Listen to this interview before buying (more) gold

[EmptyMellon]

The following is a very relevant interview for those who are thinking of buying or have already bought precious metals, but have only listened to one-sided pro-gold, pro-precious metals fear-trade "advice" - been there, done that and not going back. 

 

'Financial Sense' interview of Martin Armstrong by James J. Puplava - interview starts at the 2 minute mark:

 

http://www.financialsensenewshour.com/broadcast/fsn2015-0829-1.mp3

 

[if you have issues with the audio link (mp3), just go to the source below and select from one of the four audio options.]

 

Source: http://www.financialsense.com/financial-sense-newshour/martin-armstrong/expect-dow-hit-13000

(This interview was done on 08/29/2015.)

[Frederik]

 

have only listened to one-sided pro-gold, pro-precious metals fear-trade "advice"

This seems manipulative to me. "One-sided" implies that arguments made are fallacious / wrong and information is misrepresented. "Pro-gold" - again, this you would only write if you would assume that all the advice in favor of precious metals (PM) is not based on reason and evidence. This is insulting to those who consider themselves rational philosophers who are also invested in PM, who surely exist (because I am one).

 

As you could imagine, I don't feel that I am getting into a rational and productive discourse by reading your thread and listening to the podcast.

 

I wonder how you react to my response?

[Coonage]

Hmm? This probably doesn't support my confirmation bias, so I'll probably just shy away from it 

 

Just kidding!  Thanks for the share. I'll let you know what I think, after I listen to it.

[Marshall B]

I can see what he's saying about rising prices in commodities and tangible assets if the we lose faith in the dollar. Schiffs argument is that is where we are right now. This guy just thinks they'll be a reset and all will be good so long as we have faith in the government? He makes a claim that people would think you're crazy if you asked them "will the government go bankrupt?". I agree most people would think that's not a possibility. Until it happens. Then what? And he makes a good point in a shit hit the fan scenario about gold not mattering cause it'll be a madmax situation. Peter is more so thinking people will lose their service sector jobs and the fact that we don't produce much of anything anymore won't help things out. We won't be able to afford housing so housing comes down etc. PM being the only thing we turn to.

All in all I thought that was good stuff. I sure as shit couldn't debate the guy. I always find myself feeling really vulnerable during economic discussions. That belief in authority kicks in. I feel helpless and can't fully understand what's going on but can pick up bits and pieces of things that seem correct. I've been a successful business owner for 15 years and I can't get it so imagine how so much of the world feels about it. Especially if you don't have any assets and live paycheck to paycheck. The why bother mindset takes over. All this confusion leads me to feeling extremely pissed off about my public and private school education.

[EmptyMellon]

This seems manipulative to me. "One-sided" implies that arguments made are fallacious / wrong and information is misrepresented. "Pro-gold" - again, this you would only write if you would assume that all the advice in favor of precious metals (PM) is not based on reason and evidence. This is insulting to those who consider themselves rational philosophers who are also invested in PM, who surely exist (because I am one).

 

As you could imagine, I don't feel that I am getting into a rational and productive discourse by reading your thread and listening to the podcast.

 

I wonder how you react to my response?

 

It is a sophistic trap.  Quite the needless word-salad.  Instead of focusing on the source material and refuting the points based on the arguments made in the interview, you focus on the wording in the one sentence in my post, trying to find some hidden meaning in the already straight forward statement.

Simple Definition of one–sided

• : showing only one opinion or point of view

• : led or controlled by one of the two people or groups involved

source: http://www.merriam-webster.com/dictionary/one-sided

 

So, I am not 'implying' anything, I stated it in a straight-forward manner, yet all I see is: "seem manipulative", "implies", "assume", "insulting", "consider" and my favorite, "I wonder how you react to my response?".  And you call my post manipulative?  All I see 'is' an emotional response to my post because it does not align with your vested interest.

 

Hmm? This probably doesn't support my confirmation bias, so I'll probably just shy away from it 

 

Just kidding!  Thanks for the share. I'll let you know what I think, after I listen to it.

 

Cool.

