Another perspective on our debt

[Black_Jesus]

I understand I just disagree.

Could you explain why it will always be the reserve currency of the world? and why that wont change?

The U.S. will go to war with however many countries try to change it... no country wants those problems

 

[MMS]

the dollar having reserve currency status without the equivalent economic production to back it up means the dollar's strength is superficial, which leaves us vulnerable. and while the US is still relatively strong economically when compared to other countries, we all know US economic conditions are worsening and will most likely continue to get worse leading to a decrease in living standards across the board for most people, the bottom of which is still unknown.

it's publicly acknowledged that our current economic trajectory is unsustainable and so of course other countries know this. but we're still making money for several entities around the world so they will continue to bleed us dry until...

that's the best case scenario.

the worst case scenario is other nations decide to smarten up and stop using the dollar as reserve currency sooner than later, in which case we're looking at a possible mad max setup.

it may not happen overnight, but it could. and even if it doesn't happen overnight we're on a clear spiral downward so the eventuality of desperate economic conditions in the US are are virtual certainty.

i want to be clear though, economic depression is only imminent if we stay on this course. if we improve our economic performance in terms of policy and execution then we can certainly turn this thing around.

by that same notion gold's value is superficial

true value isnt really a tangible thing

 

[Starman]

The U.S. will go to war with however many countries try to change it... no country wants those problems

Word to Gaddafi. Damn.

 

[Black smoke and cac jokes]

@fkdmR I'm referring to the Chinese using imaginary money to build ghost towns so they can list those bullshyt values as assets and further borrow against it.

In economic context, it would just provide a lag in the population's adaption to the new standard of living. I agree that it is a mistake made, but it certainly wasn't an attempt to attain more leverage since China is one of the countries that are in desperate need of a middle-class and therefore need to adjust regulations/incentives for people to move into the urban areas, hence new highrises/residential areas. The only artificial aspect of it is the potential of an asset bubble that would harm the investors who's not really dependent on the short-term outcome. Instead, the construction workers, engineering contracts, and all other facets of buildings these towns contributed to the economy so I don't really see the whole project as artificial.

I don't know what you mean by imaginary money? The houses are definitely overvalued but it's not like they printed a large sum of money solely to build the towns, it was subsidies by the surplus in the budget I believe.

yes, the speculation by some firms on wall street is out of control. There's like 3 times the amount of oil we use in a week is traded in contracts on these futures exchanges. the CFTC has been trying to get swaps and other derivative limit rules for awhile now.

and next time I'm all for less moral hazard if they screw up again. but when Lehman failed credit markets were literally freezing up.

Exactly! Stock futures and many other methods are detrimental to the stock market and I surely agree that there should be limits, the only problem is that they are scared of agitating these large banks that were either their former employers or potentially their future employers as soon as they leave their position.

So are we going to have a economic collapse or a recovery

Any economy in the world has expansions/contractions, what economies can do is ease/hinder the impact it has (booms, recessions, depression). So we're definitely in an economic recovery period now.

by that same notion gold's value is superficial

true value isnt really a tangible thing

what do u mean?

 

[OsO]

by that same notion gold's value is superficial

true value isnt really a tangible thing

i agree with that.

but like i had to tell these fools in the "is gold crashing" thread, the difference is the track record of gold when compared to the dollar. gold has been valued as a means of exchange for several thousand years, while the dollar is only a few hundred years old. in fact if there's one constant we've seen in history it's the eventual decline of fiat currencies. fiat currencies constantly come and go, while gold has been THE MOST CONSISTENT ECONOMIC MEASURE IN HUMAN HISTORY. and there's no reason to believe that will change anytime soon.

 

[MMS]

i agree with that.

but like i had to tell these fools in the "is gold crashing" thread, the difference is the track record of gold when compared to the dollar. gold has been valued as a means of exchange for several thousand years, while the dollar is only a few hundred years old. in fact if there's one constant we've seen in history it's the eventual decline of fiat currencies. fiat currencies constantly come and go, while gold has been THE MOST CONSISTENT ECONOMIC MEASURE IN HUMAN HISTORY. and there's no reason to believe that will change anytime soon.

gold backing isnt going to work for a first world country these days

and the reasons are pretty long

 

[OsO]

gold backing isnt going to work for a first world country these days

im not making a case for an economic gold standard. im making the case that gold is far more stable than the dollar.

 

[aliG]

fkmdR you should come join us in the Boiler Room. You know whats up breh.