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 Replies: 90 / Views: 7,583 |
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Bedrock of the Community
13014 Posts |
Thats all true but as long as were a big consumer of world goods changing World Reserve Currency to another nation would hurt those countries more then help them. Devaluing our dollar would lower the wealth of the middle east which they have no interest in doing and same would go for China with how much we buy from them. China certainly has plans but wont try anything for a while. Russia is however crazy enough to try for no other reason than Putins ego, but no one wants to use their currency. Theyre about 20 years removed from complete collapse which doesn't instill confidence in their system
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Pillar of the Community
United States
4008 Posts |
It's not that we buy so much that matters. It's that the rest of the entire world uses US dollars for settling their international debts. They do this specifically because the US dollar IS the World Reserve Currency and for no other reason. Americans are the only people on the planet who do not have to exchange their currency when buying internationally. This can and will change at some point and when it does the effect WILL be HUGE. Britain had the WRC for a long time and they have not been the same since losing it.
As to hurting those other countries... I agree that it would hurt the ones who hold a lot of US dollars but maybe that thought is why those countries are using their dollars to buy real estate, gold, oil wells, mines, farms, ranches, etc.
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Bedrock of the Community
Australia
21788 Posts |
Australia is already starting to increase the volume of overseas trading contracts that they write in other than U.S. dollars.
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Bedrock of the Community
13014 Posts |
Quote:
As to hurting those other countries... I agree that it would hurt the ones who hold a lot of US dollars but maybe that thought is why those countries are using their dollars to buy real estate, gold, oil wells, mines, farms, ranches, etc. Which is smart of them, gives them a way to get back their money and probably even make money off the assets |
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Pillar of the Community
United States
2168 Posts |
Yes smart of them but if bought here in the US while many here lose their homes not good for US citizens. Really a shame as to what is happening
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Bedrock of the Community
13014 Posts |
Them spending our bonds over seas dont really affect us. We have no intention of ever paying them back in all honesty. We are getting to the point though where the debt is getting unsustainable as its become to high a percent of the GPD so either that needs to increase or we need to slow the debt down and ideally do both
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Pillar of the Community
United States
4008 Posts |
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Australia is already starting to increase the volume of overseas trading contracts that they write in other than U.S. dollars. Yep and the Aussies are some of our closest and best friends. Just think about what those who are not so friendly to us are thinking and doing. Quote:
Which is smart of them, gives them a way to get back their money and probably even make money off the assets I agree and in their position would be doing exactly the same things. I'm not saying that this is a bad thing or that they are up to no good. They are pursuing that which is in their best interest, as should we all. It irks me some that our government seems to have an agenda that is not in step with the best interests of the American citizen. Failing to protect our interests is a huge failing, IMHO. Quote:
We are getting to the point though where the debt is getting unsustainable... My belief is that the debt is already unsustainable but the Fed is using their slight of hand power to force US interest rates low enough that the interest can still be paid on these debts. Imagine what will happen when the interest rates in the US rise to a historical average of 4-5%. That would raise the cost of borrowing money from 0.25% to 4-5%, a 1600-2000% rise. Instant bankruptcy! |
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Bedrock of the Community
United States
10982 Posts |
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My belief is that the debt is already unsustainable but the Fed is using their slight of hand power to force US interest rates low enough that the interest can still be paid on these debts. Imagine what will happen when the interest rates in the US rise to a historical average of 4-5%. That would raise the cost of borrowing money from 0.25% to 4-5%, a 1600-2000% rise. Instant bankruptcy!
That's right Ed and that is the main reason The Fed is keeping interest rates near zero through 2015. What happens after that? Trouble, but it will take a few years to hit full force because interest rates will be gradually increased from 2015 forward. By 2018 or 2019 we will be out of luck I'm afraid. Unless tax revenues increase dramatically, we're bankrupt no later than 2020. |
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Pillar of the Community
United States
648 Posts |
Posted 09/08/2012 09:40 am - I posted (and agreed) this will correct, as did the OP (much earlier). Enjoy the roller coaster ride stackers.
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Bedrock of the Community
13014 Posts |
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That would raise the cost of borrowing money from 0.25% to 4-5%, a 1600-2000% rise. Instant bankruptcy! I think its pretty well understood at this point other countries are just giving us money when we borrow since they would want the same done for them in the reverse situation. The 1 huge positive would be with those rates people would actually be buying bonds. No ones going to buy bonds with the current rates |
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Bedrock of the Community
Australia
21788 Posts |
I was listenig to an economist's remarks on radio about unsustainability of debt levels.
That point is reached when the total sovereign debt is greater than the gross domestic product.
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Pillar of the Community
United States
1590 Posts |
If there was ever any doubt in anyone's mind that the price of silver is driven up solely by speculation:
"Production will exceed consumption for a fifth year in 2013, leaving a surplus of 5,095 tons, Barclays Plc estimates. Higher prices may also encourage more recycling. Scrap supplies jumped 10 percent in 2010 as prices almost doubled, according to Barclays."
From MoneyNews.com. 9/26/2012 investing analysis.
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Pillar of the Community
Canada
815 Posts |
I think no matter how you look at it, silver will increase in value in a similar way to the gold jump from the 60's to now.
Do I think we are going to see a near 100 fold increase in silver in the next 40 years? No. I do expect silver to increase much faster than inflation, and this is where I park my wager. Savings accounts rarely beat inflation, RRSP's are unstable, but tangible precious metal will *always* be in demand as long as there are people to look at it with longing.
Do I expect my Silver Maples to each represent an average Joe's monthly wage in purchasing power by 2050? No. I definitely expect that not only will that Silver Maple sell for enough to buy at least 5 times the bags of groceries $35 can right now, but that there is no better investment at this time for my $35.
Now, everyone is different, and I strongly prefer tangible investments over intangibles.
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Bedrock of the Community
Australia
21788 Posts |
For silver to have a hundred fold increase in price, it would require an average rate of inflation over 40 years of 12.2%, if the buying power of the silver was to remain the same.
If the inflation rate is less than 12.2%, the real buying power of the silver would increase.
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Pillar of the Community
United States
1590 Posts |
I read where the commodities markets may actually be hindering the "recovery".
It works something like this: The numbers for Quarter A show an increase in disposable income and is paired with an increase in purchasing non-core items. Core items being; housing, food, and energy.
So the speculators wanting to capitalize on a revitalized market go long and drive up the prices on "bread, beef, and oil". Which then drives down the amount of discretionary income. Which in turn makes the next Quarters numbers go lower.
It creates a loop that some economist do not think will end till either wages go way up to overcome the higher prices OR speculators are taken out of the market.
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Replies: 90 / Views: 7,583 |
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Posted 09/23/2012 6:48 pm
