Posted on 02/28/2006 7:41:17 AM PST by vrwc0915
My point is just that this decision may not be the deep, dark government conspiracy that some think it is.
If there were nothing wrong with deficit spending, then there would be nothing wrong with continuing to report the M3 figures. Seems to me there's an off-hand acknowledgement floating around here somers.
...and freeze-dried, N2 packed food, guns and ammo.
Cause when this puppy comes down, it could get really ugly.
Remember the Scout motto: "Be PREPARED."
In the meantime, here's a little something some of the Founding Fathers left us to read covering how they TRIED to keep BRAVO SIERRA like this from happening.
(WARNING:A CLEARLY RHETORICAL QUESTION AHEAD!)
AS A PEOPLE, ARE WE REALLY AS STUPID AS OUR MASTERS BELIEVE???
Nobody will be laughing then.
I don't think you'd have enough to live on in that scenario after taxes, food, insurance, utilities, car payment, maintenance, etc. But give it a try and let me know how you're doing. I hope you don't have a family to support. Good luck!
"In the long run, we are all dead" is a fine philosophy...if you are a heartless and nihilistic creep who doesn't care about the lives his grand children will be forced to lead.
Well possibly if your time frames are long enough. But in normal-human years someone following your diversify strategy in 1928 might have gone from rich to poor as the stock and bond values dropped through the floor, anitques devalued as money dried up. At least their gold was good, until FDR siezed by executve order! Pessimists who thought Hitler was going to destroy Germany and acted accordingly (left country) did far better than those who were 'optimistic' when bad things started happening. History offers plenty of examples.
"If I make $50,000 a year and get a 30 year mortgage for $200,000 my debt is now 400% of my GDP."
Sure, but so is your asset holdings. That $200K is backed by a $200K house. What backs our national debt or currency? Nothing.
History repeats itself while the sheeple are blind.
The difference is, in your case you very likely have a future income stream that will increase more than your future expenditures, so that you can reduce your debt. You also likely have that now. Furthermore, you won't be borrowing $200,000 next year, or the year after, of any year into the foreseeable future. And you likely don't have a bunch of unfunded liabilities down the road.
In the case of the federal government, spending is increasing faster than revenues. There is NO plan to pay down the debt, or even achieve a balanced budget. They plan to borrow even more money next year compared to this year. And there are massive unfunded liabilites around the corner once the boomers retire.
I guess it depends on whether I want to sell you a big ass hunk of gold!!
Gold beats paper over the long haul every time. As for "selling gold", as least they are selling some tangible instead of passing paper around all day like "sophisticated" investors do.
So now you agree that the chart is useless without any reference to the assets that back the debt. Welcome to the club.
The stupid chart included business and household debt. Without any reference to household and business assets, it's useless.
Gold beats paper over the long haul every time.
It doesn't beat stocks. Would you like to see a few examples that beat gold?
"So now you agree that the chart is useless without any reference to the assets that back the debt."
No, I agree that having a national debt is a bad thing and that a national debt backed only by the faith and credit of the US government is not much to go on. Our founding fathers also thought so.
"It doesn't beat stocks. "
Yes and no. Some stocks have been worth far more than metals ever could but most stocks have fizzled and many public companies have ceased to exist.
Also, most stocks do not provide dividends such that to realize the value of a stock the stock must be sold, thereby releasing any future value the stock may provide.
Metals have rarely been a great investment for gains but right now they are.
I agree, having more national debt is worse than having less national debt.
and that a national debt backed only by the faith and credit of the US government is not much to go on.
That's funny! What debt would you prefer to hold? What debt is safer than debt backed only by that silly faith and credit?
If you want to complain about the increase in national debt since Bush took office, that's fine. It increased by $2 trillion. While household net worth increased by $10 trillion.
Some stocks pay no dividends. Gold pays no dividends. Did you have a point?
It is a relevant chart since it's apples-to-apples over 100 years. Computing debt is easy. Computing GDP is accomplished in a fairly straightforward manner, and is a metric, even if not 100% accurate. How do you compute the sum of all assets? What do you think would happen to the price of those assets when everyone tried to realize their "value" by selling?
It doesn't beat stocks. Would you like to see a few examples that beat gold?
The Dow-to-gold ratio has stayed constant between 3 and 5 over most of the 20th century. It traded above this range during the 3 secular bull markets of that century, and below that range in the secular bear markets that followed. In our latest bear market, the ratio has already dropped from 45 to 20. (It is interesting to note that each succeeding bull market brought higher highs, and each succeeding bear market produced lower lows-- if that holds true this time, you'll be able to buy one Dow Jones for an ounce of gold).
Also, keep in mind that Dow Jones average is sort of cheating since it simply kicks out poor performing companing and adds strong performing companies to its average (the Dow Jones today is not composed of the same companies that comprised it in 1900). Also, it assumes that the average investor gets to change horses for free. It doesn't count broker's fees to sell the old company. It doesn't count the capital gains or other taxes on this transaction. And it doesn't count the broker's fees to purchase the new company.
It would really be interesting to see a plot of gold vs. the original Dow Jones over 100 years.
Having said all that, I make the following claims:
1) It cannot be disputed that gold has outperformed the most widely held paper asset of all in the United States over the past century: the dollar.
2) It cannot be disputed that gold has outperformed ALL fiat currencies over time.
3) I will concede that a fair analyis (including taxes, broker fees, etc....) of stock prices vs gold prices MAY conclude that stocks have outperformed gold over the past century. However I have yet to see that data, so until then we must use the previously referenced chart. Nonetheless, I would not be surprised if stocks still won out over the 20th century due to the massive economic growth of the US. Looking forward, I do not expect this growth to repeat itself in the 21st century for a number of reasons.
4) While many individual stocks undoubtedly did outperform gold during the 20th century, many (most?) others did not. The Dow Jones is sort of cheating by eliminating those companies that did not, and adding those that did over time. So an apples-to-apples comparison is suspect since it favors the Dow.
No it isn't. How much of that debt is double counted?
How do you compute the sum of all assets?
If you're using household debt, use household assets. If you're using corporate debt, use corporate assets. If you're using government debt, use government assets.
What do you think would happen to the price of those assets when everyone tried to realize their "value" by selling?
You let me know when that "happens".
The Dow-to-gold ratio has stayed constant between 3 and 5 over most of the 20th century.
Considering that gold was fixed at $20.67 an ounce until 1933 and then fixed at $35 an ounce until 1971, that ratio is kinda useless until the price of gold was floated. And most of the 20th Century would be more than 50 years. And that's not even the case.
It traded above this range during the 3 secular bull markets of that century, and below that range in the secular bear markets that followed.
I don't suppose you have a nifty little chart that shows this ratio?
Having said all that, I make the following claims:
Just so long as you stopped claiming "Gold beats paper over the long haul every time".
You have to copy and paste that link into your browser address for it to work.
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