Ammunition is my 'currency' in a SHTF scenario.
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The global Debt Clock
- Thread starter BLUE_KAWI
- Start date
Imkruzen - one thing I asked you while back, you never really answered:
In hyperinflation scenario - what happens to your mortgage? You owe $500,000 today... Hyperinflation hits, in couple of moths loaf of bread is worth $500,000 - what will banks do? I don't think answer can be found here on GTAM, try as you might...
In hyperinflation scenario - what happens to your mortgage? You owe $500,000 today... Hyperinflation hits, in couple of moths loaf of bread is worth $500,000 - what will banks do? I don't think answer can be found here on GTAM, try as you might...
imkruzen
Well-known member
This is the initiative of the US Gov. to devalue the currency through inflation. This will reduce the obligations of the indebted. The US Gov along with the populous. Unlike Japan, the majority of US debt is owed to foreigners, hence the migration to assets and out of USD. The reason for QE is to absorb the failed bond auctions and to prop up the zombie banks that are bankrupt with trillions of failed assets that the FASB allowed them to value at the rate they believe the toxic waste is worth, rather than mark to market. With the failed housing industry the banks have begun to bulldoze existing homes to create a demand. There are 3 million homes on the banks books that are not on the market and 3 million in default and another 3 million coming into default by Sept, when the final leg of the mortgage resets come due. The late comers to the housing bubble, so to speak. Litigation? Well the banks are looking for a pay one fee and be immune to any futher prosecution by State Attornies. Once debt is purged, at a huge cost and change in lifestyle, a new cycle can begin. Savers will be the losers unless they have taken action to protect their wealth from fiat money.
The USD will lose it's status as a world reserve currency. A new basket of currencies and commodities will be the valuation to global currencies in the future. The Global currency ideology is archaic in todays global economy and you are witnessing a paradigm shift in global trade.
This bankruptcy of US Inc. could have happened long ago, but the rich got richer because the banksters run the White House. Milked the US of its money and left the sleeping population holding the bag. The rich aren't invested in US treasuries.
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imkruzen
Well-known member
The US off balance sheet obligations amount to 211 trillion.
imkruzen
Well-known member
Do you? QE to infinity.
Amen to that brother!
In the big picture, there is a lot of fear being generated by this upheaval going on in the markets. Whenever anything like this (or the crash of 2008 ) happens, it is always somewhat entertaining to ask the question... who wins, and who loses? The market crash of 2008 (that was brought about by greed after the deregulation of the US banking system) has amounted to a massive transfer of wealth out of the pockets of ordinary people and into the pockets of the very wealthy (as evidenced by the mounting US debt load.) We here in Canada could have been in the same boat. Our wonderful Conservative government was on the verge of deregulating the Canadian banks when the crash hit the US economy but they didn't carry through with it. Good thing for us!!! No thanks to Joe Flaherty (remember him from Ontario's "Common Sense Revolution" spearheaded by Mike Harris and his ilk? ) and Stephen Harper (remember him from the ultra-right wing "Reform Party"? )
Anyway, it isn't very productive to worry about it... it is totally beyond our control. The Brits had the best saying that applies in these uncertain times.... Keep calm and carry on. Bottom line here is the rich get richer, the poor get poorer, and the middle class is shrinking by the minute - so what else is new?
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Don't be misled... the deficit is the yearly shortfall and the debt is the sum total of all we owe. It isnt just the Feds who owe either.... Ontario has been racking up some pretty healthy deficits in the past few years. In that map from the Economist, it shows Canada's debt at $1.3 Trillion.... The latest figures I have seen show our Federal National Debt to be somewhere around $520 Billion. So the Economist must be figuring in all the provincial debts as well. Not a pretty picture, to be sure... but it isnt the end of the world.
Another point - many so called "experts" will talk about "unfunded liabilities" when it comes to pensions etc. This is a term that is meant to mislead people. Anyone who owns a house with a mortgage has an unfunded liability of the total amount they owe, but nobody gets too upset about that! Unfunded liability means that you dont have the cash to pay it off today... but like most of us, the government gets a steady paycheque (taxes collected) that they use to pay that unfunded liability when the payments are due. Just like you pay your mortgage every month when you get your paycheque.
I loved you in that Austin Powers movie.
