# GENERAL FORUM > IN THE NEWS >  Worlds economy

## Bryan2

Whats everyones thoughts on the worlds recent monetary system issues.

It seems that nearly every currency / many countries economies are at severe risk for defaulting on debt.

A few countries come to mind, The US with our current debt ceiling, greece seems to be next

http://news.yahoo.com/s/ap/20110603/...nancial_crisis

The overall Euro,

New zealand

http://www.belfasttelegraph.co.uk/ne...-16006955.html

The talk of going back to either a gold standard

http://www.humanevents.com/article.php?id=43439

Or even the pressure from many other world leaders to move to a new oil trading currency

http://finance.yahoo.com/news/BRICS-....html?x=0&.v=3


Very very interesting time

----------


## Bryan2

Sort of expected more uproar from this post....

----------


## "Maximus"

China is dumping all of their Dollar reserves as I write this, all over the world.. Buying industrial company after industrial company, virtually everywhere.. Latest multibillion Dollar acquistion on the wester hemisphere was in Brasil! Go figure..

Put in the words of an ananlyst on the subject, apparently the intent of the money masters was to re-inflate the value of the stock market after the 2007-08 collapse, which have [partially] succeeded. But now inflation is spilling over into commodities and oil. While inflation is generally regarded as an increase in prices, in actuality it is a devaluing of money. That is particularly true in regards to the Dollar. It is being devalued at an accelerating rate. The problem is the Dollar is the world’s reserve currency. So the faster nations try to offload their massive Dollar reserves, the faster the Dollar depreciates and the more Dollars it takes to purchase things. Basically, we are witnessing the world’s financial system going into an accelerating, terminal death spiral.

----------


## Twist

Anything that deals with money has to be run like a business. There must be profit. Governments, school systems, anything that deals with money but doesn't worry about making more than they spend goes down the toilet. I don't think China will be able to take over because I don't think other countries will allow it. We are involved in every other countries' business but we are not predatory like China is. I honestly don't know what to think about inflation right now. Things are bad, that's for sure. 

I think the #1 thing that has to be changed is corporations and their interests need to be completely separated from politicians pockets. Until that happens no politician will do what's best for the country.

----------


## terraj

Don't say "new oil trading currency"....thats what got Saddam on the rope.

I'm getting cash heavy at the moment and would advise doing the same.

Gold going well but think its headed for $2000/ounce

----------


## "Maximus"

> Anything that deals with money has to be run like a business. There must be profit. Governments, school systems, anything that deals with money but doesn't worry about making more than they spend goes down the toilet. I don't think China will be able to take over because I don't think other countries will allow it. We are involved in every other countries' business but we are not predatory like China is. I honestly don't know what to think about inflation right now. Things are bad, that's for sure. 
> 
> I think the #1 thing that has to be changed is corporations and their interests need to be completely separated from politicians pockets. Until that happens no politician will do what's best for the country.


I agree somewhat with you.. Major world powers won't allow China do something like that.. However, if you owe me 10 million dollars and you default on your note, what would prevent me from going to your house and take over all of your property?

Of course, this is VERY unlikely of happening.. We have one of the best armies in the world, plus our big brother [England] and our First and Second cousins [European Union, with exception of Russia and other balkan countries] would, for sure, jump in and give us a hand to deal with the Chinese and the Russians.. But I'm speculating big time here, but it is nevertheless, an unlikely scenario either.

----------


## "Maximus"

> Don't say "new oil trading currency"....thats what got Saddam on the rope.
> 
> I'm getting cash heavy at the moment and would advise doing the same.
> 
> Gold going well but think its headed for $2000/ounce


Lol.. Are you serious? You're telling me that the Gold "bubble" is going to last... Good luck with that my friend; just make sure you make sound investment choices  :Wink:

----------


## terraj

> Lol.. Are you serious? You're telling me that the Gold "bubble" is going to last... Good luck with that my friend; just make sure you make sound investment choices


Yes.

