The Crash

Discussion in 'Financial Cents' started by ghrit, Oct 6, 2008.


  1. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    As this is written, the Dow has dropped under 10K. European markets are falling even faster, it is said that 2.5 trillion in world credit (money) has been wiped out. (Makes our 700B look like pocket change/chicken feed, eh?) On the bright side, the Euro has and will continue to fall precipitously against the dollar. Book your overseas vacations soon.

    This is apt to be a while recovering. Make sure you have enough supplies on hand, and tie up your money in hard goods. Get that new washer while you can. Now is not the time to sit on cash that is losing value.
     
  2. ColtCarbine

    ColtCarbine Monkey+++ Founding Member

    I wouldn't be surprised if .gov sucks up more taxpayers money to put into big corporations pockets than the 700B that has been already allocated before it's all said and done. We'll see and since I'm not a fortune teller, only time will tell.
     
  3. overbore

    overbore Monkey++

    Glenn Beck show tonight:eek:ne panelist claimed the price of gold per oz and the DJA will be the same ie 8,000 or so!!! Let us say he is only half right, for planning purposes, then where do we put our discresionary funds now? I think silver and gold where they are at least stores of value. I am speaking of scenario balanced toward TSHTF shortly or no later than the conflict with Iran. [cow] Any good other ideas? Overbore
     
  4. Jonas Parker

    Jonas Parker Hooligan

    Let's admit for the sake of discussion that the COMEX gold and silver prices are manipulated and not reflecting the value of physical metal, but rather a bunch of Wall Street geeks (or crooks) swapping paper.

    If this is in fact the case, then how do we determine a realistic "street price" for silver? I've been watching the 90% "Junk Silver" prices on eBay for some time now, and while I haven't been charting these prices because of the unknown (to me at least) "numismatic factor", I can say with a fair amount of certainty that the going price (including shipping) of 90% Silver half dollars reflects a market price for physical silver of $16.50/ozt. Since 90% "Junk Silver" is usually regardeded as the cheapest way to buy silver, the cost of 1 troy ounce bullion silver American Eagles would reflect a considerably higher cost. The differential between the COMEX price (currently $11.37/ozt) and the price of available physical silver in the form of pre-1965 US coinage is a whopping $5.13/ozt!
     
  5. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    I am hard pressed to explain the delta between the price of "pure" (COMEX) metals and the price of coinage. Alloying agents, wear, handling, the cost of recovering the metal from the alloy? Not too sure about that, but it seems logical that the market for coinage has to allow for the cost to recover the metal for other uses, say in electronics. I would think that new metal would be less of a problem for those needing it for processes other than mints. Others may chime in with better thinking about that.

    I believe, but do not know, that the cost of coinage has to be higher than raw metal simply because of the costs associated with minting and moving it around. Which leads me to think that owning coin is not the way to own metals. There is a convenience in coinage in that the weight is "known" within a small error, and if it can be shown that they are not counterfeit, then the basic amount of metal in the coin is known. The value, however, is not, since that is established by, and only by, what it can be traded for. The only absolute in commodities is the weight (or volume, say of soy beans) that can be physically measured with a degree of certainty.

    My thinking, and maybe mine alone. [beer]
     
  6. Jonas Parker

    Jonas Parker Hooligan

    Points well taken, Ghrit. But COMEX contracts are for 1,000 ozt bars. These would be of little use for everyday purchases (although one would make a great doorstop), and would certainly be beyond the means of most "preppers". In fact, if gold hits $8,000/ozt like Mr. Beck theorizes, a 1 ozt gold bullion coin would really not be practical for everyday use, and even a 1/10 ozt fractional coin would still be difficult to get change for. What do you believe will be the primary means of monetary exchange once the fiat FRN tanks? Will we be completely reduced to barter?
     
  7. eeyore

    eeyore Monkey++

    The Government will always have it's "paper". What ever you want to call it, i lean towards an American Euro, called the Amero.

    But black market and barter will be abundant. There i think it will be tangibles goods, services, silver and gold which will be traded. Anyone can establish a price for gold or silver easy the easy part but realizing that price for a product you want is entirely a different thing.
     
  8. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    And I think eeyore is right about some kind of paper getting established. What it will be, how it will be administered, how it's value will be established is now a mystery and will remain so. Eventually customary use will find a level, or the TPTB will either establish it as so many bushels of corn, or what may already be in place is revealed. Frankly, I don't think TPTB are in any way shape or form ready for that.

    In any case, there will be a period of time where swapping will be the main method of trade.
     
  9. BAT1

    BAT1 Cowboys know no fear

    The slow burn has turned into a flame and the frogs are wondering, whats that smell?
     
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