What is the future of the US dollar?

[jreelawg]

http://useconomy.about.com/od/criticalssues/p/dollar_collapse.htm

Are any of you doing anything to prepare for economic apocalypse? Buying gold, or other metals?

Should we be worried?

 

[turbo]

Buying gold at record prices would absolutely lock in losses that are so long-term as to be self-destructive.

Gold is still rising because people are panicking. Hint: when people start driving up prices on Beany Babies, it's probably not a good time to buy Beany Babies.

 

[airborne18]

I always keep a nice pile of oil etfs laying around.

the issue with the dollar is that interest rates will climb, and the dollar will rally.

 

[airborne18]

And as turbo points out, buy low and sell high.

 

[jreelawg]

I know of one thing which is cheap right now, land. But say the dollar does collapse, what would happen to the real estate market?

 

[turbo]

I know of one thing which is cheap right now, land. But say the dollar does collapse, what would happen to the real estate market?

I have stayed liquid as much as possible to get into land. The trouble is that people around here are not moderating their prices on real estate, because they KNOW that land is solid. Houses, not so much.

 

[russ_watters]

Are any of you doing anything to prepare for economic apocalypse? Buying gold, or other metals?

Should we be worried?

No, no, no.

 

[brainstorm]

I have stayed liquid as much as possible to get into land. The trouble is that people around here are not moderating their prices on real estate, because they KNOW that land is solid. Houses, not so much.

The problem with land is that you're stuck with the taxes, costs, and liabilities once you own it. You can hold gold or gemstones for years in a sock without paying any maintenance costs. Personally I think it is wise to invest in seeds and gardening skills. That way no matter what markets and currencies do, you can always eat.

edit: after writing this it occurred to me that if you take the "t" out of "precious metals," it becomes "precious meals." Wait until the t-partiers hear about this. They'll really be wanting to throw the "t" off the boat then.

 

[Newai]

Without predictable sensationalist and alarmist behavior, some of us would never see black.

 

[airborne18]

The problem with land is that you're stuck with the taxes, costs, and liabilities once you own it. You can hold gold or gemstones for years in a sock without paying any maintenance costs. Personally I think it is wise to invest in seeds and gardening skills. That way no matter what markets and currencies do, you can always eat.

edit: after writing this it occurred to me that if you take the "t" out of "precious metals," it becomes "precious meals." Wait until the t-partiers hear about this. They'll really be wanting to throw the "t" off the boat then.

I agree with the land. The problem with real estate is that the value is a function of credit, and how much a person can borrow. That is how the real estate mess started, they lowered the income ratios and allowed loans for consumers that were usually reserved for builders.

 

[airborne18]

Your best hedge against the dollar is investments in large multinational corporations. And investing in markets that are stable, but have broad exposure. Australia is always good, because they are a hub for Asia investments. ( there are others, but Australia is stable ).

 

[OmCheeto]

http://useconomy.about.com/od/criticalssues/p/dollar_collapse.htm

Are any of you doing anything to prepare for economic apocalypse? Buying gold, or other metals?

Should we be worried?

From the last paragraph in your article:

Is a Dollar Collapse Imminent?:
Fortunately, it is highly unlikely that the dollar will collapse. That is because no one who has the power to make that happen (China, Japan and other foreign dollar-holders) wants it to happen. It is not in their best interest. Why bankrupt your best customer?

Since I also don't see foresee our current economic apocalypse getting any worse, I'm investing all of my spare change in high growth potential companies.

I would never buy precious metals, as this is what everyone does. I can't imagine following the herd. That's how the housing and the irrationally exuberant market bubbles happened.

As for being http://www.youtube.com/watch?v=5bNE-5TVAmg"?

On a long enough timeline, the survival rate for everyone drops to zero.

 

[danzig75]

The question i would rather ask is if all countries (including the most powerful, United States) are in debt, then where the hell is the money going to?

 

[Pythagorean]

No, no, no.

Yup, pretty much. Most of us will adapt.

 

[brainstorm]

The question i would rather ask is if all countries (including the most powerful, United States) are in debt, then where the hell is the money going to?

Debt is also savings. The government borrows money by selling savings bonds. Anyone that buys/owns savings bonds is where the money went to.

 

[danzig75]

Debt is also savings. The government borrows money by selling savings bonds. Anyone that buys/owns savings bonds is where the money went to.

Who the hell would want to buy savings bonds? lol

 

[brainstorm]

Who the hell would want to buy savings bonds? lol

People who think US dollars have more long term stability than other currencies and commodities.

 

[jreelawg]

How does national debt factor into the equation? Is there some kind of threshold at which the debt causes problems for the dollar? I've heard sensationalist lines like the dollar is a time bomb, and we have the countdown clock. Can we expand on the logic behind or contrary to this thinking.

