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Over U.S. $1900 And Climbing....


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5 hours ago, Bash said:

Fed keeps printing money like they have been,

 If they were actually printing it I might be able to snag a little bit of it as it flies by but it's all done digitally - and I hate computers ( except the ones inside nugget detectors). 

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Let's see how big the wheelbarrow loaded up with money soon needs to be to buy a ML detector. 

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Hmmm... Hyperinflation due to unbacked fiat currency. Sounds all too possible. One German Mark in 1918 had the buying power of 100 Billon Marks in 1923. One story I read was about a German guy who took a wheelbarrow full of money to a store to make a purchase. Leaving it outside, he went inside to see if they had what he wanted. Upon his return, he found that someone had dumped the money on the ground but had stolen the far more valuable wheelbarrow. 

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10 hours ago, klunker said:

How low might the dollar go?

My magic lamp isn't working right now...The longer that our economy is kept shut down, stimulus money is handed out, our deficit grows at an incredible rate then most likely the value of the dollar will follow suit. Fortunately for the USA, this is a global event and is affecting most economies and not just ours. It also could be that paper gold/ silver are catching up with physical prices since they have been decoupled for some time. Gold prices are not "always" inversely related to the dollar. Most of the time it is true, but these are weird times we are living in...

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The gold not backing currency thing isn't what concerns me, it's a tiny problem when compared to currency to market/bank holding imbalances. Nothing is backed by anything today, so really anything we think has value really doesn't. 

Consider: There is only about $1.5 trillion in US currency circulating in the entire world. Yet, there is something around $13 trillion held digitally in banks in savings/checking accounts, in CDs, money markets, etc. That's "vapor money". Banks hold many times more money for people than actually exists. So what exactly do they hold? Nothing. It's a macro scale version of the gold not backing currency problem. We have accounts worth currency that aren't backed by currency, it makes no sense.

It gets worse. US combined stock markets are worth something like $34 trillion (according to Google in 2018, more now). These stocks are traded daily with money that doesn't really exist, and used as collateral for loans that grant more money that doesn't exist. Same with our housing market, worth something like $33 trillion. And our commercial real estate market is worth something like $16 trillion. And the private land in the US is worth something like $21 trillion. And who knows how much our minerals are worth combined.

So, we have about $1.5 trillion in cash. And we have about $100 trillion in "value" for our major economic holdings which derive their value from our dollar. Dollars which can't even cover 1/10th of our bank related accounts if we all withdrew to cash, and which covers 0% of the value of everything we say has "value". So, what is the actual value of our markets and real estate if there isn't enough currency to back them?

Well maybe people in parts of the world own a big portion of it then, in global currency? Nope. The actual amount of real currency globally is about $5 to $6 trillion. Total. That's it. There is something like ~$60 trillion in global savings/checking and other bank related accounts though. More vapor money.

So, all the money in the world can't even cover 1/10th of the value of our stock market and real estate in the US, ignoring entirely the value of stuff in the rest of the world.

Nothing is real anymore. Hyperinflation arrived a long time ago, we just put it off and ignore it, shoveling the problems to the next generations, by not printing the physical currency such as a place like Zimbabwe did and acting like our economy is normal instead. Everyone plays along because the world needs a stable, globally traded common currency, in a stable country. The problem is much, much larger than simply not having a currency backed by gold anymore IMO.

 

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  • 3 weeks later...

Steve, gold is going alot higher.  Gold and silver are in bullmarkets right now.  Bullmarkets end on a huge up spike.

Look at the chart of gold in 2011 I believe. Gold doubled in 3 months, then slowly died out.  How about bitcoin,  hitting 20K on its blow off spike.  Then rolling over.  The fun is just beginning if you are a possessor or investor. 

The key is to sell out during the last up spike.  Take the profits and run. 

 

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