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Author: Subject: If the dollar crashes ...

Extreme Peach





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  posted on 12/5/2008 at 10:56 AM
... what in the heck are we supposed to do? if our money is worthless, how will we pay for food, gas, etc. and what will we be paid in?

There has been talk forums about the dollar crashing, but not much in terms of what the heck to do if it actually does. So i hope we can all debate about what we should/could do if the dollar crashes.

also, JPB has recommended buying swiss francs. while they might have worth, who in America is going to accept them as legal currency in exchange for the goods we need?

 

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Zen Peach



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  posted on 12/5/2008 at 12:04 PM
Imho...The first signs of the dollar crashing..... will be terrible inflation...

Gas @ $25-50 a gallon

Milk, eggs, bread, flour @ 20X the usual cost

 

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Zen Peach



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  posted on 12/5/2008 at 12:12 PM
I found this on a site for the value of the dollar today....it's updated during the day.

The Dollar Vs World Currencies

1 USD = AUD (1.552562)
1 USD = CAD (1.250051)
1 USD = CNY (6.848208)
1 USD = EUR (0.789582)
1 USD = GBP (0.681385)
1 USD = JPY (92.500034)
1 USD = MXN (13.493134)
1 USD = NZD (1.878994)
1 USD = ZAR (10.280027)

Vs Commodities

Barrel of Oil $43.67
Ounce of Gold $773.25
Important Figures
Inflation % 3.66
Unemployment % 6.50

 

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  posted on 12/5/2008 at 12:13 PM
That being said, I'm still stocking my pantry with necessities. If things go well, it's all stuff I need anyway that I can use.

 

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True Peach



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  posted on 12/5/2008 at 12:33 PM
... fence in my yard, buy me a handful of chickens and my first ever firearm. This might seem strange ... if I didn't live in Alabama!

 

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Zen Peach



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  posted on 12/5/2008 at 12:36 PM
quote:
... fence in my yard, buy me a handful of chickens and my first ever firearm. This might seem strange ... if I didn't live in Alabama!


Damn Rusty, what kinda chickens you gonna buy if you gotta shoot them ?

 

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Zen Peach



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  posted on 12/5/2008 at 12:39 PM
quote:
I found this on a site for the value of the dollar today....it's updated during the day.

The Dollar Vs World Currencies

1 USD = AUD (1.552562)
1 USD = CAD (1.250051)
1 USD = CNY (6.848208)
1 USD = EUR (0.789582)
1 USD = GBP (0.681385)
1 USD = JPY (92.500034)
1 USD = MXN (13.493134)
1 USD = NZD (1.878994)
1 USD = ZAR (10.280027)

Vs Commodities

Barrel of Oil $43.67
Ounce of Gold $773.25
Important Figures
Inflation % 3.66
Unemployment % 6.50

No Swiss Franc?

 

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Sublime Peach



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  posted on 12/5/2008 at 01:07 PM
It's better to have what you don't need than to need what you don't have. I would have at least a 3 month supply of food. Nothing that needs eggs, cheese, or milk. I would get medical supplies and vitamins. I would have some type of protection as well. Just look at the Walmart incident and you can see what happens when mob mentallity takes over. You don't want to be out there when the shiit hits the fan looking for anything. Look at it this way, do you have everything you could want TODAY if the dollar crashed tomorrow? If not, get it. Even if you have to put it on a credit card, get it. Don't be left out in the cold. And, don't tell ANYONE what you have. You will need it all and don't want to be caught with people knocking on your door looking for your stuff.

As for the Swiss franc. It is money. You won't be able to cash it in at the grocery store, but any bank that deals in foreign currency will be glad to trade it in, especially if the dollar tanks. Use the franc as a hedge, you don't need to go "all in" on it. Simply have $1000 in Swiss Francs on hand. When the dollar crashes, would you rather be getting 2 cents on the dollar for your cash, tradeable for the new currency, or Swiss Francs, that will probably rise in value when the dollar crashes? Once the new currency is established, trade the francs in for the new currency. You will be very happy you had Swiss Francs on hand. The Swiss Franc is the 4th largest currency traded in the world and they will NEVER give up their currency, even when the G20 all convert over to the new world currency. Just check out www.FOREX.com for the latest exchange rates.

