GUN SIGTHTF v. Ron Paul Prediction v. 15 year depression/Dollar Crash

Discussion in 'On Topic' started by Bloody Sunday, Mar 25, 2009.

  1. Bloody Sunday

    Bloody Sunday OT Supporter

    Joined:
    Aug 11, 2003
    Messages:
    52,538
    Likes Received:
    63
    Location:
    North County
    Shit is Going to Hit the Fan

    Believer in small government predicts 15-year depression

    By Phil Davis

    Published: March 22 2009 09:07 | Last updated: March 22 2009 09:07

    Pension trustees and insurance company portfolio managers look away now. Your increased commitment to government bond holdings in recent times is about to blow up spectacularly.

    At least, that is the view of Ron Paul, the US congressman who ran against John McCain in last year’s Republican Party presidential nomination.

    His is a minority view. Yields on government bonds worldwide have been falling fast over the past few months and in the UK, the commencement of “quantitative easing” this month sent bond prices soaring.

    But the credibility of both western governments and their currencies is waning, and has been ever since the gold standard was abandoned in 1971, says Mr Paul. And that means even “safe” investments are far from safe, he claims.

    “People will start to abandon the dollar as current and past economic policies create a steep rise in interest rates,” Mr Paul says.

    “If you are in Treasuries, you will need to be watchful and nimble to time your escape.”

    Unfortunately, cashing out will not protect the value of investments, he insists, because “fiat” currencies will all decline over the coming years as measures to try to haul the world economy out of recession fail. “The current stimulus measures are making things a lot worse,” says Mr Paul.

    “The US government just won’t allow the correction the economy needs.” He cites the mini-depression of 1921, which lasted just a year largely because insolvent companies were allowed to fail. “No one remembers that one. They’ll remember this one, because it will last 15 years.”

    At some stage – Mr Paul estimates it will be between one and four years – the dollar will implode. “The dollar as a reserve standard is done,” he says. He sees little hope for other currencies where central banks have also created too much liquidity dating right back to the early 1970s.

    “Europe and the US will both have to fundamentally change their money systems,” he adds.

    And don’t even mention shares to Mr Paul: “The last place you want to be is in the stock market,” he says. “It may not bottom out for 10 years – just look at Japan.”

    Of course, everyone has a view on the credit crisis, its causes and putative solutions. What differentiates Mr Paul is that he has been warning of the dangers to the world economy for nearly 40 years. “The breakdown of Bretton Woods was my motivation for running for Congress. I have been talking about the dangers ever since and warning that the control by central banks over the money supply would create an enormous bubble.”

    A deep recession had only been avoided up until now because of the efforts of successive governments to reflate the economy. But there are no more policy levers left, says Mr Paul. “This is the big one.”

    Unsurprisingly, Mr Paul has been viewed as a crank in Washington, dismissed as a doomsayer and a party-pooper. His bill early this year to abolish the Federal Reserve was largely ignored. And his adherence to the Austrian School of economics, which predicted that fiat currencies would destabilise the world economy, has won him few friends.

    “People don’t like the Austrians because they are against big government, against armies and against the welfare state. To accept Austrian economics, you have to accept limitations of credit expansion and that is what has kept the government and financial firms in business for so long.”

    However, his views are, for the first time, being taken seriously in Washington. Like another politician who recently aimed for high office, Al Gore, Mr Paul’s uncomfortable truths are starting to be deliberated at elevated political levels. “Before last summer, in meetings nobody really knew I was there. Now they often defer to me on economic matters. But you won’t catch any of them admitting that publicly – not yet at least.”

    He believes that markets will fall much further and inflation rise much higher before his fellow politicians recognise that the system has failed. “We are likely to see an inflation depression,” Mr Paul says.

    “In the 1970s, we had stagflation, but not depression. Inflation depression is what you see in Zimbabwe.”

    Even Nouriel Roubini, the renegade economist whose once “extreme” views are now mainstream, fights shy of this analysis. The investment options arising from the analysis are no more palatable. In fact, according to Mr Paul, there is only one: gold.

