patrick.net

indigenous says

smaulgld says

The answer to the problem is spend more

Of course you are being facetious.

It is worth mentioning that as the dollar is devalued the savings rate has gone down.

I was.
The savings rate by design goes lower

This one just came out and talks about the move away from the dollar around the 25-30 minute mark.
http://www.peakprosperity.com/podcast/86044/mike-maloney-dollar-we-know-will-gone-within-6-years

smaulgld says

This one just came out and talks about the move away from the dollar around the 25-30 minute mark.

Ok listened to it, I don't like listening to Chris Martenson because it is so depressing.

The guest brings up something similar to the Zero Hedge link that you posted, about the cycles in reserve currencies. I could see that it might shift, and some transactions are going to get done without the dollar.

But I just don't see the dollar disappearing as a reserve currency, just because the other countries are in worse shape.

Again I see the biggest factors as demographics and rebalancing.

But while we are on the subject what is the best way to go about buying silver or gold. I hear that selling and buying you can get screwed with various aspects of the process?

Here are a few links re de dollarization http://voiceofrussia.com/2014_07_03/BRICS-is-morphing-into-an-anti-dollar-alliance-6229/

indigenous says

But I just don't see the dollar disappearing as a reserve currency, just because the other countries are in worse shape.

Again-the US doesn't have to lose reserve currency status to be adversely impacted. The dollar just has to be used less. And in recent years it has been and the trend is accelerating

Here are a few links re de dollarization http://voiceofrussia.com/2014_07_03/BRICS-is-morphing-into-an-anti-dollar-alliance-6229/

http://www.chinadaily.com.cn/world/2014xivisitskorea/2014-07/05/content_17649664.htm

http://peakoil.com/publicpolicy/china-signs-non-dollar-settlement-deal-with-russias-largest-bank

http://www.zerohedge.com/news/2014-04-08/40-central-banks-are-betting-will-be-next-reserve-currency

indigenous says

But while we are on the subject what is the best way to go about buying silver or gold. I hear that selling and buying you can get screwed with various aspects of the process?

Here are two incomplete guides

http://smaulgld.com/how-to-buy-silver/
http://smaulgld.com/how-to-buy-gold/

You have to be comfortable with what is being sold, the price, the premiums, the ease of resale, tax issues, storage and insurance costs, where its held, etc. ETFs take a lot of the thought out of the process, but some claim in a crisis these are just wall street instruments that will be illiquid or worse insolvent without the precious metals backing them.
You need to do your own research because talking only to investment professionals or precious metals dealers will give you impartial advice geared towards selling you their products.

I don't give any investment advice as I am not an investment advisor. Anything you buy - stocks, bonds, real estate, precious metals can go up or down and you need to hold the assets you think match where you think the economy is heading.

UK regulator says don't fix the gold fix
http://www.telegraph.co.uk/finance/personalfinance/investing/gold/10949878/Financial-Conduct-Authority-says-no-evidence-of-gold-price-rigging.html

indigenous says

But I just don't see the dollar disappearing as a reserve currency, just because the other countries are in worse shape.

http://voiceofrussia.com/news/2014_07_07/BRICS-currency-reserves-and-new-Development-Bank-drafts-approved-by-Russia-4895/

smaulgld says

http://voiceofrussia.com/news/2014_07_07/BRICS-currency-reserves-and-new-Development-Bank-drafts-approved-by-Russia-4895/

Is there not a tendency for there to be one monetary unit?

These countries do not foment confidence...

I don't see where they are going to create a new currency? How will this work without one?

indigenous says

smaulgld says

http://voiceofrussia.com/news/2014_07_07/BRICS-currency-reserves-and-new-Development-Bank-drafts-approved-by-Russia-4895/

Is there not a tendency for there to be one monetary unit?

These countries do not foment confidence...

I don't see where they are going to create a new currency? How will this work without one?

That's a pretty arcane view of the world- one size must fit all?
here is what the French finance minister said recently:

Michel Sapin, the French finance minister, called for a “rebalancing” of the currencies used for global payments, saying the BNP Paribas case should “make us realise the necessity of using a variety of currencies”. "
http://www.ft.com/intl/cms/s/883e7912-0513-11e4-b098-00144feab7de,Authorised=false.html#axzz36tCE3h88

Do you recall in your reading of Hayek and the argument for competing currencies?

the danger in one dominant currency, like one dominant central government is abuse

smaulgld says

That's a pretty arcane view of the world- one size must fit all?

here is what the French finance minister said recently:

No I recall reading something, that that is what happens, not an ideology.

smaulgld says

Do you recall in your reading of Hayek and the argument for competing currencies?

Have a reference?

