muses of the moment

January 24, 2013

The Fed Released its Meeting Notes from 2007

Filed under: Economic Crisis, Global Debt, The Federal Reserve, US Government Debt — totallygroovygirlfriday @ 5:28 am

Five years later, the Fed has released its meeting notes from 2007 just prior to the credit collapse. Very interesting. Here is the New Yorker’s take.

So, groovygirl’s questions are: have they learned their lesson? Can they see the next collapse? Do they have anything left in their of tricks to help in the next crisis? But most importantly, will they understand the next trigger? Could they have another blind spot that will keep them from seeing the next leg of the global debt breakdown?

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12 Comments »

  1. Answers: No. Lesson not learned. No. They can’t see beyond their noses. Tricks? Absolutely! Print, Print, Print. Next trigger? They’ll end up tripping over it no matter what, so the answer again is No.

    GG,
    Armstrong is getting more detailed in his blogs. Here are the nuggets that I’m getting …
    1) No Hyperinflation with US Dollar!
    2) Gold will NEVER go in to the stratusphere ($20,000/ounce).
    3) There will NOT be a stock market crash.

    Do you agree with my analysis? If these three are true, what does the future bring? Thoughts?

    Comment by MikePhila — January 24, 2013 @ 12:53 pm

  2. MikePhila,

    I am still not sure about hyperinflation. gg still contends that just a modest increase in the cost of living coupled with high unemployment or under-employment and low fixed earnings and high cost of debt will feel like hyperinflation to most Americans, regardless of what they call it.

    The final price in gold should never be looked at in dollars. It is what can you buy with it vs what you could buy with it 5, 10 or 15 years before that matters. If Armstrong doesn’t believe in hyperinflation in the US dollar, it follows he doesn’t believe in $20,000 gold.

    Groovygirl is looking for gold at $5000 and $10,000 and hitting that high somewhere between 2015-2018. But those are two of many clues that will signal a high or selling point. There are others like, what are the tax consequences, is the Fed still buying bonds, how does Europe and China look compared to the US, does the US government have debt under control? Do they ave a plan?

    Depends on your definition of a crash? Decline of 15% or 50% or 90%? A credit freeze like we saw in 2008 can drop stocks 50% pretty easily. Doesn’t mean they will not go back up again. gg always uses the Dow-gold ratio to determine when to move from a majority gold to a majority stocks long-term. But there will always be good and bad individual stocks in every cycle.

    gg

    Comment by totallygroovygirlfriday — January 24, 2013 @ 1:09 pm

  3. Hi GG,
    Thanks for your questions and reply to MikePhila! You are very informative and one of the sites I try to visit weekly if not daily.
    //real80
    https://twitter.com/real80

    Comment by real80 — January 24, 2013 @ 5:02 pm

  4. Thanks, Real80.

    gg

    Comment by totallygroovygirlfriday — January 24, 2013 @ 5:35 pm

  5. I think we all need to declare our definitions. Armstrong always talks about hyperinflation in terms of 1930s Germany or Zimbabwe. To me, that means wheel barrels of cash to buy bread. That, to me, is HYPERinflation. I can agree with that definition. No, we won’t see hyperinflation. I think he makes a good argument against hyperinflation. I do though think that we will see HIGH inflation. But what does THAT mean? 10%? 25%? This is where I think the argument starts.

    GG, Why will gold go to five or ten thousand? It’s rigged today. Why won’t they rig it tomorrow?

    Regarding a market crash, Armstrong compares it to Black Friday. What % was that? I forget.

    Comment by MikePhila — January 24, 2013 @ 8:07 pm

  6. It’s rigged to go up in a controlled manner. It is not rigged to change the cycle. price of gold must at least cover the outstanding debt to foreign nations. That puts it closer to $10,000 than $5000 based on Jim Sinclair’s calculations. Hyperinflation gold is $25,000 or $50,000.

    gg

    Comment by totallygroovygirlfriday — January 24, 2013 @ 8:14 pm

  7. Just wanted to share 7% is not joke. Thanks to the logarithmic of two, just 7% yr/yr the prices will double in 7 years if my memory serves me correct. There a youtube video with millions of views of a college professor lecturing about this important aspect. The more you know=POWER or shall we say, safety–financial safety, cheers.

    The greatest shortcoming of man is the understanding of Exponential functions:

    Also TGG, can you please do an article on when to sell strategy? What are some of the possible variables. Im personally looking at the GSR and Gold to Dow ratio myself but would be interested in what you found as your intellectually stimulating, danke shun!

    Comment by SilverOrGold — January 25, 2013 @ 3:32 am

  8. MIkePhil,

    I believe it was more than 50% drop in the stock market on black Friday.

    Comment by SilverOrGold — January 25, 2013 @ 3:34 am

  9. Yes, I will do an article on selling soon. However, there are so many unknowns right now I can not be very specific. I am also reluctant to talk about selling when I want people to buy long term to protect their capital. People can usually only focus on one idea at a time and buying gold is not even on most people’s radar yet.

    gg

    Comment by totallygroovygirlfriday — January 25, 2013 @ 7:14 am

  10. Thanks TGG and great work as always!

    Comment by SilverOrGold — January 25, 2013 @ 8:49 am

  11. Correction, “7% yr/yr the prices will double in 7 years”. The price will double in ten years not seven, cheers.

    Comment by SilverOrGold — January 25, 2013 @ 8:51 am

  12. Armstrong now says the DOW will rally until 2014 and that Japan’s money is now flowing into the US. Seems contradictory to what he said before. I cannot make sense out of what he says. According to him it should be buy, buy, buy.

    Comment by Janet — January 26, 2013 @ 1:40 am


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