Fed buying stocks and corporate bonds

Discussion of the Stock portion of the Permanent Portfolio

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doodle
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Re: Fed buying stocks and corporate bonds

Post by doodle » Mon Apr 06, 2020 11:38 am

I think we can agree that government has an agenda. Anything that interferes with this agenda will face pressure. How does gold support any agenda that government might have?
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Re: Fed buying stocks and corporate bonds

Post by shekels » Mon Apr 06, 2020 11:42 am

pmward wrote:
Mon Apr 06, 2020 11:29 am
doodle wrote:
Mon Apr 06, 2020 11:25 am
They have done it before and already subject it to collectible tax instead of more favorable long term capital gains rate...if they lose control over currency to gold then of course they will do this.
They will not do this. They do not care enough. We are on a fiat system, gold is meaningless to them (which is why they view it as a "collectable"). Congress isn't sitting around every day wondering how they can screw over people that hold gold.
So if you are so sure why hold Gold?
hold FRN instead.
¯\_(ツ)_/¯
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Re: Fed buying stocks and corporate bonds

Post by pmward » Mon Apr 06, 2020 11:43 am

doodle wrote:
Mon Apr 06, 2020 11:38 am
I think we can agree that government has an agenda. Anything that interferes with this agenda will face pressure. How does gold support any agenda that government might have?
Gold neither supports nor is in opposition to any agenda they have. They simply do not care. They no longer view gold as relevant, outside of being something worth holding as a reserve asset.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Mon Apr 06, 2020 11:44 am

shekels wrote:
Mon Apr 06, 2020 11:42 am
pmward wrote:
Mon Apr 06, 2020 11:29 am
doodle wrote:
Mon Apr 06, 2020 11:25 am
They have done it before and already subject it to collectible tax instead of more favorable long term capital gains rate...if they lose control over currency to gold then of course they will do this.
They will not do this. They do not care enough. We are on a fiat system, gold is meaningless to them (which is why they view it as a "collectable"). Congress isn't sitting around every day wondering how they can screw over people that hold gold.
So if you are so sure why hold Gold?
hold FRN instead.
Just because gold is meaningless to congress does not make it meaningless in a portfolio.
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Re: Fed buying stocks and corporate bonds

Post by shekels » Mon Apr 06, 2020 11:45 am

Look at Japan as a possible roadmap for the U.S.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Mon Apr 06, 2020 11:46 am

shekels wrote:
Mon Apr 06, 2020 11:45 am
Look at Japan as a possible roadmap for the U.S.
Japan hasn't started the fiscal like we have. They've simply been trying to use monetary stimulus alone. Matter of fact, they've been easing on a monetary basis and keep tightening on a fiscal basis, raising taxes, ect. This is very different than what we are doing. The fiscal is a different animal entirely.
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Re: Fed buying stocks and corporate bonds

Post by shekels » Mon Apr 06, 2020 11:51 am

pmward wrote:
Mon Apr 06, 2020 11:44 am
shekels wrote:
Mon Apr 06, 2020 11:42 am
pmward wrote:
Mon Apr 06, 2020 11:29 am
doodle wrote:
Mon Apr 06, 2020 11:25 am
They have done it before and already subject it to collectible tax instead of more favorable long term capital gains rate...if they lose control over currency to gold then of course they will do this.
They will not do this. They do not care enough. We are on a fiat system, gold is meaningless to them (which is why they view it as a "collectable"). Congress isn't sitting around every day wondering how they can screw over people that hold gold.
So if you are so sure why hold Gold?
hold FRN instead.
Just because gold is meaningless to congress does not make it meaningless in a portfolio.
I was taking Doodle by the meaning of Government to include the FED.
If that is incorrect excuse me.
But i am in Agreement with Doodle,
That both Central Banks and Governments will do what they can to Not lose Control.
We are just cannon Fodder, when it comes to Control.
¯\_(ツ)_/¯
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Re: Fed buying stocks and corporate bonds

Post by shekels » Mon Apr 06, 2020 11:53 am

pmward wrote:
Mon Apr 06, 2020 11:46 am
shekels wrote:
Mon Apr 06, 2020 11:45 am
Look at Japan as a possible roadmap for the U.S.
Japan hasn't started the fiscal like we have. They've simply been trying to use monetary stimulus alone. Matter of fact, they've been easing on a monetary basis and keep tightening on a fiscal basis, raising taxes, ect. This is very different than what we are doing. The fiscal is a different animal entirely.
Because Japan's Central bank has already bought up assets years ago.

