<< <i>The Europeans are now starting to buy more US goods because of the weak dollar.
And what goods are they exactly ? And why would anyone import much of anything from us when there's China, Vietnam, etc?
Tom >>
We still make some machine tools and lots of farm products. Our lead in computers and much high tech is evaporating but bio tech and pharmaceutical are still world class.
Deeper than deep as in deep throat. ( man am I getting old)
When I put this on my website last august, we all owed about 22K in addition to what they are already stealing from us. That's every person in this country. How much is it now? Click on the debt counter on my homepage and see for yourself. It's a few hundred a month being added to our debt.
They are going to collect this from us one way or another.
And the sheep keep baaaaaaaahing while supporting the same or similar people in the same parties and expecting different results.
Here's a good one and the Chinese are working on a law rewrite to allow foreigners direct access to their stock market. It's really funny sometimes what goes on. The US government steals from us, creates all kinds of regulations and taxes forcing any reasonable business person to outsource to China Then the Chinese government steals from their people ( although not as much as here as it's primarily a cash economy and obviously the Chinese are smart enough to avoid as much as they can), and gives money to Cuba ( as they did today, about a billion bucks thereby slapping the US government right in the puss) and then the Cuban government then steals that from it's people.
Really funny Tom
Shift to Foreign Stocks Sapping the Dollar
Mon Dec 20, 7:55 AM ET Top Stories - Los Angeles Times
By Tom Petruno Times Staff Writer
Already depressed by the nation's huge budget and trade deficits, the U.S. dollar is being undermined by American mutual fund investors: More of them are funneling money into foreign stock funds, a shift that hurts the greenback.
Thanks in large part to the dollar's weakness, returns on foreign shares overall have significantly outpaced U.S. market returns since 2002. Foreign stock mutual funds have gained 12% a year, on average, over the last three years, compared with a 4.9% average annual gain for domestic stock funds, according to Morningstar Inc
That performance edge is proving a big draw for American investors this year.
Net U.S. cash inflows to stock funds that invest overseas soared to a record $79.7 billion in the first 10 months, compared with $47.6 billion for all of 2003, according to estimates from fund tracker Financial Research Corp. in Boston.
A list of the 25 best-selling stock and bond mutual funds of 2004 includes five that primarily invest in foreign securities, Financial Research data show. By contrast, the 25 best-selling funds at this point last year all were domestic portfolios.
For financial advisors, investors' growing interest in foreign securities is a welcome change from the 1990s, when many found it difficult to get clients to diversify away from the then-hot U.S. market.
"They would say, 'Tell me again why I should be in foreign stocks,' " said Craig T. Cross, co-founder of investment advisory firm Halbert Hargrove in Long Beach.
Now, Cross said, "more and more clients" are asking about foreign investing.
That could add to the downward pressure on the U.S. currency's value against the euro, the yen and other major currencies. By investing more in foreign mutual funds, Americans in effect are selling dollars in favor of other currencies.
On their own, those cash flows aren't big enough to make or break the buck, experts say. Still, "they raise the hurdle for the dollar that much higher," said Daniel Katzive, a currency strategist at brokerage firm UBS in Stamford, Conn.
But a weaker dollar is exactly what many investors are betting on. As its value slides, foreign securities can automatically be worth more to U.S. investors.
To illustrate: When one euro was worth 86 U.S. cents in 2002, a European stock priced at 10 euros was worth $8.60 to a U.S. investor. Now, one euro is worth about $1.33. Even if that European stock is still worth just 10 euros in its home market, its value to a U.S. investor is $13.30 — 55% more than in 2002.
And if foreign stock prices rally in their native currencies, that plus the currency effect can provide hefty returns for American investors when the dollar is falling.
This year, for example, the main blue-chip German stock index, the DAX, is up a modest 5.5% in euro terms. But with the euro's appreciation against the dollar, the DAX's return for a U.S. investor is 11.4% — compared with a 7.4% price gain for the U.S. blue-chip Standard & Poor's 500 index.
The currency bonus has been even bigger this year for U.S. owners of shares traded in some smaller markets, including Poland, South Korea (news - web sites), New Zealand and South Africa.
Among broadly diversified stock mutual funds, the EuroPacific Growth fund, managed by Los Angeles-based American Funds group, has gained 15.4% for its investors this year. That compares with a 10.1% return for the average domestic stock fund, according to Morningstar.
The EuroPacific fund is the ninth-best-selling mutual fund this year. It took in a net $5.6 billion in new cash in the first 10 months, helping to lift its assets to nearly $50 billion, according to Financial Research.
By contrast, the $103-billion Vanguard 500 Index fund, which tracks the S&P 500, took in $3 billion in the first 10 months.
Also popular this year are so-called exchange-traded funds that invest abroad. ETFs are portfolios of stocks, similar to conventional mutual funds, but trade on the New York or American stock exchanges.
The iShares MSCI-EAFE fund, which trades on the American Stock Exchange, tracks the broad-based Morgan Stanley Capital International index of European, Australasian and Far Eastern stocks. The fund's price was $156.40 a share on Friday, up 14.3% since the start of the year.
Assets in foreign-stock ETFs now total $30.4 billion, more than double the $13.9 billion they held at the end of last year. Domestic-stock ETF assets have risen 31% in the same period, to $173.4 billion, according to the Investment Company Institute, the main trade group for mutual funds.
Yet as interest in foreign shares booms, market professionals caution investors about being seduced by recent returns.
"You're making a lot of bets when you buy a foreign stock fund," said Russ Kinnel, director of fund analysis at Morningstar in Chicago.
One obvious risk is that the dollar could suddenly strengthen. That would penalize American investors by shrinking the value of their foreign shares when translated from weaker currencies to dollars.
Many currency experts and investment strategists say the fundamental issues weighing on the dollar — including the nation's budget and trade deficits, and the risk that they will get bigger before they get smaller — make it more likely that the greenback is headed lower.
"Our view is that the dollar will keep falling in 2005," said Rebecca Patterson, a currency strategist at J.P. Morgan Chase & Co. in New York. She expects the euro to reach $1.38 next year and the dollar to fall to 94 yen, from about 104 yen now.
Even so, market pros concede that predicting currency trends is a dicey business.
Political risks also are a factor in foreign investing, particularly in funds that buy shares of companies in the developing world. For example, a political coup in one developing country could shake confidence in many others.
More worrisome, some experts say, is that a continuing decline in the dollar against the euro and the yen could trigger recessions in Europe and Japan by depressing demand for their exports. A weaker dollar makes foreign goods more expensive for U.S. consumers, and U.S. goods cheaper abroad.
If the net effect of a falling dollar was to cause recessions abroad, the declines in foreign stock markets might far exceed any benefit Americans accrue from the currency factor.
Kinnel and other advisors say the best reason to invest overseas is to provide a portfolio with broader diversification, long term, than U.S. securities alone can provide. In a mostly capitalist world, the U.S. has no monopoly on growth businesses, analysts note.
"Just going into a foreign fund because you think the dollar is going to go down for six months is a bad idea," Kinnel said. "You've got to go in for the right reason, which is diversification."
Rick Keller, a principal at the Keller Group Investment Management in Irvine, said he typically keeps about 20% of clients' total stock assets invested in foreign funds. He said he had anticipated that the dollar would weaken in the last few years but that the slide had exceeded his expectations.
Nonetheless, Keller said he remained bullish on foreign markets, and believed he could justify raising some clients' foreign-stock assets to 30% of their total in equities.
Considering the potential returns from stock price appreciation and the currency factor, "I'm probably still more optimistic on our foreign-stock allocation than on our U.S. allocation," he said.
Try to save enough money to pay rent when you retire if you don't own a home. During the refi boom of the last few years most borrowers went with a low fixed rate. Real Estate markets are local. Only in the late 80s early 90s did prices go down, in other slow downs(last 40yrs) home prices were level for years.
2. Stocks:
Long term.
3. Money Market:
1% minus fees?
4. Gold:
Put 5% to 10% of liquid assets in gold (stocks, bullion, coins). Modern 1986 to 1990 $50 gold eagle (pf70) is a nice coin to hold and look at. Coins should be a hobby.
People are + or - on gold not =. Everyone takes their best guess on the future why not put many eggs as you can in your basket ?
Real estate was a real asset up to the 1970's. But looking at its performance since 1980 is sort of skewed as the amount of paper and creeping inflation created over the past 20-30 years has turned it into a speculative asset. The last 33 years is the only time in our history where currency went pure fiat. Trying to equate that to the earlier 200 years or so doesn't work. Let's just say we've had 33 years of history that has no precedant in our country. We have to look at England, Holland, Spain, France, and Rome for other shining examples of paper currency destruction over the past 2000 years.
Housing prices went down drastically following the great depression so there is an existing precedant in this century.
As RR and others have pointed out, it seems that the downfall of most large governments lies in two areas. First as the size of government gets larger it taxes its citizens to the point where most individual productive time is spent paying taxes, Secondly what expenses that are not covered by taxes is simple printed. In all of the examples we can think of where these countries became World leaders the eventual debasement of money occurs.
So why not try a different approach, simple print the money needed to run the government to begin with.
I wonder how the numbers would crunch if the Federal government installed a National sales tax of 5% and set rules for the states and cities to all have an additional 5% sales tax to run the local entities.
The federal government would pay for all schools, the military, and all other functions of the federal government. In addition it would print money to give out to the States for short falls, and for large infrastructure projects.
All taxes would be eliminated, no income tax, no gas tax, no state or local or school taxes. NO other taxes of any kind. It would calculated the amount of money paid into Social security, Medicare etc. add some interest and repay everyone that paid in the system. It would set a minimum amount to pay to the poor. It would print the money, make the payments, and turn the clock back two generations so everyone was now back on their own.
They would then down size all the government entities by passing a constitutional amendment so that the Federal government nor any state or city could pass any additional tax.
They would cancel the IRS, Medicare, medicade, all tax courts, and all other social programs. They would hire many of the out of work accountants to run governments at all levels of government and truly cut costs to a minimum. All laid off government workers could go to work in the private sector since large companies would have huge amounts of capitol savings from the tax elimination.
The federal reserve would become the National lender to large companies wanting to expand, and would loan money to mortgage companies to finance housing, and there by would earn interest from all of us to help pay government expenses.
All government short falls in expenses would simple be printed and put into the economy. As the years go by with our current system the amount of simply printed money to pay interest and shortfalls increases any way past the point of potential re-payment.
The first step in that plan is to change who our elected representatives report to. Right now, if you follow the daisy chain all the way back, you'll run into the controlling interests of the central bankers. The same old money that convinced the nation to install the Federal Reserve System. And the last thing they want is for the current system to stop. That ultimately means that they don't get to continue siphoning off money from the economcy and continue to slowly transfer the people's wealth to their own. It will take many more years for the majority of citizens to understand the true impact of this effect since "3% inflation" on average over the past 90 years has been programmed into us as a "good thing" when it is anything but that.
RR I am in total agreement that so drastic a plan would never get approved. What seems ironic to me is that very few of us see this as a looming crisis.
We seem to be able to commit all our energy to Wars, terrorism, or solving other problems, but when it comes to salvaging the very engine of our country few want to pay any attention to that problem. Even the simple changes that Bush is promoting to let people save some of their own money for retirement already has a third of the country up in arms, and people have not even heard the plan. It seems more and more obvious that in the end it will be every man and woman for themselves and the ones that are individually prepared will be the smart ones.
Here are some statistics for the end of the year for 2004. I know there are many smart people here on the economy as well as Gold and Silver prices. Who can explain some of these statements?
“Ted Butler, a well known silver analyst, says that the amount of above-ground gold in the world is four times MORE than the amount of silver, making silver, surprisingly, more rare than gold. And the big paradox is that gold is selling at historic multiples of silver, which is the exact opposite of what you would expect on the basis of sheer rarity.”
“According to the Office of the Comptroller of the Currency, the latest Derivatives Report shows that Total U.S. Commercial Bank Derivatives expanded to $84.18 trillion, which is up 26% from one year ago. 26% of $84.18 trillion is $21.88 trillion. So, the derivative positions in the banks increased by twice the entire GDP of the USA!”
“John Crudele at the NY Post has taken a look at how the U.S. Treasury posted, on its Web site, a financial statement for the USA, but done in the same way that private sector companies are required to keep their books. The reason that they did this was that they had to, as ”This method of accounting for the government’s finances, namely using Generally Accepted Accounting Principles (or GAAP), is now required by law.” “Mr. Crudele paraphrases to note that “In the fiscal year 2004, government revenues were $1.9 trillion . . . The net cost of the government's operations was $2.5 trillion . . . Total revenues less operating costs resulted in a net operating cost of slightly more than $615 billion.” In short, he say that “the government ran a deficit of $615 billion,” which a little calculator work will convince you comes out to a cool $5,802 for every worker in the country who has a non-government job.”
“Ted Butler, a well known silver analyst, says that the amount of above-ground gold in the world is four times MORE than the amount of silver, making silver, surprisingly, more rare than gold. And the big paradox is that gold is selling at historic multiples of silver, which is the exact opposite of what you would expect on the basis of sheer rarity.”
This has me really confused! Surely this is somehow out of context.... no way can there be more physical gold than there is silver!! Perhaps he is referring to.... available silver...... that is available after all futures contracts, etc., are satisfied? Now that I could believe- there have been other discussions on this forum about the amount of silver contracts that are out there, that exceed the amount of physical silver to cover.
Total world silver mining since ancient times should be pushing 30 billion troy ounces. Most of this has been mined since the 1860's when production increased many fold.
At least some experts believe virtually this entire amount is still in existence. This seems highly improbable based on the amount the average person "consumes". But if all these numbers are right it's very difficult to believe there's less than 15 billion ounces though most is "tied up" in museum items, film, x-rays, collectible coins and the like.
