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aztecstargazer

Herd Anticipation

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I feel like sharing my long-term investment strategy with people. This is so I can get feedback and warn people they may be chasing with the herd. i would love if people pointed this out for me. 

The current economic environment in the U.S. is not going to be the path to an economic Eutopia. The proposed tax cuts are a benefit for the wealthiest of the wealthy. The broad and sweeping removal of regulations will see massive corporations doing unconscionable things in the name of profit. The federal reserve is going to continue to raise interest rates to counter-act the 2008 crisis. 

This is leading people to flood back into the U.S. markets. The most recent event is the raising of the interest rate, drawing foreign and domestic investors to bonds. This is also sucking currency from the stock market. The catalyst for ending the record highs in the stock market is this perceived safety of the bonds market. Since the interest rate will continue to be raised, just to bring them back to historic norms, more and more capital will be diverted towards bonds.

The tax-cuts proposed for the super rich and massive corporations is a recipe for disaster. I like to refer to this as "Cumulative Error Effect". If a few do something detrimental, there is no real long-term effect. But if a majority all begin to do these things, it will quickly lead to disaster. Think about the over-hunting of the American Bison in the 1800's. Sure if a few people over hunted, the population would be able to adapt. But when everyone feels it is their right to hunt the bison to an excessive amount, the bison will go extinct. Leaving no more bison to hunt. Do not get me wrong. I seek to build my wealth for my entire life. I want to contribute to society to a degree which will have its inherent financial rewards. I do NOT want to get their faster than is prudent nor realistic. These "get rich quick" schemes never end well. These attempts by the super wealthy, like the Koch brothers, to accelerate the rate they accumulate and dam up wealth is actually leading to inflation.

There is a term known as "velocity of money" which is how many times a currency unit changes hands. So what happens when millions of dollars are not being spent, because they are being hoarded in excessive holdings accounts? Consider how much money the wealthy hold and never spend. This is not the same as prudent saving in order to achieve certain goals. This is the pay-check to pay-check mentality which should be avoided. This is the reason taxes are prudent in order to stimulate the economy. "taxes are theft" is just about the worst attitude a person can have in my opinion. "taxes punish successful people", is another load of crap statement. Wealth is power, power equals responsibility. What is going to happen when the taxes return to a prudent level? Freedom isn't free, so pay your damn taxes. Anyway, the reason this leads to inflation is because with so much currency being hoarded, a central bank will have to create more currency to replace the hoarded currency.

Now for the sweeping deregulation. Wealthy/ powerful people don't like being told what to do. They are under the impression they are almost god-like. Or that regulations are a scheme to destroy their industry. "why can't I pump billions of metric tons of carbon dioxide into the atmosphere?" Because it will trap ultra-violet light and cause the average planetary temperature to rise; Leading to drastic weather changes and rising sea levels. "but it is still snowing, this is a Chinese hoax or the 'green tech' trying to steal our money". Regulations exist for a reason. Yes these temporary periods of deregulation will be taken advantage of in the name of profit, which will look like improved economic outcome. This is because these people and corporations are basically "cheating". If you had a righteous business model, you could afford to pay your taxes, pay your employees a living wage, and not need to sacrifice safety nor the environment, in order to be successful and profitable. 

This is why I began buying silver, not gold, about a year ago. Silver is going to have an increased demand for multiple reasons. Gold has limited need for increased demand. Silver is still a "monetary metal". But it is also an increasingly utilized industrial metal.  So as people start chasing the bonds and inflated stock markets, PM's will get cheaper. Which I will buy more and more of, until the inevitable occurs with taxes returning to needed levels, regulations being re-established. Or even when the deregulated system exploits the public and causes another crash, just like the sub-prime mortgage fiasco. AND BAM! Precious metals over correct, time to sell. Precious metals re-value, time to buy and hold.

Edited by aztecstargazer
missed clarifying statement.

