Roubini Says Rogers’s Forecast of $2,000 Gold ‘Utter Nonsense’

[BlackBison]

Quote from veritas007:

Why is core CPI not going up? If dollars are becoming truly worthless I would expect core cpi to go up. The bubbles seem to be confined to food and precious metals. If we are going to have hyper inflation, why isn't real estate just as good a hedge as gold? Shouldn't all real assets maintain their value in an hyperinflation environment?

There is probably going to be high inflation at least and the markets with the strongest underlying fundamentals will be the leaders. Commodities, particularly agricultural and precious metals, have the strongest fundamental arguments looking ahead towards the next few decades.

Houses and land will also go up, but just nowhere near as much as the market leaders. Agricultural land will greatly outperform residential land overall. Wages will probably go up too, but not by much relative to cost of living.

There does not need to be hyperinflation for the metals to bubble and go much, much higher. That would be icing on the cake for the metals bulls, but I am not counting on it myself.

 

[zdreg]

"wages.... but not by much relative to cost of living."
will rise less or more than cost of living? range below or above cost of living?

 

[rew]

Quote from veritas007:

Why is core CPI not going up? If dollars are becoming truly worthless I would expect core cpi to go up. The bubbles seem to be confined to food and precious metals. If we are going to have hyper inflation, why isn't real estate just as good a hedge as gold? Shouldn't all real assets maintain their value in an hyperinflation environment?

Core CPI excludes food and energy. So as long as you don't have to eat, fuel your car, heat your home, or run your refrigerator or computer core CPI is just fine. Core CPI does include housing as a major component, and we can both agree that housing has not been suffering any significant price increases. I'm pretty sure that no government measure of inflation counts my single biggest expense -- taxes. With state and local governments desperate to make ends meet there is a high likelihood of more tax increases.

I'll hold onto my gold and silver, you hold onto your federal reserve notes. Let's see who's ahead five years from now. I'm pretty sure it won't be you.

 

[good ole boy]

Quote from rew:

I'm pretty sure that no government measure of inflation counts my single biggest expense -- taxes.

What's your second biggest expense?

 

[rew]

Quote from good ole boy:

What's your second biggest expense?

I'm somewhat surprised to see that my second biggest expense is food (not counted in core CPI).

For the record, my federal & state income taxes plus my property taxes are about 50% more than what I spend on food, clothing, utilities, home maintenance, insurance, transportation, and charitable contributions combined.

 

[geostrathmore]

Quote from rew:

Core CPI excludes food and energy. So as long as you don't have to eat, fuel your car, heat your home, or run your refrigerator or computer core CPI is just fine. Core CPI does include housing as a major component, and we can both agree that housing has not been suffering any significant price increases.

So the CPI is based on sales of things we don't need... this is so American.

 

[veritas007]

Quote from rew:

I'm somewhat surprised to see that my second biggest expense is food (not counted in core CPI).

For the record, my federal & state income taxes plus my property taxes are about 50% more than what I spend on food, clothing, utilities, home maintenance, insurance, transportation, and charitable contributions combined.

rew, if you are long gold your taxes are going to go way down, so I wouldn't worry about inflation.

 

[rew]

Quote from veritas007:

rew, if you are long gold your taxes are going to go way down, so I wouldn't worry about inflation.

I have no idea what you mean by this, unless you believe that gold will go down so far that I will get a capital loss. There are two problems with this theory:

1. My average cost for gold is under $500. So gold will have to go down an awful lot before I lose money on it.

2. The maximum capital loss deductible per year is only $3000. I already have enough carry over losses (from stocks, not gold) to keep me at that maximum for years. So, no my taxes will not go down if I somehow get a loss on gold.

 

[rew]

Quote from geostrathmore:

So the CPI is based on sales of things we don't need... this is so American.

Food and energy are excluded from "core CPI", but not from the CPI. I-pads are included in both "core CPI" and "CPI". You can see that our government has its priorities straight.

 

[Debaser82]

A bond market revolt is not at all easy to engineer in the United States” as “there is no safer asset destination on the planet than the United States, which has the third-longest-running system of government in the world, despite being a young nation.

http://nourielroubiniblog.blogspot.com/2011/04/bond-market-revolt-is-not-at-all-easy.html