Any smart Gold and Silver investors? Where's the bottom?

[akphidelt]

Profits, yes, for now So if they give 95% of them back, what happens if those profits turn to losses? Who eats those losses? If rates spike those values collapse.
How does the Fed "fight the inflation" If they are reducing their balance sheet by selling assets and huge losses?

What huge losses are you talking about? They don't lose anything selling treasuries.

Im just speechless on this one

We can spend, borrow, create as much of our made up money as we want. We have to fund the world with our currency before we can borrow it .

Well I mean, how can we borrow a made up currency unless we make it? Kind of an illogical point of view you have.

 

[akphidelt]

The problem that so many people can't accept, based on pure stubbornness, is that we don't "fund" the government. The government has to fund us before we can fund them. Hard to conceptualize but it is what it is.

 

[brucefan]

What huge losses are you talking about? They don't lose anything selling treasuries.



Well I mean, how can we borrow a made up currency unless we make it? Kind of an illogical point of view you have.

Unless a bond is held to maturity, whoever owns it can sustain massive losses if rates spike, especially high credit long term bonds. Those paper losses become real losses if they are sold . Why do I feel like I'm going around in a circle here

 

[akphidelt]

Unless a bond is held to maturity, whoever owns it can sustain massive losses if rates spike, especially high credit long term bonds. Those paper losses become real losses if they are sold . Why do I feel like I'm going around in a circle here

Once again, the Fed does not care about losses, and Primary Dealers will buy them at whatever the Fed wants to target. This argument has nothing to do with what we are talking about.

 

[PatsFan1283]

What would be the consequences if the fed just held them to maturity or if the fed possibly just wrote the losses off?

 

[kidman232]

I wish I had a 10 oz bar in my hands right now

 

[akphidelt]

What would be the consequences if the fed just held them to maturity or if the fed possibly just wrote the losses off?

absolutely nothing. The govt/fed can write off almost $8 trillion of the debt and it would mean absolutely nothing.

 

[brucefan]

Once again, the Fed does not care about losses, and Primary Dealers will buy them at whatever the Fed wants to target. This argument has nothing to do with what we are talking about.

The losses, are real. The Fed can play acct tricks, print more money, defer the losses, but they are real. At the point the Feds credibility goes to hell, faith in the dollar collapses, and that will be the end of the profit sharing to the Treasury which will explode the deficit once again.

 

[brucefan]

What would be the consequences if the fed just held them to maturity or if the fed possibly just wrote the losses off?

Same problem. Assuming they could ignore the price inflation and just wait it out, where does the money come to redeem all the bonds when they mature? The debt just explodes Further

 

[akphidelt]

The losses, are real. The Fed can play acct tricks, print more money, defer the losses, but they are real. At the point the Feds credibility goes to hell, faith in the dollar collapses, and that will be the end of the profit sharing to the Treasury which will explode the deficit once again.

The losses do not matter to the fed or the economy at all. And the Treasury does not care how much the fed gives them.

 

[ivyconniver]

Bruce honest question - where are you investing your money? Based on this thread you seem like a reasonably intelligent guy. But when the rubber hits the road, you clearly don't believe in equities. You think rates are going to rise, and therefore long term bonds are a bad investment. Short term bonds earn virtually nothing. Gold has been one of the worst investments of the past 5 years. You think the dollar will weaken, and therefore even cash is a bad thing to hold. I'm going to go out on a limb and assume you don't like the Euro given the EU's political situation. So where does that leave you?

The problem with naysayers is that it's incredibly easy to be negative and poke investments, but rarely do they ever provide any answers.

 

[akphidelt]

Bruce, the Fed, PD's, and Treasury are all interconnected to create the "funding" for government. Even Bill Gross from PIMCO bet against equities and was crushed in the bond market. The Fed will not sell until they want to raise interest rates. When they sell it will be to the PD's and they won't care about rising interest rates. It will just be an asset swap. Since the 70s the Fed and the Govt have complete control over yields in order to target their rates.

 

[brucefan]

Bruce honest question - where are you investing your money? Based on this thread you seem like a reasonably intelligent guy. But when the rubber hits the road, you clearly don't believe in equities. You think rates are going to rise, and therefore long term bonds are a bad investment. Short term bonds earn virtually nothing. Gold has been one of the worst investments of the past 5 years. You think the dollar will weaken, and therefore even cash is a bad thing to hold. I'm going to go out on a limb and assume you don't like the Euro given the EU's political situation. So where does that leave you?

The problem with naysayers is that it's incredibly easy to be negative and poke investments, but rarely do they ever provide any answers.

The accepted narrative on the street is the US is in recovery, and the second half of this year will be strong. The Fed sometime early next year will begin raising rates, and inflation is no where to be found. That is pure fantasy. The Fed will not raise rates, and our " recovery" to the extent there is one, has been all based on raising assset prices by creating inflation. The q e program is ending , so we wil see the markets , housing, and the economy rolling over. Smart investors are accumulating gold and silver here, along with oil , platinum , and palladium . I don't think the FED will just sit idle and watch things erode, since their whole theory was to boost prices, and they will be back with more QE shortly.

 

[brucefan]

Bruce, the Fed, PD's, and Treasury are all interconnected to create the "funding" for government. Even Bill Gross from PIMCO bet against equities and was crushed in the bond market. The Fed will not sell until they want to raise interest rates. When they sell it will be to the PD's and they won't care about rising interest rates. It will just be an asset swap. Since the 70s the Fed and the Govt have complete control over yields in order to target their rates.

Funny, the Fed has control of nothing. They are flying blind and have no exit strategy at all.

 

[akphidelt]

Funny, the Fed has control of nothing. They are flying blind and have no exit strategy at all.

They have complete control over interest rates. And they know exactly what they are doing. If you didn't get that from the past 6 years, you never will.

 

[akphidelt]

The accepted narrative on the street is the US is in recovery, and the second half of this year will be strong. The Fed sometime early next year will begin raising rates, and inflation is no where to be found. That is pure fantasy. The Fed will not raise rates, and our " recovery" to the extent there is one, has been all based on raising assset prices by creating inflation. The q e program is ending , so we wil see the markets , housing, and the economy rolling over. Smart investors are accumulating gold and silver here, along with oil , platinum , and palladium . I don't think the FED will just sit idle and watch things erode, since their whole theory was to boost prices, and they will be back with more QE shortly.

Remember, the Fed deals with monetary policy. There is a trillion pound elephant in the room that deals with fiscal policy, aka Congress. The Fed can only do so much to protect our worthless Congress.

 

[brucefan]

They have complete control over interest rates. And they know exactly what they are doing. If you didn't get that from the past 6 years, you never will.

Their GDP forecasts are horrific, they never saw the housing crisis , have never correctly forecasted a recession, and you should not be claiming victory on policy until they exit

 

[brucefan]

Remember, the Fed deals with monetary policy. There is a trillion pound elephant in the room that deals with fiscal policy, aka Congress. The Fed can only do so much to protect our worthless Congress.

Finally , some common ground

 

[PatsFan1283]

Bruce what do you think is the best way to play oil right now?

 

[brucefan]

Through an ETF. . Pick one. USO, OLO, USO, USl, DBO, OIL. There are many , most trade options as well

PS. Today was an interesting reversal day for gold, with the Fed minutes again showing they will never raise rates and we will see more QE , not less