The FED is mulling policies that will increase inflation in order to encourage people to part ways more quickly with their cheapened dollars. This new STIMULUS will punish the thrifty and penalize those who save. It is a policy designed to reward debtors. It will be an encouragement to revive spendthrifty ways that precipitated the crisis.
Mr. Market has suspected this move for weeks. In case you haven’t noticed, the price of gold is now approaching $1,400 an ounce. Given these impending inflationary policies (as if we don’t already have many in place), I have the sneaking suspicion this level is still cheap.
What about those of us young folks (I’m 22) who don’t have the means to purchase heavy metal?
All I can say is it gets more and more depressing to live in this hellacious country. Especially when you have no ground to stand on and it appears there is no way out.
Not to mention, the current Stock Market rally based, in no small measure on the FEDS commitment to that little bunko program they call “Quantitative Easing”.
Brandon, the young should be investing in 1) relationships, 2) education/skills beneficial for local communities, 3) tools, and 4) guns, in that order. No guns if you’re a pacifist.
You can’t eat gold. Gold operates as a holder of excess resources, which young people don’t have, but which older people (well, maybe not the baby boomers) do have. Young people should develop themselves to be able to wisely use the excess resources the older generation invests in them when the time comes.
So don’t worry about buying gold. It’s useless to you.
Brandon,
It goes without saying that the entirety of the current policy of the nation is to impoverish the young.
Take heart – our President is making efforts to reach out to the young through new and cool forms of “electronic media.” Yay for Skype, Twitter Facebook, and – yes – the blogosphere! Just pay attention to the medium – not the message.
Needless to say, the other side is not as cool, but I have exceedingly little confidence that they will do well by the next and future generations. Not so long as “voters,” a.k.a. “consumers,” demand theirs, right now, and retaining office remains the sole aim of our “public servants.”
Albert –
Well said – thanks for being constructive. I agree entirely (and don’t forget ammo!).
To add to your observation about investment #1, the time is rapidly coming, I think, for people broadly (not just the young) to begin to live more deliberately together in communities formed around these common set of concerns, fears and hopes. We can invest little in hopes that the government will be able to pull off this Ponzi scheme (has any ever worked?), nor that we can buy enough ammo and have a hut far enough removed from civilization that a deteriorating situation will not effect us. We need a rediscovery and refounding of deliberate communities – not our faux versions – that will be able to weather not only these little gusts, but the gale winds that are gathering.
Of course, such communities are appropriate venues for human life not only in the event of cataclysm – they are a requirement for human flourishing. And, also handy in case the ammo proves necessary.
The vicious circle needs breaking and quantitative easing would appear to be entirely the wrong tool to be using. If the problem here appears to be lack of demand in part based on under-investment due to American investment in developing countries due to low USA interest rate returns which in turn are due to developing countries recycling their export earnings into US T-bills etc. then stopping the recycling and balancing trade would appear to be the better tools.
http://www.bbc.co.uk/news/business-11508918
I find myself in Brandon’s shoes. I am 25 and have started working/saving/assessing the various avenues of investment of which I am blessedly availed. They seem like so many get rich quick schemes, or at least get rich certainly. Yet, my conservative leanings (confirmed by certain comments in this thread) teach me that at this point in my life I should be building heavy capital (home, tools) and social capital (family, friends, networks), at the expense of the more ephemeral financial capital. I have had it pounded into my head that I need to invest in 401(k) plans and IRAs. I’ve been shown the graphs of how much different savings accounts can be at retirement when I start saving now versus when I’m 40. Yet the overall return in my 7-year old 401(k) is a little over 1%. (Maybe my strategy isn’t the greatest, but I’ve beaten several benchmarks in the interim periods.) I’m not willing to forgo a paid-off house, car, and other assets in order to get into debt while saving for a date 40 (maybe more like 60) years into the future when I hope the other forms of capital “investing” I’m doing now may payoff in a larger way.
Please keep the advice coming, there are youngsters out there who are listening with attentive and eager ears.
Yes, keep the advice coming! It seems like the entire financial system is set up to encourage debt. At age 25 with no credit history, there’s no way for me to get a loan on a house without building up my credit rating by going further into debt. I have almost NO trust in today’s financial systems when it comes to retirement. My only resources are my skills and knowledge. I have a feeling I could be pretty self-reliant had I some tillable land and a modest home, but that seems to be a long way off. Small communities could weather the storm- but where are these communities? How do we start them? Where’s the ignition and how do I turn the key?
I’ve been suggesting to my wife that we ought to go spend some of our retirement savings on that bicycle tour in Russia that I’ve been wanting to do for several years now. Spend it now before the government steals it all. In a way I was hoping it wouldn’t really happen, but the news from Ben Bernanke’s PR machine the last couple of weeks suggests they really do mean to take us down. It might be our last fling before we go back to setting up a goat ‘n chicken ranch on our small acreage, like we had in the early 1980s. I’m hoping they won’t find a way to take that from us, too.
I give thanks to the gold-friendly geniuses at the Fed, the US Treasury Department, and especially to Nerobama, his Bolshevik robber gangs in the Congress, and his criminal minions throughout the Federal bureaucracy, the Federal judiciary, the labor unions, and news media, whose radical (and yet entirely predictable) socialist spending programs, massive debt-creation, money creation and monetization of debt, whose take-overs, stimuli, bailouts, confiscations, seizures, shakedowns, redistributions, transfer payments, ear marks, restructurings, corruptions, thefts, bribes, payoffs, payouts, cover-ups, tax increases, drilling moratoriums, extortions, threats, insults, bullying, and anti-business tirades, whose bungling and gross incompetence, whose contempt for all constitutions, charters, precedents, statues, rules, and customs, whose shredding of the very fabric of the American constitution (here I mean constitution in the broad sense, including the whole way of life of the state), whose uncompromising ideological hostility to Western Civilization in general, and whose obstinate refusal to listen to the pleas and outcries of suffering from the outraged American people, have made possible an historic bull market in gold and silver, precious metals stocks, Swiss francs, and Australian dollars.
On behalf of conservative investors everywhere, I, Gaius Petronius Arbiter, thank you for this opportunity to profit from your enormous crimes against America.
To Zac’s question about “where’s the ignition and how do I turn the key,” check out the recent Distributist Review post by Grace Potts:
http://distributistreview.com/mag/2010/10/a-modest-proposal-part-ii/
Things are happening.
Nice to see other young folks out there with goals like mine (I’m 23 and also want to buy a farm).
Having no ground to stand on makes living in this place a pretty tenuous operation. Will these dollars I’m accumulating ever be able to purchase a few acres of tilth? Or will they be worthless by the time I have enough hours of my life converted into numbers in a bank’s computer system?
Ugh.
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