This would be a much higher amount than the amount of gold available though the gold exists primarily as bullion.
Like most articles I read, I tend to look back at where the author stands and what the author has written in the past. I believe you do as well. Two newsletters that I like to read are Martin Murenbeeld and Paul Van Eeden. Both are not totally off their rockers with what they write and they are no all about doom and gloom, I invite you to look them up on the internet and read their bio. What you won't find from these guys are statements such as if you vote for John Kerry, you are a communist.
Gold has had a nice run, The sell off in December was year end tax selling and in the New Year we will most likely see an early spike in price. I don't speak with fact, just my opinion. I believe a move to $470 is not out of the realm of possibility but I do not believe that is a sustainable price and gold will range between $430 and $450 during 2005. From what I see, Gold is not a very good investment forward looking, those who got in under $350 made a good investment but at these levels, it is too risky.
The US Dollar has certainly seen better days, I definately won't debate that fact. Many people point to debt, the trade deficit, again I won't debate that. Many people believe the US is going downhill fast but I see a different point of view. I believe there are other reasons the dollar has been devalued and those reasons are mainly debt and the trade deficit.
I apologize if I came out as a PM hater, that's not the case. I'm just against zealots who try to force feed their doom and gloom on people. I'm retiring this persona and going back to coin talk. z-ya
Gold is not a very good investment forward looking, those who got in under $350 made a good investment but at these levels, it is too risky.
With inflation considered, gold today at $435 is worth far less than gold was in 1982 at the same amount. Gold still has a far to go to reach equality with paper money. Central bankers ensured that from 1982-2002 that gold had a rough time of it. They have since lost their handle on things. They aren't selling anymore of their gold on the market to depress prices. Notice how Germany just balked at selling 500 tons after promising to do so. None of these banks want to be stupid and sell an appreciating asset for paper. Just look at how stupid they look now for selling thousands of tons of their gold over the past 15 years.
And as far as forward looking investments, bonds, stocks, major currencies, even real estate have little to offer and are quite overvalued by most any means of measurement you use. It's hard to find a mainstream "investment" that is not at near short term peak prices, gold included. What's a guy to do? For me, numismatic coins, gold, and silver. Other more mainstream choices, foreign currencies, oil, gas, water and other natural resource stocks, reverse index (short) stock funds. Conventional wisdom as preached by bankers and stock brokers is out the window. There will be more to follow with the like of Fannie Mae. They got caught with a measly $9 BILLION derivative accounting "oversight." We borrow that much from foreign banks in less than a week. There's probably well over $100 TRILLION in interest rate derivative bets in the world just waiting for a place to leak out when the scales tip too far in one direction.
Andy, I posted an article here in the past year or so that in about 20 steps listed why gold mattered. It has mattered for thousands of years while one currency after another has gone away. It's mentioned in the bible along with silver as wealth. Gold and silver was desired by our fore-fathers to keep bankers & govt's from destroying the health of the nation with paper (unfortunately it has happened and we have been trasferring the wealth of our country to the central banks and FED for the past 90 years).
Debts used to be paid between major banks and countries in GOLD. It was the only sure thing. Those bankers and countries didn't trust anyone else's currencies and they still don't today. In fact, many key debts today are still settled in gold. It was here 10,000 years ago and will be in another 10,000 years. While you cannot eat it, drink it, or make a house with it, it has been considered a store of value for as long as man became civilized. Who do you think has prospered by by the creation of the FED, the change in gold value by FDR in 1934, the Bretton Woods agreement in 1944, and then coming off the gold standard in 1974 (Nixon)? The answer: not you or me, and not Joe Dirt.
If gold doesn't matter can you explain why a Federal Reserve Note does? The FRN isn't backed by anything. It is printed at will. It is a promise to pay a debt owed. It is not an ASSET. It is a DEBT. Every world leading nation in history has destroyed its currency over time? We are just the next one in line. Imagine if we were not the holder of the world's reserve currency at the moment. We'd be in worse shape then Argentina or Turkey.
Gold still matters. It always has to the movers and shakers of the world. Joe 6 pack has been brainwashed to not see the value in gold. Asians do not have that problem. They value gold and always have. They get gold as gifts and keep it in the family. It's as vital to their every day life as the FRN is to us. The whole world has gone fiat money crazy over the past 25 years. We are just beginning to see the net effects of that. It was a great 20 year ride for equities and FRN's. The next 10-20 years will be a nice ride for PM's and commodities/natural resources in general. We came off the gold standard because the world wanted our gold in payment rather than the currency we were printing to cover the "great society." Nixon was not going to give our REAL wealth away in payment. Hence we came off the gold standard and paid debts in paper. We didn't have enough gold anymore to pay all our debts. If gold had to back every US dollar printed you'd be looking at a gold price 100 times or more greater than today's.
In a nutshell, we came off the gold standard to transfer the wealth of our nation, and the world's wealth to those in charge of the currency and printing presses. A constant 3% inflation for 90 years has moved our money into the hands of the ever-wealthier. The bankers and financiers make money moving money. Gold was a major hindrance to such a scheme. WE didn't have much inflation up until the 1920's. The reason? Gold & silver standard and no fractional Federal Reserve system. Look what's happened since we came off it. 30 years of massive monetary inflation and asset bubbles. Gold keeps the bankers and politicians honest. That's why it matters.
I wonder why those worthless coins in perfect condition matter, how about paper money that can be printer until it wallpapers the world. or stocks that aren't worth as much as the company if sold? Fact is gold, silver and diamonds have a very fixed limit of whats been mined and can be (it's called rare) and have stood the test of time. Coins, paper, and stocks have been around for a few decades but gold has been of value before Jesus although some new age thinkers think everything in the past doesn't matter. Nothing ever repeats itself does it?
<< <i>Brian - Why does gold even matter? I'm not asking from a numismatic perspective. I mean why does it matter at all? >>
There's really only one reason that gold matters- - it has value. Since it has value it is wealth. It can be traded for money or for almost anything else. Scrap iron and metalurgical coke have had a far better increase in value than gold in the last couple years. We could use steel for money but few people could lift a hundred dollar bill. Even coke could be tagged for use as money but you'd need a truck to do your grocery shopping. Of course the real problem with using steel, coke, or gold as money is that when their value changes dramatically large numbers of people starve because civilization will no longer function without stable money.
All curency has value only because people believe it does. Any currency can be devalued or in- flated. If you want a currency that doesn't inflate the only way possible is to contain government. If you vote for politicians who promise lower taxes and more benefits then there's a good chance you'll get one of them and inflation.
Looking to gold to cure our problems may lead to catastrophy. The only solution is within ourselves.
Ttown, our new found existence of leisure and wealth began in the 1980's. We keep thinking we can live off the rest of the world while we ship our FRN's overseas in payment. Eventually those FRN's stockpiled in banks overseas will make their way home when we don't want them here. The dollar will have to fall lower to account for that. We've sucked off the world for the past 40 years and most of them are pretty fed up with it.
All the gold ever mined can fit into a large house. That's scarcer than most everything else. How high does a stack of $10 TRILLION one dollar FRN's go up? That's about how much of our currency is out there. You can buy all the gold in the world with 20% of that stack. Which would you rather have? Our national debt is over $7 TRILLION. Derivative bets made by major bankers and financial houses numbers around $250 TRILLION. I think I'll take the gold.
The only answer is to fix our political system and what we value. Until we stop producing "pork" out of congress things won't change. The amount of pork attached to Patriot Act 2 is mind-boggling.
<< <i>Brian - Why does gold even matter? I'm not asking from a numismatic perspective. I mean why does it matter at all? >>
Gold doesn't matter and it has no more value than the US Dollar. The only thing that it has is the perception of value. A perception that has been created by mankind over the centuries.
First of all I would like to wish everyone here a very happy and prosperous new year. I hope we all make some good investment decisions this coming year and buy lots of great coins at good prices.
Secondly I would like to offer the below example provided graciously by one of our Internet friends as what a trillion dollars is, and how absolutly CRAZY our Worlds paper financial system has become.
In the REAL World our paper money systems are real to us, they provide us with all of the things we require both mentally and physically to sustain our lives, but without a doubt the people running our currency systems are now just playing Monopoly with printing presses and computers. As you can see by the below example not only are the amounts of paper money shifted around the World unbelievable in terms of worth or value, these sums do not even exist except in the minds and computer systems of those creating these sums.
As has already been pointed out here perception is everything, but in my mind the collapse of the Worlds paper currency systems is no longer a theory, or a scenario, but rather a FACT in the making. It is now not a matter of, if we will have a Worldwide collapse in our currency systems, but when this will happen.
WHAT’S A TRILLION DOLLARS THESE DAYS? I read in the papers that America’s Gross Domestic Product for 2003 is estimated at $10.1 Trillion Dollars as reported by the U.S. Bureau of Economic Analysis. According to the Treasury Department’s Bureau of Public Debt, our National Debt will Exceed $7.0 Trillion Dollars sometime in 2004. According to the Washington Post the IRS took in $1.7 Trillion Dollars in 2001. (All numbers are the most recent I could find.) When you look at these numbers another way it looks like this:
Value of all goods and services in U.S. for 2003: $10.1 Trillion Size of National Debt sometime in 2004: 7.0 Trillion Amount collected by IRS in 2001: 1.7 Trillion
There are several interesting things about the trillions listed above. You rarely see them listed in a manner where they can be easily compared with each other. Nobody really knows how accurate they are.
Few minds on this entire planet can even begin to comprehend how much a trillion dollars really is.
Suppose you were at a railroad crossing waiting for a freight train to go by. Suppose every car was loaded with a million dollars worth of bananas. Now suppose that one carload of bananas went past every 3 seconds. That would be twenty million dollars worth of bananas going by every minute, or $1.2 billion dollars every hour, or $28.8 billion dollars every day! How long would you have to sit there before a trillion dollars worth of bananas went by? A) Four days? Over a week? C) Over a month? According to my calculator it would take 34.7 days or over a month!
How about the National Debt? At $7 trillion dollars you would have to sit there over 8 months! Maybe it would be easier to understand if we tried to visualize how long the train would have to be if each car was loaded with a million dollars worth of bananas. At 1 million bucks per car and if each car were 60 feet long the train would have to be 60 million feet long or 11,363 miles long! That would be more than three trains reaching from San Francisco to New York City! AND THAT’S JUST TO HOLD ONE TRILLION DOLLARS!
If there were a train with $7 trillion dollars (enough to pay of the National Debt) it would have to be 78,000 miles long! As you can see, the whole idea of comprehending seven trillion dollars is far beyond anything the imagination can handle. Actually, the idea is preposterous. There aren’t enough freight cars to hold that much money. What’s even more amazing is the probability that there isn’t $7 trillion dollars in cash stashed away anywhere on this planet!
According to the World Almanac there was only $564 billion (U.S.) in circulation in 2002 and $25 billion of that was in coins! Oddly, there were more $20 bills in circulation than $5’s and more $5’s than $10’s:
Number of $5 Bills in Circulation: 1,600,787,162 Number of $10 Bills in Circulation: 1,358,201,322 Number of $20 Bills in Circulation: 4,522,108,535
Remember Everett Dirksen? The Senator from Illinois? Back in the 1960’s he made a famous quote that seems appropriate to mention here. “A Billion here and a Billion there, and pretty soon you’re talking some real money!” Maybe so Senator, but we’ve reached the point where we can now say “A Trillion here and a Trillion there, and pretty soon you’re talking about a bunch of money that isn’t there.”
This is not good! I guess the smart money is getting out before the Tax man gets turned lose, and we are left holding the bag?
Are you thinking about leaving?
The top-earning 1% of US taxpayers pay one third (33.9%) of all federal individual income taxes collected.
The top-earning 1% of taxpayers (1.28 million taxpayers) earned 16.1% of the income.
The wealthy are being systematically backed into a corner by our government. They are paying double their share of taxes. They are facing frivolous lawsuits by the greedy, in ever growing numbers. Their businesses dealings are being saddled with onerous Patriot Act and Sarbanes-Oxley Act requirements that often take so much time and cost so much money that otherwise profitable deals end up costing money, if they happen at all. And, their property is being confiscated (forfeited) by the government at an ever increasing rate. Everything for which they have worked so hard, is now being threatened by the same government, whose job it is to protect citizens from just those types of abuses.
Should we then be surprised if the top-earning 1% of taxpayers, facing an untenable situation, take the only legal route left open to them, even if such a response threatens the very fabric of the US economy? I think not. Their response is really quite simple.
According to the US Census Bureau, as reported in the "2000 Statistical Yearbook of the Immigration and Naturalization Service" (6.2 MB download), by the Bureau of Citizenship and Immigration Services (BCIS), formerly the Immigration and Naturalization Service (INS), the wealthy are leaving the United States in record numbers. According to that report, in 2002, roughly 363,000 US citizens and permanent residents quietly left the United States permanently. Now granted, not all of those 363,000 expatriates were rich. But, think about it. How many do you think were poor?... How many do you think were even middle class?
Personally, I think that it would be reasonable to expect that 80 to 90 percent were, at least, somewhat wealthy. But, don't use my estimates. Use your own. Just keep in mind that poor people come to the United States, with their hand out, because of all the economic benefits that our government offers them, using our taxes. Why would the poor leave? In fact, for all of their protestations, even our middle class has it much better here than in any other country. The only class of people who can have it better in another country are those who are at least moderately wealthy - roughly, the top-earning ten percent (those who earn at least $92,663 a year).
Furthermore, that INS report indicates that this is the highest expatriation rate ever. Other data, such as records of citizenship and permanent residency applications at key foreign consulates, support these facts and some even indicate that the problem is much worse than suggested by the US Census Bureau. But what's worse, is that this exodus appears to have increased significantly since that report; most notably, since the enactment of the USA Patriot Act. It cannot be denied. The wealthiest Americans are leaving the USA for more wealth friendly climates at the highest rate ever. "So what? Let'em leave!"
