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Serious stuff: thoughts about our money system(s) (Read 530 times)
FalconFly
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Serious stuff: thoughts about our money system(s)
04.04.11 at 20:56:24
 
We're living in turbulent times since many years now, some of the forum members may be young enough to be born in the middle of it (and may ignore the one or other crisis as "nothing out of the usual").

More specifically, I'm talking about the never-ending debt spirales, however - as it endangers our all income and savings ( unless you're either a bigshot banker yourself or have found your own solution already ).

So the big question was : what can I do to protect my hard-earned money ?


My own perspective :

...

...

- savings account currently delivers
+1.3%
(the best offerings may put me at 2.0 to 2.3%)
- official
*
inflation currently
2.4% and climbing


*
I seriously doubt that 2.4% is a trustable figure, the actual figure observed over the last 10 years is more like double of that...

So technically, I could have kept everything as is :
- long-term life insurance that pays me off in like 30 years with a sum that reads nice today (but how useful is that figure still in the year 2032 ?)
- keep savings account that has a clearly negative rate (less than inflation) and let my bank make all the money with it on the markets
- wait for my money to lose value and get burned over time

But being a human gifted with some intellect and foresight, plus having learned it's usually not smart to listen to what the government(s) say or recommend without double-checking myself, I made my decisions.

My conclusion looks like this :

The Past :
...

The Future :
...
...


Now that's something I can relate to. Easy to aquire (at least Gold is tax-free in Germany), easy to sell everywhere worldwide if needed. And instead of losing like 4 to 7% every year (IMHO a more realistic figure here in Germany), it does what it does (at bare minimum protects against inflation, but given the demand it obviously outperforms that, thanks to worldwide inflation & crisis).
And it's apparently still starting, as global money systems are steering into serious trouble, not just there yet.

Anyway, since I think it's completely unreasonable some of the No.1 players could actually ever pay back their insane debt, I don't want to have useless paper in my hands when the events unfold. Being German, I have sufficient stories of my grandparents who lived through all that.

They saw that one :
...
(that's 1 Trillion = 1000 Billion Deutsche Reichsmark...it was the equivalent of a small bread(!) at that time )

Other nice aspects :
1oz Gold/Silver will always be : 1oz Gold/Silver (regardless of currency in use)
Additionally, even in the worst of times, a shiny coin has always allowed a family to aquire what was needed; sometimes even made the difference between death and life.

As for storage, I don't keep these things at home. The safe in my bank clocks in at less than 21 Euro / year (less than what my checkings account overhead costs me every year).
The 3.7 tons heavy steel door that protects the access I can't provide at home - that makes me sleep better at night Wink


On last thought, it also looks extremely good, it immediately shows it's something of timeless value. Every kid can see that.

... ... ...

...



So, what are your thoughts about saving and protecting your hard-earned money and the future of our printed money?
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« Last Edit: 04.04.11 at 21:05:51 by FalconFly »  
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RaverX
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Re: Serious stuff: thoughts about our money system(s)
Reply #1 - 04.04.11 at 23:16:06
 
My advice : don't worry about money. Live your life and try to get the best out of it. That's all. If you try to save money, gold, etc it's useless. If the bank system will collapse your money will not worth anything and there's a huge chance that gold will also not worth anything.

Maybe a canned meat will be MUCH valuable in that future.
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Re: Serious stuff: thoughts about our money system(s)
Reply #2 - 05.04.11 at 18:49:48
 
The demand for gold goes up in turbulent times and so does the price because currencies are unstable and people get a low return from their savings in banks. As soon as interest rates go back up gold prices may fall as a lot of people invested in gold recently and may look to sell. As a long term investment it looks good though.

Pay off as many of you debts as possible with it, no point in paying interest on money you owe when you have money in the bank earning next to nothing.

You could spend it all now as it will be worth less tommorow, this is what your government wants you to do.


People have also been investing in Stamps, Wine and Art for long term investment. At least with wine you can drink away your sorrows if it becomes worthless.

Have you also thought of investing in classic video game cards, if you look at a 3dfx v5 6000 for example they have been steadily rising for a few years  Smiley

Give it all to me so I can pay lawyers to get my inheritance from my dead uncle of $10,000,000 from my evil american cousin and I will pay you $1,000,000....honest Grin
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Re: Serious stuff: thoughts about our money system(s)
Reply #3 - 05.04.11 at 20:01:49
 
oldskool wrote on 05.04.11 at 18:49:48:
Give it all to me so I can pay lawyers to get my inheritance from my dead uncle of $10,000,000 from my evil american cousin and I will pay you $1,000,000....honest Grin

Thats the best investment one can make, believe me! The whole Kenya lives on it Tongue
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FalconFly
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Re: Serious stuff: thoughts about our money system(s)
Reply #4 - 09.04.11 at 21:21:32
 
RaverX wrote on 04.04.11 at 23:16:06:
My advice : don't worry about money. Live your life and try to get the best out of it. That's all. If you try to save money, gold, etc it's useless. If the bank system will collapse your money will not worth anything and there's a huge chance that gold will also not worth anything.

