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Economic Destruction.

  • 06-10-2010 11:38pm
    #1
    Registered Users, Registered Users 2 Posts: 4,881 ✭✭✭


    I'm in my first year of Economics and Finance so I'm a bit of an amateur, but I was just thinking.

    Does anyone else think that at some stage in the foreseeable future people will realise that money is just...paper? Now I'm not expecting this to happen all at once, but I'd expect the "big" people such as the masterminds behind America and China to cop this and start spending all the money on cold hard goods, the public would pick up on this about 40 or 50 years later and civilisation as we know it would descend into chaos.


«1

Comments

  • Registered Users, Registered Users 2 Posts: 12,089 ✭✭✭✭P. Breathnach


    Your basic belief is mistaken. Most money is not paper. It is simply data recorded on bank computer systems.

    We could wreck the world economy even more thoroughly than has already happened if we could place enough people with powerful magnets in the right places.


  • Closed Accounts Posts: 1,379 ✭✭✭Sticky_Fingers


    I'm in my first year of Economics and Finance so I'm a bit of an amateur, but I was just thinking.

    Does anyone else think that at some stage in the foreseeable future people will realise that money is just...paper? Now I'm not expecting this to happen all at once, but I'd expect the "big" people such as the masterminds behind America and China to cop this and start spending all the money on cold hard goods, the public would pick up on this about 40 or 50 years later and civilisation as we know it would descend into chaos.
    It is actually surprising how many people are unaware that the cash in their pockets has little to back it except other peoples belief that it is worth something. I'm sure that most think that there is physical wealth behind it like gold reserves or other assets instead of public confidence in the system.

    As far as I'm aware China have been buying up any physical assets they can lay their hands on while it seems that the West is so far in debt to each other and countries like China that we are busy just keeping our heads above the water and can't afford to "buy" these assets.


  • Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    It is actually surprising how many people are unaware that the cash in their pockets has little to back it except other peoples belief that it is worth something.
    And the force of the entire state, the ability of said state to raise taxes, legal system, and international banks. Other than that though, not much.
    the West is so far in debt to each other and countries like China that we are busy just keeping our heads above the water and can't afford to "buy" these assets.
    Seven percent of US national debt, is exactly how much China owns.

    Ridiculous thread tbh.


  • Closed Accounts Posts: 1,379 ✭✭✭Sticky_Fingers


    Amhran Nua wrote: »
    And the force of the entire state, the ability of said state to raise taxes, legal system, and international banks. Other than that though, not much.
    Your point being? As I stated the money in your pocket is intrinsically worthless, its only value is what you and society in general put on it. All those vaulted institutions are part of society and if they ever lost faith in the countries backing the currency then the value of said cash would fall.


  • Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    Your point being? As I stated the money in your pocket is intrinsically worthless, its only value is what you and society in general put on it. All those vaulted institutions are part of society and if they ever lost faith in the countries backing the currency then the value of said cash would fall.
    My point being that if the "belief" in currency fails, everything else has failed first, so you've got bigger problems. If you're talking about currency fluctuations, that happens, then they bounce back. Its a far cry from economic destruction.


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  • Closed Accounts Posts: 1,379 ✭✭✭Sticky_Fingers


    Amhran Nua wrote: »
    My point being that if the "belief" in currency fails, everything else has failed first, so you've got bigger problems. If you're talking about currency fluctuations, that happens, then they bounce back. Its a far cry from economic destruction.
    Not everything, just the countries (perceived or otherwise) ability to keep its house in order. Currency fluctuations do happen but the notion that currencies cannot fail and will always bounce back is plainly wrong. There will not be a wholesale collapse in the financial systems of the world but individual currencies can sink and I don't think any (even the mightiest) are immune to possible collapse. It will take a severe knock in confidence to topple todays top dogs but if the last few years have taught us anything its that such knocks can and do happen.


  • Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    It will take a severe knock in confidence to topple todays top dogs but if the last few years have taught us anything its that such knocks can and do happen.
    Really? I haven't noticed any currencies failing lately except those of Iraq, Afghanistan, and Zimbabwe. If a country's ability to keep its house in order fails, everything else has already failed.


  • Closed Accounts Posts: 1,379 ✭✭✭Sticky_Fingers


    Amhran Nua wrote: »
    Really? I haven't noticed any currencies failing lately except those of Iraq, Afghanistan, and Zimbabwe. If a country's ability to keep its house in order fails, everything else has already failed.
    You forgot Argentina;). I'll concede the point to you


  • Closed Accounts Posts: 53 ✭✭Backard_Pell


    Amhran Nua wrote: »
    And the force of the entire state, the ability of said state to raise taxes, legal system, and international banks. Other than that though, not much.


    Seven percent of US national debt, is exactly how much China owns.

    Ridiculous thread tbh.

    so its a ridiculous thread? What if more people were to start doing what Mark Boyle has been doing for the last 18 months now (although its a little over 12 months in this clip). He has been living withoug money, completely. So who says its impossible / ridiculous.
    Im not saying its ideal, but hes proving a point



  • Registered Users, Registered Users 2 Posts: 535 ✭✭✭Saadyst


    so its a ridiculous thread? What if more people were to start doing what Mark Boyle has been doing for the last 18 months now (although its a little over 12 months in this clip). He has been living withoug money, completely. So who says its impossible / ridiculous.
    Im not saying its ideal, but hes proving a point


    I think it's probably more of a philosophical thread rather than economics. I mean really you have to look at the first currencies being introduced, the start of the bartering system and so on and so forth.

    The problem in itself, is not money; remember at the basic level, it's just a common standard to value goods and services. I think really what this thread (and some replies) are trying to aim at is problems they see with the capitalist / free market system?


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  • Closed Accounts Posts: 2,819 ✭✭✭dan_d


    Actually, it goes beyond that.Most money is not "just paper"....a lot of it exists in the computer world, it's just numbers on screens.It doesn't even make it to paper...


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    I'm in my first year of Economics and Finance so I'm a bit of an amateur, but I was just thinking.

    Does anyone else think that at some stage in the foreseeable future people will realise that money is just...paper? Now I'm not expecting this to happen all at once, but I'd expect the "big" people such as the masterminds behind America and China to cop this and start spending all the money on cold hard goods, the public would pick up on this about 40 or 50 years later and civilisation as we know it would descend into chaos.

    It is already happening, look at precious metals meteoric rise, they are monetizing and currencies are being devalued. ALL FIAT currencies fail, we are at the moment watching the decline of the dollar. Watching a world reserve currency fail is going to be a spectacular event but it's coming, optimists say 5 - 10 years, pessimists say any time soon. The euro will follow.

    Of course it couldn't happen this time, we're too advanced is the usual argument. Prepare to hear it a lot just before the chaos and anarchy are unleashed globally.

    Congratulations on hitting the truth of money right on the head in your first year. You are one of a very select percentage of the population who understand the difference between value and currency. I'm afraid what they are teaching you now will be obssolete by the time you are finished though.

    The last time this happened it took a war to bring us out of it. Compared to this the great deppresion was a little fart no-one noticed, this one is a big coil of steaming you know what and it's already on the way to the fan.

    Shame our leaders are not prepared to stop it.


