• This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over

DA60

Banned
DP Veteran
Joined
Jan 28, 2012
Messages
16,386
Reaction score
7,793
Location
Where I am now
Gender
Male
Political Leaning
Independent
'The BIS message, as summarized by the FT, is that "central banks must head for the exit and stop trying to spur a global economic recovery... cheap and plentiful central bank money had merely bought time, warning that more bond buying would retard the global economy’s return to health by delaying adjustments to governments’ and households’ balance sheets."

Here is a better summary of the BIS' unprecedented U-Turn on its 5 year long monetary strategy, in its own selected words:

Can central banks now really do “whatever it takes”? As each day goes by, it seems less and less likely... Six years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy. If there were an easy path to that goal, we would have found it by now.

Monetary stimulus alone cannot provide the answer because the roots of the problem are not monetary. Hence, central banks must manage a return to their stabilisation role, allowing others to do the hard but essential work of adjustment.

Many large corporations are using cheap bond funding to lengthen the duration of their liabilities instead of investing in new production capacity.

Continued low interest rates and unconventional policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system.

Overindebtedness is one of the major barriers on the path to growth after a financial crisis. Borrowing more year after year is not the cure...in some places it may be difficult to avoid an overall reduction in accommodation because some policies have clearly hit their limits.'



The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over | Zero Hedge
 

specklebang

Discount Philosopher
DP Veteran
Joined
Jan 13, 2012
Messages
11,524
Reaction score
6,769
Location
Las Vegas
Gender
Undisclosed
Political Leaning
Other
So, if they (the central banks) did that you think our PM collections will be worth anything? Just curious what you think.


'The BIS message, as summarized by the FT, is that "central banks must head for the exit and stop trying to spur a global economic recovery... cheap and plentiful central bank money had merely bought time, warning that more bond buying would retard the global economy’s return to health by delaying adjustments to governments’ and households’ balance sheets."

Here is a better summary of the BIS' unprecedented U-Turn on its 5 year long monetary strategy, in its own selected words:

Can central banks now really do “whatever it takes”? As each day goes by, it seems less and less likely... Six years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy. If there were an easy path to that goal, we would have found it by now.

Monetary stimulus alone cannot provide the answer because the roots of the problem are not monetary. Hence, central banks must manage a return to their stabilisation role, allowing others to do the hard but essential work of adjustment.

Many large corporations are using cheap bond funding to lengthen the duration of their liabilities instead of investing in new production capacity.

Continued low interest rates and unconventional policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system.

Overindebtedness is one of the major barriers on the path to growth after a financial crisis. Borrowing more year after year is not the cure...in some places it may be difficult to avoid an overall reduction in accommodation because some policies have clearly hit their limits.'



The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over | Zero Hedge
 

DA60

Banned
DP Veteran
Joined
Jan 28, 2012
Messages
16,386
Reaction score
7,793
Location
Where I am now
Gender
Male
Political Leaning
Independent
So, if they (the central banks) did that you think our PM collections will be worth anything? Just curious what you think.

If they actually stopped their various QE's and artificially suppressed interest rates, I think our precious metals would eventually plummet in price...assuming some move to gold/silver being part of a new basket of currencies to make up a new world reserve currency did not take place.

The fundamentals for gold/silver appreciation are monetary instability and inflationary concerns. Remove those fears and there is little need to invest in gold/silver, IMO.


But how can central banks stop?

Look what happened to the world markets when Bernanke just hinted at one day removing QE?

They fell hard.

No, the western world (and Japan) have become completely addicted to cheap debt and central bank stimuli.

And this train won't stop, IMO, until it either pulls into the full recovery station or goes over the debt cliff...the money 'printing' engines that power it running at maximum.

And I think the likelihood of the former happening before the latter is EXTREMELY unlikely.


I think the precious metal fundamentals are getting better every day. It's just that most of the world thinks this propped up recovery is actually based on solid fundamentals.
As soon as that fantasy falls away, I think they will rush back into dollars. And when the dollar starts to weaken, rush into gold/silver and other commodities because they will simply have virtually no place else to put their money.

But, as I said before, the gold/silver market might have a ways to drop before that happens.

As usual, all gold/silver 'bugs' need to have strong stomachs.
 
Last edited:

specklebang

Discount Philosopher
DP Veteran
Joined
Jan 13, 2012
Messages
11,524
Reaction score
6,769
Location
Las Vegas
Gender
Undisclosed
Political Leaning
Other
I haven't bought bullion in a long timer ad every bit of bullion I own is now worth a lot less tan what I invested. So, boo-hoo, I'll just sit on it. Let my heirs worry about it. By then it will no doubt be worth 50¢ an ounce and will get tossed out along with my Pink Floyd T-Shirt. Not my problem, ha-ha.

But I bought and continue to buy PM collectibles. Even those I bought at the top of the market, when silver was nearly $50, have held their values. A few are down but others are up. I've gotten some good deals on Ebay by bidding low and sticking it out. I might bid the same item 5 times but eventually I'm the winner. I've gotten the Fiji 2013 cats and the Niue 2012 cats in the last few weeks. I also picked up a 4 piece set of the IOM History Of The Cat series which I had never been able to find for years. If silver goes down more, I'll probably pick up some bullion as well.

I like gold but I still think silver is more "fun".

We shall see. I did not think silver would break $20 so as usual I'm wrong - I'm a terrible investor. I'm glad I bought a bunch of houses while I was buying PMs. They, at least, have gone up in value. Now, they have crossed my buying line so I'll get back to retirement.

If they actually stopped their various QE's and artificially suppressed interest rates, I think our precious metals would eventually plummet in price...assuming some move to gold/silver being part of a new basket of currencies to make up a new world reserve currency did not take place.

The fundamentals for gold/silver appreciation are monetary instability and inflationary concerns. Remove those fears and there is little need to invest in gold/silver, IMO.


But how can central banks stop?

Look what happened to the world markets when Bernanke just hinted at one day removing QE?

They fell hard.

No, the western world (and Japan) have become completely addicted to cheap debt and central bank stimuli.

And this train won't stop, IMO, until it either pulls into the full recovery station or goes over the debt cliff...the money 'printing' engines that power it running at maximum.

And I think the likelihood of the former happening before the latter is EXTREMELY unlikely.


I think the precious metal fundamentals are getting better every day. It's just that most of the world thinks this propped up recovery is actually based on solid fundamentals.
As soon as that fantasy falls away, I think they will rush back into dollars. And when the dollar starts to weaken, rush into gold/silver and other commodities because they will simply have virtually no place else to put their money.

But, as I said before, the gold/silver market might have a ways to drop before that happens.

As usual, all gold/silver 'bugs' need to have strong stomachs.
 
Top Bottom