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Is that so? Who's going to replace the US dollar? China? Russia?
ROFL!
The euro failed and that was the only competition.
China isn't a free market. The world won't pick them as reserve currency. They're an autocracy that spends a lot of money to just keep their population pacified so they can stay in power.
They're a fake economy compared to the US.
I mean multiple gave it up for the Euro... Since they've learned what that means but still...
That wasn't the original architecture of the US dollar. The US dollar was meant to be the US currency, like other nations had theirs. We became the world reserve currency as we took over.
China already sells bonds. Derka derr.
They said that about Japan... Look how that turned out... and Japan wasn't an autocratic dictatorship...
Yeah... See the European Union... it's been so successful...
Russia is garbage. It's currency is battered. It's population is declining with shortening lifespans and serious issues. It's military outside of nukes is nothing compared to the US.
Indian people use gold jewelry still, what does that matter? Saudis will return to camel farmers as their oil runs out, too bad they don't have more sense to invest more in their own country for a post oil world for them. Germany is tied to the EU...
You think the US is bad? Go look up how much EU debt is already zero to negative interest rates.
Frankly, I think it won't be a choice outside of individuals who, at one point, choose to start investing and trading in another currency. Bitcoin, backed by nothing, has already made tremendous strides. Once a currency is tied to something, I could see it beginning to replace sums of wealth.
In a way, I think it's already happening. The biggest store of liquid assets are likely in stocks and bonds....the "cash" account isn't even cash, it's short term treasuries. What happens when a major brokerage house starts to offer something like....GLD to be your holding account. How does that change things?
Frankly, I think it won't be a choice outside of individuals who, at one point, choose to start investing and trading in another currency. Bitcoin, backed by nothing, has already made tremendous strides. Once a currency is tied to something, I could see it beginning to replace sums of wealth.
In a way, I think it's already happening. The biggest store of liquid assets are likely in stocks and bonds....the "cash" account isn't even cash, it's short term treasuries. What happens when a major brokerage house starts to offer something like....GLD to be your holding account. How does that change things?
Gold. Get over it. Gold is trivial. The US federal gold reserve is only $11 billion, which is chump change.
The S&P 500 market cap is about $27 Trillion. Today the S&P dropped 27 points a little less than 1%, which is the equivalent of $233 billion. That is 23 times the value of gold in the US reserve, and the S&P lost it in a hiccup. Remember, the S&P is only one of several indexes, on one of several exchanges, in one of several countries with exchanges.
Global bitcoin value is $41 billion. Also trivial.
Throwing gold into a brokerage account is going to be a rounding error. There simply isn’t enough to make it worth while.
If we see an apocalyptic scenario such as a major valuation crash in US currency, no brokerage account is going to survive. Even if you keep gold under your mattress, it won’t be a significant help.
that is where i disagree . gold is a very small market because few want it as an investment .. but in a situation where it was coveted those trillions in equities would be competing for a piece of that tiny pie .. no one realizes how thirsty they are until the well runs dry.
Frankly, I think it won't be a choice outside of individuals who, at one point, choose to start investing and trading in another currency. Bitcoin, backed by nothing, has already made tremendous strides. Once a currency is tied to something, I could see it beginning to replace sums of wealth.
Bitcoin really hasn’t though. There is a single individual (actually multiple) that have more wealth than the market cap of bitcoin.
Quote:
Originally Posted by artillery77
Frankly, I think it won't be a choice outside of individuals who, at one point, choose to start investing and trIn a way, I think it's already happening. The biggest store of liquid assets are likely in stocks and bonds....the "cash" account isn't even cash, it's short term treasuries. What happens when a major brokerage house starts to offer something like....GLD to be your holding account. How does that change things?
There’s not enough gold in this world to tether the US wealth to. It’s a foolish notion to think wealth is finite, which is where tethering it to gold fails. Gold was used for currency in the olden days because it’s supply could be controlled and it’s resilience to not break down.
