Greece Votes No and Defaults on its debt

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It's pretty surreal watching them bite the hand that could feed them, over and over again. The amount and degree of corruption in Greece is astonishing. I read about an island where something like 2% of the islands 40K population claimed to be blind to get a tax break. (this is nine times the actual rate of blindness in the rest of the EU). So, Greece has a worthless and useless drachma in 3 months, confidence in the Euro plummets? Spain and Portugal default? everyone is back to Franks, Marks, dinars, lira, and kroner in 3 years?
 
I am amazed that in an era where fiat currency abounds, gold, silver and even oil aren't seen as stores of wealth and continue their downward spiral. Instead, people flock to treasuries that are denominated in said fiat currency? Am I missing something? Has history of currency devaluation (dating back to the Romans shaving off parts of coins) been completely forgotton? Meanwhile, our government prints money faster than we can keep up on the hamster wheel.
 
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And in Other News I Couldn't Care Less About........
 
If OPEC and the world ever start trading oil in currency other than the US dollar then we here in the USA will be in a world of hurt. The fact that the world buys oil in dollars is the only reason we haven't gone the way of Greece yet. The bad thing is I'm not the only one who knows this. China and Russia are actively working on making that happen.

http://www.globalresearch.ca/russia-and-china-the-dawning-of-a-new-monetary-system/5423637

The irony is Russia is turning our own strategy against us. In essence we won the cold war by destroying the Russian economy, their economy simply couldn't support our level of defense spending and they imploded.

They have figured out (as we did a long time ago) that we basically can't be beat in a traditional war, it would be to expensive for another country to attempt to do so and the cost in human lives would be too great. The patriotism of our citizens would ensure that an invasion of the US mainland would be an absolute blood bath for any foreign invader. Nuclear weapons only makes the "war" strategy less appealing.

If you could, however implement a strategy to destroy our economy then we will implode from within. This is exactly what we did to Russia and it is exactly what they are working to do to us. Sadly our citizenry are to uninvolved in world affairs to notice. Additionally our current politicians are to caught up in playing games and making themselves rich to care.

Think about it. Why is the US the "world police"? Is it because we are so altruistic and compassionate? Don't kid yourself. That sounds good and "protecting freedom and democracy" is a good sell to the public here but that's all crap. We are the only world police because we have a truly global economy. An unstable war torn world can't buy and sell our goods and services. Period. The rest is just fluff to sell our strong military to the citizens here. England heavily relies on international commerce and that is why they have been such a loyal ally. Most of the rest of Europe are soft allies at best because their economies are insignificant (except Germany) compared to ours, they don't rely on international commerce nearly as much as we do. After Russia fell they don't perceive any external military threats so they don't feel like they need us. I think a lot of people don't realize that the US economy is roughly equivalent to all the countries in Europe COMBINED.

So if you hate the USA and want to see it burn destroying our economy is basically the only way to realistically do it.

Mark my words: Unless something drastically changes in this country to address the above issues. WE ARE DOOMED. Current world events and historical perspective tells me this is so. I hope I'm wrong but gravely fear that I'm not. I'm still young (36 yrs) and genuinely fear that I may live to see the end of our country.
 
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@NOsaintsfan, you are spot on.

With establishment of BRICS bank, Russia will certainly make progress.

And this is exactly the reason why we funded the removal of Gaddafi from Libya. He wanted to trade oil for gold instead of dollars and that would have certainly spelt doom for current global economic infarstructure.

And of course we can care less, as long as we can get our piece of the pie and continue to fund our 401ks we will be ok.
 
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@NOsaintsfan I mostly agree but I think we are primarily the Middle East police and it's to protect the petro dollar established in the Nixon era.
 
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gasdoc77 said:
@NOsaintsfan I mostly agree but I think we are primarily the Middle East police and it's to protect the petro dollar established in the Nixon era.
Click to expand...

Most people don't realize how vital the establishment of the petro dollar has been for the growth of the US. Without that their is no way we would have been able to massively increase our money supply without inflating our currency to worthlessness.
 
NOsaintsfan said:
If OPEC and the world ever start trading oil in currency other than the US dollar then we here in the USA will be in a world of hurt. The fact that the world buys oil in dollars is the only reason we haven't gone the way of Greece yet. The bad thing is I'm not the only one who knows this. China and Russia are actively working on making that happen.

http://www.globalresearch.ca/russia-and-china-the-dawning-of-a-new-monetary-system/5423637

The irony is Russia is turning our own strategy against us. In essence we won the cold war by destroying the Russian economy, their economy simply couldn't support our level of defense spending and they imploded.

