First they came chasing the commodity broker
and I did not speak out
because I was not a commodity broker.
Then they came chasing the p-note FII broker,
and I did not speak out
because I was not a p-note FII broker.
Then they came chasing the local Stock broker
and I did not speak out
because I was not a local stock broker.
Then they came chasing for me
and there was no one left
to speak out for me!
Inspired by Niemoller
Wednesday, October 29, 2008
Sunday, October 19, 2008
Watch out for the Commodity boom ahead
Bail out Good for Commodities.We will see huge run up on commodity prices.
The recent argument that all this financial crisis will lead to economic slow down, causing a soft landing it is also believed that this is going to bring down the price of commodities, however contrary to popular perception people are over looking one fundamental fact, or rather the basic definition of the term INFLATION
In economics, inflation or price inflation is a rise in the general level of prices of goods and services in an economy over a period of time. The term "inflation" once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation.Inflation can also be described as a decline in the real value of money—a loss of purchasing power.
Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.Views on which factors determine moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. The consensus view is a sustained period of inflation is caused when money supply increases faster than the growth in productivity in the economy.
Now is this not the case; The whole world is talking of slow down economic recession et all,lowering of productivity which is causing markets all over the world to tank, and how do the biggies try to solve this 'pseudo liquidity' problem.Presto by printing more notes.Which is extremely inflationary.
One will see the effect of this inflationary measure hitting back at the markets,and leading to a boom in commodities.
SU rep Ron Paul said to CNN " Something has to give. You just can't create more money out of thin air and propping up everybody. It's an immoral system. You're asking the poor people to bail out the rich. You're asking the innocent people to bail out the guilty. You're asking people to just totally defy the Constitution because there's no place in the Constitution that says that we can do these things.
Besides, economically, it's a disaster. This is going to cause a great deal of harm. It's like a drug addict taking a strong fix, and he feels better for a day or two, but believe me, we're going to kill the patient. And the patient here is the dollar system and our entire world economy. I would say let's get off this addiction.
credit markets seem to start loosening a bit to some degree in the short run, but that just means we'll have more inflation. You can't create $5 trillion out of thin air and not expect inflation. So although the dollar may be up a little bit right now because the markets are a little calmer, this just means that in time we're going to all suffer and pay for this, and we're going to pay for it with higher prices"
Obviously Gold investors are going to be very happy about this, since the best hedge against inflation is Gold.
After all The Fed and Treasury are merely cushioning the massive deflationary forces in the financial system by printing more notes!!!
I have been talking to my circle this logic and impressing on them as to why it is still a very good time to be buying into gold and commodities.
After all this is just the beginning of the Commodities Boom,would definitely be surprised if commodity investors do not endorse my view on this! or come with an alternative argument against the commodity bulls who are being now pampered by the global central banks.And definitely the commodity bulls are going to be laughing all the way to the bank.
The recent argument that all this financial crisis will lead to economic slow down, causing a soft landing it is also believed that this is going to bring down the price of commodities, however contrary to popular perception people are over looking one fundamental fact, or rather the basic definition of the term INFLATION
In economics, inflation or price inflation is a rise in the general level of prices of goods and services in an economy over a period of time. The term "inflation" once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation.Inflation can also be described as a decline in the real value of money—a loss of purchasing power.
Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.Views on which factors determine moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. The consensus view is a sustained period of inflation is caused when money supply increases faster than the growth in productivity in the economy.
Now is this not the case; The whole world is talking of slow down economic recession et all,lowering of productivity which is causing markets all over the world to tank, and how do the biggies try to solve this 'pseudo liquidity' problem.Presto by printing more notes.Which is extremely inflationary.
One will see the effect of this inflationary measure hitting back at the markets,and leading to a boom in commodities.
SU rep Ron Paul said to CNN " Something has to give. You just can't create more money out of thin air and propping up everybody. It's an immoral system. You're asking the poor people to bail out the rich. You're asking the innocent people to bail out the guilty. You're asking people to just totally defy the Constitution because there's no place in the Constitution that says that we can do these things.
Besides, economically, it's a disaster. This is going to cause a great deal of harm. It's like a drug addict taking a strong fix, and he feels better for a day or two, but believe me, we're going to kill the patient. And the patient here is the dollar system and our entire world economy. I would say let's get off this addiction.
credit markets seem to start loosening a bit to some degree in the short run, but that just means we'll have more inflation. You can't create $5 trillion out of thin air and not expect inflation. So although the dollar may be up a little bit right now because the markets are a little calmer, this just means that in time we're going to all suffer and pay for this, and we're going to pay for it with higher prices"
Obviously Gold investors are going to be very happy about this, since the best hedge against inflation is Gold.
After all The Fed and Treasury are merely cushioning the massive deflationary forces in the financial system by printing more notes!!!
I have been talking to my circle this logic and impressing on them as to why it is still a very good time to be buying into gold and commodities.
After all this is just the beginning of the Commodities Boom,would definitely be surprised if commodity investors do not endorse my view on this! or come with an alternative argument against the commodity bulls who are being now pampered by the global central banks.And definitely the commodity bulls are going to be laughing all the way to the bank.
Friday, October 17, 2008
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