For those of us living in Dollar-land

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plantguy90's picture
plantguy90
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For those of us living in Dollar-land

I understand you should rush to gold if you have substantial savings, but whats the best route for those who intend to stay in business as long as the environment lets you?  Buying a ton of coins seems so unwieldy, sure the day may come, but it isn't here now.  Cash is also unwieldy, compared to the convenience of our banking system (checks, plastic, wires) How much does one keep in dollars and where?  I cant seem to find a bank thats conservativly managed, has not recieved TARP money, and still provides the convenience of the big banks.  There is still a lot of space between when we will all be bartering bullets and gold chips and trying to maintains a semblence of our existing lives.   Any thoughts from those in the small business owners crowd? 

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Lemonyellowschwin
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Re: For those of us living in Dollar-land

Buying a ton of coins probably is unwieldy.

But that would be more than 29,000 ounces, or about $27 million dollars worth.

 

plantguy90's picture
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Re: For those of us living in Dollar-land

That would be a nice problem to have!

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Re: For those of us living in Dollar-land

Plantguy,

I am a (very) small business owner, a surgical practice, with four employees. I certainly still use conventional finances, bank accounts, wire transfers, credit cards, etc. But, I do use a local bank, which has a history of good management, and no known ties to risky loans. I would recommend using a smaller, local bank; one with a good history and reputation. How much you keep in your work bank account depends upon how much fluctuation you typically see between income and costs. I try to keep my work bank account fairly lean, though, taking distributions regularly, and putting those in my personal account. I believe FDIC only covers personal accounts up to $250,000, and does not cover business accounts. When I have sufficient reserves in my personal account, and the costs of any potential investments (such as precious metals) are attractive, I make those purchases. I also carry no debt in my business, apart from credit card charges, which are payed promptly.

I agree with you that it will probably be a long time before we are accepting gold dust or bartering services. I am concerned about my fairly fixed reimbursements (Medicare and private insurance pay schedules), and what I will do when/if we see hyperinflation. I suspect inflation initially will be gradual, forcing me to sever ties with insurance companies with lower reimbursement, and eventually, possibly going to a self-pay, cash basis. Gold nuggets and chickens would follow sometime thereafter, in this scenario.

My other concern is the financial safety of my employees. I am trying to educated them about the concerns I believe we face, so that they can make their own preparations. I will also try to ensure their continued employment, even if that means that I start earning less.

It is bad enough worrying about my family's future, but I also have to keep in mind the financial health of my business and my employees.

Roundhouse's picture
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Re: For those of us living in Dollar-land

I'm a general contractor who is lucky enough to be still working (high quality, super energy efficient homes are still in demand).  I have employees who count on me to provide work for them and income for their families. It's getting more difficult all the time but we have a good reputation for quality and hope that keeps us working.  

I am out of the market and even cashed out an annuity, paying the early withdraw penalty. After researching the company that held the annuity, it was an easy decision and I'm sleeping better.   I did buy some gold (don't worry, unless you're a gazillionaire, it won't take up much room) and some silver.  I have always owned guns and have stocked up a bit on ammo but not as an investment.  I keep three months cash on hand at a minimum, sometimes more.  Depends on my perception of the global doom factor.  Dr. Martenson helps in that area as I trust his factual analysis without conspiracy theory etc etc.

In addition, I have no debt.... a HUGE advantage.  I live in a farming community in a small valley.  We have 'community', with an amazing number of independent, self-sufficient individuals.  I take great comfort in that.

We are lucky to also have a very conservative bank, locally owned and in business for eons.  They loan to farmers, the farmers pay them back. Everyone is on a first name basis and handshakes are considered much more valuable than legal documents.  I keep my company and personal funds with them and do business as usual, writing checks, taking draws on projects, cashing checks, payroll, the usual stuff.  I can't imagine trying to build a house with cash, gold dust or coins.  At best, it would be a royal PITA, if it could be done at all.

