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Old 10-06-2009, 12:30 PM
 
13,967 posts, read 13,412,433 times
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What Recession? As the Economy Crashed Around Them, The 400 Richest Americans Lined Their Pockets with $30 Billion
All of those 400 Americans keep a substantial part of their billions liquid---that means CD's or short-term Treasuries. If the American dollar were to go belly-up what would happen to their assets? We're talking about the most powerful people in the country, if not the world, and they have more say in how economies are made or broken than government institutions/politicians. Do they have the combined power/influence to keep the American dollar afloat or are they in the same boat as the rest of us idiots---vulnerable to losing their assets just like us?

PS I used a Yiddish word for idiots that rhymes with smucks and the censor censored me. Is that Yiddish word derogatory?
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Old 10-06-2009, 01:03 PM
 
14,256 posts, read 16,604,726 times
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Quote:
Originally Posted by thrillobyte View Post
Headline:



All of those 400 Americans keep a substantial part of their billions liquid---that means CD's or short-term Treasuries. If the American dollar were to go belly-up what would happen to their assets? We're talking about the most powerful people in the country, if not the world, and they have more say in how economies are made or broken than government institutions/politicians. Do they have the combined power/influence to keep the American dollar afloat or are they in the same boat as the rest of us idiots---vulnerable to losing their assets just like us?

PS I used a Yiddish word for idiots that rhymes with smucks and the censor censored me. Is that Yiddish word derogatory?
I would imagine they have hedged their currency risk by converting some of their assets to Euros, etc.
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Old 10-06-2009, 01:23 PM
 
Location: down south
514 posts, read 1,499,957 times
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Quote:
Originally Posted by thrillobyte View Post
Headline:



All of those 400 Americans keep a substantial part of their billions liquid---that means CD's or short-term Treasuries. If the American dollar were to go belly-up what would happen to their assets? We're talking about the most powerful people in the country, if not the world, and they have more say in how economies are made or broken than government institutions/politicians. Do they have the combined power/influence to keep the American dollar afloat or are they in the same boat as the rest of us idiots---vulnerable to losing their assets just like us?

PS I used a Yiddish word for idiots that rhymes with smucks and the censor censored me. Is that Yiddish word derogatory?

Everybody loses money if he/she got unlucky. The difference between people of Bill Gates or Warren Buffett's caliber and work bees toiling at cubicles is it's extremely unlikely that the former would lose enough money to force them into living lives even remotely resembles that of the latter. Their asset has long been spread throughout the world, short of meteor hitting the earth or global nuclear exchange, there is close to nil chance that you'd ever see them standing in soup line.

Not to mention for people like them, physical wealth is only part of their source of wealth and power. They're very likely connected with elite throughout the world. Michael Jackson could take sabbatical living like a prince in Persian gulf despite his, legal trouble, collapsing reputation, tanking fiance and years of neglects of his music career. Even in secluded countries like North Korea, elite like sons of Kim Jung-il went to school at elite Swiss boarding school, took regular trips to Japan, Macao, etc. for shopping errands and general. Trust me, they're never gonna live like you no matter how much money they lose.
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Old 10-06-2009, 03:27 PM
 
13,967 posts, read 13,412,433 times
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Originally Posted by Jaggy001 View Post
I would imagine they have hedged their currency risk by converting some of their assets to Euros, etc.
I'm sure they've got billions worth of dollars parked in every currency on the globe, if they have good financial managers, but jockying billions of $$$'s around in various currencies as they go stable or unstable is a daunting task. I doubt even the richest of the rich can move those kinds of numbers around on a daily basis.

Quote:
Originally Posted by eatfastnoodle View Post
Everybody loses money if he/she got unlucky. The difference between people of Bill Gates or Warren Buffett's caliber and work bees toiling at cubicles is it's extremely unlikely that the former would lose enough money to force them into living lives even remotely resembles that of the latter. Their asset has long been spread throughout the world, short of meteor hitting the earth or global nuclear exchange, there is close to nil chance that you'd ever see them standing in soup line. Trust me, they're never gonna live like you no matter how much money they lose.
Well, they'll never end up in bread lines, but the thing on my mind was if we have the BIG meltdown that everyone worries about, one on a global scale, when we lose thousands do they lose billions? Or do they wield so much power on a geo-political scale that they virtually assure that a meltdown will never occur because it would cost them too much? In a case like that, then all these doom-and-gloom articles we read in Money and Business and Yahoo and CNN seem like just a lot of hot air---the ol' "if it bleeds it leads" philosophy of selling fear to grab ratings. If that's the case I'll just tune out all this "dollar crashing" nonsense.
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Old 10-06-2009, 07:26 PM
 
48,507 posts, read 90,462,076 times
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Thye same people can survive in any economy. That isn't luick ;its survival of the fittest really. The you see people whocan't even keep their chekbook balanced. They have no chance at all.
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Old 10-06-2009, 07:40 PM
 
975 posts, read 1,653,996 times
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For staters, I don't know where the headline in your original post came from but it's not true.
According to Forbes just last month, the top 400 lost a collective $300 billion in the past year. The top 10 losing $39 billion alone. No biggie mind you, but a far cry from your headline claiming they pocketed $30 billion.

http://abcnews.go.com/Business/rich-...ory?id=8715985#

Not surprisingly one of the biggest factors was the fall in stock prices, especially for those near the top of the list. The reason it's no surprise is many of them have the majority of their wealth tied up in stock in the companies they own. Berkshire, Microsoft, Oracle, MGM, Enterprise, etc. So infact a lot of these guys are not really all that diversified or at least not to the extent we might otherwise presume. That said, were talking about 400 people so clearly there are going to be a lot of diffrerent situations.

