Ominous: The US deficit vs the dollar

[Alistar7]

Originally posted by: chess9
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

Too late, we gotta pay the price before it gets any better....

 

[Zebo]

Originally posted by: Vic
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.

Who cares? It's only numbers. You're forgetting about all the wealth we have from national defense assets to real estate. Those are what matters. Who cares what numerical value you assign to them? More importantly who cares how much we owe? We roll over the debt unlike anyone else can, such as chesses school girl example.

I agree with the second part of your statment if only to have more assets...production centers, infastructure, and wealthier communities. Plus it will pay for your concerns. (debt)

 

[Alistar7]

If you invested $1,000 in Nortel before the tech boom in the markets (1990s) it would have blasted to TENS of MILLIONS. Only takes ONE right investment in your lifetime to become insanely wealthy, want the next one right now? Every bull market has 3 phases, silver is still at the bottom of the second leg up.
There is not enough REAL silver in the world to handle industrial demand, let alone people investing in it as money. Today most silver is traded on PAPER, BILLIONs of ounces that are supposedly producable upon demand. When a default happens, and it will, the bull will run, hard.

Silver Standard (SSRI)

A silver mining company who recently had their largest cash reserve in history, guess where they invested this safety net? They BOUGHT silver off the open market, this would be like Ford making record profits and investing it in new Hondas. There is ONE of the Nortels of this bull market, shares around $15 last time I checked. With the millions of ounces of real silver they now hold as assets their value will explode exponentially when it hits, this probably will DWARF the Nortel gains.

Conversely $1,000 invested in Nortel at their height would have turned into about $49 today. If you had put that same $1000 into Budweiser, not stock, just buying the beer itself and drinking it all you it would have turned it into $107 in scrap aluminum. The bull market is in metals and has been for 3+ years, and with China and India kicking it into gear it will continue. China is turning thier US dollars into hard assets, buying the largets mining company in Canada recently and looking to purchase as much of the worlds natural resources ASAP.

 

[Alistar7]

Originally posted by: Zebo

Originally posted by: Vic
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.

Who cares? It's only numbers. You're forgetting about all the wealth we have from national defense assets to real estate. Those are what matters. Who cares what numerical value you assign to them? More importantly who cares how much we owe? We roll over the debt unlike anyone else can, such as chesses school girl example.

I agree with the second part of your statment if only to have more assets...production centers, infastructure, and wealthier communities. Plus it will pay for your concerns. (debt)

You need to understand how value is determined, the total amount of all money is equal to all goods/services/assets. Seriously, they (fed) have doubled the amount of the money suplly in the last 25 years, has the US doubled the amount of our assets/goods/services in the last 25 years? Take all we have created in the last 200+ years, do you really think it has doubled in the last 25 alone?

Our debbt is picked up by foreign investment, they are and will continue to stop buying (investing) our debt as the returns diminish. Dollar down 30% since 2001, would you want to invest in something that loses so much so fast?

 

[Alistar7]

EVERY fiat currency in the history of the world has failed. Now there is not enough silver left to back a global currency, and gold is just to expensive to make it practical. Worse yet the silver that is left is needed to continue our current lifestyle unless you prefer not having TVs/cars/computers/etc., well just forget about the military NEED for silver....

 

[Zebo]

Originally posted by: Alistar7

Originally posted by: Zebo

Originally posted by: 0marTheZealot

Originally posted by: Zebo
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.

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.

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..

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.

That's true
But we are exporting half our wealth, half of what we make to make others lives easier instead of ours..

 

[Alistar7]

Not really, we are exporting our debt, which is why so many americans have purchased homes recently. That doubling of the money supply, alot of it went into mortgages, we were bascially given the chance to buy our homes for pennies on the dollar when the crap hits the fan IF we have the $$$$ to pay them off.

If what happens in pre ww1 German happens here, money inflated so bad it took a wheelbarrow full of cash to buy a loaf of bread, that same wheelbarrow will pay off that mortgage. Unfortunately for the bank who lent you the $250,000 for your house they will get it all back, but look what they will be able to buy with it now. Not a new house, just a loaf of bread. Problem for the little guy (you and me) is that our wages wont keep up with the inflation, they havent for years, you wont have a wheelbarrow full of money. You'll still have the same amount you have now, enough to pay that mortgage at $1500 a month, but not the extra $250,000 to buy a loaf of bread.

Those figures are just for example, I dont expect it to be THAT bad, but I hope it clears the confusion and serves the purpose of letting you know what to expect. Protect yourself now if you can.....

 

[Slap]

How do you go about buying silver?

