When/If? LOL. I don't think anyone is saying "if". Even the most optimistic pollyannas are saying no more than 30 years before we peak. Most experts agree that we've already peaked or will peak by this year.
Tim, I have a lot of books and DVD's on the subject and would be more than happy to give/loan them to you.
Your response to this is actually quite normal. This is why there will not be a solution to this "predicament".
A more optimistic outcome is outlined in "Powerdown" by Richard Heinberg - another great read. Will mankind really be able to peacefully lower their consumption levels or will they take the "last man standing" approach (currently being exercised). I hope we take door number 1, however I don't see that happening.
If anyone would be open to looking into this stuff, I'd have to think it would be readers of SB.
I used sniglets Thu Jun 21, 2007 11:40 am post as my "template" since that one is closest to my own vision
2007
- Seattle prices peak spring of 2007 (average not median)
- Recession by October 2007
- Inventory continues to build and is double YOY from Dec 2006
- Median prices continue to climb as nothing sells in low end but CA equity locusts and other "cash rich" folks maintain high end activity
- Prices don't fall too much as sellers in denial but cracks appear in "Fort Seattle" as layoffs, divorce, disease, ARM resets, and desperation by flippers force sales in a maraket that appears to have no bottom
- Dow closes year at 11500
- gold closes year at $580 an ounce
- oil closes year at $58 a barrel
- mortgage rates for 30 year fixed at 7%
- News of desperation in markets in England, Spain, Australia, Poland, etc.
- Seattle area home prices 10% off peak (average)
$1 US = $40 Rupees (India)
2008
- Boeing announces plans to scale back production due to cancellation of some orders by end of 2008
- Boeing loses some key defense projects as Iraq War has drained the Pentagon budget for "toys"
- major tech-firms announce that sales are declining and there is evidence upgrade cycle is slowing significantly by year-end
- MS announces layoffs as Zune/Vista prove to be flops
- total number of foreclosure are up 200% YoY
- Dow closes year at 9500
- gold closes year at $490 an ounce
- oil closes year at $50 a barrel
- mortgage rates for 30 year fixed at 6.2%
- Seattle area home prices 30% off peak (average) as panic selling sets in
$1 US = 35 Rupees (India)
2009
- Boeing announces lay-offs as orders/projects continue to be cancelled
- major tech-firms announce hiring freezes and/or lay-offs
- total number of foreclosure are up 400% YoY
- Dow closes year at 8500
- gold closes year at $400 an ounce
- oil closes year at $47 a barrel
- mortgage rates for 30 year fixed at 5.8% (with 20% down and 750 credit score)
- Seattle area home prices 40% off peak (average)
$1 US = 30 Rupees (India)
2010
- lay-offs occur at all major Puget Sound employers
- Washington unemployment rate hits 11%
- total number of foreclosure are up 800% YoY
- Dow closes year at 7000
- gold closes year at $320 an ounce
- oil closes year at $35 a barrel
- mortgage rates for 30 year fixed at 5% (with 20% down and 800 credit score)
- Seattle area home prices 50% off peak (average)
- Runs on banks
- Crime rising rampantly as people's unemployment starts to run out and they have to feed their families
- President Clinton vows to convene panel to study economy
- All Seattle industries (MS, Starbucks, Nordstrom, Amazon, Boeing) in major retreat as nobody is buying ANYTHING!!!
- Uhaul rates into Seattle drop to all time lows as exodus heads for cheaper areas of country. Outbound rates skyrocket
$1 US = 20 Rupees (India)
2011
- Seattle area home prices 60% off peak (average)
- Dow closes year at 6000 (many boomer 401K ruined)
- Many former MS/Boeing employees on street corners with signs
$1 US = 15 Rupees (India)
2012
- Seattle area home prices 65% off peak (average)
- Dow closes year at 5000
$1 US = 10 Rupees (India)
2013 (BOTTOM)
- Seattle area home prices 70% off peak (average)
- Dow closes year at 4500 (bottom)
$1 US = 5 Rupees (India)
2014 (Year America either wakes up or gives up)
- housing "flat" for several more years as so many are "snake-bit" and so many have died (aging boomers, plagues in homeless camps and old folks dying in their homes who can't pay the utility bills)
- America is different country as whites are clear minority, infrastructure is now that of 2nd world country, cities are crime ridden, crumbling, and under martial law, and there is a small wealthy class, no middle class, and a large class of people who eat dog food and ramen just to survive
- All countries exploited by predatory western capitlaists now have the know-how and infrastructure to "take over" leadership of just about every aspect of industry (both heavy and tech)....American in contrast is a country of people who "expect a good life" armed only with the "skill" of watching TV and working in fast food joints.