Speculation has pushed it far and fast......but I say it is not close to peaking yet.

You understand that gold is the heart global commerce?

You stated " terminal death spiral".....thats a bit over the top IMO, but if this is so.....you can't argue the gold is on a bubble.

----------


## terraj

......

----------


## "Maximus"

> Yes.
> 
> Speculation has pushed it far and fast......but I say it is not close to peaking yet.
> 
> You understand that gold is the heart global commerce?
> 
> You stated " terminal death spiral".....thats a bit over the top IMO, but if this is so.....you can't argue the gold is on a bubble.


Look at it this way, "gold" USED to be the heart of the global commerce until the rank and file of the Federal Reserve --yes, those big shots running the show behind Washington and thus, the WORLD affairs-- changed the monetary system..

Do a quick read about this on Britannica or Wikipedia under "Gold Standard" or "Depression and World War II (1932–46)"..

If you haven't being following what's going on with our deficit ratio vs. other nations [China anyone?], you really need to open up your eyes brother.. Things are about to get really ugly over this end of the pond unfortunately.. seriously!

----------


## Twist

> I agree somewhat with you.. Major world powers won't allow China do something like that.. However, if you owe me 10 million dollars and you default on your note, *what would prevent me from going to your house and take over all of your property?*
> 
> Of course, this is VERY unlikely of happening.. *We have one of the best armies in the world*, plus our big brother [England] and our First and Second cousins [European Union, with exception of Russia and other balkan countries] would, for sure, jump in and give us a hand to deal with the Chinese and the Russians.. But I'm speculating big time here, but it is nevertheless, an unlikely scenario either.


You gave the answer without me even having to respond. But China is 'investing' in the US because they have to do something with their money and where else should they put it? EU, Japan, Spain? Nowhere to really put money right now. US is still the best bet. I mean there are other options of course but US is still a good bet. Even if we defaulted for a little bit (delaying payments), it wouldn't mean the end of the world. However speculators would probably make the market crash anyway... The whole financial system is ****ed, schools and ****ed, governments are ****ed, and all because the people running the show are not interested in actually improving and sustaining the economy. They just vote for whatever interests paid their way to power.

----------


## terraj

> Look at it this way, "gold" USED to be the heart of the global commerce until the rank and file of the Federal Reserve --yes, those big shots running the show behind Washington and thus, the WORLD affairs-- changed the monetary system..
> 
> Do a quick read about this on Britannica or Wikipedia under "Gold Standard" or "Depression and World War II (1932–46)"..
> 
> If you haven't being following what's going on with our deficit ratio vs. other nations [China anyone?], you really need to open up your eyes brother.. Things are about to get really ugly over this end of the pond unfortunately.. seriously!


I got to say, your posts come across as somewhat condescending. We are talking about our personal perspective and analysis of the markets...simply we differ.

I am well aware of the hole that the US is in and I don't see an easy out, but, I don't see you guys imploding any time soon. I do see the USD and the Euro getting weaker and gold heading to 2000.

So far you have said- US in death spiral and Gold is in a bubble and will not go to 2000??...... a weaker US means gold goes up, that would be the general consensus.

----------


## Twist

I too was confused about the gold bubble comment. My thoughts are if gold is a bubble, then it is overvalued. If it is overvalued it is because the economy is not expected to collapse making gold a useless commodity.

----------


## Bryan2

http://news.yahoo.com/s/nm/20110609/..._bondholders_3

Whats frightening is the dollar is in some serious trouble and will only take a very small slip for it to devalue.

Once it devalues the impact will be worldwide

I wonder very much what the next world oil reserve currency will be?

Does anyone think it will be switched to a universal currency like Britain,Russia,India,China and South Africa want as linked in my first post?

I cant really see it being changed to the Euro seeing its current trend...

