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Brokedownclimber
Trad climber
Douglas, WY
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Just a quick response to SteveW: yes I am collecting Socialist Security. The amount returned from what I paid into the system is pretty abysmal. I don't equate Socialist Security with "entitlements," although for some reason the politicians are wont to do so...
The so-called Social Security Trust Fund was pillaged by the Johnson Administration, nearly bankrupting it by the late 1960's. That's what "paid for" the Great Society.
That's one of the reasons I continued working for 6 years past "normal" retirement age, and still run my rare coin and precious metals business online.
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Brokedownclimber
Trad climber
Douglas, WY
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Here are a few sage words regarding precious metals in relation to the Fiat currencies:
PMs are currently being highly (and illegally!) manipulated in an effort to give the currencies an aura of strength. This is done through the trading of contracts for future deliveries, and no metals are actually changing hands in a physical manner...except for a one-way movement to both Russia and China. Between these 2 strong buyers of gold and silver, they have purchased nearly 70% of this year's production of the metals. Then...throw in India, another very aggressive and well heeled buyer. The BRICS are steadily preparing for the day in which they will, in an overnight move, destroy the dollar as the world's reserve currency. That is nearly a certainty, not a matter of "if," but more of a "when."
Another mechanism by which the U.S. maintains some level of financial stability is through the creation of massive derivative markets, wherein enormous amounts of debt are being sold as "investments."
When the markets finally give way under the burdens of unsustainable debt...unpayable...it isn't going to be pretty.
Note added in Edit: There is a fantastic opportunity to stock up on silver today as the spot price has been manipulated below $15 per Troy ounce...a market low for the past 5 years. Take heed, my friends!
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Brokedownclimber
Trad climber
Douglas, WY
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John D.
I've actually been considering either Italy or the Eastern portion (Saxony) of Germany as a place to look for some real estate in the future. Could be some amazing bargains there...
Note added in Edit: Don't forget to add in Ireland and Portugal to your list of countries teetering "on the edge" of default.
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Jan
Mountain climber
Colorado, Nepal & Okinawa
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I have no doubt that the Bric's have illusions of breaking the dollar as the reserve currency. The question is what would they replace it with? Who in the world has full faith in the integrity of the Russian, Chinese, or Brazilian governments?
i just finished reading Greg Crouch's excellent book, China's Wings, about aviation in China and the flights over the hump to resupply Chiang kai shek's forces during WWII and to try to shore up his government. Many of those flights contained whole plane loads of printed money due to the inflation despite the fact that we also flew many flights of solid gold bars to him because he demanded payment in gold and we agreed. The outcome was that his family ended up with the gold in Taiwan and Mao ended up in control of China. The Chinese people had more faith in Mao and his vision than they did in Chiang kai shek and his gold.
Americans for all our faults still have a corner on vision and integrity compared to the opposition. The Europeans have vision and integrity, but no unity. That leaves us.
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Brokedownclimber
Trad climber
Douglas, WY
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Jan-
The Chinese have recently become one of the countries involved in the "fixing" of the gold price on the London exchange. They are ultimately planning to become the dominant country in so doing...
The Russians are complicit as well, and either the Rouble or Yuan could ultimately replace the Petrodollar. China already hold an enormous amount of the U.S. Debt in bonds, which allows them to exert unbelievable economic pressure. It may not be this year, but the Chinese are extremely patient...as you well know.
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jstan
climber
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Topic Author's Reply - Jul 7, 2015 - 11:45am PT
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I'll ask an obvious but still impertinent question of the gold bugs here.
What portion of your net worth is presently in gold? Physical gold.
There is a new factor pushing the fixed income investor toward gold. Money has next to no time value presently and I don't see saving rates going much above 3%. When you have enough, three percent is about equal to zero, which is also the amount of risk you are willing to accept. But unexpected cash flow demands can be a problem.
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Brokedownclimber
Trad climber
Douglas, WY
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John-
Standard bank savings account interest rates are generally around 0.05%, effectively zero.
I have an interesting portfolio outside of real estate; almost entirely based on Medieval German States coinage with an emphasis on rare gold coins and Silver Thalers.
For giggles, I've posted some photos of some of my holdings.
To answer the question: yes, I put my money where my mouth is...
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JEleazarian
Trad climber
Fresno CA
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The U.S. is capable of great things when we make up our mind what we want to do. The problem now is not our lack of gold but our lack of vision and political will to convey a clear message of what needs doing in order to motivate our country.
Jan, what can our country (assuming you mean the USA) do to bring Greece out of its economic position? Its economy didn't get flattened by war. It got flattened by promising benefits for which it can't pay, and having too few workers to support pensioners. It's like the joke about how many psychologists it takes to change a light bulb: one, but the bulb must want to change.
