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Hypothetical situation regarding dollar vs peso
- Thread starter soulskier
- Start date
i have to definitely agree with the posts of harpo and bigbadwolf.
I made a somewhat similar post on the internationalman site but will go into more depth here.
I don't believe there is any doubt whatsoever that the US dollar is headed for a major decline. The damage has already been done. The inflation has already been created, it's just a matter of time until it enters the system. The decline will have a snowball effect as other central banks and creditors lose faith and dump their dollars.
How soon/quickly will this happen we don't know as it's not easy to simply dump the world's reserve currency without a viable alternative. However, at the rate events seem to be accelerating, I believe we could see a drastic drop sometime before end of this year or early next. We'll have to see what the results are after the 3rd quarter.
China/Russia are openly calling for a new reserve currency.
Tim Geitner was recently laughed at by students during a recent trip to China when he proclaimed that the US dollar was safe: http://www.youtube.com/watch?v=3qwijWYxV8U&feature=related
China recently did the currency swap with argentina in order to conduct trade in the Yuan, thus bypassing the US dollar. Indeed they're doing the same with other countries. They're also slowly dumping their existing dollars by securing commodities and resources to fuel their emerging economy for years to come.
A declining dollar is bad for argentina and any other central banks that buy/sell dollars to support their currency. Inflation is a problem since as the dollar inflates so must the peso, assuming they want to keep the peso within a certain range.
In short, get out of US dollar denominated assets - or at least don't be overly leveraged in them.
Precious metals such as gold and silver are perhaps the best hedge again inflation. Gold is up 9 straight years - a fact largely left out of the mainstream press. I can't think of another asset class that can make this claim. Gold is a store of wealth and will always maintain its value. Gold found in a sunken ship after 500 years still has value. What paper money can make this claim?
Just buy the gold and hold it. Don't pay attention to the daily price or it will drive you nuts. True, it tends to fluctuate but gold is a long term buy right now. Keep in mind there is a tremendous amount of market manipulation occurring. The true price of physical gold should be much higher than it currently is. Demand is up and physical supply relatively low. Dealers know this and thus charge upwards of a $100 commission per ounce of bullion. Don't worry about earning interest. The most important thing right now is to maintain wealth i.e. purchasing power.
There's also the issue of gold being the next bubble. As we all know, like any bubble, the sooner you get into the market, the more money a person can make. Right now the smart money is already in gold. China's central bank has been secretly buying gold for the past 6 years as they attempt to hedge against a falling dollar and stop buying our bonds.
A typical bubble works like this:
1) the smart money goes in early
2) followed by institutional money
3) followed by your avg joe - by this time the gains are very little
Northwest Mutual Insurance just bought gold for the first time in its history:
http://www.bloomberg.com/apps/news?sid=ajf0L9wTPq6Y&pid=20601087
John Paulson, top hedge fund manager: http://www.streetinsider.com/Insiders+Blog/Hedge+Fund+King+John+Paulson+Getting+Long+Gold+Through+$1.3B+Stake+In+AngloGold+Ashanti+(AU,+GLD)/4493639.html
Property is good as well, anything that has real tangible value such as commodities.
For those interested check out the 47 min video Money as Debt for a great explanation on money, how it was created and how it works in today's world: http://video.google.com/videoplay?d...419&ei=47otSsixOIO0rgK80fSxCg&q=money+as+debt
I made a somewhat similar post on the internationalman site but will go into more depth here.
I don't believe there is any doubt whatsoever that the US dollar is headed for a major decline. The damage has already been done. The inflation has already been created, it's just a matter of time until it enters the system. The decline will have a snowball effect as other central banks and creditors lose faith and dump their dollars.
How soon/quickly will this happen we don't know as it's not easy to simply dump the world's reserve currency without a viable alternative. However, at the rate events seem to be accelerating, I believe we could see a drastic drop sometime before end of this year or early next. We'll have to see what the results are after the 3rd quarter.
China/Russia are openly calling for a new reserve currency.
Tim Geitner was recently laughed at by students during a recent trip to China when he proclaimed that the US dollar was safe: http://www.youtube.com/watch?v=3qwijWYxV8U&feature=related
China recently did the currency swap with argentina in order to conduct trade in the Yuan, thus bypassing the US dollar. Indeed they're doing the same with other countries. They're also slowly dumping their existing dollars by securing commodities and resources to fuel their emerging economy for years to come.
A declining dollar is bad for argentina and any other central banks that buy/sell dollars to support their currency. Inflation is a problem since as the dollar inflates so must the peso, assuming they want to keep the peso within a certain range.
In short, get out of US dollar denominated assets - or at least don't be overly leveraged in them.
Precious metals such as gold and silver are perhaps the best hedge again inflation. Gold is up 9 straight years - a fact largely left out of the mainstream press. I can't think of another asset class that can make this claim. Gold is a store of wealth and will always maintain its value. Gold found in a sunken ship after 500 years still has value. What paper money can make this claim?
Just buy the gold and hold it. Don't pay attention to the daily price or it will drive you nuts. True, it tends to fluctuate but gold is a long term buy right now. Keep in mind there is a tremendous amount of market manipulation occurring. The true price of physical gold should be much higher than it currently is. Demand is up and physical supply relatively low. Dealers know this and thus charge upwards of a $100 commission per ounce of bullion. Don't worry about earning interest. The most important thing right now is to maintain wealth i.e. purchasing power.
There's also the issue of gold being the next bubble. As we all know, like any bubble, the sooner you get into the market, the more money a person can make. Right now the smart money is already in gold. China's central bank has been secretly buying gold for the past 6 years as they attempt to hedge against a falling dollar and stop buying our bonds.
A typical bubble works like this:
1) the smart money goes in early
2) followed by institutional money
3) followed by your avg joe - by this time the gains are very little
Northwest Mutual Insurance just bought gold for the first time in its history:
http://www.bloomberg.com/apps/news?sid=ajf0L9wTPq6Y&pid=20601087
John Paulson, top hedge fund manager: http://www.streetinsider.com/Insiders+Blog/Hedge+Fund+King+John+Paulson+Getting+Long+Gold+Through+$1.3B+Stake+In+AngloGold+Ashanti+(AU,+GLD)/4493639.html
Property is good as well, anything that has real tangible value such as commodities.
For those interested check out the 47 min video Money as Debt for a great explanation on money, how it was created and how it works in today's world: http://video.google.com/videoplay?d...419&ei=47otSsixOIO0rgK80fSxCg&q=money+as+debt
I guess this is aimed at my comment that in the '50s a family could live on one salary.BlahBlah said:I don't even want a gf or wife who does not work.
Maybe you can consider moving to Marocco or rural Turkey. I am sure you meet many people who think like you
Of course it's absolutely correct that women have the right to work, only a neanderthal could possibly disagree, so it hardly needs saying. Still, I did take the trouble to say it in my post - just in case someone made a predictable comment like yours.
Seems I shouldn't have bothered.