Any economists out there?

[Mossy]

Any economists out there?

Has a sovereign central bank experiment with a fiat currency ever ended well for the common citizen?

Maybe if the common citizen did not have any money to start with.

[.02FYI]

Any economists out there?

Has a sovereign central bank experiment with a fiat currency ever ended well for the common citizen?

Sure the Chimney Sweep. As the colorants in the burned currencies had to be cleaned as to not burn the house sdown in the chimneys .

[everything]

The Germans are really in the news these days, Max Keiser was making fun of them the other day. You have to agree PM's are a balance, everyone collects the stuff differently. It's not against the law to hoard PM's like back in 33 so don't worry be happy.

[sparechange]

Economists are like weathermen, can't predict with much accuracy. Try a weegie board.

[penny pretty]

my meager stash for the economic meltdown IS...200 plus eagles,300lbs cu pennies.and a remmy 870 tactical and a LOT of ammo.hope I never part with ANY of it!

[50centsaver]

Gold or silver eagles?

[woodyh]

Gold or silver eagles?

silver i hope if not im scared

[Economist]

Sorry I missed this post when it originally came out (come on guys, you should have flashed the bat signal!)

Theo nailed it in his reply. Yes, gold and silver could go down in price in a depression. But you have to consider what the central banks will do. They will print. They won't wait for things to even get "really bad"--just look at what the Federal Reserve did beginning in Oct. '08.

I _am_ an economist. This doesn't mean I know more than you savvy hard-money guys and PM hoarders here; I just get paid to teach it to college kids and write about it. Speaking of which, here's my brief analysis of why I think higher inflation is far more likely than deflation: http://www.soundmoneyproject.org/?p=5011

Cheers!

[50centsaver]

Economist, won't the people in the government finally reach a point someday when they realize that printing $ is not the answer anymore? -that the value of the US dollar will be devalued SO much that they will be forced to look for other answers?

If and when that day arrives, what option will they have no choice but to choose? A gold/silver backed economy?

If that happens, will the gold/silver we own now be worth a whole lot more, or a whole lot less? I'm guessing a whole lot more.

[barrytrot]

Economist, won't the people in the government finally reach a point someday when they realize that printing $ is not the answer anymore? -that the value of the US dollar will be devalued SO much that they will be forced to look for other answers?

If and when that day arrives, what option will they have no choice but to choose? A gold/silver backed economy?

If that happens, will the gold/silver we own now be worth a whole lot more, or a whole lot less? I'm guessing a whole lot more.

That day won't come so that's a moot point.

[theo]

Economist, won't the people in the government finally reach a point someday when they realize that printing $ is not the answer anymore? -that the value of the US dollar will be devalued SO much that they will be forced to look for other answers?

If and when that day arrives, what option will they have no choice but to choose? A gold/silver backed economy?

If that happens, will the gold/silver we own now be worth a whole lot more, or a whole lot less? I'm guessing a whole lot more.

I think the government/Fed will stick with the current arrangement as long as they can. However, at some point the people will lose faith in the dollar and usher in mass inflation to hyperinflation. I suppose the tipping point could be the dollar losing its reserve currency status causing 100s of billions of dollars to repatriate back to this country.

Once it is apparent to the government that the dollar is no longer a usable form of currency, they will try to institute a new "gold-backed" currency. Will it actually be backed by gold? Who knows.

Will PMs be worth more? In terms of dollars, yes. However, it is likely that an ounce of gold, for example, will be able to purchase about the same amount goods/services as it would today. Silver may gain on gold as well as the dollar, since a number of experts (Ted Butler and company) believe it to be under-valued.

[theo]

Sorry I missed this post when it originally came out (come on guys, you should have flashed the bat signal!)

Theo nailed it in his reply. Yes, gold and silver could go down in price in a depression. But you have to consider what the central banks will do. They will print. They won't wait for things to even get "really bad"--just look at what the Federal Reserve did beginning in Oct. '08.

I _am_ an economist. This doesn't mean I know more than you savvy hard-money guys and PM hoarders here; I just get paid to teach it to college kids and write about it. Speaking of which, here's my brief analysis of why I think higher inflation is far more likely than deflation: http://www.soundmoneyproject.org/?p=5011
Cheers!

Thanks, I teach college level business courses (among them economics) so, although I'm no expert, I'm familiar with much of the terminology and theory. However, I learned most of what I know about hard money from the good people on this site.

[everything]

Theo: What do you think of this The Automatic Earth or TAE? http://theautomaticearth.blogspot.com/

[theo]

Good article but a little unsettling. The author seems surprised at how quickly European countries are giving up their soveriegnty in order to keep the system running. But that ship sailed the moment these nations signed on to a common currency controlled by a central bank. The immediate question for those of us in North America is what the damage will be when the Euro finally comes a part. It is prudent to review our investments in order to get defensive and limit exposure to Euro toxic debt; not only with stocks and bonds, also money market funds. (This is NOT investment advice as I am NOT and expert)

"You're either at the table or you're on the menu." - Great quote!