- Social Security is gone due to the bankrupting of America by Bushco
- Most companies have done away with pensions or declared bankruptcy to get out of paying existing obligations
The world starts to wake up to the fact that predatory capitalsim has essentially destoryed the lives of most people on the planet. Revolutions ensue...
I wish I had a better prognosis...but there is no way out of going thru "extreme pain" with our whole corrupt and unsustainable system.
From my understanding, the USD as lost about 30% to most other major world currencies since 2002. Do you see a reversal of this trend? Are we about to start producing things again?
Even if you don't believe in PO, you have to see the coming dollar crash.
When / if we run out of oil to pump from the ground, we'll just turn chickens into oil.
I know for a fact that chickens are a renewable resource. Problem solved.
Tim! First you post how oil is non-organic, and then you post about the virtues of fowl oil? You simply cannot have it both ways.
It's time to pick. Either the earth sweats sweet crude like a fat guy doing the tango, or we are pumping dead animals out of the earth by the billions.
Either way, I'm going out back to see if I can strike some 'feathery gold'
Why do you guys think the price of gold is going to go down? Are you really that bullish on the dollar?
I can't speak for others, but I am bullish on the dollar and bearish on gold. My reasoning is that I believe most of the price inflation we have been seeing is due to an increase in credit, which is not the same thing as just printed cash (ala the Weimar republic). As this process of credit creation reverses (which we are just starting to see with tightening standards for mortgages), all asset prices will fall.
In this regard I view Gold as just another of the many assets that got an artificial boost due to the credit bubble. I don't think it is a cooincidence that Gold has been appreciating just as real-estate and stocks have been in the last few years. Likewise, I expect all these assets to drop in value when credit contracts.
Lastly, I don't believe the central banks will be able to do much to prevent deflation. If central banks begin monetizing debt in a big way (i.e. printing money) they will IMMEDIATELY become the buyer of first and last resort, and the US dollar would be toast overnight. I think that this is too great a consequence for even knucklehead central bankers to consider.
Not saying that it will happen again, I just simply don't see any intrinsic value in gold. Can't eat it, can't build anything but fancy necklaces. Why should I pay 7 hundy for a little disc of worthlessness? Why would anybody other than nastalgic gold-bugs?
Let me put it this way, when Grandma B is waiting in line at the local Coin shop to buy gold at $10000oz, that will be my cue to sell a large position.
When the fiat currencies break down and gold is the only true currency, where will people turn? As fleck says, "In a social democracy with a fiat currency, all roads lead to inflation."
He who has the gold (& silver bullion), makes the rule.
The obvious question is why would gold be the "true currency"? What's so special about it, except historical significance back when we are on the gold s tandard and it looks pretty?
I have a few Krugerands and Eagles lying around because they look pretty, but I don't really need more than 1. They all look the same.
We are in a credit bubble, not a cash bubble. Credit can disappear, quickly. All you need is for a few hedge funds to implode, people to lose confidence in the derivatives that are being peddled that are fueling the liquidity, and suddenly it's a lot harder for consumers and businesses to borrow.
And jeezus. Silver's a pain in the ass. It took me two days of hard counting and breaking my back carting a few hundred pounds of it around to liquidate my grandpa's horde. Sure, I wish I'd waited a few years, but still... it was only a 5-10K in the end, and it took my back 6 months to recover from moving all that junk silver.
My guess is that if you're right, the banking system will have completely collapsed, we'll be in marshall law, and I'd have to sit on my horde with a fair portion of my grandpa's gun collection in order to protect all those 1962 dimes.
when Grandma B is waiting in line at the local Coin shop to buy gold at $10000oz, that will be my cue to sell a large position.
Hardly... If we have hyper-inflation you wouldn't want to unload your gold for ANY funny paper money.
Don't get me wrong, I am not a fan of fiat currencies and believe that eventually we might well wind up with some serious inflation. I would even say that gold will likely hold it's value much better than many other assets (e.g. real-estate).
However, in the short-term (say 10 years) I think we are going to see the dollar appreciate significantly as the credit bubble implodes.
"When the fiat currencies break down and gold is the only true currency, where will people turn? As fleck says, "In a social democracy with a fiat currency, all roads lead to inflation." "
When we get to that point and you are the guy paying for things with gold, you will beaten, robbed, and killed on your way home from the store after paying for everything with "gold"......
In a truly desperate scenario anything of any intrinsic value (food, water, weapons....and anything that you use to buy these items, will eventually be confiscated by the biggest and strongest....survival of the fittest. And in a complete breakdown big and strong has historically always prevailed over weak, small, talented, or skilled.
To me gold is a just a fancy paper weight. Like paper fiat currency, a "rock" of anything only has value if people all believe it does.....else it has none.
I think a scenario where the value of gold could shoot up temporarily is as follows:
1) paper money becomes useless and is used to keep warm in homeless camps
2) for a while the "wise" use gold coins to obtain those things that truly have value because they keep you alive
3) but like I said, if you have gold word will get out and the strongest of the "have nots" will simply take it from you....
