Kismet,
What shift do you imagine happening, if you care to elaborate?
I’m the "goldbug antichrist" around here and even I can’t imagine a situation where gold will be worthless, at least in a long-term context.
Though I certainly can’t speak for them, my impression is that most people on this site view gold as a vehicle for tranversing an unknown future with their purchasing power intact. I have my doubts as to whether this will be successful strategy, primarily because people who buy in fear also sell in fear, but for some here that won’t be an issue.
Personally, I bought gold out of fear.
I realized my mistake and sold my gold for a profit before I could compound my mistake with an emotion-driven exit "strategy". This whole process gave me a perspective that most people here, having not sold yet, don’t have.
I frequently share that perspective to the dismay, and hopefully to the long-term benefit, of many in this community.
Best…Jeff
Have different puposes for different people. Can you eat it? Clearly not. Can you trade it for things, including food? Absolutely.
Do a little thought expirement based on real world events happening today. Why is there a run on the banks happening in Greece and Spain right now? It’s because the folks who have money in those banks, currently denominated in Euros, are concerned the old currency is coming back (i.e. Drachma) and that there will be a reset / conversion where a large portion of thier purchasing power gets wiped out overnight. If they have physical Euros in their possesion, this somewhat insulates them from this.
Also, there are centruries of history as to why gold and silver are money.
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http://www.slatev.com/video/why-gold-why-not-argon/
Also, there is a feeling that they cannot be maniupulated in the same way as fiat money via printing.
Take a look here
So, there are many reasons. But, if your concern is still about being able to eat, I believe most would advise you to take care of that (and your other needs like shelter, water, etc) FIRST, and with any remaining savings, consider PMs. Everyone has a different financial situation. But I can tell you that folks like Robbie and myself exist, where we would be happy to trade you things you need for PMs in the event that the USD got trashed or some other economic event that made cash less available or applicable.
There’s lots to learn and internalize about PMs. There are countless threads on the subject, with every possibile perspective, including anti-gold. You should take a look and understand the arguments and decide for yourself.
Well, you actually can - just depends on if you want a bit of bling in your poop! Pass the Goldsschlager!
…further actions by the Fed. When do they print? I just can’t believe unless begged for by all party’s that the Fed will print.BOB
Dear Chairman Bernanke,
It is our understanding that the Board Members of the Federal Reserve will meet later this week to consider additional monetary stimulus proposals. We write to express our reservations about any such measures. Respectfully, we submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people.
It is not clear that the recent round of quantitative easing undertaken by the Federal Reserve has facilitated economic growth or reduced the unemployment rate. To the contrary, there has been significant concern expressed by Federal Reserve Board Members, academics, business leaders, Members of Congress and the public. Although the goal of quantitative easing was, in part, to stabilize the price level against deflationary fears, the Federal Reserve’s actions have likely led to more fluctuations and uncertainty in our already weak economy.
We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy. Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers. To date, we have seen no evidence that further monetary stimulus will create jobs or provide a sustainable path towards economic recovery.
Ultimately, the American economy is driven by the confidence of consumers and investors and the innovations of its workers. The American people have reason to be skeptical of the Federal Reserve vastly increasing its role in the economy if measurable outcomes cannot be demonstrated.
We respectfully request that a copy of this letter be shared with each Member of the Board.
Sincerely,
Sen. Mitch McConnell, Rep. John Boehner, Sen. Jon Kyl, Rep. Eric Cantor
I just got a message from one of my childrens 21 YO friend who is serving in Kuwait … she has $23,ooo . in the bank and does not know what to do with it or how while she is over there . Got any suggestions that I could pass to her ?
FM
European funding markets frozen: ANZ chief
http://www.abc.net.au/news/2012-05-18/banks-funding-has-frozen-says-anz-chief/4020154
ANZ Bank chief executive Mike Smith says European wholesale funding markets for banks have effectively frozen as financial markets panic amid ongoing instability in the eurozone.
Global share markets have not posted a single day of gains all week, and the Australian share market has closed at its lowest level since November last year, as Greece lurches towards a new round of elections and investors fret about a looming banking crisis in Spain.
Speaking in Melbourne, Mr Smith said funding markets in Europe were "essentially closed" as investors headed for the exits, although markets in Asia and the United States remained open.