[Mossy]

The US started out something like the United Nations or the European Union, with the intent that the various states remain States (independent nations). Lincoln pulled a coup and lumped all the independent nations into one country. Europe is following a similar route; the only question is "when", not "if".

[slara512]

....
Isn't is true that many people have to buy metals for them to go up? People out of work will be scraping by just to buy food and gas.
.

if the US dollar falling is part of the economic collapse, then a LACK OF SELLERS instead of a glut lf buyers can also be the cause of a rise. Weimar Germany has this happen then they hyperinflated.
the question is will the dollar continue to weaken or will it rise in the face of DEFLATION.

if DEFLATION is the cause, metals could falls as the dollar (or cash) is in demand as investor de-lever and unwind positions.

[68Camaro]

USD is currently strengthening, as Euro declines.

[slara512]

USD is currently strengthening, as Euro declines.

10-4 68Camaro.
Im in the deflation camp, where commodities fall or reprice against the USD as cash becomes king again in de-leveraging. However, I think that this is part of the process of the US Dollar going into a period of recovery and strength as either the US grows or interest rates rise.

see the chart of interest rates for the past 50 years:

10 year interest rates 50 years

tnx 12-12-11.png (15.97 KiB) Viewed 197 times

[68Camaro]

I am undecided as to intermediate deflation. Certainly possible, and deflation can be practically observed in market segments (like housing), but the current USD strengthening is due to fear of the Euro and flight from it to something else perceived as less risky.

[50centsaver]

This is all very confusing to someone new to this. You'd think experts in the field would know what exactly is going to be happening, and approx when. As the US keeps printing money like it's going out of style, I can't understand how the unbacked except by promises US dollar can continue to strengthen? You'd think sooner than later it would start to head south. The million dollar question is, when?

[slara512]

I am undecided as to intermediate deflation. Certainly possible, and deflation can be practically observed in market segments (like housing), but the current USD strengthening is due to fear of the Euro and flight from it to something else perceived as less risky.

would your answer on deflation be the same if we ignored the dollar and used only gold/silver as a measure of value?

[Chief]

This is all very confusing to someone new to this. You'd think experts in the field would know what exactly is going to be happening, and approx when. As the US keeps printing money like it's going out of style, I can't understand how the unbacked except by promises US dollar can continue to strengthen? You'd think sooner than later it would start to head south. The million dollar question is, when?

I second this. I am always wondering what these talking heads on tv see as the bright future for the dollar. What makes them have and express positive opinions about treasury's and paper stocks. The same crap that is happening in Europe is going to happen here in American sometime after Europe collapses.
I mean wtf is this...

The writedown will help to reduce Greece's debt ratio to 120 percent of GDP by 2020 from over 160 percent this year.
http://www.reuters.com/article/2011/12/ ... WG20111212

These numbers are unreal and impossible to liberate yourself from. Next year I am going to only spend 120% of my disposable income on PM's, but that is down from 160% this year. This would not be sustainable. Growing an economy, or disposable income, will not be able to keep up with debt/spending.
All this global debt crisis 201? is so far out of control that some sort of "reset" is coming. Euros, Dollars, and Zimbabwe Monopoly money are backed by nothing and doomed to fail. If we beat the odds and in 10-15 years we are back to normal (maybe 1990's economy?), I will have a very negative view of the "backed by consumer confidence" Dollar from then on. Very negative even after a turnaround.

[aloneibreak]

oh the dollar is dying - no doubt about it

but right now the euro is closer to death, which will keep the dollar afloat for a bit longer

no hope in the dollar for me, which is why i trade them as fast as i can for hard assets

[slara512]

well, whether one believes in the dollar or not the fact is that gold is up like 700% against the dollar and the euro is up 200% against the dollar (both in the last decade). there are normal retracements in any Market. Bear market rallies are the most volatile. The last big rally for the US Dollar was in 2008 and boy was that historic.

[neilgin1]

This is all very confusing to someone new to this. You'd think experts in the field would know what exactly is going to be happening, and approx when. As the US keeps printing money like it's going out of style, I can't understand how the unbacked except by promises US dollar can continue to strengthen? You'd think sooner than later it would start to head south. The million dollar question is, when?

its the strength of our military...if anybody trashtalks the dollar, they wind up having a bad day....ask mummar Qaddafi...opps, cant, he's dead......right after he started raving about an gold backed african 'dinar'...suddenly well gunned up 'rebels' appeared.

thats how we roll, and it could work for a generation, but at the end of that road, you get a napoleon or a hitler.