    Such an unproductive asset (unless you are a jeweller) appears unattractive even with the gold price having risen three-fold during the Bush administration. But Mr Paul argues that the current price of about $900/ounce could look cheap in a few years.

    “It is not so much that gold will go up but that fiat currencies will go down,” he says. He even advocates a return to the gold standard, which he says is not as difficult as it sounds to achieve.

    Mr Paul, it should be noted, first invested in gold nearly 40 years ago when it was worth $35/ounce and holds a part of his wealth in the metal. But he is not alone: gold exchange traded commodities have seen record inflows in the past six months, most wealth managers now recommend a core holding and central banks are loath to sell their quotas. Indeed, Russia has even announced it is buying gold.

    Nevertheless, most large institutions, including pension funds, have little or no gold holdings. Mr Paul argues this is a mistake and decries the widely held view that gold is an anachronism.

    “Gold is natural money and has been for 6,000 years,” he says.

    “You just can’t repeal those laws. A scrap of paper, which the government can just add a nought to, will not do.” He does not, though, expect the mainstream investment industry and its advisers to rush to the bullion vaults.

    http://www.ft.com/cms/s/0/ee3e07f0-16b2-11de-9a72-0000779fd2ac.html?nclick_check=1

    Ridley's Video Report:
    [y]kADXWXgxKJk[/y]
     
  2. PC Principle

    PC Principle New Member

    Joined:
    Mar 12, 2004
    Messages:
    64,143
    Likes Received:
    0
    Very possible. People nowadays have no survival skills whatsoever. At least it should be good for our country in the long run.
     
  3. hsmith

    hsmith OT Supporter

    Joined:
    Feb 24, 2002
    Messages:
    124,649
    Likes Received:
    752
    Location:
    Your mother.
    All I am going to buy the next few years is gold and silver
     
  4. [DWI]

    [DWI] Master of Nothing

    Joined:
    Aug 6, 2000
    Messages:
    21,936
    Likes Received:
    0
    Location:
    Maine
    That works great if things don't go to hell you can still buy and sell it, the better investments are booze and bullets or the skills to make them if the dollar becomes worthless.
     
  5. Bloody Sunday

    Bloody Sunday OT Supporter

    Joined:
    Aug 11, 2003
    Messages:
    52,538
    Likes Received:
    63
    Location:
    North County
    i'm thinking more along the lines of water/food/weapons
     
  6. Rip The Jacker

    Rip The Jacker New Member

    Joined:
    Jul 24, 2002
    Messages:
    53,993
    Likes Received:
    0
    I would rather start over now than later, when I have kids.
     
  7. Bloody Sunday

    Bloody Sunday OT Supporter

    Joined:
    Aug 11, 2003
    Messages:
    52,538
    Likes Received:
    63
    Location:
    North County
    i agree
     
  8. copeland

    copeland smarter than you

    Joined:
    Jun 4, 2004
    Messages:
    3,494
    Likes Received:
    0
    Location:
    PG B.C.

    And ammo, that will be the going currency for food purchases.
     
  9. hsmith

    hsmith OT Supporter

    Joined:
    Feb 24, 2002
    Messages:
    124,649
    Likes Received:
    752
    Location:
    Your mother.
    I only care about hedging inflation.
     
  10. Mace Windu

    Mace Windu OT's Resident Pile of Awesome

    Joined:
    May 4, 2004
    Messages:
    30,831
    Likes Received:
    0
    Location:
    Easley, SC
    I'm investing in silver and a ton of ammo right now.
     
  11. GlassUser

    GlassUser send an email not a pm OT Supporter

    Joined:
    Oct 26, 2003
    Messages:
    265,173
    Likes Received:
    151
    Location:
    Pearland, Texas
    werd
     
  12. PC Principle

    PC Principle New Member

    Joined:
    Mar 12, 2004
    Messages:
    64,143
    Likes Received:
    0

    Best thing to do. Silver > gold when trading.
     
  13. jeffreyliu838

    jeffreyliu838 New Member

    Joined:
    Jan 3, 2008
    Messages:
    1,408
    Likes Received:
    0
    Location:
    CA
    Small thing, I know, but I thought it was Dr. Paul? They used "mr".
     
