40 replies to this topic

[skepticaldollars]

I just watched a 60min piece about the ghost cities in china. turns out there is a startling amount of apartments and condos that were built and no one lives in them. There are whole cities that are basically empty. I mean like 10 entire cities in china. the chinese command economy dictates where money will be spent and building whole cities is how they have kept the china Gross Domestic Product up above 5% growth.

It made me think about the quantitative easing the American Fed reserve is doing. The fed is printing money in order to buy government bonds. So basically other countries have stopped loaning America money so America is buying its own bonds. That would be like me saying I sold my car to myself with money I printed in the basement.

It can't work like that for too long. Either the dominant countries are being run by idiots or every one is being scammed. Maybe both.


what do you folks think

[wren56]

agreed, something is going to hit the fan in the not too distant future, probably.

[bobby120]

Yep I have seen an documentary about oil producing countries sell there oil in "US Dollar" currency and why not in other and much higher currency

but can`t tackle all of that I`m getting head aches now!

[martlink]

hello, globally speaking, the world economy is one big PONZI scheme...........

[gummibearu]

hello, globally speaking, the world economy is one big PONZI scheme...........

Took the words right outta my mouth

[skepticaldollars]

Took the words right outta my mouth

so do you own a lot of gold?

[gummibearu]

so do you own a lot of gold?

Dont really understand, but i do not.

[bobby120]

Dont really understand, but i do not.

Gold is like the "Money" behind the paper bills we are using. Its like 35 USD / 1 oz. of gold I think (I think I read about it once)

The more gold you stock pile the more paper bills you can use in your economy (correct me if I`m wrong)

[skepticaldollars]

Dont really understand, but i do not.

Gold is like the "Money" behind the paper bills we are using. Its like 35 USD / 1 oz. of gold I think (I think I read about it once)

The more gold you stock pile the more paper bills you can use in your economy (correct me if I`m wrong)

Bobby120 kinda has it correct. You see gummi; if the global economy is a ponzi scheme then it will collapse. when it does there will be no currency that is safe. if you have 1 million euros or 1 million dollars it wont matter. When the global economy collapses the value of those currencies will be extremely low. So the cost to purchase with paper currency will be extremely high. it will cause the cost of gold to sky rocket. In a situation like this a loaf of bread could cost a ridiculous price In fact when the german economy collapsed before world war 2 inflation was at such a high rate that if I told you how high it was you would not believe it. The denomination of their currency was set in 1000's. and 100 thousands, not 1's and 10's. a postage stamp cost around 500,000 marks and actually kept going up from there.

so paper money or electronic money would be rendered worthless. A millionaire would run out of money in weeks. but gold would always hold value. So if you had 1 million in gold today, after the global economy went scam you would have a billion. and you would need every penny because a loaf of bread would cost would cost $50,000 or more.

Sounds crazy, doesn't it. But it has happened.

[Casper]

On August 15, 1971, the United States unilaterally pulled out of the Bretton Woods Accord taking the US off the Gold Exchange Standard. This mean, there is more money (dollars) than the USA has gold in their dungeons. This is reletive of course.
The benefit of this is that it's positive for the economy because it's relative simple to create money. This only works when their is a backup mechanism to stanchion the valuta. This is for the us dollar OIL. No Oil, no dollar. The Federal Reserve can easily create money without huge inflation as in Germany in the Weimar Republic in 1923.
So, is their to much money (not only US dollar) in the world? Yep, because every valuta is related to the us dollar. There is more money than you can buy goods. Normally this causes inflation but because of the Oil.....
Every central bank has US dollar as reserve. So when you "kill" the US dollar, you kill the world economy.

So, is the world economy a Ponzi, yes with a very long cycle, and little cycles in between. Some people know this and they make good profit of it. If you bare aware of this you can make money out of this...... Hey, just like a Hyip program......

Some day this will collapse, I don't know when but it will happen, because everything has a cycle.
Money is just a conversation, no much reality there.



One of my hobbies is philosophy, specially about communities like the community of the world.

[pako8007]

yes it is slowly SCAMing Hyip... just some more cycles than the ordinary Hyip

[skepticaldollars]

On August 15, 1971, the United States unilaterally pulled out of the Bretton Woods Accord taking the US off the Gold Exchange Standard. This mean, there is more money (dollars) than the USA has gold in their dungeons. This is reletive of course.
The benefit of this is that it's positive for the economy because it's relative simple to create money. This only works when their is a backup mechanism to stanchion the valuta. This is for the us dollar OIL. No Oil, no dollar. The Federal Reserve can easily create money without huge inflation as in Germany in the Weimar Republic in 1923.
So, is their to much money (not only US dollar) in the world? Yep, because every valuta is related to the us dollar. There is more money than you can buy goods. Normally this causes inflation but because of the Oil.....
Every central bank has US dollar as reserve. So when you "kill" the US dollar, you kill the world economy.

