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Talk of a tectonic shift in the stock market and the dollar? What do you think? GOLD & SILVER

I was watching a an episode of Kudlow and Company the other day as a bunch of market cheerleaders were proclaiming that both Gold and Oil dropped significantly, that all that is bad is over, and they think it is a turn around for the dollar.

I want to see your take on this with oil dropping about 7 dollars and gold falling from 930 to 880? What do you think?

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Personally I think they're full of it. The dollar doesn't look strong and neither do the stock markets on their 1 day of gains. Gold and oil do not look weak althoug they did post a short term loss. The long term trends still seem to be headed up. If gold and silver do go down as they say ... I will only keep on buying more and more of it.

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Dollar Not Done

It still has some ways to go before it will ever rebound. I watch Kudlow too. They are short traders and try to drum support for little moves in the market. They think a couple of weeks that the dollar stops free falling then it has recovered. Oil may go down and settle at 115 or 120 but that is no bargain.

The real inflation has not even started. Did you hear DOW chemicals announce a 20% increase in the prices they charge suppliers. Chemicals DOW makes are in alot of products. Inflation has just begun.

Oil is inflated because

the value of the dollar has dropped so dramatically. The value of the dollar has dropped because the FED has increased the money supply so dramatically. This is what RP refers to as "The Inflation Tax".

In order to raise the value of the dollar, the FED has to raise interest rates. This will help shrink the money supply, thus raise the value of the dollar. If they do this, however, it will accelerate the collapse of the economy. People and businesses will not be able to afford loans for housing and growth. Homeowners with ARM's will not be able to pay current mortgages or qualify to refinance. The stock market will crash. This is what happened in The Great Depression - the tightening of the money supply. Remember, The Great Depression was building for 4 years before the FED did their dastardly deed and caused the stock market to crash.

Buying Gold and Silver is not an investment strategy it is a hedge strategy. It's like an insurance policy to protect against the 300 million car pile-up that the FED could cause. Think 1-4 years down the road. Use your imagination and envision the worst and prepare for it. The future is very uncertain.

Read melgesman's post "I wrote this to ..." He explains this much better than I.

I do understand all of that,

I do understand all of that, I would just like some insight on the facts of rising rates crushing the economy ... i know lowering rates causes inflation, but I don't want to assume that the opposite means something that it doesn't. Can you link me ... or tell me why the rising rates will create a bad economy quicker?

All paper money eventually returns to its real intrinsic value, zero. - Voltaire

I don't have a link ..

that's just history. Try reading "The Creature From Jekyll Island". You should be able to get it at the library, but it is also worth buying. It's about the history of the FED and is on RP's recommended reading list, which was posted on Lew Rockwell. It's an eye opener, reads like a detective novel. Everyone high school senior should be required to read this book.

look for oil to go back to 90.00 or so

The game is about over they have made tons of cash now it is time to purches other things .The dollar will grow stronger as it was really never as weak as they proclaimed it was .This was another massive defrauding to break more middle class and turn them poor.This happens about every 7 to 11 years as you can see on the stock charts that go back how ever many years you want .

you mind sending me a link

you mind sending me a link to these charts please?

All paper money eventually returns to its real intrinsic value, zero. - Voltaire

hear is a link

for the fedral funds rate going back. Oil and the dollar go hand in hand as you can see from the kneejerking of this chart it has a pattern of evey 7 to 10 year. the big spike is the carter adminastration and there srew ups. http://en.wikipedia.org/wiki/Federal_funds_rate