 

I can see what he's saying about rising prices in commodities and tangible assets if the we lose faith in the dollar. Schiffs argument is that is where we are right now. This guy just thinks they'll be a reset and all will be good so long as we have faith in the government? He makes a claim that people would think you're crazy if you asked them "will the government go bankrupt?". I agree most people would think that's not a possibility. Until it happens. Then what? And he makes a good point in a shit hit the fan scenario about gold not mattering cause it'll be a madmax situation. Peter is more so thinking people will lose their service sector jobs and the fact that we don't produce much of anything anymore won't help things out. We won't be able to afford housing so housing comes down etc. PM being the only thing we turn to.

All in all I thought that was good stuff. I sure as shit couldn't debate the guy. I always find myself feeling really vulnerable during economic discussions. That belief in authority kicks in. I feel helpless and can't fully understand what's going on but can pick up bits and pieces of things that seem correct. I've been a successful business owner for 15 years and I can't get it so imagine how so much of the world feels about it. Especially if you don't have any assets and live paycheck to paycheck. The why bother mindset takes over. All this confusion leads me to feeling extremely pissed off about my public and private school education.

 

From another post of mine in this sub-forum (the statements made by Peter Schiff in a 19th of December 2015 Alex Jones/Infowars interview):

 

Here are a few of Martin Armstrong blogs which I think counter Peter's opinions regarding gold and the US dollar (go to the 2:25:00 mark for Peter Schiff commentary), and that it is safe to buy gold and the dollar will tank, when in fact the opposite is being forcast by Socrates. [source: https://board.freedomainradio.com/topic/45991-regarding-precious-metals-in-preparation-of-economic-collapse/?p=421302]

 

 

The last thing Martin Armstrong thinks is that people should have faith in the government.  Check out his blog, if you wish; it is at:

http://www.armstrongeconomics.com/armstrong_economics_blog. 

 

Also, here is clip from a 2015 movie made by a small German production company, which followed him around for 3+ years:

https://www.youtube.com/watch?v=iJNEjq7I5Is.

[Jer]

It is a sophistic trap.  Quite the needless word-salad.  Instead of focusing on the source material and refuting the points based on the arguments made in the interview, you focus on the wording in the one sentence in my post, trying to find some hidden meaning in the already straight forward statement.

Simple Definition of one–sided

Do you deny that your original post has manipulative language? You insult proponents of gold by name calling when you could have instead simply stated your objection to the pro gold "advice" with an argument.

 

i.e. People selling gold have missed the fact that (insert logic/evidence here)...

[EmptyMellon]

Do you deny that your original post has manipulative language? You insult proponents of gold by name calling when you could have instead simply stated your objection to the pro gold "advice" with an argument.

 

i.e. People selling gold have missed the fact that (insert logic/evidence here)...

 

Firstly, when Jim "Mr. Gold" Sinclair, declares $50,000 per ounce of gold, that to you is a rational and evidence-based statement or is it a one-sided, pro-gold, anxiety-inducing statement?  So, saying that Jim Sinclair is not pro-gold, or is not providing a one-sided narrative is like saying that Al Gore is not pro-global warming (pro-climate change) and is not providing a one-sided narrative that is anxiety-inducing - unless of course, one has a vested interest in the climate change narrative.

 

Secondly, you state that I insult proponents of gold by name calling because my wording did not agree with your personal bias 'is' insulting.

 

Thirdly, you still fail to refute or make 'your objection' to the interview provided...because words. 

 

In closing, one doesn't need to justify their position by stating whether they have any positions in the precious metals or by labeling themselves as being a 'rational philosopher', that is not an argument, that is a personal bias; rather, provide arguments and/or evidence.

[Jer]

Firstly, when Jim "Mr. Gold" Sinclair, declares $50,000 per ounce of gold, that to you is a rational and evidence-based statement or is it a one-sided, pro-gold, anxiety-inducing statement?  So, saying that Jim Sinclair is not pro-gold, or is not providing a one-sided narrative is like saying that Al Gore is not pro-global warming (pro-climate change) and is not providing a one-sided narrative that is anxiety-inducing - unless of course, one has a vested interest in the climate change narrative.

 

Secondly, you state that I insult proponents of gold by name calling because my wording did not agree with your personal bias 'is' insulting.

 

Thirdly, you still fail to refute or make 'your objection' to the interview provided...because words. 

 

In closing, one doesn't need to justify their position by stating whether they have any positions in the precious metals or by labeling themselves as being a 'rational philosopher', that is not an argument, that is a personal bias; rather, provide arguments and/or evidence.

