Do you think that America will face problems?

[VJW]

Re: Do you think that America will face problems?

Your attempt at sarcasm is undermined by the fact that there is no inverse relationship between the value of gold and the value of the dollar.

An accurate relationship is provided by Bill Gates:


BILL GATES DUMPS DOLLAR FOR EURO

Bill Gates, whose net worth of $46.6 billion makes him the world’s richest person, is betting against the U.S. dollar.

“I’m short the dollar,” Gates, chairman of Microsoft Corp., told Charlie Rose in an interview late yesterday at the World Economic Forum in Davos, Switzerland. “The ol’ dollar, it’s gonna go down.”

Gates’s concern that widening U.S. budget and trade deficits are undermining the dollar was echoed in Davos by policymakers including European Central Bank President Jean-Claude Trichet and German Chancellor Gerhard Schroeder.

The dollar fell 21 percent against a basket of six major currencies from the start of 2002 to the end of last year. The trade deficit swelled to a record $609.3 billion last year and total U.S. government debt rose 8.7 percent to $7.62 trillion in the past 12 months.

“It is a bit scary,” Gates said. “We’re in uncharted territory when the world’s reserve currency has so much outstanding debt.”

LINK

#

[JBinKC]

Re: Do you think that America will face problems?

Right now the federal deficit just cracked above the legal limit of 8.14 billion. That also goes with the halt of providing M3 money supply data. What do you think the government will ultimately do? Inflate its way out of debt. Hopefully it doesn't end like the Weimar republic in the 1923. Now couple that with 100% mortgages on inflated real estate. I don't have a very optimistic outlook.

Lets say right now a big percentage of my assets are in foreign natural resource stocks mostly in oil and industrial metals and looking to buy even more when I see an opportunity.

Lot of people here are talking holding physical gold but I am afraid the government may attempt to repossess it again given that many Al-Queda funds are transferred this way.

[VJW]

Re: Do you think that America will face problems?

Right now the federal deficit just cracked above the legal limit of 8.14 billion. That also goes with the halt of providing M3 money supply data. What do you think the government will ultimately do?

Nothing.

I don’t see this administration doing anything to address the financial calamities they’ve created by implementing failed RightWing policies. Their four rounds of tax cuts for the Rich & Corporate have caused income tax revenues to plummet to 1959 levels, which has caused massive federal deficits and debt, even larger than that of the 12 years of Reagan and Poppy Bush. The federal debt has gone from $5.7 Trillion to $8.2 Trillion, UP 44%!, in just five years.

But this crowd is in the cab of an 18-wheeler that is Southbound on a Northbound freeway with the gas pedal wired wide open and an incompetent fool at the wheel. Trouble is, we’re all in the trailer box in the back.

#

[sweeps]

Re: Do you think that America will face problems?

Lot of people here are talking holding physical gold but I am afraid the government may attempt to repossess it again given that many Al-Queda funds are transferred this way.

Wouldn't gold become more valuable if the government started repossessing it?

[JBinKC]

Re: Do you think that America will face problems?

I agree gold will go up but you will have to be able to store it safely abroad. What good would it do if it were illegal to sell it. I heard a case this year of someone owning a rare 1933 $20 gold piece who didn't turn it in during the Roosevelt gold confiscation and was recently arrested when it sold for 7.5 million.

[VJW]

Re: Do you think that America will face problems?

Ouch.

#

[CRFSaver]

Re: Do you think that America will face problems?

I went to a CFA dinner a couple weeks a go and the panel (one Fed Gov, one economist and one equity strategist) was speaking on many things including China and its affect versus the US. Some of the interesting numbers that came up (no back up to support this) have to do with GDP numbers. China grew at something like 9.5% and the US around 3%. BUt if you look at the dollars equivalent, CHina added 400Billion to their economy while the US added 1.4Trillion. The denominator matters.

The other number I found quite interesting is if you stripped out China's exports as well as the infrustructure they build to support those exports (ship yarsd they have built, etc) their GDP is only about 3.5%. While still quite good the point behind the numbers was to say that China needs their exports (read to the US) just as much as we need them.

OK ready? Discuss...

[JBinKC]

Re: Do you think that America will face problems?

I am sick of the spin of government economic data. I might as well give you some more of my own spin back. Well first off the average wage in China is about 30 cents an hour compared to $15 here. Now use those as dividers to show the real productivity. Another point most of productivity is the US is related to Wall street and banking and double digit health care inflation and very little from manufacturing. A healthy economy needs a diverse base of GNP. What I ultimately see from this is continued wage pressure and higher costs for basic needs going forward.

[sweeps]

Re: Do you think that America will face problems?

I agree gold will go up but you will have to be able to store it safely abroad. What good would it do if it were illegal to sell it. I heard a case this year of someone owning a rare 1933 $20 gold piece who didn't turn it in during the Roosevelt gold confiscation and was recently arrested when it sold for 7.5 million.

Come on, do you really believe that the U.S. government is going to start repossessing gold from its citizens? That's ridiculous.

The 1933 double eagle in question was never circulated to the public. It was illegally obtained and that's why it was confiscated.

Source

The mint produced 445,000 new $20 Double Eagle coins after Roosevelt's order, but never put them into circulation.

"Coins are not money until it's monetized -- until the Treasury says they're money," Redden said. "They weren't legal to spend. It was simply a bright gold round disc. They were by order of the Treasury in 1937, melted down."

But some coins escaped destruction: The Secret Service discovered years later that George McCann, the Mint's chief cashier, had stolen 10 of the coins.

[sweeps]

Re: Do you think that America will face problems?

What I ultimately see from this is continued wage pressure and higher costs for basic needs going forward.

Isn't this always the case?

I concede, manufacturing in this country is a lost cause. Cheap labor is simply too plentiful in the world for us to compete. But that's why we need to boost our research and development in high-tech areas. Knowledge and innovation are the keys to future growth. One of the biggest problems we have in this country is a lack of focus on education, training and learning.

This is one of the reasons Ford and GM are in the toilet.

[cercis]

Re: Do you think that America will face problems?

Can I take a moment here and say thank you to Nate and Jeffrey for allowing us to dissent and to even get, <gasp>, a tad bit nasty to each other?

I'm sorry if it seems gushy, but I just tried to read a thread at another site where a poster was being very nasty and another poster asked for proof and that poster was told she was being disruptive and rude by the admin.

So, Jeffrey, Nate, thanks for treating us like adults and letting us have some good healthy debate.

[jeffrey]

Re: Do you think that America will face problems?

We try to keep the threads open and although we have stepped in a few times, only when the thread turns from the subject at hand to personal attacks (which we don't tolerate)which doesn't happen often here (it was a major problem on another site we ran). And with that, I'll let you all get back to your opinions

[JBinKC]

Re: Do you think that America will face problems?

Regarding Gold the Roosevelt administration allowed you to keep $100 in face value of gold the rest had to be turned in and fines and imprisonment were the consequences if you were caught.

[gavinmccallister]

Was this a good investment?

I am the owner of four 9046 MS 63 $20 1904-S Liberty coins.

I am new to numismatic investments, will they go up more in value as the price of gold goes up, or will they remain relative to the price of gold.

any help would be helpful.

[VJW]

Re: Do you think that America will face problems?

You know, what’s interesting is that the conventional wisdom is that the problems with the American auto manufacturers are that their union workers make to much money, that their healthcare is too costly, and that their retirement costs are too expensive because of an aging population.

Yet, both the Japanese and German auto manufactures are very profitable, their workers earn more than their American counterparts, have much better healthcare and receive far more generous benefits, and their societies have just as old (Germany) or older (Japan) populations.

#