Posted: 4/16/2007 6:35:25 PM EDT
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Just a heads up, but the US dollar is about to test some lows that go back to the 1980's. The rumor that has been floating around for a while is that the fed is devaluing the dollar to address our deficit issues. The question is does the law of unintended consequences kick in at some point and the dollar devaluation get out of "control"? I do know this, the euro is at an all time high, and for the last few months gold stocks have been going through the roof, even the bad ones are up substantially. I think gold be trading above 700 an ounce in the next few weeks. Just throwing it out there. |
Business and Investing Forum --> ar15.com/forums/forum.html?b=1&f=133 ar-jedi |
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The almighty $ will be knocked off its pedestal sooner or later, its just a matter of when. c0 98% of the population is asleep. The other 2% are staring around in complete amazement, abject terror, or both. falloutshelter653.org |
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Dollar devaluation is a two-edged sword... When the dollar drops consumers take a beating. The price of everything goes up. remember Federal XM ammo at $3 a box? Heck I bought Win q3131 at $2.88! Well, metals prices are up globally. And the US dollar os worth substantially less, so it takes even MORE deadpresidents to buy those same goods. Rising prices result in virtually everything, Even domestic goods (Even if we grow wheat, devalued dollars mean farmers pay more for diesel and petro-based fertilizers and pesticides). Dollar down, prices up. However, declining dollars benefit others, namely industry that exports to other countries. Example: Pulp and paper. Ten years ago teh US dollar was strong, so American companies bought paper from Canada. Canadian mills were busy, US mills were closed. Now teh US dollar is in the shitter. Canadian paper seems more expensive. As a result, US Mills are opening while CDN mills close. Its a balancing act. Personally, I do fear teh long term impact of devalued dollar. At the moment we have some control over our currency. However, trade imbalances mean we ship more cash overseas. The more money held by foriegn governments, the less control we have over the dollar. As we continue to rack up debt, we hand over control. At some point our debtors become nervous and ask themselves "are we EVER gonna git paid?". Then they start moving to other currencies. When they loose confidence then everyone bails out of US dollars hoping to get out before the other countries. The dollar freefalls... The traditional response of our government is to "buy" US dollars. As foriegn goverments and corps dump greenbacks, we use our yen/pound/euro/franc/yuan holdings to buy the US dollar up. This 'creates" demand and props the dollar up: PROBLEM: Our trade deficits and debt mean we spend more money (of all kinds) than we earn (of all kinds). We don't have enough foriegn currencies to cover our outstanding US dollars.... Every day we have these trade imbalances and every day our debt builds, we get another step closer to the cliff... |
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It all starts with Americans' insatiable apetite for debt. The attitude is "buy now and we'll figure out how to pay later". Americans' personal out-of-control spending habits affect our government out-of -control spending habits. If a person spends more than they make, eventually the bill comes due. The same with government. However, it takes longer to do so because government can manipulate the system to hide the debt longer. It won't last forever though. I don't think that we are in for a meltdown any time soon but if spending habits don't change, we will have to pay eventually. |
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It's always prudent to have foreign currencies - EUros, canadian, Yen. But it's also prudent to get out of personal debt as soon as possible, buy food, water, shelter, ammo, medicines, etc. so as to ride out a month or more without going shopping.... It's also good to train and get in good shape. It's good to make friends abroad - in stable countries.... you never know when that sudden 'vacation' might turn into a prolonged refuge. |
+1 Though I am still maintaining a balance between domestic and international, I am trying to get to 50% international equity. You need to be covered which ever way the pendulum swings. |
Please hold on for another couple of 5 years. We are on the way but still need some time to fix our poor financial decision making mistakes. This forum was one of the biggest instigators in forcing me to reevaluate our financial plans and to get serious about debt elimination; I truly think it is one of the cornerstones of preparedness. 96Ag |
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The value of the dollar has been dropping like a rock since late Jan. You can see it here. However, the stock market has been smoking at around 12,800 lately. Don't ask me. |
| For a true insight into the world of money manipulation you have to see MONEY MASTERS @ http://video.google.com/videoplay?docid=-8753934454816686947&q=money+masterst (Google video) or you can order dvds. Another good video, also @ Google is FREEDOM TO FASCISM. And finally you can read about the depressing state of the union in articles @ http://eldoradogold.net/html/current_interest.html . God Bless |
All those dollars being printed gotta go somewhere. It's always been my impression that you devalue your currency with a printing press. The US dollar index is about to test a key technical level of support @.80. Over the last decade it has tested that level of support sever times and rallied. The more times a technical resistance or support level is touched by a price, the stronger that level of support. In the event that the dollar does break that support level, it would confirm that something more substantial is happening. I don't know that a failure @80 would cause an immediate crisis, I rather doubt it, but I do know that bad things can and do happen in markets when key support levels fail. This happens to be one, and worthy of watching. |
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There are alot of questions about how over valued the USD was back in the 90s. We were nearly 2x the value of the Euro and almost on par with the british pound. Now, we are down to near record lows for post WWII. The issue isn't so much our domestic (i.e. personal and credit card) debt. (that as absolutely nothing to do with the value of the dollar) It has far more to do with what traders value the dollar at internationally and what our imports/exports look like. The less we have to offer, the more "poor" we appear. China is experiencing massive growth and is artifically keeping the Yuan to a specific rate vs the Euro and Dollar. IMHO, the Euro is not that valuable any more, since its mostly an artificial metric for so many broke countries. France is worse off than anyone else, yet, they manage to hide most of their debt behind the Euro. We need to start collecting all those loans and give aways to other countries. Those USD's overseas are costing us more and more each year. Billions flow to Egypt, turkey, South Africa...etc. Like someone already said, "its only a matter of time..." |
Sometimes, your bank, with advanced warning, and can get foreign currencies for you. I always get Pesos before going to Mexico through my bank, which they sell at the current exchange rate. I'm a good customer there, and with 48 hours notice, they will have the quantity that I need. |
| Why is it so important to get rid of personal debt? I understand that if we are going to do well as a society, but if SHTF happens and it takes $100 to buy a loaf of bread by unsecured personal debt isn't going to add up to much. In fact inflation is a debtors dream and a creditors nightmare. Or am I missing something. |
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DKing, We are having the same thougts--I have several $K that I don't know whether to dump into one of my small debts or hold off for 6mths. My concern is the economy tanking and not having some $ for the short term. Ideally, I would love to have all consumer debt gone and 6mths of expenses in cash, PM's, liquid metal (If you know what I mean) and then be working on the house. I have an uneasy feeling about the state of the economy. The more I read, the more authors compare it to summer of 1929. 
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