Will the U.S. Deficit effect you and your SL?

[Ceka Cianci]

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Mayalily wrote:

No, we wouldn't be screwed; it's quite the opposite.  I don't know how you come up with that idea?  Based on what?  Gold has nothing to do with the dollar value.  Gold is a hedge against inflation but is now becoming a protection (which is also meant by hedge) against worthless paper assets.  Not to mention I already mentioned early on in this thread that the dollar will start strengthening no later than Christmas time of this year as it is said that will be the beginning of interest rate hikes but not the end.  Interest rate hikes to increase the worth of the dollar could happen sooner this year, but it is said Christmas time at the latest.  I'm sure a round of interest rate hikes will be coming over the next few years which will increase the dollar further, and also bring up more capital from the almost free money the U.S. is lending to having it had to be paid back at the higher interest rate.   Once the worth of the U.S. Dollar begins to strengthen, the value of that gold in U.S. Dollars will begin to go up even further.  I expect that gold value to go up a lot further.

Not to mention this trillion bazillion gazillion Dollar value of the technology we have now with these killing machines.  We don't need more military.  The U.S. can afford to cut there.  However, I'm quite sure we didn't make these machines all on our own.  A few countries I can think of who may have helped are Canada, Great Britain, and possibly Italy.  I doubt the U.S. made them all on our own.  Who else has this technology is only a speculation of my part. 

 

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based on purchasing power..

based on history and the present time and the fact that gold is something that holds it's value..it is easy to measure against..gold is a safe haven for holding value..people buy gold..companies buy up gold when they see a storm coming..investors buy gold because it's a sure thing rather than lose value..

paper in one hand and gold in the other..one loses value while one remains the same..

print more money and the paper loses value..people see the devalue and buy up value holding gold..this increases the price of gold..

like a ruler has 12 inches..you can use it to measure..

gold hits 1,000 an ounce in 2008 for the first time in it's history..when was the housing crash? 2008

gold keeps going up as the dollar kept dropping as the market went unstable and into a panic..

what is gold at right now and what is the dollar value at right now?

gold is sitting at right around 1,600 an ounce and about to keep going up as we are talking about gaining more borrowing power and printing more money to devalue the dollar..

where is the dollar at as of today in value?

there are two main arguments behind this raise in the debt...it's either ment to increase borrowing power or to keep confidence in forien investors to stop them from  going and investing else where..

it's about our credit rating..it won't pull us out of debt..if anything it's just another temporary hold off to what is coming if they can't get us out of this with something solid..

if the dollar does  happen to strengthen from this..you watch gold come down..wanna know why?

becaus gold investers are not stupid and go where the win is rather than the loss in their investment money in gold..if they see gold start to drop they will start to sell..

this in turn lowers the price on gold..

they follow the value..they will follow gold before they do tech in an unsecure market..because gold is a safe bet and good for a profit..if they see  value and a chance to make profit in these robots then sure they will invest..but gold is a long term hold that investors have all the confidence in the world that will bring a profit or at least hold value..they wouldn't take that risk on robots in an unstable market..

gold doesn't  affect the dollar value...the dollar affects gold prices.

this is why it is a good thermometer for the dollar..

[Ceka Cianci]

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Mayalily wrote:

No.  But where is your or Ceka's counterpoint? I'd like to hear those 'cuz I'm laughing out loud here. 

In economics Gold is a hedge against inflation. (with a period in it's simplest explanation.) 

Gold is it's own commodity. 

@ Venus, I should have said they (meaning the government) spend our money.  That should go without saying. 

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even i sleep at times lol

you can laugh all you want..i'm not talking about anything but level of holding value..it could be rocks for all that matters..as long as there is confidence in whatever it is with holding power..

history has proven that gold is consistant in that role..

if it were spices then i would have said spices..something of consistant value is a good gague if our currency value fluxuates the cost of the valued item..

ETA: i would just like to add that it is true gold is a hedge in avg market conditions..in an unstable market or in extreme market conditions gold is concidered a safe haven..even in a market crash..



[Mayalily]

No, the Dollar has gone down because of extremely LOW interest rates.  Most of the rest of the world banks have been raising interest rates while the U.S. interest rates have remained extremely low in comparison to other global bankers and other currencies are currently strengthening because other countries have been raising interest rates for the past years, while the U.S. has not. 