Maybe a canned meat will be MUCH valuable in that future.


I thought the same about money - about 20 years ago.
Today, I have to think about my future and my family, thus I can't afford to think that way anymore.

Gold has always kept its value during the last 5000 years, ironically it (and other precious metals) only saw its true value acknowleged during times of financial crashes and after wars (where the bank/money system had ceased to function).
Basically, along with other items of trade value, it is the only way to aquire things when everything else it down the dumps or becomes worthless.
Besides other hard value (i.e. a house or own ground), it is the only way to become independent from a failing financial system, something that is more rapidly approaching these days than most people realize IMHO.
(again very ironic, the metal prices generated by the New York stock exchange themself display the falling value of printed money and the impending failure of the present currencies)

So in short, preserving value and enabling to aquire critical items in the hardest of times is about all it does. But that it does extremely well, better than anything else on the planet since the dawn of trading.
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« Last Edit: 09.04.11 at 21:29:37 by FalconFly »  
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ps47
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Re: Serious stuff: thoughts about our money system(s)
Reply #5 - 11.04.11 at 16:01:52
 
agreed.

I'll make it short-looking at the current state of the world,I think you have two options:

-if you are an optimist,buy gold.
-if you are a pessimist,buy guns and ammo.


http://video.google.com/videoplay?docid=-2550156453790090544#
http://topdocumentaryfilms.com/money-as-debt-promises-unleashed/
http://www.youtube.com/watch?v=TKurU_7zV8k

hard times await us,probably sooner than later,and anyone who thinks otherwise,is a fool..
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« Last Edit: 11.04.11 at 16:02:53 by ps47 »  
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Re: Serious stuff: thoughts about our money system(s)
Reply #6 - 17.04.11 at 17:31:45
 
Well it is certainly to get worse, I spent two years in this topic and learned a few things. One that if you are serous about protecting your money or investments never invest in one thing or expect that everything this is squared away. The paper markets are for the suckers and the metals that will eventually crash are for fools. Dig deep enough into this subject one will eventually learn that the markets are rigged. It is all about survivability and being able to ride out the high, low, and eventful crash. Personally agriculture is a good bet because no matter what the economics times are people got to eat and if you are able to make returns on those investments and produce it will be you driving the Ferrari rather than the financialist as some call them.
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Re: Serious stuff: thoughts about our money system(s)
Reply #7 - 28.09.12 at 00:08:04
 
So here we are, roughly 1.5 years after my original post.

Hence, time to check where things were going and compare predictions from Apr 2011 to reality.

...

Here's the stats in numbers (including Euro) :
Gold 04 Apr 2011 : 1435.50 US$ | 1008.08 Eur
Gold 27 Sep 2012 : 1777.60 US$ | 1376.57 Eur
US$
+23.8%
, Eur
+36.6%


Turns out, the "fever thermometer" of all FIAT currencies (unbacked paper money) tells us the predictions came/remained true.
Remember, it's not the Gold that became more expensive, it was mainly the paper money devaluating, effectively losing purchasing power due to inflation but mostly excessive 'money printing' by respective central banks.
Medium and Long term trends remain fully intact.

For common-sense check, take a close look how your personal prices for essentials have developed - food, fuel, energy etc. And then check if you see any reason how this decades old trend would reverse - I can see none, rather it continuing at accelerating pace.

...

Silver 04 Apr 2011 : 38.46 US$ | 27.01 Eur
Silver 27 Sep 2012 : 34.66 US$ | 26.84 Eur
US$
-9.9%
, Eur
-0.6%


Being far more volatile, Silver took quite a ride. Turned out Apr 2011 took it explosively very near its all-time-high, somewhat distorting the point-to-point comparison.
Will be interesting to see where it's at in Apr 2013...
Medium and Long term trends remain fully intact, despite significant volatility (aka manipulation, but that's a different story that - in its intensity - silver shares with no single other stock exchange traded asset worldwide in such extremes).


So compressed into as little as possible text, kept in layman terms, what happened :

Central Banks all over the world have intensified their "race to the bottom" in devaluating their respective currencies.

That central bank magic is called QE aka Quantitative Easing, performed increasingly excessively by :
US Federal Reserve, Bank of Japan, Bank of China, Bank of England, European Central Bank. Other national central banks took similar or other harming steps to peg their currencies onto the race.

All done to create the illusion of economic recovery, all while the real world slowly fades from recession further in direction of depression. All done to prop up too big to fail bank institutes that operate on less than 2% of core capital in the global markets.
In short, give a banker 1000$ to play an he will place bets in excess of 50000$ in the markets. Deutsche Bank (to give a german example) is leveraged something like 1:63. That means for every 1000 Euro they have (or claim to have) on their balance sheet, they game the market with 63000 Euros.

Extremely profitable when they win, extremely dangerous when they lose.

And since the banks lost more often than not, they're hopelessly insolvent, carrying trillions (!) of toxic derivates in their balance sheets (still valued 1:1 aka 'mark-to-model' rather than realistically mark-to-market in order to make the impression of solvency).