One of the most absurd statements that I have heard, in response to the above facts is, "So what? Let'em leave." In fact, that attitude is actually contributing to the problem and making it much worse. You see, as a result of one of the laws that I will discuss below, designed to punish the wealthy for leaving, the wealthy are now taking ALL of their investment capital with them, when they leave. And, therein lies the true problem. When the wealthy leave, it creates severe problems for the rest of us, since we are the ones who have to make up the difference in taxes. Those who argue that Americans with the most money should be taxed at a higher rate will find themselves being taxed at a much higher rate, instead. If you are paying $5,000 in income tax today, then imagine paying an additional $2500 in taxes. If you are paying $25,000, then imagine paying an additional $12,500. If you are paying $100,000 - well if you are paying $100,000 in income tax, there's a good chance that you already have your bags packed and your second passport in hand, so you don't need to imagine anything.
As shown above, approximately 363,000 mostly wealthy Americans chose expatriation in 2002. That rate has been increasing at a rate significantly higher than the growth of wealth in this nation for many years. Even so, for our calculations, we will assume that the number of wealthy Americans that are leaving remains stable, which further assumes that Bush and Congress hold back any more legislation that the wealthy see as detrimental to themselves, their business or their rights. However, now that most of what has been deemed "Patriot II" has been passed by the lame duck Congress and even more ominous legislation is waiting in the wings.
What this means, is that if this rate of expatriation continues for only three more years, what appears to be a minor problem today, could turn out to be a catastrophe for the US economy tomorrow. Remember that in 2002, the top-earning 1% amounted to only 1.28 million taxpayers. You can see that it's quite possible that most of those people could be gone by the time Bush leaves office.
Of course, officials of the Internal Revenue Service and other federal agencies deny that expatriation of the wealthy is a problem. But, the government's actions belie their words. Consider this. If the government's claims are true, why did both Republicans and Democrats in Congress suddenly find it necessary to add an amendment to the Health Insurance Portability & Accountability Act of 1996 (HIPAA) (26 USC 877(a)(1)), that claims the right to tax expatriate Americans for 10 years after they renounce their US citizenship and are taxpaying citizens of another country, Do you see what this says? Think about this. The United States government is now claiming the right to tax foreigners. They want to tax people who live in, work in and pay taxes to another country.
Why then, did they follow-up that abominable law with the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), which modified the Immigration and Nationality Act (8 USC 1182(a)(10)(E)) to allow the government to permanently deny expatriates entry into the United States?
Just the American expatriates in those 10 cities alone, numbers almost two million and that's only the ones who have notified US authorities of their whereabouts, at that. In fact, there is very good reason to believe that less than one expatriate in 10 ever formally renounces or notifies.
not to mention that a house on either the gulf of Siam or South China Sea, known as a villa there, with marble floors, ensuite marble baths in each bedroom ( 4 ), german kitchen ( a good one like pogenpohl or alno), incredibly gorgeous views with a white powder sand beach, etc can be had for less than 250K ( or lease for less than a thousand a month including all utilities). Add in the cost of 2 full time staff @ 100 bucks a month each ( 6 full days per week, plus half of sunday), and also don't forget that even in the most dictatorial of countries being given essentially a free reign to do whatever you like, whenever you like ( they know you'll just leave otherwise and they don't want the money to leave!) and it becomes quite compelling to check it out. How do I know? Shhhh, just trust me, I know.
Just make sure you have all your financials set to self pay the monthly maintenence as the communications infrastructure is not quite up to the highest of quality ( yet, but getting better every year ) and it becomes very do able. After you have that taken care of, just pick a place to go and just keep truckin.
A friend/client of mine lives sort of like that, since the 1970's on a whole lot less, came back here in 1976, stayed for a week, left again and hasn't been back since. He'll be back next month for a look see and is not all that happy about it, but he told me the other day, it's only for 2 weeks so what the heck.
Gold doesn't matter and it has no more value than the US Dollar. The only thing that it has is the perception of value. A perception that has been created by mankind over the centuries.
This is an absurd statement. But infortunately it is believed by the majority of Americans. Gold always has had value. Our FRN only has had value since 1913. And even since 1913 it has lost 95% of its value. One dollar of gold in 1913 is still worth approximately 20X what it was then. The supposedly "worthless" gold has done its job to keep the FRN honest. That's what it's there for and why the Founding Fathers chose it as the foundation of our currency system. Bankers and financiers, along with our congress decided to insitute paper currency. Gold has value to the majority of the world's inhabitants and always will. Our FRN has only been around 90 years and won't be round forever. Gold will.
Let's not push our blinded perceptions on the rest of the world. Even the US knew the value of gold at one time. But since we took hold as the World's Reserve Currency in 1944 (good as gold), we've twisted the system into a unrecognizable mess. In 1974 Nixon recognized that our money wasn't as good as gold any more and wasn't going to give any more of it away in debt payments. At that point we had given away almost half or our gold reserves in 30 years. This was bankrupting the nation. Yes, gold meant plenty to Nixon and even Greenspan back in the 60's and 70's. And 30 years of continued brainwashing has most Americans convinced that gold has no role as a currency in the world. But looking at how gold has reacted inversely to every move of the dollar for the past 4 years proves that gold is once again currency and is keeping the FRN honest. Gold indeed has value. Just like an insurance policy. It's why central bankers aren't selling any more gold and why countries like Argentina are buying it back. The Chinese and Indians buy gold with their extra money. Don't tell them they should be putting it into paper currency where inflation is over 10%.
And by the way, the coins we collect have no value. It's just a perception created by collectors over the past 150 years. Sell them all and invest in Federal Reserve Notes as it is just a misconception that US dollar value is shrinking and coin values are rising.
Perception is everything. Gold, diamonds, real estate, oil, water, wood, rare coins, rare currency, rare collectibles, have been perceived as having value for thousands of years. Paper currency NEVER has. Show me one paper currency still in existence that has a long term track record of being a storehouse of traded value.
I also have to wonder why this discussion is taking place here and not on some other economy, investment or gold board where you can discuss this information with like minded individuals. From my perspective of investments, whenever someone invests in something they are apt to promote it any way they can. They want people to believe, like yourself, that what you are investing in is the greatest thing since the toaster. I'm guessing you feel the best way to get people to invest in PM's is by fear and that is why you plaster your negative articles here every chance you get.
I made my feelings known in my last message but I will expand. Gold is an excellent hedge against the dollar but at this level, I don't believe gold has much further to go. I believe $800 was a fluke and just as quickly as it went up, it came crashing down. Imaging the people who purchased gold as high as $800? They must have been hurting a few short months later.
Every market is cyclical, in every market their are longs and shorts, bulls and bears. For those of you who are bearish about the dollar and bullish on gold, why not take a peak at an opposing view? Why not do some research on what might be happening behind the scenes in support of the dollar.
No, the sky is falling, America will be bankrupt, our fiat money will not be worth the paper it is written on. I know your set in your ways and will only show your pessimism on the boards. The day of reckoning will be here soon and I believe America will be back on track.
<< <i>Gold doesn't matter and it has no more value than the US Dollar. The only thing that it has is the perception of value. A perception that has been created by mankind over the centuries. >>
<< <i>This is an absurd statement. But infortunately it is believed by the majority of Americans. Gold always has had value. >>
My statement was in response to Andy's question.
Of course gold has value, because people think it does. And thank-you for confirming my statement by this statement that you made. You call my statement absurd while you make the same observation.
<< <i>And by the way, the coins we collect have no value. It's just a perception created by collectors over the past 150 years. >>
Something has value only if there is a demand for it or people believe it has value. If they found huge new deposits of gold. What would happen to its value. Spices at one time had great value. No more.
Something has value only if there is a demand for it or people believe it has value. If they found huge new deposits of gold. What would happen to its value. Spices at one time had great value. No more. >>
A) Well substitute coins for gold and we'll see after this abomination at FUN won't we?
ISTANBUL, Turkey - Turkey launched a new currency Saturday by dropping six zeros from the old one, in a sign of progress in its decades-long struggle with inflation. But getting rid of old habits in a country where even a loaf of bread costs hundreds of thousands isn't likely to be easy.
No major problems were reported after the new Turkish lira went into circulation for the New Year, although credit cards were unusable for about five minutes while the transition was made.
Bank machines were also distributing the new currency, but few on the street appeared to have made the switch. The old notes will remain usable for a year, but the Central Bank predicts they will largely be out of circulation by the end of February.
Harun Fakcioglu, who works at a shop selling nuts and cigarettes in Istanbul, said customers hadn't started using the new money.
"That'll be 1.5 million," he said to a man who bought a bottle of cola. "People won't spend the new money right away. At first they'll be curious. But at least managing the books will be easier without the zeros."
Under the new system, 1,000,000 Turkish lira, about 75 cents, is equivalent to 1 new Turkish lira — the price of about three loaves of bread. The jackpot in Turkey's New Year lottery was announced Friday night in old lira — 15 trillion equivalent to $11.1 million.
The old currency boasted the world's largest bank note — 20,000,000 lira, worth only about $15.
The move comes as the government has made important progress in reducing inflation, which ran in the double digits for decades.
Prime Minister Recep Tayyip Erdogan withdrew the new currency from a bank machine early Saturday and said he was happy Turkey had been rescued from "the shame" of the old system.
He later went grocery shopping with the new money, and received change that included kurus, the Turkish equivalent of a cent, which had been dropped years ago because of inflation.
Turkey is attempting to stabilize its economy as it pushes for membership in the European Union (news - web sites), which agreed last month to open membership talks with the mainly Muslim country. Turkey has implemented a $16 billion International Monetary Fund (news - web sites)-backed austerity plan designed to help its economy recover from a crisis in 2001.
The country hopes the new currency will ease foreign investment. Introducing a new currency has been a Turkish goal for years, but the government was only able to move forward now that inflation is projected to run about 8 percent this year.
But there are challenges ahead. Turkish governments must avoid the type of excessive spending that was partly responsible for the inflation.
Erdogan spent Saturday quizzing citizens to make sure they understood the value of the new currency, as he handed them 5 new Turkish lira bills.
"How much is this worth in old lira?" he asked one woman.
Television channels and newspapers also explained the conversion to the public.
"The easiest formula," explained the mass-circulation Hurriyet, "is say 'new Turkish lira' instead of 'million.'"
Gold is an excellent hedge against the dollar but at this level, I don't believe gold has much further to go. I believe $800 was a fluke and just as quickly as it went up, it came crashing down. Imaging the people who purchased gold as high as $800? They must have been hurting a few short months later.
Each of us has their beliefs in which way gold is going. The dollar chart is extremely bearish and in general sloped steeply downward over the past year or two. It's a very, very BEARISH chart with currently no end in sight on the low end. That's what it says. There is lots of correcting still to be done via the price of gold. When the dollar chart shows a longer term reversal, then we can start talking about gold's demise. The NASDAQ to $5000 was a fluke. How many people are smarting after that one? Imagine the people who purchased ENRON stock? For what it's worth, gold and silver took a 6 year run to reach their highs in 1980. Not 6 months. One could have traded in and out on the trend lines for years. If you care to only look at the last 60 days in 1980 when all the lemmings decided to buy gold and got killed, that's your view. There is no such exponentially rising curve yet apparent in gold even though the dollar curve appears somewhat exponential in the down direction.
Every market is cyclical, in every market their are longs and shorts, bulls and bears. For those of you who are bearish about the dollar and bullish on gold, why not take a peak at an opposing view? Why not do some research on what might be happening behind the scenes in support of the dollar.
The dollar and stock markets have been bullish for 20 years. Yet gold has been moving up for only 3 years. I've looked closely at the opposing view and the only thing keeping the economy floated is foreign buying of our debt. That's the secret. And if it ends, the gig is up for us. As far as the dollar chart goes, it is about as bullish as the chart of ENRON in its last year of operation. Go compare them. The similarities are very striking. I cannot post one bullish support item for the dollar other than Bush and Snow stating they support a "strong" dollar polciy while letting it slide as it wants. If you can think of one positive economic factor in support of the dollar, please do. Stocks have always corrected for 10-15 years following a strong bull market that lasted decades. That part hasn't even yet begun to be apparent, but will be eventually. That's what the cycles tells us happens every time. This will be different? What current changes in our policies will support the dollar's recovery? So far not one has even been proposed, let alone been enacted.
No, the sky is falling, America will be bankrupt, our fiat money will not be worth the paper it is written on. I know your set in your ways and will only show your pessimism on the boards. The day of reckoning will be here soon and I believe America will be back on track.
America IS bankrupt. We have $50-75 TRILLION in payables due over the next 50-70 years and no way currently to pay it....or LIVE up to the agreements that were made to the american people. We owe $7.5 TRILLION as a country right now. Our inflows do not exceed our expenses. And yes, the days of accountability are coming. The fiat money IS worth only the paper it is written on. Why has Buffet put over $10 BILLION of Hathaway into foreign currencies? Could it be that he sees little value in the stock market and our US dollar? This is the same guy who has made billions in the stock market over decades. Why is he not so bullish now? The next step is what do we do about all this? If we didn't own the world's reserve currency and had a strong military we'd already be down and out for the count. The answer: is not to continue to spend $600 BILLION per year that we don't have. And not to attach ridiculous pork to bills like Patriot Act 2 that make things worse. Worse is that few if any of our congressman read Patriot Act 1 or 2 before voting for them. Let's start by making our politicians accountable to us and not special interests and corporations. These same senators and congressman that gave us Sarbanes-Oxley to hold corporations accountable do not hold themselves accountable for the same reckless behavior. It is about as two-faced as it gets.
Gold and gold coins are one of the biggest drivers in the coin market right now. What gold does, affects every collector, investor, dealer, etc. Sure, we could place this on the Open Forum where hardly anyone goes except to play games and boost their thread counts. But it has as much applicability here as do 2004 clad proof set prices.