I still get up and go to work every day.  Life goes on but I'm unwilling to 'risk it all' hoping things are going to return to 2005, they aren't.  I guess, "hope for the best and prepare for the worst" is my base philosophy. 

Reading this over, I doubt I helped you a bit. Everyone's situation is different and I don't think there is one 'cookie cutter' plan that can be applied to all. 

 

BSV's picture
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Re: For those of us living in Dollar-land

I agree with Dr. Christopher Peters on this point. Here in my part of the country (Texas) we have lots of well managed local community owned banks that are sound. While it is true that they participate in the arguably unsound fractional reserve banking system, they tend to make money consistently. I owned and operated a business for years before I retired and I know what it is like to meet a payroll. I kept my bank fully informed through good times and bad, and they always stuck with me.

For now, it seems to me that a good strategy would be to form a relationship with a community owned bank and make sure you keep them informed about your business, both good and bad. Chances are they will stick with you when you need them.

These community banks avoided the oh-so-clever moves that sank the big banks. They did not get involved in derivatives transactions. Instead, they concentrated on the business of taking in deposits and lending money, making money on the spread between the cost of funds and interest earned on loans.

At some point, it seems likely that the world as we know it will come unglued. When that happens, we will have to move to Plan B, whatever that may turn out to be. For now, business as usual -- with appropriate precautions taken to prepare -- is probably a good plan. At least it's a plan, which is something.

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Re: For those of us living in Dollar-land

plantguy90, remember to take future availability of desirable resources and assets (e.g., physical gold) into consideration.  I.e., don't forget to take future supply-and-demand into account if all of a sudden EVERYONE knows and is rushing to prepare for a collapsing economy.  Here are a couple examples from a family-preparation perspective, but I think they will still make the point. 

E.g., physical gold.  I have been tracking its price for months on-line, on www.bulliondirect.com .  Guess what?  I am seeing the availability of certain popular coins decrease significantly (e.g., 1 oz. American Gold Eagle and 1 oz. Canadian Gold Maple Leaf).  They have a "nucleo auction" option where people can set prices for gold/silver that bulliondirect is holding for them.  And the price now being asked for those coins is climbing.  And if you click on one of those coins in their nucleo exchange, and see how many are actually available of each, you see that there are only a few left at the lower costs, and the costs of the remaining ones climbs and climbs. Lets see if I can paste this:

GCCM100
Canadian Maple Gold Coin (1.00 oz.)
Bid

Quantity   @  Price each
Ask

Quantity   @  Price each
5 $971.50
5 $971.00
1 $950.00
4 $946.02
1 $946.01
1 $940.01
27 $940.00
2 $915.00
1 $902.00
2 $875.00
6 other Bids
1 $1014.01
1 $1015.00
1 $1015.64
1 $1028.50
3 $1100.00
1 $1100.00

 

The bid column is what people are offering to pay to get that coin, the Ask is what people selling the coins are asking.  So after the 1 coin each at $1014, $1015, $1015.64 and $1028.50 are gone, 1 oz Canadian Maple Leaf Gold coins will be $1,100 on this exchange.  You can get them much cheaper in the regular catalog: $978.  But then you deal with the long waiting time and potential lack of availability (e.g., they do not even list 1 oz. American Eagle coins in their regular catalogue right now).

 Here's another example from a family perspective.  I've been researching what seeds to buy to start a garden, to move towards sustainability "just in case we need it in the fututre".  Know what?  Heirloom seeds is seeing such an overwhelming increase in demand, they are not even taking any new orders.  And the place I did end up  buying from already had several selections sold out.  Multiple sites I visited posted warnings that they were experieincing an unprecedented demand, and for people to have patience, orders would be slow.

My point?  You may not have the luxury of waiting to prepare later, after we experience  TSHTF big-time.  Supply and demand is ALREADY a factor.  Availability of desirable resources and assets is ALREADY a factor.  Please take that into account in your planning!

