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Thread: Show me the Money: Hard vs Fiat

  1. #81
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    Quote Originally Posted by michaelr View Post
    What I said is at this point the trade deficit doesn't matter, it's irrelevant. You have a debt bubble, a stock bubble, the lack of velocity, a commodities crash, and more that matter. The global GDP is tanked, so who gets the scraps isn't important....in fact nothing is until the above mentioned wither gets fixed or completely blows out.
    OK? If you're going to use me to show your prowess, use my words not your interpretation.
    Obviously, what i said was accurate. You do not see the trade deficit as important. So what is the problem? It was not a jab at you, but a statement of fact.

    I do think you are wrong. I see the trade deficit as very significant, & is an indicator of the wealth of the land being 'redistributed' to other nations. I don't see how you can see it otherwise.

    But my point here is not to promote a private flame war, but to show the intricacies of correlation between these indicators.
    I am used to men who mock and scorn things beyond their comprehension. ~ Johann Wolfgang von Goethe, 1749-1832

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    Quote Originally Posted by usfan View Post
    Obviously, what i said was accurate. You do not see the trade deficit as important. So what is the problem? It was not a jab at you, but a statement of fact.

    I do think you are wrong. I see the trade deficit as very significant, & is an indicator of the wealth of the land being 'redistributed' to other nations. I don't see how you can see it otherwise.

    But my point here is not to promote a private flame war, but to show the intricacies of correlation between these indicators.
    Normally I would see the trade deficit as important, just not at this time. Lets see usfan, I railed against the trade deficits back in 2005 to probably right around 2012. You can completely reverse the trade deficit right now, and you know what, it don't mean a freaking thing.

    I don't have the room for a flame war either, I'm saying, normally and at a time, your observation would be spot on. It's to bad that those days are behind us.

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    Quote Originally Posted by usfan View Post


    this is a fascinating chart.. i'll provide some analysis later.. got to get to bed, now.. {yawn..}
    This chart, along with the earlier ones, shows how for over 150 yrs, the economy had minor up & down cycles, but nothing too severe until the govt went full fiat with the currency. Prices remained stable. But this emphasizes the point that we are in new territory, & the old rules do not apply.

    But the correlation with the consumer price index & the steady upward graph showing inflation, & the trade balance, showing the same curve bleeding us of our wealth should make us realize that this is unsustainable, & needs drastic reform. IMO, there are several things that can be done:

    1. Stabilize the currency. Stop the QEs, the artificial interest rates, & stop trying to engineer the economy. It never works.
    2. Cut govt drastically. Balance the budget. Arrive at fiscal solvency. Minimize govt so more capital is moving in the economy, & stays in the control of the working man, who originates EVERYTHING.
    3. Take measures to balance trade. Return to tariffs, to balance it out, if you have to. Trump is right in this. We have the monster economy in the world, & can negotiate from a position of strength. We do not have to sell out American business & the American economy to 3rd world wannabes.
    4. Begin the slow weaning from govt dependency. End the welfare state, & stop rewarding sloth. Promote production & wealth building, so the whole nation can prosper again.
    I am used to men who mock and scorn things beyond their comprehension. ~ Johann Wolfgang von Goethe, 1749-1832

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    I made this post in another thread, but i'd like to continue this thought here, too, for continuity.

    The past major hegemonies of Britain & Spain, spanning a few centuries, saw hard currency building their empires, & the world using their currencies. Early America used the spanish dollar.. pieces of 8, a spanish dollar divided into eighths. The American dollar was patterned after it. During England's heydey, the pound sterling ruled the waves, & was the global currency. It remained the world currency up to early in the last century. Other nations, especially with fiat currency, had ups & downs, but the global markets could rely on the soundness of the hegemony.

