25-07-2002 20:07									#1
	This subject scares the heck out of me! Enter the AD-FREE zone

From Newsmax
http://www.newsmax.com/ubb/Forum16/HTML/002594.html

quote: The value of our currency is not based upon anything of intrensic value, but rather on the full faith and confidence of the Federal Government, and our economic ability. Social Security and other entitlements currently represent an 8.7 trillion dollar unfunded liability. http://www.whitehouse.gov/infocus/social-security/ American businesses are currently under investigation for deliberately mis-reporting income, and other financial frauds, as never before in our history. Our trade deficits are at record all time highs. As a nation, we purchase far more than we sell to outside countries. What will happen to the value of our money, and inflation, when it becomes widely accepted that the country is broke, and hopelessly in debt? Serious informed comments will be appreciated.

quote: A serious answer. Dead serious. At your FIRST opportunity, convert about a fifth of your personal worth into hard cash. Hard cash is not dollar bills and quarters. It is pre-1964 silver currency, and gold. You can buy what is called "junk silver" by the "bag". These are US silver coins. They are sold at very nearly silver value/weight, with the premium being added by the fact that they are easily recognized worldwide as silver. If you are a *****in' gambler, you could mortgage yer house, car, and wife, buy a buncha junk silver... and then when the balloon goes up, pay off your mortgage, get yer car and wife back -- for one thousandth part or less of what you got for them. In Germany, (1922) people bought houses, then paid for them at a ten-thousandth of a cent on the dollar a month later. Timing, for this kind of thinking, requires a bona fide time machine. For serious planning, though, do Paragraph 2.

	25-07-2002 20:11									#2
	Support Apolyton, buy Galactic Civilizations

I don't quite get the point, but I think this is a good time to invest money, now that everything is down. Just be careful you don't buy stocks of a company that might be insovlent tomorrow

	25-07-2002 20:11									#3
	Suffering from ads?

If you have much money, you can invest. If you have little money, you shouldn't invest. If you have no money at all, you must invest. - Andre Kostolany

	25-07-2002 20:47									#4
	Help yourself to an AD-FREE life

A paper bill or a silver coin has value for the exact same reason--everyone else thinks it has value. There's no real reason for gold and silver to be considered valuable. You can't eat a gold bar, or burn it for warmth, or live in it. I suppose you could make it into bullets to defend yourself, but that's about it. Silver collapsed several years ago when everyone realized it was just another metal, and gold looked like it was headed the same way until recently. There's no certificate from God in a vault in Zurich that says "Gold is valuable." The only investment I can think of with real value is real estate, and that's if you can convince people that the piece of paper you have means you own the land it says you do.

	25-07-2002 21:11									#5
	Support Apolyton, pre-order Civilization IV

Bad advice. The US will either try to inflate its way out of this mess, but just as easily it could fall into deflation.

If you mortgage your house to the brim you'd have debt that stays and an imploding nominal house value. Not good.

	25-07-2002 21:47									#6
	Support Apolyton, buy Civilization 2

When the entire world collapses the only things that are of any real value are food, clean water, fuel, and land. Possibly seeds of crops. Things that people need to survive. Anything else don't mean a thing. During hard times a steel knife is worth a lot more than a gold bar, or even 10 gold bars.

	25-07-2002 21:51									#7
	Lose 30 kilos (of popups)

But what if you have a situation in which only the monitary system collapses, and everything else stays more or less intact? Gold and silver could still be valuable because they have uses, for example gold is used in the manufacture of computers.

	25-07-2002 22:01									#8
	Inflate your Upload Space

You end up with a bartering system when money doesn't mean crap. That happened in a whole bunch of countries including China (ROC to be precise) when a person need a cartload of banknotes just to get a loaf of bread.

	25-07-2002 22:07									#9
	Suffering from ads?

Caligasta, you just realized all of this? This topic is like the DUH of economics.

IMO, you shouldn't just get money for the sake of having money. You should get money and buy stuff with it. My goal is to buy some land in New Mexico, and become totally self-sufficient (buy solar power cells, grow my food hydroponically). I'll simply invest a little money to pay property taxes, water costs, maybe a vehicle, and for simple maintenance. Of course, I'll have to buy a stockpile of weapons just in case there's some sort of major collapse .

