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Zimbabwe was an exageration. Also, with a system where information on monetary policy is increasingly suppressed (lack of M3 for example since 2005), it takes a few years for the public to realize that the emporer has no clothes.
I wouldn't be surprised if the Fed convinces government to scare folks into surrendering gold/silver and taxing/restricting foreign investment in preparation for what's to come. Lots of spin can make it seem legit. "For the good of the nation", "To help the poor", etc.
Schiff is definitely a wee bit too arrogant, but few can deny most of his predictions have come true. I'm quite convinced that Schiff (in agreement with Marc Faber and Jim Rogers) believe that rampant inflation will be the end game to complete the prophecy. Whether we teeter into hyperinflation is anyone's guess, but on a daily basis my money is increasingly on that bet.
Something I've been thinking about...what's going to happen to the currency etf's, gold etf's, and electronic means to stash your money in something other than dollars....that wasn't there in the 30's, or in other times when the govt confiscated gold or restricted for investment, ownership.
Say you threw all your money into the fxe or fxy tomorrow, the euro or the yen to ride out the bad times. And used a simple etrade or schwab account.
I can see trying to go to the bank and exchange your money, and they won't let you do it and give you some new rule or regulation. Or they close all physical branches or who knows what. Or they check/restrict your money at the airport. The no toothpaste or nail clipers turns into...no gold coins, no silver.
Something I've been thinking about...what's going to happen to the currency etf's, gold etf's, and electronic means to stash your money in something other than dollars....that wasn't there in the 30's, or in other times when the govt confiscated gold or restricted for investment, ownership.
Say you threw all your money into the fxe or fxy tomorrow, the euro or the yen to ride out the bad times. And used a simple etrade or schwab account.
I can see trying to go to the bank and exchange your money, and they won't let you do it and give you some new rule or regulation. Or they close all physical branches or who knows what. Or they check/restrict your money at the airport. The no toothpaste or nail clipers turns into...no gold coins, no silver.
I would be very careful to buy any gold etf. I would either have it physical in my possession, in a non-US based safety deposit box, or on foreign soil in a Westernized country.
Also, one should hedge and open foreign bank accounts as opposed to dumping it in scottrade or some other online broker.
snippet:
"The chairman of China’s sovereign wealth fund said on Wednesday that China had no plans for further investments in Western financial institutions, nor did it have any plans to “save” the world through economic policies.
..
Asked whether China might pursue economic policies aimed at saving the world, Mr. Lou said that the country’s leaders had a narrower focus. “China can only save herself because the scale of China is still rather small,” he said, adding that while China has more people than any other country, economic output is still low enough that the Chinese economy is not yet big enough to have a big effect on the global economy."
That is why Bernake announced the Fed would be buying Treasuries..because no one else will.
I would be very careful to buy any gold etf. I would either have it physical in my possession, in a non-US based safety deposit box, or on foreign soil in a Westernized country.
Also, one should hedge and open foreign bank accounts as opposed to dumping it in scottrade or some other online broker.
I don't own any currency or commodity etf's. Not sure how to play it yet.
Physical gold in a non US safety deposit box....been thinking about it. But then I wonder if it's so bad, I have to have gold stored somewhere else...what's the point of being here?
I think a bigger risk for most normal people in the next 3-5 years is managing debt, credit, being dependent on high credit lines to live...that's a bigger risk to them than the dollar declining or gold hoarding.
SHANGHAI: China's central bank is considering hiking increasing gold reserves nearly seven-fold to spread risks in its huge foreign exchange holdings, state media reported on Wednesday. Beijing is mulling a move to increase its reserves to 4,000 tonnes from the current 600 tonnes. It did not provide further details.
SHANGHAI: China's central bank is considering hiking increasing gold reserves nearly seven-fold to spread risks in its huge foreign exchange holdings, state media reported on Wednesday. Beijing is mulling a move to increase its reserves to 4,000 tonnes from the current 600 tonnes. It did not provide further details.
Something I've been thinking about...what's going to happen to the currency etf's, gold etf's, and electronic means to stash your money in something other than dollars....that wasn't there in the 30's, or in other times when the govt confiscated gold or restricted for investment, ownership.
Say you threw all your money into the fxe or fxy tomorrow, the euro or the yen to ride out the bad times. And used a simple etrade or schwab account.
I can see trying to go to the bank and exchange your money, and they won't let you do it and give you some new rule or regulation. Or they close all physical branches or who knows what. Or they check/restrict your money at the airport. The no toothpaste or nail clipers turns into...no gold coins, no silver.
Last I heard the Chinese save a huge amount of their income. I betcha they would love to use that income to consume the same iDork gadgets that have been shipped here for quite some time. Some of the Scandanavian countries that are running a budget surplus might want them as well.
Obviously, there is something wrong with this story from even first sight. So, the Chinese have a bunch of savings, but they would love to use that income to consume the same gadgets we do. So.....ahem....why aren't they?
There are certainly cultural issues at play here, but there are other things that explain their high savings right. The Chinese don't have a mature financial system and hence don't have access to credit in the same way Americans (or Europeans etc) do. This requires a higher savings rate. So comparing the savings rate in the US vs China isn't very telling. Much of that savings can't be spent on gadgets.
For example, say auto loans only became available to the wealthy in the US. This would cause an increase in the savings rate because people would have to save for a car instead of taking out an auto loan. But, the increased savings rate doesn't translate into an increased number of cars purchased. As far as economic activity goes, both situations are pretty much the same.
....So, the Chinese have a bunch of savings, but they would love to use that income to consume the same gadgets we do. So.....ahem....why aren't they?
Mainly because the goods for export are too expensive for the domestic market. The price you will pay means that we do not get the same goods here. Only the rich Chinese would be able to afford the for-export goods and they choose not to pay those inflated prices. There are a lot of made-in-china goods that I can buy in the UK, but cannot find easily here in Beijing.
The manafacturers exporting goods to other countries do not want (or cannot afford to) to sell their goods internally. This is why so many toy factories are going down - because the poor in China are still in the habit of allowing their kids to play with simple toys that they make out of everyday items.
Yes, of course this is changing as people get wealthier in the cities, but the gap between rich and poor is still enormous and this is where the problem will arise if the authorities do not get the financial formulas correct.
People save because there is not much of a state system of health and pension. There is a fledgling one, but people still have to rely on their savings after they retire or not retire at all. Many people invest in real estate and the (one) son perhaps gets given an apartment to live in when he gets married. Old peoples homes are not common at all, as the daughter/son is expected to look after the parents when they get older.
Looking at a wider economic picture, some people say there are some mega-rich families who stand to gain a lot from world economic depression. All Conspiracy Theory rubbish perhaps?
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