They have figured out (as we did a long time ago) that we basically can't be beat in a traditional war, it would be to expensive for another country to attempt to do so and the cost in human lives would be too great. The patriotism of our citizens would ensure that an invasion of the US mainland would be an absolute blood bath for any foreign invader. Nuclear weapons only makes the "war" strategy less appealing.

If you could, however implement a strategy to destroy our economy then we will implode from within. This is exactly what we did to Russia and it is exactly what they are working to do to us. Sadly our citizenry are to uninvolved in world affairs to notice. Additionally our current politicians are to caught up in playing games and making themselves rich to care.

Think about it. Why is the US the "world police"? Is it because we are so altruistic and compassionate? Don't kid yourself. That sounds good and "protecting freedom and democracy" is a good sell to the public here but that's all crap. We are the only world police because we have a truly global economy. An unstable war torn world can't buy and sell our goods and services. Period. The rest is just fluff to sell our strong military to the citizens here. England heavily relies on international commerce and that is why they have been such a loyal ally. Most of the rest of Europe are soft allies at best because their economies are insignificant (except Germany) compared to ours, they don't rely on international commerce nearly as much as we do. After Russia fell they don't perceive any external military threats so they don't feel like they need us. I think a lot of people don't realize that the US economy is roughly equivalent to all the countries in Europe COMBINED.

So if you hate the USA and want to see it burn destroying our economy is basically the only way to realistically do it.

Mark my words: Unless something drastically changes in this country to address the above issues. WE ARE DOOMED. Current world events and historical perspective tells me this is so. I hope I'm wrong but gravely fear that I'm not. I'm still young (36 yrs) and genuinely fear that I may live to see the end of our country.
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Don't agree.

There is so much shale oil in the US that the whole oil argument is null.

As to policing the world, I think it is pathologic empire mentality. Nothing to do with economics. The Swiss trade with everybody without issues.

The threat to the US is its welfare system. Why would you work when the state will take care of you? Have enough people on welfare who do not want to work, with the right to vote, and eventually the country will be in shambles.
 
urge said:
Don't agree.

There is so much shale oil in the US that the whole oil argument is null.

As to policing the world, I think it is pathologic empire mentality. Nothing to do with economics. The Swiss trade with everybody without issues.

The threat to the US is its welfare system. Why would you work when the state will take care of you? Have enough people on welfare who do not want to work, with the right to vote, and eventually the country will be in shambles.
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The welfare state and mentality it has created are major concerns for our country that is for sure. No doubt about it the USA faces many complex issues as does every nation.

Consider this though. How can the US print seemingly unlimited amounts of money and it have little if any impact on inflation? Currency is traded as a commodity on world markets and is subject to basic supply and demand pressure like every commodity is. If we keep increasing supply of dollars how come our money never devalues? Why haven't we seen hyperinflation like so many other nations who have done exactly what we are doing?

The answer is simple. Its because demand roughly matches supply. How can this be? The petrodollar is why. If you don't know what that is or have never heard of it don't worry not many people have.

Simply put ALL oil produced by OPEC (75% of the world supply) is paid for with US dollars. Every country MUST convert their currency to US dollars and then use those dollars to buy oil. It was an absolutely genius act of political and foreign policy negotiated by Richard Nixon and Henry Kissinger back in the early 1970's. Its the reason the US has been able to see such amazing economic growth. As world oil consumption increases so does the demand for US dollars. Protecting the current petrodollar system is something every US citizen should care deeply about. That is if you like the standard of living we all enjoy here in the USA. If OPEC decided tomorrow that all its oil would be traded in any other currency besides the dollar then the only thing the cash in your wallet would be good for is fueling a dumpster fire.

So while oil shale and supplies of oil in the continental US have an impact on world oil supply and therefore the price of oil, it has nothing to do with the demand for US dollars and the value of our currency.

The issues you bring up are real and can erode away our society and have long term impacts on our country. The issues I'm talking about could destroy our country overnight. Our money is only valuable because their is global artificial demand for it. Take that demand away and hyperinflation will set in real quick like. The scary thing is that countries that hate us are working very hard to try to make that happen. It's in all of our best interests (like it or not) to make sure that doesn't happen.
 
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NOsaintsfan said:
The welfare state and mentality it has created are major concerns for our country that is for sure. No doubt about it the USA faces many complex issues as does every nation.

Consider this though. How can the US print seemingly unlimited amounts of money and it have little if any impact on inflation? Currency is traded as a commodity on world markets and is subject to basic supply and demand pressure like every commodity is. If we keep increasing supply of dollars how come our money never devalues? Why haven't we seen hyperinflation like so many other nations who have done exactly what we are doing?

The answer is simple. Its because demand roughly matches supply. How can this be? The petrodollar is why. If you don't know what that is or have never heard of it don't worry not many people have.

