Currency wars

Flight2quality

So Purch what do you think would be the best anchor for currencies after this system fails? Precious metal?

Wouldn't you agree that the war between real money gold and silver and currencies has been raging for around 6000 years. No currency has ever lasted, tally sticks, shells or many forms of paper currency. Only gold and silver have been a long term store of value.


You can “always use it to pay your way, anywhere, anytime”. And in the kind of “race to debase” we are living through it is surely worth holding a currency that no one can easily debase. Although the price is still debased to a certain extent because of the phantom supply of 100x more paper ounces than real ounces exist.

purch

Well I think the answer is pretty obvious.

What we don't need is another synthetic reserve. The BW agreement was designed for one reason, the rebuild of Europe after WW2 and it did that job brilliantly. What it wasn't designed for was the Cold War/Arms Race, Vietnam War, Space Race etc. and if it hadn't collapsed when it did, the Oil shock and subsequent events such as the rise of the Asian Tiger would have brought it about at some stage. The EUR too is a synthetic reserve that can't possibly work. Germany needs to leave, but if they did their currency would appreciate 10-15%, and 30% would be wiped off their GDP overnight.

I don't necessarily agree with the idea that a complete monetary collapse is likely imminent. Sure, the huge amount of QE has inflated the supply of money, but at this stage there is no guarantee that it will not be reversed at some stage in the future. If it isn't removed, then we have stored up a huge inflationary bubble for the medium term, but the Jury is still out on that scenario.

Flight2quality

purch wrote: »

Well I think the answer is pretty obvious.

What we don't need is another synthetic reserve. The BW agreement was designed for one reason, the rebuild of Europe after WW2 and it did that job brilliantly. What it wasn't designed for was the Cold War/Arms Race, Vietnam War, Space Race etc. and if it hadn't collapsed when it did, the Oil shock and subsequent events such as the rise of the Asian Tiger would have brought it about at some stage. The EUR too is a synthetic reserve that can't possibly work. Germany needs to leave, but if they did their currency would appreciate 10-15%, and 30% would be wiped off their GDP overnight.

I don't necessarily agree with the idea that a complete monetary collapse is likely imminent. Sure, the huge amount of QE has inflated the supply of money, but at this stage there is no guarantee that it will not be reversed at some stage in the future. If it isn't removed, then we have stored up a huge inflationary bubble for the medium term, but the Jury is still out on that scenario.

Yes the answer in my opinion would be a new monetary system based on precious metals. Some say there is not enough gold and silver available now that world population is over 7 billion.

There is of course enough gold and silver but the value has to go up a great deal. One milligram of silver could buy about as much as a USD.

A new digital form of using Milligrams of silver where the buyer digitally transfers serial numbers of ownership of actual silver bullion.

Still have notes in use as today Pounds sterling and Euro notes have about a milligram of silver on them anyway. Most people don't know that is real silver on their 20 pound/Euro notes.

As long as its honest money based on actual silver and gold in existence and you can't have more printed out of thin air, giving too much power to whoever can create currency out of thin air.

You can not cheat gold and silver, every time it has been tried throughout all history, gold and silver do an accounting and when the public wake up to currency abuse, gold and silver are always the money of last resort. Then gold and silver revalue themselves to catch up with all the units of currency that have been printed around the world.

Flight2quality

purch wrote: »

It's been happening for nearly 100 years.

Under the Gold Standard the GBP/USD exchange rate equated to $4.86

The Gold Standard ended as nations inflated their economies and money supply in preparation for WW1

By the end of WW1 the GBP/USD rate equated to roughly $3.50.

Ever since then there have been repeated attempts to restore monetary order, but all those attempts have failed.

The Gold Exchange Standard dreamt up at the Genoa Conference in 1922 allowed currency to be exchanged only for 400 Troy Oz Bars, which meant it wasn't a real Gold Standard at all. Only the U.S. allowed their currency to be easily redeemed for Gold, but that only lasted until 1934.

At the start of WW2 the GBP/USD exchange rate was set at $4.03.

In 1949 the GBP/USD exchange rate was revalued to $ 2.80 under BW.

The Bretton Woods agreement after WW2 was just the same mistakes of the 1926 Gold Exchange Standard repeated, but with the U.S. as the reserve currency instead of the GBP.

In 1945 the U.S. had over $ 25,000,000,000 of Gold Reserves. By 1968 these reserves had dropped to only $ 9,000,000,000 due to the mechanics of the BW system, that allowed everyone else to devalue and spend USD, that the US had to create for them.

In 1967 GBP was devalued to $ 2.40

Bretton Woods collapsed because even though the price of Gold remained fixed at $ 35, the true value of the USD had collapsed over the 27 year period.

They tried to maintain some semblance of order via the Smithsonian Agreement which "revalued" Gold at $ 38, and later $ 42, but it could never last, and the USD finally collapsed in value during 1973, as it finally caught up with the reality of the hugely inflated money supply.

The Currency War is not a new phenomenon.

The current War has been in progress for close to 100 years, but over history for as long as currency has existed,the war to devalue it has been raging.

Why this muppet thinks that today is somehow different to other times in history is not apparent.

Have you any idea who you are calling a muppet purch? I suggest you take a look at his credentials before you call him a muppet.

Any way yes having just read his book you are in agreement with him when you say its been happening for 100yrs.

He says "the world is now entering its third currency war in less than 100yrs.

Whether it ends tragically as in CW1 or has a soft landing as in CW2 remains to be seen.

But CW3 may be the last currency war. Or to paraphrase Woodrow Wilson,

The War to end all currency wars."

sabretoothtigger

Just read this article pointing out India keeps spending increasing amounts on gold. As they do not sell it or leverage, it is suggested Indian growth is being restricted by too much ownership of gold.

I would like to see the tide change and such bias listed as a positive but we are a long way from that and devaluing currency and having as much debt as possible is still the way to fortunes apparently

http://blogs.ft.com/beyond-brics/2011/12/05/gold-dulling-indias-economy/#axzz1fyXxKO5x

chewmylegoff

Sock puppets trolling other sock puppets. A new low.

£10 says at least one "what's a sock puppet and/or troll" response

Flight2quality

As soon as MSE stops censoring bullion investment chat there will be a lot less alternative usernames on here.

But for now the censorship remains.

FTBFun

Flight2quality wrote: »

As soon as MSE stops censoring bullion investment chat there will be a lot less alternative usernames on here.

But for the censorship remains.

Yes but what you're doing isn't that - spamming web forums about how great a single investment category is is not constructive.

purch

Have you any idea who you are calling a muppet purch?

Yes.

The moron who was a senior player in Long Term Capital Management, a high risk, highly speculative hedge fund that went BUST in the late 1990's.

What a great CV :eek:

The guy is a complete moron, with little or no credibility anywhere other than in the world of internet nutters who consider everything they read on the internet as credible.

And NO, I do not agree with the moron.

We are not entering a 3rd currency war.

There has been one and one only, and it is ongoing.

JonnyBravo

Flight2quality wrote: »

As soon as MSE stops censoring bullion investment chat there will be a lot less alternative usernames on here.

But for now the censorship remains.

So why do you need more than one at any particular time?
Is it, perchance, a desperate attempt to make your threads appear more popular than they actually are?