Gold can go lower.  Pullbacks are healthy for investors who wants to get in.  Nothing goes straight up, but is this gold fever over?  I'd completely, completely doubt it. 

It's going to at least $3,000 an ounce if not higher, but that doesn't mean this year or next year.  It takes awhile for the price of gold to rise.  Could a pullback happen?  Of course, doesn't mean jack. 

And it has nothing to do with the Dollar, it has to do with inflation. 

Not to mention that the U.S. owns 60% of the worlds gold.  That is a lot to say the least.  That's leaves 40% for all the other world countries combined.  This is an astronomical amount of gold for one country to hold and it's already mined and pressed into bars.

People have become sick of paper assets, this is another reason for gold's climb.

Also, a huge portion of the U.S. stock market crash was due to the unwinding of the Yen carry trade. 

[Ceka Cianci]

well i guess we will just be waiting to see what it does i guess..

you are predicting it will go up as the dollar increases in value..

i'll be sticking with what i said..

it won't be long before we find out..

i'll gamble on history repeating itself

it'll be fun to see what happens..*winks*

we can pick this back up in a few months then i take it? hehehehe

[Dogboat Taurog]

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Mayalily wrote:

No, the Dollar has gone down because of extremely LOW interest rates.  Most of the rest of the world banks have been raising interest rates while the U.S. interest rates have remained extremely low in comparison to other global bankers and other currencies are currently strengthening because other countries have been raising interest rates for the past years, while the U.S. has not. 

Gold can go lower.  Pullbacks are healthy for investors who wants to get in.  Nothing goes straight up, but is this gold fever over?  I'd completely, completely doubt it. 

It's going to at least $3,000 an ounce if not higher, but that doesn't mean this year or next year.  It takes awhile for the price of gold to rise.  Could a pullback happen?  Of course, doesn't mean jack. 

And it has nothing to do with the Dollar, it has to do with inflation. 

Not to mention that the U.S. owns 60% of the worlds gold.  That is a lot to say the least.  That's leaves 40% for all the other world countries combined.  This is an astronomical amount of gold for one country to hold and it's already mined and pressed into bars.

People have become sick of paper assets, this is another reason for gold's climb.

Also, a huge portion of the U.S. stock market crash was due to the unwinding of the Yen carry trade. 

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http://blogs.reuters.com/james-saft/2010/11/04/enter-the-era-of-dollar-devaluation/

ps you owe almost every country money.

even the uk is owed .35 trillion dollars by you.

europe has the largest amount of gold holdings in the world btw.

you are not the country you think you are im afraid.

[Mayalily]

Europe isn't a country; it's a continent, btw. 

QE (quantitative easing is over, that's an old article). 

However, there are way for you too look up who owns what gold and it's current worth and such and such and it's called google.

http://www.wealthdaily.com/articles/who-owns-worlds-gold/2491

Where is the proof the U.S. owes the U.K. .35 trillion dollars.  Proof please.  Sounds like you're reading some silly internet propaganda to me.

I came across this website which is really just a blog by who knows who when it comes to the internet, and the person who responded to the blog said the U.K. owes more money than any country in the whole world.  Do I really want to play internet dueling websites which are really blogs and often false junk on the internet?  Cuz my answer to that would be no, I don't want to play blogging duels written by anyone.

Here's one that says the U.K. owes the most money in the world. 

http://www.londonpatriot.org/2011/07/24/greece-cannot-pay-and-america-cannot-pay/

There is A LOT of propaganda on the internet in case you didn't know. 

[Mayalily]

I didn't vote for any of those guys, so don't count me in there. 

[Celestiall Nightfire]

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Mayalily wrote:

Not to mention that the U.S. owns 60% of the worlds gold.  That is a lot to say the least.  That's leaves 40% for all the other world countries combined.  This is an astronomical amount of gold for one country to hold and it's already mined and pressed into bars.

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It's good to see a discussion on economics.  

But, if we're talking about gold held in reserve by governments, then the US holds in reserve approximately 8,133.5 (tonnes) in gold bullion.  Currently, all nations of the world currently hold 30,562.5 (tonnes) of gold bullion. 

