QUOTE(lordvader129 @ Jul 8 2008, 07:31 PM)
as counter intuitive as it may sound inflation is good for those in debt, since the debt is reflected in US dollars if the dollar is devalued the debt similarly becomes less
True, and to some extent it may help those in debt, but as the price of the cost of living increases the ability to continue making payments becomes more difficult.
saving is pointless if you think the dollar will be worthless in a few years, if this is the case spend it while it can buy something, my great grandparents grew up in the weimar republic in germany, when their parents got paid theyd spend it all that day, because the next day it would be davlued again and you wouldnt be able to buy as much
Also true. Saving will help somewhat but if true hyperinflation is coming, it won't do much in the long run. Stocking up on non-perishable foods is a good alternative.
actually youd want to avoid investing in things tied to the US dollar not the US itself, so be careful, many foreign economies are tied directly to the US dollar, the following countries currecies are pegged via fixed exchange rate to the US dollar:
Another good point, but for some of these countries they have the ability to remove that peg. If that happens, the US will be in more trouble. And when I said avoid things tied to the US I didn't just mean in trade, I was reffering to dollar pegs as well.
if you feel the US economy is going to crash to nil gold and silver wont do you any good unless you plan on leaving the country as soon as possible, instead you want things with practical value, think about it, if your family is starving whats worth more, a pound of gold or a pound of bread?
Gold and Silver are real money. They retain their value. If and when the dollar collapses, Gold will still be worth something. If a new currency is established, you'll be able to get a lot more of it with gold purchased when the dollar still had some worth. Of course it's a bit more complicated than that. If things start to accelerate gold will likely take off like it did in '79/80 and turn into speculative hysteria. But even when it corrects you'd likely be better off.
Paper money is not worth anything more than what someone is willing to accept it for. The only thing besides that previous statement that makes fiat currency worth anything is that the government says it is an acceptable as taxation and for payments of debt. Any country that is not forced to accept the US dollar can decide they no longer want to accept it. And that is already happening.
however, the US is a world economic power, our GDP represents almost a quarter of the entire worlds GDP (not counting the GPD of the above listed countries which are pegged to the US dollar) a US economic crash would be a world economic crash...
This is the type of thinking that gets the US in trouble. What is the GDP based on? Lately it's consumption. The US doesn't make anything anymore. Threre is very little productive industry left. Almost all the products consumed in the US are made in another country, and the GDP numbers are based on consumer spending.
Most of this consumer spending in the last few years has come from loans, lines of credit, credit cards - and the big one - home equity. How long can consumers borrow and spend?
A crash in the US economic system will hurt the world a bit, at first, but they'll do fine without it. Actually, after the world adjusts, many countries (china) will likely be better off.
and just out of curiosity, how old are you?
I'm 31. I've just recently become interested in this due to a friends interest in the markets and his advice.
I'm going to post back some links that may explain this batter than I can...plus It'll be more entertaining and save me some typing...