The issue is the ratio of how much energy you put in versus how much you get out. BTW, when is the last time you threw up a bunch of nuclear plants?
Not exactly. Some form of energy are more convenient than others, and therefore of higher value. Thus, using hydro or nuclear power to process tar sands may make sense, even if it take MORE energy input than what results from the processed bitumen.
Convience is directly related to energy cost and turning one energy into another puts in even more energy losses. Conversions aren't free. These sound like great ideas, but if you haven't done the math, you're just wishing upon a star.
Lots of people do it, so you don't have to feel alone.
The US is energy dependent today because foreign energy has been dirt cheap. There is no reason to develop the relatively more expensive alternate energy sources (e.g. bitumen, shale, coal-oil, wind, etc) when one can purchase crude oil for a pittance on the global market.
Right, so when we turn to all these expensive sources of energy, they aren't going to help because our economy is not just dependent on oil, it is dependent on CHEAP oil. That's the trouble with the alternatives that gives us expensive replacements: they don't replace CHEAP oil, so our whole civilizational model, in other words, has NO future.
In any event, my belief is that there is a ceiling on oil prices that will be pretty hard to break. Any time oil get's close to $80 a barrel, there will be massive investments in alternate energy resource production which suddenly looks profitable (e.g. coal-to-oil). This will keep a lid on oil prices from rising into the stratosphere. I repeat: the main reason alternative energy sources haven't been developed is because crude has been so damn cheap.
This all sounds very nice, but it is completely wrong. It takes 10 calories of fossil energy to make one calorie of food in the U.S. agriculture system. Where does the oil price ceiling come from? Are you willing to go hungry a few weeks a year? By the way, the ethanol craze has already quadrupled the price of corn tortillas in mexico. How much do you think we should ramp that up? I think some of us will be going hungry whether we like it or not.
That said, I don't think it would be the end of civilization, or even our western economies, if oil were to rise to a plateau of $80 to $90 for 15 or 20 years. Sure, there would be some painful restructuring of things (e.g. denser cities, preferences for different cars, public transit, etc), but nothing earth-shattering.
let me give you a clue about why our economy is doomed to collapse when oil peaks. When the fed prints money by making loans, you pay the principal back eventually, but you also pay the interest back. Where does the interest come from? Who creates that money?
The answer is one of the most basic facts of our monetary system, and it only appears to work as long as everything gets more abundant and more efficient every day. That'll stop soon.
To me gold is a just a fancy paper weight. Like paper fiat currency, a "rock" of anything only has value if people all believe it does.....else it has none.
Actually, that is false. Gold does have intrinsic value, just not as much as people act like it does. It is excellent at conducting electricity. That's why many electronics use some gold in their wiring. Some people in china now make a living breaking apart old US garbage electronics, and pulling the gold (and other valuable minerals) out.
A truer statement is that gold has comparable intrinsic value to copper.
Nor mine, that's why you have to make plans for these possible outcomes. I'm not saying it WILL happen, just that I will do my best to be prepared - without impacting my currently lifestyle.
Sniglet said:
If we have hyper-inflation you wouldn't want to unload your gold for ANY funny paper money.
If you notice, I didn't say I'd sell ALL my gold. My goal is to get the heck out of USD. Once out, I'm prepared if there is hyperinflation. We could have hyperinflation in commodities (stuff we need) while deflation in others (see, housing, boats, artwork, toys, - stuff we want). So at that point I could enter back into the market with my wheelbarrow full of cash and buy all those toys that now cost next to nothing. $200K 42' Island Packet for the equivalent of $50K, or maybe a SW facing Queen Anne 4BD hill-house for 10c on the dollar.
Who knows, maybe it will probably make a lot more sense to bail out of this country, which may then be infested by nothing more than peasants and feudal lords. Move to New Zealand or Switzerland.
Gotta have options.
However, in the short-term (say 10 years) I think we are going to see the dollar appreciate significantly as the credit bubble implodes.
How would that happen exactly? Last time I checked, each person in the US owes about $500K (or is that per family) in debt.
The US is insolvent. We are a nation of consumers who don't produce anything. Now factor in energy depletion - even if we wanted to start producing again, where will we get all the energy?
My guess is that we'll keep trying our damndest to take it.
Stock market down 185 pts today, me thinks the wisenheimer bulls are finally starting to get the picture in the credit markets. Next week should be interesting.
let me give you a clue about why our economy is doomed to collapse when oil peaks. When the fed prints money by making loans, you pay the principal back eventually, but you also pay the interest back. Where does the interest come from? Who creates that money?
The answer is one of the most basic facts of our monetary system, and it only appears to work as long as everything gets more abundant and more efficient every day. That'll stop soon.