Unless the Greeks have the political will to change their governmental benefits to make them affordable, there is nothing any outside government can do to fix their problem.
John
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Brokedownclimber
Trad climber
Douglas, WY
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^^^^^^John: agreed; the victims of the handout mentality are like alcoholics; once addicted to freebies, hard to go back to work.
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SteveW
Trad climber
The state of confusion
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Thannks, Rodger.
Too many people call SS an entitlement. . .
(I'm not sure it was just the Great Society--how about continued
obscene defense spending by the US). . .
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John Duffield
Mountain climber
New York
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The Defense Industry is obscene and why I won't vote for the Republicans this upcoming cycle. Though the Democrats are in it up to their necks as well. That F-35 a case in point.
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JEleazarian
Trad climber
Fresno CA
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The aging of the population is a world wide problem but nobody is going to have more difficulties supporting their aged than China because of its one child policy. They're going to eat up their trade surplus and their gold doing that.
Exactly, Jan. Japan already came up against that problem about ten years ago. Western Europe is seeing it in various places as well. One quibble, though: The issue isn't so much the trade surplus as it is the balance of payments, so while I agree with your comments about gold (or "hard currency" generally), I'm not so sure about their trade surplus.
John
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Brokedownclimber
Trad climber
Douglas, WY
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John D. --You can blame the F35 problems and costs straight on the Marine Corps, and their stupid requirement for VTOL capability in an air superiority type fighter. The F35 is similar to the old joke: a camel is a horse designed by a committee. Trying at taxpayer expense to build a "one size fits all" warplane didn't seem to work out very well, did it? At $325 Million a copy, it is obscenely expensive. It doesn't fly very well, is consistently outmaneuvered by the aging F16 in mock dogfights. My prediction: cancellation of the project after fewer than 25% of them are built. As well it should be... It does all the tasks asked of it, but NONE of them well. It would get a helluva lot of young American pilots killed in combat.
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Norton
Social climber
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Population
Food for interesting conversation!
On this issue I have to disagree with the seemingly consensus opinion that increasing population is "necessary" to ....to what exactly..to somehow further human existence?
to insure capitalism's continued profitability?
My feeling is the opposite, that actually decreasing human populations is the "best"
way to raise the quality of life for future generations
I guess I look at it largely in terms of human misery, rather than buying into the arguably
strong position that more will prosper from relentless reproduction
perhaps more will prosper, numerically, but many more will also endure lives of poverty and misery- yes those of us in the First World are doing fine but many more in the Third
World live horrible lives
the old Star Trek saying: the needs of the many outweigh the needs(wants) of the few
makes me believe that far fewer humans can live better lives than many humans can
without going into a great deal more rambling detail...China is making the right decision
I think we should have staying in the trees, we ate, sh!t, had sex, and died
not all evolution is for the best, and in the case of us evolved primates I have my doubts
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Brokedownclimber
Trad climber
Douglas, WY
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Norton-
The big issue facing the world is, indeed, out of control population growth. Here at home, we continue subsidization of children born out of wedlock, and seemingly encourage same? I'm actually a compassionate individual, but not stupid. If a teenage girl becomes pregnant and has a child w/o means of support, we pay her welfare payments. Fine. The more illegitimate offspring she has, the more we pay. Fine. I can forgive a single simple mistake, and even consider society lending her a helping hand(out). A second pregnancy should be penalized, not subsidized, so a deal with the woman should be made: in order to receive ongoing financial support, she must VOLUNTARILY submit to sterilization. Two mistakes is simply one too many. Massive financial penalties then ensue. Third mistake? Forced sterilization as in China.
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John Duffield
Mountain climber
New York
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Agreed. A generation of mandatory birth control did a 180 on Chinas economy. They're too wealthy now. All we can do, is moan about the islands they're building.
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Jan
Mountain climber
Colorado, Nepal & Okinawa
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I think our moaning about their island building has more to do with our fatigue from fighting seemingly endless wars in the Middle East than entitlement economics.
As far as China's 180, they got fast results but pushed the problems further down the line. Too many old people or too many young are both problems. We all need to strive for societies with only replacement levels of population. How we get from the growth based capitalism we have now to a more sustainable economics is the big question. I somehow think it won't happen until it's forced on us, probably by depleting energy supplies.
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JEleazarian
Trad climber
Fresno CA
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the old Star Trek saying: the needs of the many outweigh the needs(wants) of the few
makes me believe that far fewer humans can live better lives than many humans can
In a steady state, you're right, Norton. The problem is that the population of recipients is increasing, while the population of donors is not (or is even decreasing).
John
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John Duffield
Mountain climber
New York
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Everyone is making moves right now. Vacations getting cancelled. In a month, Europe will be a different place.
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