Oil Drops over 30% since summer, now what?

[tnjind]

Let us say that you purchase real certified physical gold at $1250 an ounce.

1) tell nobody or somebody will show up and steal it.

2) Don't try to buy anything with it because nobody can verify its purity and anybody willing to take gold as payment knows they too will have a hard way of spending it, and so the terms anybody will accept gold as payment will stink.

3) As commodities devalue, the paper currency traditionally increases, thereby increased the actual purchasing power of the currency. Why? Because people want cash, not heavy stuff that hurts if they drop it on their foot.

4) if commodes devalue in a deflationary cycle, then gold devalues and you ride that descending slope downward.

5) Thus gold is not a hedge in a deflationary cycle.

6) If cash runs out, you're broke, just as you would be at any other time cash ran out. Why? Because cash (or any currency) is packaged power that can be deployed, held in reserve, lent and stockpiled for a rainy day.

I don't believe that is what happened in Argentina when there economy collapsed.

 

[niemeyjt]

The House passed the trillion dollar spending bill I think the numbers were 1.1trillion more than expected to come in this year.?

I agree with those that say we will not be able to pay off the 18trillion debt (least not without devaluation the dollar) and printing trillions upon trillions more out of thin air.. That my friends is where the US Dollar then is tossed out as favored denomination for global trade.


Oil going down is good for little guy like me (other than fact much of my 401K/IRA is in oil stocks.) Paying less at gas pump means I can save or spend it elsewhere maybe on a more efficient car!


Mark

And that was not all. They also snuck in a bit that transferred liability for $300 trillion of derivatives onto the taxpayer

http://www.zerohedge.com/news/2014-...rillion-derivatives-us-taxpayers-are-now-hook

One of the side effects of low oil prices is the risk to banks holding derivatives in oil:

Plummeting Oil Prices Could Destroy The Banks That Are Holding Trillions In Commodity Derivatives

Well I guess that should be past tense - it seems the US Taxpayer is now on the hook for it. So if you are a US Taxpayer, it may just cost a bit more than you save on a tankful.

J

 

[mjarrels]

Privetize profits, socialize loses

 

[newbury]

<snip>
Then we still have diesel here at 3.75 per gallon which I dont understand and still holding off filling up the tanks...


Mark

And they've got it at $2.93 in Chattanooga

<snip>
4) if commodes devalue in a deflationary cycle, then gold devalues and you ride that descending slope downward.
<snip>

I dislike the thought of riding commodes downward.

Privetize profits, socialize loses

Good for business right?

 

[Egon]

Let us say that you purchase real certified physical gold at $1250 an ounce.

1) tell nobody or somebody will show up and steal it.

2) Don't try to buy anything with it because nobody can verify its purity and anybody willing to take gold as payment knows they too will have a hard way of spending it, and so the terms anybody will accept gold as payment will stink.

3) As commodities devalue, the paper currency traditionally increases, thereby increased the actual purchasing power of the currency. Why? Because people want cash, not heavy stuff that hurts if they drop it on their foot.

4) if commodes devalue in a deflationary cycle, then gold devalues and you ride that descending slope downward.

5) Thus gold is not a hedge in a deflationary cycle.

6) If cash runs out, you're broke, just as you would be at any other time cash ran out. Why? Because cash (or any currency) is packaged power that can be deployed, held in reserve, lent and stockpiled for a rainy day.

That there Gold, what's it's status once a new economy is in place?

Currency; any Confederate Dollars still in use as the main daily currency?



< Re: Oil Drops over 30% since summer, now what?
Privetize profits, socialize loses>

Fact's without the verbiage. Nice, understandable.

 

[houstonscott]

Gold and silver are currency, or money. Generally they buy the same amount of goods and services. A silver dime buys a gallon of gas today. Buying gold and silver is more like buying insurance rather than something that will raise in value, gold silver value is fixed as to what or how much it will purchase. Is not dependent on paper currency. HS

 

[KiotiKowboy]

As a hedge for the coming dollar crash, I chose to pick up several hundred ounces of silver. While it is not a long-term solution, the smaller value per "coin" will make it far easier to use in an exchange for food and/or fuel. The same can be said for bottles of alcohol or any other high-demand commodity.

 

[houstonscott]

As a hedge for the coming dollar crash, I chose to pick up several hundred ounces of silver. While it is not a long-term solution, the smaller value per "coin" will make it far easier to use in an exchange for food and/or fuel. The same can be said for bottles of alcohol or any other high-demand commodity.

Agreed, guns and ammo may be like money too. When a person was interviewed who survived the collapse in Argentina he said remaining clean and sanitary was difficult in a panic situation. Toilet paper was difficult to obtain. Stupid but true. HS

 

[300UGUY]

http://www.zerohedge.com/news/2014-12-12/paying-down-debt-now-almost-mathematically-impossible

The only problem I see with the piece is that there are only two things that that are considered debt to the federal government and would constitute a default if not payed. Bonds and federal retirements including military retirements, and both of those are easily covered with revenue. Everything else is not real debt. Yes, SS is not a debt, just a tax, and could stopped at anytime. The issue is settled law at SCOUS. HS

And why would the military retirements, along with the other federal employee's bennies be sacrosanct in this scenario? You really think if all this comes to pass, that you will be exempt?

 

[300UGUY]

I've heard all this doom and gloom since the 70's. The US might not be the straw that stirs the drink, economically, but we will have a place, especially if can avoid the extremist's of one sort or another.