Full Moon,
For the person in question, it sounds like her money is in a bank in the US I assume? If it was in Kuwait I’m guessing it wouldn’t be as much of a problem. I had to put some thought into this myself before moving abroad, and I had a family member I trust added to our account just in case so they could take money out if necessary. If she has a joint account with someone still home then that makes the "how" easy, but if not then she still might have options. The potential catch is that just about any such options involves having someone she can trust completely AND who has a safe place to keep any cash (not always easy to find both qualifications… I have a couple people I trust but their living arrangements or location makes keeping valuables with them a risk). But if there is such a person, then it is possible to arrange a wire transfer to the trusted person of any money she wishes to withdraw, provided she has access to a fax machine and a phone to call her bank. A couple years ago I had to do something similar for a vehicle purchase but was working far away from my nearest branch; it took two days for the fund transfer to finalize in my case, but I think one day is about the norm.
As to the "what to do with it", she sounds like she might be a little panicked so I’d be reluctant to advise her to spend or invest any of it in anything, and she might be better off keeping it all as cash in the US. I’m guessing she’s serving in the military, so wherever she’s at during her deployment the money isn’t likely to help to her where she’s at. If it were me I’d save half of it as cash (2/3 of it outside the bank with a trusted person) and put the other half in gold and silver bullion (given the attractive price opportunity that currently exists), but if she’s operating from a point of fear or panic then that would be a bad idea. Even if I disagree with JAG on the likely future of gold/silver prices, I think he’s dead on about not buying it, or anything, in a mindset of fear. While keeping it all as cash may not be the optimum solution as far as maintaining her purchasing power in the long run, the flexibility it offers is hard to beat. It’s a lot easier to move from cash to stuff in a bad inflationary environment than it is to sell stuff for cash during a period of deflation. If she has any credit card or auto loans or high interest rate loans, I think paying loans off would be a really good place to use that money. Otherwise given her situation cash is hard to beat, as long as not all of it is in the bank and not all of it is in one place.
- Nick
But, the G8 leaders ended their Camp David summit with a pledge to keep Greece in the Eurozone.
. . . . . as though the people of Greece have a say in regards to their sovereignty.
I think i see a pattern here. Greece, followed by the rest will be bank runs.most of that money will be deposited with the stronger Euro Countries probably Germany and the Nordic Countries. so from Germanys perspective this is welcome investment. while all those countries go bust. Its a win for Germany and her concubines.
Perhaps at this point, that we’ve been at before, where what seems inevetable could really be inevitable,
… maybe we’d allow our selveves to consider the rediculous. What if the creditors bailed out the system they’ve been milking dry and so can no longer stand on its own? Have you recently studied how that might work?
Adopt natural system principles to keep economies profitable at their limits
…this don’t sound good.Stimulas, soon? This Deflation we are about to witness could be serious stuff. Could it be worse than the lows of 2009 (666)? Why not?
http://www.zerohedge.com/news/chinese-buyers-defaulting-commodity-shipments-prices-plunge
Kismet, respectfully, your answer is supplied by history. Just take a look at the Wiemar Republic and your questions should be found there. BOB
http://www.forbes.com/sites/gordonchang/2012/05/20/hey-krugman-ask-china-if-stimulus-is-a-good-idea/Mr. Chang has China at ZERO to NEGATIVE growth for April!!! That can’t be good. That’s probably a little harder landing than China expected but not Chanos. He nailed it!
China is defaulting on shipments of coal and other commodities, in route, because they have so much in storage that they are using parking lots to store the over flow. I would ask then, why is China buying any commodities at these prices? Isn’t the point of investing to buy low and sell high?
The CRB sure indicates what the market thinks of China’s hard landing theory.
So, Europe, Japan, China, UK, and the ECRI has the United States in Recession NOW, where is growth going to come from?
I certainly agree that Chris is right to predict a 2009 low in the S&P with all the serious headwinds out there. Growth?
JPM? Other shoes to drop?
I also agree with Gregor that Oil and its marginal cost is $90 bucks, however, a serious contraction is long over due because nothing the Fed or Litro printing in Europe, and six hundred Billion, maybe a Trillion spent by China has not done a darn thing. Perhaps Trillions now by the Fed will do the trick, and Trillions in Europe, and maybe Trillions elsewhere! When does it stop? Does all fiat money have to be destroyed first so we can all suffer together? Do the central planners have a clue? I don’t think so. UNINTENDED CONSEQUENCES?
Respectfully Given
BOB