So, the US holds 26.6% of the worlds' gold bullion reserves. 

http://www.gold.org/government_affairs/gold_reserves/

 

Now, the gold bullion held in reserve by the world's governments is not the total of the world's mined gold.  The US holds about  "15.4% of all the gold ever mined."...that's total mined gold.  Which includes gold bullion held by the US federal reserve, and gold held privately by individuals in the form of coins, jewelry , and gold objects.

http://www.wealthdaily.com/articles/who-owns-worlds-gold/2491

So, the US actually holds (held by government and privately) 15.4% of the world's gold.  

Many other countries hold large reserves of gold bullion, with Germany being the individual country that holds the next highest percent after the US. 

http://www.cnbc.com/id/33242464/The_World_s_Biggest_Gold_Reserves?slide=16

 

Having a large bullion reserve is good, but the US is not at the top of the list for financial stability based upon it's gold reserves.   The financial stability and credit worthiness of the US, is based upon the pecentage of total reserves that the US has. That percentage is derived by a particular formula.   

The formula is: gold reserves per person. 

The US has a large population, and the gold reserves are factored (divided) by the total population of it's given country.  For an example, Germany is in a much better financial position, because their gold reserves are higher percentage-wise compared to their total population.

http://www.economist.com/blogs/dailychart/2011/04/gold_reserves

(see above link)  With gold reserves per person, Switerland tops the list and far exceeds the US for financial stability. 

Credit-worthiness is crucial to the US being able to secure funds on the global lending market, as the US government is currently unable to sustain itself with the tax revenue generated by US total production. 

An analogy for this situation would be a family that spends money that far exceeds their income, and they are forced to borrow to make ends meet.  Yet, since their assets (gold reserves) are less than what would be needed to support the number of people in the family, they are a higher credit risk.  This is the basic credit dilemma that the US has managed to spend itself into.

For anyone reading this thread:   I've recently been appointed to the position of Mises Institute SL Director, and plan to set-up some information displays inworld, regarding economics and finances.  (after the new inworld location is built)

Contact me inworld if you'd like a LM to the new SL location once it's built, or you may join the Mises Institute SL group for further information.

[Mayalily]

I never said the U.S. was in good financial shape with it's gold now.  I said "there is hope"... hope eluding to the future as gold appreciates further. 

And, I heard it said on CNBC that the U.S. holds 60% of the world's gold.  I do btw listen to CNBC just about every day and have for years.  I don't like TV much.  I'd rather watch and listen to CNBC everyday.  It depends on what formula CNBC came up with their figure as to how or why the USA owns 60% of the worlds gold.  There are differing formulas, but I highly doubt CNBC lied that the USA owns 60% of the world's gold.  That was said oh about six months ago, not years ago on CNBC.  All I can do is try to write CNBC on how they arrived at that figure.  But do I really want to do that?  No.  I want to go decorate my SL home right now.

And no I really don't want to read internet blogs either written by who knows who?  That economist website sounds like propaganda to me.  I don't read those things nor give them any credence.   I don't know why people do, but they do.  As for me, no thanks, I don't care to read any blogs. 

[Celestiall Nightfire]

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Mayalily wrote:

Europe isn't a country; it's a continent, btw. 

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Dogboat's correct.  The largest gold reserves are held by the greater EU.  Economically, the are considered "one unit" with their gold reserves, as the countries have united under a common currency.

 

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Mayalily wrote:

However, there are way for you too look up who owns what gold and it's current worth and such and such and it's called google.

http://www.wealthdaily.com/articles/who-owns-worlds-gold/2491

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Hmm, well looking up articles is not the same as understanding the articles. 

The article that you've cited, (which is one of the articles I cited) clearly states that the US holds  8,133.5 (tonnes) of gold bullion.  Which is 26.6% of the world's gold bullion and only 15.4% of the world's total mined gold. 

When you read that article, the number "78.3%" is not the amount of gold that the US has. That number is the percentage of the total foreign reserves.   

 

Why do you post links to articles that you do not understand, and subsequesntly try to ignore links that others post?  In the past on this forum I posted links to reputable University research and US government websites.  Yet, you chose to ignore them.   If you're going to cherry-pick your sources, and skim articles with lack of comprehension, then it is futile to discuss issues with you.  

[Venus Petrov]

Do you mean you did not vote or you voted and none of your candidates won?  Either way, it is still 'our' government.

[Celestiall Nightfire]

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Mayalily wrote:

I never said the U.S. was in good financial shape with it's gold now.  I said "there is hope"... hope eluding to the future as gold appreciates further. 