Edit: Spelling
Last edited by shekels on Mon Apr 06, 2020 11:58 am, edited 1 time in total.
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Re: Fed buying stocks and corporate bonds

Post by shekels » Mon Apr 06, 2020 11:55 am

I am not Putting my trust in the Central Bank or Government for a soft landing in this Environment.
If you think they will do what is right then
I wish you well. :)
Last edited by shekels on Mon Apr 06, 2020 11:56 am, edited 1 time in total.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Mon Apr 06, 2020 11:56 am

shekels wrote:
Mon Apr 06, 2020 11:51 am
pmward wrote:
Mon Apr 06, 2020 11:44 am
shekels wrote:
Mon Apr 06, 2020 11:42 am
pmward wrote:
Mon Apr 06, 2020 11:29 am
doodle wrote:
Mon Apr 06, 2020 11:25 am
They have done it before and already subject it to collectible tax instead of more favorable long term capital gains rate...if they lose control over currency to gold then of course they will do this.
They will not do this. They do not care enough. We are on a fiat system, gold is meaningless to them (which is why they view it as a "collectable"). Congress isn't sitting around every day wondering how they can screw over people that hold gold.
So if you are so sure why hold Gold?
hold FRN instead.
Just because gold is meaningless to congress does not make it meaningless in a portfolio.
I was taking Doodle by the meaning of Government to include the FED.
If that is incorrect excuse me.
But i am in Agreement with Doodle,
That both Central Banks and Governments will do what they can to Not lose Control.
We are just cannon Fodder, when it comes to Control.
Of course they will. I'm in agreement there as well. Like I said I believe they will "rescue" the markets again eventually in this crisis. But the diminishing returns means they cannot do this forever. Eventually they will paint themselves in a corner. And in regards to what doodle was saying about gold, the Fed cannot make gold illegal nor can they increase taxes. That's all on congress. And congress does not care about people that hold gold as an investment. They have other things to worry about and other agendas to push.
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Re: Fed buying stocks and corporate bonds

Post by Tortoise » Mon Apr 06, 2020 1:57 pm

doodle wrote:
Mon Apr 06, 2020 11:14 am
Hard assets look good until the government makes owning them illegal or imposes a 90 percent tax on their sale.
If such laws were enacted, do you really think Harry Browne would have complied with them?

Think for a moment about why he advocated holding gold in physical rather than paper form.
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Re: Fed buying stocks and corporate bonds

Post by Kriegsspiel » Mon Apr 06, 2020 3:39 pm

pmward wrote:
Mon Apr 06, 2020 11:43 am
doodle wrote:
Mon Apr 06, 2020 11:38 am
I think we can agree that government has an agenda. Anything that interferes with this agenda will face pressure. How does gold support any agenda that government might have?
Gold neither supports nor is in opposition to any agenda they have. They simply do not care. They no longer view gold as relevant, outside of being something worth holding as a reserve asset.
I think it would be one of those things they casually slide into a law, and nobody will really fight it because so few people own gold, and they're (we?) mostly stigmatized as weird survivalist preppers or uber rich people.
You there, Ephialtes. May you live forever.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Mon Apr 06, 2020 3:44 pm

Kriegsspiel wrote:
Mon Apr 06, 2020 3:39 pm
pmward wrote:
Mon Apr 06, 2020 11:43 am
doodle wrote:
Mon Apr 06, 2020 11:38 am
I think we can agree that government has an agenda. Anything that interferes with this agenda will face pressure. How does gold support any agenda that government might have?
Gold neither supports nor is in opposition to any agenda they have. They simply do not care. They no longer view gold as relevant, outside of being something worth holding as a reserve asset.
I think it would be one of those things they casually slide into a law, and nobody will really fight it because so few people own gold, and they're (we?) mostly stigmatized as weird survivalist preppers or uber rich people.
Why would they even bother? Honestly. It's not worth the time nor effort to them. I mean, if they debase the currency, all those people holding gold will be paying taxes on their gains. What purpose would it serve to eliminate that source of revenue? It's honestly silly to think that the politicians actually care enough about the tiny gold investment market to put it as an agenda item out of all the other possible things in the world. I think that there are many better and more realistic things that people on this forum can worry about than the government taking their gold.
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Re: Fed buying stocks and corporate bonds

Post by Kriegsspiel » Mon Apr 06, 2020 3:50 pm

pmward wrote:
Mon Apr 06, 2020 3:44 pm
Kriegsspiel wrote:
Mon Apr 06, 2020 3:39 pm
pmward wrote:
Mon Apr 06, 2020 11:43 am
doodle wrote:
Mon Apr 06, 2020 11:38 am
I think we can agree that government has an agenda. Anything that interferes with this agenda will face pressure. How does gold support any agenda that government might have?
Gold neither supports nor is in opposition to any agenda they have. They simply do not care. They no longer view gold as relevant, outside of being something worth holding as a reserve asset.
I think it would be one of those things they casually slide into a law, and nobody will really fight it because so few people own gold, and they're (we?) mostly stigmatized as weird survivalist preppers or uber rich people.
Why would they even bother? Honestly. It's not worth the time nor effort to them. I mean, if they debase the currency, all those people holding gold will be paying taxes on their gains. What purpose would it serve to eliminate that source of revenue? It's honestly silly to think that the politicians actually care enough about the tiny gold investment market to put it as an agenda item out of all the other possible things in the world. I think that there are many better and more realistic things that people on this forum can worry about than the government taking their gold.
If people keep electing people in the Occasional-Cortex mold, I could see them doing it to show their constituents that they hate the same people.
You there, Ephialtes. May you live forever.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Mon Apr 06, 2020 4:01 pm

