I’m a pessimist when it comes to our future economy as well. I’ll keep my eye on this thread for others to reassure me why I shouldn’t be so worried.
The part about some global group coming up with a gold-based currency is interesting - and worrisome. Not sure how easy that would be to do though. I think that is one of the ONLY things going for us now - where else would you rather be invested?
I agree.....seems like they are talking about a one world coalition. I will be watching the responses also.
Interesting. I seem to remember references to China buying up gold, even as we and others (gov’t, not individuals) were dumping it. Will have to look for that ref.
I’m not so convinced that China is desperate enough to destroy its American golden goose. Status quo before Q308 had them growing at a much faster rate than the US, so they seem to have an approach of not upsetting the China-leaning apple cart... at least not in this generation. Of course, yes, it does limit our freedom of action when they own so much of our debt.
I’m more concerned about Russia and Iran. $40/b petroleum strangles both Russia and Iran, and they both have the means to create “economically favorable” (for them) “disturbances” to the world geopolitical balance, if you know what I mean. I think that’s the most probable next shoe to drop.
Al Qaeda? They must be drooling right now to do something. All they need to do is undermine confidence. That alone sends us into another downward economic tailspin. If they have the capacity, they will use it. If not, the open bok of history will treat Bush much better than the closed files required of ongoing policy.
This is actually a very good opportunity to break OPEC. With prices so low and such dramatic production cuts planned, a lot of the smaller OPEC countries are gonne cheat. If the US (and Canada) ramped up production now, internicine fighting within OPEC could unravel it, or at the least induce further cheating and help keep prices low. Tragically, I doubt it will happen. Now would be a good time to re-read the previous 2 paragraphs, and maybe think about a good price to get into USO. I’m thinking 30, although I may wait for 25-27.
I don’t know that actual conversion to a non-government gold-based currency would happen. Ignoring the question of inflation, the US Treasury and Fed prob have enough gold reserves to use as an implied (if only partial) backing for the dollar if worse comes to worst. Of course, that would require that gold increase to several multiples if its current price, but I’ve always held that a little GLD is a good portfolio hedge against both inflation and against a general flight from risk.
As far as just plain old boring economics... deflation and debt. The Fed is hamstrung. Japan did zero interest rates, quantitative easing and fiscal stimulus, and got nothing but zombie corporations and debt of 160% of GDP. We had 60% of GDP before we even started.