There's nothing misleading about this. The so called "experts" (not sure why they are so-called, or appear in quotation marks) are correct. They are referring to liabilities that don't appear as debt. Pension liabilities, future health care costs, etc. They are not debt, because they are not on the balance sheet. This is totally different from your mortgage. Your mortgage is debt. It is on your balance sheet, and you know exactly how much you owe. The unfunded liabilities they're talking about are large and have a somewhat unknown dollar value. The government needs their "paycheque" to pay their debt. They also need their "paycheque" to pay their unfunded, off-balance sheet liabilities. Will the paycheque stretch far enough? Do you know what pension and health care costs for the US Government are in 2030?
--- D
slogan
Well-known member
Does it means, that Belarus life style is right??? I do not want to live in Belarus no way:la:
Why is it that everyone who thinks "gold" is the answer are always going around talking about how much gold is worth in terms of fiat currency that they believe is worthless?
They'll say that US Dollars are worthless and just paper, but then they'll tell you how well they're doing because the value of gold is $1700 USD per ounce.
Owning a bunch of gold is a good hedge against inflation, and even hyper inflation. It is NOT the answer to a full-fledged global economic collapse. You're still going to need somewhere to sell the gold in return for spendable money. Gold may have backed money, but gold hasn't BEEN money for a long time, and there are good reasons for that.
In past economic failures, people who have had gold, and I mean HAD gold, as opposed to OWNING gold, did well only if they could move that gold or sell that gold in other, stable economies. During hyperinflation in Europe, if they could get that gold to Switzerland or the USA, they did well.
But in a global economic collapse, where fiat currency becomes worthless, gold isn't going to be the answer.
They'll say that US Dollars are worthless and just paper, but then they'll tell you how well they're doing because the value of gold is $1700 USD per ounce.
Owning a bunch of gold is a good hedge against inflation, and even hyper inflation. It is NOT the answer to a full-fledged global economic collapse. You're still going to need somewhere to sell the gold in return for spendable money. Gold may have backed money, but gold hasn't BEEN money for a long time, and there are good reasons for that.
In past economic failures, people who have had gold, and I mean HAD gold, as opposed to OWNING gold, did well only if they could move that gold or sell that gold in other, stable economies. During hyperinflation in Europe, if they could get that gold to Switzerland or the USA, they did well.
But in a global economic collapse, where fiat currency becomes worthless, gold isn't going to be the answer.
Really? You think the economics they teach us in school is right? From what I see, the economics we have been taught is a complete fraud and only a ponzi scheme. We are starting to see the wealth destruction and countries going under from the same economics.
I have been buying gold since it was $1000/oz and silver at $18/oz......these two metals have been crushing every other investment. What is your explanation of gold/silver hitting these highs? Why are central banks around the world dumping fiat money and buying gold/silver like crazy? Even a Texas based University bought gold…do you think these experts are predicting the **** is about to hit the fan?
http://www.thestockenthusiast.com/opinion/why-did-the-university-of-texas-buy-so-much-gold/
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Lots of interesting points here but regardless of your position you need to decide what the end game is.
If you have gold in your basement you are still counting on fiat currency. Why you ask, well you need to trade it for something, trading it directly for goods is not going to happen in a total collapse (reset). If there is a total collapse there will be total anarchy. The only option is "running to the hills" but it is hard to run with bags of gold, more importantly there are already people "in the hills" that will shoot you on site. So unless you are already bunkered in the hills with your gold in your bunker you are going to be as screwed as everyone else in a total collapse.
What you are hoping for is a greater partial collapse than today, but no where near full failure. That will drive the price of gold up in the short term, basically speculation. At some point your best bet is to unload it for some of that fiat currency right before it corrects.
One could think of gold somewhat like real estate. Like real estate there is a limited supply, unlike real estate you do not need gold but need housing (of some sort, not necessarily owned homes...). If you put on blinders and look at set periods of time real estate was a really good investment. If you put on blinders and look at set periods of time gold is a really good investment. Neither will go up for ever and both have and will correct.
Just keep in mind that the guys in the hills are not going to welcome you with your bags of gold. If you are not there now you ain't getting there.