I'm always open to see hard data as to why our current triple deficit and declining dollar will be fixed. I spend hours each day looking for supporting and opposing data. So far I see nothing that shows a dollar recovery in our near future (years). Just because something has gone down a lot doesn't mean it is due to go back up. That's silly. The dollar's decline, as well as all the world's fiat currencies, only support a longer run for gold, commodites and natural resources.
Tom, I wonder what the Turkish govt was spending all that money on to inflate the economy so terribly? It certainly wasn't on their people. Had they anchored their currency to precious metals or even the US dollar as the Chinese currently do, things wouldn't have been so severe on them.
The dollar was up for years during the '90's. It turned around. Now the dollar will be down for years and then it will go back up.
The US economy is still among the most productive in the world. We still have substantial resources and huge amounts of talent.
Most importantly the economy is improving. The economy is not dependent on any specific value of a dollar. So long as currency doesn't fluctuate wildly it has never had much affect on the economy. The only thing which can kill a fiat currency is a panic.
The actions of the government over the past seventy years are far more likely to cause a gradual erosion in the perception of the value of the fiat currency than a panic. This erosion is called inflation and has been severe over this time frame and will likely get worse before it gets better.
<< <i>Tom, I wonder what the Turkish govt was spending all that money on to inflate the economy so terribly? It certainly wasn't on their people. Had they anchored their currency to precious metals or even the US dollar as the Chinese currently do, things wouldn't have been so severe on them.
roadrunner >>
Roadrunner, just like the government here, have a little faith, it'll be "back on track soon" Hahahahaha!
These are interesting financial times. One thing for sure is that the US is very productive and astute. We graduate a number of people from colleges and universities and like little flagulates looking for an egg, they are very aggressive and they will find a way to succede and it will go on but it is evolving. I feel we will always be in front, on top...leading the way in productivity and innovation. You can throw a million indian labor pool at some outsourcing project but those million folks X 100 are less valuable than one Bill Gates or one Warren Buffett in terms of financial theory or technological advances and each of those folks will produce hundreds of thousands of very productive jobs. The US heavily dominates the Forbes list. I worry about the dominance of China but then reflect on the importance of free enterprise and freedom of independent thinking and how those will always lead any mass movements. No one is going to outwit, outsmart, outplay us any time soon. The financial markets in the US will not collapse because we are so very exponentially productive.
In the business world in the US now, everyone has to know word, xcel, and probably some specific software applications, and that's just to play. No one has a secretary or assistant anymore, it is about getting 4 or 5 job tasks out of each person as a basic place to start. The american worker is the most productive worker in the world and there are millions of them and millions more going to school.
Predictions for 05
Commodities
Oil will remain paramont in important and some nations will emerge and some will be cast into oblivion during the year by the way they handle oil. A must watch commodity. Look for the US to start developing all the reserves we have been nesting for the last decade.
Aluminum is a good test of mining/manufacturing/energy markets. As the price of aluminum moves, it will indicate the relative health of these three market segments.
Gold is in play. It will be manipulated, hyped, played like a $2 harmonica, and remain a very hot news item. Buying gold coins will cost more, they are going higher, they already are and there is no sign of relief. Can profit be found here...I guess but if you watch your populations and auction archives, you can keep a pretty good grip on where you need to be with this.
World stability...looking at things, it is easy to see increased state control, more intrusive security, more people watching...this will be an international growth industry but there will certainly be a lot of pressure from the religious zealots, third world dictators, wannabe rulers, and outright rebellion by the disenfranchised in areas of the world so this conflict will remain a very hot news item for 05.
The Dollar...I really am not a fan of holding cash right now but it is good to have some ready. Realestate is good but with interest going up and ARM's doing likewise, I see trouble here in '05 at a minimum, a thinning of the herd probably late in the year. I like realestate but it has to be a good piece at a good price. Stocks...you know, as much as everyone slams the industry, stocks still make money. Funds are good but having an individual stock account with a few stocks is a good thing and I like it. Gold is good too, your downside is very minimal and the upside is going to be good enough to recover your in and out fees so it does give you some insurance against a rising dollar since it tracks internationally.
I worry about the dominance of China but then reflect on the importance of free enterprise and freedom of independent thinking and how those will always lead any mass movements. No one is going to outwit, outsmart, outplay us any time soon. The financial markets in the US will not collapse because we are so very exponentially productive.
A) Define "free" and do you have any personal experience in Asia? At all? How can you compare what you don't know?
Outsmart, outplay, outwit who? Government? Cause as it stands, the people sure are about as ignorant as a walking potato in this regards.
I took a double eagle and a roll of silver eagles and asked my grandkids which one they wanted. Everyone wanted the gold. Even turning down dollars which they love to spend on junk. Now I have to get at least 5 more double eagles. I think the kids got it right!
1. Free, as in free enterprise?...you should know this one.
Asia experience...lived there for 2 years and going in august, studied/speak some chinese, study tai chi for 5 years, work with chinese engineers/architects and hear china stories from suppliers and contractors on a daily basis. Read what is available on china, have a chinese dentist and doctor so other than having a name like chen or hu, I suspect I'm ahead of the curve on china culture/information/current events. Here's a couple of nice website for general information, with some in english. This should help, scroll down. If you go to some of these sites you will get the general idea of what's going on over there.
2.Yes, outsmart, outwit, outplay. There is an economic war going on right now and the game is on. No, not outwit the populace, it is a banking/government/trade issue right now. Probably an article on this issue in every paper you have picked up in the last month.
1. Free, as in free enterprise?...you should know this one.
Asia experience...lived there for 2 years and going in august, studied/speak some chinese, study tai chi for 5 years, work with chinese engineers/architects and hear china stories from suppliers and contractors on a daily basis. Read what is available on china, have a chinese dentist and doctor so other than having a name like chen or hu, I suspect I'm ahead of the curve on china culture/information/current events. Here's a couple of nice website for general information, with some in english. This should help, scroll down. If you go to some of these sites you will get the general idea of what's going on over there.
2.Yes, outsmart, outwit, outplay. There is an economic war going on right now and the game is on. No, not outwit the populace, it is a banking/government/trade issue right now. Probably an article on this issue in every paper you have picked up in the last month. >>
Yes, "free" seems to be difficult for most people to understand. You don't really want to tell me how free it is here do you? I don't have all that much experience with "great china" but I DO have quite a bit of experience in Asia having lived there myself for a little longer than 2 years ( Vietnam, Thailand with periodic trips to China). Was married to a Chinese who was a lawyer ( top 2 at Peking U ) and arts instructor ( The original Tai Chi, I cannot remember the term but it went on into kung fu I think?) That mistake cost me nearly half a million!
I disagree with you and would state that Asia is kicking our butts, and in fact the future greatly favors them. Mostly because of the continuing erosion of freedom in this country, but other reasons as well such as costs of doing business which of course is an offshoot of that erosion. But there are other reasons as well, and no I'm not disagreeing with anyones "China" stories. I don't find the Chinese honorable in business. But ruthless, yes and smart. In general.
I would be "gleeful" if I could only "in-source" labor from Vietnam as a case in point to build a new house. Not just for the wages either, but for the work ethic.
Far as high tech, I own several e-commerce websites which are unrelated to the coin business as investments. Not a single web developer or programmer did the right thing in this country after I tried my best ( over 50K worth) to keep it here ( while I was living there) at the costs of 50 bucks an hour+. I outsourced them and they're doing great. Cost? Less than 10 bucks an hour.
Taxes in that communist country are about the same as the highest levels here now although not many people pay anywhere near those rates there as it's a cash society for those reasons among others. DSL is now a reality in Saigon and moving to the countryside soon.
I could write a book as I'm sure you can but this obviously isn't the medium in which to do so.
I wouldn't necessarily live there again on a full time basis but it sure was an adventure.
Chery Automobile Co., owned by the Chinese government, has signed a deal with auto entrepreneur Malcolm Bricklin and his privately held Visionary Vehicles LLC of New York to sell Chery's cars in United States, Visionary announced Sunday.
The companies aim to sell 250,000 vehicles in five models in their first year, 2007, with the goal of selling 1 million units of eight to 10 models by 2012, Visionary Vehicles chief of staff Paul Lambert said Sunday.
Lambert said the company will aim at selling vehicles well below the price of models now available while matching the quality of Japanese carmakers.
"America doesn't need another car company unless we can do it at 30 percent below market with quality and styling," Lambert said. "We've got to have a Toyota-Lexus-like quality."
The vehicles will carry 10-year, 100,000-mile warranties, Visionary said. No brand name has been selected. Visionary will invest $200 million in new Chery products for the U.S. market.
Bricklin was behind the selling of the low-cost Yugoslavia-made Yugo cars in the United States in the late 1980s and early '90s. His company, Yugo America Inc., collapsed in 1992 amid falling sales and production problems in war-torn Yugoslavia.
He also started importing Subaru cars from Japan in 1968. In 1974, he founded a short-lived Canadian company to build a gull-winged Bricklin SV-1 sports car.
Chery is China's eighth-largest automaker. It was founded in 1997 and sold about 90,000 vehicles in China in 2004.
South Korea (news - web sites)'s GM Daewoo Auto & Technology Co. sued Chery in December, accusing it of illegally copying one of its car models, the Chevrolet Spark.
The exclusive distribution agreement is for five new Chery models that would go on sale in January 2007 — a compact sedan, midsize sedan, car-sport utility crossover sedan, sport/luxury coupe and an SUV.
"The North American automobile market is complex, competitive and always changing," Chery President Yin Tongyao said in a written statement. "We are looking forward to working with Visionary Vehicles and taking advantage of Malcolm's expertise as we enter it."
Chery officials "are very ambitious people," Lambert said. "They have a tremendous desire to learn."
"The original Tai Chi, I cannot remember the term but it went on into kung fu I think."
yes, you are correct but it is actually called Chen Style. It gave rise to Shaolin and later spun off the yang, wu, and sun styles.
"... the future greatly favors them... I don't find the Chinese honorable in business. But ruthless, yes and smart. In general."
True and also correct. History favors china. The symbol for china in chinese writing is a rectangle with a hash through the middle of it. It signifies that china is the center of the world and that is their belief. Very similar to our manifest destiny mantle that we felt was our right. To us, we might call it domination but to them, it is their rightful place. Do not expect fair play.
Very interesting that you understand their passion for work and efficiency, few people do. They are well educated, massive in numbers, and are becoming consumers, big time. When the government begins collecting the taxes the businesses and individuals should pay then we will see some class politics start coming into play there and it must yield to free enterprise. Communism really has no place in a free enterprise system so china has some growing pains to experience before they become monsters but they are going to the moon it is still a question as to what kind of vehicle they will use.
“Goldsaint- I'm wondering if you meant to plagiarize or if you forgot quotes in your last two messages:”
CSCOIN, No Sir I did not mean to plagiarize someone else thoughts on these subjects and I think I mentioned that these were taken from the Internet in my opening statement. On the other hand although many of these folks posting their work on the Web saves us all a great deal of time, I really don’t consider using a calculator and quoting existing Government stats to be original thinking.
This thread has become pretty long and so I am sure you did not see my post where I stated I was not a Gold Bug having less than 1% of my net worth invested in that metal, that being said I am sure that will change this coming year.
In addition I posted this thread as an ongoing thread were we could all have a place to continue to post information about the Worlds economies and the money being printed. I do think that much of what is discussed here has a great deal to do with our hobby, and how we perceive spending our hard earned dollars. This information also gives us insight as to why very wealth people have been entering our hobby in droves driving up prices.
As RR and others have said here any of you on the other side of these issues are more than welcome to post information to the contrary, but like RR I can just not find much in the way of information showing what a great thing it is that we are running the printing presses day and night as well as creating trillions of dollars out of thin air with computers.
I think the article that MEG posted on Turkey was very interesting and wonder if we will eventually go through that here?
Some more "help" is on the way from the fed! On a slightly different note, The consignors at these manhattan telephone book auctions better pray for a quick turnaround in the gold market huh?
Tom
Business - Reuters
Fed: Rates Too Low to Curb Inflation
2 hours, 35 minutes ago Business - Reuters
By Glenn Somerville
WASHINGTON (Reuters) - The U.S. Federal Reserve (news - web sites) believed interest rates were too low to forestall inflation even after it raised borrowing costs in December, according to minutes of that meeting released on Tuesday.
"Even with this action, the current level of the real funds rate target remained below the level it most likely would need to reach to keep inflation stable and output at its potential," said the minutes of the Dec. 14 meeting, clearly pointing to more rate rises this year.
The central bank's wariness about inflation sent stock and Treasury bond prices lower as investors saw the Fed indicating higher borrowing costs ahead -- although economists did not see any change in the gradual pace of rate rises.
"A number of participants cited the recent depreciation of the dollar on foreign exchange markets, elevated energy costs and the possibility of a slowing in underlying productivity growth as factors tending to boost the upside risks to their inflation outlook," the minutes of the Dec. 14 meeting said.
But they added: "On net, they saw the risks to stable underlying inflation as still balanced."
At the Dec. 14 meeting, the Fed raised rates for a fifth time in the space of six months, up another quarter-percentage point to 2.25 percent. The U.S. central bank is widely expected to continue raising them when the FOMC next meets on Feb. 1-2.
Financial markets and economists concluded the minutes meant the Fed's policy of gradually bringing rates up from low current levels will continue for some time.
The minutes said some meeting participants also felt the prolonged stretch of cheap credit may have prompted "potentially excessive" risk-taking in financial markets -- citing narrow credit spreads, as well as an increase in initial stock offerings, mergers and speculative demand in the residential real estate market.
"Basically what they're saying is that given the rate in the bond market, people are taking excessive risk," said Christopher Low, chief economist at FTN Financial in New York.
