*When currencies became commodities to be traded, they became vehicles of manipulation.* Currencies have ALWAYS been traded.. thats what they are: vehicles to be traded and to facilitate trade. And their value has ALWAYS been negotiated and manipulated... Dont have the data at my finger-tips, but it obvious that the purchasing power of gold (independent of currency conversions) has varied throughout history.
*...will gold and silver work as currency* - On the one hand, been there, done that. On the other, precious metals remain part of the basket of currencies kept by all central banks
*... it would make the world a better place.* Doubtful.
*... many problems might be solved with a world wide currency based on the same value, am I wrong ?* You are largely wrong. Currency fluctuation is not evil in itself. More evil are the kind of problems we have now with the euro, the fiction of a single currency uniting disparate economies; more, bigger problems. RG, I thought you were against the international banker conspiracy to control the world... but now you advocate a single currency? What up with that?
*So what is wrong with the idea of currencies actually being backed by intrinsic value ? It certainly makes sense to me.* Intrinsic value? What is IV, a human life? Intrinsic value is like a free market -- it doesnt exist. The only intrinsic value is the caloric intake it takes to keep you alive, after that, its all negotiable.
Thanks for your view and observations. Since there are varying views on short/med/long term. What's short term ? You mentioned two years... is that your short term view of the US dollar ?
I agree is likely that more stimulus programs will be born or re-born. If so, let's hope they are more successful than the first time... I'm not holding my breath.
As far as the yen, I think we previously had the discussion about the yen being different than the US dollar, I still think the yen is another animal. To me the differences are significant enough to not attempt to draw an exact correlation. However, why I should think I know more than you on this subject I don't know... lol. You're the man !
I think the only thing you've missed on was the direction of uranium... and given more time, you still might be right on that one too.
As for currencies and the metals. I think the potential for the metals going up is still there. If hyper-inflation were to occur, the prices could get ridiculous. Even with the estimates of 100% for a number of years(which in NOT considered hyper-inflation) could send the metals quite high. You know I've been agreeing that the US dollar is undervalued. I'm not making any predictions for gold since I'm terrible at making longer range predictions about where specific markets are going. However, I am still fairly confident that silver comes down, and I'm using the ZSL to secure my bet. If the US dollar strength tanks gold... silver will completely fall apart. and silver will easily see $20.
I've been watching the EUO for a few months, I think you are correct and now might be a good time for a long term position(much as this high frequency trader hates long term positions).
As for the world fiat paper. Musk thinks I'm proposing returning to gold and silver exchange as a means of currency.... I'm not. My problem with fiat currencies is that they are not currencies at all, they are commodities that are traded. That is BS ! How can a currency have a value when it changes from day to day based on the wind ? That is my problem with modern currencies. When currencies became commodities to be traded, they became vehicles of manipulation. As you have stated, it became a world wide race to devalue. HOGWASH !
So, that is my issue with paper, will gold and silver work as currency, likely not, but in some ways, it would make the world a better place. In my view, many problems might be solved with a world wide currency based on the same value, am I wrong ?
So what is wrong with the idea of currencies actually being backed by intrinsic value ? It certainly makes sense to me. I think the biggest problem is that they could not be manipulated... that won't fly in today's world.
The end of fiat currencies... lol... thats like returning to candles for light... wont happen.
Agree the Euro is overvalued and that EUO should rise... but it has hardly moved following a big decline (= euro appreciation).
If commodities are over-valued, how could commodity currencies NOT be overvalued? I do not know about the Ruble, Aussie or Loonie, but the Real is at least 30% overvalued (I thought you agreed with that).
RG on the dollar, it will go up short term especially given the news that germany is not supporting Italy. I told my brother there is a 100% chance EUO goes up over next two years save for nuclear war ETC.
Expect the fed or government to try to prop up the market again by devaluing the dollar. So you will see some bumps along the way, but Japan is still the model, and the yen is near all time highs.
Everybody rushing to gold is saying the end of fiat currencies is near. They could not be more wrong. With a few exceptions, there has been a race to devalue one's currencies, and fiat currencies are actually undervalued. What is overvalued are stocks, commodities, and some bonds. The currencies that are not overvalued are China and the commodity currencies (Canada, Australia, Brazil, Russia). You could also add the currencies of Norway and Switzerland; they are up because of people fleeing the euro.
Lets just say I use the stock market as a proxy for the state of the economy. I worry less when markets signal economic health and the prospect of more health, and worry more when they signal the opposite. I suffer no guilt about my interest in the market... its how I survive. That interest in no way restricts my love of country or concern for our people.
I have wins on ignore, so I cannot link you directly to where he posted something absurd about a *much needed recession* and defended that with reference to creative-destruction (you can find it in the string starting here): http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_P/threadview?m=tm&bn=26953&tid=40778&mid=40780&tof=-1&rt=2&frt=2&off=1
Wins writes: *You operate under the implicit assumption that a recession and some creative destruction in the financial/investment banking sector would necessarily hurt the masses and their standard of living....I don't think the impact of that would be felt much at all by the middle class, the poor, or on Main Street.*
You, RG, are now advocating a reduction of 30% in Federal spending. Apparently you have no concept of how devastating this would be for our economy. And you accuse me of being unconcerned with *getting things right*? Sure, Ra Ra Recession, GOOOOO Recession!
RGs prescription for economic well-being: (*entitlement programs, medicare and the defense budget account for 60% of the budget spending. If all three of those programs could be cut by 50%... we might stand a chance.
Neither I nor winny said anything about wanting a recession... your translation. What we inferred is that the over leveraging that took place requires a painful period to compensate for such borrowing. That includes the private sector.
Yes, if you wanna say "no pain no gain" ... I think that is appropriate. But nobody WANTS it.
I don't think you're concerned with getting things right in the US. It seems as if as long as your stock portfolio goes up... the congress can do whatever they like.
Let me make it a little less *silly*.
*Threatening to un-fund the governments obligations put us over the top.*
Meanwhile, I have joined the Chicken-little Cheerleading squad (aka *The Cheering Chickens*):
GIMME AN R, GIMME AN E, GIMME A C-E-S-S-I-O-N.
WHAT DO WE WANT? RECESSSION!
WHEN DO WE WANT IT? NOW!
WHAT DO WE NEED? RECESSSION!
WHEN DO WE NEED IT? FOR A LONG TIME!
YEA! GO RECESSION!
(Sorry. I know I am being silly. Again. But I am just sooo excited to have seen the light. Its, like... like... a new me. I wish I had believed in the healing power of recession all along. I have never felt so good about a recession before. Watch out canned tuna, cause if I can afford you, Im coming to get you!)
That is just some silly spin you put on the problem because you still wanna put some dirt on the Tea Party.
Fact is that if I run up a credit card account beyond my ability to pay. It was my spending that got outta hand... my income IS what it IS.
The Tea Party was not about threatening not to pay creditors. It was an attempt to bring attention to the fact that apparently congress needs to have a debt ceiling in order to live withing a budget.
doc, you probably are already aware of this. As I understand it, the three items you mentioned... entitlement programs, medicare and the defense budget account for 60% of the budget spending. If all three of those programs could be cut by 50%... we might stand a chance.