Actually, that is false. Gold does have intrinsic value, just not as much as people act like it does. It is excellent at conducting electricity. That's why many electronics use some gold in their wiring.
I disagree.
Audiophiles have long battled over all the qualities of different metals when it comes to their cables etc. Silver has been determined to be one of the better conductors as it doesn't degrade the signal when it tarnishes as copper does although some find the sound a little "bright". Gold's application in the audio industry is primarily to prevent oxidation of the underlying copper because it doesn't tarnish. That is why you will see the gold plating on RCA jacks on the back of your stereo gear. Some cable companies (that are more like snake oil salesmen) use a small amount of gold in the wire but it is more of a "tone" control than a "better conductor". The general consensus among the members at both Audiogon and AudioAsylum is that it isn't the "best" conductor of electricity, and the members there include tons of engineers, scientists etc. etc.
And if any of you guys are using those little black patch cords that came with your stereo gear you are doing yourself a big disservice. For under $50 you can get satisfactory IC's that will really show the difference. Upgraded speaker cable helps also.
Oh...and I'm not saying that gold doesn't conduct electricity well...I just don't believe that it's application in electronics has anything to do with it's conductivity as it much as it does with it's corrosion/oxidation resistance.
just my 2c.
now you gold bugs can get back to your argument...to me gold is just more "stuff".
Oh...and I'm not saying that gold doesn't conduct electricity well...I just don't believe that it's application in electronics has anything to do with it's conductivity as it much as it does with it's corrosion/oxidation resistance.
Sir, you do me a disservice. I never argued that gold is the perfect conductor, or even the best. Only that it is a very good conductor, and that has intrinsic value. In engineering, everything is a trade off. A better conductor that doesn't corrode is very important in some domains and less so in others.
NASA for instance used gold heavily in the electrons of the Apollo program. That doesn't mean that the cable on my Ipod Earbuds should be made out of gold.
Besides, I'm not a huge fan of metals either. My point was just that several of them do have value other than being a dollar hedge. If you want to invest in a commodity, pick one with industrial value. Those are more likely to suffer from legitimate scarcity, and are therefor more likely to increase in value during economic expansion, regardless of what the USD does.
When we get to that point and you are the guy paying for things with gold, you will beaten, robbed, and killed on your way home from the store after paying for everything with "gold"......
In a truly desperate scenario anything of any intrinsic value (food, water, weapons....and anything that you use to buy these items, will eventually be confiscated by the biggest and strongest....survival of the fittest. And in a complete breakdown big and strong has historically always prevailed over weak, small, talented, or skilled
I can't predict the future, but if it comes to that, I won't be paying in anything that raises attention or makes me a target. No matter what we're paying in, gold and silver will always be money. There should be a way to turn that currency/wealth into whatever we're using for currency at the time.
Who is going to confiscate what they cannot find?
As far as protecting yourself, if you plan accordingly that shouldn't be a problem. If you are sitting in a bunker all alone with your guns, ammo and MRE's - you might have a problem. I believe the smart, talented and skilled will form alliances (this is already happening FYI) and networks where we work together to keep the group well fed, clothed and out of harms way.
Again, it doesn't hurt to be prepared. In the unlikely event that this PO event doesn't take place in my lifetime - at least I've made some fantastic friends.
Oh...and I'm not saying that gold doesn't conduct electricity well...I just don't believe that it's application in electronics has anything to do with it's conductivity as it much as it does with it's corrosion/oxidation resistance.
Sir, you do me a disservice. I never argued that gold is the perfect conductor, or even the best. Only that it is a very good conductor, and that has intrinsic value. In engineering, everything is a trade off. A better conductor that doesn't corrode is very important in some domains and less so in others.
NASA for instance used gold heavily in the electrons of the Apollo program. That doesn't mean that the cable on my Ipod Earbuds should be made out of gold.
Besides, I'm not a huge fan of metals either. My point was just that several of them do have value other than being a dollar hedge. If you want to invest in a commodity, pick one with industrial value. Those are more likely to suffer from legitimate scarcity, and are therefor more likely to increase in value during economic expansion, regardless of what the USD does.
Seriously, buy Uranium. I know I should.
I do you a "disservice"?
Whatever. And I wasn't ever in the military so "Sir" isn't necessary.
Your post specifically stated that it was used because it was an excellent conductor and you went into no further description. Stating what it was used for in the Apollo program nearly 40 years ago doesn't really mean anything to me either. All I stated was that there are other metals that actually conduct electricity better and I'd be willing to bet that there is far more silver and copper in use when it comes to the wiring of electronics than gold.
What I find a bit amusing is the concept that gold isn't intrinsically good money because you can't do anyting with it. This is one of the things that makes it great for money because it means it doesn't get used up, and it is hard to find and mine, so that makes it hard to increase the supply as well.