"Some members said the economy is close to potential, which suggests we might soon see inflation pressures take hold. All in all, I'd say it's considerably more hawkish than what we've seen."
The minutes were the first released under a new policy adopted at the Dec. 14 gathering to speed up publication by issuing minutes three weeks after each of the eight-times-a-year meetings are held.
CLEARER RATE SIGNALS
The minutes said FOMC members felt faster release of the information "would help markets interpret economic developments and predict the course of interest rates."
"All that suggests they are on track to hike over the next several meetings," said Paresh Upadhyaya, a portfolio manager for Putnam Investments, adding this would likely bolster the dollar's value.
The minutes said "all members agreed that the FOMC statement ... should again indicate that policy accommodation could be removed at a pace that was likely to be measured," an indication the Fed likely would continue to raise rates in quarter percentage point increments.
Until now, the Fed has waited until after the following meeting to issue minutes, which market watchers say has limited their value as an insight into policy-makers' thinking while reducing their significance as a signaling device for the Fed.
OIL STILL HIGH
The minutes say that "a number of participants cited developments that could pose upside inflation risks."
Even though oil prices have moderated, they remain above levels in early 2004 and that, along with a cheaper dollar <=USD>, makes imports more costly, which could reduce competitive pressures on many industries.
One factor that has helped keep U.S. inflation low is a reluctance by companies to push prices up for fear of losing customers. So businesses have sought to keep profits up by trimming costs in other areas, but those savings are limited.
"A few participants also noted that uncertainty about the extent of resource slack in the economy was considerable and that it was possible the economy could soon be operating close to potential," the minutes said.
The minutes alluded to an increase in short-term rates on U.S. Treasury nominal and inflation-indexed securities as well, which the Fed worried "might be a warning sign that expectations were not as well anchored as they had been over the summer."
For all the concern, though, "participants generally expected that inflation would remain low in the foreseeable future."
Comments
<< <i>The Europeans are now starting to buy more US goods because of the weak dollar.
And what goods are they exactly ? And why would anyone import much of anything from us when there's China, Vietnam, etc?
Tom >>
We still make some machine tools and lots of farm products. Our lead in computers and
much high tech is evaporating but bio tech and pharmaceutical are still world class.
$7,586,648,348,842.95
Deeper than deep as in deep throat. ( man am I getting old)
When I put this on my website last august, we all owed about 22K in addition to what they are already stealing from us. That's every person in this country. How much is it now? Click on the debt counter on my homepage and see for yourself. It's a few hundred a month being added to our debt.
They are going to collect this from us one way or another.
And the sheep keep baaaaaaaahing while supporting the same or similar people in the same parties and expecting different results.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
How much foreign debt does the US, it's banks and investors own. Anybody know?
http://usinfo.state.gov/usa/infousa/trade/files/98-916.pdf
read into it as you will...just the facts sir.
Really funny
Tom
Shift to Foreign Stocks Sapping the Dollar
Mon Dec 20, 7:55 AM ET Top Stories - Los Angeles Times
By Tom Petruno Times Staff Writer
Already depressed by the nation's huge budget and trade deficits, the U.S. dollar is being undermined by American mutual fund investors: More of them are funneling money into foreign stock funds, a shift that hurts the greenback.
Thanks in large part to the dollar's weakness, returns on foreign shares overall have significantly outpaced U.S. market returns since 2002. Foreign stock mutual funds have gained 12% a year, on average, over the last three years, compared with a 4.9% average annual gain for domestic stock funds, according to Morningstar Inc
That performance edge is proving a big draw for American investors this year.
Net U.S. cash inflows to stock funds that invest overseas soared to a record $79.7 billion in the first 10 months, compared with $47.6 billion for all of 2003, according to estimates from fund tracker Financial Research Corp. in Boston.
A list of the 25 best-selling stock and bond mutual funds of 2004 includes five that primarily invest in foreign securities, Financial Research data show. By contrast, the 25 best-selling funds at this point last year all were domestic portfolios.
For financial advisors, investors' growing interest in foreign securities is a welcome change from the 1990s, when many found it difficult to get clients to diversify away from the then-hot U.S. market.
"They would say, 'Tell me again why I should be in foreign stocks,' " said Craig T. Cross, co-founder of investment advisory firm Halbert Hargrove in Long Beach.
Now, Cross said, "more and more clients" are asking about foreign investing.
That could add to the downward pressure on the U.S. currency's value against the euro, the yen and other major currencies. By investing more in foreign mutual funds, Americans in effect are selling dollars in favor of other currencies.
On their own, those cash flows aren't big enough to make or break the buck, experts say. Still, "they raise the hurdle for the dollar that much higher," said Daniel Katzive, a currency strategist at brokerage firm UBS in Stamford, Conn.
But a weaker dollar is exactly what many investors are betting on. As its value slides, foreign securities can automatically be worth more to U.S. investors.
To illustrate: When one euro was worth 86 U.S. cents in 2002, a European stock priced at 10 euros was worth $8.60 to a U.S. investor. Now, one euro is worth about $1.33. Even if that European stock is still worth just 10 euros in its home market, its value to a U.S. investor is $13.30 — 55% more than in 2002.
And if foreign stock prices rally in their native currencies, that plus the currency effect can provide hefty returns for American investors when the dollar is falling.
This year, for example, the main blue-chip German stock index, the DAX, is up a modest 5.5% in euro terms. But with the euro's appreciation against the dollar, the DAX's return for a U.S. investor is 11.4% — compared with a 7.4% price gain for the U.S. blue-chip Standard & Poor's 500 index.
The currency bonus has been even bigger this year for U.S. owners of shares traded in some smaller markets, including Poland, South Korea (news - web sites), New Zealand and South Africa.
Among broadly diversified stock mutual funds, the EuroPacific Growth fund, managed by Los Angeles-based American Funds group, has gained 15.4% for its investors this year. That compares with a 10.1% return for the average domestic stock fund, according to Morningstar.
The EuroPacific fund is the ninth-best-selling mutual fund this year. It took in a net $5.6 billion in new cash in the first 10 months, helping to lift its assets to nearly $50 billion, according to Financial Research.
By contrast, the $103-billion Vanguard 500 Index fund, which tracks the S&P 500, took in $3 billion in the first 10 months.
Also popular this year are so-called exchange-traded funds that invest abroad. ETFs are portfolios of stocks, similar to conventional mutual funds, but trade on the New York or American stock exchanges.
The iShares MSCI-EAFE fund, which trades on the American Stock Exchange, tracks the broad-based Morgan Stanley Capital International index of European, Australasian and Far Eastern stocks. The fund's price was $156.40 a share on Friday, up 14.3% since the start of the year.
Assets in foreign-stock ETFs now total $30.4 billion, more than double the $13.9 billion they held at the end of last year. Domestic-stock ETF assets have risen 31% in the same period, to $173.4 billion, according to the Investment Company Institute, the main trade group for mutual funds.
Yet as interest in foreign shares booms, market professionals caution investors about being seduced by recent returns.
"You're making a lot of bets when you buy a foreign stock fund," said Russ Kinnel, director of fund analysis at Morningstar in Chicago.
One obvious risk is that the dollar could suddenly strengthen. That would penalize American investors by shrinking the value of their foreign shares when translated from weaker currencies to dollars.
Many currency experts and investment strategists say the fundamental issues weighing on the dollar — including the nation's budget and trade deficits, and the risk that they will get bigger before they get smaller — make it more likely that the greenback is headed lower.
"Our view is that the dollar will keep falling in 2005," said Rebecca Patterson, a currency strategist at J.P. Morgan Chase & Co. in New York. She expects the euro to reach $1.38 next year and the dollar to fall to 94 yen, from about 104 yen now.
Even so, market pros concede that predicting currency trends is a dicey business.
Political risks also are a factor in foreign investing, particularly in funds that buy shares of companies in the developing world. For example, a political coup in one developing country could shake confidence in many others.
More worrisome, some experts say, is that a continuing decline in the dollar against the euro and the yen could trigger recessions in Europe and Japan by depressing demand for their exports. A weaker dollar makes foreign goods more expensive for U.S. consumers, and U.S. goods cheaper abroad.
If the net effect of a falling dollar was to cause recessions abroad, the declines in foreign stock markets might far exceed any benefit Americans accrue from the currency factor.
Kinnel and other advisors say the best reason to invest overseas is to provide a portfolio with broader diversification, long term, than U.S. securities alone can provide. In a mostly capitalist world, the U.S. has no monopoly on growth businesses, analysts note.
"Just going into a foreign fund because you think the dollar is going to go down for six months is a bad idea," Kinnel said. "You've got to go in for the right reason, which is diversification."
Rick Keller, a principal at the Keller Group Investment Management in Irvine, said he typically keeps about 20% of clients' total stock assets invested in foreign funds. He said he had anticipated that the dollar would weaken in the last few years but that the slide had exceeded his expectations.
Nonetheless, Keller said he remained bullish on foreign markets, and believed he could justify raising some clients' foreign-stock assets to 30% of their total in equities.
Considering the potential returns from stock price appreciation and the currency factor, "I'm probably still more optimistic on our foreign-stock allocation than on our U.S. allocation," he said.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
KISS= keep it simple
1. Real Estate:
Try to save enough money to pay rent when you retire if you don't own a home. During the refi boom of the last few years most borrowers went with a low fixed rate. Real Estate markets are local.
Only in the late 80s early 90s did prices go down, in other slow downs(last 40yrs) home prices were level for years.
2. Stocks:
Long term.
3. Money Market:
1% minus fees?
4. Gold:
Put 5% to 10% of liquid assets in gold (stocks, bullion, coins). Modern 1986 to 1990 $50 gold eagle (pf70) is a nice coin to hold and look at. Coins should be a hobby.
People are + or - on gold not =. Everyone takes their best guess on the future why not put many eggs as you can in your basket ?
Housing prices went down drastically following the great depression so there is an existing precedant in this century.
roadrunner
So why not try a different approach, simple print the money needed to run the government to begin with.
I wonder how the numbers would crunch if the Federal government installed a National sales tax of 5% and set rules for the states and cities to all have an additional 5% sales tax to run the local entities.
The federal government would pay for all schools, the military, and all other functions of the federal government. In addition it would print money to give out to the States for short falls, and for large infrastructure projects.
All taxes would be eliminated, no income tax, no gas tax, no state or local or school taxes. NO other taxes of any kind. It would calculated the amount of money paid into Social security, Medicare etc. add some interest and repay everyone that paid in the system. It would set a minimum amount to pay to the poor. It would print the money, make the payments, and turn the clock back two generations so everyone was now back on their own.
They would then down size all the government entities by passing a constitutional amendment so that the Federal government nor any state or city could pass any additional tax.
They would cancel the IRS, Medicare, medicade, all tax courts, and all other social programs. They would hire many of the out of work accountants to run governments at all levels of government and truly cut costs to a minimum.
All laid off government workers could go to work in the private sector since large companies would have huge amounts of capitol savings from the tax elimination.
The federal reserve would become the National lender to large companies wanting to expand, and would loan money to mortgage companies to finance housing, and there by would earn interest from all of us to help pay government expenses.
All government short falls in expenses would simple be printed and put into the economy.
As the years go by with our current system the amount of simply printed money to pay interest and shortfalls increases any way past the point of potential re-payment.
roadrunner
What seems ironic to me is that very few of us see this as a looming crisis.
We seem to be able to commit all our energy to Wars, terrorism, or solving other problems, but when it comes to salvaging the very engine of our country few want to pay any attention to that problem. Even the simple changes that Bush is promoting to let people save some of their own money for retirement already has a third of the country up in arms, and people have not even heard the plan.
It seems more and more obvious that in the end it will be every man and woman for themselves and the ones that are individually prepared will be the smart ones.
Flat taxers and sales taxers wake up.
Working people would have fewer kids, as your taxes kick the crap out of their buying power.
Welfare people keep churning out kids, what do they care - you pay their bills.
In the end your welfare class outgrows your ability to spend on them.
If only I had sold my home in 1980 and put the money in gold.
composed of some hard assets( gold, silver, rare coins home,art work, diamonds),
cash assets, (cash,stocks, bonds). Finally a good selection of guns and lots of ammunition.
Camelot
“Ted Butler, a well known silver analyst, says that the amount of above-ground gold in the world is four times MORE than the amount of silver, making silver, surprisingly, more rare than gold. And the big paradox is that gold is selling at historic multiples of silver, which is the exact opposite of what you would expect on the basis of sheer rarity.”
“According to the Office of the Comptroller of the Currency, the latest Derivatives Report shows that Total U.S. Commercial Bank Derivatives expanded to $84.18 trillion, which is up 26% from one year ago. 26% of $84.18 trillion is $21.88 trillion. So, the derivative positions in the banks increased by twice the entire GDP of the USA!”
“John Crudele at the NY Post has taken a look at how the U.S. Treasury posted, on its Web site, a financial statement for the USA, but done in the same way that private sector companies are required to keep their books. The reason that they did this was that they had to, as ”This method of accounting for the government’s finances, namely using Generally Accepted Accounting Principles (or GAAP), is now required by law.”
“Mr. Crudele paraphrases to note that “In the fiscal year 2004, government revenues were $1.9 trillion . . . The net cost of the government's operations was $2.5 trillion . . . Total revenues less operating costs resulted in a net operating cost of slightly more than $615 billion.” In short, he say that “the government ran a deficit of $615 billion,” which a little calculator work will convince you comes out to a cool $5,802 for every worker in the country who has a non-government job.”
This has me really confused! Surely this is somehow out of context.... no way can there be more physical gold than there is silver!! Perhaps he is referring to.... available silver...... that is available after all futures contracts, etc., are satisfied? Now that I could believe- there have been other discussions on this forum about the amount of silver contracts that are out there, that exceed the amount of physical silver to cover.