1 I've never heard of Jim Sinclair.

2 you used manipulative language and name calling where reason and evidence could have been used with fewer words

3 I didn't have a problem with the interview.

 

Right, you don't need to justify anything to me, unless you want to have a friendly conversation...

[Crallask]

I diiiid notice quite a few problems with certain deductions of his.

 

Such as asking the average person on the street if they think the government is going to go broke... okaaaay, but why would you use the average citizen as a gauge for governmental stability. Yes, I understand he was using the context of trust in government as the basis for currency stability, but I think that's extremely inverted. Most people react to the collapse of value and purchasing power of a currency rather than currency falling because people hitting a tipping point in their trust. 

 

That is to say, most individuals are reactive rather than proactive in these matters. 

[EmptyMellon]

1 I've never heard of Jim Sinclair.

2 you used manipulative language and name calling where reason and evidence could have been used with fewer words

3 I didn't have a problem with the interview.

 

Right, you don't need to justify anything to me, unless you want to have a friendly conversation...

 

1.  So you are not aware of some of the known gold proponents/promoters and their gold-centric message, and you simply dismiss this point by saying you have never heard of him.  So, if I've never hear of Ayn Rand, I get to dismiss Objectivist arguments/counter-arguments because I've never heard of her, while saying that I don't like the language you are using?

 

2. Repeating the same or similar statement over and over is not an argument for reason and/or evidence.  I don't need to change my words or admit any wrong, as you have repeatedly failed to provide a valid argument against it.  Repeating the words "insulting language" twenty times over, doesn't make things insulting.  If people are getting triggered by my statement is another thing.

 

If a group of people is standing on the train tracks (in the path of an on-coming train) and I would yell, "get off the tracks, the train is coming, you are going to get killed!"  Instead of getting off the tracks, you would say that I am using insulting language, and that I should use some other words.  This completely derails the main point, so you just keep standing there while others will judge the situation based on the merit of the info rather than the language used in the warning.

 

3. The point was and still is to provide people with an alternative perspective, and have themselves make up their own mind based on the info.  Whether they find it helpful (wanting to do more research on their own) or not (and move along) to find something more interesting, is simply up to them.

 

Way to twist things around.  First you write that I am using an insulting language, because I did not use words that are agreeable to you (and someone else), which is insulting.  And now, you write that I need to justify myself in order to have a friendly conversation.

[EmptyMellon]

I diiiid notice quite a few problems with certain deductions of his.

 

Such as asking the average person on the street if they think the government is going to go broke... okaaaay, but why would you use the average citizen as a gauge for governmental stability. Yes, I understand he was using the context of trust in government as the basis for currency stability, but I think that's extremely inverted. Most people react to the collapse of value and purchasing power of a currency rather than currency falling because people hitting a tipping point in their trust. 

 

That is to say, most individuals are reactive rather than proactive in these matters. 

 

So as I understand it, you disagree with the point that the collapse in value of money comes about as a result of economic uncertainty, which then manifests in the form of people hoarding money; the hoarding of money then results in the shrinkage of the money supply, which is why the western governments are failing to create inflation in spite of their best efforts; hoarding thus slows down the velocity of money and peoples' disposable income?

[Marshall B]

The collapse in the value of a nations currency would come from trillions dollars being pumped into the system. I see plenty of economic uncertainty and we don't have a whole lot of hoarding of money until recently that I knew of. Why would a good store of value be in the dollar? Short term yea maybe but long term? We have plenty of inflation. Food prices, home prices, stock prices, etc. There's not as much inflation as one would think but doesn't that have something to do with the fed paying the banks a small percentage for holding onto the money that the fed gave them? That's wierd. There's a good argument for our currency holding strong for a little while but that doesn't seem to be what a government drowning in debt would want to do for too long. What do I know. Strap up and get a garden.

[EmptyMellon]

The collapse in the value of a nations currency would come from trillions dollars being pumped into the system. I see plenty of economic uncertainty and we don't have a whole lot of hoarding of money until recently that I knew of. Why would a good store of value be in the dollar? Short term yea maybe but long term? We have plenty of inflation. Food prices, home prices, stock prices, etc. There's not as much inflation as one would think but doesn't that have something to do with the fed paying the banks a small percentage for holding onto the money that the fed gave them? That's wierd. There's a good argument for our currency holding strong for a little while but that doesn't seem to be what a government drowning in debt would want to do for too long. What do I know. Strap up and get a garden.

