Is It Time to Bail Out of the US?

[jedard]

Steve, I mostly agree with what you've written but want to point out the US is in a depression now. "Recession" has become a euphemism.

And Uncle Sam keeps printing money like a drunken sailor. Does anyone out there really believe that this Tsunami bailout is going to turn the world around. Once the dollar reaches its saturation point, then what?
Didn't Truman try the same plan as Obama or am I wrong on this too.
Japan tried the same plan in 91 and look where they are today. Are they better off or are they still trying to figure out what happened let alone what next?
Your right on the money, Depression is the right word. It took 2 year for the elected and professional money makers in the USA to accept the R word. Too late for them.

For those who do not have the money to subscribe to the many financial news letters I do or take the time that I do to read so many, my posting here is for them. I do not do this for alternative reasons as put forth by the many learned expats from the USA. Many of us just don't have the time to do this. I have have insulted those with a higher intelligence, I apologize.

And finally if anyone of you want to really come out of this in say 2 or 3 years, Gold is the way to go. The best way for Pensioners is to buy into some Gold funds or even better some well funded gold mines, which there are a lot here in Argentina. Exeter being one, which I bought in at 92 cents, now at 3.15 and on its way to 6. Another better buy and one of the largest proven funds in Gold is Central Fund of Canada. I got in at 11.50 and now at 14.59 and climbing. Why?
Because at no time in the past has Gold and the dollar risen in the same direction at the same time. Something is wrong here folks! And it is not Gold.
Can it be that the American Greenback is counterfeit? They can print it and we cannot? It has an artificial support and a strong overdose of too much will be its end.

 

[RWS]

J., your message is gloomy but likely correct. It would take a brave politician to reverse course now.

 

[Moxon]

For those who do not have the money to subscribe to the many financial news letters I do or take the time that I do to read so many, my posting here is for them. I do not do this for alternative reasons as put forth by the many learned expats from the USA. Many of us just don't have the time to do this. I have have insulted those with a higher intelligence, I apologize.

Jedard, nowhere can I find an instance where your lavish cutting and pasting is not sourced from an article freely accessible on the internet (a number of these sources, of course, are not even credited). Just who do you think you are fooling?

I can't put it any better than BBW:

It's enough to provide the links, along with a few apposite comments on what makes the link relevant and why it is interesting, along with perhaps a quick summary or one's own individual take on it. This lengthy cut-and-paste is just a waste of bandwidth and they eyes of many -- including mine -- just gloss over such "contributions."

 

[criswkh]

I feel sorry for the suckers who are selling all their gold jewelry and such. They are only getting maybe 30% or less of the value. I find it hard to believe that by printing more money the dollar will maintain is "high" value. It has been a while since we were in the States. Most of the commercials were for buying Gold, foreclosure, bankruptcy, divorce and low low financing. Chicago was like a ghost town. We couldn't believe the lack of people walking around, shopping, or eating out. The funny thing about the situation is my friends/family worry about me in Argentina. I haven't lost my job yet and three of my friends have lost their job.

 

[steveinbsas]

There streets of BA are still full of people. It's true that there aren't so many customers in the shops as a year ago. There are a lot more sales and a number of storefronts are vacant, but there are also a few that are only closed for remodeling. I don't get any sense of doom in BA.

Anyone who thinks its going to get really bad in the future will probably be well served to buy rice and beans. If and when the grocery store shelves are empty it won't matter how much gold or jewelry you have.

Those holding dollars might even be well served to consider a property purchase in today's "softer" market. When the consequences of the "Economic Recovery Act" and legislation to follow have their inevitable inflationary effect, it might be even more unwise to be stuck with a fistful of dollars.

 

[elhombresinnombre]

There streets of BA are still full of people. It's true that there aren't so many customers in the shops as a year ago. There are a lot more sales and a number of storefronts are vacant, but there are also a few that are only closed for remodeling. I don't get any sense of doom in BA.

Anyone who thinks its going to get really bad in the future will probably be well served to buy rice and beans. If and when the grocery store shelves are empty it won't matter how much gold or jewelry you have.

Those holding dollars might even be well served to consider a property purchase in today's "softer" market. When the consequences of the "Economic Recovery Act" and legislation to follow have their inevitable inflationary effect, it might be even more unwise to be stuck with a fistful of dollars.

A couple of months ago I would have said that the USD was safe because China would ensure that the USD remained safe. China owns gazillions in foreign debt and their sovereign wealth funds have the dollars to own however much of the western world that they want provided the dollar is still worth something. Well, maybe the Chinese are playing an even longer game than I thought or maybe they miscalculated or something. I've been listening to reports on the BBC World Service which tell of vast shutdowns and layoffs in Chinese industry and link the fall in those commodity prices such as steel and oil to the lack of demand from China. So now, I just don't know.

 

[steveinbsas]

Just keep in mind how dependent the Chinese economy is on the US consumer. Yes, the Chicoms could put us in a world of hurt by not continuing to finance the US debt, but that would hurt them as well.

 

[RWS]

Americans had property rights from the beginning of the country, more than four centuries ago. The Revolution broke out, in 1775, in large part to defend those rights.

But Americans aren't unique in this. The idea of private property can be traced back at least as far as the creation of written communication. So, Lucas, I'm uncertain what you wish to convey by your comment.

 

[bigbadwolf]

China owns gazillions in foreign debt and their sovereign wealth funds have the dollars to own however much of the western world that they want provided the dollar is still worth something.

That is not correct. They're sitting on a pile of worthless IOUs -- and American power dictates what they can do with that paper. Look at the power, always look at the power. Remember when the Arabs were flush with the funds in the mid-'70s and wanted to buy up America -- but were told at the point of a gun that they would have to put it in the US financial system instead.

Military and economic power interact in subtle ways. I might recommend Paul Kennedy's book -- already two decades old -- "The Rise and Fall of the Great Powers."

 

[steveinbsas]

And Uncle Sam keeps printing money like a drunken sailor. Does anyone out there really believe that this Tsunami bailout is going to turn the world around. Once the dollar reaches its saturation point, then what?
Didn't Truman try the same plan as Obama or am I wrong on this too.
Japan tried the same plan in 91 and look where they are today. Are they better off or are they still trying to figure out what happened let alone what next?
Your right on the money, Depression is the right word. It took 2 year for the elected and professional money makers in the USA to accept the R word. Too late for them.

For those who do not have the money to subscribe to the many financial news letters I do or take the time that I do to read so many, my posting here is for them. I do not do this for alternative reasons as put forth by the many learned expats from the USA. Many of us just don't have the time to do this. I have have insulted those with a higher intelligence, I apologize.

And finally if anyone of you want to really come out of this in say 2 or 3 years, Gold is the way to go. The best way for Pensioners is to buy into some Gold funds or even better some well funded gold mines, which there are a lot here in Argentina. Exeter being one, which I bought in at 92 cents, now at 3.15 and on its way to 6. Another better buy and one of the largest proven funds in Gold is Central Fund of Canada. I got in at 11.50 and now at 14.59 and climbing. Why?
Because at no time in the past has Gold and the dollar risen in the same direction at the same time. Something is wrong here folks! And it is not Gold.
Can it be that the American Greenback is counterfeit? They can print it and we cannot? It has an artificial support and a strong overdose of too much will be its end.

I know you love to copy and paste and hate to type, but this post shows what you are capable of writing when you want to, and conveying what you think quite well. Your financial advice is well worth considering.