It's bad because without the foreign (asian primarily) buying our dollar will fail, and it will come home then. Do your wages keep up with infaltion as reported now, no, and they won't when the bottom falls out either. You might still have enough to pay your mortgage, hopefully you didnt buy into an ARM, but that's about it unfortunately. Do you realize the hyperinflation experienced during pre ww1 German got so bad that at the ned you needed literally a full wheelbarrow full of cash to buy a loaf of bread, you better hope you get one damn good raise real soon..........
Buffet bought the majority of his silver in 1998 when this dollar issue wasn't even on the map, the dollar has lost over 30% since 2001....
He bought based on the market fundamentals of silver, that was the sole reason. His reasons for bailing on the dollar are separate, but the two play together as people flock to gold/silver when confidence in currency wavers.
One day last week a properly executed sell/buy in silver netted about a 12% gain, in ONE DAY.
He bought based on the market fundamentals of silver, that was the sole reason. His reasons for bailing on the dollar are separate, but the two play together as people flock to gold/silver when confidence in currency wavers.
One day last week a properly executed sell/buy in silver netted about a 12% gain, in ONE DAY.
What happens when our debt to GNP ratio gets so bad that foreigners won't buy our bonds and bills?
This is not just a pipe dream but a real possibility if we don't do something now about soaring deficits.
Sheezh, we've gone nuts in this country. Now, even the Repuglicans think they are entitled.
-Robert
This is not just a pipe dream but a real possibility if we don't do something now about soaring deficits.
Sheezh, we've gone nuts in this country. Now, even the Repuglicans think they are entitled.
-Robert
Thats when our money comes back and really really bad inflation occurs, that money they dump into our bonds is not even counted in the m3 supply. They are fudging the numbers pretty bad, the elction doesnt help but its been happening for awhile anyway.
You think inflation is as minimal as they claim, do you find yourself paying more of your dollars for anything lately than you did before? Do you pay more for gas or a gallon of milk lately? It's not the cost of the gas or the milk, it's the lowered value of the dollar. Infaltion is not a rising price in goods, it's a lowered value in the buying power of the currency.
You think inflation is as minimal as they claim, do you find yourself paying more of your dollars for anything lately than you did before? Do you pay more for gas or a gallon of milk lately? It's not the cost of the gas or the milk, it's the lowered value of the dollar. Infaltion is not a rising price in goods, it's a lowered value in the buying power of the currency.
Alistair7:
I don't understand. If we in Florida buy milk from NC dairy farmers how is the money supply (or exchange rate) affecting that transaction? I think I didn't get your last point. Perhaps you could expand it a bit?
-Robert
I don't understand. If we in Florida buy milk from NC dairy farmers how is the money supply (or exchange rate) affecting that transaction? I think I didn't get your last point. Perhaps you could expand it a bit?
-Robert
The dollar fails and the world economy goes under and we go into WWIII. Silver won't do you any good in a world that no longer exists.
Zebo
Elite Member
- Jul 29, 2001
- 39,398
- 19
- 81
These threads always bring the conspriacy nuts out.
w/o fractional reserve banking out economy would be frozen since you can loan only what you got. Once all is loaned out there is no more movement, jobs, growth. Fractional reserve does'nt have this problem. Labor and fake money makes assets like homes and cars and freeways.
The problem is americans are forking over all thier wealth to foriegners and employing them instead of americans.
w/o fractional reserve banking out economy would be frozen since you can loan only what you got. Once all is loaned out there is no more movement, jobs, growth. Fractional reserve does'nt have this problem. Labor and fake money makes assets like homes and cars and freeways.
The problem is americans are forking over all thier wealth to foriegners and employing them instead of americans.
yeah conspiracy nuts, lol.... WHERE is anyone claiming this is a conspiracy? I have found many who feel that way and have valid points, especially regarding the UK, but facts are what is being discussed right now.
http://www.kitco.com/market/
Theres the actual rates for world currencies and precious metals. These are cold hard facts, proven time and time again throughout history, and they are happening again. I understand the need for fractional banking and it's use in creating growth, the problem lies in our outrageous spending and the fact we just keep printing MORE $$$$. Is the dollar going to be the first currency in history that somehow avoids the problems this creates, as it did in pre ww1 germany? Please explain to me why the US can print as much as it wants without this happening.