  • Registered Users, Registered Users 2 Posts: 535 ✭✭✭Saadyst


    szjon wrote: »
    It is already happening, look at precious metals meteoric rise, they are monetizing and currencies are being devalued. ALL FIAT currencies fail, we are at the moment watching the decline of the dollar. Watching a world reserve currency fail is going to be a spectacular event but it's coming, optimists say 5 - 10 years, pessimists say any time soon. The euro will follow.

    Of course it couldn't happen this time, we're too advanced is the usual argument. Prepare to hear it a lot just before the chaos and anarchy are unleashed globally.

    Congratulations on hitting the truth of money right on the head in your first year. You are one of a very select percentage of the population who understand the difference between value and currency. I'm afraid what they are teaching you now will be obssolete by the time you are finished though.

    The last time this happened it took a war to bring us out of it. Compared to this the great deppresion was a little fart no-one noticed, this one is a big coil of steaming you know what and it's already on the way to the fan.

    Shame our leaders are not prepared to stop it.

    Conspiracy Forum


  • Closed Accounts Posts: 805 ✭✭✭BeeDI


    szjon wrote: »
    It is already happening, look at precious metals meteoric rise, they are monetizing and currencies are being devalued. ALL FIAT currencies fail, we are at the moment watching the decline of the dollar. Watching a world reserve currency fail is going to be a spectacular event but it's coming, optimists say 5 - 10 years, pessimists say any time soon. The euro will follow.

    Of course it couldn't happen this time, we're too advanced is the usual argument. Prepare to hear it a lot just before the chaos and anarchy are unleashed globally.

    Congratulations on hitting the truth of money right on the head in your first year. You are one of a very select percentage of the population who understand the difference between value and currency. I'm afraid what they are teaching you now will be obssolete by the time you are finished though.

    The last time this happened it took a war to bring us out of it. Compared to this the great deppresion was a little fart no-one noticed, this one is a big coil of steaming you know what and it's already on the way to the fan.

    Shame our leaders are not prepared to stop it.

    Pity precious metals are difficult to hold and to keep and to trade for the ordinary Joe Citizen.
    I like good quality farm land as an investment. There's no more of it being made. You can see it, feel it, touch it, farm it, rent it out to another farmer, and it's difficult for some scammer to steal it from you. The world is always going to have to feed itself. There will always be a market for it. You can sell on if circumstances require. Etc, etc.


  • Closed Accounts Posts: 171 ✭✭SamSamSammy


    szjon wrote: »
    It is already happening, look at precious metals meteoric rise, they are monetizing and currencies are being devalued. ALL FIAT currencies fail, we are at the moment watching the decline of the dollar. Watching a world reserve currency fail is going to be a spectacular event but it's coming, optimists say 5 - 10 years, pessimists say any time soon. The euro will follow.

    Of course it couldn't happen this time, we're too advanced is the usual argument. Prepare to hear it a lot just before the chaos and anarchy are unleashed globally.

    Congratulations on hitting the truth of money right on the head in your first year. You are one of a very select percentage of the population who understand the difference between value and currency. I'm afraid what they are teaching you now will be obssolete by the time you are finished though.

    The last time this happened it took a war to bring us out of it. Compared to this the great deppresion was a little fart no-one noticed, this one is a big coil of steaming you know what and it's already on the way to the fan.

    Shame our leaders are not prepared to stop it.

    God, life must be horrible and awful for you knowing the world is going turn out like that. Would you not just kill yourself now instead of waiting until it happens?

    Dont worry, be happy.


  • Registered Users, Registered Users 2 Posts: 799 ✭✭✭Scarab80


    szjon wrote: »
    It is already happening, look at precious metals meteoric rise, they are monetizing and currencies are being devalued. ALL FIAT currencies fail, we are at the moment watching the decline of the dollar. Watching a world reserve currency fail is going to be a spectacular event but it's coming, optimists say 5 - 10 years, pessimists say any time soon. The euro will follow.

    The inflation adjusted price of gold is still 40% off the highs reached in 1980 which was about $2,300 in current dollar terms. Can you please point out the optimists and pessimists who are predicting the failure of the dollar, a currency backed by 14 trillion dollars of domestic production annually.
    szjon wrote: »
    The last time this happened it took a war to bring us out of it. Compared to this the great deppresion was a little fart no-one noticed, this one is a big coil of steaming you know what and it's already on the way to the fan.

    Shame our leaders are not prepared to stop it.

    World currencies were gold backed during the great depression, the abandonment of the gold standard combined with the effects of WW2 is what brought an end to the depression. Analysis shows that the sooner countries abandoned the gold standard the sooner they exited recession.


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    Saadyst wrote: »

    Please elaborate? I see no conspiracy here? I am stating facts and opinions. Nothing more? Where is the conspiracy?


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    BeeDI wrote: »
    Pity precious metals are difficult to hold and to keep and to trade for the ordinary Joe Citizen.
    I like good quality farm land as an investment. There's no more of it being made. You can see it, feel it, touch it, farm it, rent it out to another farmer, and it's difficult for some scammer to steal it from you. The world is always going to have to feed itself. There will always be a market for it. You can sell on if circumstances require. Etc, etc.

    You're right but food is harer to protect than the value stored in a small bar of gold. Gold stores wealth, nothing else, it's useful for those periods of change from one system to another.

    I have land and PMs. Paper is becoming worthless.


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    God, life must be horrible and awful for you knowing the world is going turn out like that. Would you not just kill yourself now instead of waiting until it happens?

    Dont worry, be happy.


    Why? I'm prepared and I have three kids to look out for, like I said. Prepared and happy. I just need to get in some popcorn.


  • Registered Users, Registered Users 2 Posts: 25,243 ✭✭✭✭Jesus Wept


    so its a ridiculous thread? What if more people were to start doing what Mark Boyle has been doing for the last 18 months now (although its a little over 12 months in this clip). He has been living withoug money, completely. So who says its impossible / ridiculous.
    Im not saying its ideal, but hes proving a point


    lol.
    What a tit.


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  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    Scarab80 wrote: »
    The inflation adjusted price of gold is still 40% off the highs reached in 1980 which was about $2,300 in current dollar terms. Can you please point out the optimists and pessimists who are predicting the failure of the dollar, a currency backed by 14 trillion dollars of domestic production annually.

    That's right, I expect physical gold to decouple from ETF paper anytime soon and see a true value put on it. ETFs are leveraged around 100:1 and when the poo hits the fan the rush for delivery will make physical a lot heavier to hold. Today's correction was a shakedown of the nervous by the big boys, it worked, maybe $1380 tomorrow (I hope, I've put a position on my forex account, profits to go on physical), $1500 by year end? We should start to see paper unravel by then I imagine. I could be wrong though but I don't care, I'm not in PMs for profit, just don't know what's coming down the line so turning to history.

    Downfall of the dollar sayeth,

    Nobel Prize-winning economist Joseph Stiglitz (Pessimist)
    Gerald Celente, Trends Institute. (Pessimist)
    Head of the world's largest bond fund, Pimco Chief Executive Mohamed El-Erian. (Pessimist)
    Chief Executive Warren Buffet Berkshire Hathaway. (Optomist)
    Peter Schiff, economist. President of Euro Pacific Capital (Pessimist)
    Nouriel Roubini NYU Economics Professor (Pessimist)

    You can do due diligence on that lot, there are many more. The IMF is 'concerned'. etc, etc. Lines are there to be read between.


    World currencies were gold backed during the great depression, the abandonment of the gold standard combined with the effects of WW2 is what brought an end to the depression. Analysis shows that the sooner countries abandoned the gold standard the sooner they exited recession.