 

Historically, no money (paper or metal) lasted.  It was debased, devalued or defaulted on the debts by the borrowers.  So yes, as a result of the current global market conditions, there is a short-term store of value in the US dollar, particularly for currencies outside of the US wanting to protect against local currency inflation.

 

As for your inflation question, I can highly recommend reading the following Martin Armstrong blog posts to address your perception of inflation, which I too carried prior to the past Fall:

 

- INFLATION - Multi-Dimensional Confusions (10 Aug. 2015)

 

and

 

- The Misconception of Deflation vs. Inflation (14 Jul. 2015)

[Matthew Ed Moran]

Historically, no money (paper or metal) lasted.  It was debased, devalued or defaulted on the debts by the borrowers.  So yes, as a result of the current global market conditions, there is a short-term store of value in the US dollar, particularly for currencies outside of the US wanting to protect against local currency inflation.

 

As for your inflation question, I can highly recommend reading the following Martin Armstrong blog posts to address your perception of inflation, which I too carried prior to the past Fall:

 

- INFLATION - Multi-Dimensional Confusions (10 Aug. 2015)

 

and

 

- The Misconception of Deflation vs. Inflation (14 Jul. 2015)

 

Hey. I appreciate you sharing, since it is good to have counter-information. I haven't listened to the interview yet, but I did read the two articles. I'm going to check the interview out later since I'm curious, but I do have a critique of his article on inflation.

 

http://www.armstrongeconomics.com/archives/35806

 

 

 

The old idea that inflation is created by an increase in money supply has distorted the minds of many people. Inflation is caused by numerous factors for it is not a one-dimensional aspect. For example, the current bird flu has rendered half of the egg production to be worthless, which has sent egg prices soaring. This has nothing to do with the quantity of money. So obviously, a decline in the supply of some service or commodity can also lead to rising prices.

 

The old idea is that an increase in the supply of money is the definition of inflation. It has long been stated according to this theory, that rising prices are merely an effect of inflation. For instance, in theory, if the price of eggs soared, there would have to be a corresponding decrease in price somewhere else in the economy, unless there were an increase in the money supply.

 

 

 

Then there can be cost-push inflation as we saw during the 1970s due to OPEC. The first OPEC price shock was October 1973 from where we should see the next low in 2016 (43 years later). The sudden rise in oil sent a shockwave through the economy, driving up prices because the entire economy had to readjust to higher energy. This was not the result of an increase in demand nor an increase in the money supply.

 

Once again, for oil prices to rise without a corresponding decrease in the price of something else would necessarily imply there is an increase in the money supply. If the money supply were constant, but oil prices soared, other prices would decrease, not increase. For instance, the price of labor would go down in other industries so they could remain profitable despite the shortage of oil, all other things equal.

 

 

 

When gold was used for money during the 19th century, it fell sharply in value with each new discovery from California, Australian, and Alaska. There inflation rose because there was a dramatic increase in money supply, which is exactly what took place in Europe when Spain brought back ship after ship of gold from the New World. The sudden dramatic rise in the supply of money unleashed inflation and during both periods money (gold) failed to provide a store of value.

 

How exactly did gold fail to provide a store of value during these periods? And wouldn't this be irrelevant if (1) gold were a hedge against inflation in fiat currency, or (2) there was no reason to expect a significant increase in the supply of gold over the time in which it was used as a hedge?

 

I am also having trouble interpreting how gold failed to provide a store of value considering this data I have only vaguely looked over:

 

http://www.nma.org/pdf/gold/his_gold_prices.pdf

 

 

 

Steady slow growth in the supply of money does not lead to inflation waves. We find that major waves of inflation are often tied to waves of speculation, which differ with each wave moving from real estate, commodities, stocks, or bonds, constantly rotating over decades within a domestic economy and then this movement of capital takes place internationally.

 

Steady slow growth in the supply of money is steady inflation. If you endure steady inflation without trying to recoup your losses some other way, then your money over a long enough period of time will erode as if there were an inflation "wave." But I am not sure the relevance of this point, since the money supply of dollars has been increasing exponentially and without historical precedent since the financial crisis.

 

I think it's good to share counter-information but also be skeptical. If my points are correct, then it would seem unwise to take advice from someone who doesn't understand what inflation is, if your main concern investing is to hedge against inflation.

