Economic collapse.......?
 

Any thoughts out there on the American economy,,dollar,the price of gold and the way they are heading? Also what effects they may(will) have on our economy?

i dont worry about gold to much....... if the canadian or american dollar goes to crap, ill still have the gold i bought to sell if need be.

The US economy will chug along one way or another. IMO: Gold is risky. Energy is undervalued. Once things begin to pick up (and its unpredictable when that will be), gold prices will likely plummet and energy prices will rise. Its all in the history books...google gold price history and look at 1982. Yes, things are different this time...but...

remember, the wealthy investors make their big buys when things are down...they are optimists.

Our dollar tanked 3 cents today

and that is because of confidence in the US economy, despite all the difficulties.

That is the best news for the Canadian economy. Hopefully it stays down so the manufacturing side of things can pick back up.

it doesn't look good that's for sure.

I don't think it is entirely due to confidence.

I don't buy the safe haven BS the news feeds us.

This 400 BILLION $$ Bond ploy by the Fed Res. is plenty reason enough to upset the dollar 3c.

LINK

Is it confidence that saw international investors flock to the US markets? Or was it half a trillion dollars worth of low interest bonds with which to hide bad debt????


I also agree with the above poster who suggested that energy is undervalued. I think it is significantly undervalued.

Energy is the greatest currency of all.

Our southern neighbours must keep energy prices artificially low otherwise their leaking ship would come apart at the seams.

I guess a pressing question is how do you define "economic collapse"?

Global market capitalization reach a maximum in late 2007 and has been declining ever since (in fits and starts).

This I would suggest is an "economic decline".

Are we talking a crisis and catastrophe? Lawlessness in the streets? Loss of basic services?

What is the scale? Regional, National??

I kinda disagree.

When you purchase an equity or a fund, you do it with dollars that you have purchased with your labor.

When you cash in a fund or equity... you have to think of it like selling - or trading it for US dollars. (Another type of asset). When you have large amounts of people cashing out of funds & equities, they are actually buying US dollars in trade for those assets.

Supply and demand comes into play, where to the average investor or bank (not the fed) the high demand for US dollars causes the price of those dollars to climb against the assets that are being cashed in.

Love it. Just about stuck a couple US paychecks in the bank yesterday. Didn't get around to it. Doing it today and is gonna save me $2000. Hopefully it drops more in the time it takes me to get to Rocky. :)

Ugh, I ordered some U.S. cash at the bank and meant to pick it up yesterday...that was a costly mistake not getting it. Think I'll spin the wheel and wait till next week now.

you are describing the 'churn'. but the money is still in the US. There are no 'safe havens' right now except possibly the greenback (US Cash)...gold is dropping today too...otherwise, why would we trade a barrel of oil for that US cash?

I don't know what the answer is. I could gamble and hope it drops more, but every 3 cents is +/- $2000 with the cheques I have in my hand. I'm not that big of a gambler so I better run

those are some nice cheques your holding sir!

No doubt!!

2000$$ swing from 3c is 65,000-70,000$$


I havent seen that kinda cash since I was on the cover of Rolling Stone.

LOL...well if I had that kind of money I wouldn't gamble either. Mine is a paultry sum in comparison.

I would say that the way it is declining it will one day(maybe sooner than later) it will collapse, like chopping a tree down with an axe, with every swing it comes closer to falling.
If or when it does collapse I think it will have catastrophic results in both lawlessness and services.
I also think such an event would be more national on scale effecting all regions.

Don't do it too fast. Most banks set day rates before they open.
For example the day rate at RBC still puts the values the US dollar slightly lower then the Canadian dollar. Unless your trading Forex you do not get the luxury of accessing spot market prices on your currency transactions.

I would wait until tomorow for the day rate to change more in your favor.

Oh, and right on for having a $66 666.66 USD cheque in your pocket! Can we trade jobs for a while?

I'm surprised at how stable everything is, especially since they did all of that spending for the war, and than all of the natural disasters. You would think that hopefully there won't be another war because that is a drain on the economy, but now it is a complete mystery. Things seem to have gone well in the last six or seven years. Maybe we should have another war. I don't understand the logic but there has been many improvements that have taken place and people seem to be getting by.

They used to have gold and they had problems moving to the fiat money standard because some banks would experience bank runs, people taking out all of their money. They could not pay everyone back, so only so much is guaranteed by the government. You are good for up to 100 thousand dollars, and than if you want more security, you can open accounts in more than one bank, and last of all, you can than buy gold or real estate, etc.

There should be inflation if the treasury creates too much money. I'm not so sure that is what took place. Didn't they borrow money instead?

Thats what I was thinking, I hope you don't go all air canada on us. LOL

War Debt??? Can anyone tell me if the loser pays???
 

Iraq signed an armistance the first time, and was defeated the second time. In prior wars, loser pays if they surrender, and where there is a defeat, the new government of the country, set up by the Victors, also pays. Germany just finished paying its first world war debt. We never hear anything about the surrender terms and war debt repayment terms. Does anyone have more knowledge on this topic to shed some light on this?

The other side of things is that the US spent huge amounts on its own domestic war industries, which of course flows back into the economy. the latest toys are then marketed world wide to allies. Biggest problem is that the allies are all broke, and there is no super power to scare the allies into buying. You don't need an F 35 to fight a guy in a bed sheet and sandals carrying a rusty AK 47.

As for the world economy, it is a race to the bottom. The devaluation among the developed world to counter the balance of trade deficit with the developing world, and pay the national debts, means that our standard of living declines, while the debt we owe is degraded.

Thank god we live in Canada, and our economy is doing well and our debts are under control. We get to bargain shop the world and as long as we don't extend credit, we get the benefit of this mess.

Drewski

I suppose that the region might be held responsible for the destruction of the world trade buildings and the deaths of 5000 people, but that is all that they destroyed where as Germany marched into France and Poland and Russia and they attacked the English. There was a lot of destruction. In this recent war, it is the USA that has paid for the damages. I don't know anything about war reparations for the losers.

Maybe because mining sector took a huge hit and these export loses impacts the dollar?

Germany came out brand spanking new, clean and shiny and pretty much run the EU show and are actually playing back room politics with Russia, it's quite ugly to be truthful.

I think with Iraq, the rebuilding/reinvestment was seen on paper as a possible boon but they forgot to factor the disgruntled insurgents into the equation. There was a U.S Senator who suggested (after hearing of the huge mineral wealth of Afghanistan) that Afghanistan should pay the U.S back in trade for minerals.

depressing yet funny,,, I posted after Drewski said the brilliant line "a race to the bottom"

http://www.youtube.com/watch?v=PTUY1...&feature=share

One huge mining operation. That would be something positive, if there was any wealth at all there. Sure though, the region was unstable and it did not cooperate with other governments, so now the new constitution is supposed to work for them, bring them to the table in however many years it takes to restructure.

I don't know about you guy's but I'm going with the sure thing, I'm gonna open up a Dodge or Chev dealership. :sHa_shakeshout:

US Treasury Bonds
 

For me the big elephant in the room is US Treasury Bonds. They are surging and right at (or just above) a long term upper resistance trend line. IMHO they are gigantically overbought. When they start down the stock market will rise. I am watching for them to start down. I don't know that they will but I believe that's more likely than they keep going up at a quick pace.

http://screencast.com/t/J0duEIZa

The above chart shows a Price/MACD divergence which often signals a turn of some size.

With yields as lows as they are you would only buy bonds if you thought financial/economic Armageddon was upon us. It may be but I don't think we are quite there ... yet. Let's see ...

[Edited for grammar.]