Simply put ALL oil produced by OPEC (75% of the world supply) is paid for with US dollars. Every country MUST convert their currency to US dollars and then use those dollars to buy oil. It was an absolutely genius act of political and foreign policy negotiated by Richard Nixon and Henry Kissinger back in the early 1970's. Its the reason the US has been able to see such amazing economic growth. As world oil consumption increases so does the demand for US dollars. Protecting the current petrodollar system is something every US citizen should care deeply about. That is if you like the standard of living we all enjoy here in the USA. If OPEC decided tomorrow that all its oil would be traded in any other currency besides the dollar then the only thing the cash in your wallet would be good for is fueling a dumpster fire.

So while oil shale and supplies of oil in the continental US have an impact on world oil supply and therefore the price of oil, it has nothing to do with the demand for US dollars and the value of our currency.

The issues you bring up are real and can erode away our society and have long term impacts on our country. The issues I'm talking about could destroy our country overnight. Our money is only valuable because their is global artificial demand for it. Take that demand away and hyperinflation will set in real quick like. The scary thing is that countries that hate us are working very hard to try to make that happen. It's in all of our best interests (like it or not) to make sure that doesn't happen.
Click to expand...

I get that the petrodollar maintains demand for the dollar.

But, what happens to the dollars one the OPEC nations get paid? They just dump it into the market. Heard of Dubai? Qatar?

My understanding is that inflation has not hit because the banks are holding on to the dollars. They are capitalizing their derivatives so that when SHTF they will still be in business.
 
urge said:
I get that the petrodollar maintains demand for the dollar.

But, what happens to the dollars one the OPEC nations get paid? They just dump it into the market. Heard of Dubai? Qatar?

My understanding is that inflation has not hit because the banks are holding on to the dollars. They are capitalizing their derivatives so that when SHTF they will still be in business.
Click to expand...

What you are alluding to is why the petrodollar system was so brilliant. Part of the deal that Nixon/Kissinger negotiated is call "recycling". The short answer to your questing is that the vast majority of profits from OPEC nations are invested in US and other western banks along with US treasuries. This was a requirement under the original deal struck in 1972.

On a global scale what this did was create a system where every country in the world has a need for US dollars. OPEC nations are small with relatively small populations yet they supply the entire world with energy. OPEC has and continues to have WAY more money than they could ever spend. They invest that excess money in western banks. Those banks then lend that money to developing nations (Brazil, India, ect.). Those countries then repay that money with interest :).

So yes OPEC dumps their money into the market but NO that "market" isn't Dubai and Qatar, its NYC and London. At least traditionally it was. It was pure genius on our part.

Bottom line: The current petrodollar system has allowed the USA to basically print enormous amounts of currency that still RETAINS ALL ITS PURCHASING POWER due to the artificial demand structure that was negotiated. This is simplistic but in essence we have had since the 70's an endless supply of money.

Think of it like this, under "normal" situations who has a need for any given currency? The people within that country. So the central government of said country only can print enough bills to circulate within its boarders to fund its economy. The more money it prints the less its worth and vice versa. What happens if all the sudden everyone in the entire world NEEDS your money (not just wants to hold some of it as an asset). In that situation if the supply of money isn't increased then their won't be enough for the entire world to use. So you print enough money to supply the world. The demand for your currency is their so your currency doesn't devalue. As world demand for your currency increases (as demand for oil goes up) you are able to print more money without it devaluing your purchasing power.

I know I keep saying it but you can't overstate how genius this was on our part.

Here's the problem. Instead of being financially responsible with the amazing situation we found ourselves in we have accumulated $17 trillion in debt. Think of it like high output cardiac failure if you will. In addition because of the situation described above we DEPEND on global demand to keep our money afloat. There are so many dollars circulating around the world that if demand for our money collapsed then so would our currency and with it our way of life as we currently know it.

We have literally turned the most advantageous situation possibly in world history and turned it into a very dangerous Achilles heal. Russia and China know this and are working very hard to exploit it.

If you are interested in this stuff read up on the Bretton Woods Agreement in 1944 to get a background context for the creation of the petrodollar system.

Then if you are really interested read this: http://www.rferl.org/content/article/1095057.html and pay close attention to the date of the article. Ponder its impact on world events.
 
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:soexcited:
 
pgg said:
Did someone just argue that Russia is putting the screws to us these days? China too?
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Apparently China would benefit from a collapsed American economy. The folks who buy the majority of their goods. It also seems unlikely they'd be interested in us defaulting on the trillion plus of our debt they own.
 
pgg said:
Did someone just argue that Russia is putting the screws to us these days? China too?
Click to expand...

