English Pound collapsing

[jp]

Well like I said, those indicators are not very good as they will give you positive growth when borrowing money. Did you read that last part of my last post?

I'm going to leave you to wallow happily.
Never wrestle with a pig...

 

[orwellian]

I'm going to leave you to wallow happily.
Never wrestle with a pig...

What you should do is admit you're were wrong. But I guess you're to proud to do that.

 

[Ries]

Actually, the United States FOUGHT a nuclear war- WW2.

And throughout that war, and throughout the horrible depression that preceded it, "fiat currency" as a concept stayed in effect thruout most of the world.

Certainly, there were countries that had horrible inflation- Germany in the 20's, for example. And today, we see similar inflation in Zimbabwe.
In each case, the world economy did not collapse, then or now, in the sense that all currencies became worthless, and all transactions had to take place in gold.

The US dollar is still the best medium of exchange in the most lawless parts of the world- the places where you would think fiat currency would go first- war torn parts of the middle east or asia, the hills of Pakistan or the anarchy ruled areas of the horn of Africa.
For practical reasons, Benjamins beat Bullion today, whether you are buying AK-47's in the southern Phillipines, or opium in Afghanistan.

I am not arguing against diversification- I have savings or investments in 3 countries on 2 continents.
But what do you fall back on, when somebody with a bigger stick (and there is always somebody with a bigger stick) takes all your gold?

I maintain that if you can sharpen a knife, or make a stew, or fix a broken water pump, or patch a ripped coat, or deliver a baby, nobody can take that away from you.

But if you are speculating in foreign currencies online, or piling gold coins under your mattress, your longterm prospects are totally based on world financial systems working, not failing.

Me, I put away 3 dozen or so jars of pickles every year, dry a couple dozen pounds of apples, and grow all my own garlic. I can make my own pizza, instead of relying on the delivery boy.

We will see who comes out better in the end, eh?

to quote the sage-
"laugh while you can, monkeyboy".

 

[orwellian]

Actually, the United States FOUGHT a nuclear war- WW2.

They dropped two nuclear bombs on another nation that didn't have any yeah. But that was hardly my point. They almost triggered a full scale nuclear war with Russia. They demanded that the Soviets would remove their war heads on Cuba but let their nukes still be aimed at Russia in Turkey. Luckily for us, the Soviets weren't as crazy as the Americans.

Certainly, there were countries that had horrible inflation- Germany in the 20's, for example. And today, we see similar inflation in Zimbabwe.
In each case, the world economy did not collapse, then or now, in the sense that all currencies became worthless, and all transactions had to take place in gold.

Things are a bit different on the global market then and now. The German economy collapsed due to war reparations, that's hardly the case with the indebted countries today.

The US dollar is still the best medium of exchange in the most lawless parts of the world- the places where you would think fiat currency would go first- war torn parts of the middle east or asia, the hills of Pakistan or the anarchy ruled areas of the horn of Africa.
For practical reasons, Benjamins beat Bullion today, whether you are buying AK-47's in the southern Phillipines, or opium in Afghanistan.

Most transactions takes place in fiat currencies yes, it's more practical that way. Although I wouldn't have large sums of it sitting in any bank account. That is my point.

I am not arguing against diversification- I have savings or investments in 3 countries on 2 continents.
But what do you fall back on, when somebody with a bigger stick (and there is always somebody with a bigger stick) takes all your gold?

I maintain that if you can sharpen a knife, or make a stew, or fix a broken water pump, or patch a ripped coat, or deliver a baby, nobody can take that away from you.

But if you are speculating in foreign currencies online, or piling gold coins under your mattress, your longterm prospects are totally based on world financial systems working, not failing.

Me, I put away 3 dozen or so jars of pickles every year, dry a couple dozen pounds of apples, and grow all my own garlic. I can make my own pizza, instead of relying on the delivery boy.

We will see who comes out better in the end, eh?

to quote the sage-
"laugh while you can, monkeyboy".

Well if you think it's going to get that bad, then who's being paranoid? Although it is not impossible that such a scenario would play out and I think owning land and stocking up food is not a bad idea. But I am not planning to do it because I do not think it will get that bad.

 

[jp]

What you should do is admit you're were wrong. But I guess you're to proud to do that.

Not about things like this. There are lots of promising indicators of economic recovery.

So far you've offered nothing to counter this, beyond suggesting that all aspects of economic recovery are attributable to borrowing. Good for you. Suck the gold out your teeth, flap your arms and head for the hills.

 

[Joew]

All this talk of diversification and pending apocalypse has convinced me the best idea is to liquidate all of my electrical goods into pesos using mercado libre, and diversify those assets into a combination of Bear Grylls/Ray Mears instructional books, and Mad Max style dune buggies.

