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Discuss issues related to business, finance, taxes, investments, cost of living in different countries, etc.
The dollar is fiat currency, basically backed by oil and the government's promise to always pay back what it borrows from us (with interest). Our national debt is so extreme that we could never realistically pay it off, and other countries are wising up to that fact. Once enough countries lose enough confidence in the US government's ability to pay back its debts, those countries will start selling all those Treasuries they bought over the years, and expect to get interest too (insert laugh track here). The US gov't will then do one of two things: print more money to pay the debts and devalue the dollar even more, or just say WTF...we can't pay you back. One of the first things I'm doing, once I get overseas is to open up a euro bank account (and maybe Swiss franc/Norwegian Krone) and start transferring some of my money from here to there. I'll be buying some gold and silver with some of that money I transfer over there, too. That way, I'm hedging my bets legally and not putting all my eggs in one basket (US $$).
Real simple China holds close to a trillion dollars of U.S national debt. America is the biggest debtor nation on earth. China will rise and the yuan will be the reserve currency in our lifetimes. They are telling their citizens to buy gold and silver. So buy gold and silver to preserve your wealth. Buy food and medical supplies. And also guns and ammo. China will be ruling our foreign policy as they will hold the notes.
The world's major currencies, the dollar, euro, and yen, will all crash together. None of them is strong and when the paper money crashes, people will look for alternatives. It may be gold or silver or something else. I don't know what and I don't want to bet. Since real estate was a hot investment but crashed and is now shunned, I think this is probably the best investment now. Real estate is the only hard asset that actually pays you for owning it. So I will buy rental property and unload all of my stocks and bonds. You can calculate your effective yearly return on rental property where you live to see if it is a good value.
All major national currencies today are fiat money.
Well Mr. Momopi, it looks like you spoke way too soon here, lol. Sliver has appreciated 5 fold since October 3, 2008 when you made these comments!!! The guys who short sold your advice made 4 bags. There's a lot more behind that than just a weak dollar. Gold has doubled against the US$ since then too. The lowest gold ever closed from the time you made your comments was a modest 12% down; silver slightly more, both just minor corrections to raging multi-year bull markets, especially the one in sliver.
I've warned before, short term market timing is a fools game. Don't go there unless you at least have a strong fundamental argument to back it up. I'm talking about things like interest rate and yield trends in major currencies, inflation outlook, money supply growth, risk sentiment which can be partially quantified by a few indicators, supply/demand dynamics in gold and commodity markets, price ratios between gold/silver/leading stock markets/oil/commodity currencies such as Aussie dollar and Canadian dollar, etc. Then if you are wrong, you can at least point to how you misinterpreted the factors driving the price or how they changed. Your advice was clearly against a wonderful bull trend which could have more than preserved the true value of precious savings for investors who concentrated assets into these precious metals.
What made you think gold and silver were overpriced anyway? Just because they had already appreciated so much during the first few years of the 21st century? Or did you perform some sort of technical analysis hocus-pocus to come to that conclusion? Just very curious.
I was very surprise by the $200 increase in gold in the last 2 months. but I like to keep in mind some fact. There are only 3 true currencies in the world.
Drugs. yes that includes illegal drugs and pharmacutical.
In the 70's kissinger made treaties with many of the opec nations where we would purchase their all their oil, but in reture they would by certain amount of US bond(i dont remember how much as it was many years ago that I read this) and if there hasn't been any changes in the agreement all oils are purchased only in US Dollars. After WWII, the US government pegged the US dollar to oil price and Kissinger's deal locked it in with his deal.
I dont think the US dollar will collapse per say, but it will be devalued greatly. It's not that the gold price is going up, but to be accurately, gold is staying constant and dollar is getting weaker. just today I looked at the Euro and it's at $.67 to $1 US. it hadn't been this low since right before the world economic crises start in 08 when the Euro was $.65 to $1US. And if you all remember the gas price in 08 the US was about $4.29 and we're not to far off from it now, Gas price last night was $3.95.
Additionaly. US Federal Reserve printed 700 billions more US currency, and in the 08-09 Federal Reserve gave away or loan at no interest about 5 trillion( it may be 20 trillion I cant remember that far back with exact number as im alway reading numbers, but I do remember the events).
