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Originally Posted by RISJR
Please Mike...you predicted a far worse outcome than that which actually transpired. The metals have been quite shaky as of late and their downward spiral could very well occur before a stock crash,especially if the Euro continues to slide,further strenghtening the dollar and it's consequent long term stay as the definitive reserve currency.

I can think of no event which will reverse the US dollars course as the dominant world currency.


I predicted a far worse outcome because I never expected that the Fed and the Congress would throw $21 Trillion to maintain an obviously failed system. My mistake. They have only made the inevitable collapse worse by orders of magnitude.

Metals shaky? Maybe in your universe, but not in mine. Metals cannot default, and are highly resistant to debasement, both of which are of paramount importance in this day and age of fraud, violation of contract law and crony capitalism. No prosecutions for Lehman? How about Corzine and MF Global? I suppose theft is OK as long as those doing it wear a suit and have political connections.

As to the FRN$ remaining the world's reserve, here are a couple of "think" pieces for your reading pleasure. It's hubris to believe that just because something has been one way for a long time that it always will be. It's also called normalcy bias, and is endemic in today's world. People and countries are moving away from the FRN$ because they can do math, something that our politicians and state economists seemingly cannot fathom. The math doesn't add up when you look at debt and liabilities and our productive capabilities and assets. There will be a reckoning, and it will be harsh. Telling yourself that it will never happen is to live in denial of reality.

http://www.zerohedge.com/news/guest-post-chinese-chaos-immediate-threat-dollar

http://www.zerohedge.com/news/china...cross-rate-system-will-transact-directly


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I believe in base metals like brass and lead - my crystal ball is pitiful, but my garden is tended, and for the first time I will be doing a winter crop.

The biggest condemnation of Keynesian School of thoughtlessness is the endorsement of it by Richard Nixon, you know the guy who worked in the wage and price control department during WWII - I believe the reason only Nixon could go to China was because he was a commie - American contemporary thought on the matter nonetheless.


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Originally Posted by siskiyous6
I believe the reason only Nixon could go to China was because he was a commie.
Pretty much. The most leftist Republican president in our history prior to Dubya.

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I also have plenty of base metals in finished form laugh , and a large garden. The PM's are for insurance, and for after a monetary system "event" shall we say.


If the American People allow private banks to control the issuance of their currency, first by inflation, then by deflation, the banks..., will deprive the People of all their Property,...Thomas Jefferson
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Originally Posted by mike762
There comes a point, called the "bang point", when confidence is lost and you get Weimar. It isn't that far off.

Sure, but the "bang point" is irrelevant as long as the rubes stay on the hook, which they appear to have been doing lately.

I guess one thing that figures into this is whether the Treasury and the Fed really believe that they can get a handle on this thing and turn it around, or whether they realize that there's no saving it and they're just interested in getting out of office before it hits the wall.

If they're honestly but incompetently trying to save it, there's no telling what they might do; but if they're just sucking it dry before leaping off, they'll be pretty predictable.


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Originally Posted by kwg020
So, Mike, your prediction when this will happen is what, this fall? The end of the summer?

Trends can be pretty hard to pick out of the data underneath all the deception and noise that governments throw in; but trends are much easier to see than deadlines.

You're looking for a cusp point, and nobody can really know when that might happen, because it's a psychological event, not an economic event. Wile E Coyote has been running in midair between the two cliffs for years now, and as long as he doesn't look down, he could theoretically continue to do so for years more. What will make him look down? It's unknowable. A tick one way or another in a key stock or commodity; a news story on 60 Minutes; a major political scandal; an interview on a talk show.

Just before I went for my first night solo flight, my instructor briefed me about night engine failures outside gliding distance from an airport. He said, "First turn off everything electrical except for the instrument lights, to save your battery for the landing lights. Then look out the window and find the blackest patch of terrain you can see, and set up an approach to it. When you're low enough for the landing lights to be effective, switch them on. If you like what you see, go ahead and land. If you don't like what you see, just turn 'em back off."