 

[Ries]

Personally, I dont think its going to get bad at all.
I think things will always change, that countries will rise and fall in power and economic might, and that one needs to be light on ones feet.

I dont believe the english pound (shouldnt that be the GB pound?) is going to crash.

I happen to enjoy making, doing, and learning, so I do it.
I think homegrown food tastes better, is purer, and is usually cheaper as well.
I prefer fixing things to buying new, crappy, made in china throw away's, and I make my living making things for other people.
I prefer clothes made by a designer I can meet, of which there are many in Buenos Aires, to mass produced sweatshop imports from china or madagascar or haiti.

I enjoy making my own furniture, designing my own rugs, installing my own light fixtures, and all the other things I have done to my departmento in BsAs that make it personal and homey.

None of it is based on paranoia or a sense of impending doom.

 

[orwellian]

Not about things like this. There are lots of promising indicators of economic recovery.

So far you've offered nothing to counter this, beyond suggesting that all aspects of economic recovery are attributable to borrowing.

So you do wanna wrestle. Let's recap then, this is what you said earlier:

IMF predicts 1.7% growth in 2010, and 2.7% growth in 2011, when it will outstrip both the US & the euro area.

The fancy word growth that everyone likes to use. But what does it mean? According to Wikipedia:
"Economic growth is a term used to indicate the increase of per capita gross domestic product (GDP) or other measure of aggregate income. It is often measured as the rate of change in GDP. Economic growth refers only to the quantity of goods and services produced."
http://en.wikipedia.org/wiki/Economic_growth

Interesting, so how do you calculate a nation's GDP? Again according to Wikipedia:
GDP = private consumption + gross investment + government spending + (exports − imports)
http://en.wikipedia.org/wiki/Gross_domestic_product

So what an awesome way to measure growth of an economy right? Just borrow money and spend it on bailing out banks and your GDP goes up. So this is what you mean by "Economic indicators are looking good..." then jp? If not, what other indicators are there out there? Do you care to indulge us who don't know what you're talking about?

The problem isn't negative economic growth, a.k.a recession. It's the huge debt that they incur trying to stay out of a recession. If they had let the market fix itself without government interference, we wouldn't have this problem that we're having right now.

 

[steveinbsas]

Statistically, (looking at the past century) the world is a bit overdue for the extermination of 50-60 million people within a five year period.

 

[redrum]

"?[/QUOTE]

Before I forget - true story! - a friend of mine rents out his apartments. One of the tenants asked if he could pay the rent in gold. As in actual pieces of gold. We couldn't stop laughing about it for days.

I believe we have all had this discussion before but gold is only as valuable as people agree it to be. It doesn't have intrinsic worth. It's shiny, it's pretty but it's still just a medium of monetary exchange.

I certainly would not argue that having a balanced portfolio is a good thing. And hedging your bets is always a safe play - real-estate, currencies, stocks, etc. Personally, I would never put 30% in gold but that's just me.

And I also don't disagree that there is a distinct possibility of the dollar no longer being the global currency at some point in the future. However, it's not going to happen overnight. How exactly does anyone think that would work? Is every major currency going to go away overnight to be replaced by some amorphous "global currency"?

I don't find that a tenant asking to pay their rent in gold funny at all. Gold after all is real money. The fact that you giggle and laugh indicates that you really don't have an understanding of what gold is and why it is important to own gold in today's world. Go back and re read my previous post.

Gold does have intrinsic value. It took time, energy and resources to locate, dig up, refine and distribute the finished product that we know as gold. Gold is a hard currency that competes with fiat currencies. Gold is the best currency because it has zero counter party risk.

If gold is found at the bottom of the ocean on a sunken ship after 500 years, that gold still have value. Tell me what fiat currency would hold its value after such a period of time.

Look at it from an historical point of view. It was only about 80 years ago that gold coins were used as legal tender in the united states. And it's only been about 45 years since the US stopped making silver coins. If gold and/or silver has been used as money for 5,000 years, why is it so strange that we are going back to thinking about gold/silver as being money?

Remember that governments don't like gold because they can't print gold and engage in reckless fiscal policy if they are tied to a gold standard. The private, for profit, federal reserve doesn’t like gold because it competes with the dollar - a currency over which they control via monopoly. So naturally, we and many generations grow up and become indoctrinated in paper money and paper assets, never completing understanding what gold is.

25% to 30% of your portfolio in precious metals is a good hedge. I would definitely stay away from long term treasury bonds as sovereign debt will become more of an issue as evidenced by Greece right now.