 

[brainstorm]

How does national debt factor into the equation? Is there some kind of threshold at which the debt causes problems for the dollar? I've heard sensationalist lines like the dollar is a time bomb, and we have the countdown clock. Can we expand on the logic behind or contrary to this thinking.

There may be different points of view, but this seems logical to me: everyone in the world has a stake in the future value of the US dollar so everyone is going to have an opinion about what causes its value to rise and fall. Ultimately, like any other commodity the dollar's value rises and falls based on whether people are buying it or selling it.

People probably think that if national debt is high, then there will be high taxation to pay off that debt and as a result, dollars received will translate into relatively less dollars kept. They think that no one will want to buy dollars and invest in US business if too much of the revenues/income are going to be taxed.

This is not the only possible point of view, though. People might also think of dollar investments and savings bonds as long-term commodities to be held through market ups and downs. I don't believe savings bonds are taxed, nor are investments until they are sold resulting in capital gains. So, to the extent that US real estate or other investments would stabilize as value-holders instead of instruments of profit-making through appreciation, people could come to view US markets and the dollar as having stable long-term value relative to competing markets they might view as relatively more volatile in comparison.

 

[magnetboy]

I am not sure why people are saying things like "is the dollar safe?" I know that the depression, is, well, depressing but it isn't the end of the world. I would also like to point out that the dollar has always recovered time and time again. This is a normal cycle that money takes about every ten years. Yes, this is a lot worse than the regular cycle, because of Black Monday when the stock market went crazy because there was a mistake on the stock numbers. I also think that our President shelling out trillions of dollars to every company is completely stupid and has made things worse.

What I am trying to say is even though the economy is facing some major issues right now it will recover. I can't predict when, a stock investor I know says that it will take at least 5 years to even out. He is probably right. Anyways, don't buy Gold, because as someone stated earlier Gold is selling for a ton right now. If you have gold you want to sell, well then by all means sell it.
I believe that in ten years or less the markets will be booming again.

 

[Phrak]

If we are willing to accept the 1929 time line from wall street collapse to housing market collapse, through unemployment in the thirties, one year then for each year now, employment recovery should follow the March 2000 market peak in one or two years from this year, 2010.

 

[brainstorm]

I am not sure why people are saying things like "is the dollar safe?" I know that the depression, is, well, depressing but it isn't the end of the world. I would also like to point out that the dollar has always recovered time and time again. This is a normal cycle that money takes about every ten years. Yes, this is a lot worse than the regular cycle, because of Black Monday when the stock market went crazy because there was a mistake on the stock numbers. I also think that our President shelling out trillions of dollars to every company is completely stupid and has made things worse.

What I am trying to say is even though the economy is facing some major issues right now it will recover. I can't predict when, a stock investor I know says that it will take at least 5 years to even out. He is probably right. Anyways, don't buy Gold, because as someone stated earlier Gold is selling for a ton right now. If you have gold you want to sell, well then by all means sell it.
I believe that in ten years or less the markets will be booming again.

What's odd, imo, is thinking about what it's going to be like when all this fiscal stimulus money has been used to pay off all the big debts. What is all that money suddenly going to be worth when it floods into circulation? I suspect at that point interest rates are going to increase sharply to provide an incentive for saving to prevent the money from being spent - that is unless people just go on saving it voluntarily, in which case interest rates will just keep decreasing.

 

[magnetboy]

I think that this crash and the 1929 crash are a lot alike. I am also concerned about the stimulus money flooding into circulation. If a flood of circulation starts they can stop printing any new money, but it wouldn't stop the current flood of money. The only possible way to stop that money from causing a flood is if the government took action and said that the money printed from the stimulus packages is no longer valid currency and will not be accepted. Then we have a totally different crisis on our hands. I know that any new tax or law always affects the consumers. I think it is possible that the government could make a law that stated the banking industry must pay back a certain amount of the money they were given because they misused it and that legal action will be taken against each bank if they try to raise any charges,etc. to shove their debt off to their customers.

I know that the ideas above probably wouldn't work or I missed something very important, but I am just putting it out there as food for thought

 

[OmCheeto]

I am not sure why people are saying things like "is the dollar safe?" I know that the depression, is, well, depressing but it isn't the end of the world.

Are you kidding! http://www.moneynews.com/StreetTalk/samuelson-saving-recession/2010/08/30/id/368745" just:

"Since late 2007, lower home and stock values have shaved about $10 trillion from household wealth. If Americans tried to replace most of this through more annual saving, consumer spending would remain weak for years."

Do the math!

1e13 / 3e8 = 1/3*1e5

Oh.. The humanity...

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my stocks are creeping up and I expect to have a very nice retirement, regardless of the current wah wah.
Invest in where you want the future to be, and all will be good.