And, I heard it said on CNBC that the U.S. holds 60% of the world's gold.  I do btw listen to CNBC just about every day and have for years.  I don't like TV much.  I'd rather watch and listen to CNBC everyday.  It depends on what formula CNBC came up with their figure as to how or why the USA owns 60% of the worlds gold.  There are differing formulas, but I highly doubt CNBC lied that the USA owns 60% of the world's gold.  That was said oh about six months ago, not years ago on CNBC.  All I can do is try to write CNBC on how they arrived at that figure.  But do I really want to do that?  No.  I want to go decorate my SL home right now.

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I doubt that CNBC lied either.  What I do suspect is, that you either did not pay attention to the news that you were listening to, or did not understand it.   This is neither good nor bad, but just...is.  

I'm actually impressed that you've contributed so much to the discussion of economics in this thread.  I'd be happy to meet with you inworld sometime...and we don't have to talk about economics. 

[Ceka Cianci]

Congradulations on the directors position..I will be sure to look up the group for sure when i log in next.. =)

 

 

[Celestiall Nightfire]

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Mayalily wrote:

And no I really don't want to read internet blogs either written by who knows who?  That economist website sounds like propaganda to me.  I don't read those things nor give them any credence.   I don't know why people do, but they do.  As for me, no thanks, I don't care to read any blogs. 

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Blogs?  What are you talking about? 

"The Economist"  is one of the world's oldest financial media organizations.  (founded in 1843) 

http://www.economist.com/

Newspapers, magazines, books, etc.  They now have a website, as the internet is the newest form of media. 

 

 

[Mayalily]

I doubt they lied either.  I'll have to contact them directly and see if I get a response. 

Sure if you want to meet inworld, but I'm not studying economics in SL right now.  SL is my escape from ecomomics in many ways.  lol

As far as that website, sorry, however, yes there is a lot of propaganda on the internet.  I used to read The Wall Street Journal online but was never as good as The Wall Street Journal in paper form as when TWSJ was in print form, it cost more for more qualified writers and researchers.  If I ever feel like checking out the website you posted, I'll take a poke around, but it looks like for the best news, it's a paying website? (not sure on whether it's a paying website or not, but at first glance it looked like a subscribing deal). 

I took off my Wall Street Journal online subscription because it just wasn't very good, imo.  It wasn't worth the money.  Plus I get CNBC and Bloomberg included with my cable. 

[Celestiall Nightfire]

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Ceka Cianci wrote:

print more money and the paper loses value..people see the devalue and buy up value holding gold..this increases the price of gold.

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Ceka, you have very elegantly summed up the fall of the dollars value and the rise in gold prices.

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Ceka Cianci wrote:

Congradulations on the directors position..I will be sure to look up the group for sure when i log in next.. =)

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Thanks.   : )

 

 

[Mayalily]

I wonder who regulates the news on the internet?

I just typed the following question:  who regulates the news on the internet and pretty much came up with strange looking websites that I don't have time to read right now.

But, if you have time to find, who regulates the news on the internet?  Anyone know? 

[Celestiall Nightfire]

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Mayalily wrote: 

SL is my escape from ecomomics in many ways.  lol

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I also use SL for entertainment.  The internet is a fabulous medium, and SL provides a form of immersive entertainment, that is unique. 

 

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Mayalily wrote:

(not sure on whether it's a paying website or not, but at first glance it looked like a subscribing deal). 

I took off my Wall Street Journal online subscription because it just wasn't very good, imo.  It wasn't worth the money.  Plus I get CNBC and Bloomberg included with my cable. 

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The "The Economist" actually is paid magazine, and the online version is too.  But, anyone can read the articles after they have been posted for short while.  The subscriptions just provide a current feed to the most recent issue.

(You're right about the WSJ...they have always been rather pricey)

The http://mises.org/ website is free. 

They have a daily feed with free articles.  http://mises.org/daily/

[Mayalily]

Celestial wrote:  Ceka, you have very elegantly summed up the fall of the dollars value and the rise in gold prices. 

Well, that's part of it, but not exactly.  Gold is a hedge against inflation.  Since the Dollar has been kept by Bernanke at such low interest rates, the Dollar has devalued, but it's being kept that way for a reason, to help people to try to afford some of the excess homes on the market as well as other things I don't have time to get into right now. 