Again what competing currency? Where is it?

indigenous says

smaulgld says

That's a pretty arcane view of the world- one size must fit all?

here is what the French finance minister said recently:

No I recall reading something, that that is what happens, not an ideology.

smaulgld says

Do you recall in your reading of Hayek and the argument for competing currencies?

Have a reference?

Again what competing currency? Where is it?

Any of the curencies of the world!
Certainly the unbacked dollar printed at will in the trillions isnt the only viable currency
http://mises.org/document/3983

The Professor says

The dollar deal was that the dollar would always be exchangeable for real money or other things of value. While the US Dollar, once backed by all the gold in Fort Knox, is gone, the federal reserve note can still buy gold and other things of value.

Money by definition has to have an element of confidence, I don't see where two communist countries (one in a quasi civil war, the other at the beginning of a major economic adjustment ) foment confidence.

smaulgld says

Any of the curencies of the world!

Certainly the unbacked dollar printed at will in the trillions isnt the only viable currency

But until they are accepted by all, as freely being accepted, there will be an imbalance in the currencies.

indigenous says

smaulgld says

Any of the curencies of the world!

Certainly the unbacked dollar printed at will in the trillions isnt the only viable currency

But until they are accepted by all, as freely being accepted, there will be an imbalance in the currencies.

Putting aside the reckless monetary policies of the fed that dont engender confidence, russia is more than happy to accept Yuan and china rubles
Thus they have already removed a need for a certain amount of dollar reserves
You can overlay your opinion of the dollar but it wont trump the fact of what countries are doing

indigenous says

smaulgld says

Any of the curencies of the world!

Certainly the unbacked dollar printed at will in the trillions isnt the only viable currency

But until they are accepted by all, as freely being accepted, there will be an imbalance in the currencies.

Increasingly however there is talk and actual rejection of the dollar
In favor of alternative currencies which you may not think is a good idea but the countries are doing it

What if there is a negative price to pay in dealing in dollars?
How does that fit on your "confidence" scale
https://www.linkedin.com/today/post/article/20140707222622-7037048-how-u-s-foreign-policy-can-create-inflation-at-home?trk=mp-details-rr-rmpost&_mSplash=1

The Professor says

Who ever thought it would be a good idea for a quasi governmental agency to print fiat currency?

How did congress ever create such an abomination as the Fed? (Rhetorical question for those of you that know history).

Bitcoin really highlights the desperation to find a new currency.

Bitcoin is misguided desperation with the mentality being if you can create a fictional currency, we can do the same but better by building in artificial scarcity into our thin air currency

smaulgld says

What if there is a negative price to pay in dealing in dollars?

How does that fit on your "confidence" scale

Until I see a currency, I don't see it. There will be imbalances that will be hard to reconcile. E.G. How much rubbish will Russia buy with their Yuan?

Becoming the reserve currency is not necessarily a gift.

The largest manufacturer in the world is the US by far.

The US makes producer goods as does Germany. When Russia or China needs producer goods they buy from the US.

Re balancing will mitigate the desire for an alternative currency.

If it does happen it seems to me it would be a good thing for the US, as it would greatly reduce the 3rd sector of the economy, as it is not necessarily productive.

indigenous says

smaulgld says

What if there is a negative price to pay in dealing in dollars?

How does that fit on your "confidence" scale

Until I see a currency, I don't see it. There will be imbalances that will be hard to reconcile. E.G. How much rubbish will Russia buy with their Yuan?

Becoming the reserve currency is not necessarily a gift.

The largest manufacturer in the world is the US by far.

The US makes producer goods as does Germany. When Russia or China needs producer goods they buy from the US.

Re balancing will mitigate the desire for an alternative currency.

If it does happen it seems to me it would be a good thing for the US, as it would greatly reduce the 3rd sector of the economy, as it is not necessarily productive.

Its not up to whether YOU see anything
The countries are rejecting the dollar
Short term there is no way its good for the US
Ultimately it may work out in our favor but that isnt certain

smaulgld says

Its not up to whether YOU see anything

The countries are rejecting the dollar

Short term there is no way its good for the US

Ultimately it may work out in our favor but that isnt certain

You choose not to listen...

It is good for the US because for the reason's you are arguing for.

indigenous says

smaulgld says

Its not up to whether YOU see anything

The countries are rejecting the dollar

Short term there is no way its good for the US

Ultimately it may work out in our favor but that isnt certain

You choose not to listen...

It is good for the US because for the reason's you are arguing for.

Its good ultimately for the discipline but devastating in its short term inflationary consequences as the dollar's value erodes due to declining demand

smaulgld says

Its good ultimately for the discipline but devastating in its short term inflationary consequences as the dollar's value erodes due to declining demand

Which would finally force interest rates up. It would finally would encourage saving. It would finally encourage investment. It would finally bring manufacturing on shore (to some degree). It would finally create jobs.

