Just call them "New Dollars" and put this guys mug on them for credibility
Posted on 12/04/2008 11:44:24 AM PST by Vince Ferrer
While on the subject of furniture stores, our local neighborhood furniture store that has been running a month long going out of business sale every 3 months for the past 5 years, has finally actually gone out of business. Was surprised as heck to see his unit empty.
While I agree that hyperinflation is a potential threat, the bigger threat IMHO is the liquidity trap. That is, the FED and the Treasury even can pump as much money as they want but it does not stimulate the economy. This causes DEFLATION.
The asset bubbles in housing, stocks, oil, gold and other commodities caused real inflation to soar - some say 15% annualized last year alone. We know housing inflation was over 7% compounded per year. We know oil prices went from $40 to $140 in a year.
Now the unwinding, the deleveraging, is causing deflation in all those asset classes. In periods of deflation it is better to hoard dollars and invest in nothing and buy nothing but the essentials.
Look now, they are printing money and they have cut the fed rate to 1% - and still no stimulus. This is perilously close to the problem Japan had with no real interest rate and no real economic growth. It is possible that Bernanke and Paulson are making it worse by not letting deadbeats go broke but Paulson already cut the banks off because he saw they weren’t lending. The Treasury was buying shares and assets but the banks were hoarding the money. That means they think we are in a deflationary period.
Nobody is buying cars or tvs. Housing is still falling. Oil is still falling. At some point that deflation will hit manufacturers costs and they will begin to pass along lower prices too.
I hope we get out of it but I’m not convinced that the conventional wisdom of impending inflation is really the problem. IMHO the problem could just as likely be 1) the consumer and small business is tapped out and 2) people with money are hoarding it because they think deflation is the real problem and they would rather keep cash today because they believe they will get better deals later - they won’t even buy T bills because 1% return is no good if cash will earn even more... which it is - look at the interest banks will pay on a CD vs what the Fed pays of a T-bill.
Good luck.
Thanks for the ping.
Credibility will require that it be based on something - especially after the financial messes we've been having.
Gold is an obvious.
That was a really good reply, and I agree that cash is the best thing to be in right now, with a keen eye toward what to move it into in the future. Also, it isn’t just cash, but which currency that is important, as there is now tremendous government intervention, with various effects, around the world. Just moving from curreny to currency may be the way to be safe and profitable.
Sorry, but a gold standard isn’t going to happen, especially in the US and other major industrialized nations. I don’t disagree that it probably SHOULD, but it will not.
MAYBE in a few middle eastern nations, and maybe in a few African nations and possibly Switzerland, or small financial havens like the Bahamas and Caymans. Venezuela would have been a candidate, but in spite of their coming collapse, I think that the chance of it happening there is long gone too.
If the major nations are smart, they will eventually have a commodity ‘basket’ based currency, and gold will probably be a part of that basket. But a pure gold standard backing ANY major international trading currency isn’t going to happen.
The biggest potential thing I can see happening is that OPEC (and perhaps the Russians???... I dunno... have to think about that one for a while) might start accepting ONLY gold for their oil, (after this ‘anti-bubble’ bursts), since it is becoming more and more unlikely that the US is ever going to get around to pulling its head out of its @$$and its own oil out of the ground.
Probably their computers are now locked up in some warehouse with all the rest of the crap from Countrywide, Bear Stearns, etc.
Like you say, good ridance.
“””Naked short selling is a scourge. I for one will not invest any money in the US equity or commodity markets until this issue is addressed seriously. The means to prevent naked short selling exists”””
That about sums it all up naked shorts, comex, stocks, Credit default swaps, carry trade, derivatives etc were all free credit trades till they got caught with negative leverage and now we have to bail them out.
The elite and their greed have destroyed this country Democrat and Republican. The Joe the plumbers had their heads down doing it by the book, paying their taxes, working doing something constructive. I am incensed every time some pundit blames the average guy for this mess.
>If the US spends more than it’s possible to repay - we’re going to have to come up with a new currency. And that goes double for the rest of the world.<
http://www.freerepublic.com/focus/chat/2135081/posts?page=7#7
A Euro Dollar, an Amero Dollar, an Asian Yuan, a South American Peso and the Russian Ruble financial systems is what I am expecting when they are done wringing us out to dry. Five or six separate but similar money systems that will smoothly interact. The IMF will accept any or all of them.
Devaluation of the US Dollar will ease the swap over to the new, stronger Amero Dollar. Maybe 10 or 15 to 1.
Canada will not be confiscating gold it never has. It is a mining nation
#2-— Good luck with curency controls these days. Our borders are very porous.
Devaluation of the US Dollar will ease the swap over to the new, stronger Amero Dollar. Maybe 10 or 15 to 1.
