go down the bar and leave the rest of us alone."
Referring again to the usual solution by governments, printing more money and offering more debt will do more harm than anything else. It simply needs to be allowed to play out as it usually is. There's nothing the G7 countries will be able to do other than that.
These are markets made up of billions of actors and consumers. Nobody, no matter how much they try to convince us, is able to centrally plan or salvage this mess. Socialism has already proven itself a failure, and this is nothing more than corporate socialism.
As many people know in their individual lives, when they live in excess they will have to go through some real pain in order to overcome those excesses. For someone to interfere with that isn't kindness, but a form of hate, as they enable the person to continue on in their folly.
It's no different with government interference in the marketplace. To shore up poor management and irresponsible decisions isn't a form of help, it's only reinforcing terrible choices and behavior, and possibly setting the rest of us up for more and more significant pain in the near future.
See Video Here
Rogers maintains commodities will continue to be a good place to put your money. We're simply on pause for the time being.
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