Thanks David,
I read a real interesting article on www.kitco.com (thanks Phil) about how real estate (while going up in dollars) has been declining 5% per year relative to the price of gold for the last two years despite the claims that real estate is "going up". So he says (sorry I don't have time to link the article) Americans have fallen into the classic trap of thinking they are getting richer because they have more dollars but are ignoring the fact that the dollars are decreasing in value faster than the asset...much like your bathtub story.
He also had very worrysome views about the future of American consumption as the pensions and incomes were declining due to the bankruptcy of American Industry....these would eventually have significant impact on consumers as well as America's ability to repay the nearly $30K each and every American owes in Federal debt. It will also have significant impact on the ability of foreign investments to recover their expectations from sales to US consumers in real money. My wine industry is a classic example.
As fiat currencies are the last hope of every government (the average increase in money supply for all major currencies was between 10-15% last year) nearly all international currencies are being abused by their governments and will be losing their value against real assets like metals or commodities that need real money to create...not just computer digits the government creates through the Federal Reserve at will.
He predicts gold will double every year for the next 3 years bringing it to $4K per ounce. If all the dollars today were to be converted to all the gold today, gold would be $20K. I'm not saying that's a completely reasonalbe expectation of reality, I'm just using this to put dollars into their appropriate perspective...little more than criminally issued paper for the benefit of the printers and the armies they hire to enforce the currency they create. What a raquette!
Mike
Dear MIke;
Okay - so then let's devalue the greenback by 1,000 to one. Then go back on the gold standard of say $50/troy oz gold and disband the Federal Reserve.
What da yah say???
Ron Getty
SF Libertarian
Mike Denny <mike@...> wrote:
Thanks David,
I read a real interesting article on www.kitco.com (thanks Phil) about how real estate (while going up in dollars) has been declining 5% per year relative to the price of gold for the last two years despite the claims that real estate is "going up". So he says (sorry I don't have time to link the article) Americans have fallen into the classic trap of thinking they are getting richer because they have more dollars but are ignoring the fact that the dollars are decreasing in value faster than the asset...much like your bathtub story.
He also had very worrysome views about the future of American consumption as the pensions and incomes were declining due to the bankruptcy of American Industry....these would eventually have significant impact on consumers as well as America's ability to repay the nearly $30K each and every American owes in Federal debt. It will also have significant impact on the ability of foreign investments to recover their expectations from sales to US consumers in real money. My wine industry is a classic example.
As fiat currencies are the last hope of every government (the average increase in money supply for all major currencies was between 10-15% last year) nearly all international currencies are being abused by their governments and will be losing their value against real assets like metals or commodities that need real money to create...not just computer digits the government creates through the Federal Reserve at will.
He predicts gold will double every year for the next 3 years bringing it to $4K per ounce. If all the dollars today were to be converted to all the gold today, gold would be $20K. I'm not saying that's a completely reasonalbe expectation of reality, I'm just using this to put dollars into their appropriate perspective...little more than criminally issued paper for the benefit of the printers and the armies they hire to enforce the currency they create. What a raquette!
Mike