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moral standards are based on exact figures. eg if I had

a 10% margin on a product I sold that would be moral.

if I had a 10000% margin of profit that could be

perceived as immoral. how much taxes should the rich

pay? can the rich protest if you demand under law that

they pay over what is deemed to be a fair rate of tax

for them? instead of bashing the rich based on textbook

theories I see it's better to work with the rich to make a

better future.

53 minutes ago, aztecstargazer said:

Consider how much money the wealthy hold and never spend.

give them reason to spend it and they will do so.

 

53 minutes ago, aztecstargazer said:

Silver is still a "monetary metal"

I have my doubts that this is true going forward.

is copper a monetary metal?(remember those old

copper pennies?)

 

HH

Edited by HawkHybrid

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I have only 2 things that pass my mind reading this.

One is, how much is fair? Every tv throws that around but no one says a number. And once a fair amount is decided will it stay there? Like, is 50% fair? If it is does that mean it will never increase again then?

As for corporations and taxes, I heard a smart explain to me , corporations do not pay taxes. It' the customers who pay it. You increase they're taxes so they increase prices which is paid by the customer. And tax is theft. How many times do you get taxed on the same Money? You pay income tax. If you save it you pay tax on savings. If you spend you pay sales tax. Land that you bought and paid for , even paying taxes when you bought it, get land taxed. So yes, tax is theft. Does that mean you have no responsibilities? No, but I am also not responsible for everyone else. I' responsible for myself.

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Good post I enjoyed reading. 

It is my opinion that Taxes are theft - money taken without permission using the threat of force. It's not an attitude it is more akin to a logical definition in my opinion. Moral arguments of where the money goes next are questionable under that context. Necessity is a better starting point, what does society actually need - this has sadly been lost among the noise of virtue signalling that has near bankrupted this nation and has transformed a great deal of attitudes, mostly that the government should look after you whether you contribute or not (especially if you don't contribute). 

The UK is one of the most tax heavy nations on earth. Look at the problems we have and consider that the solution is perhaps to do away with the things taxes are spent on and perhaps that taxes should be cut? An unpopular idea among the herd. 

I agree with you that pms are undervalued and are one of the few assets that are left in that state. I don't think that silver is a monetary metal, but it's a mute point. It has investor demand near to industrial demand, but unlike gold it is not used as money today as gold is on the sovereign level, nor is it used at local level. It has a great case for investment without this though. 

Given sentiment around silver, it's safe to assume you are not following the herd :)

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1 hour ago, aztecstargazer said:

Since the interest rate will continue to be raised, just to bring them back to historic norms, more and more capital will be diverted towards bonds.

 

If US rates go over 3% the gov will not be able to pay the interest on its debt. it will default.  The ramifications of this for the rest of the world probably aren't positive.   They have no choice but to continue to keep the price of money (interest rates) at historic lows.   The end game is a cashless society with negative rates for the serfs.   Maybe, just maybe, one way out is if they actually hold the 8000 tonnes of shiny as they claim, they could revalue it to a real market price ($10k an oz) and clear some of their debt.  Although I doubt that they have it tbh.

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41 minutes ago, breaktwister said:

If US rates go over 3% the gov will not be able to pay the interest on its debt. it will default.  The ramifications of this for the rest of the world probably aren't positive.   They have no choice but to continue to keep the price of money (interest rates) at historic lows.   The end game is a cashless society with negative rates for the serfs.   Maybe, just maybe, one way out is if they actually hold the 8000 tonnes of shiny as they claim, they could revalue it to a real market price ($10k an oz) and clear some of their debt.  Although I doubt that they have it tbh.

I don' believe it either. Afterall per governments PM isn't money so why would they hold on to it with that mentality ?

I'm probably wrong, but I see it going to a world currency in order to get all under control and milk the people even more. I figure the euro as an experiment if it could work bringing currencies under one to control and it basically worked. Mayby I am wearing a tin hat but one thing I learned in my many years is not to trust governments or people with power.

And with one currency they wouldn' care anymore about PM except for industrial and speculative reasons.