The US--and world--economy at this point is low enough to turn on the landing lights. If you're prepared for what's coming, it makes sense to keep tabs on what's happening in the world. If you're not, it's a little silly at this point to start rushing around and trying to prepare. I mean, how much gold are you really going to buy at >$1500/oz? Just relax and enjoy the time you've got left, sez I.


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There's no political will for "turning it around". There's only political will for temporary palliatives that will kick the can (debt) down the road for another term of office. Unfortunately for them, and us, the can is getting too large to be kicked anymore. He!!, you couldn't move it with a forklift.

The only way to "turn it around" is to cut .gov spending by 40% right now, and the ensuing economic pain, and by extension, political pain is too great to be contemplated by our so called leaders. It will happen one way or another, it's just a matter of when and how. It would be nice to think that those in power would like to have some modicum of control over the when and how, but after the debt ceiling theatre last year, I have little hope.

IRT the "bang point"; it IS relevant to everyone, as that is the point where the currency/credit becomes rapidly worthless. I hate to imagine what happens in the cities when "the check" won't buy anything, but it won't be pretty.

Here's an interesting article that covers some aspects of the debt, specifically on rollovers and how much different countries have to roll this year alone. It also covers how gold is possibly being readied for official re-monetization.


http://www.safehaven.com/article/25577/sprout-less-gold-tier-1-capital


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Originally Posted by mike762
It also covers how gold is possibly being readied for official re-monetization.


http://www.safehaven.com/article/25577/sprout-less-gold-tier-1-capital
If by re-monetization is meant simply lifting the legal penalties connected to the use of gold and silver as money, that would be wonderful, but I'm assuming it's merely referring to some sort of gold backed paper currency. The latter will suffer from the same defect that led to the run on the dollar that caused Nixon to close the gold exchange window in 1971, since there's no way, even with gold backing, that they'd stop spending, printing, and borrowing. As you've observed many times, they really cannot stop at this point, or the whole system crashes.

Inflation is just as easy with a gold backed currency as with a pure fiat currency, as Nixon proved. The limit on it with gold backing, however, is that as soon as folks lose confidence, they start cashing in for the real thing (gold), and the Treasury's stockpiles become depleted, so in that sense there is a natural limit on how much printing they can do with a truly gold backed currency before they either have to rein in the printing/spending/borrowing, or abandon it and start up again a pure, debt based, fiat system, as in 1971.

That being the case, any effort to start again, at this point, with a truly gold backed currency would only end in failure as sure as the FRN is failing. That only leaves a true gold standard, i.e., simply lifting the penalties on gold and silver as money (as is, to this day, required by the US Constitution), without backing the FRN, and let the chips fall where they may. But I'm not holding my breath.

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I wouldn't call that a gold standard; I'd call it currency freedom. A gold standard is when a government coercively decrees how gold must and must not be used.


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Originally Posted by RISJR
I can think of no event which will reverse the US dollars course as the dominant world currency.


I can.
When the "elites" decide. No sooner, no later.

They've made a lot of mistakes and worked thorugh many learning processes but even the slowest on the uptake eventually learns when an apple is ripe to be picked.

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folks, all we have available to us is a consensus answer, imho.

once technology gets to the point of mining asteroids, the moon, and other extraterrestrial bodies, we're be to the point of one of two things happening. we've be flooded, and therefore overrun with gold, and/or another more "rare" mineral will be discovered, and the fight will be on. grin

you goldbugs need to hold on to the gold, for better or worse. the rest of us will work to distribute the annual productivity of the Earth amongst the general citizenry, so that only a minimum starve on an annual basis.


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Originally Posted by Barak
I wouldn't call that a gold standard; I'd call it currency freedom. A gold standard is when a government coercively decrees how gold must and must not be used.
Yes, that's the sense in which I meant it, i.e., not a government imposed standard, but one chosen by the market by merely lifting legal barriers to using gold and silver as money. Essentially, a return to the system of "free coinage." An improvement to that system, however, would be the elimination of the practice of assigning a value to the coins, but rather only a weight and purity.