So, is the world economy a Ponzi, yes with a very long cycle, and little cycles in between. Some people know this and they make good profit of it. If you bare aware of this you can make money out of this...... Hey, just like a Hyip program......

Some day this will collapse, I don't know when but it will happen, because everything has a cycle.
Money is just a conversation, no much reality there.



One of my hobbies is philosophy, specially about communities like the community of the world.

I like this convo. Thanks for your input.

Germany had gargantuan inflation from some time just past 1923 to world war 2. It was because they printed a bunch of fiat currency. I'm not sure if I read you correctly but did you say the fed can safely print money without inflation? Thats impossible. If the fed doubled the the cash supply in the US all at once then the price of everything would double also. Right now the printing of money can be seen in an inflated stock market and inflated fuel prices. It certainly isnt a thriving economy that is making the market and oil prices so high.

We were able to pull out of the brentan wood accords because our money, is actually backed by purchasing power. good or services for money. It is the only thing backing any of the world currencies. I don't think there is any place left where you can trade paper money for gold.



What do you mean there is no inflation from printing money because of the oil?

I know the price of oil is counted out in US dollars but I do not see where that matters because you could call the price of a barrel of oil 200 cats per barrel and it would still be a barrel of oil. The oil doesn't change in value. only the amont of currency or traded goods per barrel. Or if oil was pegged to the euro or the yaun it would not actually change the price of oil. it would only change the exchange.

Some people actually feel gold will not even be of high value after the global economy falls. Myself. I don't understand that theory.

[Casper]

I like this convo. Thanks for your input.

Germany had gargantuan inflation from some time just past 1923 to world war 2. It was because they printed a bunch of fiat currency. I'm not sure if I read you correctly but did you say the fed can safely print money without inflation? Thats impossible. If the fed doubled the the cash supply in the US all at once then the price of everything would double also. Right now the printing of money can be seen in an inflated stock market and inflated fuel prices. It certainly isnt a thriving economy that is making the market and oil prices so high.

We were able to pull out of the brentan wood accords because our money, is actually backed by purchasing power. good or services for money. It is the only thing backing any of the world currencies. I don't think there is any place left where you can trade paper money for gold.



What do you mean there is no inflation from printing money because of the oil?

I know the price of oil is counted out in US dollars but I do not see where that matters because you could call the price of a barrel of oil 200 cats per barrel and it would still be a barrel of oil. The oil doesn't change in value. only the amont of currency or traded goods per barrel. Or if oil was pegged to the euro or the yaun it would not actually change the price of oil. it would only change the exchange.

Some people actually feel gold will not even be of high value after the global economy falls. Myself. I don't understand that theory.

I try to explain it.
First the FED determined the interest rates. This is the interest rate where other banks can lend money from the central bank. Than companies who want to lend get a interest rate what is a compound of the FED interest rate and the from the bank itself. Because of this low interest rate of 0.25% the compound rate is also low. When a bank want to lend money from the central bank, the central bank doesn't need to have this money in "stock". It can just say, here is the money. Of course there are rules for this but bottem line, you want 10milj, here is the 10milj. So, money is created.
Normally (but this is people business and people are not normal) this will cause inflation because to much money not enough goods so inflation. But than the Oil is coming in the play field.
The oil is coming out of the ground and when it is in the barrels it is worth for example 120$. If you want to buy a barrel oil you can not buy it with pound sterling or euro's.
First you have to buy enough US dollars, 120$. You exchange your euro or pound sterling in 120$. The bank where you buy you 120$, for example the bank of america, gives you 120$ and gets the corresponding euro's.
Because every country in the world needs oil and most of the oil has to be paid in USD is the demand for dollars enough to control the inflation. So the money created by the FED is backed up by the demand of dollars needed for buying oil.
These days, more and more countries are chaning from dollar to their own currency for paying for oil eg. china, brazil, russia.
Imagine, the oil found in the UK is administered in USD. Not in pound sterling.

Also the amount of dollars bought by the bank of china is huge, but I mean HUGE 2.000.000.000.000, 2000 billion usd!
The countries keep eachother in the hold.

[bobby120]

This gonna be one "BIG HEADACHE"

[skepticaldollars]

I try to explain it.
First the FED determined the interest rates. This is the interest rate where other banks can lend money from the central bank. Than companies who want to lend get a interest rate what is a compound of the FED interest rate and the from the bank itself. Because of this low interest rate of 0.25% the compound rate is also low. When a bank want to lend money from the central bank, the central bank doesn't need to have this money in "stock". It can just say, here is the money. Of course there are rules for this but bottem line, you want 10milj, here is the 10milj. So, money is created.
Normally (but this is people business and people are not normal) this will cause inflation because to much money not enough goods so inflation. But than the Oil is coming in the play field.
The oil is coming out of the ground and when it is in the barrels it is worth for example 120$. If you want to buy a barrel oil you can not buy it with pound sterling or euro's.
First you have to buy enough US dollars, 120$. You exchange your euro or pound sterling in 120$. The bank where you buy you 120$, for example the bank of america, gives you 120$ and gets the corresponding euro's.
Because every country in the world needs oil and most of the oil has to be paid in USD is the demand for dollars enough to control the inflation. So the money created by the FED is backed up by the demand of dollars needed for buying oil.
These days, more and more countries are chaning from dollar to their own currency for paying for oil eg. china, brazil, russia.
Imagine, the oil found in the UK is administered in USD. Not in pound sterling.