    I'm not advocating a gold based currency system, that's what I'm gambling we'll get, (or silver but its industrial usage wouldn't really make this a viable option) Personally I would like to see governments issue currency rather than borrow it from the private banks as we do. Henry Ford had a lot to say about this, as did Thomas Edisson as did many American Presidents throughout history. I'm sure you know what I'm on about judging from the knowledge in your post.

    "It is well enough that people of the nation do not understand
    our banking and monetary system, for if they did,
    I believe there would be a revolution before tomorrow morning."

    Henry Ford


    The Fed is destroying the dollar, they are actively propping up the stock market, look at the outflow of money and the constant rise in stocks. Look how the markets react to bad news. They are trying to lure in people and it isn't working, they are now in a situation where QE2 is priced into the market so they are damned if they do and damned if they don't, this is not going to be pretty and I am not afraid to admit that it is scaring the excrement out of me.

    Every fiat money system has collapsed before, just as every gold standard too. It has NEVER been pretty.

    What really annoys me is that I left school at 14 and have no formal qualifications at all. If I saw this coming then why didn't those who were trained? If I can see the mistakes being made, why can't they? It makes me wonder if this is global Friedman shock therapy. It's getting positively Orwellian. What is the bigger picture I can't see?

    I was an anti-globalisation demonstrator back in the day. People thought we were mad. Hmm...


  • Registered Users, Registered Users 2 Posts: 216 ✭✭Jane5




  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    Jane5 wrote: »


    Don't agree with the timeframe but the conclusions are hard to deny. But then, this is the same S&P that was rating securities AAA that turned out to be full of n.i.n.j.a mortgages.

    Zerohedge is a good site to get the truth though, cuts through the propaganda.


  • Registered Users, Registered Users 2 Posts: 799 ✭✭✭Scarab80


    szjon wrote: »
    Personally I would like to see governments issue currency rather than borrow it from the private banks as we do. Henry Ford had a lot to say about this, as did Thomas Edisson as did many American Presidents throughout history. I'm sure you know what I'm on about judging from the knowledge in your post.

    "It is well enough that people of the nation do not understand
    our banking and monetary system, for if they did,
    I believe there would be a revolution before tomorrow morning."

    Henry Ford

    .....

    Ok you seem to be getting your information from a youtube video called Zeitgeist, correct me if I am wrong. That video, like many youtube videos, is BS.

    http://conspiracyscience.com/articles/zeitgeist/part-three/
    szjon wrote: »
    Zerohedge is a good site to get the truth though, cuts through the propaganda.

    Run by an SEC banned inside trader, hardly the most reliable source of information.

    I suggest a move to CT forum.


  • Closed Accounts Posts: 959 ✭✭✭changes


    It is actually surprising how many people are unaware that the cash in their pockets has little to back it except other peoples belief that it is worth something.

    So in effect we are all paying for agreements made by sean fitzpatrick.


  • Registered Users, Registered Users 2 Posts: 7,234 ✭✭✭amacca


    szjon wrote: »
    What really annoys me is that I left school at 14 and have no formal qualifications at all. If I saw this coming then why didn't those who were trained?

    I believe they did...at least some of those that are forced to look at the bigger picture because of the nature of what they do...and some of those that are thinkers rather than doers

    trouble is some of them probably take the long view and steer clear of getting involved in a system headed for collapse (and therefore having any influence over it ... preferring instead to profit from it) and the rest are up to their necks in it...vested interest in seeing it continue I suppose

    and then you can never discount that even the most intelligent of people can get swept up in the enthusiasm/caught in the hysteria/believe the hype especially if they gain from it initially etc etc

    szjon wrote: »
    If I can see the mistakes being made, why can't they? It makes me wonder if this is global Friedman shock therapy. It's getting positively Orwellian. What is the bigger picture I can't see?

    just an opinion but the eventuality (the mistakes will lead to) may not be too difficult to predict but the timeframe ..... thats a different story


    many of the people you would think should have seen what happened coming depend on that very system to continue, so they will do what it takes to keep it ticking over because they are part of it....they also act in their own self interest...if the disaster/unravelling could be as far away as 20/30 years (approaching approx 40% of an average lifespan in a lot of countries) or some undetermined time in the future....then that's a long time to spend sitting on the sidelines trying to get the game called off and the rules changed to make it a more sensible less destructive sport...its impossible to change it from within imo...there's just too much momentum against you


    +factor in self interest, some holding a belief that they will get out before the **** hits the fan (self delusion in some cases) and the difficulty of trying to swim against the current (sometimes its easier to go with the flow, get what you want even though you don't agree with the direction its going and then get off before the waterfall and this at least imo might help explain why this **** is going to happen again and again and again as it has happened repeatedly before

    as a species we will need to become a hell of a lot more enlightened sidestep this in some form or another in the future


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    s
    Scarab80 wrote: »
    Ok you seem to be getting your information from a youtube video called Zeitgeist, correct me if I am wrong. That video, like many youtube videos, is BS.

    http://conspiracyscience.com/articles/zeitgeist/part-three/



    Run by an SEC banned inside trader, hardly the most reliable source of information.

    I suggest a move to CT forum.

    Add bloomberg, bbc, rte, kitco, forex.com, capitalists@work, ftalphaville, the economist, time mgazine, newsweek. These are my daily, weekly and monthly sources. Others are naomi klein, greg pallast, wikipedia........ Must I go on. How do you know where I get my info from and why are so many people on this site referring anything that they don't believe to conspiracy theory?

    Last night I printed the full wiki entries on Goldman sachs and Lehman Brothers as my bedtime read.

    Did you read those names I listed above? Some of the most important financial people on the planet whose opinions are just as valid as any others.

    I also read a lot of books, you should try a few of these.

    http://www.amazon.com/Rise-Fall-Great-Powers/dp/0679720197
    http://www.amazon.com/Shock-Doctrine-Rise-Disaster-Capitalism/dp/0805079831
    http://www.amazon.com/Best-Democracy-Money-Can-Globalization/dp/0452283914

    I read history for fun, I haven't read anything that wasn't non-fiction since I was 15 years old, that was along time ago.

    Instead of labelling my views as crackpot just because you don't agree with them, perhaps you could point out why I am wrong? I'm always open to new ideas.

    I have seen zeitgeist, I think the people behind it just point out a few facts and then go on to plug their own utopian ideal. I read zerohedge, mainly because a disgruntled financier might be telling the truth? It doesn't mean I don't read anything else.

    Now if I was one of the millions watching x-factor or eastenders I would understand where you are coming from.

    To be honest, why don't you just go and micturate upon someone elses parade if you have nothing constructive to add to the topic except personal attacks.



    Look here.
    http://www.bbc.co.uk/news/business/

    Read all those headlines and then look at the dow and nasdaq. Please explain the problem here?

    Look here.
    http://www.rte.ie/business/2010/1008/imf.html
    Conspiracy?

    Look here.
    http://www.bloomberg.com/markets/commodities/futures/
    Look at the commodity rise. Please explain why?

    Otherwise as I said above, nothing to add, say nothing.


  • Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    CT FTW.


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    Amhran Nua wrote: »
    CT FTW.

    I'm assuming that lazy newspeak is aimed at me or can't you spell? I refer you to the post above, mainly the last sentence.