Kriegsspiel wrote:
Mon Apr 06, 2020 3:50 pm
pmward wrote:
Mon Apr 06, 2020 3:44 pm
Kriegsspiel wrote:
Mon Apr 06, 2020 3:39 pm
pmward wrote:
Mon Apr 06, 2020 11:43 am
doodle wrote:
Mon Apr 06, 2020 11:38 am
I think we can agree that government has an agenda. Anything that interferes with this agenda will face pressure. How does gold support any agenda that government might have?
Gold neither supports nor is in opposition to any agenda they have. They simply do not care. They no longer view gold as relevant, outside of being something worth holding as a reserve asset.
I think it would be one of those things they casually slide into a law, and nobody will really fight it because so few people own gold, and they're (we?) mostly stigmatized as weird survivalist preppers or uber rich people.
Why would they even bother? Honestly. It's not worth the time nor effort to them. I mean, if they debase the currency, all those people holding gold will be paying taxes on their gains. What purpose would it serve to eliminate that source of revenue? It's honestly silly to think that the politicians actually care enough about the tiny gold investment market to put it as an agenda item out of all the other possible things in the world. I think that there are many better and more realistic things that people on this forum can worry about than the government taking their gold.
If people keep electing people in the Occasional-Cortex mold, I could see them doing it to show their constituents that they hate the same people.
Their more targeted at stock holders than gold investors, especially in their desire to want to make stock buybacks illegal. I think stock investors have more to worry about than gold investors. Their enemy #1 is the "top 1%" and the "top 1%" holds most of their net worth in stocks, not gold.
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Re: Fed buying stocks and corporate bonds

Post by Kriegsspiel » Mon Apr 06, 2020 4:19 pm

Hey man, my wild-ass suspicion is just as good as yours.
You there, Ephialtes. May you live forever.
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Re: Fed buying stocks and corporate bonds

Post by jalanlong » Mon Apr 06, 2020 9:08 pm

doodle wrote:
Mon Apr 06, 2020 10:52 am
So in other words Yellen doesn't believe in free markets where participants actions have consequences. I think the issue with the permanent portfolio is that it is designed for a world with free markets. It makes little sense to me to have a portfolio that protects me against the harsh realities of a free market if the government is going to basically prop it up if it drops more than 20 percent. Why would I worry about diversification or insurance? The society has been told that they will not have to take responsibility for their bad decisions anymore. Stocks as a part of Americans wealth have become too big to fail and will get bailed out in order to save people time and time again. Harry Browne envisioned a different world than the one we live in. The rules have changed.
I have wondered this for quite some time. However, if I wonder it out loud I get labelled a Peter Schiff tinfoil hatter. But seriously if a casino tells you when you arrive that you will win on red OR black then eventually the house will go broke. Or at least I assume. In any case it makes me want to pack up the PP, pay off all debt and just buy gold and land.
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Re: Fed buying stocks and corporate bonds

Post by doodle » Mon Apr 06, 2020 10:06 pm

jalanlong wrote:
Mon Apr 06, 2020 9:08 pm
doodle wrote:
Mon Apr 06, 2020 10:52 am
So in other words Yellen doesn't believe in free markets where participants actions have consequences. I think the issue with the permanent portfolio is that it is designed for a world with free markets. It makes little sense to me to have a portfolio that protects me against the harsh realities of a free market if the government is going to basically prop it up if it drops more than 20 percent. Why would I worry about diversification or insurance? The society has been told that they will not have to take responsibility for their bad decisions anymore. Stocks as a part of Americans wealth have become too big to fail and will get bailed out in order to save people time and time again. Harry Browne envisioned a different world than the one we live in. The rules have changed.
I have wondered this for quite some time. However, if I wonder it out loud I get labelled a Peter Schiff tinfoil hatter. But seriously if a casino tells you when you arrive that you will win on red OR black then eventually the house will go broke. Or at least I assume. In any case it makes me want to pack up the PP, pay off all debt and just buy gold and land.
The house in this case can't go broke, but they can certainly devalue the currency. They also can change the rules of the game whenever they choose so even if you think you can protect yourself by purchasing gold the government can easily make a law making it illegal as they did back in 1933...or they could tax it's sale at some exhorbitant rate. I disagree with pmward, when the government begins to lose control of currency and people start fleeing to gold then they will care as no sovereign nation's government or banking institutions will blithely give up their power to create money. It's really disheartening trying to operate responsibly in an environment where the government is actively taking sides.
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Re: Fed buying stocks and corporate bonds