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Michael Höhne
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Re: For those of us living in Dollar-land

I'm watching the availability of gold and silver bars and coins at my local dealer constantly. Back in September 2008 you could buy almost everything, but since a few months it's very restricted. It started with gold bars in the range of 10 to 100 grams and 1 ounce coins disappearing. The next item to be sold out was the 500 gram gold bar. Starting in the last 6 weeks or so even the supply of 5, 2.5, 2 and 1 gram bars was limited, though there is a big premium on these smaller items. Today the only gold bar available is 1,000 grams for 22,860 Euros and this most likely is because most individuals cannot afford to buy it. Instead they go for the smaller bars, even it seems ridiculous when looking at the price.

Supply of 1 ounce gold coins changes frequently. Today the Austrian Philharmoniker, the Canadian Maple Leaf and the Australian Lunare are available. Everything else is sold out. 1/2 ounce Kruegerrand, 1/10 ounce Philharmoniker and a 1,000 gram coin of the Australian Nugget are the only other items available.

Silver wasn't that popular in the beginning, but it changed in the last months. It seems that because the smaller gold bars are gone, people started buying silver bars and coins instead. The only silver bar available today is 1,000 gram at 376 Euros. However, silver bars are taxed with 19%, so the final price is 447.44, compared to 323 when selling the same bar. This difference of almost 40% have prevented many people from buying silver bars in the beginning.

Silver coins are "only" taxed with 7% (by the way, there is no sales tax on gold) and today the only available items are 1 ounce of Maple Leaf and China Panda and 1,000 grams of the Mexico Libertad. Everything else is gone.

The dealer also sells silver pellets. You can mint your own bars and coins with that and it's sold in a box of 1,000 or 5,000 grams. Today is the first time that I see the 5,000 gram box sold out. The 1,000 gram pack is still available, but it seems that the bigger items (5,000 gram "coins", bars and pellets) are all gone.

Current delivery time is 7-10 days after payment.

plantguy90's picture
plantguy90
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Re: For those of us living in Dollar-land

Thanks for all the input.  Its not that I am against physical gold, its that my family are aggressive savers and the thought of too much gold troubles me, that vs the idea of letting a percentage of your paper money blow up when the time comes.  The most frustrating part in my life is my inabilty to convince my family business that SHTF is coming.  Ironically, my family business is horticulture.  Our major supplier is my in-laws, they have a farm out in another country and we are the importers of their plants.  My in-laws are amazing, they actually have sharecropper backgrounds and are expert in growing and farming.  So they fear nothing. They have been dirt poor, have many skills we doomer and gloomers crave, still live incerdibly austere lives, and work like the devil has a whip on their backs.  Odd but they take all of my SHTF views with a grain of salt; they have been through it in their lifetimes already, and I guess its no biggie.  I on the other hand, was blessed to be raised in the US, and TSHTF grates wildly with my background and privilege and FIRE economy education.  As for my parents, its hard to convince them of the infallibility of the West; so they plan on being swept with the tide.

One example is that I want to convert our business to raising food crops.  However the family is continuing with non-edible houseplants for the time being.  We have discussed converting a portion to an orchard, which I know takes time to get young trees established and productive, but they dont seem to be in any real hurry, as we still have a lot of work to do with our current business. 

Sometimes my wife asks me what she should do with her savings.  Past PM's I think the best thing to do is to invest back into the land, as in solar, additional equipment, etc.  Anything but cash.  But as a whole our family doesn't hold anyting other than land or cash, and have always been very much against debt.  I just bought about 1-2 months supply of freeze dried food, the in-laws reaction was almost embarrasing; storing food is good, but spending extra money on hi-tech food is not in their programming. 

I realise there are many who have much worse problems. I guess the biggest hit we could take is if the banks failed and savings got locked up, Argentina-style.  But that does worry me.

 

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Re: For those of us living in Dollar-land

Thank you for your comment. I too am a small business person. This is my first post and do it only to inform you as far as I know business accounts be they incorporated or otherwise are insured by the FDIC for what that is worth. Go to the FDIC website to confirm.