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  • Registered Users, Registered Users 2 Posts: 799 ✭✭✭Scarab80


    szjon wrote: »
    Did you read those names I listed above? Some of the most important financial people on the planet whose opinions are just as valid as any others.

    Yes they are the most well respected commentators in the world, the thing is none of them are predicting the collapse of fiat currency, they echo to certain degrees widely held views that the strength of the dollar and it's position as a global reserve currency is under threat.
    szjon wrote: »
    Instead of labelling my views as crackpot just because you don't agree with them, perhaps you could point out why I am wrong? I'm always open to new ideas.

    I have seen zeitgeist, I think the people behind it just point out a few facts and then go on to plug their own utopian ideal. I read zerohedge, mainly because a disgruntled financier might be telling the truth? It doesn't mean I don't read anything else.

    Now if I was one of the millions watching x-factor or eastenders I would understand where you are coming from.

    To be honest, why don't you just go and micturate upon someone elses parade if you have nothing constructive to add to the topic except personal attacks.

    I don't mean to be personal but when I see the whole "the Fed is privately owned" nonsense it smacks of CT. It is a blatant misrepresentation of the truth, while the federal reserve banks are private institutions they are controlled by the board of governors which is publicly appointed with all surplus fed funds remitted to the US Treasury.
    szjon wrote: »
    Look here.
    http://www.bbc.co.uk/news/business/

    Read all those headlines and then look at the dow and nasdaq. Please explain the problem here?

    Look here.
    http://www.bloomberg.com/markets/commodities/futures/
    Look at the commodity rise. Please explain why?

    US jobs figures were down due to the ending of census work, private sector employment was up for the 9th month in a row but not by as much as had been expected. This sluggish growth combined with global factors has increased the chances of QE2, hence the increase in equities and commodities.
    szjon wrote: »

    I'm sure you know what's going on here, China, Australia, Brazil, BOJ, BOE and the Fed are all trying to weaken their currencies to stimulate domestic employment. That does not equal the end of fiat currencies, though it probably means that holding gold is a good short term hedge until the situation is stabalised.


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    Scarab80 wrote: »
    Yes they are the most well respected commentators in the world, the thing is none of them are predicting the collapse of fiat currency, they echo to certain degrees widely held views that the strength of the dollar and it's position as a global reserve currency is under threat.

    They can't predict a collapse, they are essentially diplomats, their language is cautious but they are being as extreme as decency allows. Every one of them questions the feds handling of the situation. It hasn't changed the actions of the fed, therefore if this current fiscal policy is adhered to then ultimately it will lead to what they say, the end of the dollar as reserve currency. To me that is a collapse in faith of a fiat currency, the ramifications of this would be catastrophic. I concede you the point that they are not specifically stating utter collapse but I believe I said there were lines to be read between.

    I don't mean to be personal but when I see the whole "the Fed is privately owned" nonsense it smacks of CT. It is a blatant misrepresentation of the truth, while the federal reserve banks are private institutions they are controlled by the board of governors which is publicly appointed with all surplus fed funds remitted to the US Treasury.

    I detest being labelled a conspiracy theorist, NWO and the jewish zionists etc are nothing but populist tripe, however, I do read about the Bilderberg group, because they are real and don't publish minutes. I find this somewhat suspicious but I don't believe they run the world. This is not theory, they exist and I'm of an inquisitive nature, this does not mean I can be tarred with the large brush that is wielded here. Nobody can argue humanity hasn't got a dark side and history has shown us many examples of abuse of power by our elected officials, (I won't insult your intelligence by providing links), a degree of mistrust is a good thing IMO.

    My concern over the fed being private is more to do with the revolving door policy of government and financial heavyweights moving from board to board with apparently no conflict of interest, there is a lot of circumstancial evidence that these positions are abused to profit institutions that are not related to governments, Goldman Sachs has a fair bit of pull around the US government and has for some time. They are far from honest as the abacus scandal, Greek euro entry, etc has shown. I think Landesbank are suing them now over something similar.

    I have done a bit of research into the fed and apart from the usual suspects listed on conspiracy sites I have been unable to determine who owns this bank. I'm also aware that they are resistant to audit and are currently in court with Bloomberg to get something done about this. This doesn't mean I think they are corrupt or have some kind of game plan to rule the world, it merely makes me suspicious. There is a line between inquisitiveness and outright accusation, I don't believe I have crossed it. I will keep reading and researching this because that's what I do. Who recieves the 6% dividend of the surplus before handing it to treasury? Just how much gold do they really have? Why can't we see? If these questions were answered I would lose interest, the fact that they are not and I would like them to be doesn't make me a crackpot. I apologise for coming on so strong about this but I am a new member and have been referred to the conspiracy theory section 5 times already. I have neither theorised nor stated any conspiracy. I have merely mentioned 'the usual suspects' in the course of my points. I sit squarely on the fence with most marginal things like bilderburg. I have seen nothing to confirm or deny any theories. Things like the 9/11 inside job and zionist dominance are frankly an insult to logic and I do not partake in their discussion.

    Just so you know, I skim read that article (mostly the quotes) about 5 minutes after watching zeitgeist. I am not a one track mind, while his taking apart of a lot of the quotes was masterful he failed (IMO) to take away any of their meaning or substance, a word here, a month there. These things were said by these people. The religious stuff I care not a jot about, as a fundamentalist atheist my only concern is the effect it can have on humanity and individuals. I think he might want to check some of his information with Richard Dawkins though, I read the god delusion some time ago and if I remember correctly he made quite a few of the same comparisons made in zeitgeist, this is not a man I would say is a conspiracy theorist, nor a lightweight academic. Some of the political and anti-semitism sources were enlightening and he indeed casts a lack of credibility over the film. The general thrust of the film is intact though in my view, the unsustainability of our current system and a need for monetary and societal reform. The fact it is so inflamatory and dumbed down is a reflection of the society we live in, it's target audience are the young and they are far from worldly wise these days.

    US jobs figures were down due to the ending of census work, private sector employment was up for the 9th month in a row but not by as much as had been expected. This sluggish growth combined with global factors has increased the chances of QE2, hence the increase in equities and commodities.

    To turn it on its head, the figures were better before due to the census work, essentially seasonal jobs, not a good reflection on overall employment in the bigger picture. These figures are constantly revised downwards too so there is not much good news there. You are intelligent enough to know there are many ways to massage unemployment figures and they are widely employed, just look at the september figures here in Ireland, largely down because of the unemployed studying but sold as a positive sign of improvement, grossly misleading in my opinion.

    These figures will increase the chance of QE2, this is a failed policy going double or quits and will ultimately lead to the dollar declining further, gold breaking free of manipulative shackles and will result in people losing the last threads of faith in this thoroughly debased currency, the rise in commodity prices is shocking (although not on the scale of 08 yet) and with pay likely to be frozen or even decreased, coupled with rampant unemployment then the stage is set for a perfect storm. In my opinion there is no way out. The dollar will lose all credibility.


    I'm sure you know what's going on here, China, Australia, Brazil, BOJ, BOE and the Fed are all trying to weaken their currencies to stimulate domestic employment. That does not equal the end of fiat currencies, though it probably means that holding gold is a good short term hedge until the situation is stabalised.

    Agreed, but with all the bad news floating around and plenty more shocks to come this race to the bottom is the death throes of our very monetary belief system. We hear talk of a jobless recovery, a bump along the bottom, a v shaped, u shaped, w shaped recovery etc but there are NO signs of recovery I can see unless clutching at straws is going to become profitable.

