I believe before Obama is out of office the dollar will crash and the market with it.
can you say why you feel the dollar will crash?
Edward, I answered your question to my friend who I feel comfortable with because he doesn't talk down to me. I don't like putting myself in a position for that to happen and as you are quite knowledgable I thought you'd appreciate an answer from someone who is educated on the subject and can give a better answer than I can.
FYI. I am a rancher and a farmer. I have a 7th grade education. ( I started working at age 10 ) That's it. So I'll let him answer for me. Thanks. p.s. I told him that from what you have said thus far I am assuming you believe the dollar is not going to crash but continue on. ( your reply to Editec the other day where you bit his head off )
- Jeri
His Response:
Actually how can he say the dollar will continue its reign when it has lost its credit standing twice. People like me who have wealth to move have moved their wealth out of the currency. Understand that you only gamble with money you can loose.
The Stock Market is a gamble, any time someone wins someone looses. The stock market can not create wealth it can only shift wealth. Anytime anyplace "creates wealth" without content there is a gap or a bubble between what the actual value is and what it is priced. Simply put value an price must be equal or there will be a correction. The housing bubble was created when the inventory exceeded the number of people that could afford the houses. We are facing another bubble. We have people with degrees that are in excess of those people that can afford or desire the over saturated fields. Who needs all those communication, art and history majors. The government feels so certain that the dollar will crash that the pentagon did a study shortly after we got a third world president. Read about "Unified Quest 2011" Read the conclusions.
Having a third world president will certainly allow america to active greater equality. It is just that we won't all be equal rich. This third world mentality president is doing something that is very economically irresponsible which throws more nails in the dollar's coffin. This third world president is doing something that is stereotypical of the heritage he so proudly hails. He is inviting more people into the USA for free food stamps, free healthcare and education when he is pulling a $17T dollar debt and his response is to print $84B a month. I can understand having a big open house when you have a a $17T surplus but come on shake the stereotype!
The First thing to go is confidence that we will go from a debt to a surplus. Many countries are already excluding the dollar. Would you believe that 10 years after the civil war people were still trading confederate dollars? The dollar will still be around long after the collapse. Look how long the ruble, peso, mark all hung out. The only value is the currency that was minted in precious metals.
From Jeri:
My own opinion is that the dollar is already worthless paper. No gold backing it.
His response:
For that matter hypothecation and rehypothication isn't of enough substance to back it either (look up the terms). The government can only tax money in transactions or movement of money that is why w use the term "Velocity of money." When people like me move our money to solid assets the velocity of money is halted. The money to the government stops. They cough and choke so they print more money which dilutes the value and its buying power. This means you have to use more paper to buy fuel and food. Notice that the value of com oddity to commodity has not changed. (one pound of bacon will still trade for one punt of bacon and how much gold it takes to buy that bacon has never changed but the amount of dollars has because of the dilution of the dollar)
Now here is the rub. Remember a few weeks ago the Germans asked the US Treasury for some of their gold? Remember the response from the treasury? They said it would take more than 6 years to give Germany back a small portion of the gold we were holding for them. Well only a few weeks ago Texas asked for their gold to be shipped to their state for them to hold themselves. Pravda (lamesteream media) report little to nothing about the request. Typical of a third world mentality our administration threw a hissy fit. The treasury knew that the physical amount of gold was now locked down in the request relative to the dollars represented (we are on the gold standard in many ways). In an enraged hissy fit more paper was released on gold driving the gold prices down from the dilution which should make the Gov of Texas premature but something happened that should have happened until we hit the $20T debt mark a split happened. For the first time there was a separation in spot (the price of an ounce of precious metal if melted) and the price of paper ownership. People like me realized that they went too for in printing paper ownership of precious metals and we bought and bought. Now for the first time there is a gap between paper ownership and delivery price of the precious metals. This separation is not good when coupled with the number of states that have passed laws to accept precious metals in leu of US Currency. (look it up)
Jeri :
With 17 Trillion in debt how much longer could we possibly go printing worthless paper?