 

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Peach Master



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  posted on 12/5/2008 at 01:08 PM

If the dollar crashes...
Lets all hope it has an airbag.


 

Universal Peach



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  posted on 12/5/2008 at 01:11 PM
Those numbers are about right, maybe a little weak, IMHO.

Here's how it fits together--
As the dollar gets stronger, imports get cheaper, which is good re inflation. On the other hand, it means goods produced here cost more abroad.

When the dollar is weaker, imports cost more. But our products cost less in other countries.

So it's a trade-off. It's like that in all countries.
China has eaten everybody's lunch by keeping its currency unnaturally low for a number of years. But it resulted in pretty bad inflation for its people. So they let it trend upward for maybe 18 months before the olympics. But their economy has fallen off a cliff, and they have weakened it again to help their manufacturers.

The world has just been through a period where the Euro stayed unnaturally high for 3-4 years. This was due to the European Central Bank keeping rates too high, focusing on fighting inflation, not paying attention to economic growth. As a result, world-traded commodities, such as oil, copper, wheat, etc., etc. were priced extremely high around the world, as it took lots of dollars, yen, Canadian dollars, etc. to make one Euro. In the last 5-6 months, the Euro has taken a dive. From 160 (dollars per 100 Euro) to 125.
And commodity prices have followed.

Bottom line--a weak dollar means high import costs (i.e. oil, etc.) but it is great for U.S. companies that sell abroad. Companies like Caterpillar, Goodyear, Proctor and Gamble, Dell.
As the dollar has strengthened, it has hurt international sales of these companies, because their stuff costs more abroad (takes more Canadian dollars to equal a U.S. dollar)
and imports from competitors become cheaper.

So it's a trade-off. I think we're pretty good where we are. Much weaker, and oil goes back up. Much stronger, and our exports drop. But it's not cut and dried. Economic stuff rarely is.

Finally, I almost never come to the Whipping Post. I come over occasionally to check the MT thread, recently noticed a topic about how it works when the Treasury borrows from the FED, knew a little about the topic, as I did this one. If my comments are out of line, or not how things work in this forum, just let me know and I'll go away.

 
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Zen Peach



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  posted on 12/5/2008 at 01:23 PM
Troll Seriously, your input is appreciated Randy. It's an open forum free for all and everyone is welcome.

 

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Zen Peach



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  posted on 12/5/2008 at 01:28 PM
Enjoyed your thoughtful, level input, Randy!

 

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Extreme Peach



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  posted on 12/5/2008 at 03:39 PM
Gold is the only place to be when the dollar crashes. I keep saying that you should turn your dollars in for Gold. Gold goes up when the dollar goes down. It is plain and simple.
 

Maximum Peach



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  posted on 12/5/2008 at 08:13 PM
Currency crashes have occurred before; Germany at one point before the end of WW II, Russia in the early 90's. I'm sure there are other examples.

When a point is reached where a government's Treasury or Finance officials have to devalue the currency, then that's a crash.

Hyper-inflation is a harbinger of a crash. But perhaps even before that; if you're a debitor nation who depends upon others buying your debt, and they stop doing so, you know the chances are good that big trouble isn't far behind.

That's what's a bit scary about that G20 conference a while back. The dollar is somewhat imune to these actions right now because it's the world's reserve currency. That isn't going to last forever. Many other countries would like an option to having everything being pegged to the dollar. When the Euro was ridding high, there was a lot of sentiment about getting off the dollar. That's calmed a bit for now because of a world-wide crisis. But all this deficit bailout spending will eventually catch up and create that problem again. If the rest of the world's economy wakes up before ours does, you may see that pressure re-emerge in real earnest. At that point, something like the G20 is going to figure a way off the dollar standard.

It's not easy to move the world to a new financial standard, and will probably take years to happen. But if it does, watch out. America's standing in the world, and the condition of the dollar, will never be the same afterward.

 

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Zen Peach



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  posted on 12/5/2008 at 10:14 PM
quote:
... what in the heck are we supposed to do? if our money is worthless, how will we pay for food, gas, etc. and what will we be paid in?

There has been talk forums about the dollar crashing, but not much in terms of what the heck to do if it actually does. So i hope we can all debate about what we should/could do if the dollar crashes.

also, JPB has recommended buying swiss francs. while they might have worth, who in America is going to accept them as legal currency in exchange for the goods we need?



