Tuesday, October 4, 2011

Silver vs Bananas

Where are all the banana speculators? Why are bananas still selling for 69 cents a pound at my local grocery store? Why silver? Why not toilet paper or aluminum foil or things we may someday actually need personally?

5 comments:

Stagflationary Mark said...

I was really hoping that you'd have an answer to my question!

Where ARE all the banana speculators? ;)

CP said...

Forget the bananas - where are all the U.S. Nickel speculators??

There are tons of missing speculators!

Stagflationary Mark said...

I have a reader who is a U.S. Nickel speculator.

You know things are precarious when there's a desire to hoard commodities AND still have deflation protection.

In a sense, I am similar I guess.

I like I-Bonds for their inflation proection AND their deflation protection. I've been pumping all I can into them since 2000.

They cannot deflate, even month to month. They are tax deferred. The fixed rate for new purchases is 0.0% but at least it tracks the CPI guaranteed. That's still worth something to me.

The ones I bought in 2000 are up 97% and still have 19 more years to grow at 3.4% over inflation. In hindsight, they did a bit better than the Nasdaq. ;)

Where were the I-Bond speculators? It was such a good deal that the government lowered the amount we can buy by 83% AND jammed the fixed rate to 0.0%. They announced it in December 2007. That was the very month the recession officially began. Go figure.

CP said...

Hilarious point!

Can you imagine someone in Weimar or Zimbabwe worrying about deflation protection when they were spending their wheelbarrows full of currency?

Deflation ho!

Stagflationary Mark said...

Can you imagine someone in Weimar or Zimbabwe worrying about deflation protection when they were spending their wheelbarrows full of currency?

Not exactly! I can picture this though. ;)