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1 hour ago, metallica73 said:

Ha, wait until Comrade Corbyn and his marxist chums enter No.10.....

often people forget these rich people/businesses pay business rates.tax on their goods and all sorts,before you even get to tax their wages/profits etc etc.Plus they employ people for the most part,which also pay tax.

Most would just f*** off if you increased it more,Or do even more tax avoidance stuff :P

1 hour ago, KDave said:

The UK is one of the most tax heavy nations on earth

Yes and still wants more and more on everything :)

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1 minute ago, blackadder said:

often people forget these rich people/businesses pay business rates.tax on their goods and all sorts,before you even get to tax their wages/profits etc etc.P

...

Rich people/corps almost to fault don't pay tax appropriately.

Their employees do.

Easy to see where the burden and blame lays for me.

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23 hours ago, blackadder said:

yeah to right ie amazon :P Smaller outlets and businesses do get hit for everything.

There aren't many smaller outlets left where I live...even the charity shops are being priced out...takeaways (often fronts for crime including visa dodgers - some of them make little to no pretence to actually sell food!) are pretty much the only new businesses we get around here now.

Edited by kimchi

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4 minutes ago, kimchi said:

There aren't many smaller outlets left where I live...even the charity shops are being priced out...takeaways (often fronts for crime including visa dodgers - some of them make little to no presence to actually sell food!) are pretty much the only new businesses we get around here now.

Sounds like you live in the same village as me!

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3 minutes ago, kimchi said:

There aren't many smaller outlets left where I live...even the charity shops are being priced out...takeaways (often fronts for crime including visa dodgers - some of them make little to no presence to actually sell food!) are pretty much the only new businesses we get around here now.

Getting like that in most places,Near me the shops were having a hard time.So the council made the street one way,banned all parking on that street and increased the carpark fee to something dumb...final nail in the coffin.

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23 hours ago, JunkBond said:

Sounds like you live in the same village as me!

Look out your window in ten minutes and I'll flash (a torch @fehk2001, get your mind out of the gutter for once man!) five times from mine. If you see me, pop round for a beer and a moan about the PM dip when we have no money left to spend! :P

22 hours ago, blackadder said:

Getting like that in most places,Near me the shops were having a hard time.So the council made the street one way,banned all parking on that street and increased the carpark fee to something dumb...final nail in the coffin.

The pubs were the worst/most obvious for me (but then I don't shop much). In our little village we had little else except three thriving pubs that were the heart of the community. Working men stopped on the way home to chat, meet their friends, and unwind. The smoking ban (I'm all for smoke free spaces but it's quite easy in large pubs and restaurants to adapt the building so smoking and non-smoking are separate) was the first hit and then with rising taxes it was a one-two knock-out, even for busy places. My ex-publican friend told me recently it's simple - you either have to sell food now or you can't run a pub at profit, no matter how busy it is.

It depends how you see it but for me it's a systematic and deliberate disassembly of local communities. It makes us much easier to control/corrall. Pubs, friendly local shops, community centres...all were places where locals would meet and chew the fat and organise opposition to local councils if necessary. All mostly gone now here (we do have one pub left but it only gets busy just before closing time, because that's when the lock in starts and the ashtrays come out, and people feel there is some freedom left in the world, if only for a few short hours).

The same with our local fire station - sold now to a dental practice (and the money those places make is obscene imho). What would benefit the community more, a fire station (with emergency medical aid as well) on the doorstep or a private dental practice (there's something to be said for the latter tbf because now they're stopping our rural buses too so there's nowhere left for elderly folk to go to)?

United we stand, divided we fall, and I only see policies that further divide us and either directly alienate folk from each other, or remove their natural instinct to forge community spirit and cohesiveness. It's been happening for far too long to be a coincidence imho. I have lived here most of my life and the difference between what I grew up with (unopened doors, always a hand to neighbours etc) has completely gone in 30 years. I'll be gone in four decades or so, what I worry about is the kids in the family who have never known anything else.

