Currency devaluation

[Kenster]

Also, deflation is good for savers, bad for debters. The debt, even if it doesn't change, will take more servicing. Hmm........At least I won that bit.

Deflation can be bad as well as good, depending on how we look at the situation and finding ways to take advantage of it.

Deflation is bad for sellers when they have to sell for less, sometimes at a loss to keep the business going.

On the other hand, prices are falling every where, from shares, properties to furnitures, cars, electronics.

A 42" LCD TV priced $2000 a few months ago is now $1600 (20% drop) even before the Xmas sale. New Subaru Forester is around $32k for nearly 10 years. Now people talks about 40% drop in property prices. IR drops 2% over 2 months, and more reduction is coming

I'd think the current deflation will be short lived as world governments is printing money non stop to reflate the economy. The Fed balance sheet doubles in the last 6 weeks, jumping from 900b to 2 trillions. It is expected to be 3 trillions by end of this year (6 weeks to go). Price dropping is more likely an effect of deleveraging, which will ease out eventually. We are more likely to become inflationary sometimes next year.

 

[Kenster]

One thing that is really really bugging me in this financial melt down, is that when the US market tanks, our market tanks, yet the damn US dollar remains strong.

The USD bull run can be short term as there is high demand for it when everyone is getting out of paper assets (such as redeeming funds, selling shares or treasury bonds) and hoarding it.

By the time this eases out, USD value will be lowered.

 

[hobo-jo]

1 metric ton = 32,150 troy oz.
1oz of gold = $738
1t of gold = $23,726,700
8,133.5t of gold = $193 trillion (US holdings)
US national debt = $10,666 trillion http://www.brillig.com/debt_clock/

So the Yanks would need 15% of their Au holdings to pay off their national debt. Not as bad as I thought.

It's late, so could also be miscalculating, but I think your figures are way off.
US public debt = 10,666,883,530,340 ($10.6 trillion) - VERY conservative figure if you ask me
Gold value = 192,969,251,100 ($193 billion)

So to pay off their national debt (with gold reserves) they would need to increase gold value by 55x (approx), that's assuming that all the US gold reserves are public owned, which I don't believe to be the case and we haven't included private debt in these figures.

http://www.marketoracle.co.uk/Article7310.html

* To monetize 100% of the outstanding public and private sector debt in the U.S., the official government price of gold would have to be raised to about $53,000 per ounce.
* To monetize 50%, the price of gold would have to be raised to around $26,500 an ounce.
* To monetize 20% would require a gold price a hair over $10,600 an ounce.
* To monetize just 10%, gold would have to be priced just over $5,300 an ounce.

 

[Patosan]

The USD bull run can be short term as there is high demand for it when everyone is getting out of paper assets (such as redeeming funds, selling shares or treasury bonds) and hoarding it.

By the time this eases out, USD value will be lowered.

I feel you are right has kept it's head up recently but should seriously drop in the near future ... but what will that mean for our dwarf AUD ? I hear some people saying the AUD could go to USD 0.40 ... is that before the US drops, after or what ?

Is the USD going thru the floor the start of hyper-inflation some are predicting ?

 

[Sunfish]

Listened to Don Coxe this morning explaining how this devaluation could be brought about without going back to a gold standard.

http://events.startcast.com/events/199/B0003/

 

[james_w]

Deflation can be bad as well as good, depending on how we look at the situation and finding ways to take advantage of it.

Deflation is bad for sellers when they have to sell for less, sometimes at a loss to keep the business going.

On the other hand, prices are falling every where, from shares, properties to furnitures, cars, electronics.

A 42" LCD TV priced $2000 a few months ago is now $1600 (20% drop) even before the Xmas sale. New Subaru Forester is around $32k for nearly 10 years. Now people talks about 40% drop in property prices. IR drops 2% over 2 months, and more reduction is coming

I'd think the current deflation will be short lived as world governments is printing money non stop to reflate the economy. The Fed balance sheet doubles in the last 6 weeks, jumping from 900b to 2 trillions. It is expected to be 3 trillions by end of this year (6 weeks to go). Price dropping is more likely an effect of deleveraging, which will ease out eventually. We are more likely to become inflationary sometimes next year.

hmm must of been some top end brand even $1600 for a 42inch lcd is damn expensive they've been around $1159 shipping included for a 40inch highlander on dealsdirect for over 6months lol.seen em at big w even cheaper

 

[boomtown]

Price of gold would drop through the floor if the US released their 5,000 tonnes.

 

[Sunfish]

Could you give any justification for making such a post?

Why would the US dump their gold? They are trying to defend their dollar.

Why would such a sale cause more than a temporary reversal in the ever increasing POG? Silly Gordon Brown sold a big heap of Pommie gold @ about $275. I'll take all you can get at that price, thank you.

Did you listen to the Don Coxe netcast? Don is a very smart man.