When I baught my silver at $19 per ounce i'd figure it would go up to about $30, but I was wrong. At then I was sure the gold had stabalized at about $1250. So I hadn't plan to buy anymore as the price of silver keeping up. But the siver right now is at $49 and gold is at $1530. if you do a 100 year historical comparison. You'll find that there is about 17.2 to 20 time difference from price of silver and gold.
With that knowledge in mind. the price of silver should go up to no less then $75 per ounce if the price of gold is stabalize at current price. if not it will keep rising.
I want to give you a bit of warning as how much the price of gold/silver will go up to. Your all smart enought o realize that history does repeat it self. Think of the great derpession and what we had to do to. Massive spending on infrastructure and ultimately WWII get out the US economy out of the shiter. In 1931 gold took a 15% deep, but the PPP hadn't decline like it is today. If you add up all the inflation over the last 100 years. we only about about %5 PPP currently. That's why gold price was $18.92 in 1910 and $1530 in 2011. (Silver was about a dollar in 1910). The 1980 to 1983 rise and fall of gold/silver was a set up IMHO. The Saudie were convince to buys tons of gold and they ran out of money on their massive building phase of late 70's and early 80's. FYI I dont belive in conspiricy. It's just business as usual in high power games. So they were force to sell of massive amounts of Gold to off set to cash shortage. and if you remember the timing thats when Reagon went on a masive military spending.
During those years the gold dropped from it's highest point about $678 to $325. US made a killing selling off gold high and buying it back low. Currently I see a another pattern forming as the Chiness governments is telling it's people to buy gold/silver. We know culturaly chiness horde gold/silver because their long history of unstable government from external and internal has taught them to be wise. They know that gold/silver/gems represent true currencies in government upheval.
Going back to topic. During Reagons massive military spending and the space shuttle build up. US when into shit load of debt, but the economy is good for most part. Nice economic recovery from the 70's. Now we'r in the 2010's as in the 10's. Maybe some of you guys can see the pattern. 1930s,1970s 2010 about 40 year cycle, but little faster as the cycle of money is speed up by faster communication.
Another thing to point out. Silver is use more often in electronic then gold. Such as you DVD Blue Ray CDs use silver. Your cell phone uses silver. And many other electronic good uses silver as it is the best reflector and better conductor then copper. BTW there is a world shortage of coppers, been like this for well over a decade. Now as 1.1 billion Chiness and 1.02 billion India want their electronic goods as their national GDP increase. that's gonna drive up the silver demand and unrecoverable silver. Because it costs 10 to 20 time more to recover them silver components then its worth. I can't prove it as I'm not into silver mining, but common sense tells me there are less silver currency in circulation as they were in the 80's
Sorry for the many typo's. Errr mayhaps I may have rambled a bit too. These are things that come into my had as I use to read about 1000 page book in 3 hours and I dont remember exact datas after so many years. But I do remember the events. Also you can google most of these data's.
Last edited by CheezeRaider on April 28th, 2011, 2:11 pm, edited 1 time in total.
Sounds about right from what I have researched myself about cycles and trends. IF you are into that sort of thing you should read "The Fourth Turning", great piece of writing about returning cycles and how the next cycle they call the "4th turning is upon us now" (The most f***ed up one)
"The object of life is not to be on the side of the majority but to escape finding oneself in the ranks of the insane." Marcus Aurelius, Roman Emperor and stoic philosopher, 121-180 A.D.
North Korea a very f***ed up place, a few years ago they did a currency reform that bankrupted the aspiring merchant class
http://www.time.com/time/world/article/ ... 51,00.html
Guess what is being used as currency now, meth.
http://english.chosun.com/site/data/htm ... 00353.html
South Korean activist routinely send balloons into North Korea with all kinds of anti North Korean propaganda, bibles, socks and peeps. All kinds of stuff that really pisses off the North Korean Government.
You know what kind of bait they put in those package's to encourage North Koreans to pick it up?
The US dollar, one dollar bills are the bait.
The US dollar is operationally king currency in North Korea.
Did you in Zimbabwe it is the same.