[ResidingOnEarth]

I got about half way through this podcast and have decided not to listen to the rest.  Martin Armstrong really didn't make very strong arguments and at times he was incoherently babbling.

 

Also: his analysis doesn't seem to be rooted in Austrian economic principles (of which I'm not expert, but I know some of the powerful basics).  He seemed to frequently refer to the actions of concepts.  Concepts cannot perform actions.  His arguments did not seem to be based on the actions of real economic actors: individual people (including people working together within a hierarchical organisation).

 

Here are some things in particular which I made a note of while listening.  He said:

 

Yeah gold did not perform very well.  It made a nice little pop.  That was it.  Didn't get up to any significant resistance at all.  That was really a sucker play because gold would rally why?  Only if you're going to have a collapse in government.  But at the same time you had interest rates going to new lows.  That shows the people that we're not afraid of government.

 

How does interest rates set by the fed show that people are not afraid of a government collapse?

 

That makes no sense at all to me for two reasons.

 

1. the fed (people in the Federal Reserve organisation) can do whatever they want.  They can even deliberately sabotage a market if they like to serve their own interests.  In-fact there are many that argue that the fed deliberately caused the 1930s great depression.  The interest rate set by them thus cannot be an indicator of people's fear or confidence in a government.

 

2. The interest rate (the fed rate) is only 1 of many tools the fed can use to toy with the economy.  For example the fed can:

* adjust the commercial bank reserve requirement
* adjust the fed discount rate (the rate slightly higher than the fed rate, which is the rate at which people can borrow directly from the fed)
* issue bonds
* perform open market operations
* quantitative easing (money printing)

 

So I'm pretty sure the fed could keep the interest completely stable and just mess with all the other variables.  So my point is the interest rate is only valuable for analysis when you factor in the other variables.

 

Note: for those of you not familiar with the terms I used above, there are nice descriptions of them in this glossary: http://useconomy.about.com/od/glossary/

 

In the context of hyper-inflation and what causes it he said this (at 16:55):

 

It's the collapse in confidence in the government that takes place first.  That then results in the government having to print more.  It's not the other way around.  The confidence drops, then as the confidence drops... then, the government needs more and more money.

 

This makes no sense to me.  If a government organisation prints a lot of money over a short period of time (probably to try and service debts that they cannot pay) that could cause runaway inflation which in-turn could cause people to loose trust in the government organisation that rules over them.

 

I'm not aware of a good argument to support the conclusion that it happens the other way around (as he says).

 

Finally (saving the best for last... cringe...).  The interviewer asked this question to Martin Armstrong (at 23:49):

 

So given what you see in the short term and where we are right now, what do you think investors ought to be doing?

 

This is the reply he gave:

 

I think you're basically gonna see, initially confusion.  If the fed -- really the numbers economically, whatever -- but the fed needs to raise interest rates.  They have to help the pension funds out... and you have states and cities gonna go bust.  Alright, so they're not gonna come in with some super QE4 to help the market.  The markets are on their own.  What they're really concerned about at this point is: you have massive amounts of debt problems out there; even in the state and local levels.  So if they don't begin to raise interest rates, you're looking at a lot of cities going bust.

 

What the ****?

 

The question was really clear and simple.  His response was this weird macro-economic, disjointed, consciousness stream!  I'm pretty sure I wrote down what he said exactly as he said it.  That second and third sentence make no sense at all; especially in light of the question he was asked.

 

It sounds like he doesn't know what investors ought to be doing, but he didn't just say that.  In-fact his first sentence is telling.  He's saying you're "gonna see, initially confusion."  I think he's talking about his own mental state.

 

 

 

Disclaimer: I'm not an economic expert.  In-fact I'm pretty new to the field of economics.  I am trying to learn sound economic principles so I can make good economic decisions in my own life.

[Matthew Ed Moran]

 

 

Great post +1

 

I liked the comment about his mental state actually being of confusion. It makes sense to me, since I thought that was an odd way to lead off his answer.

 

To conclude my comment on your post, I will say this: If the post, economically numbers, whatever! gonna go bust, we all need to buy a donkey.

[Waffles]

Screw gold, long live dogecoin

[ResidingOnEarth]

To conclude my comment on your post, I will say this: If the post, economically numbers, whatever! gonna go bust, we all need to buy a donkey.