If you have gold in your basement you are still counting on fiat currency. Why you ask, well you need to trade it for something, trading it directly for goods is not going to happen in a total collapse (reset). If there is a total collapse there will be total anarchy. The only option is "running to the hills" but it is hard to run with bags of gold, more importantly there are already people "in the hills" that will shoot you on site. So unless you are already bunkered in the hills with your gold in your bunker you are going to be as screwed as everyone else in a total collapse.
What you are hoping for is a greater partial collapse than today, but no where near full failure. That will drive the price of gold up in the short term, basically speculation. At some point your best bet is to unload it for some of that fiat currency right before it corrects.
One could think of gold somewhat like real estate. Like real estate there is a limited supply, unlike real estate you do not need gold but need housing (of some sort, not necessarily owned homes...). If you put on blinders and look at set periods of time real estate was a really good investment. If you put on blinders and look at set periods of time gold is a really good investment. Neither will go up for ever and both have and will correct.
Just keep in mind that the guys in the hills are not going to welcome you with your bags of gold. If you are not there now you ain't getting there.
The difference is that when a mortgage is set up, there is a foreseeable cash flow that leads to the debt eventually being paid off at a set date, and there is a hard asset that (supposedly, unless there is a housing price crash ...) backs up the debt and (most of the time ...) covers the mortgage lender's position if there is a failure in the payments. Most of the time, it works.
In the case of pension and health care unfunded liabilities, the problem is that we have an ageing population, with more and more people that will be placing demands on these systems, but there is a foreseeable insufficient tax inflow to cover these costs and there is no hard asset that could foreseeably be sold to anyone to raise cash to cover them. "Just raise taxes" - the problem is that there is only a certain level of taxation that an economy can support, and if you increase taxation beyond that level (on a percentage basis) the destructive effect that it has on the economy results in a net loss.
I don't subscribe to the hyperinflation theory, but I do see the trouble on the horizon, and the day when a government eventually defaults on its payment obligations, without being able to "kick the can down the road" as they have been doing up until now, is foreseeably not very many years away. Sorry, you're not getting your old age security cheque this month, we're out of money. Sorry, we're no longer paying interest on your "guaranteed investment certificate", we're out of money. Sorry, China Inc., we're not making this month's interest payment on the government bonds that you own. The response will be, of course, a failed government debt auction. Sorry, US Military, we can't pay you any more. Sorry, government employees, there's no more money. Oops.
I do not know what happens beyond that point.
I do not know what one can do to prepare for such an event. All I've been doing is the best I can think of within the system as it currently works right now.
Correct. Gold can be thought of as a "store of value", like real estate, but it isn't "money". What I think people are saying here is that they are using their money to buy assets that are less impacted by inflation. That's wise if you are anticipating high inflation. The mistake is thinking that by buying these assets you are trading one kind of money for a better kind of money. Assets are not money.
Yeah, who needs all that book-lernin'! I learned everything I need to know from thestockenthusiast.com. Just like I learned everything I need to know about engineering from American Chopper!
The idea that the study of economics is useless just doesn't make any sense. I don't know what "the economics they teach us in school" is, or why you think it's wrong. I learned a lot of different theories about economics by studying it academically and professionally. It's up to you as a student to make sense of it, observe the world, and determine what makes sense. Learning something in school is a big part of it, but only part of it.
That's like saying it's not worth studying physics because Newton and Einstein weren't right about everything. It still makes sense to study it, because they were right about a lot of things.
When someone tells me that the stuff they got taught in school was wrong, I usually tell them that it was their own fault for learning the wrong things.
Good post. I agree with everything you wrote, including this line. But I will say that the US economy and tax rate is nowhere near that level yet.
Im guessing you have no formal economics education.
Ya, go way to point out how well gold and silver are doing.....by valuing it in "worthless paper."
Ya, buying gold and silver is best thing you could have ever done with your money in the last 10-20 years. What have you been living under a rock?
It appears you crawl out from under it for about an hour a day to post here.
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The key words that tell me immediately the poster likely got his info from the 'money conspiracy websites' and YouTube is PONZI SCHEME. The forums I surf, which generally have an open forum area for off topics, always have at least one guy who loves to use those two words. It's like word for word the same sentences they write about their 'theories' about the financial market collapses.
Brian P, Duster and CBR - keep up the good work here.
Brian P, Duster and CBR - keep up the good work here.
How do you suppose your holdings in gold will save you from a state of anarchy?
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