Gold flirting with $1,500.00/ounce. Broke another all-time record today.

[Nick Gromicko]

I know you are tempted to sell... not yet... unless it is to buy silver.

[Joseph A. Ferry]

That would not be happening if Obama were President.

[Jeff Merritt]

OK Nick, where is silver going?

[Nick Gromicko]

OK Nick, where is silver going?

$145/ounce.

[Jeff Merritt]

Originally Posted by gromicko

$145/ounce.

And why do you think that?

[Nick Gromicko]

For the same reasons I was able to predict on this message board (for the past several years) that gold would soar. Silver is an absolute no-brainer. There is less silver above ground than gold right now. Let me repeat that in case you missed it: There is less silver above ground than gold right now. And silver is an industrial commodity that is being used up fast (gold is merely hoarded). And, don't listen to my critics (on this message board) who didn't believe my inflation prediction (some even claiming deflation is a risk). We are in the beginning phases of hyperinflation just as I predicted last year. Don't believe me? Buy some gas on the way to the grocery store. Silver is the perfect hedge.

[Michael Larson]

The deflation already happened Nick.

Have you seen the price of houses lately?

None of us like the price of gas but call me when is takes a wheel barrow of $$$ to buy a gallon.

BTW- in the short term i agree with about silver as a hedge.

The trick is getting out in time.

Do you remember the Hunt Bothers?

[Nick Gromicko]

The price of housing has only come down because of government intervention that pumped the prices way up. The government did two things to create the bubble: First they gave (and still give) a mortgage interest deduction. This artificially decreases the cost of home ownership, thus increases prices. Second, the government, lead by idiot Barney Frank, pushed banks to make loans to people who had little chance of paying the loan back, by buying this bad paper with taxpayer money. Intervention by our federal government is what caused the housing bubble which caused the burst which brought housing prices back to where they should be. A bursting bubble isn't true deflation. We are most definitely in an inflationary stage.

[Michael Larson]

You let the banks off to easily.

They made money whether the loan performed or not and many of them should be in jail along with the officers of Fannie and Freddie who backstoped the banks and bought their worthless paper.

Unless you see $$$ getting into wages hyperinflation is unlikely to happen.

If is does watch out.

[Nick Gromicko]

I'm lost. What did the banks do wrong?

[Michael Larson]

Originally Posted by gromicko

I'm lost. What did the banks do wrong?

They lent money to borrowers they knew could not pay.

They didn't care because as soon as the issued the loan they either sold it on the secondary market to Freddie and Fannie or packaged loans and sold them to everyone and their brother. With the implied back stop of the US. Gov via Freddie and Fannie they were not hard to sell.

And lets not forget all the mortgage shops that did the very same thing.

Of course when these loans failed to preform the bag holders got screwed.

This included many pension funds and many others who thought they were buying a safe investment.

Mean time the regulators looked the other way and failed at their job.

[Nick Gromicko]

It is not wrong for a bank to write a loan (on behalf of the government who is backing it) that the federal government compels the bank to write. See Community Reinvestment Act.

Left alone, the banks would not have written those loans with their own money.

Complying with that Act is not a crime. Failing to is.

[Michael Larson]

Banker friends, Nick?

Are you OK with the banks not reporting what the mortgages they hold are really worth too?

Many of them would be insolvent if they did.

[Michael Larson]

Where are the handcuffs?

Savings and loan crisis and current crisis compared.

If you want to understand better please rent Inside Job

[Nick Gromicko]

Are you OK with the banks not reporting what the mortgages they hold are really worth too?

Yes. I'm OK with that. That info should only be released to stockholders of the bank. Why should the public or the government know/care?