They are both are absolutely trying to. We all should hope they don't succeed. Most people aren't paying attention though or think that the possibility is so remote that they don't even care. Many people don't realize how vulnerable we have made ourselves.

Think of it this way, if you were the leader of a foreign government and wanted to destroy the USA what strategy would give you the best chance? Oh and military options are off the table for numerous reasons.
 
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NOsaintsfan said:
They are both are absolutely trying to. We all should hope they don't succeed. Most people aren't paying attention though or think that the possibility is so remote that they don't even care. Many people don't realize how vulnerable we have made ourselves.

Think of it this way, if you were the leader of a foreign government and wanted to destroy the USA what strategy would give you the best chance? Oh and military options are off the table for numerous reasons.
Click to expand...

What are your thoughts about the future of bitcoin and gold?
 
FollowTheMoney said:
What are your thoughts about the future of bitcoin and gold?
Click to expand...

Don't know much about bitcoin so can't make any sort of informed comments however the little I do know makes me skeptical at least for long term.

As for gold well it depends on what your strategy is and how much of the stuff I wrote about above you're willing to believe. If you think that the dollar is safe then gold may not be the best investment in terms of return. Keep in mind gold will most probably never be with zero (although I guess you really never know). On the other hand the US dollar is only valuable because our government says it is (fiat currency).

One thing is a fact. China, Russia, India and a few other countries are buying as much gold as they possibly can off of the world markets. At the same time China and Russia in particular are steadily unloading their holdings of US treasuries. Simply stated they are divesting themselves of any exposure to us currency and stockpiling gold. They (Russia and China) think gold is a great investment. Take that for whatever its worth.

PS: I'm not a financial adviser so don't get too excited about what I wrote. I'm just a guy with a business degree who firmly believes that money makes the world go round. I think that if you "follow the money" much of what happens in the world becomes easy to explain. Especially when looking at things like corporate behavior, politics and foreign policy. Not just US politics, foreign policy and corporate behavior either. Money is the universal language and as a rapper once said if it don't make dollars then it don't make sense.
 
NOsaintsfan said:
What you are alluding to is why the petrodollar system was so brilliant. Part of the deal that Nixon/Kissinger negotiated is call "recycling". The short answer to your questing is that the vast majority of profits from OPEC nations are invested in US and other western banks along with US treasuries. This was a requirement under the original deal struck in 1972.

On a global scale what this did was create a system where every country in the world has a need for US dollars. OPEC nations are small with relatively small populations yet they supply the entire world with energy. OPEC has and continues to have WAY more money than they could ever spend. They invest that excess money in western banks. Those banks then lend that money to developing nations (Brazil, India, ect.). Those countries then repay that money with interest :).

So yes OPEC dumps their money into the market but NO that "market" isn't Dubai and Qatar, its NYC and London. At least traditionally it was. It was pure genius on our part.

Bottom line: The current petrodollar system has allowed the USA to basically print enormous amounts of currency that still RETAINS ALL ITS PURCHASING POWER due to the artificial demand structure that was negotiated. This is simplistic but in essence we have had since the 70's an endless supply of money.

Think of it like this, under "normal" situations who has a need for any given currency? The people within that country. So the central government of said country only can print enough bills to circulate within its boarders to fund its economy. The more money it prints the less its worth and vice versa. What happens if all the sudden everyone in the entire world NEEDS your money (not just wants to hold some of it as an asset). In that situation if the supply of money isn't increased then their won't be enough for the entire world to use. So you print enough money to supply the world. The demand for your currency is their so your currency doesn't devalue. As world demand for your currency increases (as demand for oil goes up) you are able to print more money without it devaluing your purchasing power.

I know I keep saying it but you can't overstate how genius this was on our part.

Here's the problem. Instead of being financially responsible with the amazing situation we found ourselves in we have accumulated $17 trillion in debt. Think of it like high output cardiac failure if you will. In addition because of the situation described above we DEPEND on global demand to keep our money afloat. There are so many dollars circulating around the world that if demand for our money collapsed then so would our currency and with it our way of life as we currently know it.

We have literally turned the most advantageous situation possibly in world history and turned it into a very dangerous Achilles heal. Russia and China know this and are working very hard to exploit it.

If you are interested in this stuff read up on the Bretton Woods Agreement in 1944 to get a background context for the creation of the petrodollar system.

Then if you are really interested read this: http://www.rferl.org/content/article/1095057.html and pay close attention to the date of the article. Ponder its impact on world events.
Click to expand...

I don't buy that petty reporters have a real understanding of what is going on. If this were the case, there would be no financial crisis ever.

My guess is as good as theirs, and probably better than any talking head on TV.