The green paper in my pocket is just as useless as the gold, but the problem is how much of that stuff Bernanke can print.
Call me old-old-old-old fashioned, but if it was good enough for Moses, Hitler and everyone in between, then I think it's still a better money than this 36 year-old experiment in fiat paper we got going donw in D.C.
Regarding the inflation vs. deflation, here's something to chew on.
I used to argue the delfation case under a massive credit-loss scenario, but here's the counter argument that has me stumped and almost permanently in the hyperinflation camp. It's even got a great real-life example: me.
So, I'm selling my house and going to rent. Walking with 150k in equity that is all bubble-goodness. I came into the house with 6k in 2001.
Ok, so we have a credit collapse. The guy who owns the house now defaults, like millions of other people. Great. No access to credit.
So here's the counterargument: I still have the 150k and that money can't be destroyed. The bank can't come after me for the new buyer's loan. The money is here to stay, so if I don't put it into housing, then I'll just put it into something else.
Deflation can't really happen unless money gets destroyed or the supply of goods increases faster than the supply of money. I think I've made the case that the supply of goods is probably going to go precipitously down. So how will the supply of money go down faster than that? How will my 150K get taken out of the economy?
Maybe my premises are poor, but I haven't been able to take this argument apart. Maybe som of you can have at it?
"I believe the smart, talented and skilled will form alliances (this is already happening FYI) and networks where we work together to keep the group well fed, clothed and out of harms way."
I had a very intelligent friend who stock-piled ammo and planned escape to a cave in the desert, all because of the Y2K problem. He even worked in the IT industry (as a programmer) and should have known better. He was forecasting riots, looting, planes crashing etc.
My point? Paranoia and intelligence are not mutually exclusive.
IMO, we're due for a pretty nasty recession, a collapse in an industry or two, but hyperinflation? Total economic collapse? Destruction of the dollar?
Y2K was people preparing for the unknown. Resource shortages based on science (which is what peak oil is) is a completely different thing.
Also, why is the dollar forever? You realize it has lost 97% of its value since inception of the Fed in 1913, right? Seems like the destruction, rather than being "unlikely" is instead a guarantee that is already nearly complete.
Face it, we've become a get-something-for-nothing nation and we're not going to be able to kite checks forever, but that's essentially what a an economy with a chronic 6-7% deficit is doing.
Comments
When / if we run out of oil to pump from the ground, we'll just turn chickens into oil.
I know for a fact that chickens are a renewable resource. Problem solved.
Tim, I have a lot of books and DVD's on the subject and would be more than happy to give/loan them to you.
Your response to this is actually quite normal. This is why there will not be a solution to this "predicament".
A more optimistic outcome is outlined in "Powerdown" by Richard Heinberg - another great read. Will mankind really be able to peacefully lower their consumption levels or will they take the "last man standing" approach (currently being exercised). I hope we take door number 1, however I don't see that happening.
If anyone would be open to looking into this stuff, I'd have to think it would be readers of SB.
2007
- Seattle prices peak spring of 2007 (average not median)
- Recession by October 2007
- Inventory continues to build and is double YOY from Dec 2006
- Median prices continue to climb as nothing sells in low end but CA equity locusts and other "cash rich" folks maintain high end activity
- Prices don't fall too much as sellers in denial but cracks appear in "Fort Seattle" as layoffs, divorce, disease, ARM resets, and desperation by flippers force sales in a maraket that appears to have no bottom
- Dow closes year at 11500
- gold closes year at $580 an ounce
- oil closes year at $58 a barrel
- mortgage rates for 30 year fixed at 7%
- News of desperation in markets in England, Spain, Australia, Poland, etc.
- Seattle area home prices 10% off peak (average)
$1 US = $40 Rupees (India)
2008
- Boeing announces plans to scale back production due to cancellation of some orders by end of 2008
- Boeing loses some key defense projects as Iraq War has drained the Pentagon budget for "toys"
- major tech-firms announce that sales are declining and there is evidence upgrade cycle is slowing significantly by year-end
- MS announces layoffs as Zune/Vista prove to be flops
- total number of foreclosure are up 200% YoY
- Dow closes year at 9500
- gold closes year at $490 an ounce
- oil closes year at $50 a barrel
- mortgage rates for 30 year fixed at 6.2%
- Seattle area home prices 30% off peak (average) as panic selling sets in
$1 US = 35 Rupees (India)
2009
- Boeing announces lay-offs as orders/projects continue to be cancelled
- major tech-firms announce hiring freezes and/or lay-offs
- total number of foreclosure are up 400% YoY
- Dow closes year at 8500
- gold closes year at $400 an ounce
- oil closes year at $47 a barrel
- mortgage rates for 30 year fixed at 5.8% (with 20% down and 750 credit score)
- Seattle area home prices 40% off peak (average)
$1 US = 30 Rupees (India)
2010
- lay-offs occur at all major Puget Sound employers
- Washington unemployment rate hits 11%
- total number of foreclosure are up 800% YoY
- Dow closes year at 7000
- gold closes year at $320 an ounce
- oil closes year at $35 a barrel
- mortgage rates for 30 year fixed at 5% (with 20% down and 800 credit score)
- Seattle area home prices 50% off peak (average)
- Runs on banks
- Crime rising rampantly as people's unemployment starts to run out and they have to feed their families
- President Clinton vows to convene panel to study economy
- All Seattle industries (MS, Starbucks, Nordstrom, Amazon, Boeing) in major retreat as nobody is buying ANYTHING!!!