When the Dollar devalues, we get inflation, because it costs the USA more to import the goods it imports when the Dollar is worth .75 cents on the Dollar let's say rather than it's true value.  However, the devaluing of the Dollar is not the only thing driving inflation at the rate it is climbing now, especially in food commodities and other commodities.  The commodities boom has been driven by emerging countries, especially China, India and Brazil; however, there is a slowdown in those emerging countries in 2011.  There's so much to cover here, I just don't have the time. 

However, one more TING, this time around, this is new territory with all these bailouts, and the gold bug is still going strong, as countries are struggling to prove that they have something that backs their currency for these bailout packages and their debts.   The USA is hardly the only one entering this new territory of bailout packages. 

[Anaiya Arnold]

Regulates the news on the internet?

No one in particular.

China (as an example) censor both the publishing and accessing of content locally.  Google filters your search results for you.  Various countries around the world have local laws about what may be published and about what content may be accessed. 

[Ceka Cianci]

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Celestiall Nightfire wrote:

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Ceka Cianci wrote:

print more money and the paper loses value..people see the devalue and buy up value holding gold..this increases the price of gold.

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Ceka, you have very elegantly summed up the fall of the dollars value

and

the rise in gold prices

.

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Ceka Cianci wrote:

Congradulations on the directors position..I will be sure to look up the group for sure when i log in next.. =)

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Thanks.   : )

 

 

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Thank you  =)

[Venus Petrov]

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Mayalily wrote:

I wonder who regulates the news on the internet?

I just typed the following question:  who regulates the news on the internet and pretty much came up with strange looking websites that I don't have time to read right now.

But, if you have time to find, who regulates the news on the internet?  Anyone know? 

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I think it is the same agency that regulates builds in SL.  /me smiles

[WADE1 Jya]

I make most of my money (not from SL) but across the border, making American dollars, while living in Canada. If current trends continue I will slowly get poorer (due to weaker dollar, and thus higher local costs) despite growth I am seeing in all my businesses!

So I'm currently winning, but I don't get to see the gains (aside from less loss than I'd see otherwise I guess) :matte-motes-stress:

Supposedly, cause of all this debt & problems, the USD will be worth just 90 cents to Canadian dollar by 2012 :matte-motes-crying:

My response so far is I started working lately as a real life model, getting local modeling jobs, just so I can earn some of these now-valuable Canadian dollars! :matte-motes-delicious:

For me, things would have to deteriorate hugely (think USD = Mexican peso kind of situation) before The LOLO Pet Shop would see any danger. So no worries there. My SL is doing well and $L dollar keeps moving up :matte-motes-grin: Yay for strong Second Life economy at least!

[Mayalily]

According to whom as to where are these laws?  Just about anyone can publish an internet website?  Not to mention they do -- with many false statements, and it's been going on for years with the internet.  So much propaganda on the internet, it's unfreaking believable. 

[Mayalily]

No, the EU is no better shape than the U.S.  You haven't heard that Greece has had bailout packages?  Greece, Italy, Portugal, Ireland, Spain (those are the ones I know of for now) ALL want out of the EU and the Euro as those countries are all teetering on defaulting on their debts.

Greece should be allowed out of the EU imo, as Greece is a basically a club med country.  About 50% of jobs in Greece are tourist related and about 50% of people who work in Greece work in the tourist industry.  With the Euro so high, people aren't vacationing in Europe so much anymore, but I know some who are chomping at the bit to go to Europe when the Euro starts tanking.   Also, you haven't heard about all the rioting that's been going on in Greece because of this nonsense, as Greece wants out of the EU as do other countries.  Greece has been rioting for months because Greece doesn't want the bailout packages; they just want out (of the Euro and EU) so they are rioting. 

Also, with the Euro and the EU having such incredible debt default issues, the Euro doesn't seem to be devaluing all that much at least not yet, so with all this debt in the EU and all this gold, something doesn't jive here as it relates to currency that seems to be spoken about in this thread.  If what you all are saying is true, then the same thing would be happening in the EU with all it's current default issues, bailout packages, and risky near junk level status debt for some of it's countries.  I think Greece was rated as near junk level.  The other countries:  Ireland, Portugal, Spain, Italy not running too far behind that status.  A junk rating means more or less it's certain they cannot pay back the loans for the bailouts they are receiving from the EU yet the Euro has been fairly stable in price, with the exception of a few quick drops, but the Euro recovered and has stayed fairly flat for a long time, even though people are rioting in the streets.