The bubble is going to pop one way or another, to continue to feed the bubble is not good.

indigenous says

smaulgld says

Its good ultimately for the discipline but devastating in its short term inflationary consequences as the dollar's value erodes due to declining demand

Which would finally force interest rates up. It would finally would encourage saving. It would finally encourage investment. It would finally bring manufacturing on shore (to some degree). It would finally create jobs.

The bubble is going to pop one way or another, to continue to feed the bubble is not good.

Agree 100pct it will happen but the transition will be painful

smaulgld says

Agree 100pct it will happen but the transition will be painful

I read around 2030

The Professor says

smaulgld says

Agree 100pct it will happen but the transition will be painful

I'm not liking your painful transition. Do you expect: Weimar hyperinflation, worthless Fed reserve notes, cannibal anarchy, something else?

Depends on how its handled
They never should have done Qe in the first place and certainly not for five years
If there is an increased move away from the dollar raising rates wont have the eventual salubrious impact they had in 80-81
because there was still massive demand for the dollar and the us could absorb the higher borrowing costs.

Today if the dollar falls out of favor our imports become more expensive as do our borrowing costs if rates need to be raised
The fed should already be preparing for this but they keep pushing it off preferring the palliative effects of a zero interest rate policy.

If their hand is forced due to price inflation caused by reduction in the value of the dollar, raising rates wont necessarily help as we dont know how high they would need to be raised to attract capital
If they are too high they crush the economy and force the government to slash spending which short term would cause massive displacement
The fed could choose instead to print more dollars to make up for the shortfall in foreign and domestic bond investment
Or the government could transfer retirement money in private accounts to treasuries at a set low rate of interest

That move would accelerate price inflation

No matter what happens there will be a period of transition
Unfortunately what happens depends on what the fed decides to do
The longer they wait to normalize monetary policy the worse the consequences

What about deflation as witnessed in Japan despite Abenomics?

indigenous says

What about deflation as witnessed in Japan despite Abenomics?

the value of the YEN stayed strong for twenty years even as Japan boosted stimulus as the country had savings and a trade surplus- that is changing.

Price inflation has finally struck Japan with no corresponding benefits to the economy

The inflation rate in Japan was recorded at 3.70 percent in May of 2014. Inflation Rate in Japan was a record low of -2.52 Percent in October of 2009.

http://www.tradingeconomics.com/japan/inflation-cpi

Japan will be instructive for the US. Now that they have their inflation- what are they going to do with it. Will it accelerate?

A BRICs bank
Another interesting development
http://thebricspost.com/brics-bank-to-start-lending-soon-brazil/#.U7yUAu29LCR

bgamall4 says

Gold demand is down. All commodity demand is down. Gold is not treasury bonds. There aren't enough of those.

Its hard to gauge demand
Here is the 2013 silver demand report
http://smaulgld.com/silver-hits-record-demand-2013-led-76-increase-coin-bar-sales/

The decline of the dollar as percentage of reserves https://twitter.com/bySamRo/status/486945367309561856/photo/1

Yahoo! A positive chart on gold : http://finance.yahoo.com/news/charts-hinting-at-a-big-move-for-gold-200430416.html

I just took a bunch of gold and silver and used a hammer to hammer it all really flat. Hence I manipulated it. There. I win!

edvard2 says

I just took a bunch of gold and silver and used a hammer to hammer it all really flat. Hence I manipulated it. There. I win!

You'll find that gold is easier to manipulate than silver. Been done since the time of Exodus:

And they did beat the gold into thin plates, and cut it into wires, to work it in the blue, and in the purple, and in the scarlet, and in the fine linen, with cunning work. Exodus 39:3 KJV

yes... very cunning.

edvard2 says

yes... very cunning.

cunning manipulators!

indigenous says

smaulgld says

This one just came out and talks about the move away from the dollar around the 25-30 minute mark.

Ok listened to it, I don't like listening to Chris Martenson because it is so depressing.

The guest brings up something similar to the Zero Hedge link that you posted, about the cycles in reserve currencies. I could see that it might shift, and some transactions are going to get done without the dollar.

But I just don't see the dollar disappearing as a reserve currency, just because the other countries are in worse shape.

Again I see the biggest factors as demographics and rebalancing.

But while we are on the subject what is the best way to go about buying silver or gold. I hear that selling and buying you can get screwed with various aspects of the process?

another one for you
Doug Casey
https://www.youtube.com/watch?v=PzKpDKQ0gSs#t=383

smaulgld says

another one for you

Doug Casey

Notice he uses the word confidence?

Yea if the Ruble or the Yuan get backed by gold it will be a game changer.