Good as GOLD. Some thoughts to ponder...

You are comparing apples and oranges, or more specifically, economic systems with monetary systems. Gold is part of a monetary system-- working to produce new technologies, etc., is part of the economic system. A system wherein everyone just trades gold is not an economy; conversely, most people do not work for free, at least, not since slavery and serfdom have been been outlawed, so they need a monetary system to be part of their economic system.

All the technologies that have been developed since the Stone Age may have had intrinsic value when they were developed, but most have gone by the wayside and are in themselves basically worthless now. "Bio-tech" in the 18th century, for example, used leeches and bleeding to "cure" patients. Gold, on the other hand, is still valuable today, as it was when King Croesus minted his first coins so many millennia ago.

 

Log in or Sign up to hide this ad.

As A time traveler.. I have found that in the future.. Money is not used. We have no needs or thirst for wealth. Kirk has been zipping around the universe sleeping with green chicks.
I have been producing Coins from this machine in the wall and my coins value is based on the LOVE and BEAUTY of them.. Yes the History part is a bit lost but what is history when you can jump though time...

 

It isn't my intent to change your mind, but only to point out that what is "self evident" to you, Lincoln and Marx has been disproven. It should be easier for someone who grew up in a technologically advanced society to understand it.

 

Bingo! At current prices. I read recently where the estimated price would need to be $50-60,000 per ounce to go back to an int'l gold standard.

thinking fondly of my gold and silver stash, rono thinks $60K per AGE would work nicely, TYVM!

rono

 

Howdy,

In '92 we visited Russia on a tour - Moscow, St.Pete., etc. It was a whole bunch set up by a local travel agent. She had a russian lady come and do a series of shows touting the trip. We were encouraged to take goods to use in lieu of $ tips. They (like Cuba today) were running parallel economies - one with local currency where very little was available and one with 'hard currencies' where a lot of stuff was for sale. Even so, some things were impossible.

I stashed picnic salt&pepper sets, soap, shampoo, cigarettes. A pack of marlboros was cab fare anywhere in moscow.

whatever works,

rono

 

Howdy,

I'm taking a bit of a different approach to this. I've long believed that everyone should have 3-5% in precious metals as a core investment and that more than this was speculation. Speculation is ok, as long as you know that's what it is.

A few years back I read a quote from the original Baron Rothschild that everyone should have 1/3 of their wealth in securities, 1/3 in real estate, and 1/3 in rare art. Well, I don't know anything about rare art, but do know a bit about coins and bullion, so I subbed the latter for the former.

At first count we were at 90/8/2. Now I'm at 70/20/10. By this time next year I hope to be between 50/30/20 and 60/25/15.

As you can see, I'm converting securitized wealth into either real estate or 'rare art'. Major moves I've made to do this include cashing out my traditional IRA a couple of years back, paying the taxes and converting it to the latter two categories. I'll be retiring in 106 days with both a 401 and 457 and DB pension and plan to roll the 401 into a Roth and perhaps even the 457. This would allow me to convert some or all of these monies to the latter two categories.

just some thoughts,

rono

 

Howdy,

The official debt right now is about $12 trillion. However, the Unfunded Liabilities are pushing $70 T!!!! These include social security, medicare/aid, the various trust funds, service on the debt, etc.

There is no politically viable way to both raise taxes and cut benefits sufficiently to cover this tab. The only option is to monetize it and that means printing money 24/7/365. I read an estimate that they would need to halve the value of the dollar over the next 12 years or so, to even get close to covering this tab.

Since 1913, when the federal reserve was formed, the dollar has lost 96% of its value.

rono

 

A former teacher of mine organized a trip to Russia for a group of students in the 1970s [I didn't go]. He told them to bring as many pairs of blue jeans as they could. He brought the pornography. Today this would probably result in a major scandal. Back then it just financed the majority of the trip for everyone who went.

 

I'm kinda liking this scenario...:goofer:

 

Yes. That was the point I was trying to get at. Nobody should be under the illusion that Americans and the government will just dig in their heels and roll up their sleeves when they have to, cut a few programs and raise taxes on the rich and the problem will be solved!! No way. That's an absolute unrealistic pipe dream. Anyone who thinks this doesn't fully understand the magnitude of the numbers that we're dealing with now. The unfunded liabilities you mention are what swamps the boat. They are the nail in the coffin.

Real unemployment is at 17 to 22% currenly. We were screwed when the economy was great and the taxes were rolling in. Now they are severely reduced just because so many people are not working and their employers are not paying in taxes for them either. There's less coming in now, but the govt is still spending more than ever. I'm hearing 1 trillion dollar deficit every year now.
It will take drastic measures to ever hope to deal with this mess which will likely be another formal devaluation. I wouldn't be surprised if it happens this decade. It would actually solve a lot of problems. But people on fixed incomes will likely struggle to survive. It's left to be seen if employers would double people's salaries to accommodate and keep people up with where they were after such an event. They may not be able to, or they may just take advantage of the situation and bring people back to 75% of where they were as a 'favor'.