/rant

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58 minutes ago, kimchi said:

The pubs were the worst/most obvious for me (but then I don't shop much). In our little village we had little else except three thriving pubs that were the heart of the community. Working men stopped on the way home to chat, meet their friends, and unwind. The smoking ban (I'm all for smoke free spaces but it's quite easy in large pubs and restaurants to adapt the building so smoking and non-smoking are separate)

When i used to smoke,I would never smoke in a restaurant etc anyway.Would always go outside as would 99.9% of other people.your friday night type high street pubs that are F***ed now.

My local little village one,I never once saw anyway smoking in the restaurant part..would be in the pub/bar area which was like 3 miles away :P so was separate anyway.

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2 minutes ago, JunkBond said:

I was going to react with a laugh but I have used up my daily quota, Perhaps I should upgrade my membership!

I'll bet that's what you tell all the cute ladies with no sense of humour, you scoundrel you! :o

To return to the OP, basically I believe the US is ****ed, and we in the UK and then Europe are next in line (hence the withdrawal of security on deposits here). A price reset/currency collapse is on its way, and my feeling is the US as head of the petro-dollar will be the first to fall.

If that might be a possibility then it's not just PMs you need, but (actually far, far more important) stocks of food and a way to purify water without electricity, unless you have a way to generate it (as well as plenty of basic medical supplies). I'm not a 'prepper' per se but if you have home insurance, car insurance, etc you get the basic idea. You don't pay for these things wanting to claim - you get them for a worst case scenario. If the SHTF you can only rely on yourself, but you need water and food simply to survive - a different kettle of fish from having to claim to get your bumper repaired when some idiot backed into your car.

Almost everyone has misjudged the North Korean 'moves' imho. There will be no war. I agree with the Russian commentator (or at least I think there is a lot of truth possibly in what he's speculating) - I'm sorry I forget his name. Basically his view is that the North Korean noise is to force the West into letting China be the peacemaker. North Korea gets grudgingly accepted into the fold in return for 'peace' and an easing on imports, which placates the population. For China- 'saving the world' from a possible nuclear catastophe (we'll forget Fukushima for now - why not, everyone else has?) puts them then in pretty much top spot apart from the US. But the one thing China has and the US doesn't (because the latter have sold most of it to the former and other Asian countries) is gold to back their currency.

Nothing backs the dollar and many experts say it now costs more energy to extract a barrel of oil from the ground than it yields. If so, such pretense can only go on for so long. I'm pretty certain rough times are coming, alas.

Now, if you'll excuse me there seems to be a gimp at my window (no idea where he got the ladder from) but I suspect a possible bluff from @JunkBond with his 'two pubs' schtick...

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24 minutes ago, blackadder said:

When i used to smoke,I would never smoke in a restaurant etc anyway.Would always go outside as would 99.9% of other people.your friday night type high street pubs that are F***ed now.

My local little village one,I never once saw anyway smoking in the restaurant part..would be in the pub/bar area which was like 3 miles away :P so was separate anyway.

Surprised at that, which country do you live in?

Edited by kimchi

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1 minute ago, blackadder said:

uk :) I'am mainly talking about country pubs that were 100% food anyway.however i do know afew villages that had three pubs all gone now.

Still very surprised but I think I'm probably a fair bit older than you then. When I first started getting taken to pubs or restaurants as a child it was an exception to see folk who didn't permanantly have a fag in hand when not drinking or eating, and that continued round here to a lesser extent as tax went up (SE/London) until the ban. However, the UK is nothing if not extremely provincial with local customs and etiquette etc (and often you cross those at your peril!).

I think the point remains though. When I've been up north in recent years I've been surprised how laidback they are about stuff like that compared to here. But the communities here have been utterly neutered by closing of the pubs, community meeting places, libraries, bus services being stopped, etc.

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I guess alot less people smoked leading upto the ban due to the costs.Then say in earlier years :) I can think of atleast ten pubs that are now gone for good around here.Alot of the ones that remain are all michelin star type food pubs now.Which most people can't afford to eat at.

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