To expand on the milk example it's not that it costs more to make milk, or a gallon of gas, it's the fact our dollar is becoming worth less, and will soon be worthless.....
THE GREAT INFLATION--Part 1 The Nature of Money
http://www.kitco.com/ind/Puplava/sept302004.html
A great read but heres a snippet to address and earlier post:
Fractional Reserve Banking System
By adopting a fractional reserve banking system, the money supply?and thus the standard of value of that money?can be expanded tenfold by every dollar on deposit. For example, in the case of a new $100 deposit, a bank can loan out $90 of that deposit, keeping $10 (10% reserve requirement) as a reserve. The bank receiving that $90 deposit can also make an additional loan of $81 keeping 10% of the deposit or $9 in reserve. This process can continue expanding the initial deposit of $100 into a maximum of $1,000 of new money. The process becomes more complex since reserve requirements are applied only to transaction accounts such as checking, which is a component of M1. Savings accounts and time deposits, which are components of M2 and M3, representing broader measures of money, have zero reserve requirements. Since time deposits and savings accounts have no reserve requirements, they can expand indefinitely. Banks can also expand the money supply by drawing down their reserves and replacing their reserves through money market loans at the prevailing cost of money (the federal funds rate).
By its very nature, a fractional reserve banking system is inherently an inflationary institution. Banks as shown in the example above can expand the money supply by creating money out of? thin air.? They enjoy a unique privilege under our present economic system not available to you and me. As individuals the only way we can expand our bank accounts is through savings.
"INHERENTLY INFLATIONARY"
http://www.kitco.com/ind/Puplava/sept302004.html
A great read but heres a snippet to address and earlier post:
Fractional Reserve Banking System
By adopting a fractional reserve banking system, the money supply?and thus the standard of value of that money?can be expanded tenfold by every dollar on deposit. For example, in the case of a new $100 deposit, a bank can loan out $90 of that deposit, keeping $10 (10% reserve requirement) as a reserve. The bank receiving that $90 deposit can also make an additional loan of $81 keeping 10% of the deposit or $9 in reserve. This process can continue expanding the initial deposit of $100 into a maximum of $1,000 of new money. The process becomes more complex since reserve requirements are applied only to transaction accounts such as checking, which is a component of M1. Savings accounts and time deposits, which are components of M2 and M3, representing broader measures of money, have zero reserve requirements. Since time deposits and savings accounts have no reserve requirements, they can expand indefinitely. Banks can also expand the money supply by drawing down their reserves and replacing their reserves through money market loans at the prevailing cost of money (the federal funds rate).
By its very nature, a fractional reserve banking system is inherently an inflationary institution. Banks as shown in the example above can expand the money supply by creating money out of? thin air.? They enjoy a unique privilege under our present economic system not available to you and me. As individuals the only way we can expand our bank accounts is through savings.
"INHERENTLY INFLATIONARY"
The dollar has lost 30% since 2001, thats why they will stop buying our bonds. Who will keep investing in anything thats such a big loser?
Buy America II: The First Shoe Drops
http://www.kitco.com/ind/Appel/oct132004.html
"This is where the problem arises! A flood of dollars that are issued when foreigners sell their Treasuries will enter the U.S. monetary system and dramatically inflate it. The resultant exploding money supply will have the potential to foster a serious inflationary event.
