What if our currency becomes next to worthless.

[JBC77]

It's painfully obvious that Paulson, Bernake and the U.S Gov aren't going to tell us the truth about what destruction or the extent of destruction of the financial industry. They just aren't.

I don't have the energy to explain counter party risk, derivatives and these complex financial instruments. The market for these vehicles are unregulated and literally are a time bomb ready to explode. You won't really here this stuff on CNBC.........

1. Citigroup may not survive no matter how much money the Fed throws at it.

2. Over the next year and a half credit card debt is going to go bad to the tune of 90 billion. Credit card debt has been packaged or securitized, much like the bad mortgages. Next shoe to drop so to speak.

3. Today buying U.S treasuries is just like holding cash. Whats the point of buying them then if there is no return. If countries like Russia, China, Japan.....who are large holders of treasuries decided to dump them or just stop buying them.....it would be a disaster. A kin to financial war.

4. Can't keep printing money backed by nothing, the more there is the less it's worth.

5. The large banks, aside from the smaller regional ones are insolvent.

6. Historically, every problem the government has tried to fix, has only made it worse.

I don't know boys, I don't have a crystal ball. Things could get very, very ugly in the near future.

Is anyone purchasing gold and silver right now in the event that the U.S dollar gets absolutely destroyed?

Can you imagine bringing a grocery bag full of currency to the store to buy a bag of apples because our dollars became worthless.

No one thought arabs would fly planes into buildings but they did. You just never know boys.

I think gold and silver is a great way to prepare for the absolute worst. Might even make you rich. Last month there was a very large physical purchase of gold done in Canada (off grid for hush hush transaction) by Arabs in Dubai.

Worst case sceniro, what are some opinions on where this world will be two years down the road?

[losturmarbles]

it will make way for a international currency. the fed is already in secret talks with other countries' central banks.

and people need to realize inflation is a tax, inflation is the government stealing your money without you even knowing it.

and with international currency you will have international government stealing your money the same way.

[FreeFall]

you say if like your not watching it happen

[JBC77]

it will make way for a international currency. the fed is already in secret talks with other countries' central banks.

and people need to realize inflation is a tax, inflation is the government stealing your money without you even knowing it.

and with international currency you will have international government stealing your money the same way.

Good point. Dubai is also starting a currency backed by gold.

We are definitely in some sh1t boys......

[l7ustin]

If they decided to go to International Currency how would they transistion to it?

[JBC77]

If they decided to go to International Currency how would they transistion to it?

I would imagine it would be similar to when they introduced the Euro.

My concern is that the Fed will continue to print money at this alarming rate. It's like these guys are a bunch of morons. Ninety percent of the media won't even speak of the inflation that could literally ruin us. It's the most basic of economics.

[wtf]

its funny, you see some of these talking heads saying they are bullish on the USD.

i posted something similar to this a week ago and was scoffed at. but i totally agree with you premise.

EXCEPT, you wont see china-japan , etc dumping treasuries, it will be self defeating, lowering the price of assets they hold. unless there is a spiral of magnitude unknown to man.

[durito]

then i will be selling avocados in the street

[ShamsWoof10]

it will make way for a international currency. the fed is already in secret talks with other countries' central banks.

and people need to realize inflation is a tax, inflation is the government stealing your money without you even knowing it.

and with international currency you will have international government stealing your money the same way.

I agree with this the most.. I think an international currency has been planned for a long time and it's coming... I also think President Obama will impose a bank holiday (closed banks for a week) as FDR did back in the 30's.. Actually I think he did it in his first year of presidency too but I am not sure on that...

[crisp]

i should start trading in my us dollars for euros.

[durito]

i should start trading in my us dollars for euros.

the euro zone is in worse shape

[wtf]

please read this story. this is a super ugly situation. and i see no turning back. america will have to become a country of savers, instead of spenders.

this is why china could implode because nobody spends there, they just export everything abroad.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a1KBBJn8ORc4&refer=home

[RogueJuror]

i'll buy some avocados to make some guacamole

[crisp]

china can take over the world.

[Outlawdino]

I have been hedging myself with silver against currency. Gold is out of my reach at the moment. If you have the room to grow some of your own food, you will feel a smaller impact when you have to go to the grocery store and face higher food prices.

[pico]

i stock up on guns and ammo. i can always trade those for food like the old west.

[curious]

There is a theory published by a professor named Wolf that says that countries will naturally achieve an equalibrium. He classifies countries as savers or spenders. Savers tend to export, spenders tend to consume. Eventually the currency value of the spender country gets so out of wack that manufacturing moves to that country to take advantage of the low currency value. Imports go up in price and consumers start saving instead of spending. The saver country has the opposite happen. Exports become more and more expensive, imports become less expensive, eventually the consumers start spending instead of saving.

I haven't looked at all the data fr this but the trends seem pretty obvious from the data I did look at.

[crisp]

i was listening to sportscenter yesterday and they said the blue jays were in trouble because of the crumbling canadian dollar. so i guess exchanging the us dollar for canadian dollar is out of the question.

[pico]

There is a theory published by a professor named Wolf that says that countries will naturally achieve an equalibrium. He classifies countries as savers or spenders. Savers tend to export, spenders tend to consume. Eventually the currency value of the spender country gets so out of wack that manufacturing moves to that country to take advantage of the low currency value. Imports go up in price and consumers start saving instead of spending. The saver country has the opposite happen. Exports become more and more expensive, imports become less expensive, eventually the consumers start spending instead of saving.

I haven't looked at all the data fr this but the trends seem pretty obvious from the data I did look at.

equilirium among the ruling nations. small countries are still going to get ****ed.

[curious]

equilirium among the ruling nations. small countries are still going to get ****ed.

