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Ghost
12-11-2008, 01:48 PM
I'm starting this thread because I have been worried about this for a long time, and I'm interested to talk to anyone who knows anything or is interested. There are lots of folks here who seem to know a lot about economics, and any pooling of knowledge is appreciated.

One basic driver behind my thinking is that I have heard that of the total number of dollars that exist, somewhere between half and two thirds have been created in the last 3 months or so. (Anyone have any good data on this?) It scares me.

Obviously, when a company decides to double or triple the number of shares of its stock, the stock immediately goes to half or a third of its prior value. With the dollar, I would expect the same thing to be true in the longer run, just without being immediate, since the effects are hidden for a while until the ripples get out.

Not that it matters, but what triggered my thinking today was starting to see what seemed to me like perhaps a real uptick in gold along with bouncing stock markets with extremely bleak jobs news. This matches what I would expect to see with a falling dollar. (Gold outpacing the overall market and stocks, stocks maybe doing well relative to the dollar, at least good stocks, but fighting against a bad market for business.)

The thinking being that gold prices are a direct dollar hedge--dollars get worth less, gold prices climb--all prices climb, really. So the same force acts o increase stock prices, except that the overall economy is doing so poorly, so the outcome is mixed.

Anyhow, I don't know if any particular news of today really reflects this yet, but it tripped my head to start what might be a long term thread about this. I'm interested in anybody's thoughts or data. I have seen from other threads that some folks here do a lot of financial reading, as well as knowing a lot to begin with.

Regards,

Mike

gcarter
12-11-2008, 03:14 PM
I know very little about this, but, I believe and have observed in the past that other countries screw up worse than we do.
Use Russia as an example, as "gruff" as they have been recently, in these circumstances, they cannot succeed. They have not developed any new oilfields, onjly improved extraction methods in the existing production areas. Raw material production is down world wide, what else do they have? In the present government structure, they've scared off foreign investment in any really promising areas.

In Europe, the social welfare costs are going to keep their economies from expanding as fast as ours can, as long as we don't screw up in the next few years w/socialized medicine.

So many other regions are like Russia or the middle East, all of their GDP is centered in too few areas.

Even China is hurting. But India is a bright spot. With their move to Westernize and the explosion of Capitalism, their own internal economy is expanding extremely rapidly. They can continue to grow and not export at all. A truly unique example.

China could learn a lot from India. China has channeled so many resources to export that the expansion of the internal economy has grown much more slowly than it could have. China has never appreciated it own people.

This is not a direct answer to your question, but maybe a perspective that maybe balances things.

Oh, about the dollar, your statement could be true, but it could be a worldwide rush to liquidity by individuals and businessmen in many third world regions.

MOP
12-11-2008, 03:17 PM
Good chance we are on our way to La La Land! We owe the Chinese several Trillion we are printing money so fast it hardly has time to dry. But yet all the big boys are getting their multimillion $$ bonus checks, Hmm anyone else that can paint a better picture!!!!!!!!!!!

Lenny
12-11-2008, 03:52 PM
This is not that related, but, I have heard this far more than once lately, and I have heard of the concept for a long time,...

but...
I have heard that the "Amero" has been minted and is in print somewhere...

Who knows ???

Ghost
12-11-2008, 04:52 PM
Thanks, good stuff. (The India stuff is interesting in particular.)

For clarification, when I say "Death of the Dollar" what I really am thinking about is not that dollars go away, but that we se skyrocketing inflation, such that the dollar plummets to about half to a third or less of what it was worth pre-bailout bill.

Lenny
12-11-2008, 05:50 PM
the dollar plummets to about half to a third or less of what it was worth pre-bailout bill.

Let's hope so. Our Dollar is tied to natural resources and crude. Went from par to the US$ to $.78 in 8-10 weeks. :(

If what you describe transpires, I will finally be able to get a 28 CIG/Magnum... :)

zelatore
12-12-2008, 11:35 AM
Let's hope so. Our Dollar is tied to natural resources and crude. Went from par to the US$ to $.78 in 8-10 weeks. :(

If what you describe transpires, I will finally be able to get a 28 CIG/Magnum... :)

Gee, uh, no offense or anything but I'd be OK with the Canadian dollar dropping to about 50 cents US for a little while. You know, just long enough for me to book a charter out of Vancouver...:wink:

Just kidding.

BTW, what are fuel prices looking like for diesel in the Gulf islands? I'm looking at going with a faster boat than a trawler which means more fuel $$$.

fogducker III
12-12-2008, 11:41 AM
Fuel prices up here have dropped considerably over the last few weeks, regular gas is under $.84 a liter, not sure exactly the cost of diesel but it is close.......

I am dumb-founded that the exchange rate between our dollar and the US dollar is what it is, I guess, as Lenny points out, it all depends what a countries economy is based on........:frown: