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Interesting piece on the $


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What would be the ramifications of this? We will be less able to buy products from other countries, we'll have to produce more things here in the US (production of tangible goods is something I feel we should do more of, b/c as a people we are losing our sense of purpose in a service/pampering-driven economy), bartering might get back in style, more localized economies.... Five years ago in an econ class I predicted this would happen. I'm no worldbeater in econ tho. Anyone who can chime in?

 

I don't get the financial services and people who erupt into absolute panic over infectious paranoia and the smallest things (e.g. what happened when the S. Korean manager uttered "diversification" during lunch). It's a big part why I want nothing to do with the stock market, etc. I don't get what can suddenly make a dollar worth less in a matter of minutes b/c someone isn't as "confident" anymore. I also don't get what happens to the dollar you invested before everyone's confidence suddenly dropped (we need to send them to that kindergarten class that uses the purple pens for grading, I guess) --- did it evaporate or disappear? Or is it fancy, legal theft?

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Good luck stashing money away for your retirement in the bank.  :rolleyes:

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Better than people I know who've lost $300 in the past 6 months in their so-called safe John Hancock mutual funds.

 

Right now, I'm building up a fallback fund. Then I think I'll start burying my surplus in the backyard; it'll be safer. I also honestly don't plan on living to retirement age.

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Collapse of the dollar?

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Seems to me the author has an axe to grind against America. Using buzz words like "America's global hegemony" and getting quotes from Soros, the left-wing windbag.

 

When he ends the story with: "How's the US going to look as a global power when the dollar is at 50 per cent of its current value?", I have news for him. If we go down hard, the whole world is coming with.

 

He makes the point that China will be a stronger economy, but who are they going to sell their junk to if we collapse? Sudan?

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What would be the ramifications of this? We will be less able to buy products from other countries, we'll have to produce more things here in the US (production of tangible goods is something I feel we should do more of, b/c as a people we are losing our sense of purpose in a service/pampering-driven economy), bartering might get back in style, more localized economies.... Five years ago in an econ class I predicted this would happen. I'm no worldbeater in econ tho. Anyone who can chime in?

 

I don't get the financial services and people who erupt into absolute panic over infectious paranoia and the smallest things (e.g. what happened when the S. Korean manager uttered "diversification" during lunch). It's a big part why I want nothing to do with the stock market, etc. I don't get what can suddenly make a dollar worth less in a matter of minutes b/c someone isn't as "confident" anymore. I also don't get what happens to the dollar you invested before everyone's confidence suddenly dropped (we need to send them to that kindergarten class that uses the purple pens for grading, I guess) --- did it evaporate or disappear? Or is it fancy, legal theft?

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"Holding dollars" is equivalent to "holding US Treasury Notes/Bonds/Bills". Interest rates on US government debt would go up, the government would have to find other ways of financing itself (raise taxes), or cut spending (lower consumption), either of which creates a drag on the economy - and a serious one, if there's a real run on the dollar. And anyone who doesn't get out early is going to get raped by a collapsing market - lots of entities keep cash stashed away in Treasuries, since they're stable and liquid. Lots of those entities, if the dollar collapses, are basically going to hemmorhage cash and go under (i.e. bankruptcy). Countries that peg their currency to the dollar (of which there are quite a few) are going to get destroyed.

 

Basically, total economic collapse. The world runs on US dollars and debt (the US debt market was the largest investment market in the world a few years back; it probably still is).

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He makes the point that China will be a stronger economy, but who are they going to sell their junk to if we collapse? Sudan?

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Which is transparently stupid. With the possible exception of Japan (I don't remember exactly), China is the biggest foreign holder of US debt in the world. If the dollar collapses to half its former value, that devalues a huge chunk of China's currency reserves, and ultimately devalues their currency as well. They wouldn't suffer as much as we would...but "stronger" is a misuse of the word. "Not quite as weakened as us" would be more accurate.

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Which is transparently stupid.  With the possible exception of Japan (I don't remember exactly), China is the biggest foreign holder of US debt in the world.  If the dollar collapses to half its former value, that devalues a huge chunk of China's currency reserves, and ultimately devalues their currency as well.  They wouldn't suffer as much as we would...but "stronger" is a misuse of the word.  "Not quite as weakened as us" would be more accurate.

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Right, if the US goes down the tubes, there will be no "Safe Haven". The only thing that would keep it value would be gold.

 

If, and that is a big if, it happens, it would suck real bad for awhile I'm sure. But it might also give a chance to start over, and create a "New, New Deal". One that would be so dependant on middle east oil (something liberals and conservitives can agree on), and may be fiannly stop the illegal invasion that will turn America in a western version of the Balkins.

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Right, if the US goes down the tubes, there will be no "Safe Haven". The only thing that would keep it value would be gold.

If, and that is a big if, it happens, it would suck real bad for awhile I'm sure. But it might also give a chance to start over, and create a "New, New Deal". One that would be so dependant on middle east oil (something liberals and conservitives can agree on), and may be fiannly stop the illegal invasion that will turn America in a western version of the Balkins.

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I was falling asleep to a gold show the other night. Why IS gold the standard? What is the value besides tradition?

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I was falling asleep to a gold show the other night. Why IS gold the standard? What is the value besides tradition?

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Rarity. Aside from looking pretty, gold's a pretty important industrial metal with interesting physical properties (like you can pound a sheet so thin it becomes transparent.)

 

But mostly, because it's pretty and traditional.

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Better than people I know who've lost $300 in the past 6 months in their so-called safe John Hancock mutual funds.

 

Right now, I'm building up a fallback fund. Then I think I'll start burying my surplus in the backyard; it'll be safer. I also honestly don't plan on living to retirement age.

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Great job of planning. And what's your plan if you do live to retirement age? Blow your brains out?

 

So they lost $300, doesn't tell me much seeing as you don't say what the investment amout was. The real question is how much $$ did they make in their "safe" MFs in 2003-2004?

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