Post by I Shrugged » Mon Apr 06, 2020 10:57 pm

In seminars (pre PP days), HB used to advocate betting against the government.
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Re: Fed buying stocks and corporate bonds

Post by doodle » Mon Apr 06, 2020 11:00 pm

I Shrugged wrote:
Mon Apr 06, 2020 10:57 pm
In seminars (pre PP days), HB used to advocate betting against the government.
Any material you can link detailing his rationale?
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Re: Fed buying stocks and corporate bonds

Post by I Shrugged » Mon Apr 06, 2020 11:05 pm

doodle wrote:
Mon Apr 06, 2020 11:00 pm
I Shrugged wrote:
Mon Apr 06, 2020 10:57 pm
In seminars (pre PP days), HB used to advocate betting against the government.
Any material you can link detailing his rationale?
My dad told me that.
I think Harry thought the government was going to be unable to rein in inflation.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Tue Apr 07, 2020 9:58 am

Seriously, if they are going too make gold illegal they also have to default on their TIPS, make international stocks illegal, make crypto investing illegal, make holding foreign currencies and bonds illegal, make owning real estate illegal, make holding all precious metals illegal, make investing in commodities illegal... there are numerous ways to play a hyper inflation. You're really wasting your time by stressing over thoughts of the government suddenly waking up one day and deciding to go after all gold investors exclusively. The government is not sitting around obsessing over how it can stick it to gold investors. They have other things to worry about... especially if they lose control over the currency. This is not the 1930's... we are not on a gold standard and have not been on a gold standard for 50 years...
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Re: Fed buying stocks and corporate bonds

Post by jalanlong » Thu Apr 09, 2020 2:49 pm

doodle wrote:
Mon Apr 06, 2020 10:06 pm
jalanlong wrote:
Mon Apr 06, 2020 9:08 pm
doodle wrote:
Mon Apr 06, 2020 10:52 am
So in other words Yellen doesn't believe in free markets where participants actions have consequences. I think the issue with the permanent portfolio is that it is designed for a world with free markets. It makes little sense to me to have a portfolio that protects me against the harsh realities of a free market if the government is going to basically prop it up if it drops more than 20 percent. Why would I worry about diversification or insurance? The society has been told that they will not have to take responsibility for their bad decisions anymore. Stocks as a part of Americans wealth have become too big to fail and will get bailed out in order to save people time and time again. Harry Browne envisioned a different world than the one we live in. The rules have changed.
I have wondered this for quite some time. However, if I wonder it out loud I get labelled a Peter Schiff tinfoil hatter. But seriously if a casino tells you when you arrive that you will win on red OR black then eventually the house will go broke. Or at least I assume. In any case it makes me want to pack up the PP, pay off all debt and just buy gold and land.
The house in this case can't go broke, but they can certainly devalue the currency. They also can change the rules of the game whenever they choose so even if you think you can protect yourself by purchasing gold the government can easily make a law making it illegal as they did back in 1933...or they could tax it's sale at some exhorbitant rate. I disagree with pmward, when the government begins to lose control of currency and people start fleeing to gold then they will care as no sovereign nation's government or banking institutions will blithely give up their power to create money. It's really disheartening trying to operate responsibly in an environment where the government is actively taking sides.
My feeling has been that a confiscation could happen as well. If you believe the inflation numbers are rigged so as to under report price increases then in a hyper-inflationary environment the government is certainly not going to want something like gold doubling in price telling a different story than the official CPI tells. And they are not going to want people using something else as currency.

However, the guest in this podcast says it will not happen. He says 1933 was different since the government HAD to confiscate gold in order to be able to inflate since we were on a gold standard. And even in that case there was no door-to-door theft of citizen's gold. So he concludes it it such a far flung consideration that it is not even worth discussing. Although a year ago being ordered to stay in your home and not even go to the park would have also been considered crazy talk as well. Circumstances change.

https://www.macrovoices.com/podcasts-co ... the-market
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Re: Fed buying stocks and corporate bonds

Post by I Shrugged » Thu Apr 09, 2020 11:02 pm

I agree with pmward. Gold isn't on the radar. It could be taxed in a zombie desperation world, I suppose.

However, to disagree with myself, some have said the US could go back on a gold standard as a painful cure at some point. Peg gold at $5000 per ounce or some such number. If that happened, I'm sure the existing holders would not get away without being hammered somehow.

OK, so there are two completely opposite opinions, LOL!
Time to go to bed, I guess.
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Re: Fed buying stocks and corporate bonds

Post by ochotona » Fri Apr 10, 2020 3:27 am

Just substitute HYG for TLT niw
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