A balance occurs in a country between the size of its money supply and the value of the goods and services offered on their markets. When this is in a state of equilibrium, prices are stable. Throughout history whenever a nation fostered an increase in their money stock, without a similar rise in the quantity of their offered goods and services, prices rose. In effect, a condition results, called inflation, where too many monetary units are chasing the same number of goods. An extreme case would be the German hyperinflation of the early 1920's, of which we have all heard. In that event, their government was creating so many deutschemarks that in the end, before the currency and the country collapsed, it required a wheel barrel full of currency to purchase a loaf of bread."
alistair7:
Oh, I agree that is the first shoe to drop, but the bomb is when the investors finally realize that there actually exists a possiblity that the US will be unable to repay its debt. They have no guarantee than 1929 will not revisit the US economy, though it IS highly unlikely IMHO. Anyway, when we start looking like Mexico, and at these deficit rates it won't be long, the investors will stop buying and interest rates will HAVE to soar.
-Robert
Oh, I agree that is the first shoe to drop, but the bomb is when the investors finally realize that there actually exists a possiblity that the US will be unable to repay its debt. They have no guarantee than 1929 will not revisit the US economy, though it IS highly unlikely IMHO. Anyway, when we start looking like Mexico, and at these deficit rates it won't be long, the investors will stop buying and interest rates will HAVE to soar.
-Robert
http://en.wikipedia.org/wiki/Money_supply
"As of about the year 2000, the M1 money supply was about 1.3 trillion dollars, the M2 was $5.4 trillion, and the M3 was $7.8 trillion. If you split all of the money equally per person in the United States, each person would end up with about 26,000."
So youre telling me the US created 6.7 trillion dollars worth of new products/buildings/services/assets in the last 4 years?
"if the money supply grows faster than real GDP, inflation must follow as velocity has been shown to be relatively stable."
Really, in the last 25 years the fed has DOUBLED the money supply of the US as compared to our first 200+ years of existence. Are you going to sit here and tell me the US has doubled the real assets of this country in the last 25 years? We have created as much actual wealth in goods/services in 25 years as we did in all our time before then? I missed that EXPLOSIVE growth somehow, where is it?
"As of about the year 2000, the M1 money supply was about 1.3 trillion dollars, the M2 was $5.4 trillion, and the M3 was $7.8 trillion. If you split all of the money equally per person in the United States, each person would end up with about 26,000."
So youre telling me the US created 6.7 trillion dollars worth of new products/buildings/services/assets in the last 4 years?
"if the money supply grows faster than real GDP, inflation must follow as velocity has been shown to be relatively stable."
Really, in the last 25 years the fed has DOUBLED the money supply of the US as compared to our first 200+ years of existence. Are you going to sit here and tell me the US has doubled the real assets of this country in the last 25 years? We have created as much actual wealth in goods/services in 25 years as we did in all our time before then? I missed that EXPLOSIVE growth somehow, where is it?
A steady state economy will have to come into play one day or another.
And businesses are breaking no law (in fact they are holding the up law by outsourcing, every company's officer is bound by law to do the best for their company) by outsourcing to other countries. The US is in dire straits and everyone wants to pull their wool over their eyes.
Vic
Elite Member
- Jun 12, 2001
- 50,422
- 14,337
- 136
During the 1st Presidential Debate, Bush and Kerry were asked what they thought was the single greatest threat facing America today. Bush answered, "Terrorism." Kerry proclaimed, with great flourish, "Nuclear proliferation!"
They are both dead wrong. Or do they know better and are boldly lying for the sake of the ignorant masses?
This topic, the impending bankruptcy of the United States and the long global depression that will surely follow, is the single greatest threat facing the US today. It is very real. And the worst part is that, while Clinton didn't help, the Bush Administration is hastening it. To survive, the US must voluntarily tighten its belt and undergo a period of austerity. It must re-focus on manfacturing the goods that it needs on its own soil. But I sincerely doubt that will happen as never have the masses wanted more from their government for less, and never have the politicians been more subject to the whims of the masses.
See my sig. That prediction, almost 200 years old, is happening... right now.
They are both dead wrong. Or do they know better and are boldly lying for the sake of the ignorant masses?