 

[Alistar7]

www.kitco.com

They have a precious metals store there, you can also find it here:

www.goldinvestment.com

one of the best prices I have found for certified rounds.

Mexico has been issuing silver coins recently through their mint. A ten peso coin is one pure troy ounce of .999 silver. Right now the US dollar is worth 11.48 pesos. Techinally if you can get over there you MAY be able to pick up a one ounce silver coin (ten peso coin) for one US dollar, which would be akin to stealing candy from a baby, or gold from a king IMO.

In the past year I have checked literally EVERY coin that has come through my hands, looking for the older US coins that have silver content. I have not found ONE.......

 

[Vic]

Originally posted by: Alistar7
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.

My beef against Clinton in this regard is not that he balanced the budget (hardly, I commend him for that), but that he used (nay, encouraged) the dot-com liquidity boom in order to get the tax revenues to do it, and projected those obviously unsustainable revenues in order to show even greater surpluses over the long-term.
The Fed was just as bad, with only Greenspan's token warning of "Irrational exuberence", and is even worse today with the property boom, with Greespan advising mortgage borrowers to get a bigger home with an adjustable rate...

 

[Alistar7]

The fed needs to go, they have outflanked the US Constitution, trying to make themselves the ONLY ones permitted to coin/print US currency. They actually think that is the case, but they are dead wrong. Sorry, that power was given to the Govt, and we should use it AGAIN by returning to the gold standard and eliminating the fed.

Alot of the boom of the 90s in the market was the huge influx of foreign investment capital our "fiscal responsibility" generated, almost puked when I type that, lol. The rest came from US workers looking towards retirement, when they saw the market exploding they FINALLY began to save, or so they thought.

This is beyond the dems/redubs, Dems passed the Balanced Budget Act, took a GOP congress to make it happen, but the damage to our dollar was too far gone even then. That falls squarely on the private banks known as the federal reserves.

The rest of the world continus to buy our debt becuase THEY HAVE TO in order to keep their economy rolling. I'm not so worried that will stop based on diminished returns, what bothers me is our deficit spending if not checked will require them to spend over 100% of what they have to keep this ponzi scheme going. I don't care if they have to, you can do whats not possible, you cant contribute over 100% of anything.....

 

[Vic]

Originally posted by: Zebo
Who cares? It's only numbers. You're forgetting about all the wealth we have from national defense assets to real estate. Those are what matters. Who cares what numerical value you assign to them? More importantly who cares how much we owe? We roll over the debt unlike anyone else can, such as chesses school girl example.

I agree with the second part of your statment if only to have more assets...production centers, infastructure, and wealthier communities. Plus it will pay for your concerns. (debt)

It's not just numbers. Money may be abstract but it is not imaginary.

The problem is that our assets are already mortgaged to the hilt. And as our currency is based only on the "good faith and credit of the United States government", we cannot just write-off our debt without the consequence of collapsing the dollar (and subsequently, our economy and global standing).

One thing that is propping our nation up right now is all that foreign investment. Just like any other investor, they want to eventually get their money back and then some. They will continue to prop us up as long as they can, investing and re-investing, but this is where the prospect of a poor economy in China becomes that much more dire. Those foreign investors may suddenly find themselves unable to prop us up anymore. Bonds will collapse and yields will soar, the government's ability to borrow will be restricted and payment on the debt will exceed the government's ability to pay it, and a classic "default domino" will occur, where one default leads to another.

 

[Alistar7]

Originally posted by: Vic

Originally posted by: Zebo
Who cares? It's only numbers. You're forgetting about all the wealth we have from national defense assets to real estate. Those are what matters. Who cares what numerical value you assign to them? More importantly who cares how much we owe? We roll over the debt unlike anyone else can, such as chesses school girl example.

I agree with the second part of your statment if only to have more assets...production centers, infastructure, and wealthier communities. Plus it will pay for your concerns. (debt)

It's not just numbers. Money may be abstract but it is not imaginary.

The problem is that our assets are already mortgaged to the hilt. And as our currency is based only on the "good faith and credit of the United States government", we cannot just write-off our debt without the consequence of collapsing the dollar (and subsequently, our economy and global standing).

One thing that is propping our nation up right now is all that foreign investment. Just like any other investor, they want to eventually get their money back and then some. They will continue to prop us up as long as they can, investing and re-investing, but this is where the prospect of a poor economy in China becomes that much more dire. Those foreign investors may suddenly find themselves unable to prop us up anymore. Bonds will collapse and yields will soar, the government's ability to borrow will be restricted and payment on the debt will exceed the government's ability to pay it, and a classic "default domino" will occur, where one default leads to another.