I don't know about that. I do know that the data the guy published backs up his theory for most nations. Now, stupid policies like too much regulation, protecting monopolies, letting unions get too powerful can skew this for some countries, in other words their curencies get cheaper but companies cannot take advantage of that fact.

[Sinister Cat]

I think gold and silver is a great way to prepare for the absolute worst. Might even make you rich. Last month there was a very large physical purchase of gold done in Canada (off grid for hush hush transaction) by Arabs in Dubai.

Worst case sceniro, what are some opinions on where this world will be two years down the road?

I think the U.S. dollar is probably overvalued right now. There has been a flight to USD because of worldwide panic; pretty much ignoring the fact that they will be printing money like crazy.

Having said that, to say that it will totally collapse or that inflation will become a real problem soon might be a bit of a stretch. Tough to have inflation when nobody is spending money and the bubble bursting in the oil markets helps too.

Gold is definitely in an intermediate uptrend though, and there is a seasonal trade in gold at this time. USD might drop back to levels it was at in the summer as panic subsides. Have to be careful with gold investments because it is not historically a good long-term investment, and it can be very volatile and really tank on you.

2 yrs from now, tough to say.

[pico]

I don't know about that. I do know that the data the guy published backs up his theory for most nations. Now, stupid policies like too much regulation, protecting monopolies, letting unions get too powerful can skew this for some countries, in other words their curencies get cheaper but companies cannot take advantage of that fact.

once a ruling nation sees things are going out of whack, they still have the military. economic data is all in the past. public policy change can render any economic theory worthless.

Mao once said, truth comes from guns barrels.

[Sinister Cat]

i was listening to sportscenter yesterday and they said the blue jays were in trouble because of the crumbling canadian dollar. so i guess exchanging the us dollar for canadian dollar is out of the question.

impossible for a huge company like Rogers to hedge their currency exposure when they know they have large future fixed costs in USD right? Good excuse to cut budget; maybe threaten to sell the team unless they get a gov't bailout if CDN dollar continues to weaken.

[curious]

once a ruling nation sees things are going out of whack, they still have the military. economic data is all in the past. public policy change can render any economic theory worthless.

Mao once said, truth comes from guns barrels.

Public policy change can affect the factors that make a country's products easier or harder to export. Or, they can make other country's imports more or less desireable. That was why I said a country can put in stupid policies that will make it non-competetive no matter how cheap their currency is. But the basic premise that savers export and spenders import is sound. And the premise that savers or spenders cannot save or spend indefinitely because at some point their currencies will become so over/under valued that their trading patterns will reverse.

China's currency is grossly undervalued right now. This makes anything that China wants to buy much more expensive than it should be. And it makes China's exports much cheaper than they should be. So, China is sacrificing he living standards of its people in order to subsidize the living standards of their trading partners. At some point they will no longer be able to make that sacrifice.

[pico]

when you're the big man, you can spend spend spend, then rob the saver and repeat.

[Kargo]

A country like China which reduced the level of unemplyment from 30% to 1% must be doing something right, maybe something we'd like to implement here. I agree on the world coming to the use of une currency only and soon everything will be electronic transactions as well, no more printing of bills.

[Kargo]

But one international currency also means someone will have the most control over it, and I'm afraid it won't be the US !

[Boner_18]

I don't understand the question, and I wont respond to it.

[Dark Horse]

Plenty of people who think that there will be a shift to a new currency.

I would suggest reading the linked article. It's not about a new currency, but about what is really going on, and has been going on for centuries. While controversial, this article, the best I've ever read on the economy, actually allowed me to call the moment oil had peaked. This was before the bailout was approved, when Bernanke leaned into the microphone to interrupt Paulson, to interject the following comment to a Congress that was as clueless as willing to roll over for every suggestion placed before it: "I do want to see that as legislation."

http://www.scribd.com/doc/3495040/complete-history-of-US-money-bankers-a-mustread

Why on earth would we give the same people who would gladly drive us to the brink of bankruptcy the right to print more money out of thin air with which to buy up all our remaining assets? We should be up in arms and drive out these reptilians. They are the true terrorists. We are giving away our freedom to international bankers, who have been planning this all along.

[Killer_Demo]

i stock up on guns and ammo. i can always trade those for food like the old west.

exactly what i was thinking...

[bmw530i]

I just got a letter from Citi, and my Citiflex line of credit has been stopped, I haven't used it in over a year, come to find out they stopped offering the product all together, effective immediately. These retail numbers after the holiday season will hurt more than Larry Kudlows bright ties.

[WileOut]

We are in a recession. We got out of the great depression and we will get out of this. People have stopped spending and are saving now. Prices will drop and this will create more demand. People will start buying more, jobs will be created and the economy will rebound. Look at our nations economic history. Its capitalism. There are peaks and valleys. Just like the ocean tides, it will rise and fall. Buy stocks now. Buy the S@P 500 index fund now.

[WileOut]

This is the difference between people who make money in the stock market and those who don't. Those who don't are those people who sell when others are selling. When the economy goes down they panic and sell. When the economy is down is when guys like Warren Buffet unloads.

He unloads on companies when the economy is up too but you get my point.

[Outlawdino]

I would have to challenge "sinister cat" on his thoughts...the economy whether here in the U.S. or abroad is obviously experiencing a difficult time. To think everything is going to fix itself overnight would be foolish. The market and dollar have nothing going for them in the short term....the market still needs to hit the bottom and purge itself. Point of the post....there has never been a better time in our lifetimes than to protect yourself with commodities.

[wtf]

this is NOT a normal vacillation in the business cycle. there was a massive housing bubble that still has not been purged.

please dont think america is unique or operates in a vacuum.

japan had a very similar experience 20 years ago and is STILL NOT out of it. america is more dynamic than japan i will grant that, but i am not seeing an instant rebound.