    This is before even entering into the realms of pension provisions, PFI initiatives, off balance SIVs, the securitization insurance products and the elephant in the room, peak (cheap) oil or its alternatives. Our system is just not sustainable and we are watching it fail. This is my belief. In a way I welcome it but I fear the stage of re-adjustment to whatever is next. My biggest concern is that the people we expect to get us out of this mess are the very ones who didn't see it coming. As El erian said, if they didn't see it coming, I don't think we should be listening, those that did are the ones we should be consulting.

    Personally I started buying gold in 2007, we were about to open a family business with our savings and we junked it and bought some land and some gold. I've been buying it since with every spare cent, I also buy silver, platinum and palladium just in case we see recovery, (more demand as gold falls) this is purely for wealth protection. We also buy more non-perishable shopping than we need, just in case. It's going to take us a year to eat it all if nothing happens but with futures prices rising? It makes sense to me.
    People laugh at me on forums when I say this, I was a boy scout once though and I never forgot the motto.

    The one thing learning history has taught me is that I can learn from history, the future does not look rosy from where I'm sitting.

    I'm not so stupid to believe I am right about all this though, it's my best uneducated guess, I'm open to new ideas. Do you see recovery? To take it back to the original posters question, will we see social unrest and chaos?
    How will the dollar recover?


  • Moderators, Entertainment Moderators, Politics Moderators Posts: 14,556 Mod ✭✭✭✭johnnyskeleton


    It is actually surprising how many people are unaware that the cash in their pockets has little to back it except other peoples belief that it is worth something. I'm sure that most think that there is physical wealth behind it like gold reserves or other assets instead of public confidence in the system.

    As far as I'm aware China have been buying up any physical assets they can lay their hands on while it seems that the West is so far in debt to each other and countries like China that we are busy just keeping our heads above the water and can't afford to "buy" these assets.

    But why would it be better if it was backed by some other physical item such as gold (paper is physical too). Gold is only worth what people believe it is worth too.

    It's much better that the money is backed up by people's beliefs, misguided as they are. So all things being equal, it's better that the money in my pocket represents future goods and services than that it represents little pieces of shiny metal.


  • Closed Accounts Posts: 6,084 ✭✭✭oppenheimer1


    I'm in my first year of Economics and Finance so I'm a bit of an amateur, but I was just thinking.

    Does anyone else think that at some stage in the foreseeable future people will realise that money is just...paper? Now I'm not expecting this to happen all at once, but I'd expect the "big" people such as the masterminds behind America and China to cop this and start spending all the money on cold hard goods, the public would pick up on this about 40 or 50 years later and civilisation as we know it would descend into chaos.

    All wealth is just in the mind, in confidence. Take gold for example, a widely used store of wealth. Gold has very limited industrial applications and its main use is as a store of wealth. If people didn't believe it was worth something, it would be worthless. The more people that want gold to store their wealth the more valuable it becomes.

    The economic system is a strange creation and fundamentally depends on the collective confidence of people.

    On a more philosophical level it could be argued that the only valuable thing that exists is time, and you can't store that.


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    But why would it be better if it was backed by some other physical item such as gold (paper is physical too). Gold is only worth what people believe it is worth too.

    It's much better that the money is backed up by people's beliefs, misguided as they are. So all things being equal, it's better that the money in my pocket represents future goods and services than that it represents little pieces of shiny metal.

    Gold is a finite resource, all the gold mined would barely fill 3 swimming pools I believe. it is this scarcity that makes it valuable. Although gold can be debased, (filled with lead etc) it is much harder than the finite debasement of paper through inflation.

    Remember, prices don't rise, inflation reduces the spending power of the money in your pocket. This is growth and as long as money is debt based (with interest payable on nearly all of it at production) then inflation must occur. We have now got to the point that the numbers are getting too big for us to comprehend. Check out this link.

    http://www.pagetutor.com/trillion/index.html

    What's next? Quadrillions, gazillions?


  • Closed Accounts Posts: 6,084 ✭✭✭oppenheimer1


    szjon wrote: »
    Gold is a finite resource, all the gold mined would barely fill 3 swimming pools I believe. it is this scarcity that makes it valuable. Although gold can be debased, (filled with lead etc) it is much harder than the finite debasement of paper through inflation.

    Remember, prices don't rise, inflation reduces the spending power of the money in your pocket. This is growth and as long as money is debt based (with interest payable on nearly all of it at production) then inflation must occur. We have now got to the point that the numbers are getting too big for us to comprehend. Check out this link.

    http://www.pagetutor.com/trillion/index.html

    What's next? Quadrillions, gazillions?

    You're missing the point. Gold is only valuable because people place a value on it!


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  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    You're missing the point. Gold is only valuable because people place a value on it!

    I understand that perfectly, I was merely pointing out WHY people place such value on it as opposed to paper currency.


    Don't tell me that trillion dollar visual isn't cool though? Scary too!

    I should add, I don't advocate a gold backed currency, I just believe that is what we are heading for. I couldn't care less. Just wish we could get on with it one way or another rather than prop up this current defunct approach.


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    @scarab80

    Printed the wiki entry on the fed last night for some bedtime reading, my that's a long wiki, maybe 40 pages. This made me laugh.
    Current functions of the Federal Reserve System include:[6][30]
    • To address the problem of banking panics
    • To serve as the central bank for the United States
    • To strike a balance between private interests of banks and the centralized responsibility of government
      • To supervise and regulate banking institutions
      • To protect the credit rights of consumers
    • To manage the nation's money supply through monetary policy to achieve the sometimes-conflicting goals of
      • maximum employment
      • stable prices, including prevention of either inflation or deflation[31]
      • moderate long-term interest rates
    • To maintain the stability of the financial system and contain systemic risk in financial markets
    • To provide financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
      • To facilitate the exchange of payments among regions
      • To respond to local liquidity needs
    • To strengthen U.S. standing in the world economy

    1. FAIL
    2. OK
    3. 50/50?
    4. FAIL
    5. FAIL
    6a. FAIL
    6b. FAIL
    6c. FAIL
    7. FAIL
    8a & b. PASS
    9. EPIC FAIL!

    Not a good record really is it?


  • Moderators, Entertainment Moderators, Politics Moderators Posts: 14,556 Mod ✭✭✭✭johnnyskeleton


    szjon wrote: »
    Gold is a finite resource,

    There is a finite amount in the earth, but the amount that has been mined and refined grows on a daily basis. More than half of the total world's gold has been mined in the last 50 years.

    But more importantly, more than half of all gold produced is used in jewelry and industry, so half of all gold produced each year is consumed rather than stored.
    szjon wrote: »
    all the gold mined would barely fill 3 swimming pools I believe.

    There are approximately 150k tonnes or 4bn ounces of extracted gold in the world.

    http://www.gold-eagle.com/editorials_05/zurbuchen011506.html
    szjon wrote: »
    it is this scarcity that makes it valuable.

    Lots of things are scarce but that does not make them valuable. Things are only valuable if there is demand for them. The higher the demand relative to the supply increases the price, but this demand is not borne out of its scarcity.
    szjon wrote: »
    Although gold can be debased, (filled with lead etc) it is much harder than the finite debasement of paper through inflation.