The first thing is to investigate banks in other countries and find out if you can open some accounts there, and put some money there. Maybe you can send a copy of your passport or some other suitable identification. Then you wire transfer money into those accounts from your bank here. (You can't transfer more than $4,999 at one time or else by law US banks have to notify the feds; and you DON'T want that). Just be casual about it. If they ask you questions tell them, you are planning for your retirement, or planning on vacationing there and you'd like to get a place there. You can't wait till our money is worthless to try to exchange it, it's too late then. Check out what is going on in other countries, read their newspapers, do searches on the internet, talk to people on forums, all the info. is out there, it just takes time to do this, but you have to cover your butt. You HAVE to because if our government does go under, it will be bad, real bad, in some places maybe even nationwide, they will have to institute martial law to control angry people. When this stuff starts to happen, you want to be able to get on a plane and get out of here, with our airports you will not be able to stash lots of money in a suitcase and take it with you. You need to be able to just take some money you have stashed in your house, book a flight, get on a plane and go live free somewhere.

Don't panic, just start slowly, but make a commitment to develop your plan.

 

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Zen Peach



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  posted on 12/5/2008 at 11:11 PM
This is all assuming people have money to buy Swiss francs and open off shore accounts. I know a lot of people living from one check to the next without any kind of cushion on which to fall back. Your every day musicians, not the 'stars' with the big tours and big bucks, are notoriously lacking in financial security. I worry about them because they're our friends.

 

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Maximum Peach



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  posted on 12/6/2008 at 03:12 AM
No need for Swiss francs - buy gold American Eagle coins. They'll be much easier to transact if the stuff hits the fan.

 

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Sublime Peach



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  posted on 12/6/2008 at 11:01 AM
Gold is directly tied to the dollar. If the dollar crashes, who will have the money to buy your gold? I don't know any banks that accept gold, but many that will exchange Swiss Francs, becuase it IS money. In fact, the buying power of the Franc will be HUGE if when the dollar crashes. The USA drives the price of gold, if the dollar crashes, who will be buying this gold at outrageous prices? No one. It is simple supply and demand. There will be plenty of supply and no demand. In fact, during the great depression, the government made it illegal to own gold. They set the exchange rate and forced people to sell it back to them at an outrageously low price. Gold is NOT the answer.

 

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Maximum Peach



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  posted on 12/6/2008 at 01:27 PM
quote:
Gold is directly tied to the dollar. If the dollar crashes, who will have the money to buy your gold? I don't know any banks that accept gold, but many that will exchange Swiss Francs, becuase it IS money. In fact, the buying power of the Franc will be HUGE if when the dollar crashes. The USA drives the price of gold, if the dollar crashes, who will be buying this gold at outrageous prices? No one. It is simple supply and demand. There will be plenty of supply and no demand. In fact, during the great depression, the government made it illegal to own gold. They set the exchange rate and forced people to sell it back to them at an outrageously low price. Gold is NOT the answer.
This only makes continued sense JPB if we think in terms of the dollar still existing. In a serious crash, where the value of that paper is nil, gold then becomes far more acceptable - in fact far more desireable because everyone knows it has value.

Why is the Swiss franc valuable? After all, it's only paper too. It has higher perceived value because the Swiss offer to back up the franc with a certain amout of gold. So in times of real currency trouble, gold is the most accepted form of payment, bar none.

Now you are right about government intervention regarding transactions in gold. They usually don't want people undermining their worthless paper systems with something of real value, like gold, so they make it illegal. But this is only done to facilitate their needs, ie: have everybody accept paper as legal tender. However, that doesn't mean that gold has no value.

If so, why are gold coins priced right now at levels much higher than the actual commodity price of gold? Gold is about $750/oz right now, but an ounce of gold coins is going for more than $900/oz. The reason is demand. Demand is so high that the traders and mints can't keep up, so they can charge a premium.

Those who know and have the resources are running to gold as fast as they can for security. Even if the scenario you describe occurs, and government outlaws transactions in gold, they'd still have to offer an exchange of gold to whatever the new currency is. Now in an extreme case, they may also demand that citizens turn in their gold, but depending upon where you have it stored (Swiss bank safety deposit box, coffee cans burried in the back yard?), you can probably find ways not to loose everything you have until a new currency system is settled, proven, and accepted.