Most of this has been mined since the 1860's when production increased many fold.
At least some experts believe virtually this entire amount is still in existence. This seems
highly improbable based on the amount the average person "consumes". But if all these
numbers are right it's very difficult to believe there's less than 15 billion ounces though
most is "tied up" in museum items, film, x-rays, collectible coins and the like.
This would be a much higher amount than the amount of gold available though the gold
exists primarily as bullion.
Like most articles I read, I tend to look back at where the author stands and what the author has written in the past. I believe you do as well. Two newsletters that I like to read are Martin Murenbeeld and Paul Van Eeden. Both are not totally off their rockers with what they write and they are no all about doom and gloom, I invite you to look them up on the internet and read their bio. What you won't find from these guys are statements such as if you vote for John Kerry, you are a communist.
Gold has had a nice run, The sell off in December was year end tax selling and in the New Year we will most likely see an early spike in price. I don't speak with fact, just my opinion. I believe a move to $470 is not out of the realm of possibility but I do not believe that is a sustainable price and gold will range between $430 and $450 during 2005. From what I see, Gold is not a very good investment forward looking, those who got in under $350 made a good investment but at these levels, it is too risky.
The US Dollar has certainly seen better days, I definately won't debate that fact. Many people point to debt, the trade deficit, again I won't debate that. Many people believe the US is going downhill fast but I see a different point of view. I believe there are other reasons the dollar has been devalued and those reasons are mainly debt and the trade deficit.
I apologize if I came out as a PM hater, that's not the case. I'm just against zealots who try to force feed their doom and gloom on people. I'm retiring this persona and going back to coin talk. z-ya
With inflation considered, gold today at $435 is worth far less than gold was in 1982 at the same amount. Gold still has a far to go to reach equality with paper money. Central bankers ensured that from 1982-2002 that gold had a rough time of it. They have since lost their handle on things. They aren't selling anymore of their gold on the market to depress prices. Notice how Germany just balked at selling 500 tons after promising to do so. None of these banks want to be stupid and sell an appreciating asset for paper. Just look at how stupid they look now for selling thousands of tons of their gold over the past 15 years.
And as far as forward looking investments, bonds, stocks, major currencies, even real estate have little to offer and are quite overvalued by most any means of measurement you use. It's hard to find a mainstream "investment" that is not at near short term peak prices, gold included. What's a guy to do? For me, numismatic coins, gold, and silver. Other more mainstream choices, foreign currencies, oil, gas, water and other natural resource stocks, reverse index (short) stock funds. Conventional wisdom as preached by bankers and stock brokers is out the window. There will be more to follow with the like of Fannie Mae. They got caught with a measly $9 BILLION derivative accounting "oversight." We borrow that much from foreign banks in less than a week. There's probably well over $100 TRILLION in interest rate derivative bets in the world just waiting for a place to leak out when the scales tip too far in one direction.
roadrunner
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Debts used to be paid between major banks and countries in GOLD.
It was the only sure thing. Those bankers and countries didn't trust anyone else's currencies and they still don't today. In fact, many key debts today are still settled in gold. It was here 10,000 years ago and will be in another 10,000 years. While you cannot eat it, drink it, or make a house with it, it has been considered a store of value for as long as man became civilized. Who do you think has prospered by by the creation of the FED, the change in gold value by FDR in 1934, the Bretton Woods agreement in 1944, and then coming off the gold standard in 1974 (Nixon)? The answer: not you or me, and not Joe
Dirt.
If gold doesn't matter can you explain why a Federal Reserve Note does? The FRN isn't backed by anything. It is printed at will. It is a promise to pay a debt owed. It is not an ASSET. It is a DEBT. Every world leading nation in history has destroyed its currency over time? We are just the next one in line. Imagine if we were not the holder of the world's reserve currency at the moment. We'd be in worse shape then Argentina or Turkey.
Gold still matters. It always has to the movers and shakers of the world. Joe 6 pack has been brainwashed to not see the value in gold. Asians do not have that problem. They value gold and always have. They get gold as gifts and keep it in the family. It's as vital to their every day life as the FRN is to us. The whole world has gone fiat money crazy over the past 25 years. We are just beginning to see the net effects of that. It was a great 20 year ride for equities and FRN's. The next 10-20 years will be a nice ride for PM's and commodities/natural resources in general. We came off the gold standard because the world wanted our gold in payment rather than the currency we were printing to cover the "great society." Nixon was not going to give our REAL wealth away in payment. Hence we came off the gold standard and paid debts in paper. We didn't have enough gold anymore to pay all our debts. If gold had to back every US dollar printed you'd be looking at a gold price 100 times or more greater than today's.
In a nutshell, we came off the gold standard to transfer the wealth of our nation, and the world's wealth to those in charge of the currency and printing presses. A constant 3% inflation for 90 years has moved our money into the hands of the ever-wealthier. The bankers and financiers make money moving money. Gold was a major hindrance to such a scheme. WE didn't have much inflation up until the 1920's. The reason? Gold & silver standard and no fractional Federal Reserve system. Look what's happened since we came off it. 30 years of massive monetary inflation and asset bubbles. Gold keeps the bankers and politicians honest. That's why it matters.
roadrunner
<< <i>Brian - Why does gold even matter? I'm not asking from a numismatic perspective. I mean why does it matter at all? >>
There's really only one reason that gold matters- - it has value. Since it has value it is wealth.
It can be traded for money or for almost anything else. Scrap iron and metalurgical coke have
had a far better increase in value than gold in the last couple years. We could use steel for
money but few people could lift a hundred dollar bill. Even coke could be tagged for use as money
but you'd need a truck to do your grocery shopping. Of course the real problem with using steel,
coke, or gold as money is that when their value changes dramatically large numbers of people
starve because civilization will no longer function without stable money.
All curency has value only because people believe it does. Any currency can be devalued or in-
flated. If you want a currency that doesn't inflate the only way possible is to contain government.
If you vote for politicians who promise lower taxes and more benefits then there's a good chance
you'll get one of them and inflation.
Looking to gold to cure our problems may lead to catastrophy. The only solution is within ourselves.
All the gold ever mined can fit into a large house. That's scarcer than most everything else. How high does a stack of $10 TRILLION one dollar FRN's go up? That's about how much of our currency is out there. You can buy all the gold in the world with 20% of that stack. Which would you rather have? Our national debt is over $7 TRILLION. Derivative bets made by major bankers and financial houses numbers around $250 TRILLION. I think I'll take the gold.
The only answer is to fix our political system and what we value.
Until we stop producing "pork" out of congress things won't change.
The amount of pork attached to Patriot Act 2 is mind-boggling.
roadrunner
<< <i>Brian - Why does gold even matter? I'm not asking from a numismatic perspective. I mean why does it matter at all? >>
Gold doesn't matter and it has no more value than the US Dollar. The only thing that it has is the perception of value. A perception that has been created by mankind over the centuries.
First of all I would like to wish everyone here a very happy and prosperous new year. I hope we all make some good investment decisions this coming year and buy lots of great coins at good prices.
Secondly I would like to offer the below example provided graciously by one of our Internet friends as what a trillion dollars is, and how absolutly CRAZY our Worlds paper financial system has become.
In the REAL World our paper money systems are real to us, they provide us with all of the things we require both mentally and physically to sustain our lives, but without a doubt the people running our currency systems are now just playing Monopoly with printing presses and computers. As you can see by the below example not only are the amounts of paper money shifted around the World unbelievable in terms of worth or value, these sums do not even exist except in the minds and computer systems of those creating these sums.
As has already been pointed out here perception is everything, but in my mind the collapse of the Worlds paper currency systems is no longer a theory, or a scenario, but rather a FACT in the making. It is now not a matter of, if we will have a Worldwide collapse in our currency systems, but when this will happen.
WHAT’S A TRILLION DOLLARS THESE DAYS?
I read in the papers that America’s Gross Domestic Product for 2003 is estimated at $10.1 Trillion Dollars as reported by the U.S. Bureau of Economic Analysis. According to the Treasury Department’s Bureau of Public Debt, our National Debt will Exceed $7.0 Trillion Dollars sometime in 2004. According to the Washington Post the IRS took in $1.7 Trillion Dollars in 2001. (All numbers are the most recent I could find.)
When you look at these numbers another way it looks like this:
Value of all goods and services in U.S. for 2003: $10.1 Trillion
Size of National Debt sometime in 2004: 7.0 Trillion
Amount collected by IRS in 2001: 1.7 Trillion
There are several interesting things about the trillions listed above.
You rarely see them listed in a manner where they can be easily compared with each other.
Nobody really knows how accurate they are.
Few minds on this entire planet can even begin to comprehend how much a trillion dollars really is.
Suppose you were at a railroad crossing waiting for a freight train to go by. Suppose every car was loaded with a million dollars worth of bananas. Now suppose that one carload of bananas went past every 3 seconds. That would be twenty million dollars worth of bananas going by every minute, or $1.2 billion dollars every hour, or $28.8 billion dollars every day!
How long would you have to sit there before a trillion dollars worth of bananas went by? A) Four days?
How about the National Debt? At $7 trillion dollars you would have to sit there over 8 months! Maybe it would be easier to understand if we tried to visualize how long the train would have to be if each car was loaded with a million dollars worth of bananas. At 1 million bucks per car and if each car were 60 feet long the train would have to be 60 million feet long or 11,363 miles long! That would be more than three trains reaching from San Francisco to New York City! AND THAT’S JUST TO HOLD ONE TRILLION DOLLARS!
If there were a train with $7 trillion dollars (enough to pay of the National Debt) it would have to be 78,000 miles long! As you can see, the whole idea of comprehending seven trillion dollars is far beyond anything the imagination can handle. Actually, the idea is preposterous. There aren’t enough freight cars to hold that much money. What’s even more amazing is the probability that there isn’t $7 trillion dollars in cash stashed away anywhere on this planet!
According to the World Almanac there was only $564 billion (U.S.) in circulation in 2002 and $25 billion of that was in coins! Oddly, there were more $20 bills in circulation than $5’s and more $5’s than $10’s:
Number of $5 Bills in Circulation: 1,600,787,162
Number of $10 Bills in Circulation: 1,358,201,322
Number of $20 Bills in Circulation: 4,522,108,535
Remember Everett Dirksen? The Senator from Illinois? Back in the 1960’s he made a famous quote that seems appropriate to mention here. “A Billion here and a Billion there, and pretty soon you’re talking some real money!”
Maybe so Senator, but we’ve reached the point where we can now say “A Trillion here and a Trillion there, and pretty soon you’re talking about a bunch of money that isn’t there.”
Are you thinking about leaving?
The top-earning 1% of US taxpayers pay one third (33.9%) of all federal individual income taxes collected.
The top-earning 1% of taxpayers (1.28 million taxpayers) earned 16.1% of the income.
The wealthy are being systematically backed into a corner by our government. They are paying double their share of taxes. They are facing frivolous lawsuits by the greedy, in ever growing numbers. Their businesses dealings are being saddled with onerous Patriot Act and Sarbanes-Oxley Act requirements that often take so much time and cost so much money that otherwise profitable deals end up costing money, if they happen at all. And, their property is being confiscated (forfeited) by the government at an ever increasing rate. Everything for which they have worked so hard, is now being threatened by the same government, whose job it is to protect citizens from just those types of abuses.
Should we then be surprised if the top-earning 1% of taxpayers, facing an untenable situation, take the only legal route left open to them, even if such a response threatens the very fabric of the US economy? I think not. Their response is really quite simple.
According to the US Census Bureau, as reported in the "2000 Statistical Yearbook of the Immigration and Naturalization Service" (6.2 MB download), by the Bureau of Citizenship and Immigration Services (BCIS), formerly the Immigration and Naturalization Service (INS), the wealthy are leaving the United States in record numbers. According to that report, in 2002, roughly 363,000 US citizens and permanent residents quietly left the United States permanently. Now granted, not all of those 363,000 expatriates were rich. But, think about it. How many do you think were poor?... How many do you think were even middle class?
Personally, I think that it would be reasonable to expect that 80 to 90 percent were, at least, somewhat wealthy. But, don't use my estimates. Use your own. Just keep in mind that poor people come to the United States, with their hand out, because of all the economic benefits that our government offers them, using our taxes. Why would the poor leave? In fact, for all of their protestations, even our middle class has it much better here than in any other country. The only class of people who can have it better in another country are those who are at least moderately wealthy - roughly, the top-earning ten percent (those who earn at least $92,663 a year).
Furthermore, that INS report indicates that this is the highest expatriation rate ever. Other data, such as records of citizenship and permanent residency applications at key foreign consulates, support these facts and some even indicate that the problem is much worse than suggested by the US Census Bureau. But what's worse, is that this exodus appears to have increased significantly since that report; most notably, since the enactment of the USA Patriot Act. It cannot be denied. The wealthiest Americans are leaving the USA for more wealth friendly climates at the highest rate ever.
"So what? Let'em leave!"
One of the most absurd statements that I have heard, in response to the above facts is, "So what? Let'em leave." In fact, that attitude is actually contributing to the problem and making it much worse. You see, as a result of one of the laws that I will discuss below, designed to punish the wealthy for leaving, the wealthy are now taking ALL of their investment capital with them, when they leave. And, therein lies the true problem. When the wealthy leave, it creates severe problems for the rest of us, since we are the ones who have to make up the difference in taxes.
Those who argue that Americans with the most money should be taxed at a higher rate will find themselves being taxed at a much higher rate, instead. If you are paying $5,000 in income tax today, then imagine paying an additional $2500 in taxes. If you are paying $25,000, then imagine paying an additional $12,500. If you are paying $100,000 - well if you are paying $100,000 in income tax, there's a good chance that you already have your bags packed and your second passport in hand, so you don't need to imagine anything.