Sounds like you got your ASSets covered

 

[Vic]

<- is completely lacking in sense of humor

 

[Alistar7]

So what will happen first Vic, will we require more than they can invest, or will they be unable to keep up the pace to that saturation point? I think they will give before we make it impossible for them to keep up.

 

[Alistar7]

AMERICA'S ADDICTION TO ASIAN CREDIT

http://www.kitco.com/ind/Texashedge/oct082004.html

"While it is not news that Asia's reserves continue to increase, it is worth nothing that Japan, China, South Korea and other countries have started to reassess their appetite for US Treasuries. Some Asian finance ministers have spoken out openly about diversifying out of dollars and plowing reserves into alternatives such as gold and euros. As the dollar has fallen to record lows against several currencies, more international scrutiny has been applied to how the United States would fund its fiscal and current account deficits without Asian credit. If America doesn't decrease its dependence on foreign capital, the dollar could weaken further, forcing the Federal Reserve to choose between (1) protecting its currency by raising interest rates and choking off economic growth or (2) continue debasing the dollar which could potentially result in hyperinflation.

Unfortunately, American businesses, consumers and governmental organizations show no signs of reducing their addiction to foreign capital."

 

[Vic]

Originally posted by: Alistar7
So what will happen first Vic, will we require more than they can invest, or will they be unable to keep up the pace to that saturation point? I think they will give before we make it impossible for them to keep up.

I think so too. Eventually they will cut their losses and being investing that same money in themselves. You could say that is already happening, and it presents a terrifying prospect to our nation.

 

[Alistar7]

Originally posted by: Vic

Originally posted by: Alistar7
So what will happen first Vic, will we require more than they can invest, or will they be unable to keep up the pace to that saturation point? I think they will give before we make it impossible for them to keep up.

I think so too. Eventually they will cut their losses and being investing that same money in themselves. You could say that is already happening, and it presents a terrifying prospect to our nation.

I think it will be a devastating GLOBAL problem, and unfortunately will kill the great growth China was on the brink of having. They already started having inflationary issues and have slowed their economy, but our irresponsibility will negate their fiscal prudence. You are correct, it is already happpening, especially with the dollar dipping below the mark (yesterday) many asian and eu countries set as an end out......

The Chineese are working like mad to convert their US dollars into hard assets, primarily in commodities and resources they need now and will need in the future. I feel fortunate to have been aware of this issue beforehand and getting the chance to protect myself, but I know for alot of people it's going to be a fast trip down with no notice.

I would urge everyone who reads this to pick up at least 100 ounces of real silver in any form whatsoever, however recognized bars and rounds will be easier to convert into hard assets quickly. I agree with the predictions of it hitting at least $2,000 an ounce, if only for a short period. At todays price that 100 ounces is less than $750, and could turn into $200,000 +. I would suggest using that $2,000 per ounce mark as a guide, buy enough to pay off ALL your debt plus an extra 50% beyond that for a nice safety net until the dust clears.

 

[Alistar7]

"The American Republic will endure until Congress discovers that it can bribe the public with the public's own money." ?Alexis de Tocqueville

BTW that quote in your sig is DEAD ON THE $$$$ Vic, many of the founding fathers also knew that was the case and how right they were.......

 

[rahvin]

$2000 an ounce for silver? Man that is some good crack you are smoking.

If the dollar collapses as you are predicting in this thread you shouldn't be stocking up on silver you should be stocking up on ammunition.

 

[Alistar7]

Originally posted by: rahvin
$2000 an ounce for silver? Man that is some good crack you are smoking.

If the dollar collapses as you are predicting in this thread you shouldn't be stocking up on silver you should be stocking up on ammunition.

The price as it stands today is heavily manipulated, and silver is price inelastic, those who USE it and NEED it can pay $10,000 an ounce without a sweat. Market fundamentals will do this alone, forget about the monetary issue which will be a SECONDARY factor in the price rise. BTW the dollar is collapsing, you dont consider 30% in 3 years a major decline? What about the fact that silver and silver stocks have outperformed EVERY other investment vehicle the past 3 years? Coincidence I guess.....

Go check the facts before you crack jokes, haha, or at least tell me why a silver mining compnay spent millions of their largest cash reserve ever to BUY silver off the open market.........


Got plenty of ammo already

 

[Alistar7]

At $10,000 an ounce, you know how much it would cost for the silver needed to build a motherboard, cell phone, etc?