----------


## Twist

I do see that happening in the future, but oil is not gonna be around for too much longer. If we can stabilize the dollar than there is no reason to change. It is our crappy policies that is causing this and giving leverage to other nations

----------


## Times Roman

> I too was confused about the gold bubble comment. *My thoughts are if gold is a bubble, then it is overvalued*. If it is overvalued it is because the economy is not expected to collapse making gold a useless commodity.


think of it this way.... supply of gold is more or less stable in the short term.

if the value of the dollar continues to weaken, and the supply of gold remains stable, then basic economics would tell you it will take more devalued dollars to buy the same amount of gold.

There is an inverse relationship between the value of the dollar and the price of gold.

I am oversimplifying, but the basic principles do apply to this scenerio.

----------


## chumpster

> I too was confused about the gold bubble comment. My thoughts are if gold is a bubble, then it is overvalued. If it is overvalued it is because the economy is not expected to collapse making gold a useless commodity.


It's all speculation. Gold may not be a bubble now, but it will be at the moment the economy corrects and people don't get out of Gold fast enough.

----------


## chumpster

> Whats everyones thoughts on the worlds recent monetary system issues.
> 
> It seems that nearly every currency / many countries economies are at severe risk for defaulting on debt.
> 
> A few countries come to mind, The US with our current debt ceiling, greece seems to be next
> 
> http://news.yahoo.com/s/ap/20110603/...nancial_crisis
> 
> The overall Euro,
> ...




Gold standard has its own set of problems. I doubt the US will default. It's all just political posturing until the last moment. I'm hoping that things improve economically in the next 5 years. Some of the really doomy prediction on housing was 10 years. Well we are at the half way mark.

----------


## Flagg

The US is in serious deep shit now, as is Greece, Italy and Spain. It's being said that Ireland could be in trouble again. That Earthquake in Japan cant have done their precarious financial situation much good. 

It's NOT looking good for the Developed world at the moment. Yet we're still wasting money on the Middle fvcking East and Libya. Fvck our Governments.

----------


## Bryan2

> The US is in serious deep shit now, as is Greece, Italy and Spain. It's being said that Ireland could be in trouble again. That Earthquake in Japan cant have done their precarious financial situation much good. 
> 
> It's NOT looking good for the Developed world at the moment. Yet we're still wasting money on the Middle fvcking East and Libya. Fvck our Governments.



You know the funniest part about it is that a vast majority of americans have NO IDEA WHATS GOING ON or how serious it is...

----------


## thingysmeg

governments don't need to borrow money, they can just make it themselves....

----------


## terraj

> Lol.. Are you serious? You're telling me that the Gold "bubble" is going to last... Good luck with that my friend; just make sure you make sound investment choices


over 1700 now  :Smilie:

----------


## optionsdude

terraj be careful about getting fully out of equities. If they do away with the dollar your cash will not be owrth much. If you own a stake in a company not necessarily common shares you are a little safer. I am increasing my positions in MLP's and different energy trusts. These pay good dividends and if the price goes down the yield goes up. I also don't think that the powers that be will let markets fall too far or let the dollar collapse. I think that this was done to unwind some of the commodities. I also own a lot of coins mostly silver and some really old pennies (1800's). Too bad I can't demand an ounce of silver for all of my silver certificates, I have a pile of those too. The one thing I would recommend to all is to start learning how to hunt,fish, and grow a garden. At least you can trade your food to some sucker who has no survival instincts for gold.

----------


## terraj

I hear you.
I'm not playing the gold market, just thought it had a greater chance of upside when it was at 1500. I've been all Yen for years, I'm heavy in cash with a few MFs and an energy fund.

----------


## optionsdude

Smart man terraj, I'll play gold once it tips over. I also run a options account and right now I am breathing a huge sigh of relief for doing the right thing 2 weeks ago. I have been long the Jan 2012 AAPL 320 call. I had a huge gain in it and sold an upside call and bought a put for some insurance. That insurance is paying off well and I bought back the call I sold for cheap. I'll continue to hold the Jan 320 since a new product cycle is soon and then christmas starts.

----------


## terraj

Q4 seasonal demand coming, gold going higher still.

Maximus?

----------