As shown above, approximately 363,000 mostly wealthy Americans chose expatriation in 2002. That rate has been increasing at a rate significantly higher than the growth of wealth in this nation for many years. Even so, for our calculations, we will assume that the number of wealthy Americans that are leaving remains stable, which further assumes that Bush and Congress hold back any more legislation that the wealthy see as detrimental to themselves, their business or their rights. However, now that most of what has been deemed "Patriot II" has been passed by the lame duck Congress and even more ominous legislation is waiting in the wings.
What this means, is that if this rate of expatriation continues for only three more years, what appears to be a minor problem today, could turn out to be a catastrophe for the US economy tomorrow. Remember that in 2002, the top-earning 1% amounted to only 1.28 million taxpayers. You can see that it's quite possible that most of those people could be gone by the time Bush leaves office.
Of course, officials of the Internal Revenue Service and other federal agencies deny that expatriation of the wealthy is a problem. But, the government's actions belie their words. Consider this. If the government's claims are true, why did both Republicans and Democrats in Congress suddenly find it necessary to add an amendment to the Health Insurance Portability & Accountability Act of 1996 (HIPAA) (26 USC 877(a)(1)), that claims the right to tax expatriate Americans for 10 years after they renounce their US citizenship and are taxpaying citizens of another country,
Do you see what this says? Think about this. The United States government is now claiming the right to tax foreigners. They want to tax people who live in, work in and pay taxes to another country.
Why then, did they follow-up that abominable law with the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), which modified the Immigration and Nationality Act (8 USC 1182(a)(10)(E)) to allow the government to permanently deny expatriates entry into the United States?
What cites are the rich choosing?
• Mexico City, Mexico 441,680
• Toronto, Canada 250,000
• London, England 200,000
• Vancouver, Canada 200,000
• Tijuana, Mexico 196,000
• Frankfurt, Germany 138,815
• Guadalajara, Mexico 111,100
• Calgary, Canada 105,000
• Manila, Philippines 105,000
• Santo Domingo, Dominican Republic 82,000
Just the American expatriates in those 10 cities alone, numbers almost two million and that's only the ones who have notified US authorities of their whereabouts, at that. In fact, there is very good reason to believe that less than one expatriate in 10 ever formally renounces or notifies.
not to mention that a house on either the gulf of Siam or South China Sea, known as a villa there, with marble floors, ensuite marble baths in each bedroom ( 4 ), german kitchen ( a good one like pogenpohl or alno), incredibly gorgeous views with a white powder sand beach, etc can be had for less than 250K ( or lease for less than a thousand a month including all utilities). Add in the cost of 2 full time staff @ 100 bucks a month each ( 6 full days per week, plus half of sunday), and also don't forget that even in the most dictatorial of countries being given essentially a free reign to do whatever you like, whenever you like ( they know you'll just leave otherwise and they don't want the money to leave!) and it becomes quite compelling to check it out. How do I know? Shhhh, just trust me, I know.
Just make sure you have all your financials set to self pay the monthly maintenence as the communications infrastructure is not quite up to the highest of quality ( yet, but getting better every year ) and it becomes very do able. After you have that taken care of, just pick a place to go and just keep truckin.
A friend/client of mine lives sort of like that, since the 1970's on a whole lot less, came back here in 1976, stayed for a week, left again and hasn't been back since. He'll be back next month for a look see and is not all that happy about it, but he told me the other day, it's only for 2 weeks so what the heck.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
This is an absurd statement. But infortunately it is believed by the majority of Americans. Gold always has had value. Our FRN only has had value since 1913. And even since 1913 it has lost 95% of its value. One dollar of gold in 1913 is still worth approximately 20X what it was then. The supposedly "worthless" gold has done its job to keep the FRN honest. That's what it's there for and why the Founding Fathers chose it as the foundation of our currency system.
Bankers and financiers, along with our congress decided to insitute paper currency. Gold has value to the majority of the world's inhabitants and always will. Our FRN has only been around 90 years and won't be round forever. Gold will.
Let's not push our blinded perceptions on the rest of the world. Even the US knew the value of gold at one time. But since we took hold as the World's Reserve Currency in 1944 (good as gold), we've twisted the system into a unrecognizable mess. In 1974 Nixon recognized that our money wasn't as good as gold any more and wasn't going to give any more of it away in debt payments. At that point we had given away almost half or our gold reserves in 30 years. This was bankrupting the nation. Yes, gold meant plenty to Nixon and even Greenspan back in the 60's and 70's. And 30 years of continued brainwashing has most Americans convinced that gold has no role as a currency in the world. But looking at how gold has reacted inversely to every move of the dollar for the past 4 years proves that gold is once again currency and is keeping the FRN honest. Gold indeed has value. Just like an insurance policy. It's why central bankers aren't selling any more gold and why countries like Argentina are buying it back. The Chinese and Indians buy gold with their extra money. Don't tell them they should be putting it into paper currency where inflation is over 10%.
And by the way, the coins we collect have no value. It's just a perception created by collectors over the past 150 years. Sell them
all and invest in Federal Reserve Notes as it is just a misconception that US dollar value is shrinking and coin values are rising.
Perception is everything. Gold, diamonds, real estate, oil, water, wood, rare coins, rare currency, rare collectibles, have been perceived as having value for thousands of years. Paper currency NEVER has. Show me one paper currency still in existence that has a long term track record of being a storehouse of traded value.
roadrunner
Goldsaint- I'm wondering if you meant to plagiarize or if you forgot quotes in your last two messages:
What is a million dollars worth
Tick Tick Tick, The Economic Time Bomb
I also have to wonder why this discussion is taking place here and not on some other economy, investment or gold board where you can discuss this information with like minded individuals. From my perspective of investments, whenever someone invests in something they are apt to promote it any way they can. They want people to believe, like yourself, that what you are investing in is the greatest thing since the toaster. I'm guessing you feel the best way to get people to invest in PM's is by fear and that is why you plaster your negative articles here every chance you get.
I made my feelings known in my last message but I will expand. Gold is an excellent hedge against the dollar but at this level, I don't believe gold has much further to go. I believe $800 was a fluke and just as quickly as it went up, it came crashing down. Imaging the people who purchased gold as high as $800? They must have been hurting a few short months later.
Every market is cyclical, in every market their are longs and shorts, bulls and bears. For those of you who are bearish about the dollar and bullish on gold, why not take a peak at an opposing view? Why not do some research on what might be happening behind the scenes in support of the dollar.
No, the sky is falling, America will be bankrupt, our fiat money will not be worth the paper it is written on. I know your set in your ways and will only show your pessimism on the boards. The day of reckoning will be here soon and I believe America will be back on track.
<< <i>Gold doesn't matter and it has no more value than the US Dollar. The only thing that it has is the perception of value. A perception that has been created by mankind over the centuries. >>
<< <i>This is an absurd statement. But infortunately it is believed by the majority of Americans. Gold always has had value. >>
My statement was in response to Andy's question.
Of course gold has value, because people think it does. And thank-you for confirming my statement by this statement that you made. You call my statement absurd while you make the same observation.
<< <i>And by the way, the coins we collect have no value. It's just a perception created by collectors over the past 150 years. >>
Something has value only if there is a demand for it or people believe it has value. If they found huge new deposits of gold. What would happen to its value. Spices at one time had great value. No more.
A) Well substitute coins for gold and we'll see after this abomination at FUN won't we?
Hehehehe
Rgrds
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Tom
Turkey Launches New Currency
Sun Jan 2, 9:13 AM ET Business - AP
By JAMES C. HELICKE, Associated Press Writer
ISTANBUL, Turkey - Turkey launched a new currency Saturday by dropping six zeros from the old one, in a sign of progress in its decades-long struggle with inflation. But getting rid of old habits in a country where even a loaf of bread costs hundreds of thousands isn't likely to be easy.
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No major problems were reported after the new Turkish lira went into circulation for the New Year, although credit cards were unusable for about five minutes while the transition was made.
Bank machines were also distributing the new currency, but few on the street appeared to have made the switch. The old notes will remain usable for a year, but the Central Bank predicts they will largely be out of circulation by the end of February.
Harun Fakcioglu, who works at a shop selling nuts and cigarettes in Istanbul, said customers hadn't started using the new money.
"That'll be 1.5 million," he said to a man who bought a bottle of cola. "People won't spend the new money right away. At first they'll be curious. But at least managing the books will be easier without the zeros."
Under the new system, 1,000,000 Turkish lira, about 75 cents, is equivalent to 1 new Turkish lira — the price of about three loaves of bread. The jackpot in Turkey's New Year lottery was announced Friday night in old lira — 15 trillion equivalent to $11.1 million.
The old currency boasted the world's largest bank note — 20,000,000 lira, worth only about $15.
The move comes as the government has made important progress in reducing inflation, which ran in the double digits for decades.
Prime Minister Recep Tayyip Erdogan withdrew the new currency from a bank machine early Saturday and said he was happy Turkey had been rescued from "the shame" of the old system.
He later went grocery shopping with the new money, and received change that included kurus, the Turkish equivalent of a cent, which had been dropped years ago because of inflation.
Turkey is attempting to stabilize its economy as it pushes for membership in the European Union (news - web sites), which agreed last month to open membership talks with the mainly Muslim country. Turkey has implemented a $16 billion International Monetary Fund (news - web sites)-backed austerity plan designed to help its economy recover from a crisis in 2001.
The country hopes the new currency will ease foreign investment. Introducing a new currency has been a Turkish goal for years, but the government was only able to move forward now that inflation is projected to run about 8 percent this year.
But there are challenges ahead. Turkish governments must avoid the type of excessive spending that was partly responsible for the inflation.
Erdogan spent Saturday quizzing citizens to make sure they understood the value of the new currency, as he handed them 5 new Turkish lira bills.
"How much is this worth in old lira?" he asked one woman.
Television channels and newspapers also explained the conversion to the public.
"The easiest formula," explained the mass-circulation Hurriyet, "is say 'new Turkish lira' instead of 'million.'"
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Each of us has their beliefs in which way gold is going. The dollar chart is extremely bearish and in general sloped steeply downward over the past year or two. It's a very, very BEARISH chart with currently no end in sight on the low end. That's what it says.
There is lots of correcting still to be done via the price of gold. When the dollar chart shows a longer term reversal, then we can start talking about gold's demise. The NASDAQ to $5000 was a fluke. How many people are smarting after that one? Imagine the people who purchased ENRON stock? For what it's worth, gold and silver took a 6 year run to reach their highs in 1980. Not 6 months. One could have traded in and out on the trend lines for years. If you care to only look at the last 60 days in 1980 when all the lemmings decided to buy gold and got killed, that's your view. There is no such exponentially rising curve yet apparent in gold even though the dollar curve appears somewhat exponential in the down direction.
Every market is cyclical, in every market their are longs and shorts, bulls and bears. For those of you who are bearish about the dollar and bullish on gold, why not take a peak at an opposing view? Why not do some research on what might be happening behind the scenes in support of the dollar.
The dollar and stock markets have been bullish for 20 years. Yet gold has been moving up for only 3 years. I've looked closely at the opposing view and the only thing keeping the economy floated is foreign buying of our debt. That's the secret. And if it ends, the gig is up for us. As far as the dollar chart goes, it is about as bullish as the chart of ENRON in its last year of operation. Go compare them.
The similarities are very striking. I cannot post one bullish support item for the dollar other than Bush and Snow stating they support a "strong" dollar polciy while letting it slide as it wants. If you can think of one positive economic factor in support of the dollar, please do. Stocks have always corrected for 10-15 years following a strong bull market that lasted decades. That part hasn't even yet begun to be apparent, but will be eventually. That's what the cycles tells us happens every time. This will be different? What current changes in our policies will support the dollar's recovery? So far not one has even been proposed, let alone been enacted.
No, the sky is falling, America will be bankrupt, our fiat money will not be worth the paper it is written on. I know your set in your ways and will only show your pessimism on the boards. The day of reckoning will be here soon and I believe America will be back on track.
America IS bankrupt. We have $50-75 TRILLION in payables due over the next 50-70 years and no way currently to pay it....or LIVE up to the agreements that were made to the american people. We owe $7.5 TRILLION as a country right now. Our inflows do not exceed our expenses. And yes, the days of accountability are coming. The fiat money IS worth only the paper it is written on. Why has Buffet put over $10 BILLION of Hathaway into foreign currencies?
Could it be that he sees little value in the stock market and our US dollar? This is the same guy who has made billions in the stock market over decades. Why is he not so bullish now? The next step is what do we do about all this? If we didn't own the world's reserve currency and had a strong military we'd already be down and out for the count. The answer: is not to continue to spend $600 BILLION per year that we don't have. And not to attach ridiculous pork to bills like Patriot Act 2 that make things worse. Worse is that few if any of our congressman read Patriot Act 1 or 2 before voting for them. Let's start by making our politicians accountable to us and not special interests and corporations. These same senators and congressman that gave us Sarbanes-Oxley to hold corporations accountable do not hold themselves accountable for the same reckless behavior. It is about as two-faced as it gets.
Gold and gold coins are one of the biggest drivers in the coin market right now. What gold does, affects every collector, investor, dealer, etc. Sure, we could place this on the Open Forum where hardly anyone goes except to play games and boost their thread counts.
But it has as much applicability here as do 2004 clad proof set prices.
I'm always open to see hard data as to why our current triple deficit and declining dollar will be fixed. I spend hours each day looking for supporting and opposing data. So far I see nothing that shows a dollar recovery in our near future (years). Just because something has gone down a lot doesn't mean it is due to go back up. That's silly. The dollar's decline, as well as all the world's fiat currencies, only support a longer run for gold, commodites and natural resources.
roadrunner
roadrunner
The US economy is still among the most productive in the world. We still have substantial resources and huge amounts of talent.
Most importantly the economy is improving. The economy is not dependent on any specific value of a dollar. So long as currency doesn't fluctuate wildly it has never had much affect on the economy. The only thing which can kill a fiat currency is a panic.