A new form of American currency seems like a safe bet as this crisis deepens
A new currency gives the elites a chance to shear the sheeple while fooling the sheeple that we are off to a fresh new start.
Gonna be somewhat difficult.
The 7th Amendment explicitly mentions “DOLLARS”.
Congress or the Courts are not supposed to simply redefine the meanings of things, but I guess we been there, done that already.
Currently no nation wants to back its currency with gold. Every nation prefers to play games and have a leveraged currency
But we are now in the age of deflation and de-leveraging. I can see that somewhere down the road Russia or Canada would create a 30-50% gold backed currency for internal and external use. They both produce gold but a larger question is -- How much gold does the Central government of a Canada or a Russia have?
To have a gold backed currency you must have gold to back it up.
>>I agree that cash is the best thing to be in right now, with a keen eye toward what to move it into in the future.<<
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You have got to watch which currency you are in, I mean, of course, not for day to day expenses, but for investment funds. It looks like the worldwide race to devalue one’s currency against other nations is beginning. Harsh words over currency between the US & China, round after round of interest rate cuts by central banks go round the globe. There’s so much debt in Europe and the US, really everywhere except for selected Asian countries, that the only hope of repayment is through a devalued currency, paying down the debt with $$’s that are cut by half or more in value.
There’s going to come a point when investment cash flees to tangible goods, i.e. metals, agriculturals and the like as the value of funny paper money plummets.
Gold may not be shining strongly YET, but relatively speaking, gold’s approximate break even (-3%) over the past year beats the pants off most everything. When the dollar cracks and heads back down again it might be a brutally rapid decline.
Several times in the past 130 years, the DOW/Gold ratio has approached par, meaning one ounce of gold buys one unit of the Dow Jones Industrials. Look at the chart, it’s headed that way again, where do they meet? $3,000, $4,000, $5,000?
Just call them "New Dollars" and put this guys mug on them for credibility
So you’re sayin they almost got it right - it won’t be the AMERO, it will be the OMERO?
It is already illegal to intentionally sell short without the means to deliver but nobody is policing it. Nobody is forcing a buy-in when the trade fails. Furthermore, market makers and options contract market makers are permitted to naked short sell as a hedging strategy, but that loophole is ripe for abuse since anyone could force an option market maker to naked short sell by taking a large options position.
For crying out loud they even have a list of stocks with inordinate numbers of fails and they don’t do anything other than list them as REG SHO (fail). They don’t investigate who is failing, why they are failing, or force anyone to deliver.
This scam has destroyed or damaged hundreds if not thousands of companies. If you can sell shares that you do not own, cannot locate for borrow and have no intention of borrowing, then you are artificially increasing the supply and putting downward price pressure on the issue.
The markets are unsafe and ripe for fleecing - as everyone with eyes has just seen occur.
Can these practices be policed and regulated even if we wanted too?
What I heard was that Chris Cox's SEC staff was too small
At any rate blame President Bush and Cox here. Also Greenspan. They believed in 100% hands off attitude towards markets. This is what the libertarians always want and this is what they got. A totally unregulated and obscure market in credit default swaps and other derivatives. Which may be OK in theory but not when the taxpayers are forced to bail them out
Greenspan made many statements in favor of derivatives. He liked the way they hedged risk
According to Paul Volker, the former chairman of the Federal Reserve, the entire modern financial system is based upon derivatives, and the financial system today is entirely different from the traditional American or global financial system because derivatives - a relatively new concept - now underly the entire fabric of the financial system.
It will be called the Omero! Or the Hope Dollar. Or the Change Dollar.... and it won’t be worth a plugged nickle
ping
I wouldn't imagine that Canada, as a governmental entity has much gold stashed away.... I have a feeling that they have been pretty much playing the game pretty much the same way the USA has been. Their holdings of Actual, PHYSICAL gold are probably greatly exaggerated, as are the US's (If there are really 145 million ounces of real gold in Ft. Knox, as they say there are, I'll eat 'shinola'.)
Russia.... thats really the trick part of the question.... Because of their natural resources (LOTS of gold in Siberia) they could have many tons of it squirreled away.... But given the way Putin has been playing his own games for the last 9 years I wouldn't be surprised if he had less than ten pounds or more than ten thousand tons of it stashed in his central bank.
You can never tell for sure what the Russians have, or are willing to do. For instance, during the 1970's, before 'Glasnost', the Russians had so many good quality gem diamonds stashed, that they could have have destroyed the diamond market (to about the price of Cubic Zirconia +20%) if they had wanted to dump their holdings. Probably only a dozen people know what the Russians actually have and actually intend to do.... And they aren't talking.
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