Quote from bwolinsky:
Law of One Price and Arbitrage Pricing Theory say that whether it's Euro or Dollar Denominated Gold and precious medals that they must be worth the same or else there is an arbitrage opportunity.
This is the hyperinflationary scenario envisioned by the NIA, and I think the Euro's collapse will confirm for us the failure of sovereigns is all but assured.
It's a nightmare I woke up from to beg my dad to sell because these problems aren't just much worse than our credit crisis, again, they are 156 times worse because of the scope and lack of economies of scale in dealing with financial problems as big as those of entire nations.
However the ECB decides to handle it it's nice that we're watching them go through it before us because we'll see a Semi-Sovereign like California declrare bankruptcy and that could be the signal that could be the trigger when it comes time to re-up once again and default yet again on our Treasury obligations as the Federal government orchestrates a bailout of State governments likely to include California, New York, and a few other states under major financial distress.
So, yes, I'm sure. It will be interesting following a chart of this occuring, especially the first time interest rates globally spike, gold and precious medals sky rocket because of interest rate carry and arbitrage opportunities as the Euro crashes and struggles for prices denominated globally to reach equilibrium which I estimate in order for the Euro to fall as much as it needs to would mean Euro is worth much less than parity with the US Dollar, around 0.8-0.9 as I have said.
Trade accordingly, but I really don't advise anybody to hold stocks if they're merely expecting inflation to carry their investments because just as Bill Gross is finding his decision to exit longer term bonds may have been his worst decision ever as PIMCO's portfolio manager. The "cry in your beer" comment means he's aware that he made a mistake in his timing, but I'm sure he'll be proven right because it is absolutely impossible for our Fed to maintain rates at their current levels without another round of quantitative easing and more hyperinflation that is understated by our government through the use of hedonics and geometric weighting. I don't really know how fast inflation is rising, or the real interest rates, but if you're not an economist and have no data then this is impossible to say because truly their dependence on government collected statistics, especially ones recorded by the BLS and Federal Reserve, are seriously suspicious as to have been manipulated out of necessity where than veracity.
I'm more concerned that we will try get involved beyond our limited currency swap agreements, and though I'm sure they're priced consistently, those swaps are so the ECB has leverage to intervene using currencies other than Euros, but if they tap their lines and are unable to pay, it is very likely that those swaps will lead to more European defaults and send USD's down with it, and that's the armageddon time where there won't be any way to even afford a loaf of bread, much less an ounce of silver or gold.
Think about it, bhardy, and to the OP, I wish you had more input than listening to me rattle on about the Euro Crisis, and what may soon come in addition to that is its cause the European Sovereign debt crisis, which will make the problem at least twice as worst or 312 times bigger of a problem than the 156 times we have right now when we're facing a central bank who does not feel committing funds just to lose them is worth the risk, and I agree.
Most of the headlines should support this conclusion, but the economics point of it is obvious, if you understand a lot of macroeconomics, not the misconceptions that pervade our financial media cheerleaders like CNBC. Bloomberg doesn't have as big of a problem when it comes to that, but certainly nearly always features a commentator telling you to buy stocks when they could be the worst investment of the next decade no matter how well adept you are at picking them.