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Re: For those of us living in Dollar-land
bscotty wrote:

Thank you for your comment. I too am a small business person. This is my first post and do it only to inform you as far as I know business accounts be they incorporated or otherwise are insured by the FDIC for what that is worth. Go to the FDIC website to confirm.

I stand corrected, in several ways. I verified the following from a few sources, not wanting to blindly trust USA Today, but this seemed to be a fairly cogent summary:

http://www.usatoday.com/money/smallbusiness/columnist/abrams/2008-07-25-...

Business and personal accounts are covered by FDIC (we can argue what that may or may actually mean), but only to $100,000. And, depending upon the structure of the business (a sole proprietorship, for example), if your business and personal accounts are at the same bank, you may be covered for up to $100,000 total, for both accounts. From what I read elsewhere, it seems things can be structured to offer more coverage, but I haven't investigated that well enough to report on further at this time.

Thanks, bscotty! Who was that masked man? 

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plantguy90
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Re: For those of us living in Dollar-land

I believe FDIC insurance will work in normal times, but when we are already in a huge amount of debt, the FDIC insurance amounts to freshly printed paper money, no?  So lets say Ben and Barry are wrong and we slip into super-inflation while there is a dollar crisis, and maybe a run on banks begins.  We already just saw the trembling of that earthquake in last fall.  So the govt just announces "Hey, not to worry, you money is safe, see?  Just wait until we print up some more." all the time its buying less and less of anything, and by the time you get to it it buys maybe 1/2 or less of what it used to buy.  That's a possible scenario, right?

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ccpetersmd
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Re: For those of us living in Dollar-land
plantguy90 wrote:

I believe FDIC insurance will work in normal times, but when we are already in a huge amount of debt, the FDIC insurance amounts to freshly printed paper money, no?  So lets say Ben and Barry are wrong and we slip into super-inflation while there is a dollar crisis, and maybe a run on banks begins.  We already just saw the trembling of that earthquake in last fall.  So the govt just announces "Hey, not to worry, you money is safe, see?  Just wait until we print up some more." all the time its buying less and less of anything, and by the time you get to it it buys maybe 1/2 or less of what it used to buy.  That's a possible scenario, right?

That is absolutely one of the ways FDIC could fail us, by insuring our accounts with devalued dollars. The other way, of course, if simply for the government to cancel FDIC coverage.

In any case, I try to limit my exposure by limiting the size of my accounts. Speaking of which, I could really use a couple of pairs of new blue jeans... 

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Re: For those of us living in Dollar-land

Chris Martenson wrote an article posted on another website I read frequently, www.financialsense.com - I don't have the article in front of me, but the title was, more or less: "Is the FDIC really as safe as you think?" The answer, of course, is no, the FDIC is not as safe as we think.

The FDIC is as safe as the Federal Government under normal circumstances, but, these are not normal circumstances. The FDIC has either no money, or limited money. They have to ask Congress to borrow money, which is normally no problem. But, what if: The US was at war with, say.....Iran. What if we were in an economic war with China? With a little creative thinking, any number of scenarios emerge. I'm sure I've done a terrible job of quoting the article. If no one finds it, I'll dig it up and do a better job.

I'm a late-comer to the preparation phase to this whole unfolding debacle, but my first step is to move my savings account from Bank of America to a local credit union. I don't trust the FDIC insurance any more than I trust the rest of the Government to deliver true on their promises, or any more than I trust the banks. I think a great number of people trusting that FDIC will be there to replace their accounts are going to be greatly disappointed and then angry when there is simply no more money.

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Re: For those of us living in Dollar-land

This masked man, and the reason the man prefers to stay masked, is he is one of those evil persons in the domestic "oil" business. If that is not evil now a days in popular opinion just what is? Except maybe doctors, a distant second. I would not keep money in any one bank exceeding 100k and hope, and I emphasize hope, the FDIC will cover it if anything happens. The way I understand things the 250K FDIC insurance, if it is insurance, only lasts FOR INDIVIDUALS through 2009. That date could easily be overlooked and if overlooked and something happens you live with the results, no recourse. I am in the fortunate position of having no debt and have taken Mr. Martenson's advice as putting about 10% plus of my available assets in physical gold and silver.