A formal devaluation is not doom and gloom, make believe stuff. It has to happen sooner or later. There is no other way to deal with the problem. We have informal devaluation year after year in the form of inflation already. A formal 50% cut or more would be much more painful though.

BTW, going into the great depression, we were still on a gold standard which allowed for a deflationary depression. That won't be happening again. The gold standard is gone. The printing presses are unleashed. The next one will be a hyperinflationary great depression. It has to be.

There should be no doubt in anyone's minds that they will keep printing to take care of things and fend off problems for as long as possible. Up to the point where it simply doesn't work anymore. They've done it for years and they do it more now. Why wouldn't they continue?

 

I apologize ahead of time, but I disagree. Most of what you said is standard internet wisdom these days. I'm not going to debate this, but I can't let it pass. So the following is the other side of the story for anyone who wants to pursue truth. This said, I'm done with this issue.

A devaluation is total economic catastrophe. Look at Iceland for the most recent example. There are many others if you look for them. There is no upside for citizens. It doesn't have to happen, it's a choice. There are many alternatives to attract permanent productive investment capital to the nation and relieve the debt. They are well known, but have not been taught to the last few generations for reasons not appropriate to CoinTalk. Gold did not create the deflation of the 30s. The confiscation of gold and subsequent devaluation of the dollar created the deflation by removing a significant portion of the purchasing power of citizens from the economy. Maybe we will have hyperinflation. Maybe not. It isn't inevitable. It is a decision that will be made by the government and their bankers when the time comes. They may choose default instead if it suits their purposes as it did in Iceland. Nobody knows yet, not even Bernanke. Time will tell, and in the meantime prepare for both outcomes.

 

I find it interesting that you said "there is no upside for citizens." And then you go on to say, "look at Iceland.....There are many others if you look for them."

So, whether it is an upside or a downside, you've proven that Iceland and many others are willing to do it. So, it is in fact a reality.

 

Correct. There is no upside, and it is a reality. Be prepared.

 

No need to apologize! I expected someone would disagree with me. I realize I am not the end all informational source for the topic and what exactly will happen is all conjecture. But the point is, it is likely that 'something' will have to happen. That is yet to be decided.

I'm not sure how we could encourage more investment into the country without selling off the land itself. I don't believe our creditors think they will ever be paid back as it is.

I think you are being smart and realistic about this in your last statement. Many others stick to wishful thinking only.

BTW, as I write this, I just heard that the U.S. is sending 100 million dollars to relief efforts in Haiti. While the Chinese have committed 1 million dollars. Says a lot about how we value money that we don't have. Nothing new.

 

Hi folks,

They're trying to keep the tire inflated even though it has a few leaks by pumping air into it fullforce. Ok, perhaps not full force, but dropping dollars from bombers, keeping interest rates at zero and a fiscal stimulus package of $1T, together is fairly substantial. The nut is - will it last long enough for the private sector to pick up the slack? And that's not with stock price or profits - that's with sales and job creation.

Whilst this is going on, they know they've got to devalue the currency but are trying to do it slowly and gradually and everyone agrees. Hell, our debtors don't want to see a dollar crash because it's not in their best interest. They'll hide as much as possible with smoke, mirrors, spin and a lot of interesting bookkeeping tricks. But I honestly feel that many of them are trying to do the job. However, en masse, congress and the elected politicians are kicking the can down the road. This is what will screw us and spell the death of the dollar.

It won't die with a bang but a whimper.

peace,

rono

 

I've thought about this, and I'm not so sure. The government leaders in China and Russia seem to still view the USA as a military and political adversary. If they view it to be in their best interest, do you think they would hesitate to take action to implode the US economy? Do you think they care about what happens to their own economies or people? If they believe they can do this and survive physically, politically, and militarily they might just go for it regardless of other consequences. They don't think like we do, and our major weakness may be that we believe they are like us.

But that is a political post so I won't say any more or respond to responses. Sorry.

 

Hi Cloudsweeper,

I'm not suggesting that they like us or wish us well. I'm working from the assumption that they only care about their own selfinterest. Right now, they hold sufficient dollars and treasuries, that it is not to their selfinterest to have them drastically devalued.

For example, let's take China. They must keep exporting and the factories humming to provide jobs for the massive numbers of peasants migrating into the cities on an ongoing basis. Otherwise, there will be social unrest if not outright revolt. So the powers that be are willing to do whatever it takes to continue the expansion. And right now we're their best market so they want us healthy and shopping at Walmart buying their stuff. And they hold a ton of our dollars that they are trying to diversify out of while maintaining the value of their principal. They're buying gold hand over fist, but again, playing the market while they do so.

At this point in time they want the dollar to not crash and the US to continue on the road to economic recovery.

Tomorrow? feh, I wouldn't count on it.

take care,

rono