This is how I see it: All governments are trying to devalue their currency to minimize their debt. The US has not been able because the banks keep hoarding the cash to cover their horrendous balance sheets. For the average American it seems like inflation is <5%, but eventually that money will come out of the banks and inflation will be a lot higher. There will be another geopolitical issue at that moment to confuse people.

Russia and China are just trying to keep up with the banks.
 
Much of the currency devaluation efforts are to cheapen our cost of goods globally and increase exports while stimulating GDP. The trade imbalance is the real reason for erosion of our country's wealth.
 
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urge said:
I don't buy that petty reporters have a real understanding of what is going on. If this were the case, there would be no financial crisis ever.

My guess is as good as theirs, and probably better than any talking head on TV.

This is how I see it: All governments are trying to devalue their currency to minimize their debt. The US has not been able because the banks keep hoarding the cash to cover their horrendous balance sheets. For the average American it seems like inflation is <5%, but eventually that money will come out of the banks and inflation will be a lot higher. There will be another geopolitical issue at that moment to confuse people.

Russia and China are just trying to keep up with the banks.
Click to expand...

I hope you are right. If what you say happens it won't be good but its a whole lot better than what I have alluded to. Still, I have an uneasy feeling about what would happen if OPEC decided to abandon the dollar. Maybe I should just take some Prilosec and call it a day it's not like I can do anything about any of it anyway.
 
FollowTheMoney said:
What are your thoughts about the future of bitcoin
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I'm surprised and a little disappointed that the 200-ish smilies the SDN forum software has installed doesn't include a little face desperately trying and failing to contain hysterical, derisive laughter. But I guess this is close: :X3:


FollowTheMoney said:
and gold?
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As a post-apoctalyptic currency, like sealed #10 cans of heirloom seeds? Silly.

As a hedge vs inflation? Not really sure if it's any better than owning any other real asset, including shares in real companies producing real goods (equities).

As a diversifier in a portfolio? I think it's worth owning (and I do) somewhere in the neighborhood of 10%, 20% at most. The difficulty here is balancing the practical side (having ETF gold that you can actually sell in meaningful quantities when it's time to rebalance OUT of it) vs the paranoid side (having physical gold). Somewhere there may be a place for mining co equities too.

As a backup/escape plan for relocating yourself and your family in case of a catastrophic economic collapse? Sure, if you're not an American. It was a good strategy for people who've fled Argentina in the last 15 years, but they had someplace to go. If the US goes down, your pocketful of gold won't get you anywhere safer.
 
NOsaintsfan said:
I hope you are right. If what you say happens it won't be good but its a whole lot better than what I have alluded to. Still, I have an uneasy feeling about what would happen if OPEC decided to abandon the dollar. Maybe I should just take some Prilosec and call it a day it's not like I can do anything about any of it anyway.
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What you can do:
- live beneath your means
- live someplace safe
- save, and diversify those savings
- make sure your plan will work out if nothing bad ever happens (plan for a long life and boring retirement)
- self-insure for short term problems (and by this I mean everything from food to security)

And take some Prilosec if your gut still bothers you.
 
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NOsaintsfan said:
Then if you are really interested read this: http://www.rferl.org/content/article/1095057.html and pay close attention to the date of the article. Ponder its impact on world events.
Click to expand...

Very interesting. Looking at the date reminded me of Confessions of an Economic Hit Man. https://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man

Funny how the timing of 9/11 played right into our hands.

Two trends I haven't seen much discussion on, but which have the potential for major disruption in our way of life are 1) the inevitable transition to alternative energy. The world will still need oil, but probably a lot less. And 2) the inevitable loss of American jobs secondary to automation. The Atlantic recently had an article discussing this. http://www.theatlantic.com/magazine/archive/2015/07/world-without-work/395294/

I know the conservatives among us will freak out at the concept of a government supplied basic income and/or job, but what is the alternative when there is a greatly diminished need for labor?
 
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powermd said:
Two trends I haven't seen much discussion on, but which have the potential for major disruption in our way of life are 1) the inevitable transition to alternative energy. The world will still need oil, but probably a lot less. And 2) the inevitable loss of American jobs secondary to automation. The Atlantic recently had an article discussing this. http://www.theatlantic.com/magazine/archive/2015/07/world-without-work/395294/

I know the conservatives among us will freak out at the concept of a government supplied basic income and/or job, but what is the alternative when there is a greatly diminished need for labor?
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1 Will happen at some point. That's why oil came down in the past few years. Every time oil goes up alternative energy gets closer. I don't see oil going up anytime soon for that reason. Plus, solar panels keep getting cheaper. Since I don't subscribe to the petrodollar conspiracy, I don't think it will have much economic repercussion for us. I suspect the US will lose interest in the middle east and will leave it alone to bankrupt.