- Uhaul rates into Seattle drop to all time lows as exodus heads for cheaper areas of country. Outbound rates skyrocket
$1 US = 20 Rupees (India)
2011
- Seattle area home prices 60% off peak (average)
- Dow closes year at 6000 (many boomer 401K ruined)
- Many former MS/Boeing employees on street corners with signs
$1 US = 15 Rupees (India)
2012
- Seattle area home prices 65% off peak (average)
- Dow closes year at 5000
$1 US = 10 Rupees (India)
2013 (BOTTOM)
- Seattle area home prices 70% off peak (average)
- Dow closes year at 4500 (bottom)
$1 US = 5 Rupees (India)
2014 (Year America either wakes up or gives up)
- housing "flat" for several more years as so many are "snake-bit" and so many have died (aging boomers, plagues in homeless camps and old folks dying in their homes who can't pay the utility bills)
- America is different country as whites are clear minority, infrastructure is now that of 2nd world country, cities are crime ridden, crumbling, and under martial law, and there is a small wealthy class, no middle class, and a large class of people who eat dog food and ramen just to survive
- All countries exploited by predatory western capitlaists now have the know-how and infrastructure to "take over" leadership of just about every aspect of industry (both heavy and tech)....American in contrast is a country of people who "expect a good life" armed only with the "skill" of watching TV and working in fast food joints.
- Social Security is gone due to the bankrupting of America by Bushco
- Most companies have done away with pensions or declared bankruptcy to get out of paying existing obligations
The world starts to wake up to the fact that predatory capitalsim has essentially destoryed the lives of most people on the planet. Revolutions ensue...
I wish I had a better prognosis...but there is no way out of going thru "extreme pain" with our whole corrupt and unsustainable system.
Fart Car anyone?
Price of gold:
1996: 388
1997: 331
1998: 294
1999: 278
2000: 279
2001: 271
2002: 310
2003: 364
2004: 410
2005: 445
2006: 638
Today: 650
From my understanding, the USD as lost about 30% to most other major world currencies since 2002. Do you see a reversal of this trend? Are we about to start producing things again?
Even if you don't believe in PO, you have to see the coming dollar crash.
Tim! First you post how oil is non-organic, and then you post about the virtues of fowl oil? You simply cannot have it both ways.
It's time to pick. Either the earth sweats sweet crude like a fat guy doing the tango, or we are pumping dead animals out of the earth by the billions.
Either way, I'm going out back to see if I can strike some 'feathery gold'
I can't speak for others, but I am bullish on the dollar and bearish on gold. My reasoning is that I believe most of the price inflation we have been seeing is due to an increase in credit, which is not the same thing as just printed cash (ala the Weimar republic). As this process of credit creation reverses (which we are just starting to see with tightening standards for mortgages), all asset prices will fall.
In this regard I view Gold as just another of the many assets that got an artificial boost due to the credit bubble. I don't think it is a cooincidence that Gold has been appreciating just as real-estate and stocks have been in the last few years. Likewise, I expect all these assets to drop in value when credit contracts.
Lastly, I don't believe the central banks will be able to do much to prevent deflation. If central banks begin monetizing debt in a big way (i.e. printing money) they will IMMEDIATELY become the buyer of first and last resort, and the US dollar would be toast overnight. I think that this is too great a consequence for even knucklehead central bankers to consider.
wait
for
it,
wait
for
it...
ooooohhhhhhh....
Not saying that it will happen again, I just simply don't see any intrinsic value in gold. Can't eat it, can't build anything but fancy necklaces. Why should I pay 7 hundy for a little disc of worthlessness? Why would anybody other than nastalgic gold-bugs?
When the fiat currencies break down and gold is the only true currency, where will people turn? As fleck says, "In a social democracy with a fiat currency, all roads lead to inflation."
He who has the gold (& silver bullion), makes the rule.
I have a few Krugerands and Eagles lying around because they look pretty, but I don't really need more than 1. They all look the same.
We are in a credit bubble, not a cash bubble. Credit can disappear, quickly. All you need is for a few hedge funds to implode, people to lose confidence in the derivatives that are being peddled that are fueling the liquidity, and suddenly it's a lot harder for consumers and businesses to borrow.
