patrick.net

Glock-n-Load says

I don’t know how we aren’t in at least a recession if not worse.

High inflation is stimulating - since people are increasingly desperate to get rid of dollars, this increases monetary velocity. Deflation is much worse, as people hoard money and thus bring the economy to a standstill. At least that's what the Fed thinks, and why they're doing what they're doing.

TPTB learned the hard truth about industrial economies and financial panics in the Great Depression. Initially, they tried what they used to do back in the 19th century - let prices crash and stand by while their cronies fleeced the overindebted plebes. The problem was that an industrial economy can't take a sudden stop without catastrophic damage. We almost had full-on class warfare in the early 1930's, and the economic misery boosted the cache of communism that wouldn't fade for another 50 years. We had widescale hunger and despair - TPTB never want that much revolutionary kindling to accumulate again.

stereotomy says

Glock-n-Load says

I don’t know how we aren’t in at least a recession if not worse.

High inflation is stimulating - since people are increasingly desperate to get rid of dollars, this increases monetary velocity. Deflation is much worse, as people hoard money and thus bring the economy to a standstill. At least that's what the Fed thinks, and why they're doing what they're doing.

TPTB learned the hard truth about industrial economies and financial panics in the Great Depression. Initially, they tried what they used to do back in the 19th century - let prices crash and stand by while their cronies fleeced the overindebted plebes. The problem was that an industrial economy can't take a sudden stop without catastrophic damage. We almost had full-on class warfare in the early 1930's, and the economic misery boosted the cache of communism that wouldn't fade for another 50 years. We had widescale hunger and despair - TPTB never want that much revolutionary kindling to accumulate again.

At what point do people lose ground to this inflation to the point something breaks? Trump wants lower interest rates even.

Glock-n-Load says

I don’t know how we aren’t in at least a recession if not worse.

Oh we are, money printer and low rates, that masks everything. It’s why inflation went 100% and everything doubled in price last few years.

There’s no free market, economy is in full managed mode. Trump too keeps bailing out investors. Tons of bad debt.

Glock-n-Load says

stereotomy says

Glock-n-Load says

I don’t know how we aren’t in at least a recession if not worse.

High inflation is stimulating - since people are increasingly desperate to get rid of dollars, this increases monetary velocity. Deflation is much worse, as people hoard money and thus bring the economy to a standstill. At least that's what the Fed thinks, and why they're doing what they're doing.

TPTB learned the hard truth about industrial economies and financial panics in the Great Depression. Initially, they tried what they used to do back in the 19th century - let prices crash and stand by while their cronies fleeced the overindebted plebes. The problem was that an industrial economy can't take a sudden stop without catastrophic damage. We almost had full-on class warfare in the early 1930's, and the economic misery boosted the cache of communism that wouldn't fade for another 50 years. We had widescale hunger and despair - TPTB never want that much revolutionary kindling to accumulate again.

At what point do people lose ground to this inflation to the point something breaks? Trump wants lower interest rates even.

In the US, we're in a unique position wrt inflation. 70-80% of trade worldwide is in USD, so the worst effects of inflation are mitigated at home at the expense of exporting inflation to the rest of the world. If the world ditches the dollar, then we're fucked, but that can't happen for at least another decade - it's hard unwinding that which has been built up over 80 years.

Short answer: if you're boomer or gen-x, this isn't a problem. Millenials will be somewhat fucked, especially if they don't inherit the boomers' wealth. Zoomers and beyond might as well start learning how to grow yams and eat face.

Glock-n-Load says

don’t know how we aren’t in at least a recession if not worse.

The GDPNOW forecast for the 4th quarter is a 5.3% annualized growth rate (they base that rate as after inflation). The economy is booming The unemployment rate dropped from 4.5% to 4.4%.

About 2.5 million illegals are outta the country over the last year.

Retail sales up 3.1% over last year to a new record.

US savings rate is about 4%. The people have record high amounts of financial assets, including record amounts of cash (money markets/savings(. They also have record amounts of physical gold & silver.

The trillions of dollars Trump negotiated to be invested in US based industries is starting to take place. We're gonna see other manufacturers increasing production and hiring. Example: Boeing has a backlog of 11-12 years production.

Sure, there's some weak spots like private equity and private credit that need some extra papering over, but right now we're in a good spot, and Trumps working on getting construction of SFH going as well as extra production lines opened up by Defense contractors.

Misc says

About 2.5 million illegals are outta the country over the last year.

And this is raising wages for the poorest US citizens, which is excellent news for them, and is good for the economy because they generally spend whatever they get.

I think gold is hitting 5k this week.

RC2006 says

I think gold is hitting 5k this week.

Silver reached its all time high of nearly $96 this week.

ForcedTQ says

The_Deplorable says

Executive order, applicable to the executive branch of the federal government…… The poor people who couldn’t think critically had the wool pulled over their eyes…

ForcedTQ says

Executive order, applicable to the executive branch of the federal government…… The poor people who couldn’t think critically had the wool pulled over their eyes…

"Critical thinking" is not the issue. True, it was mere executive order, but the government would have locked you up anyway. A modern day example is those who got the clot shot rather than lose their jobs. Does not matter that nobody really had that authority to force the jab, as folks faced real dismissal if they did not comply.

HeadSet says

ForcedTQ says

Executive order, applicable to the executive branch of the federal government…… The poor people who couldn’t think critically had the wool pulled over their eyes…

"Critical thinking" is not the issue. True, it was mere executive order, but the government would have locked you up anyway. A modern day example is those who got the clot shot rather than lose their jobs. Does not matter that nobody really had that authority to force the jab, as folks faced real dismissal if they did not comply.