	25-07-2002 22:08									#10
	Avatar Enlargement: We've got the solution

quote: Originally posted by Caligastia But what if you have a situation in which only the monitary system collapses, and everything else stays more or less intact? Gold and silver could still be valuable because they have uses, for example gold is used in the manufacture of computers.

Would it still be at $300/oz though? I don't know exactly how much copper and aluminum trade for but they're priced in cents per ton, not dollars per ounce.

	25-07-2002 22:10									#11
	Help yourself to an AD-FREE life

The monitary system of the US will collapse when it collapses militarily. As long as people can be thrown into prison for refusing to accept US currency, it will be accepted.

	25-07-2002 22:11									#12
	Full PM-box? Change here!

quote: Originally posted by Sava You should get money and buy stuff with it. My goal is to buy some land in New Mexico, and become totally self-sufficient (buy solar power cells, grow my food hydroponically).

And you're going to share it with Lexa?

	25-07-2002 22:12									#13
	Support Apolyton, buy Alpha Centauri

People survived the the 20s and 30s, even in Germany.

Some People always has to be so dramatic and dig down in preparation of the apocalypse.

	25-07-2002 22:15									#14
	Support Apolyton, buy Civilization: The Boardgame

I still think the worst case scenario for the US economy now is Japan II. Still a lit better than the great depression.

	25-07-2002 22:25									#15
	Support Apolyton, buy Civilization III: Complete

Another melo-dramatic thread.

	25-07-2002 22:30									#16
	Increase the size of your Attachments

the gold standard and silver standard pretty much don't mean anything. but then again, anybody could have told you that the dollar is a currency based on faith. and since most other currencies are pegged to the dollar...

besides, the us isn't broke. it is in a debt, but there is enough strength in the economy to generate wealth for some time, whether the corporations are bust or not.

the only thing that i'm worried about is an argentina-style collapse, but i don't think the government could let things get that bad.

	25-07-2002 22:31									#18
	Increase the size of your Attachments

Well, it's not as if Argentina really had any choice. They kept doing what the IMF told them to do, and things kept getting worse. Finally they had to balk because if they pushed any further, their people would revolt, and they did.

	25-07-2002 22:49									#19
	Increase the size of your Attachments

Caligastia, the vast majority of annual production of gold is still used for investment purposes or jewelry manufacturing. Its use in industrial applications is also tiny compared to that of other precious metals such as palladium.

Those two articles miss a fundamental element in the value of currency, namely that it depends on demand and supply just like commodities. The more money is printed, the less it is worth. Hyperinflation has always been caused by runaway printing and there no reason to fear a collapse of a currency's value as long the govt ensures a stable money supply.

	25-07-2002 22:51									#20
	Support Apolyton buy from Amazon

quote: Originally posted by Sava Caligasta, you just realized all of this? This topic is like the DUH of economics.

No Sava, as I said, this is a thread from Newsmax. I used the same title.

	25-07-2002 22:52									#21
	Inflate your Upload Space

quote: Originally posted by Q Cubed the gold standard and silver standard pretty much don't mean anything. but then again, anybody could have told you that the dollar is a currency based on faith. and since most other currencies are pegged to the dollar...

No, most currencies aren't pegged to the dollar.

	25-07-2002 23:56									#22
	Support Apolyton buy from Amazon

quote: Originally posted by chegitz guevara Well, it's not as if Argentina really had any choice. They kept doing what the IMF told them to do, and things kept getting worse. Finally they had to balk because if they pushed any further, their people would revolt, and they did.

My impression is that it was just the argentinian politicians who lacked the guts to run the country properly. Note that the argentinians themselves don't protest against the IMF, but against their own politicians.

That said, the IMF do promote policies in 3rd world countries that the rich countries would never accept themselves, and that have proved counterproductive for the 3rd world countries.

	26-07-2002 00:30									#23
	Help yourself to an AD-FREE life

Actually investing your money in something concrete and tangible like bullion isn't a half bad idea. It's almost certainly a safer investment than some stock. I have a pretty cool coin collection, so if currency does collapse I should have enough money to eat for a couple of weeks.