2 Either the people owning the robots share the wealth, or you just need less people. We know the latter has more chances of happening. Advanced coountries are already moving into that direction. The developping countries will be hit the hardest.
 
powermd said:
The Atlantic recently had an article discussing this. http://www.theatlantic.com/magazine/archive/2015/07/world-without-work/395294/

but what is the alternative when there is a greatly diminished need for labor?
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The alternative is the need for innovation. That is why we should be concerned that we lag behind other countries in areas of education like math and science. We need more engineers, physicists, ect. We need more brain power and I'm not talking about more MBA and finance people. That's how we will stay ahead of a world becoming less and less dependent on physical labor.
 
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pgg said:
I'm surprised and a little disappointed that the 200-ish smilies the SDN forum software has installed doesn't include a little face desperately trying and failing to contain hysterical, derisive laughter. But I guess this is close: :X3:
Click to expand...

I don't personally own any bitcoins, but the sheer concept of it is ingenious. I have a few friends that are enthusiasts and after gaining a better understanding of it, I think it could take off in the future if it becomes more user friendly, simplified, and not as complex. Goldman Sachs and some other major financial institutions are investing big money into Bitcoin exchanges. Most notably, Circle just received $50 million dollars from Goldman Sachs and many venture capitalists are investing millions into the infrastructure of Bitcoin. This could be what the Internet was in the 1980s. I wouldn't laugh just yet.

http://insidebitcoins.com/news/circle-raises-50m-off-goldman-sachs-support-adds-usd-features/32201


pgg said:
As a post-apoctalyptic currency, like sealed #10 cans of heirloom seeds? Silly.

As a hedge vs inflation? Not really sure if it's any better than owning any other real asset, including shares in real companies producing real goods (equities).

As a diversifier in a portfolio? I think it's worth owning (and I do) somewhere in the neighborhood of 10%, 20% at most. The difficulty here is balancing the practical side (having ETF gold that you can actually sell in meaningful quantities when it's time to rebalance OUT of it) vs the paranoid side (having physical gold). Somewhere there may be a place for mining co equities too.

As a backup/escape plan for relocating yourself and your family in case of a catastrophic economic collapse? Sure, if you're not an American. It was a good strategy for people who've fled Argentina in the last 15 years, but they had someplace to go. If the US goes down, your pocketful of gold won't get you anywhere safer.
Click to expand...

Based on your analysis, it appears you don't fundamentally believe in the value of gold or the concept of sound money. Unless you're a "right wing wacko" or the world collapses, you don't see a purpose for it. That's fine, I just think you should see the other side of the coin. A fiat currency like the US dollar will collapse, it's not a matter of if its a matter of when. We are getting close to the point of no return on our debt crisis, we are printing 85 billion dollars a month, and this monetary system that is built on failed Keynesian economics is going to blow up. We are in such a precarious financial situation and I'm surprised people are not more concerned. I don't think there is truly a place to run or hide when the implosion happens because it's going to be like dropping an economic nuclear bomb, everyone will feel the impact of it. Gold has been a scarce resource that has been used as money for 5,000 years and all of our enemies are stockpiling as much as they can as we speak. I think it has more value than just something that you diversify your portfolio with for the sake of diversification.
 
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I just get a kick out of people who rant and rave against worthless "fiat" currencies and then get all misty-eyed and dreamy about Bitcoin.


Yes, the USD is a fiat currency backed by "nothing" ... if nothing is a 330-million person country that's the largest economy in the world, in the most enviable geographic position of any country on earth, with the only truly projection-capable military leviathan monstrosity in the world, with a few thousand thermonuclear weapons just in case ...

Just a few posts back there was speculation that we invaded Iraq because Saddam had the audacity to threaten that worthless fiat currency with Euro-oil, so don't tell me with your next breath that we don't have the will to throw that economic and military weight around if the push becomes a shove.

Russia is a mess, China is ****ed eleven different ways, that silly "United States of Europe" experimental debacle is burning ... you might want to consider the possibility that the USD will remain the least ugly girl in the bar for a long while yet. There is an opportunity cost to sinking too much of your net worth into gold; there is a risk to that kind of speculation.

I would simply offer the caution that the risk you're hedging by buying lots of gold (collapse, hyperinflation) may be less than the risk you're taking by overcommitting to that asset class (underperformance, loss of value) if nothing happens for decades to come.
 
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Of course, petrodollar isn't going away without a fight. I think Russia and China can muster up a better fight than 3rd world Iraq.
 
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It seems that people's politics and world view tend to creep into their investing. While there are multiple reasonable arguments for using precious metals and/or precious metals equity as part of a diversified portfolio strategy, It is one of the hardest disciplines to follow because of the incredible volatility of this asset class and the fact that portfolio benefits often take multiple decades to accrue.

I've noticed that people who do commit to a strategy including precious metals often tilt right in their world view the same way the those who believe in socially responsible funds (no tobacco, gun, alcohol, other sin stocks) tilt left.
 
Mostly agree with dr doze, so far as investing goes, but much of this discussion has little to do with investing.

I would argue that those who buy gold out of hyperinflation / fiat currency / collapse concerns aren't really investing. It's more accurate to say they're buying insurance. Whether they are paying a fair price for that insurance and making a ressonable assessment of the risk they're insuring is another topic.

As a person who values preparedness and personal/family resiliency (e.g. I'm not Mormon but I have the better part of a year's worth of food on hand, among other things), I've spent more time than is probably healthy :) frequenting survivalist-oriented forums. (In between the chemtrail and birther and 9/11 truther threads and other wackiness there is some useful practical information on what I characterize as reasonably attainable independent living.)

Financial matters are an especially difficult topic to discuss with them because half think their ammo fort and rolls of pre-64 silver coins constitute prudent investing and the other half think investing is stupid because The Man has fixed the markets.
 
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Just read an article where a Greek surgeon was saying he can't get supplies any longer to provide operations people need. The credit card is maxed.
 
The old saying goes a picture is worth a thousand words...

us-debt-debt-limit-gold.png
 
pgg said:
I just get a kick out of people who rant and rave against worthless "fiat" currencies and then get all misty-eyed and dreamy about Bitcoin.


Yes, the USD is a fiat currency backed by "nothing" ... if nothing is a 330-million person country that's the largest economy in the world, in the most enviable geographic position of any country on earth, with the only truly projection-capable military leviathan monstrosity in the world, with a few thousand thermonuclear weapons just in case ...

Just a few posts back there was speculation that we invaded Iraq because Saddam had the audacity to threaten that worthless fiat currency with Euro-oil, so don't tell me with your next breath that we don't have the will to throw that economic and military weight around if the push becomes a shove.

Russia is a mess, China is ****ed eleven different ways, that silly "United States of Europe" experimental debacle is burning ... you might want to consider the possibility that the USD will remain the least ugly girl in the bar for a long while yet. There is an opportunity cost to sinking too much of your net worth into gold; there is a risk to that kind of speculation.

I would simply offer the caution that the risk you're hedging by buying lots of gold (collapse, hyperinflation) may be less than the risk you're taking by overcommitting to that asset class (underperformance, loss of value) if nothing happens for decades to come.
Click to expand...

1.) Bitcoin itself cannot be hacked because there is no central server and its completely peer to peer. You cannot just make more Bitcoins, unlike the US dollar. It is completely unregulated and if it were to succeed it would eliminate the need for middlemen for transactions (banks, etc). The federal government, the Federal Reserve system, and the reckless spending would come to a screeching halt as everyone transitions to Bitcoin. The government wouldn't be able to generate revenue for the corporate welfare, military industrial complex, our military empire/adventurism, and the millions of governmental programs that are just grotesque waste. Imagine a world where the IRS would be unable to track your fiances, it would just be complete economic freedom. You can't stop progress... once it becomes mainstream and accepted by everyone as a competing currency to the US dollar that will be the end game for the dollar. You heard it here first... as this country becomes more socialist and economically liberal (Bernie Sanders, the socialist, is actually a serious candidate) and as the leaders in Washington raise taxes on businesses and productive members of society with tax rates of 90% there is going to be a breaking point. I can tell you productive members of society will be the first ones looking to escape the oppression and Bitcoin will be right there ready to flourish.

2.) That is such a neocon statement and is the reason we are in this dilemma in the first place. The expansion of our empire with military adventurism is how we put ourselves trillions in debt and created enemies all over the world. We should be focusing on national security and making sure the U.S. is safe, not stirring up trouble. I can tell you if things keep going the way they're going, we are going to be bankrupt and unable to afford anything... especially military expansion. Just think of the Roman Empire because the U.S. is a carbon copy.

3.) We are far from the least ugly girl at the bar. I would rather have money in swiss francs personally. As long as the Federal Reserve and US economic system remains the way it is, bet big on the mega corporations in bed with the government. You can rest assured for the moment companies like Berkshire Hathaway, Walmart, Boeing, etc. will continue to be safe investments. We need to keep building those bombs and Apache helicopters so Boeing will still have great profits long term... I bet on corruption and the military industrial complex, but my personal beliefs are to the contrary.
 
Anyone investing more than 10 percent of his/her portfolio in gold is being foolish. We have no idea how long (if ever) until the U.S. Greenback collapses. Until then a diversified portfolio including metals and miners makes the most fiscal sense.