Deflation is more likely than inflation.
My guess is that if you're right, the banking system will have completely collapsed, we'll be in marshall law, and I'd have to sit on my horde with a fair portion of my grandpa's gun collection in order to protect all those 1962 dimes.
That's not my idea of living.
Hardly... If we have hyper-inflation you wouldn't want to unload your gold for ANY funny paper money.
Don't get me wrong, I am not a fan of fiat currencies and believe that eventually we might well wind up with some serious inflation. I would even say that gold will likely hold it's value much better than many other assets (e.g. real-estate).
However, in the short-term (say 10 years) I think we are going to see the dollar appreciate significantly as the credit bubble implodes.
When we get to that point and you are the guy paying for things with gold, you will beaten, robbed, and killed on your way home from the store after paying for everything with "gold"......
In a truly desperate scenario anything of any intrinsic value (food, water, weapons....and anything that you use to buy these items, will eventually be confiscated by the biggest and strongest....survival of the fittest. And in a complete breakdown big and strong has historically always prevailed over weak, small, talented, or skilled.
To me gold is a just a fancy paper weight. Like paper fiat currency, a "rock" of anything only has value if people all believe it does.....else it has none.
I think a scenario where the value of gold could shoot up temporarily is as follows:
1) paper money becomes useless and is used to keep warm in homeless camps
2) for a while the "wise" use gold coins to obtain those things that truly have value because they keep you alive
3) but like I said, if you have gold word will get out and the strongest of the "have nots" will simply take it from you....
Convience is directly related to energy cost and turning one energy into another puts in even more energy losses. Conversions aren't free. These sound like great ideas, but if you haven't done the math, you're just wishing upon a star.
Lots of people do it, so you don't have to feel alone.
Right, so when we turn to all these expensive sources of energy, they aren't going to help because our economy is not just dependent on oil, it is dependent on CHEAP oil. That's the trouble with the alternatives that gives us expensive replacements: they don't replace CHEAP oil, so our whole civilizational model, in other words, has NO future.
This all sounds very nice, but it is completely wrong. It takes 10 calories of fossil energy to make one calorie of food in the U.S. agriculture system. Where does the oil price ceiling come from? Are you willing to go hungry a few weeks a year? By the way, the ethanol craze has already quadrupled the price of corn tortillas in mexico. How much do you think we should ramp that up? I think some of us will be going hungry whether we like it or not.
let me give you a clue about why our economy is doomed to collapse when oil peaks. When the fed prints money by making loans, you pay the principal back eventually, but you also pay the interest back. Where does the interest come from? Who creates that money?
The answer is one of the most basic facts of our monetary system, and it only appears to work as long as everything gets more abundant and more efficient every day. That'll stop soon.
And the intrinsic value of these green pieces of paper in my wallet?
Oh, right, I can start a fire with them. That's something at least.
Gold Standard? meh
Uranium Standard? WINNER!!!
Me I'm going to start minting nuclear coins.
Actually, that is false. Gold does have intrinsic value, just not as much as people act like it does. It is excellent at conducting electricity. That's why many electronics use some gold in their wiring. Some people in china now make a living breaking apart old US garbage electronics, and pulling the gold (and other valuable minerals) out.
A truer statement is that gold has comparable intrinsic value to copper.
Nor mine, that's why you have to make plans for these possible outcomes. I'm not saying it WILL happen, just that I will do my best to be prepared - without impacting my currently lifestyle.
Sniglet said:
If you notice, I didn't say I'd sell ALL my gold. My goal is to get the heck out of USD. Once out, I'm prepared if there is hyperinflation. We could have hyperinflation in commodities (stuff we need) while deflation in others (see, housing, boats, artwork, toys, - stuff we want). So at that point I could enter back into the market with my wheelbarrow full of cash and buy all those toys that now cost next to nothing. $200K 42' Island Packet for the equivalent of $50K, or maybe a SW facing Queen Anne 4BD hill-house for 10c on the dollar.
Who knows, maybe it will probably make a lot more sense to bail out of this country, which may then be infested by nothing more than peasants and feudal lords. Move to New Zealand or Switzerland.
Gotta have options.
How would that happen exactly? Last time I checked, each person in the US owes about $500K (or is that per family) in debt.
The US is insolvent. We are a nation of consumers who don't produce anything. Now factor in energy depletion - even if we wanted to start producing again, where will we get all the energy?
My guess is that we'll keep trying our damndest to take it.
Stock market down 185 pts today, me thinks the wisenheimer bulls are finally starting to get the picture in the credit markets. Next week should be interesting.
Testify!
I disagree.
