A Must Read - Tulips you say?

[edsinger]

OK I have been doing a lot of research and I came across this, Its sort of long, but A MUST to understand what is going on with the dollar and world currencies.

Ever heard of Tulip Mania? Well take a look, read it, then comment..

http://www.google.com/url?sa=t&sour...sg=AFQjCNEIoOVfpHppRPqOdZjQGMdGziFqog&cad=rja


Wow, I had heard of it but did not pay attention. Now I am.


Also, I was thinking about something, in late 2008, folks and countries FLOCKED to the dollar, couldn't get enough. It was the stable one.

Is it now? We are 14 trillion in debt, but fully 2/3 of that is owned by US. Can someone possibly be long on the dollar right now? I am not but now I wonder just what the heck is going on.

I had thought Australia was in good shape, low debt, lots of natural resources and then I read this...


Australia's "Tulip Mania" About to Crash by Mish


Maybe we have given up on the dollar to soon. You see I remember the fall of 2008, it was scary, damn scary. the Dollar was the place to be.....or was it? In mid 2008 gold was around $700, today its $1400.

In Australian dollars, gold was $900, now its $1400

In Euros it was $600, now its $1000

In Yen it was $80k yen, now its $120k

In China it was $5k Yaun, now $9K

Is the dollar really that bad? Are we buying tulips when we buy precious metals? I think not, but it sure is a point to ponder no?

Take a look for yourself at this site:
Gold Price Top Left corner


Some interesting thoughts for sure, and I am going to add another link that I am not through reading yet but it has folks from outside the USA in the comments.

Advice about buying silver



And one of the things I do remember was the 1980's and Silver.



"Started buying when it was 6 USD/oz and stopped at 13 USD/oz. Anyone that lived thru and saw the fallout of the Hunt Bros move in the late 70s should have learned the lesson.

The FedGov stepped in and the price of silver went from 80 USD/oz to just under 4 USD/oz -- in less than a week, 3 days IIRC.

Read the above sentence again - then look up "tulip mania" -- just say'n, know what you are getting yourself into."

Posted by TacAir Dec 2010 from Alaska


This guy might be onto something...


Comments???

 

[CarmelHP]

I'm not in the "silver (or gold) is worthless" school of thought. Throughout history gold and silver have been stores of value in times of upheaval. However, that said, I'm also not in the "buy silver (or gold) now school either. About 15 years ago, I was buying silver around $5-$6 for 1 ounce silver eagles and some decorative 1 ounce silver rounds could be found below spot. Gold was around $300 an ounce and I was paying about $7.50 for a 50 round box of S&B 9mm and about $1.30 or so for a gallon of gas. That same box is now about $12 and gas at $3.50. Silver is above $35 and gold above $1400. So, which ones are way out of proportion? Metals shouldn't be the first place to be puuting your money at this point. The bonanza was bought into over 10 years ago. Now's too late. Buy other stores of value in SHTF. Got matches? Flint? Water? Food? Ammo? Guns? All better values at this point.

 

[E5RANGER375]

well you can be sure that this govt while it still has breath left, will not hesitate to sacrifice the lives of our brave soldiers to make sure the dollar retains its value and further its own agenda. and to make sure we all can put gas in our cars to go to the mall

 

[edsinger]

The bonanza was bought into over 10 years ago. Now's too late. Buy other stores of value in SHTF. Got matches? Flint? Water? Food? Ammo? Guns? All better values at this point.

I can not disagree with you at this point, it is high and the fact that it is being pushed means the prices for the metals are inflated for sure.

I just want out of the dollar with some of my investments. I will be searching for a good place to put my IRA. I pulled a bunch out of stocks yesterday.

In June when QE2 ends, the artificial bump will have ended and then I fear inflation arrives with a vengeance. But, in the same token it could just as well be deflation. My bet is on inflation.

 

[edsinger]

Another Great Article, now keep in mind it is from a site that sells Gold, but it was written in the 70's.


Hyperinflation of the Weimar Republic in 1923 Germany

 

[DanO]

As far as currency, what currency would be better to hold? A lot of Argentinians wished they had taken their savings out in USD prior to the bank run in 2000, where they lost 2/3 of their savings in the peso devaluation. As the Nazis marched toward various European capitals, it was US Dolars, British Pounds and Swiss Francs that were withdrawn first at the banks. Holding cash is not an investment unless you expect it to gain against a currency you wish to own later.

I agree the best time for Gold and Silver was if you bought it 10 years ago. It may go up more, but it is really speculative. If you are left with it, you can't eat it. It won't be worthless, but look at the declines above. You can take a bath.

I am about 10 years away from semi-retirement, meaning I will work as much as I want to or need to. My goals over the last 25 years have not changed much. They were: large nest egg of cash or investments, a energy efficient house PAID OFF in a place I want to live, my kids eductated well. I have added to that list by deciding I wanted to live in a gun-friendly, conservative and solvent state with low taxes. I also have decided I will keep doing some type of work, but something I enjoy, as long as I can, because I think it is healthier for me. I am still on track even though the last decade was not that kind to the market. While my stock portfolio has not performed as I hoped, I have done OK on housing and the kid's education through making cuts in other areas and the low interest rates. I have also figured I do not want a 5,000 SF mansion on 25 acres in my retirement. My appettite for "stuff" has gotten more refined and I am more aware of getting a value for every dollar I spend.

You will always need housing. Housing is inexpensive in a lot of areas right now. Interest rates are still low if you have good credit. I would not worry about investing in Metals if you are renting a place. Get a roof over your head at a price where you will ALWAYS have a roof over your head!! I have seen older people lose their homes in their old age because they were clueless and no one advised them on their finances. Don't be that guy.


You will always need to eat. Have a food storage program to make sure it is there in a shortage or a price spike. Eat out less and take the savings to the bulk store. Learn to economize and eat healthier foods, garden if you can or raise a few pet ducks in your backyard.

What can you do without or with less of? How large a home do you really need? Do you need 3 cars, or will one do? Add up the cost of your internet, cable, health club, cell phone plan, etc. and see how much is really going out the door. Can you eliminate some or find a better deal? I like my cable, but I always call when it is about to go up and tell them to cancel it. Then I demand the new subscriber rate. If they don't give it to me, I switch providers. Educate yourself.

Some economic principles are timeless and irrefutable, like "Buy low - sell high" As long as the item will always be in demand, you will be able to make a profit. Precious metals and tulips will never be worthless, but they are a gamble to a certain extent. If you are going to invest in them make sure you have the necessities covered first and that metals are only A PART of your plan.

 

[ranjah6]

Really good points made. Anyone consider just going back to more of the old barter system in our communities

 

[edsinger]

DanO - Great Points...

 

[indiver]

Thanks Dano.