  14. Bloody Sunday

    Bloody Sunday OT Supporter

    Joined:
    Aug 11, 2003
    Messages:
    52,538
    Likes Received:
    63
    Location:
    North County
    Doctors aren't always called Doctors. It's a courtesy/tact thing, really.
     
  15. TATEROTE

    TATEROTE OT Supporter

    Joined:
    May 31, 2008
    Messages:
    3,965
    Likes Received:
    0
  16. AVengeance

    AVengeance Active Member

    Joined:
    Aug 17, 2004
    Messages:
    22,615
    Likes Received:
    0
    Location:
    In my bunker Position:Hunkering
    Soap. If you don't know how, learn to make soap. That would be a valuable commodity.


    Bought silver last fall. May buy more, but it's low on the list right now. Still picking up a little ammo here n there. Right now, bigger monies are spent on open-pollinating and heirloom (non hybrid) seeds, and gardening stuff. Might get a grain mill in a month or two, so we can buy wheat and corn in bulk.

    Just taking it gradually. I didn't panic before Y2K, and I ain't gonna panic now.
     
  17. Unless you are French.
     
  18. zumin3k

    zumin3k New Member

    Joined:
    Dec 2, 2006
    Messages:
    4,958
    Likes Received:
    0
    Location:
    Northern CA
    I'm French... I love me some soap :noes:
     
  19. :noes:
     
  20. Laurel

    Laurel New Member

    Joined:
    Jan 5, 2005
    Messages:
    7,307
    Likes Received:
    0
    Location:
    Bothell, WA
    I can make my own beer and will soon be buying yeast in bulk, not that it isn't easy enough to culture.

    I have the start of a veggie garden and next year after I get some skills under my belt I'll start doing heirlooms.

    Bread is easy enough, I have a feeling that wood will become a big commodity in urban areas.

    I know how to make soap, but I'm not sure of a source for lye. How do you get/make it?
     
  21. GlassUser

    GlassUser send an email not a pm OT Supporter

    Joined:
    Oct 26, 2003
    Messages:
    265,173
    Likes Received:
    151
    Location:
    Pearland, Texas
    Soak wood ash.
     
  22. Laurel

    Laurel New Member

    Joined:
    Jan 5, 2005
    Messages:
    7,307
    Likes Received:
    0
    Location:
    Bothell, WA

    Just soak it in water? That's easy enough!
     
  23. dpixel8

    dpixel8 New Member

    Joined:
    Feb 8, 2001
    Messages:
    48,450
    Likes Received:
    0
    Location:
    WI Go Bucky!!!!!!!

    I cannot WAIT to thin out the herd
     
  24. AVengeance

    AVengeance Active Member

    Joined:
    Aug 17, 2004
    Messages:
    22,615
    Likes Received:
    0
    Location:
    In my bunker Position:Hunkering
    You can make lye from wood ashes.

    See #2. Potassium and sodium hydroxide can be extracted from wood ashes by running through water. The lye will become solution in the water, and you can filter off the solids. You can concentrate the lye by boiling off some of the water.
    You'll need some pH paper or something so you can know when a mixture turns alkaline/basic. Start with some fat in some water. Add the lye you extracted from the wood ashes slowly until the solution is SLIGHTLY alkaline, and you essentially have soap.

    That's pretty crude, but once you have a "recipe" down pat, it's easy. Wifey was asking just last night if we should save some animal fat from the next deer and try to make soap "the hard way". I told her: let's get a soap making kit first, and play with that. Then we'll do it the hard way.

    Chemistry books from the 50s and 60s FTW! That was before we got all PC and worried that 4th graders were going to make WMDs in their bedroom closets.
     
    Last edited: Mar 25, 2009
  25. AVengeance

    AVengeance Active Member

    Joined:
    Aug 17, 2004
    Messages:
    22,615
    Likes Received:
    0
    Location:
    In my bunker Position:Hunkering
    I think a great number of them will do most of the work of that for us.
     

Share This Page