    Lets look at it another way then. Supposing we live in a world with the gold standard, and X amount of gold is a good represntation of Y amount of goods. Then a new good comes along which creates more wealth and makes our lives better. This creates Z wealth. We now have total gold of X for goods Y & Z, so unless we create more gold in the meantime, X will be be worth more goods for no reason other than we cannot easily increase the level of monetary tokens.

    However, if Z doesn't create more wealth but in fact lets us make Y goods for less, then X is debased because X represents Y - Z.

    Also, each year M amount of extra gold is mined, so even if there is no increase in goods, X + M = Y, so gold is further debased.

    Gold's price can go up as well as down, and what gold affictionadoes don't realise is that gold itself is a good. It can be used as an effective currency because it is an easy good to trade, but the problem lies in that the economy does not have a stable level of production or demand.

    So while inflation can eat away at the purchasing power of paper money due to overprinting, this is a political decision rather than an automatic consequence. An economy that got the balance right and only printed more money to reflect actual new wealth would be doing well.

    szjon wrote: »
    Remember, prices don't rise,

    What, never?
    szjon wrote: »
    inflation reduces the spending power of the money in your pocket.

    And deflation increases it.
    szjon wrote: »
    This is growth

    No its not, growth and inflation are different. It may appear like nominal growth, but it is not real growth.
    szjon wrote: »
    and as long as money is debt based (with interest payable on nearly all of it at production) then inflation must occur

    I'm sorry, I don't get this. You mean money created through banking? That doesn't mean it is debt based. But also, it doesn't mean that inflation must occur, so long as the amount of money created is proportionate to the amount of additional wealth in the country.
    szjon wrote: »
    We have now got to the point that the numbers are getting too big for us to comprehend.

    So your point is that because you can't comprehend the level of money in the world that we should all go back to the gold standard?
    szjon wrote: »
    Check out this link.

    http://www.pagetutor.com/trillion/index.html

    What's next? Quadrillions, gazillions?


    That's been around for a while. But comparing a trillion dollars to an individual is a bit of a nonsense. For example, if you were to compare one individual to €1tn worth of goods produced, you would get an even bigger scale. Compare 1 individual to 3,000 F16s and the imagery would be just as stark.


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    There is a finite amount in the earth, but the amount that has been mined and refined grows on a daily basis. More than half of the total world's gold has been mined in the last 50 years.

    This is not true, since 2003 gold production has been in decline, many mines have taken the easy stuff and have gone from getting 12g per ton to 3g per ton. Many say peak gold has come, for sure as in oil, peak (cheap) production has been reached. It is similar to drilling 2km underwater for oil, or digging out tar pits. It's there but the production costs are much higher. Please check your figures, world gold council is a good start.

    But more importantly, more than half of all gold produced is used in jewelry and industry, so half of all gold produced each year is consumed rather than stored.
    Gold is not consumed, this is an idiotic statement. What do you think is happening at the moment with all the 'we buy your gold' ads. They buy it at half value, pay for it to be refined back to bullion and make a handsome profit. It has NOT been consumed. It might be sitting in a jewellery box or round someone’s neck but it's not going anywhere. Nearly all of the gold ever mined can be accounted for. Losses are negligible. Some is in space, granted, but in tiny amounts.


    There are approximately 150k tonnes or 4bn ounces of extracted gold in the world.

    http://www.gold-eagle.com/editorials_05/zurbuchen011506.html
    You’re point?

    There is around 161,000 tons mined to date.

    First, 161,000 Tons translates to 160,227,200,000 grams.

    We know that the density of gold is 19.3 g/cm3.

    (160,227,200,000 / 19.3) = 8,301,927,461.14 cm3

    Doing some maths, we translate the cm3 to ft3. One cubed foot is 28,316.8466cubed centimeters.

    (8,301,927,461.14 / 28,316.8466 = 293,179.8 ft3)

    An Olympic-sized pool has a volume of 88,000 ft3. So...

    293,179.8 / 88,000 = 3.3315 Olympic Pools.

    There is less than 1 ounce (troy) of gold on earth for each person, about 24 grams each at todays world population. Also, I would suggest when questioning a figure you should stick to the unit of measurement used.e.g. volume not weight.
    Lots of things are scarce but that does not make them valuable. Things are only valuable if there is demand for them. The higher the demand relative to the supply increases the price, but this demand is not borne out of its scarcity.
    Partially, yes it is. Platinum is scarcer and demands a higher price but gold is much harder to fake due to its density and colour, platinum, silver and palladium are faked by using alloys, gold is much harder to counterfeit.

    As for demand. Scarcity brings its own demand, find me a penny black stamp with a mis-print and I'll find you a buyer willing to pay a fortune for it. I'm sure there are plenty examples of scarce things that are not of value but provenance and history make gold intrinsically worth holding.

    Lets look at it another way then. Supposing we live in a world with the gold standard, and X amount of gold is a good represntation of Y amount of goods. Then a new good comes along which creates more wealth and makes our lives better. This creates Z wealth. We now have total gold of X for goods Y & Z, so unless we create more gold in the meantime, X will be be worth more goods for no reason other than we cannot easily increase the level of monetary tokens.

    However, if Z doesn't create more wealth but in fact lets us make Y goods for less, then X is debased because X represents Y - Z.

    Also, each year M amount of extra gold is mined, so even if there is no increase in goods, X + M = Y, so gold is further debased.
    The basic flaw in this argument is the lack of this new good you speak of. What is it? An Ipad? Not being a materialistic man I’m afraid my expenditure goes mainly on food, shelter etc so this new good would have no effect on my needs whatsoever.
    Gold's price can go up as well as down, and what gold affictionadoes don't realise is that gold itself is a good. It can be used as an effective currency because it is an easy good to trade, but the problem lies in that the economy does not have a stable level of production or demand.
    So while inflation can eat away at the purchasing power of paper money due to overprinting, this is a political decision rather than an automatic consequence. An economy that got the balance right and only printed more money to reflect actual new wealth would be doing well.
    I’m afraid I got distracted at the ‘ what gold affectionadoes don’t realise’ statement. Just what are you inferring? Do you think people don’t do due diligence on investments? Who said I was an affectionado? I hold gold because I am worried we are heading into a financial meltdown and my judgement is that I’d rather exchange my gold for the next currency than my euros. To be frank, I got most of my gold for free, open a forex account, deposit money, buy gold against the dollar and wait for a price rise, I bet on 1380 on Friday but it didn’t make it that far, still, sell for paper profit, withdraw, spend on (cheap) gold in euro. Simplez. What was it you were saying I don’t realise?
    As to the wonder economy who got the balance right. Please provide an example. Trichet will be warming up the presses now the euro is too strong. Mark my words.

    What, never?
    There are exceptions that prove the rule.


    And deflation increases it.
    Well yes, I assumed people would understand the basic theory of opposites.


    No its not, growth and inflation are different. It may appear like nominal growth, but it is not real growth.
    And that is what we are seeing now around the world. Would you say the celtic tiger was real growth? We’ll see when it is fully corrected.

    I'm sorry, I don't get this. You mean money created through banking? That doesn't mean it is debt based. But also, it doesn't mean that inflation must occur, so long as the amount of money created is proportionate to the amount of additional wealth in the country.
    Nearly all money is created with interest on top, that’s why we have to have growth. If all debt was repayed there would be no money in circulation, this is of course impossible because of the interest. Why does the ecb have a target inflation rate of 2%?