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Re: For those of us living in Dollar-land
bscotty wrote:

This masked man, and the reason the man prefers to stay masked, is he is one of those evil persons in the domestic "oil" business. If that is not evil now a days in popular opinion just what is? Except maybe doctors, a distant second. I would not keep money in any one bank exceeding 100k and hope, and I emphasize hope, the FDIC will cover it if anything happens. The way I understand things the 250K FDIC insurance, if it is insurance, only lasts FOR INDIVIDUALS through 2009. That date could easily be overlooked and if overlooked and something happens you live with the results, no recourse. I am in the fortunate position of having no debt and have taken Mr. Martenson's advice as putting about 10% plus of my available assets in physical gold and silver.

Welcome, masked man! By the way, I didn't mean to imply that I thought you were being evasive, in case you thought that. Most people here tend to maintain some degree of anonymity, and I find nothing wrong with that. I was simply referring to the (previously) unknown respondent who came along to right my error.

I agree with your recommendations regarding FDIC. I don't think I'd agree with your ranking system, though. I'd have to put financiers and politicians way up at the top!

How's the domestic oil business going? My stock portfolio in energy isn't looking too hot, but I expect that will change. 

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Re: For those of us living in Dollar-land
ccpetersmd wrote:

In any case, I try to limit my exposure by limiting the size of my accounts. Speaking of which, I could really use a couple of pairs of new blue jeans... 

Completely agree.  The only way this corrupt system can get at savers is to withhold their money while simultaneously debasing it.  Also, there's still money being held by investors that the system can suddenly capture also, by shutting down markets.  I believe its in the cards.  I have a list of preparedness items to spend some savings on, but it seems inevitable that some money has to be lost in the system, unless you go completely "off-grid." 

Its too bad we cant convert monetary assets into Physical delivery Oil!

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Re: For those of us living in Dollar-land
plantguy90 wrote:

Its too bad we cant convert monetary assets into Physical delivery Oil!

I was wondering about this. Is there any reason, beyond the logistics, why one couldn't stockpile a large supply of gasoline and today's (relatively) low prices? 

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Re: For those of us living in Dollar-land

For somebody like me, with more financial needs than savings, the solution to a potential "bank-holiday-which-freezes-assets-during-a-short-&-rapid-devaluation" is fairly simple.  Simply be ready to suck all excess cash out of the bank and make purchases of goods on short notice (e.g., go buy ammo, non-perishable food, barter items, tools, etc.) -- thereby converting soon-to-be-devalued $$$ into things w/tangible day-to-day value.

The tricky bit, of course, is to recognize when that's about to happen and make one's move first.  But we have less at stake than somebody w/significant savings in banks/stocks/retirement funds/pensions.  Not sure what someone in *that* sitch would want to do.  Precious metals (which have their own set of limitations/complications)?

Roight!  Out to the yard to work on a retaining wall... 

Viva -- Sager 

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Re: For those of us living in Dollar-land
ccpetersmd wrote:

I was wondering about this. Is there any reason, beyond the logistics, why one couldn't stockpile a large supply of gasoline and today's (relatively) low prices? 

Maybe I haven't reasearched it enough, but the logistics are daunting. 

1) safe containers are expensive,

2) gasoline is volatile, diesel not so much 

3) Are you gonna tell the local govvy, and the fire dept?  They really get all excited over this.

4) How do you go fill a large container?  How do you drive around on the roads with your stash safely?

5) Moving even 55gal barrels requires a special crane for the job.

So far its small 12 gal tanks, which doesn't seem worth it, medium containers which are a bigger hassle, or large container you have to either get a permit for, or hide from the law.   Then comes the question of how much oil are you trying to store?

I havent looked into paper oil yet...