    Now, the US dollar has been the global currency for over 70 yrs, as the pound lost credibility & almost blew up in the 50s. All of the main euro currencies are fiat, & even the Euro has nothing to base it on, other than the combined banking cartels. So, if there was a hegemony with a sound currency, the Euro & many other of the sloppy fiat currencies would be crashing, like they always have. But because the world currency, which is MORE important than it ever was in previous times, is also FIAT, they all prop each other up like mutual ponzi schemes, which is what fiat currency basically is.

    So the result of this is new territory. The loose, sloppy currencies can limp along, not wiped out by a strong, hard world currency. The world currency can limp along on momentum.. on the memory of its reputation, rather than anything intrinsic in it.

    IMO, that is why we don't have immediate reactions to the flawed fundamentals.. there is no alternative. The dollar sucks, but not as bad as everything else. So it cruises along, QE after QE, diluting the real value of the currency, & building a currency bubble, but there is NO WAY to predict when, where, how, & why it will all come crashing down.. if ever! It is a unique time in history, & the old patterns are not being repeated in the bigger picture.

    It is more likely that globalism will increase, & a one world currency will be pitched to solve our economic woes. Along with that, would be a one world administration of this currency, which would be unprecedented power in this venture.

    Anyway, this has gotten too long, but i can't analyze this with bumper sticker slogans, or simple hysteria. We are in uncharted territory, & those who are wise will move slowly, but be alert to reality. And this is very hard, with misinformation, disinformation, & no information to be able to analyze the markets & the world. I'm intrigued by all of this, but i cannot make any predictions, as there are no patterns to follow.
    I am used to men who mock and scorn things beyond their comprehension. ~ Johann Wolfgang von Goethe, 1749-1832

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  8. #85
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    Quote Originally Posted by usfan View Post
    I made this post in another thread, but i'd like to continue this thought here, too, for continuity.

    The past major hegemonies of Britain & Spain, spanning a few centuries, saw hard currency building their empires, & the world using their currencies. Early America used the spanish dollar.. pieces of 8, a spanish dollar divided into eighths. The American dollar was patterned after it. During England's heydey, the pound sterling ruled the waves, & was the global currency. It remained the world currency up to early in the last century. Other nations, especially with fiat currency, had ups & downs, but the global markets could rely on the soundness of the hegemony.

    Now, the US dollar has been the global currency for over 70 yrs, as the pound lost credibility & almost blew up in the 50s. All of the main euro currencies are fiat, & even the Euro has nothing to base it on, other than the combined banking cartels. So, if there was a hegemony with a sound currency, the Euro & many other of the sloppy fiat currencies would be crashing, like they always have. But because the world currency, which is MORE important than it ever was in previous times, is also FIAT, they all prop each other up like mutual ponzi schemes, which is what fiat currency basically is.

    So the result of this is new territory. The loose, sloppy currencies can limp along, not wiped out by a strong, hard world currency. The world currency can limp along on momentum.. on the memory of its reputation, rather than anything intrinsic in it.

    IMO, that is why we don't have immediate reactions to the flawed fundamentals.. there is no alternative. The dollar sucks, but not as bad as everything else. So it cruises along, QE after QE, diluting the real value of the currency, & building a currency bubble, but there is NO WAY to predict when, where, how, & why it will all come crashing down.. if ever! It is a unique time in history, & the old patterns are not being repeated in the bigger picture.

    It is more likely that globalism will increase, & a one world currency will be pitched to solve our economic woes. Along with that, would be a one world administration of this currency, which would be unprecedented power in this venture.

    Anyway, this has gotten too long, but i can't analyze this with bumper sticker slogans, or simple hysteria. We are in uncharted territory, & those who are wise will move slowly, but be alert to reality. And this is very hard, with misinformation, disinformation, & no information to be able to analyze the markets & the world. I'm intrigued by all of this, but i cannot make any predictions, as there are no patterns to follow.
    Think SDR, and directly after China allegedly devalued the yuan, the IMF accepted the currency into the SDR basket. Because of its popularity, being a commodities based currency, it is set to replace the dollar as reserve currency.

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