Also the amount of dollars bought by the bank of china is huge, but I mean HUGE 2.000.000.000.000, 2000 billion usd!
The countries keep eachother in the hold.

Good Job Casper! that was a very good explanation. I believe I understand where you are coming from but I do not agree. I have heard of something called the petro dollar consperacy which seems like the same Idea you just put across. but I have a specific reason why I do not think it is valid.

For instance. China does not purchase Dollars. it actually purchase US bonds. Those bonds are payable in Dollars. that is true. but it does not alter the fact that the bonds were really purchased with yuan's. The Yuan's were exchanged for dollars only on paper for the idea of record keeping because each currency has its own value. right now you can buy a yuan for 16 US cents. that is the only reason the exchange has to happen. If you were able to buy 1 billion dollars worth of American Bonds for 1 billion yuans then it would mean you just payed 16 cents on the dollar for the bonds. It would be an excellent deal for china. The same goes for Oil. it is only sold in a denomination of dollars for the purpose of record keeping. If we started denominating oil in yuans then the price of oil would be 750 yuans per barrel instead of 120 dollars. Effectively the same price. $120 would still buy a barrel of oil.

What will end the dollar is if its purchasing power is diminished. If the Dollar is no longer stable then no one will want to buy US bonds and America will not be able to borrow money.

There has been inflation in America and every where else where money is being printed in excess. Lots of it. it is the only reason why oil is so high now. think of it. during most of the global economic boom of 2002 to 2006 the average for barrel was around $40 per barrel. it did spike like crazy as the economy came to a halt and then nose dived. The global economy SUCKS right now. In 2005 Every country was using oil like crazy. demand has dropped way down. Yet oil is $90 a barrel.

[Casper]

That's true, now days not only the Oil but also bounds are stanchion the dollar. And China is the most important buyer of these bonds.
Keep in mind that these bonds are bought with USD. So, first China has to get Yuan exchanged in USD (this will take out dollars of the world market and the inflation is damped) and then go to the central bank of the USA and buy the bonds. You can not buy the bonds with Yuan, euro's etc. directly. Because the government want to receive dollars they can use for their purposes (economy, depts, army etc.).
In the Netherlands you can also buy bonds. You can only buy them with Euro's, not with dollar's or other currencies.

Interesting piece of journalism:
http://economix.blog...-exchange-rate/

The oil is no consperacy, freshman economy shows that in their study.
The advantage of the dollar as a global currency is stability and transparency. Very good for the economy and trade.

[skepticaldollars]

That's true, now days not only the Oil but also bounds are stanchion the dollar. And China is the most important buyer of these bonds.
Keep in mind that these bonds are bought with USD. So, first China has to get Yuan exchanged in USD (this will take out dollars of the world market and the inflation is damped) and then go to the central bank of the USA and buy the bonds. You can not buy the bonds with Yuan, euro's etc. directly. Because the government want to receive dollars they can use for their purposes (economy, depts, army etc.).
In the Netherlands you can also buy bonds. You can only buy them with Euro's, not with dollar's or other currencies.

Interesting piece of journalism:
http://economix.blog...-exchange-rate/

The oil is no consperacy, freshman economy shows that in their study.
The advantage of the dollar as a global currency is stability and transparency. Very good for the economy and trade.

But I do not see how exchanging one currency for another on paper stems inflation? As I see it All that is happening in the exchange is fixing the difference in the weight of the 2 currencies. could you explain that to me so i could understand better?

And like I said there has been lots of inflation and it will continue to get worse I think unless the course is changed. Snow balls rolling down hill always start out much smaller than they end up, that is before they hit something hard and get destroyed.

[Casper]

I will explain it, now sleepy.....
I like the questions, good for me to order my mind, squirrel......, now to bed.

[Vis]

I will explain it, now sleepy.....
I like the questions, good for me to order my mind, squirrel......, now to bed.

Yep, makes a nice change, doesn't it?
Do carry on, I'm enjoying this discussion.

[skepticaldollars]

Yep, makes a nice change, doesn't it?
Do carry on, I'm enjoying this discussion.

Well. casper should have woken up by now. Some one check on him and see if he's still breathing. I'm worried