Audiophiles have long battled over all the qualities of different metals when it comes to their cables etc. Silver has been determined to be one of the better conductors as it doesn't degrade the signal when it tarnishes as copper does although some find the sound a little "bright". Gold's application in the audio industry is primarily to prevent oxidation of the underlying copper because it doesn't tarnish. That is why you will see the gold plating on RCA jacks on the back of your stereo gear. Some cable companies (that are more like snake oil salesmen) use a small amount of gold in the wire but it is more of a "tone" control than a "better conductor". The general consensus among the members at both Audiogon and AudioAsylum is that it isn't the "best" conductor of electricity, and the members there include tons of engineers, scientists etc. etc.
And if any of you guys are using those little black patch cords that came with your stereo gear you are doing yourself a big disservice. For under $50 you can get satisfactory IC's that will really show the difference. Upgraded speaker cable helps also.
Oh...and I'm not saying that gold doesn't conduct electricity well...I just don't believe that it's application in electronics has anything to do with it's conductivity as it much as it does with it's corrosion/oxidation resistance.
just my 2c.
now you gold bugs can get back to your argument...to me gold is just more "stuff".
Sir, you do me a disservice. I never argued that gold is the perfect conductor, or even the best. Only that it is a very good conductor, and that has intrinsic value. In engineering, everything is a trade off. A better conductor that doesn't corrode is very important in some domains and less so in others.
NASA for instance used gold heavily in the electrons of the Apollo program. That doesn't mean that the cable on my Ipod Earbuds should be made out of gold.
Besides, I'm not a huge fan of metals either. My point was just that several of them do have value other than being a dollar hedge. If you want to invest in a commodity, pick one with industrial value. Those are more likely to suffer from legitimate scarcity, and are therefor more likely to increase in value during economic expansion, regardless of what the USD does.
Seriously, buy Uranium. I know I should.
I can't predict the future, but if it comes to that, I won't be paying in anything that raises attention or makes me a target. No matter what we're paying in, gold and silver will always be money. There should be a way to turn that currency/wealth into whatever we're using for currency at the time.
Who is going to confiscate what they cannot find?
As far as protecting yourself, if you plan accordingly that shouldn't be a problem. If you are sitting in a bunker all alone with your guns, ammo and MRE's - you might have a problem. I believe the smart, talented and skilled will form alliances (this is already happening FYI) and networks where we work together to keep the group well fed, clothed and out of harms way.
Again, it doesn't hurt to be prepared. In the unlikely event that this PO event doesn't take place in my lifetime - at least I've made some fantastic friends.
I do you a "disservice"?
Whatever. And I wasn't ever in the military so "Sir" isn't necessary.
Your post specifically stated that it was used because it was an excellent conductor and you went into no further description. Stating what it was used for in the Apollo program nearly 40 years ago doesn't really mean anything to me either. All I stated was that there are other metals that actually conduct electricity better and I'd be willing to bet that there is far more silver and copper in use when it comes to the wiring of electronics than gold.
The green paper in my pocket is just as useless as the gold, but the problem is how much of that stuff Bernanke can print.
Call me old-old-old-old fashioned, but if it was good enough for Moses, Hitler and everyone in between, then I think it's still a better money than this 36 year-old experiment in fiat paper we got going donw in D.C.
I used to argue the delfation case under a massive credit-loss scenario, but here's the counter argument that has me stumped and almost permanently in the hyperinflation camp. It's even got a great real-life example: me.
So, I'm selling my house and going to rent. Walking with 150k in equity that is all bubble-goodness. I came into the house with 6k in 2001.
Ok, so we have a credit collapse. The guy who owns the house now defaults, like millions of other people. Great. No access to credit.
So here's the counterargument: I still have the 150k and that money can't be destroyed. The bank can't come after me for the new buyer's loan. The money is here to stay, so if I don't put it into housing, then I'll just put it into something else.
Deflation can't really happen unless money gets destroyed or the supply of goods increases faster than the supply of money. I think I've made the case that the supply of goods is probably going to go precipitously down. So how will the supply of money go down faster than that? How will my 150K get taken out of the economy?
Maybe my premises are poor, but I haven't been able to take this argument apart. Maybe som of you can have at it?
I had a very intelligent friend who stock-piled ammo and planned escape to a cave in the desert, all because of the Y2K problem. He even worked in the IT industry (as a programmer) and should have known better. He was forecasting riots, looting, planes crashing etc.
My point? Paranoia and intelligence are not mutually exclusive.
IMO, we're due for a pretty nasty recession, a collapse in an industry or two, but hyperinflation? Total economic collapse? Destruction of the dollar?
Also, why is the dollar forever? You realize it has lost 97% of its value since inception of the Fed in 1913, right? Seems like the destruction, rather than being "unlikely" is instead a guarantee that is already nearly complete.
Face it, we've become a get-something-for-nothing nation and we're not going to be able to kite checks forever, but that's essentially what a an economy with a chronic 6-7% deficit is doing.