Frankenhop wrote:meisterofpuppets wrote:Build it now. The price of SS is going to skyrocket in the next year or so.
Why?
This is why. The monetary base has been incredibly expanded. (Figure 1)
Figure 1
This newly created credit is going to monetized sooner or later by congress forcing the banks to loan this money out or by the banks having to loan the money out to make money. Right now the Federal funds rate is essentially zero (Figure 2), so the banks are not able to get much interest from the Fed by keeping that new money that they got on deposit. They are slowly losing money because they have to pay interest to their depositors. The rates that they pay depositors are higher than the Federal Funds rates by a large margin. They will have to start lending or they will lose all money.
Figure 2
When this happens, we will start seeing stagflation. When China sees that we are just printing money to get out of debt, they will no longer buy up our debt, and they will send the dollars that they accumulated back over here, buying everything they can get their hands on. The inflation combined with the Chinese buying streak will cause all commodities will go way up. China will also pull the plug on their currency peg to the dollar, causing the Chinese currency to rapidly appreciate. This appreciated currency will allow the Chinese people to out price American consumers, sending everything to China.
That's why I recommend buying stainless now.
<see, it's getting better.