This is the real crime. It must be punished.

FortWayneHatesRealtors says

Gold skyrocketing because bad things are happening. World doesn’t think we can fix our debt problem.

Heard this a lot when I my last year in high school 1979-1980.

In 2006-2007 my engineer office mates and I began following the Gold Price and trying to figure out what should be the right price.

In my model, I priced it not in fiat money nor in any tradeable commodity, but instead in hours of the median US wage. In November 2007, when we ended our modeling, it was about 46 median worker hours per ounce of gold.

I reckoned that the purchasing power of US wages was already in a secular decline of about 1.3% per year since the US went off the gold standard. That conclusion was from a study of household vs individual wages covering the period 1967 - 2007, all data publicly available from US government websites.

The hard drive on my computer got wiped around the time I ended the analysis. I've been too lazy and stupid to reconstruct it. But I did reconstruct my 2007 figure of merit, 46 hours of labor.

Assuming the 1.3% decline per year since November 2027, that ounce would cost a median American about 59 hours of labor now, or about $1700 - $1800 for an "asset" that is not liquid, pays no income, and for many, has a storage cost. Today it closed at around $4940, or 166 hours of labor.

The peak price during my senior year of high school on January 21, 1980 was $850 per ounce.or 142 hours of median labor.

Certainly, gold was in a bubble at $850 in January 1980. Is it in a bubble at $4940 in January 2026? Time will tell.

B.A.C.A.H. says

Time will tell.

Silver $93...$94...$96...$99...$98

The new hundred dollar coin from the mint.

B.A.C.A.H. says

Certainly, gold was in a bubble at $850 in January 1980. Is it in a bubble at $4940 in January 2026? Time will tell.

If Trump ends his Presidency with the Ayatollahs out, some Reindustrialization in, etc. the dollar will get nice n' stronk

After usa seized russian assets, many countries started holding gold instead of us bonds etc.

If us can just seize $ then there is no point in holding dollar n us bonds. World is soaring to lose faith in $.

Yes, it was a disaster when Biden seized Russian assets.

Trust lost is hard to regain. Now every country realizes that it is very dangerous to hold any assets that are under US control.

That's why Trump is trying to do all this silly Peace Board stuff and having envoys with Putin. Goal is to break up BRICS, they are the system not under our control. We can't sanction away when they can trade with each other. Can't globohomo if there is no leverage.

Patrick says

Yes, it was a disaster when Biden seized Russian assets.

Trust lost is hard to regain. Now every country realizes that it is very dangerous to hold any assets that are under US control.

Most of the funds are stuck in EU banks where the EU has jurisdiction. That's why the EU were the ones trying to use the frozen Russian funds as collateral for a loan to the Ukraine. The funds are simply denominated in US dollars.

You're right:

Most frozen Russian funds are under EU jurisdiction, not U.S. jurisdiction.

The European Union holds approximately €210 billion ($245 billion) of the frozen Russian assets, making it the largest single holder.

The United States holds only about $5 billion in frozen Russian assets, a small fraction of the total.

When gold hit $900 back in 1979, it was tracking the real inflation in the economy; nowdays the inflation numbers are essentially made up. In most things I think we've seen > 200% inflation over the last 20 years (housing, education, food, medical - anything you really need, not bullshit electronics).

After Volker took the US economy out to the woodshed in the early 1980's and shot it twice dead with >15% interest rates, gold dropped back to around $400 and stayed that way until the late 1990's, when the US nominally ran a surplus (mostly by legerdemain by "unifying" the budget - before then, the SS trust fund was kept separate from the Federal budget).

If the past is a guide, then wherever gold ends up, we might expect a 50% retracement to a lower, but stable value. This will only occur if a major deflationary event occurs, such as turning off the spigot of $trillions in deficit spending every year.

Silver at $99 today. What is driving the 220% increase in silver prices over the last 12 months ?

Chicoms are hoarding and stockpiling since solar panels and Tomahawk cruise missiles use a lot of silver ?

Commodities are very volatile.

Just look at natural gas prices over the last week. We saw an increase of 60-75% in ONE WEEK.

You can make a lot of money at market peaks, but watch that fucking timing.

stereotomy says

After Volker took the US economy out to the woodshed in the early 1980's

There is no rampant inflation, like the trade, auto and teamster unions causing massive wage inflation, and no OPEC embargo.

Eggs, gasoline, townhome rental prices, etc are all notably down in Panama City Beach.

As of January 23, 2026, the current Truflation US CPI inflation rate is 1.21%.

The Federal Reserve should just keep the Fed Funds rate around 3.75%.

And the Federal Reserve is buying about $50 billion a month in US Treasuries now since QT is over and it has not restarted QE; the purchases are replacing matured Treasuries to keep the balance sheet around $6 trillion.

stereotomy says

When gold hit $900 back in 1979,

Didn't hit $900. See below.

B.A.C.A.H. says

The peak price during my senior year of high school on January 21, 1980 was $850 per ounce.or 142 hours of median labor.

What I left off the earlier post was this calculation. Assuming the 1.3% decline in purchasing power of American wages since 1967, what costed 142 hours of median labor in January of 1980 would be expected to cost about 260 hours of median labor in January 2026. This would correspond to a gold price of about $7000 per ounce to match the January 1980 mania.

We'll find out

I wonder if Iwog "backed up the truck" when silver was less than $20 per ounce.

At a silver spot price of $100 per troy ounce, the melt value of one silver dollar is 0.7734 × $100 = $77.34

That dollar coin used to be one dollar.