I’d continue to use short term treasuries. GLD doesn’t fit the purpose of the cash account. Gold returns aren’t impressive enough.
that is where i disagree . gold is a very small market because few want it as an investment .. but in a situation where it was coveted those trillions in equities would be competing for a piece of that tiny pie .. no one realizes how thirsty they are until the well runs dry.
And the silver market is even smaller. If just a million people in the world tried to buy $65K worth of silver, the silver does not exist. There is not enough silver in the world for that.
I'm getting all the silver I can now while it's still cheap.
We all know that the paper dollar is constantly losing purchasing power, and that all fiat currencies eventually fail. On a scale from 1-10, how likely is the USD to collapse in the next 3 decades? With 1 being an infintesimally small probability and 10 being an absolute certainty.
Why or why not is a dollar failure likely, how would a currency collapse happen, what effects would it have on American society and the global economy, and what should a prudent saver do to protect himself? Are precious metals, land/property, or even Bitcoin good protection measures?
The chance of a USD collapse is equal to the chance of a US government collapse, and the causality runs entirely from government collapse to currency collapse. The dollar is a creation of the US government and will be just fine as long as the US government functions.
I don't understand your statement "the paper dollar is constantly losing purchasing power, and all fiat currencies eventually fail." Fiat currencies have only been common for half a century, for one thing, and I can't think of any situation where an otherwise-functional country collapsed due to a failure of fiat currency. The strength of the dollar is roughly average for the post-Bretton period.
Regarding what to do, dollar failure follows societal collapse, so the only practical protection would probably be dual citizenship in whatever country fares best after the collapse of the world's superpower.
The chance of a USD collapse is equal to the chance of a US government collapse, and the causality runs entirely from government collapse to currency collapse. The dollar is a creation of the US government and will be just fine as long as the US government functions.
I don't understand your statement "the paper dollar is constantly losing purchasing power, and all fiat currencies eventually fail." Fiat currencies have only been common for half a century, for one thing, and I can't think of any situation where an otherwise-functional country collapsed due to a failure of fiat currency. The strength of the dollar is roughly average for the post-Bretton period.
Regarding what to do, dollar failure follows societal collapse, so the only practical protection would probably be dual citizenship in whatever country fares best after the collapse of the world's superpower.
They're just brainwashed. The day the US dollar collapses the world is probably ending so nothing they hoard matters.
Gold. Get over it. Gold is trivial. The US federal gold reserve is only $11 billion, which is chump change.
The S&P 500 market cap is about $27 Trillion. Today the S&P dropped 27 points a little less than 1%, which is the equivalent of $233 billion. That is 23 times the value of gold in the US reserve, and the S&P lost it in a hiccup. Remember, the S&P is only one of several indexes, on one of several exchanges, in one of several countries with exchanges.
Global bitcoin value is $41 billion. Also trivial.
Throwing gold into a brokerage account is going to be a rounding error. There simply isn’t enough to make it worth while.
If we see an apocalyptic scenario such as a major valuation crash in US currency, no brokerage account is going to survive. Even if you keep gold under your mattress, it won’t be a significant help.
The Federal Reserve Bank has about 261M Troy Ounces of fine gold.
Their book value (cost), is about $11B USD. The FMV of that gold is just shy of $400B.
The dollar has depreciated in relative terms nearly 40 to 1 from the government's purchase point. Alternatively speaking, your gold will buy about 2.5% of the gold it would have when the government bought theirs.
If you look at the precursors of banks, used for millenia before modern banking, there are components of three things which are entirely separate today. A central bank of a small city state would serve as a granary, where depositors would actually pay to deposit their grain, which would be converted into food and stores. It would also serve as the head of religion, where judgement would able to carried out. It was important because each planting season loans of seed from the central religion/bank would be made. An invasion that destroyed this would effectively be disastrous for the community. For a time it was almost sacrosanct to do so to a community....the area needed to be lead by someone fair and noble, but strong and orderly...the granary/temple itself was sacred....the quarrels must be kept outside of it. Perhaps then stories of monsters or spirits attacking those that would violate this helped fuel a need for bated breath as would be conquerors someone how needed to be warned against taking everything in full.