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omg, in due respect, do any of you people really understand what is being proposed?

we've already been there, and done that. you want the masses to go back to what has already failed? i understand your serious position. what i don't and can't understand is how gold, silver, etc.etc. would work in a day to day basis, as we mover futher into the post-modern era.

something is happening for sure. but i doubt gold is the solution.


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Here Gus, read this, it might make things more clear. BTW, it doesn't matter if it's post modern or pre modern, money is money and is necessary to facilitate trade. Until we get to mining asteroids for gold making it as common as dirt, it will be held in esteem as a preserver of wealth, simply because it is rare and difficult to come by.

www.zerohedge.com/news/it's-capital-we-guarantee-it

Well, the dadgum link won't work, so just type it in.

Last edited by mike762; 05/27/12.

If the American People allow private banks to control the issuance of their currency, first by inflation, then by deflation, the banks..., will deprive the People of all their Property,...Thomas Jefferson
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Originally Posted by mike762
Here Gus, read this, it might make things more clear. BTW, it doesn't matter if it's post modern or pre modern, money is money and is necessary to facilitate trade. Until we get to mining asteroids for gold making it as common as dirt, it will be held in esteem as a preserver of wealth, simply because it is rare and difficult to come by.

www.zerohedge.com/news/it's-capital-we-guarantee-it

Well, the dadgum link won't work, so just type it in.
I know you don't like a negative comment to be directed at Gus, so long as he refrains from bad language, but what you might not realize is that I've been through this with him several times. In the end, after you've presented him with the facts and arguments, he will pretend that he cannot grasp the concepts and that he was never provided with the facts that refute his arguments, thus nullifying your efforts. But I guess this is one of those things you will have to learn on your own through bitter experience. He's not the sincere seeker of information and understanding that he pretends to be, is my point. He has his own very bizarre agenda. But carry on, because it's good to get you commenting on this stuff for the rest of the folks to potentially learn from.

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Roger that.


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OK. Now you have me worried. I don't have gold or silver and if the collapse occurs in short order:
As Mike said:
"Then there is the next debt ceiling kabuki show, due in late September or early October just prior to the election, which could result in further downgrades of our debte"

At least I have my house paid for and some seniority at the local Walmart so I should have a job. How do you all think this will affect those of us getting a retirement check. Our retirement program is tied in with the stock market and government securities. Both of which appear to be on shaky ground.

I do have trading fodder to include firearms and ammuntion. Hopefully we will not need them but having them may add comfort to the owners, or future owners.

I agree the way America has been doing business cannot go on. I'm sure some of Europe has similar issues. Maybe it's time to take out that bank loan and buy primers and powder. It's not gold but as close as I can come.
kwg


For liberals and anarchists, power and control is opium, selling envy is the fastest and easiest way to get it. TRR. American conservative. Never trust a white liberal. Malcom X Current NRA member.
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Originally Posted by kwg020
OK. Now you have me worried. I don't have gold or silver and if the collapse occurs in short order:
As Mike said:
"Then there is the next debt ceiling kabuki show, due in late September or early October just prior to the election, which could result in further downgrades of our debte"

At least I have my house paid for and some seniority at the local Walmart so I should have a job. How do you all think this will affect those of us getting a retirement check. Our retirement program is tied in with the stock market and government securities. Both of which appear to be on shaky ground.

I do have trading fodder to include firearms and ammuntion. Hopefully we will not need them but having them may add comfort to the owners, or future owners.

I agree the way America has been doing business cannot go on. I'm sure some of Europe has similar issues. Maybe it's time to take out that bank loan and buy primers and powder. It's not gold but as close as I can come.
kwg
Buy gold and silver in the dips. Currently, they're both on sale.

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