    So your point is that because you can't comprehend the level of money in the world that we should all go back to the gold standard?
    No, if you bothered to read my posts I believe I have been quite clear. I DO NOT ADVOCATE A RETURN TO A GOLD BACKED CURRENCY! I just believe that is what we will get. I believe I said this before more than once. I also said us, not I, so turning it into me not understanding is a cheap shot. No, I don’t believe the majority of the population of this planet can truly comprehend the amounts of money flying around. €4 trillion every 3 days traded on forex markets alone. Most don’t know what a cdo is, most don’t know what M1 money is, most have never heard of libor or vix etc. Go and ask ten random people tomorrow to explain compound interest (pretty basic) and see how you get on. Most take money for granted.

    That's been around for a while. But comparing a trillion dollars to an individual is a bit of a nonsense. For example, if you were to compare one individual to €1tn worth of goods produced, you would get an even bigger scale. Compare 1 individual to 3,000 F16s and the imagery would be just as stark.
    I fail to see your point. ‘That’s been around for a while’ proves what? Pythagoras theorem isn’t a spring chicken either.
    It is meant only as a representation of how big that number is. In that sense it does its job quite admirably.
    Now, I’ll state my position again.

    I hold precious metals and land because I am worried due to the calamitous state of global commerce and the perilous state of currencies. I do not advocate a gold standard I am merely protecting myself and my family from the ravages of what I believe is about to come. History has proven gold to be the best thing to have in these situations and I trust history.

    I believe the OP asked for thoughts on this. I’ve provided mine and people seem to take this as an opportunity to debate it. Fair enough but how about you answer the original question, give your point of view instead of just trying to take mine to pieces, (poorly I might add).


  • Closed Accounts Posts: 595 ✭✭✭the_dark_side


    The-Rigger wrote: »
    lol.
    What a tit.

    your entitled to your opinion mate, and he is entitled to do whatever he wants to do; just remember, there are no shops in the graveyard...


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  • Registered Users, Registered Users 2 Posts: 799 ✭✭✭Scarab80


    szjon wrote: »
    They can't predict a collapse, they are essentially diplomats, their language is cautious but they are being as extreme as decency allows. Every one of them questions the feds handling of the situation. It hasn't changed the actions of the fed, therefore if this current fiscal policy is adhered to then ultimately it will lead to what they say, the end of the dollar as reserve currency. To me that is a collapse in faith of a fiat currency, the ramifications of this would be catastrophic. I concede you the point that they are not specifically stating utter collapse but I believe I said there were lines to be read between.

    I would question the feds current course of action aswell, US banks are currently sitting on 1 Trn in excess reserves due to QE1. The fact that they are not lending is less a monetary issue and more to do with a general atmosphere of risk aversion. Unfortunately this is human nature, however as history has shown us this risk aversion will end and growth will begin again. The fed are just trying to speed up this transition. Inflation in the US is currently running at just above 1%, when these excess reserves are finally put to use the fed can intervene once again by contracting the money supply and helping holders of the dollar.

    Why do you see the end of the dollar as global reserve currency as catastrophic, personally I think a basket currency basis for global reserve would be much healthier for both the US and global economies in the long run.
    szjon wrote: »
    I detest being labelled a conspiracy theorist, NWO and the jewish zionists etc are nothing but populist tripe, however, I do read about the Bilderberg group, because they are real and don't publish minutes. I find this somewhat suspicious but I don't believe they run the world. This is not theory, they exist and I'm of an inquisitive nature, this does not mean I can be tarred with the large brush that is wielded here. Nobody can argue humanity hasn't got a dark side and history has shown us many examples of abuse of power by our elected officials, (I won't insult your intelligence by providing links), a degree of mistrust is a good thing IMO.

    I apologise for the presumption.
    szjon wrote: »
    My concern over the fed being private is more to do with the revolving door policy of government and financial heavyweights moving from board to board with apparently no conflict of interest, there is a lot of circumstancial evidence that these positions are abused to profit institutions that are not related to governments, Goldman Sachs has a fair bit of pull around the US government and has for some time. They are far from honest as the abacus scandal, Greek euro entry, etc has shown. I think Landesbank are suing them now over something similar.

    Indeed GS are probably recognised as the closest thing to an embodiment of pure evil these days. However the Feb BOG are political appointees and who they are is a matter for the president and by extension the American people.
    szjon wrote: »
    I have done a bit of research into the fed and apart from the usual suspects listed on conspiracy sites I have been unable to determine who owns this bank. I'm also aware that they are resistant to audit and are currently in court with Bloomberg to get something done about this.

    The fed district banks are owned by the banks in their district, they are not controlled by these banks though. All district banks and the board of governors are subject to full audit by independent accounting firms. There are some dispensations from regular auditing practice in order to preserve the independence of the fed from political interference.
    szjon wrote: »
    Who recieves the 6% dividend of the surplus before handing it to treasury?

    The banks receive it as a return for the fed holding their capital reserves, probably seems high at the moment given current interest rates however remember that this rate is set in legislation and does not float with the fed rate.
    szjon wrote: »
    Just how much gold do they really have? Why can't we see?

    You can see, $11bn..... http://www.federalreserve.gov/boarddocs/rptcongress/annual09/sec6/c3.htm

    You are probably thinking about the gold held in Manhattan at the Fed offices. This is not their gold, it is held in trust mainly on behalf of foreign nations and Swiss banks (who do not report their gold holdings)
    szjon wrote: »
    To turn it on its head, the figures were better before due to the census work, essentially seasonal jobs, not a good reflection on overall employment in the bigger picture. These figures are constantly revised downwards too so there is not much good news there. You are intelligent enough to know there are many ways to massage unemployment figures and they are widely employed, just look at the september figures here in Ireland, largely down because of the unemployed studying but sold as a positive sign of improvement, grossly misleading in my opinion.

    And the market is intelligent enough to know to look into these figures, you will see that they did not react to the inclusion of census figures, but instead base their decisions on the long term employment figures. Unfortunately in Ireland there is not the same public analysis of government figures that is carried out in the US.
    szjon wrote: »
    These figures will increase the chance of QE2, this is a failed policy going double or quits and will ultimately lead to the dollar declining further, gold breaking free of manipulative shackles and will result in people losing the last threads of faith in this thoroughly debased currency, the rise in commodity prices is shocking (although not on the scale of 08 yet) and with pay likely to be frozen or even decreased, coupled with rampant unemployment then the stage is set for a perfect storm. In my opinion there is no way out. The dollar will lose all credibility.

    Commodities are a temporary store of wealth, which during periods of expected inflation rise beyond their real value, but will return to mean once economies return to normal. See oil in 2008, from $70/$80 up to $150 down to $30 and back to $70/$80. Currencies rise and fall, see the yen, however a complete collapse of a currency requires one of two things - an unmanangeable amount of foreign denominated debt or an inability to use the currency to purchase necessary imports. The US and the dollar faces neither of these problems as US debt is dollar denominated and the US is still one of the most prosperous countries in the world and more than able to purchase imports, moreover most of these imports are themselves denominated in dollars.
    szjon wrote: »
    Agreed, but with all the bad news floating around and plenty more shocks to come this race to the bottom is the death throes of our very monetary belief system. We hear talk of a jobless recovery, a bump along the bottom, a v shaped, u shaped, w shaped recovery etc but there are NO signs of recovery I can see unless clutching at straws is going to become profitable.

