actually commodities are very sencitive to monetary policies......if interest rates were to skyrocket then commodity prices would collapse!
http://www.futurecasts.com/Depression_descent-end-'30.html "Spring, 1930 Crash in commodities prices:: When steel production also slipped - falling just below 80% of capacity - the stock market broke wide open. Selling of agricultural futures then broke the dam erected by the Farm Board, and grain prices sunk like stones, taking the stock market with them. The Big Board quickly lost 75% of the ground gained since the beginning of the year. Wheat prices tumbled below $1 per bushel. This breached the "dollar line," which had become a traditional bear market signal. Steel prices dropped to the lowest level since 1922 - down about 7% - about in line with the general decline in wholesale prices. (There is still no evidence here to support the left wing myth that steel prices were "sticky in a downwards direction.") Copper had been pegged at 18 cents per pound by an international cartel. It had been as high as 24 cents per pound in April, 1929. However, overwhelming stockpiles and sales from secondary sources at lower prices broke the dam. The price dropped to 12 1/2 cents in the beginning of May Silver, a vital monetary metal, crashed in May, when the Chinese Reserve Bank was forced to cease purchases. This cut deeply into Indian and Chinese financial strength as well as that of several Latin American nations that used silver to denominate their currencies, and drastically reduced their imports. The English and U.S. textile industries were especially hard hit, as was the price of cotton and other fibers. Many other industries suffered lesser but still significant losses. However, commodity prices had collapsed. Cotton dropped 3 cents (18%) in one week. Predictions of bumper crops added to world wide agricultural miseries. The world's wheat surplus was reported at almost 600 million bushels (almost 1/7th of total world average production). Farm Board buying was now conspicuous by its absence. Wheat dropped 19 cents in June, hitting 86 cents by the beginning of July. Cotton hit 13.04 cents with a 6 million bale carryover, 1 million of which was in the hands of the Farm Board. The carryover equaled just under half of average consumption for a full year. Beef prices plummeted By the end of August, most grain prices were again hitting new Depression lows. The financial after effects of WW I and the trade war continued to strangle world trade Cotton declined below 12 cents, copper below 11 cents. Even with the periodic surges in commodity exports when prices fell, foreign trade was now running a staggering 30% below 1929 levels - 14% of which was due to lower prices. Steel production bottomed out at 52% of capacity for this period and then rebounded back over 60%. The copper cartel again attempted to peg copper prices - at 12 cents per pound - in November. This precipitous rise of almost 3 cents resulted in a collapse of demand. Secondary sources undersold the official price. Surplus stockpiles in producer hands grew at a record pace. The peg slipped, falling below 10 cents in February, 1931, the lowest level since 1896, with sales still few and far between. Another attempt to peg and then raise steel prices came in December. However, by the end of the year, steel prices, too, were again slipping As of December 1, 1930, the price declines and drought had cut the value of U.S. crops by 27%. Corn lost $2/3 billion, cotton $1/2 billion, wheat $1/3 billion. The July, 1931 wheat contract - which was not pegged - sunk like a stone to 61 cents. Corn hit 69 cents and cotton 9 1/2 cents" Short terminterest rates were near zero (as today), long term rates on 30 year Railroad bonds were as low as 2.5%
^^^^ you are forgetting one thing though...this was after the collapse of 1929....in the period leading to the 1929 collapse interest rates had actually risen....of course after the markets collapsed then all commodities came crashing down as was also witnessed in 2008.....the only difference is in 1929 there was no Bernacke monetizing debt like crazy
No doubt about it (in my mind) - everyone who owns silver (and gold) should send azthank you card to Ben Bernanke.
You asked for a specific istorical example: I gave ya one. We are in a deflationary period, (as we were in the 1930s), so Bernacke can monetize debt with relatively little pain, (which was not done in the 1930s). That is why speculating in commodities is so very dangerous at this juncture. Only an opinion yer milage may vary.....
U.S. import prices climb 2.2% in April 'U.S. import prices climbed 2.2% in April, the Labor Department said Tuesday, marking the first time prices have climbed over 2% in consecutive months since June 2008.'... 'Meanwhile, export prices rose 1.1% in April, the agency added.' http://www.marketwatch.com/story/us-...k=MW_news_stmp So import prices are climbing at over 26% per year (right now) and export prices at over 13% per year (right now). Plus, the inflation rate in April was 3.2% - double what it was in January. http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ Maybe America was in a deflationary period, but I would say that period is over. Though I agree that speculating in commodities can be dangerous.
it can be argued that the fed is creating inflation in order to cancel out the affects of deflation....the theory is that the two should cancel each other out, but history has taught us that it dont work that way....in the long run there is a real danger that hyper-inflation will take hold!
this is for you Iriemon naturally you will ignore it as you only respond to stuff that makes you look good LOL
I refuse to consider buying any silver till it gets near twenty. But I may cave and buy a little at 25.
The folks that made the big bucks on the 2008 bubble collapse where the ones that perceived a market with an unusual level of increasing phony hype and fraud and then bet on that market's demise. Wait until everyone panics and attempts to bail on gold... I wonder if AIG would be willing to sell insurance against that potential event.
i had to think about that for a second, my first impression was rum but now i remember bacardi, he was always talking about how good his predictions were from what you say, i guess he's afraid to post any more
He's not afraid. He's afraid that he can't teach the blind to understand the concept of silver. I think he was Canadian so he won't have too much to worry about when the USA dollar collapses as long as the Mounties secure the border. I think the Mounties will see a rush not seen since the cowards ran from the draft during the Vietnam war.
the point is that his predictions were completely wrong and if the dollar collapsed, i think canada would be the next domino to fall
Well, let's debate that. When did Bacardi start predicting to buy silver and what is the current price? Silver has a long and complex history. This reminds me of the superjew Jon Stewart criticizing Jim Cramer about his stock predictions. The time frame of the predictions were never critically analyzed to determine if superjew had a point or was just being a bully. Unfortunately, Cramer didn't have the balls to debate the superjew.
You mean your response is "Duh, I don't know" or are you conceding that Bacardi may have been correct?
Awesome statistical analysis to support your claim that "Bacardi was wrong". Top notch. Obama will put you in his inner circle with heavily and documented research like that.
"superjew"? What kind of word is that. What difference does it make whether he's jewish? (*)(*)(*)(*) there's a ton of racists on this site. It has really opened my eyes up to how people really think.