This topic, the impending bankruptcy of the United States and the long global depression that will surely follow, is the single greatest threat facing the US today. It is very real. And the worst part is that, while Clinton didn't help, the Bush Administration is hastening it. To survive, the US must voluntarily tighten its belt and undergo a period of austerity. It must re-focus on manfacturing the goods that it needs on its own soil. But I sincerely doubt that will happen as never have the masses wanted more from their government for less, and never have the politicians been more subject to the whims of the masses.
See my sig. That prediction, almost 200 years old, is happening... right now.
Last week the us reached its debt ceiling, an artificial ceiling imposed and routinely raised by congress, it WAS 7.4 trillion US. Because they had to wait for congress to approve MORE deficit spending they had to make a choice, not make required payments into Govt employee pensions, or default on US debt. They stiffed the pensions, cant default on the dollar, and will just use the printing presses and fractional banking system to MAKE more money. For every extra dollar they MAKE, lol, all the rest become worth less...
The dollar fell below a certain mark YESTERDAY that mark was a sell point for ALOT of Asian and EU investors in the dollar. The sell off has begun.....
Alistar7:
Do you trade currencies? My commodity broker had us in quite a few currency trades in the 1980's, but not since then so I don't follow that market. But, you've piqued my interest in the dollar's position. I'm wondering what this poses for the bond/bill markets? Hmm...sounds like rising interest rates to me.
-Robert
Do you trade currencies? My commodity broker had us in quite a few currency trades in the 1980's, but not since then so I don't follow that market. But, you've piqued my interest in the dollar's position. I'm wondering what this poses for the bond/bill markets? Hmm...sounds like rising interest rates to me.
-Robert
I'll disagree to a certain point, Clinton did have balanced budgets and paid down on the debt. He couldnt stop it from growing so of course it increased. We saw the largets influx of foreign investment capital since WW2 when we started being fiscally repsonsible, with Bush we have record deficits that make Reagans look like chump change.
If anyone wants to get into the conspiracy aspects of "money" and real money like gold/silver i'll run that dog too, plenty of actual evidence out there to support that claim. Know the history of the bank of england and their crusade against real money (gold/silver) or their role in the great depression? They did not CAUSE it, they just pushed the last button when it was in their favor, our fault for setting it up for them.
Zebo
Elite Member
- Jul 29, 2001
- 39,398
- 19
- 81
Yup law should be changed. We survived as a nation with no income taxes until 1913 on high tarrifs only as the form of taxation and built industries which were envy of world out of the dirt with this advantage.
But I have no problem with companies out-sourceing. The governemnt is forceing it upon business owners with policy, policy to compete with basiclly slave labor, policy that needs to be changed. Policy that is redistributing wealth to red china. Policy that lowers americans living standards since the 1960's...when I was growing up you never heard of two parent workers to make ends meat. No it seems more common..
Vic:
Amen, brother, now yer' talking my language.
If we don't get our financial house in order we will be just like all those kids who max their credit cards and end up in federal bankruptcy court. This is just old fashioned good sense.
-Robert
Amen, brother, now yer' talking my language.
If we don't get our financial house in order we will be just like all those kids who max their credit cards and end up in federal bankruptcy court. This is just old fashioned good sense.
-Robert
No no the US can print as much money as it wants with no inflation, they can keep rates at near zero while bond prices go up and returns drop and people will still buy, lol.
I would stay away from currencies right now, the Euro might be winning big now but our dollar will pull everyone down. If you are going to invest in currency I would suggest one that is based on a gold standard, argentina is planning on buying 40 tonnes of gold to back their currency. I would stick with REAL money, gold/silver with silver being having the largest upside potential. Real money will not be affected by any fiat currency or govt policy
one of the main reasons people have historically sought refuge in precious metals in uncertain financial/geopolitical times.how is that possible? The dollar is wotht as much as the 60's right, but wages have grown far beyond the 60's range. Seems to me one person would only have to work part time now IF THE DOLLAR WAS WORTH AS MUCH AS THEN, theres a real life example of the declining value of the dollar.
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