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Re: For those of us living in Dollar-land

Gasoline doesn't keep well longer than a few months, apart from the fire hazard! Remember

those gummed up carburetors and that nasty kerosene-like smell?

 I'm buying some gold from James Turk's "GoldMoney" outfit based in Jersey, UK.

 The metal exists in a Swiss vault and is mine (no counterparty risk, they say, unlike GLD).

If two people have an account there, they can pay each other for goods in  "goldgrams",

a "currency" that could grow in popularity, reckon?

 Ted

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Re: For those of us living in Dollar-land
xpatUSA wrote:

Gasoline doesn't keep well longer than a few months, apart from the fire hazard! Remember

those gummed up carburetors and that nasty kerosene-like smell?

I'm buying some gold from James Turk's "GoldMoney" outfit based in Jersey, UK.

The metal exists in a Swiss vault and is mine (no counterparty risk, they say, unlike GLD).

If two people have an account there, they can pay each other for goods in  "goldgrams",

a "currency" that could grow in popularity, reckon?

Ted

Ted,

With all due respect to your plans, how do you know the gold will actually be available to you when you decide you want it?

I agree that purchasing PM's is a good idea and I plan to obtain some in the near future. However, I will take immediate physical possession to make sure it is there when I need/want it. I'm too leery of "promises" in today's environment!

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Re: For those of us living in Dollar-land

Thanks to those who offered suggestions regarding the storage of fuel. I had not looked into it at all, so had no idea regarding the relevant concerns. I looked around a bit, and I thought this summary was the best of the bunch I read:

http://www.backwoodshome.com/articles/warner43.html

I doubt very much I'll do anything along these lines, but a little internet browsing seemed like a good way to fill part of a lazy Saturday morning... 

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Re: For those of us living in Dollar-land

I just read a hypothesis where the dollar will be trashed, either A) slowly or B) suddenly.  In any event, those of us stuck here have little choice.  We will continue to trade mostly in dollars, which will buy less and less goods that come from foreign places.  But wouldn't it eventually hit a point where it would actually encourage domestic production?  Of course raw materials at that point would be costly, but labor cheap.  So in effect, we become a third-world country.  Are we ready for that?  Seems it could be a smooth transition, examples would be at all the Asian countries that have big savings rates,, low labor costs, and hustle and bustle, or we could fall into African-style anarchy, or maybe Middle-eastern style oligarchy.  Hardest to figure out is that we in dollar-land are a broad mix of people from all over the place.  

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Re: For those of us living in Dollar-land

On the storage of diesel. If you get an empty 200litre container and keep it not too far from you vehicle along with about 20 + 20 + 10 small containers. Four or more trips can fill the small ones at the pump and fill the big one from them. Hand pumps to move diesel from big containers to vehicle are quite cheap second hand. So are used 200litre drums.

You need to add a bacteria eater to the fuel for long term storage. 

Don

_____________

still ...
here  ...
still here
still here?

ccpetersmd's picture
ccpetersmd
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Re: For those of us living in Dollar-land
plantguy90 wrote:

I just read a hypothesis where the dollar will be trashed, either A) slowly or B) suddenly.  In any event, those of us stuck here have little choice.  We will continue to trade mostly in dollars, which will buy less and less goods that come from foreign places.  But wouldn't it eventually hit a point where it would actually encourage domestic production?  Of course raw materials at that point would be costly, but labor cheap.  So in effect, we become a third-world country.  Are we ready for that?  Seems it could be a smooth transition, examples would be at all the Asian countries that have big savings rates,, low labor costs, and hustle and bustle, or we could fall into African-style anarchy, or maybe Middle-eastern style oligarchy.  Hardest to figure out is that we in dollar-land are a broad mix of people from all over the place.  

U.S. as Third World Nation:

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/25/AR2009032502226.html 

http://georgewashington2.blogspot.com/2009/03/experts-on-third-world-ban...

http://en.afrik.com/article14618.html

The first article is very good.