The actions of the government over the past seventy years are far more likely to cause a gradual erosion in the perception of the value of the fiat currency than a panic. This erosion is called inflation and has been severe over this time frame and will likely get worse before it gets better.
This isn't rocket science.
...though it's certainly less predictable.
<< <i>Tom, I wonder what the Turkish govt was spending all that money on to inflate the economy so terribly? It certainly wasn't on their people. Had they anchored their currency to precious metals or even the US dollar as the Chinese currently do, things wouldn't have been so severe on them.
roadrunner >>
Roadrunner, just like the government here, have a little faith, it'll be "back on track soon" Hahahahaha!
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
In the business world in the US now, everyone has to know word, xcel, and probably some specific software applications, and that's just to play. No one has a secretary or assistant anymore, it is about getting 4 or 5 job tasks out of each person as a basic place to start. The american worker is the most productive worker in the world and there are millions of them and millions more going to school.
Predictions for 05
Commodities
Oil will remain paramont in important and some nations will emerge and some will be cast into oblivion during the year by the way they handle oil. A must watch commodity. Look for the US to start developing all the reserves we have been nesting for the last decade.
Aluminum is a good test of mining/manufacturing/energy markets. As the price of aluminum moves, it will indicate the relative health of these three market segments.
Gold is in play. It will be manipulated, hyped, played like a $2 harmonica, and remain a very hot news item. Buying gold coins will cost more, they are going higher, they already are and there is no sign of relief. Can profit be found here...I guess but if you watch your populations and auction archives, you can keep a pretty good grip on where you need to be with this.
World stability...looking at things, it is easy to see increased state control, more intrusive security, more people watching...this will be an international growth industry but there will certainly be a lot of pressure from the religious zealots, third world dictators, wannabe rulers, and outright rebellion by the disenfranchised in areas of the world so this conflict will remain a very hot news item for 05.
The Dollar...I really am not a fan of holding cash right now but it is good to have some ready. Realestate is good but with interest going up and ARM's doing likewise, I see trouble here in '05 at a minimum, a thinning of the herd probably late in the year. I like realestate but it has to be a good piece at a good price. Stocks...you know, as much as everyone slams the industry, stocks still make money. Funds are good but having an individual stock account with a few stocks is a good thing and I like it. Gold is good too, your downside is very minimal and the upside is going to be good enough to recover your in and out fees so it does give you some insurance against a rising dollar since it tracks internationally.
Overall, I am optimistic for '05.
Denny Crane
A) Define "free" and do you have any personal experience in Asia? At all? How can you compare what you don't know?
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
1. Free, as in free enterprise?...you should know this one.
Asia experience...lived there for 2 years and going in august, studied/speak some chinese, study tai chi for 5 years, work with chinese engineers/architects and hear china stories from suppliers and contractors on a daily basis. Read what is available on china, have a chinese dentist and doctor so other than having a name like chen or hu, I suspect I'm ahead of the curve on china culture/information/current events. Here's a couple of nice website for general information, with some in english. This should help, scroll down. If you go to some of these sites you will get the general idea of what's going on over there.
http://www.sdcc.com/
http://www.kn.pacbell.com/wired/China/hotlist.html
2.Yes, outsmart, outwit, outplay. There is an economic war going on right now and the game is on. No, not outwit the populace, it is a banking/government/trade issue right now. Probably an article on this issue in every paper you have picked up in the last month.
<< <i>earlygold...all good questions
1. Free, as in free enterprise?...you should know this one.
Asia experience...lived there for 2 years and going in august, studied/speak some chinese, study tai chi for 5 years, work with chinese engineers/architects and hear china stories from suppliers and contractors on a daily basis. Read what is available on china, have a chinese dentist and doctor so other than having a name like chen or hu, I suspect I'm ahead of the curve on china culture/information/current events. Here's a couple of nice website for general information, with some in english. This should help, scroll down. If you go to some of these sites you will get the general idea of what's going on over there.
http://www.sdcc.com/
http://www.kn.pacbell.com/wired/China/hotlist.html
2.Yes, outsmart, outwit, outplay. There is an economic war going on right now and the game is on. No, not outwit the populace, it is a banking/government/trade issue right now. Probably an article on this issue in every paper you have picked up in the last month. >>
Yes, "free" seems to be difficult for most people to understand. You don't really want to tell me how free it is here do you? I don't have all that much experience with "great china" but I DO have quite a bit of experience in Asia having lived there myself for a little longer than 2 years ( Vietnam, Thailand with periodic trips to China). Was married to a Chinese who was a lawyer ( top 2 at Peking U ) and arts instructor ( The original Tai Chi, I cannot remember the term but it went on into kung fu I think?) That mistake cost me nearly half a million!
I disagree with you and would state that Asia is kicking our butts, and in fact the future greatly favors them. Mostly because of the continuing erosion of freedom in this country, but other reasons as well such as costs of doing business which of course is an offshoot of that erosion. But there are other reasons as well, and no I'm not disagreeing with anyones "China" stories. I don't find the Chinese honorable in business. But ruthless, yes and smart. In general.
I would be "gleeful" if I could only "in-source" labor from Vietnam as a case in point to build a new house. Not just for the wages either, but for the work ethic.
Far as high tech, I own several e-commerce websites which are unrelated to the coin business as investments. Not a single web developer or programmer did the right thing in this country after I tried my best ( over 50K worth) to keep it here ( while I was living there) at the costs of 50 bucks an hour+. I outsourced them and they're doing great. Cost? Less than 10 bucks an hour.
Taxes in that communist country are about the same as the highest levels here now although not many people pay anywhere near those rates there as it's a cash society for those reasons among others. DSL is now a reality in Saigon and moving to the countryside soon.
I could write a book as I'm sure you can but this obviously isn't the medium in which to do so.
I wouldn't necessarily live there again on a full time basis but it sure was an adventure.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
That's going to be tough to compete with if it's true.
Tom
Chinese-Made Cars to Be Sold in U.S.
1 hour, 29 minutes ago Business - AP
By DAVID N. GOODMAN, Associated Press Writer
DETROIT - The man who brought the Yugo and Subaru to this country has a new project — becoming the first mass importer of low-cost Chinese-made cars.
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Chery Automobile Co., owned by the Chinese government, has signed a deal with auto entrepreneur Malcolm Bricklin and his privately held Visionary Vehicles LLC of New York to sell Chery's cars in United States, Visionary announced Sunday.
The companies aim to sell 250,000 vehicles in five models in their first year, 2007, with the goal of selling 1 million units of eight to 10 models by 2012, Visionary Vehicles chief of staff Paul Lambert said Sunday.
Lambert said the company will aim at selling vehicles well below the price of models now available while matching the quality of Japanese carmakers.
"America doesn't need another car company unless we can do it at 30 percent below market with quality and styling," Lambert said. "We've got to have a Toyota-Lexus-like quality."
The vehicles will carry 10-year, 100,000-mile warranties, Visionary said. No brand name has been selected. Visionary will invest $200 million in new Chery products for the U.S. market.
Bricklin was behind the selling of the low-cost Yugoslavia-made Yugo cars in the United States in the late 1980s and early '90s. His company, Yugo America Inc., collapsed in 1992 amid falling sales and production problems in war-torn Yugoslavia.
He also started importing Subaru cars from Japan in 1968. In 1974, he founded a short-lived Canadian company to build a gull-winged Bricklin SV-1 sports car.
Chery is China's eighth-largest automaker. It was founded in 1997 and sold about 90,000 vehicles in China in 2004.
South Korea (news - web sites)'s GM Daewoo Auto & Technology Co. sued Chery in December, accusing it of illegally copying one of its car models, the Chevrolet Spark.
The exclusive distribution agreement is for five new Chery models that would go on sale in January 2007 — a compact sedan, midsize sedan, car-sport utility crossover sedan, sport/luxury coupe and an SUV.
"The North American automobile market is complex, competitive and always changing," Chery President Yin Tongyao said in a written statement. "We are looking forward to working with Visionary Vehicles and taking advantage of Malcolm's expertise as we enter it."
Chery officials "are very ambitious people," Lambert said. "They have a tremendous desire to learn."
___
On the Net:
Visionary Vehicles LLC: http://www.vvcars.com
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
yes, you are correct but it is actually called Chen Style. It gave rise to Shaolin and later spun off the yang, wu, and sun styles.
"... the future greatly favors them... I don't find the Chinese honorable in business. But ruthless, yes and smart. In general."
True and also correct. History favors china. The symbol for china in chinese writing is a rectangle with a hash through the middle of it. It signifies that china is the center of the world and that is their belief. Very similar to our manifest destiny mantle that we felt was our right. To us, we might call it domination but to them, it is their rightful place. Do not expect fair play.
Very interesting that you understand their passion for work and efficiency, few people do. They are well educated, massive in numbers, and are becoming consumers, big time. When the government begins collecting the taxes the businesses and individuals should pay then we will see some class politics start coming into play there and it must yield to free enterprise. Communism really has no place in a free enterprise system so china has some growing pains to experience before they become monsters but they are going to the moon it is still a question as to what kind of vehicle they will use.
CSCOIN,
No Sir I did not mean to plagiarize someone else thoughts on these subjects and I think I mentioned that these were taken from the Internet in my opening statement. On the other hand although many of these folks posting their work on the Web saves us all a great deal of time, I really don’t consider using a calculator and quoting existing Government stats to be original thinking.
This thread has become pretty long and so I am sure you did not see my post where I stated I was not a Gold Bug having less than 1% of my net worth invested in that metal, that being said I am sure that will change this coming year.
In addition I posted this thread as an ongoing thread were we could all have a place to continue to post information about the Worlds economies and the money being printed.
I do think that much of what is discussed here has a great deal to do with our hobby, and how we perceive spending our hard earned dollars. This information also gives us insight as to why very wealth people have been entering our hobby in droves driving up prices.
As RR and others have said here any of you on the other side of these issues are more than welcome to post information to the contrary, but like RR I can just not find much in the way of information showing what a great thing it is that we are running the printing presses day and night as well as creating trillions of dollars out of thin air with computers.
I think the article that MEG posted on Turkey was very interesting and wonder if we will eventually go through that here?
Tom
Business - Reuters
Fed: Rates Too Low to Curb Inflation
2 hours, 35 minutes ago Business - Reuters
By Glenn Somerville
WASHINGTON (Reuters) - The U.S. Federal Reserve (news - web sites) believed interest rates were too low to forestall inflation even after it raised borrowing costs in December, according to minutes of that meeting released on Tuesday.
AFP
Slideshow: Greenspan & The Federal Reserve
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"Even with this action, the current level of the real funds rate target remained below the level it most likely would need to reach to keep inflation stable and output at its potential," said the minutes of the Dec. 14 meeting, clearly pointing to more rate rises this year.
The central bank's wariness about inflation sent stock and Treasury bond prices lower as investors saw the Fed indicating higher borrowing costs ahead -- although economists did not see any change in the gradual pace of rate rises.
"A number of participants cited the recent depreciation of the dollar on foreign exchange markets, elevated energy costs and the possibility of a slowing in underlying productivity growth as factors tending to boost the upside risks to their inflation outlook," the minutes of the Dec. 14 meeting said.
But they added: "On net, they saw the risks to stable underlying inflation as still balanced."
At the Dec. 14 meeting, the Fed raised rates for a fifth time in the space of six months, up another quarter-percentage point to 2.25 percent. The U.S. central bank is widely expected to continue raising them when the FOMC next meets on Feb. 1-2.
Financial markets and economists concluded the minutes meant the Fed's policy of gradually bringing rates up from low current levels will continue for some time.
The minutes said some meeting participants also felt the prolonged stretch of cheap credit may have prompted "potentially excessive" risk-taking in financial markets -- citing narrow credit spreads, as well as an increase in initial stock offerings, mergers and speculative demand in the residential real estate market.
"Basically what they're saying is that given the rate in the bond market, people are taking excessive risk," said Christopher Low, chief economist at FTN Financial in New York.
"Some members said the economy is close to potential, which suggests we might soon see inflation pressures take hold. All in all, I'd say it's considerably more hawkish than what we've seen."
The minutes were the first released under a new policy adopted at the Dec. 14 gathering to speed up publication by issuing minutes three weeks after each of the eight-times-a-year meetings are held.
CLEARER RATE SIGNALS
The minutes said FOMC members felt faster release of the information "would help markets interpret economic developments and predict the course of interest rates."
"All that suggests they are on track to hike over the next several meetings," said Paresh Upadhyaya, a portfolio manager for Putnam Investments, adding this would likely bolster the dollar's value.
The minutes said "all members agreed that the FOMC statement ... should again indicate that policy accommodation could be removed at a pace that was likely to be measured," an indication the Fed likely would continue to raise rates in quarter percentage point increments.
Until now, the Fed has waited until after the following meeting to issue minutes, which market watchers say has limited their value as an insight into policy-makers' thinking while reducing their significance as a signaling device for the Fed.
OIL STILL HIGH
The minutes say that "a number of participants cited developments that could pose upside inflation risks."
Even though oil prices have moderated, they remain above levels in early 2004 and that, along with a cheaper dollar <=USD>, makes imports more costly, which could reduce competitive pressures on many industries.
One factor that has helped keep U.S. inflation low is a reluctance by companies to push prices up for fear of losing customers. So businesses have sought to keep profits up by trimming costs in other areas, but those savings are limited.
"A few participants also noted that uncertainty about the extent of resource slack in the economy was considerable and that it was possible the economy could soon be operating close to potential," the minutes said.
The minutes alluded to an increase in short-term rates on U.S. Treasury nominal and inflation-indexed securities as well, which the Fed worried "might be a warning sign that expectations were not as well anchored as they had been over the summer."
For all the concern, though, "participants generally expected that inflation would remain low in the foreseeable future."
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