In a currency crisis, gold will always have both value and options. You can't always be sure of the same with paper currency, although one like the Swiss franc with its backing in gold, should fare much better.

 

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Zen Peach



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  posted on 12/6/2008 at 07:19 PM
For the past twenty or so years I've watched as certain factions have pursued an agenda that goes against the Americaan way. I saw this happening with the 'Greed is Good' 80s under Reagan. I'm not blaming anyone in our government, no presidential blame directly, but there has still been a lot slide down a slippery slope.

Bush, in my opinion, was incredibly unprepared and unqualified for the presidency and by not knowing what to do and by letting others make decisions based on their self interests, this country has gone down the tubes more from neglect and from policy.

I see the big money people making even more money culminating with a total raid on the treasury in the form of the bailout of wall street.....without any real accounting, even, of the money received. I wouldn't feel any differently if someone stuck a gun in my face and told me to hand over all my cash....well, maybe I'd feel better if I did....at least I'd know who was getting my money.

I don't know how we're going to pull out of this because no one so far has come up with a plausible reason for what went wrong. I'm hoping Obama will have some answers. I don't expect miracles and didn't when I voted for him, but this is bigger than a presidential election. I fear we're in for a very rough 2009. And, as I said, a lot of the people I know can't afford to buy gold or francs.

 

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Maximum Peach



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  posted on 12/6/2008 at 11:55 PM
I agree with some of your sentiment Ann. I think the raid on the Treasury right now is nothing more than those with power and connections stealing the last vestages of wealth left in the country so they can transfer that to something (gold, other currency?) that will prepare them for whatever comes after the crash.

Here's a guy who seems to agree - http://www.youtube.com/watch?v=kizqJ1aH4_Q

 

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Zen Peach



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  posted on 12/7/2008 at 12:05 PM
So, the question is, if there are people who don't have the money to invest in gold or open off shore accounts....how do you (the collective you being used here) propose they ride out the storm?

 

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Maximum Peach



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  posted on 12/7/2008 at 01:17 PM
Well, we're really getting into worse case stuff here, and I'm not sure it will get that bad. But if there is a dollar crash, I think you'll see something set up quickly to take it's place. The serious conspiracy theorists would say that would be the North American Union with the Amero as the new currency. Some dollar for amero exchange would be established, and hopefully order would resume.

But that period could be very uncomfortable, with a high potential for lawlessness.

Probably the best model to look at is what happened in Russia as the ruble fell. But there's a society that wasn't used to much in terms of convienience and luxuries, with hardship common among most of the people and institutions. We're quite the opposite, making any fall all the more difficult.

 

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Obamacare: To insure the uninsured, we first make the insured
uninsured and then make them pay more to be insured again,
so the original uninsured can be insured for free.

 

Zen Peach



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  posted on 12/7/2008 at 02:55 PM
I suppose I'll know when I think about buying a can of Spam we'll have bottomed out! Seriously....I'm beginning to wonder just exactly how much rice we're going to be able to stand and at what point Vienna sausages are going to get old. I think I need to buy more tuna and salmon.

 

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Sometimes we can't choose the music life gives us - but we damn sure can choose how we dance!


 

Zen Peach



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  posted on 12/9/2008 at 08:32 PM
quote:
This is all assuming people have money to buy Swiss francs and open off shore accounts. I know a lot of people living from one check to the next without any kind of cushion on which to fall back. Your every day musicians, not the 'stars' with the big tours and big bucks, are notoriously lacking in financial security. I worry about them because they're our friends.


Very true, but everyone has to have a plan. If it means the poor have to work a 2nd or p/t weekend job and take that money to save and start thinking about putting it elsewhere just to cover themselves with, than that is what it will take. Nobody should have to end up like the people devasted from Katrina, who had no homes, had nothing left and waiting for the govt. to help them out. If the govt. fails, it will be a long time before they can help anybody out and there will be a lot of anybodies on line before everyone. People need to be scared, but also need to make a plan or else be at the mercy of whoever is in charge when it all happens.

 

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"Mankind is a single nation" "Allah did not make you a single people so he could try you in what he gave you, to him you will all return, he will inform you where you differed". Quran Chapter 2 Sura 213

 
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