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Re: For those of us living in Dollar-land
SamLinder wrote:

I'm buying some gold from James Turk's "GoldMoney" outfit based in Jersey, UK.

The metal exists in a Swiss vault and is mine (no counterparty risk, they say, unlike GLD).

Ted,

With all due respect to your plans, how do you know the gold will actually be available to you when you decide you want it?

I don't. It's just there as temporary savings until I can add more value to my country property, buildings, barbed wire, watchtowers ;-)

On physical gold, I wonder how people might actually use it in trade? It would seem a shame to buy some I oz bullion coins at quite a high premium and then be cutting them into pieces in the Apocolyptic Future. On the other hand, 1/10 or 1/20 oz bullion would certainly be better suited in terms of per item value - but today's premium is so high that I can't bring myself to purchase it. Sorry, Kitco.

best regards,

Ted

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: For those of us living in Dollar-land

I think the "junk" 90% silver coins are the best for trading purposes, they will always retain their original value and are in small denominations.

More info here,

http://www.monex.com/prods/silver_90.html

BTW- I'm not affiliated with Monex in any way.

machinehead's picture
machinehead
Status: Diamond Member (Offline)
Joined: Mar 18 2008
Posts: 1077
Re: For those of us living in Dollar-land
plantguy90 wrote:

I just read a hypothesis where the dollar will be
trashed, either A) slowly or B) suddenly. In any event, those of us
stuck here have little choice. We will continue to trade mostly in
dollars, which will buy less and less goods that come from foreign
places. But wouldn't it eventually hit a point where it would actually
encourage domestic production? Of course raw materials at that point
would be costly, but labor cheap. So in effect, we become a third-world
country. Are we ready for that?

No, we aren't ready for it. But I think you're on the right track.

After
linking its peso to the US dollar at 1-to-1 for a decade, Argentina
entered a currency crisis in late 2001. Soon the peso was 3 pesos to
the dollar; that is, one-third of its previous value. The results were
amazing. Argentine products -- especially agricultural products, the
only sector in which it is really an efficient, world-class producer --
became hypercompetitive. In fact, European winemakers came in and
snapped up many of the wineries in Mendoza province, making substantial
capital investments in order to use them as bases for export.

Nevertheless,
despite its sharp devaluation, pesos are still used as the means of
exchange today. This is true in every country I know of, including
Zimbabwe. Evidently, 'legal tender' laws work, unless the government is
actually overthrown. What does happen with weak currencies is that
velocity accelerates -- people try to spend them quickly, or convert
them to foreign currencies for longer-term savings.

If the US
dollar dropped to a third of its current value, I have no doubt that
dollars would be still be the 'coin of the realm' -- though pennies and
nickels might not. What you would see is a huge surge of foreign
investment -- Chinese buying wheat farms; Germans buying factories;
etc. A devalued dollar will most definitely cause a surge in U.S.
physical production. Because ultimately, if we can't buy the stuff in
WalMart with paper dollars, we will be obliged to make and export
things to trade for essential imports, such as oil.

Kids who
aren't academically inclined should be encouraged to pursue vocational
education. An impoverished U.S. is going to become a busy workshop,
with many noses to the grindstone. If possible, follow the Chinese
example and own a two-story place -- living quarters upstairs, store or
factory downstairs. I see Mexican and Korean immigrants doing this
here. They know how such economies work. Suburb-dwelling Americans
still laughably think their peachback dollars come from a magic
beanstalk, and receive cargo-cult-like respect overseas. Not for long
...

plantguy90's picture
plantguy90
Status: Gold Member (Offline)
Joined: Jan 26 2009
Posts: 271
Re: For those of us living in Dollar-land
machinehead wrote:

Kids who aren't academically inclined should be encouraged to pursue vocational education. An impoverished U.S. is going to become a busy workshop, with many noses to the grindstone.

True.  The most worthless thing my US loving immigrant parents did for me was to allow me to get a modern liberal arts education.  I woke up to find myself middle aged and lacking any real skills. 

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