This subject scares the heck out of me!

[Q Classic]

the gold standard and silver standard pretty much don't mean anything. but then again, anybody could have told you that the dollar is a currency based on faith. and since most other currencies are pegged to the dollar...

besides, the us isn't broke. it is in a debt, but there is enough strength in the economy to generate wealth for some time, whether the corporations are bust or not.

the only thing that i'm worried about is an argentina-style collapse, but i don't think the government could let things get that bad.

[Carver]

[chequita guevara]

Well, it's not as if Argentina really had any choice. They kept doing what the IMF told them to do, and things kept getting worse. Finally they had to balk because if they pushed any further, their people would revolt, and they did.

[Colonâ„¢]

Caligastia, the vast majority of annual production of gold is still used for investment purposes or jewelry manufacturing. Its use in industrial applications is also tiny compared to that of other precious metals such as palladium.

Those two articles miss a fundamental element in the value of currency, namely that it depends on demand and supply just like commodities. The more money is printed, the less it is worth. Hyperinflation has always been caused by runaway printing and there no reason to fear a collapse of a currency's value as long the govt ensures a stable money supply.

[Caligastia]

Originally posted by Sava
Caligasta, you just realized all of this? This topic is like the DUH of economics.

No Sava, as I said, this is a thread from Newsmax. I used the same title.

[Colonâ„¢]

Originally posted by Q Cubed
the gold standard and silver standard pretty much don't mean anything. but then again, anybody could have told you that the dollar is a currency based on faith. and since most other currencies are pegged to the dollar...

No, most currencies aren't pegged to the dollar.

[Thue]

Originally posted by chegitz guevara
Well, it's not as if Argentina really had any choice. They kept doing what the IMF told them to do, and things kept getting worse. Finally they had to balk because if they pushed any further, their people would revolt, and they did.

My impression is that it was just the argentinian politicians who lacked the guts to run the country properly. Note that the argentinians themselves don't protest against the IMF, but against their own politicians.

That said, the IMF do promote policies in 3rd world countries that the rich countries would never accept themselves, and that have proved counterproductive for the 3rd world countries.

[monkspider]

Actually investing your money in something concrete and tangible like bullion isn't a half bad idea. It's almost certainly a safer investment than some stock. I have a pretty cool coin collection, so if currency does collapse I should have enough money to eat for a couple of weeks.

[Lord Merciless]

I don't understand the fuss about our trade deficit: we are getting the goods and services from other countries, while we just print out bunch papers in exchange. What's so bad about other countries regarding our papers as so valuable?

The US national debt may sound astronomical in absolute number, but in terms of GDP it's much lower than that of Japan and Germany. In Italy and Belgium, national debt has already surpassed 140% of the GDP. Do you see their economy collapsing? No.

[chequita guevara]

Originally posted by Thue
My impression is that it was just the argentinian politicians who lacked the guts to run the country properly. Note that the argentinians themselves don't protest against the IMF, but against their own politicians.

They protest against their own government because it had been doing what the IMF told it to do. They protest now to stop it from continuing to follow the IMF.

[Colonâ„¢]

Originally posted by Lord Merciless
I don't understand the fuss about our trade deficit: we are getting the goods and services from other countries, while we just print out bunch papers in exchange. What's so bad about other countries regarding our papers as so valuable?

The US national debt may sound astronomical in absolute number, but in terms of GDP it's much lower than that of Japan and Germany. In Italy and Belgium, national debt has already surpassed 140% of the GDP. Do you see their economy collapsing? No.

For chrissake, is there some sort of unwritten law that states you shouldn't, above all, check you facts before posting in an econ thread? Belgian debt peaked at 138% of GDP and stood at 107% in 2001, Italy's highest rate was 124% and was 109% last year.
And Germany's debt rate was barely 2% of GDP higher than that of the US last year...

And if you'd had read my previous post and did some logical reasoning you'd understand that printing the bucks to pay for your imports would send the dollar on a diving course. A higher amount of dollars in circulation decreases it value. Don't believe it? It's happening now.

[Ecthy]

Ecthy's ecotip for the day: buy gold when it's down, sell it when it's up.

That's 5 pence to me from everyone around.

[Colonâ„¢]

Originally posted by chegitz guevara


They protest against their own government because it had been doing what the IMF told it to do. They protest now to stop it from continuing to follow the IMF.

South Korea did what the IMF asked it to do, even if they pretend otherwise, so did Malaysia. (even with those high profile currency controls that actually were quite meaningless) and I'd say both are doing rather well nowadays.

[Caligastia]

Gold and silver are useful things. They are real. There are many crucial uses for these real things. Dollar bills are pieces of paper of a type that is not even good for starting a fire or being used for toilet paper.

Electronics, medicine, photography... even bleedin' bowls and plates are some of the uses of gold and silver.

There have been upheavals in human history for quite some time... and yet, and yet, since the time of that guy (popularly called Croesus, but that ain't his real name) who stated that in his kingdom, a gold coin of a certain weight would be guaranteed by him to be worth a sheepskin... gold and silver have maintained their usefulness and value despite catatrophic upheavals.

No, you can't eat gold. But it will be the first thing recognized after simple barter. It is extremely difficult to move 40 oxen from here to there to pay for 500 bushels of corn... But five gold pieces will work. Trust me: they HAVE worked for 5,000 years.

We, who with foresight and knowledge keep some of our wealth in REAL things, will be in a LOT better shape than the "Strings" -- those "Strings" who have not had the extremely good fortune to have been instructed in the basics by good ole Unca Waltie, (like, now, yourself).

Fiat money is money that is completely and uttlerly based on faith in the printer of that money.

The Hungarian pengo went to 32,000 to the penny in the 20th century. The Deutchmark went to 12,000,000 to the penny in the 20th century.

Strings: when these two currencies did this... what do you think gold and silver did? Yup. They bought bread.

End of sermon. Reread until you are evangelical, and can convince the next iggerunt type.

Constitutionalist: Doesn't really matter whose mint mark is on the commodity. If it is silver or gold, it is silver or gold.

You cannot PRINT silver or gold.

[Starchild]

Gold is too heavy and ugly. Give me tetrahedral carbon networks and aluminium oxide. They go fab with anything.