	26-07-2002 00:42									#24
	Support Apolyton or Terrorists Win

I don't understand the fuss about our trade deficit: we are getting the goods and services from other countries, while we just print out bunch papers in exchange. What's so bad about other countries regarding our papers as so valuable?

The US national debt may sound astronomical in absolute number, but in terms of GDP it's much lower than that of Japan and Germany. In Italy and Belgium, national debt has already surpassed 140% of the GDP. Do you see their economy collapsing? No.

	26-07-2002 00:45									#25
	Lose 30 kilos (of popups)

quote: Originally posted by Thue My impression is that it was just the argentinian politicians who lacked the guts to run the country properly. Note that the argentinians themselves don't protest against the IMF, but against their own politicians.

They protest against their own government because it had been doing what the IMF told it to do. They protest now to stop it from continuing to follow the IMF.

	26-07-2002 03:01									#26
	Avatar Enlargement: We've got the solution

quote: Originally posted by Lord Merciless I don't understand the fuss about our trade deficit: we are getting the goods and services from other countries, while we just print out bunch papers in exchange. What's so bad about other countries regarding our papers as so valuable? The US national debt may sound astronomical in absolute number, but in terms of GDP it's much lower than that of Japan and Germany. In Italy and Belgium, national debt has already surpassed 140% of the GDP. Do you see their economy collapsing? No.

For chrissake, is there some sort of unwritten law that states you shouldn't, above all, check you facts before posting in an econ thread? Belgian debt peaked at 138% of GDP and stood at 107% in 2001, Italy's highest rate was 124% and was 109% last year.
And Germany's debt rate was barely 2% of GDP higher than that of the US last year...

And if you'd had read my previous post and did some logical reasoning you'd understand that printing the bucks to pay for your imports would send the dollar on a diving course. A higher amount of dollars in circulation decreases it value. Don't believe it? It's happening now.

	26-07-2002 03:03									#27
	Support Apolyton buy from Amazon

Ecthy's ecotip for the day: buy gold when it's down, sell it when it's up.

That's 5 pence to me from everyone around.

	26-07-2002 03:16									#28
	Got spare money?

quote: Originally posted by chegitz guevara They protest against their own government because it had been doing what the IMF told it to do. They protest now to stop it from continuing to follow the IMF.

South Korea did what the IMF asked it to do, even if they pretend otherwise, so did Malaysia. (even with those high profile currency controls that actually were quite meaningless) and I'd say both are doing rather well nowadays.

	26-07-2002 03:47									#29
	Remove this text

quote: Gold and silver are useful things. They are real. There are many crucial uses for these real things. Dollar bills are pieces of paper of a type that is not even good for starting a fire or being used for toilet paper. Electronics, medicine, photography... even bleedin' bowls and plates are some of the uses of gold and silver. There have been upheavals in human history for quite some time... and yet, and yet, since the time of that guy (popularly called Croesus, but that ain't his real name) who stated that in his kingdom, a gold coin of a certain weight would be guaranteed by him to be worth a sheepskin... gold and silver have maintained their usefulness and value despite catatrophic upheavals. No, you can't eat gold. But it will be the first thing recognized after simple barter. It is extremely difficult to move 40 oxen from here to there to pay for 500 bushels of corn... But five gold pieces will work. Trust me: they HAVE worked for 5,000 years. We, who with foresight and knowledge keep some of our wealth in REAL things, will be in a LOT better shape than the "Strings" -- those "Strings" who have not had the extremely good fortune to have been instructed in the basics by good ole Unca Waltie, (like, now, yourself). Fiat money is money that is completely and uttlerly based on faith in the printer of that money. The Hungarian pengo went to 32,000 to the penny in the 20th century. The Deutchmark went to 12,000,000 to the penny in the 20th century. Strings: when these two currencies did this... what do you think gold and silver did? Yup. They bought bread. End of sermon. Reread until you are evangelical, and can convince the next iggerunt type. Constitutionalist: Doesn't really matter whose mint mark is on the commodity. If it is silver or gold, it is silver or gold. You cannot PRINT silver or gold.

	26-07-2002 07:53									#30
	Support Apolyton or Terrorists Win

Gold is too heavy and ugly. Give me tetrahedral carbon networks and aluminium oxide. They go fab with anything.