Observation

[Sarge]

I was out for an appointment and walked by a jewelery store.

Not a customer in the store.

If the rest of the stores are like this, I would expect to see many stores having problems staying open much longer.

If that happens, in large numbers, things will likely get worse. With the price of silver and gold jumping so much, it might be that people are just not buying.

Something to watch for at any rate. If they go out of business, in large numbers, it will start to drive the metal prices down big time. They are big consumers.

 

[Shed]

You walked past one shop for two seconds and there wasn't anyone there. Therefore, the country is headed for deep depression.

Oh, wait, that makes no sense . I think the USA economy will probably crash, but not based on that evidence.

 

[Sarge]

If you read, what I said, I said, if it happens and if the rest of the stores are like this.

I didn't expect a 10 second walk by of a large jewelry store to be gospel.

I just did some searching and see that Zales is closing 60 stores. Tiffney and Blue Nile are seeing a big slow down.

Pawn shops are seeing a large increase in people having trouble and people are coming in to sell jewelry as they are having a hard time.

All I was trying to say was, all might to keep an eye on this due to jewelry stores being large consumers of gold and silver.

 

[RadiantBlueLight]

China consumes more gold than the U.S. now. Gold consumption there increased 26% last year alone. With new millionaires every day in China's larger cities, I don't think there will be an excess of gold on the market.

 

[JSutter]

There was a link on Kitco saying that with personal incomes increasing that Egypt is seeing a surge in gold sales, same goes for India, and China, Russians won't be too far behind with all the money flowing into the country from energy. We're seeing a redistribution of global wealth and what Americans can't afford to buy others will. Granted the sales may be smaller but the number of sales will be numerous making up the difference.

 

[Sarge]

You well might be right. The question will be though, if the price of gold keeps going up, will the purchases also go down in China, as less are able to afford to buy it. How many of the new big money people bought when the price was much lower is another question.

The average wage in China is 160 a month. Millions earn way below that.

Jewelry stores going out of business here, will hurt our economy and create more loss of jobs in the US. 8.6 Billion is sales in the US in 2005. Plus there are 1890 or so Jewelery MFG. that could be hit if no one buying here.

I can see the wedding rings still being sold but if the hard times hit, not much else.

Other higher wage earning country's could pick up some slack.

Bottom line, I think is it is the US that is going to suffer here the most.

 

[JSutter]

Day and time you passed the shop could account for a lot too. If it was a weekday during work hours most people are working. I'd bet most jewelry is sold in the late afternoon early evening or on weekends when people are off of work and have time to shop

 

[Dr.3D]

The price of jewelry is going up at a dramatic rate. I would tend to believe people are more focused on more immediate needs at this time, rather than on something that says, "look at me, I had money."

 

[misa]

You well might be right. The question will be though, if the price of gold keeps going up, will the purchases also go down in China, as less are able to afford to buy it. How many of the new big money people bought when the price was much lower is another question.

That's interesting. But the USD is falling down against almost all currencies, right? So gold priced in dollar may see to be cheap to them anyway.

 

[Sarge]

You have a good point about the declining value of our dollar making gold cheaper for many.

 

[Sarge]

Note another billion went bye bye as another hedge fund goes belly up. Ouch!

I guess they didn't buy any gold.

http://www.ft.com/cms/s/0/29813658-ea58-11dc-b3c9-0000779fd2ac.html

 

[Corydoras]

A big local jewelry chain near me just went into bankruptcy. They had shown no sign of trouble before it happened, and they've been around for decades.

 

[Sarge]

I was commenting on that the other day. We might see many more. Zales is closing 60 stores.

People are more interested in paying for food, gas, debt and their house payment right now then buying jewelry.

The longer this mess continues, the less they will buy from jewelery stores.

I am seeing multi million dollar houses being foreclosed in Phoenix. It is mind blowing when you see that happening. One would wonder how they could get into that expensive a house, and then loose it that way.

 

[Acala]

But it's worse

But all of the businesses being mentioned are providers of consumer goods. When a recession gets going, it is the providers of secondary goods - goods used in producing consumer goods - that take it in the shorts. Rothbard says that in a depression, providers of goods for consumers have unemployment 15-20%. Producers of secondary goods have unemployment of 80-90%!!!!!! So the decline you are seeing in providers of consumer goods is the tip of the iceberg.

However, high rates of inflation can keep unemployment down. In Germany during the hyper-inflation, they had almost full employment until near the end.



Yikes!!!