But then again, if we really have some sort of global meltdown being diversified probably wouldn't help much, would it?

As far as the dollar crashing, imo, thats psycho babble. Just a few of those reasons are:

1. One of the attractive features of the dollar is safety through consistency. Some would agrue that consistency doesn't exist anymore but I think the idea of a political coup is rather low. Some would say safety isn't even much of an issue nowdays. I tend to think most countries don't agree with that wholeheartedly. Look what happened last Sept when the financial system did meltdown. The dollar actually rose and the only conceivable explanation is the safe haven status of US currency.

2. You have to store money somewhere. The fact is there isn't enough supply of other currencies for everyone to sell the dollar. There isn't enough gold, silver or oil either.

3. Things have a way of equaling out and right now, for whatever reason, most people seem to only be able to see one side of the situation. Most times when most people believe something they end up wrong, btw. But there are advantages to a weaker dollar. Ironically a weaker dollar may actually turn out being the engine for job growth that no one can find right now. As the dollar weakens our products become more affordable and companies doing business internationally do much better. Since 60% of all the eps in the S&P500 come from overseas thats pretty important. It also makes American labor cheaper meaning that it makes less since to move jobs out of the country and more sense locating here. And please, for those who want to argue we don't produce anything, yeah I got it so no need to respond. If I want silly conversation I've got children here at home to goof around with.

Clearly though a strong currency would be better than a weaker one, but for now thats not going to happen. That doesn't mean the trend will never reverse itself though and it doesn't mean that a weak currency automatically leads to ruin. As I said earlier, there are benefits from a weaker dollar and in time they will begin to show themselves. At some point later in time it's probable that the dollar will strength and begin to negate some of those benefits. And so the world turns.
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Old 10-06-2009, 08:08 PM
 
16,400 posts, read 29,235,286 times
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Maybe I've been watching too much Faux News (even a little is too much). Glenn Beck was doing some demonstration with piles and bundles of dollars. I tried not to pay attention. Would prefer a more informed source of concern, and would appreciate directions to a more balanced link.
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Old 10-06-2009, 10:54 PM
 
13,967 posts, read 13,412,433 times
Reputation: 5327
Quote:
Originally Posted by Traderx View Post
For staters, I don't know where the headline in your original post came from but it's not true.
According to Forbes just last month, the top 400 lost a collective $300 billion in the past year. The top 10 losing $39 billion alone. No biggie mind you, but a far cry from your headline claiming they pocketed $30 billion.

Rich Get Poorer: Buffett Loses $10B, Gates Down $7B - ABC News#

Not surprisingly one of the biggest factors was the fall in stock prices, especially for those near the top of the list. The reason it's no surprise is many of them have the majority of their wealth tied up in stock in the companies they own. Berkshire, Microsoft, Oracle, MGM, Enterprise, etc. So infact a lot of these guys are not really all that diversified or at least not to the extent we might otherwise presume. That said, were talking about 400 people so clearly there are going to be a lot of diffrerent situations.

But then again, if we really have some sort of global meltdown being diversified probably wouldn't help much, would it?

As far as the dollar crashing, imo, thats psycho babble. Just a few of those reasons are:

1. One of the attractive features of the dollar is safety through consistency. Some would agrue that consistency doesn't exist anymore but I think the idea of a political coup is rather low. Some would say safety isn't even much of an issue nowdays. I tend to think most countries don't agree with that wholeheartedly. Look what happened last Sept when the financial system did meltdown. The dollar actually rose and the only conceivable explanation is the safe haven status of US currency.

2. You have to store money somewhere. The fact is there isn't enough supply of other currencies for everyone to sell the dollar. There isn't enough gold, silver or oil either.

3. Things have a way of equaling out and right now, for whatever reason, most people seem to only be able to see one side of the situation. Most times when most people believe something they end up wrong, btw. But there are advantages to a weaker dollar. Ironically a weaker dollar may actually turn out being the engine for job growth that no one can find right now. As the dollar weakens our products become more affordable and companies doing business internationally do much better. Since 60% of all the eps in the S&P500 come from overseas thats pretty important. It also makes American labor cheaper meaning that it makes less since to move jobs out of the country and more sense locating here. And please, for those who want to argue we don't produce anything, yeah I got it so no need to respond. If I want silly conversation I've got children here at home to goof around with.

Clearly though a strong currency would be better than a weaker one, but for now thats not going to happen. That doesn't mean the trend will never reverse itself though and it doesn't mean that a weak currency automatically leads to ruin. As I said earlier, there are benefits from a weaker dollar and in time they will begin to show themselves. At some point later in time it's probable that the dollar will strength and begin to negate some of those benefits. And so the world turns.
Thanks, Trader. That's the most concise, level-headed analysis I've read thus far. This dollar crashing stuff is just yellow journalism, IMHO.
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