At the time, the deposits were exactly what they were. A measure of wheat or rye. These measures could be traded and along the way came money, made of a valuable, portable and divisible material.
The outlier is that, for our entire existence, money has always been based upon something. That basis couldn't always be maintained, or perhaps was overly accepted....but it was based upon something. Until the 1970's.
I'm not saying gold is a good standard. 1802 saw a deflation rate of nearly 15% in inflation of about 5% each of the following years. There is no good single standard for currency. What makes more sense, however, if for there to be several currencies....not necessarily issued by a government, but by a guarantor.
If I were to issue coins that were worth the value of 1 pair of dry cleaned pants....and nobody questions my ability to provide that service, I could potentially make a currency. If the post office has a stamp that, if returned, it will always promise to deliver 1 oz of mail from point A to point B in the USA....is that not worth something? Are stamps not....currency like? Sometimes casinos will allow to take each other's chips. Currently they are based on dollars, but what if they were based on a minimum to play a game of some sort?
The Euro sought to get rid of some of that confusion in Europe, where everyone had their own currency...but the currency of next year may be one where I can back dry clean pant dollars in this region, and someone else has the same in another region... I may then choose to also dry clean pants for $3 or $5 or $8....but the value of that currency is still based upon something.
Whatever it is, I think there's a serious risk that the US Dollar will inflate away her value in the next 30 years...who knows about collapse. I think it will still be the US currency, but I could forsee where the dollar's convertibility into all goods starts to diminish, or be less favorable.
Likely...no, I wouldn't say likely. I'd put about 20% chance of it happening. That's not likely. That's enough to have a Plan B for though. All I know is that gold has been considered valuable for about 2000-2500 years. Fiat currency backed by confidence and the Federal Reserve has had a solid 50 years...and frankly, there hasn't been a deflationary spell in any of those years.
We couldn't fix it in early 1970's, back when the debt was in hundreds of billions and the % to the economy was steadily in the 30 percentile range. Now we're at 106%. That's what happens when you give a country's treasury to politicians on their honor. They have no honor and you'll soon have no treasure.
It's allowed, only because the leaders have invited each other to do the same. It's a shared debt madness this time. The root of all evil unleashed from any sort of temple-like restraint. Money goes on to make more money and more speculation in a manner that makes coefficients passe.
Will the dollar crash? I don't know.
In 1930 a loaf of bread was .09.
In 1960 a loaf of bread was .23.
In 1971 we officially stopped tying the dollar to anything, though the practice was already underway.
In 1990 a loaf of bread was .75.
In 2020 a loaf of bread will be what....$4?
Do you think $20 will buy you a loaf of bread in 2050? I do not. Do you think a token that could be redeemed for 1 lb of ribeye bought today for $20 will be able to buy a loaf of bread and get change back 30 years from now? I do.
So if the US's cost basis in its gold shows dollars are worth 1/40th of when they acquired and a loaf of bread now costs 40X as much as it did....and it's odd to me because the cost of producing an ounce of gold has gone up, while mass production has made bread fairly cheap...I thought...
I could be wrong...I mean for some 97.5% loss of buying power would be enough collapse already. All I'm saying is currencies that have a basis in something look attractive to me at the moment.
Remember cash is worth what it can acquire. The fact that the yen, dollar, RMB, euro, sterling etc, lose value at the relatively same rate, doesn't make any of them a great store of value in terms of buying gold or bread....it merely creates lots of jobs for diplomats.
In 1930 a loaf of bread was .09.
In 1960 a loaf of bread was .23.
In 1971 we officially stopped tying the dollar to anything, though the practice was already underway.
In 1990 a loaf of bread was .75.
In 2020 a loaf of bread will be what....$4?
Do you think $20 will buy you a loaf of bread in 2050? I do not.
Who cares? I make a lot more dollars today than I did in 1990. My concern isn't what I can get for a dollar but what I can get with my paycheck.
And unless you are the only one with the ribeyes you can't tie a token to a pound of ribeye because I might not sell you a pound of my ribeye for your silly token next week much less in 20 years. Essentially, what fiat currency is tied to is the GDP.
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