Slabbed Coins vs Raw for bullion

I also have confidence in the Dollar. I mean it hasn't failed yet. Also it helps if you stop thinking of the dollar as a store of wealth and think of it more of a unit of accounting. Now so what if it fails, whatever that means, you just convert your assets over to the new unit of accounting.

 

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I'm sorry I didn't mean to be condescending. I just worry about anybody who has 100% confidence in the dollar. There are A LOT of things being done that are setting the dollar up for failure. I think people really need to take notice.

 

I hear what you are saying, and unfortunately, that is how most people view it. I wonder how people would feel if one day they realized that it costs 15 units of accounting for a loaf of bread, yet they still make the same amount of units per year.

And btw, in reference to an earlier reply. This is far from doomsday propaganda. If you view it as a family who makes $50,000 a year, spends $60,000 a year, and has $500,000 in credit card debt. You would say to yourself, they will never get out from under that, they need to file for bankruptcy. However, the U.S. doesn't have that option.

 

I am not happy with our debt level either, but it is just about the same as it was right after WWII. That was almost 70 years ago. The situation is far from hopeless. We worked our way out once before, why be so pessimistic?

 

Also, your analogy of making $50,000 and having $500,000 in debt is not even close to being realistic. Our debt is currently around 17 trillion and the US citizens currenty pull in around 14 trillion per year so the ratio is much closer to making $50,000 per year with a total debt of $60,000. Sounds a lot more doable than the fantasy numbers you presented......

I would lay off the silverdoctor.com if I were you. They will say anything to scare you into buying their bullion.

 

" . . . I am not happy with our debt level either, but it is just about the same as it was right after WWII. That was almost 70 years ago. . . "

70 years ago, the country was able to capitalize on an industrial base transiting from a war economy to a market economy with an expanding industrial base. And a GI bill
that lifted millions into the middle class.

Today, we have for as far as we can see, expanding trade deficits.
A Government that doesn't have the courage, character or will to
rein in spending.

Tell me, just how is the government going to pay off the debt?

Mike

 

The bottom line of the strong growth after the war,the GDP grew from 200 million to 300 million from 1940-1950. That works out to 3.5 % per year. Our economy is growing right now and getting stronger by they day. Do you think it is impossible to do 3.5% a year for a decade? We don't have all the baby boomers as new consumers as we did back them, but we have 1.3 Billion Indians and at least as many Chinese developing a middle class that will be buying American Goods and Services. It really isn't so different, it never is,

If you really want to go broke in investing, remember these words. "It is different this time"
.

 

"It is different this time"

Last year more people collected federal benefits (food stamps, federal welfare payments, lifetime disability payments, vocation rehab, etc) than paid taxes.
This trend will continue for the foreseeable future.

Social Security
In 1950, there were 16 workers paying taxes into the system for every retiree who was taking benefits out of it. Today, there are a little more than three. By the time the baby boomers retire, there will be just two workers who will have to pay all the taxes to support every one retiree.

http://www.cato.org/publications/commentary/social-security-follow-math

There is no end of heavy deficit spending. In 2012, I believe we paid about 6% of gross federal revenues to service the debt. That's six percent we cannot spend of infrastructure, defense, federal welfare programs or to lower taxes. Interest rates are rising and the government is borrowing money with no end is sight.

"This year, federal taxation will take up less
than 15 percent of total national economic activity. That’s the lowest level in
60 years. In fact, total revenue as a share
of gross domestic product has now been
under 15 percent for three straight
years—the first time that has happened
since before World War II

http://www.americanprogress.org/issues/2011/06/pdf/low_tax_graphs.pdf

A lot of middle class jobs such as tool and die makers, parts designers, machinists are going to be disappear due to 3D printing.
Boeing is on record stating they plan to make most parts for airplanes using 3D printers.


Yes, things are different this time.



Mike

 

Mike, sorry but you just don't have enough spins around the sun. If I had a nickel for everytime I was told me it was different this time, I could pay off the debt.

When you were listing your "differences", you only listed the bad ones. How about the huge gains in productivity we have accomplished with technology. What about the leaps in efficiencies in harvesting natural resources. What about the fact we will be able to sell goods and services, to the largest global middle class population the World has ever seen.

The details change a little bit, but economic cycles stay the same. There has been 47 recessions in US history and every time, the US econony has roared back, EVERY TIME. Believing this time is different, is simply being on the wrong side of the odds. But hey some people like to play the hard 8 in craps.

 

Mike,

Good Handle "Lost Cause"

 

I wish some of you were right, but here's what makes this VERY different from WWII.... Back then the vast majority of the debt issued was owned by Americans. We invested in our own country. Today, over 60% is owned by foreign entities. That has very dangerous implications. There is a reason China is loading up on gold.

Also, the idea that our debt is $17 trillion and the citizens make $14 trillion means nothing. What matters is what the government actually brings in, which is about $3 trillion. Still doesn't sound THAT bad. However the government already spends more than that! Also, $500 billion of that is interest on the debt, which is at rates that are very low. That will not last. There is a reason they "suspended" the debt ceiling. This has nothing to do with Democrats and Republicans putting aside there differences. They know it's coming. Costs are about to go much higher, which means more money printed, which means the money in your pocket is worth less and less. Our debt holders could get tired of this and start dumping the debt which compounds the issue. To be in debt is to be enslaved. We are partially enslaved to China and Japan. Not a good situation.

When you also start to look at the unprecedented debt that our citizens hold, it becomes an even more dismal picture. We have people graduating college with debt that they have no hope of paying off for many many years. That's before they ever own a house or a car! We as a nation are deeper in debt vastly more than anybody ever was after WWII.

I could go on and on, but the last thing I will say is, none of this even takes into consideration the MASSIVE shadow banking system. The collapse that almost occurred in '08 was held off buy unprecedented money printing. It didn't fix a thing, it actually allowed that system to grow even larger. Warren Buffet called these instruments "financial WMDs", and he is right.

There's pretty much one way out that I could see, the collapse of the dollar, or to put it nicely, massive inflation.

 

Reality bites.