His response:
This is a pretty easy question to answer. The threshold should be that the the limit is when the cost to print exceeds the purchasing power. This has already happened with one metal, copper. The copper in the penny exceeded the value of the purchasing power of the penny so now the penny is zinc with copper plating. The media didn't tell people this and this has been going on for decades. The next coin to fall is the nickel because of the nickel content. Paper is cheap so the actual dollar will likely run as long as the mark. One loaf of bread during the Weimar collapse was a wheel barrow of marks (yet the value of a loaf of bread relative to eggs, bacon or gold didn't budge). So the answer is paper currency will be printed long after the value has been reduced a hundred thousand fold. The problem is for those people that rely on government checks, pensions, bank accounts, savings because they made the gains in the past they will be hit with the losses in the future.
Jeri:
Do you think I'm off on this or do you think we could see the dollar crash before Obama leaves office?
His response:
We are already in the process of the crash. Look what you are paying of food and fuel. Look at the stock market. Has the company revenues justified the increase in the stock prices? I think people look at the currency crash in the wrong sense. There is very little sudden immediate impacts like you see in an actual crash. A crash is best viewed in retrospect. In this case you would say
I remember when the currency collapsed. Unions in the private and government sector secured monstrous benefit packages. Taxes went up to support the government and industry took up residence where labor costs were lower. Things had to be made with lighter materials to reduce shipping costs and they didn't hold up like the old stuff we could repair. Both parents had to work to keep the standard of living improving. The productive reduced the size of their families while the unproductive received increased benefits for bigger families.The first to go was the penny they started substituting zinc and plated the pennies like cheap jewelry next food and fuel prices doubled. Not long after the government tried to cut the costs of printing with changing the dollar from paper to longer circulating coins but people wouldn't use them. Not long after that people started stock piling food. Countries in europe started cutting benefits while we raised taxes and increased benefits. Would you believe we are approaching $17T when we gave amnesty and full social benefits to 12 million illegal strangers many of which were here as enemies ???? Houses went up because it was easy to borrow money and own a nice home but too many homes were built and people ended up loosing their big and or extra vacation homes. People went to college because the government made it easy to borrow money for college. Everybody went and colleges lowered their standards so everyone could get in some kind of school. People took the easy majors and were unemployed. It was hidden because the government only reported new applicants. The government extended unemployment benefits and allowed children to stay on their parents insurance until they were beyond their fertility peak. Then it happened China went with the Australian currency and countries began asking the treasury for their gold back. Prices continued to climb and people started making more and more sacrifices. Years before the vision of an advanced society full of new inventions and populated by technologically advanced people gave way to gang bangers and lottery hopefuls. Many cities became uninhabitable as people moved to conservatively run states and polluted those states too. Too many dollars were chasing too few products. Lifestyles were decreasing inversely proportional to the number of relatives sharing a house. A culling had to happen. It came in the form of a war. All the people that were on the government doles went firstÂ…. A hundred years from now it will seem like it happened in a weekend. I guess relative to recorded history it is a short time but in reality it is as slow and silent as a cancer. The roots go unnoticed you really don't notice the disease and say it is fast only because the symptoms are out in the open. Most of this stuff is still hidden. If you as people today if their life has improved or stayed the same since the election of this third world president they would say "the same" even though food and fuel has doubled therefore reducing he pension by half...
Jeri:
This guy claims that short selling future contracts is what reduces value of gold.
He is wrong it does not reduce the value of gold it decreases the price of gold. It does this because it exaggerates/lies about the amount of gold available. People buy into the deception but again it is not changing the value of gold just the price.
Jeri: How is it possible for Gold to lose its value? I say it isn't possible.
His response:
You can decrease the value of gold by making more gold or less currency. The problem is that we know, very closely, how much gold is possible on earth and we can't make more. We can make oil (Carbon, Hydrogen and Oxygen) we can make diamonds (just a crystal state of carbon) but gold is an element. Printing more money would drive the price of gold up but not the value. Burning money would drive the price down but it would not devalue the gold. The gold standard is just that "the gold standard" it is how all wealth is measured because it is a constant. It doesn't oxidize or disappear.
Jeri:
Isn't that the basis of the value of money and not the other way around?
His response:
Yes like it not we can say we are not on the gold standard domestically. We may say that we are on the energy standard intentionally but the fact is that gold is the standard by which all other items bought and sold in the world are held even tulips in amsterdam.
The guy you are talking to is into either insurance or stocks.
There will likely be an empty grocery shelf period but the crash is really a c---r----a-----s----h. lol