Less than a dollar, ya think Asus is going to shut down their company over $1 per mobo.......

just like when the hunt's cornered the market they will charge a nice % on top because their product contains silver, and make even MORE of a profit margin.

 

[Alistar7]

http://www.bibleprophesy.org/s..._CARDERO_RESOURCE.html


"I have recently written how the price of gold could easily skyrocket towards infinity dollars per ounce as a result of a total dollar currency collapse, and how the gold price might stabilize at $32,567/oz. if the U.S. pledged its official gold holdings to back the dollar in a last ditch effort to prevent a total currency collapse, and return to a gold standard. All the monetary reasons for owning gold, such as inflation and collapse of paper currencies, also apply to silver, but silver has other features which make it even more attractive than gold.

1. The historic silver/gold price ratio was 15 or 16:1 , but in recent years, silver is relatively cheaper ranging from about 40:1 to 80:1. On January 24th, 2003, with silver at $4.89/oz. and gold at $368/oz., the ratio is 75:1. This means that silver is currently undervalued, and cheaper than historic norms, and thus it is a better investment than even gold if you want to "buy low and sell high"."

Ya see those numbers in bold? That is one way the Govt could stop the devaluation of the dollar, by pegging it back to the gold they have which would drive the price of gold to that 32,567/oz mark. At 16-1, the 5,000 yr old standard ratio of gold/silver that would make silver just over $2,000 an ounce....

I dont think gold will ever go that high, but there is a monetary situation that could cause that to happen, although it would not be the primary reason silver could easily hit that 2k mark. Do you understand what "price inelastic" means? Normal supply/demand, as demand goes up and supply goes down prices rise until an equilibrium is reached. Eventually the rising cost will temper demand, UNLESS the item is price inelastic as is silver. For over 20 years demand has at least stayed even, while supply has dwindled, we have been running SUPPLY DEFICITS in silver for over 20 years, and were talking 30% deficits in supply. Why don't you tell me why deman has stayed the same, supply has dwindled, but the price never rose? Manipulated market, and when it blows the price inelasticity will not stop it from becoming WAY OVERVALUED....

 

[Alistar7]

Also from the article above:

"On January 24th, 2003, with silver at $4.89/oz. and gold at $368/oz., the ratio is 75:1."

Nice price for an ounce of silver, its @ $7.30 today, not too bad of a gain I'd say. Care to show me any other investment that gave that type of return in less than 24 months?

Forget about the fact it was OVER $8.00 an ounce in March of this year, yeah thats right from $4.89 to over $8.00 in 15 months, enjoy your crack, I'll be smoking mine through a SILVER STEM

 

[rahvin]

Originally posted by: Alistar7

Originally posted by: rahvin
$2000 an ounce for silver? Man that is some good crack you are smoking.

If the dollar collapses as you are predicting in this thread you shouldn't be stocking up on silver you should be stocking up on ammunition.

The price as it stands today is heavily manipulated, and silver is price inelastic, those who USE it and NEED it can pay $10,000 an ounce without a sweat. Market fundamentals will do this alone, forget about the monetary issue which will be a SECONDARY factor in the price rise. BTW the dollar is collapsing, you dont consider 30% in 3 years a major decline? What about the fact that silver and silver stocks have outperformed EVERY other investment vehicle the past 3 years? Coincidence I guess.....

Go check the facts before you crack jokes, haha, or at least tell me why a silver mining compnay spent millions of their largest cash reserve ever to BUY silver off the open market.........


Got plenty of ammo already

The simple answer is to manipulate prices just as you said. Buffet bought into silver to try to corner the market, if I remember the Berkshire conference call correctly after he purchased the silver at around $6 an ounce his target was $10 an ounce to start selling.

Silver is VERY abundant, it will never be a restricted commidity like gold or platinum. If price goes up much more mine production is going to increase and drop the price, because it is so abundant the only reason they haven't been mining more is because of price. I suggest you brush up on the actual geology and reserves instead of relying on market maniuplations to guide your precious metals investing. You could start with the USGS report on Silver.

http://minerals.usgs.gov/miner...dity/silver/880303.pdf

You will note in that 2002 report that they predicted the rise in silver prices because some zinc mines were going to be idled due to the low price of zinc, you will also note that a price pressure on silver is going to be the conversion from film to digital photography as this is one of the primary uses for silver. Silver, like any precious metal is a VERY risky investment. Like most recessions people flee to precious metals and the price goes up but not very long ago gold was $240 an ounce and silver was around $6. As the economy recovers the price of precious metals will drop as they ALWAYS have. I have said it before and I will say it again, the only people that make money on precious metals are those that sell those precious metals to others.