That said, I'll be adding to my gold coin collection when gold goes below $1100 an ounce. At $1,000 an ounce I'll likely take a larger position in gold and GLD along with GDX.

My hope is that the USA reigns in spending, enacts a Federal Sales Tax and stops borrowing money so we can grow our way out of debt. I'm for lower income taxes along with a national sales tax.
 
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FollowTheMoney said:
1.) Bitcoin itself cannot be hacked because there is no central server and its completely peer to peer. You cannot just make more Bitcoins, unlike the US dollar. It is completely unregulated and if it were to succeed it would eliminate the need for middlemen for transactions (banks, etc). The federal government, the Federal Reserve system, and the reckless spending would come to a screeching halt as everyone transitions to Bitcoin. The government wouldn't be able to generate revenue for the corporate welfare, military industrial complex, our military empire/adventurism, and the millions of governmental programs that are just grotesque waste. Imagine a world where the IRS would be unable to track your fiances, it would just be complete economic freedom. You can't stop progress... once it becomes mainstream and accepted by everyone as a competing currency to the US dollar that will be the end game for the dollar. You heard it here first... as this country becomes more socialist and economically liberal (Bernie Sanders, the socialist, is actually a serious candidate) and as the leaders in Washington raise taxes on businesses and productive members of society with tax rates of 90% there is going to be a breaking point. I can tell you productive members of society will be the first ones looking to escape the oppression and Bitcoin will be right there ready to flourish.

2.) That is such a neocon statement and is the reason we are in this dilemma in the first place. The expansion of our empire with military adventurism is how we put ourselves trillions in debt and created enemies all over the world. We should be focusing on national security and making sure the U.S. is safe, not stirring up trouble. I can tell you if things keep going the way they're going, we are going to be bankrupt and unable to afford anything... especially military expansion. Just think of the Roman Empire because the U.S. is a carbon copy.

3.) We are far from the least ugly girl at the bar. I would rather have money in swiss francs personally. As long as the Federal Reserve and US economic system remains the way it is, bet big on the mega corporations in bed with the government. You can rest assured for the moment companies like Berkshire Hathaway, Walmart, Boeing, etc. will continue to be safe investments. We need to keep building those bombs and Apache helicopters so Boeing will still have great profits long term... I bet on corruption and the military industrial complex, but my personal beliefs are to the contrary.
Click to expand...

I don't know much about bitcoin but to say it CAN'T be hacked is fallacy.

ANYTHING electronic has the potential to be hacked. Sure it may be difficult but impossible, nothing is impossible my friend.
 
NOsaintsfan said:
I don't know much about bitcoin but to say it CAN'T be hacked is fallacy.

ANYTHING electronic has the potential to be hacked. Sure it may be difficult but impossible, nothing is impossible my friend.
Click to expand...

Forget the computers and hackers. Go with the old school currency which has been around for 5,000 years: gold. Our founders intended the U.S. Currency to be made of gold/silver for a reason. It's real currency which requires actual precious metals to manufacture. Unlike the Greenback which can be manipulated Gold is a true global currency whose value every nation recognizes.
 
BLADEMDA said:
Anyone investing more than 10 percent of his/her portfolio in gold is being foolish. We have no idea how long (if ever) until the U.S. Greenback collapses. Until then a diversified portfolio including metals and miners makes the most fiscal sense.

That said, I'll be adding to my gold coin collection when gold goes below $1100 an ounce. At $1,000 an ounce I'll likely take a larger position in gold and GLD along with GDX.

My hope is that the USA reigns in spending, enacts a Federal Sales Tax and stops borrowing money so we can grow our way out of debt. I'm for lower income taxes along with a national sales tax.
Click to expand...

I don't think it's going that low. Yes, everyone should have a diversified portfolio. Keep dreaming with that last statement... Clinton or good old Bernie will make sure the problem is exacerbated.

My opinion: Flat tax 0f 10% that everyone pays (yes, everyone), no state taxes, no sales taxes.
 
FollowTheMoney said:
1.) Bitcoin itself cannot be hacked because there is no central server and its completely peer to peer.

[...]
Click to expand...

I know how Bitcoin works. The techno-nerd in me loves the idea of cryptocurrencies immune to government manipulation.

But it's still a faith-based currency with no intrinsic value, no backing. It's inferior to cash, credit, and gold doubloons in terms of convenience. The blockchain guarantees that all transactions are traceable, hence it precludes any real anonymity. It's deflationary. The mining process is tremendously wasteful and destroys actual value, as Bitcoin farms turn massive amounts of electricity into heat to crunch the numbers.

This is not to say that no cryptocurrency ever will be useful, but Bitcoin isn't it.

But believe what you want.
 
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