    US GDP up between 2% and 3%, DowJones up 65% from it's trough, Unemployment down 0.5% from it's peak in Oct 2010. What more do you want to see?, it's not a stunning recovery but a long way from the collapse of the dollar.
    szjon wrote: »
    This is before even entering into the realms of pension provisions, PFI initiatives, off balance SIVs, the securitization insurance products and the elephant in the room, peak (cheap) oil or its alternatives. Our system is just not sustainable and we are watching it fail. This is my belief. In a way I welcome it but I fear the stage of re-adjustment to whatever is next. My biggest concern is that the people we expect to get us out of this mess are the very ones who didn't see it coming. As El erian said, if they didn't see it coming, I don't think we should be listening, those that did are the ones we should be consulting.

    Hey we could be looking at fusion power within 50 years, what kind of a world will we be living in then. Add to that advances in genetic engineering and it's possible we have only begun to exploit the biological capacity of the planet.
    szjon wrote: »
    Personally I started buying gold in 2007, we were about to open a family business with our savings and we junked it and bought some land and some gold. I've been buying it since with every spare cent, I also buy silver, platinum and palladium just in case we see recovery, (more demand as gold falls) this is purely for wealth protection. We also buy more non-perishable shopping than we need, just in case. It's going to take us a year to eat it all if nothing happens but with futures prices rising? It makes sense to me.
    People laugh at me on forums when I say this, I was a boy scout once though and I never forgot the motto.

    I'm sorry you feel so pessimistic about the future of mankind, but life is for living and you should go out and live it instead of worrying about the holocaust around the corner that may never come. Human development has been inexorably and exponentially upwards since the neolithic revolution 10,000 years ago - absenting a period of religious irrationality in the 1st century - and there is no reason to think it is going to stop now. Be prepared by all means but don't forget to live your life.
    szjon wrote: »
    The one thing learning history has taught me is that I can learn from history, the future does not look rosy from where I'm sitting.

    I'm not so stupid to believe I am right about all this though, it's my best uneducated guess, I'm open to new ideas. Do you see recovery? To take it back to the original posters question, will we see social unrest and chaos?
    How will the dollar recover?

    The dollar will recover the way it has always recovered, through US innovation and exports, helped by a weaker dollar.


  • Registered Users, Registered Users 2 Posts: 799 ✭✭✭Scarab80


    szjon wrote: »
    @scarab80

    Printed the wiki entry on the fed last night for some bedtime reading, my that's a long wiki, maybe 40 pages. This made me laugh.



    1. FAIL
    2. OK
    3. 50/50?
    4. FAIL
    5. FAIL
    6a. FAIL
    6b. FAIL
    6c. FAIL
    7. FAIL
    8a & b. PASS
    9. EPIC FAIL!

    Not a good record really is it?

    The Fed has presided over the most stable and sustained growth period in the history of the US.

    500px-US_Historical_Inflation_Ancient.svg.png
    saupload_conference_board_employment_trends_index_february_2009.jpg
    _41437267_us_gdp_growth_graph416.gif
    book2_12658_image001.gif
    mega-bear-quartet.gif


  • Registered Users, Registered Users 2 Posts: 4,881 ✭✭✭TimeToShine


    I don't think I should bother showing up for my lectures tomorrow, I'll just stay and read this :D


  • Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    Scarab80 wrote: »
    The Fed has presided over the most stable and sustained growth period in the history of the US.

    Correlation is not causation.
    I don't think I should bother showing up for my lectures tomorrow, I'll just stay and read this :D

    See above :D stats101 in one sentence :)


  • Closed Accounts Posts: 1,258 ✭✭✭Tora Bora


    Lads, get out the DVD of "The Field". Sit back and enjoy a powerhouse performance by Richard Harris as the Bull McCabe. Study the ferocious maniac love of the "land".
    Go out the next day of you have money to invest, and buy as much as you can.

    Sure twill always be there, and no robbing, thieving, currency manipulating, dickhead, on a computer screen in the Fed, or the ECB, or some hedge fund can take it from you.

    "Yearra, will you look at it Tadgh. My fathers, fathers, fathers, father took care of it. And your sons, sons, sons, sons son will take care of it too boy".

    Quote from the bull McCabe.


  • Registered Users, Registered Users 2 Posts: 799 ✭✭✭Scarab80


    ei.sdraob wrote: »
    Correlation is not causation.


    You're probably right, it's all just a big coincidence, we should go back to the gold standard.

    In keeping with the graphing theme heres another big coincidence
    20090326-ni25ke6b5u5fxp51kqe2bhh3qs.render.png


  • Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    Scarab80 wrote: »
    You're probably right, it's all just a big coincidence, we should go back to the gold standard.

    I am not advocating going back to gold, I have many times illustrated my scepticism for gold and its current bubble.
    There was alot more happening in all these countries during the 20th century...

    ..and how do you explain the large rises in economies during the 1946-1971 period under the Bretton Woods system where major currencies where pegged to the dollar which was fixed to gold in turn.


  • Registered Users, Registered Users 2 Posts: 68 ✭✭szjon


    Been a bit busy to reply, I will later.

    For now some interesting reading. QE2 anyone?

    http://ftalphaville.ft.com/blog/2010/10/12/367366/the-qe2-passenger-list/

    I understand he is a politician so big tub of salt required but...

    http://news.bbc.co.uk/2/hi/programmes/newsnight/9079654.stm


  • Registered Users, Registered Users 2 Posts: 232 ✭✭Citizen_Cutback


    Scarab80 wrote: »
    I don't mean to be personal but when I see the whole "the Fed is privately owned" nonsense it smacks of CT. It is a blatant misrepresentation of the truth, while the federal reserve banks are private institutions they are controlled by the board of governors which is publicly appointed with all surplus fed funds remitted to the US Treasury.

    The Fed is not unlike a Quango then or a semi-state like FAS?

    "Surplus FED Funds" is a euphemism for what?


  • Registered Users, Registered Users 2 Posts: 799 ✭✭✭Scarab80


    ei.sdraob wrote: »
    I am not advocating going back to gold, I have many times illustrated my scepticism for gold and its current bubble.
    There was alot more happening in all these countries during the 20th century...

    ..and how do you explain the large rises in economies during the 1946-1971 period under the Bretton Woods system where major currencies where pegged to the dollar which was fixed to gold in turn.

    I'm saying that in a fixed monetary system economies tend to go boom to bust a lot more than one where the money supply is controlled. During the great depression the economy found an equilibrium point with under production and high unemployment. An exit from the gold standard clearly helped economies to grow. Now you don't want a fixed monetary system linked to gold (by the way gold is a possible bubble because money is no longer linked to it, if we still had a gold standard we would not see this spike in gold as people would already be holding it) and you don't seem to favour a managed monetary policy, what do you advocate?

    Of course economic growth is not solely a function of monetary policy, technological advances are a much greater driver however I believe a managed monetary policy provides a stable environment in which this growth can take place and can help to reduce periods of over and under investment in the markets.

    In relation to Bretton Woods, there was a booming American economy after the war and devestation in Europe. I believe the Marshall plan helped to address the imbalances between these 2 economies, the equivalent of increased rates in the US and decreased rates in Europe. The system managed to tick along for a while after that but eventually had to be abandoned when changes in the real economies no longer fit the fixed system.


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