And since they were bailed out by our beloved politicians countless times, their problem (corporate debt) now has become our taxpayer's problem (sovereign debt). Great lobbying I must say.


So how's the future looking for us all ?
Grim.. very grim. The race to the bottom is accelerating at an insane pace, as no nation wants to be left behind in order to maintain FX ratios suitable for exporting goods at competitive prices.
While good for the banks and industry, we (taxpayers) are left holding the bag. Business as usual.

During my ~2 years of research focussed on global finance systems, one thing became clear :
It's not the politicians that run the show, they're merely puppets to create the illusion of democracy and choice.
That thing is a dark, dark rabbit hole - and it goes DEEP. VERY deep. The level of corruption on political, economic and financial scales is beyond words, it is literally rampaging insane.

While originally my investment had the goal of proving some insurance against inflation and banking woes - it has now literally become a personal hedge against the criminality, incompetence and corruptness of decisionmakers worldwide.

And such insurance (in form of hard assets) is becoming more important by the day.



I can only urge those with a sense of (or hunger for) reality or those who want to understand what this all means/how the political/financial world actually works to keep a close eye on a few websites :

www.zerohedge.com
http://www.theburningplatform.com/
http://www.roadtoroota.com/

Finally, I can as well only urge anyone to review their spending habits. If you're a typical "consumer" that is used to live off credit cards or never thought about saving - NOW is a good time to change that.
Things are going to get ugly and you don't want to be catched wrong footed on this one.


To give an impression that this isn't just me ranting or bullsh*tting around :

The knowledge gained during the last ~2 years has caused me to
- minimize spending
- maximize savings (outside the banking system !)
- shutdown my entire scientific network and sell it
- basically transforming from "comsumer" to "aware citizen"

Although I could afford it easily, no more need for latest hardware, cellphone or any other unneeded tokens/gadgets.
No need to panic either, but not the right time to relax, thinking they (politicians) will fix anything - cause they won't !

--- edit ---

And for those that DO have savings accounts etc., here's a mandatory thing you HAVE to consider :

- what is the actual inflation rate ?
(at minimum, it will be the official, fudged CPI, realistically - it will be higher than that)
- what interest rate do I get for my savings ?

Chances are, if you're into classic savings - your real interest rate may be NEGATIVE (less interest rate than inflation). That means although the nominal number on your accounting may rise (looks good) - its actual VALUE (purchasing power) has actually declined.

Negative real interest rates, once understood and its consequences thought over, one can more easily grasp how banks/central banks win with inflation, while the end of the financial food chain (taxpayer) loses big.

And remember, interest rates are cumulative. The compound interest is an exponential function.
NEGATIVE real interest rates are as well. Go figure.


Quote:
Do You Know
What Baron Rothschild
Considered The
Eighth Wonder Of The World?
Compound Interest. Rothschild, one of the world’s richest bankers, was asked at a dinner party if he could name the Seven Wonders of the World. He said: “No, but I can tell you what the Eighth Wonder is. The Eighth Wonder should be utilized by all of us to accomplish what we want. It is compound interest.”
(Community Savings and Loan Association—ed.)


Quote:
"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit... In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value..." (Alan Greenspan, former Chairman of the Federal Reserve)


An image says more than a thousand words :
...
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« Last Edit: 28.09.12 at 14:24:52 by FalconFly »  
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Re: Serious stuff: thoughts about our money system(s)
Reply #8 - 28.09.12 at 12:20:29
 
couldn't agree more - a word of advice: if you have a family, kids etc, pack your stuff, and go somewhere where the storm won't be hitting that hard (Australia / New Zealand or similar). I'm staying, as I have nothing to lose, and want to see the faces of all the stupid, arrogant people around me when the sh!t hits the fan, saying "told you so" with a grim smile.

people NEVER learn, that's why the world is the nasty bad place it is.
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Re: Serious stuff: thoughts about our money system(s)
Reply #9 - 28.09.12 at 16:40:37
 
Let's just say I learned a few things at a young age, and it really helped me.

Get a good job and work hard for your money. (less likely to waste it)
Don't spend/waste money if you don't have to.  (for awhile this didn't apply to 3dfx items for me...  haha )
Save money.  Invest excess.
Either pay off debt ASAP or don't accrue any.
Live within your means.
Be happy and healthy, you can't control much in this world.

Worked for me so far.  Hell, I don't even look at the gas prices when I fill up my car.  Just fill it until it's full and drive away.  So many people bitch about gas prices, but guess what, it doesn't matter because you need gas and can't control the price. (Hello Gas Buddy)

I treat many situations like this, not only with gas.
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« Last Edit: 28.09.12 at 16:41:23 by rottentreats »  
 
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Re: Serious stuff: thoughts about our money system(s)
Reply #10 - 29.09.12 at 03:44:14
 
FalconFly wrote on 28.09.12 at 00:08:04:
The knowledge gained during the last ~2 years has caused me to
- minimize spending



Cutting "overhead" is always good advice.

Quote:
- maximize savings (outside the banking system !)



MAYBE!

If you are saving "cash" is being devalued by the second, physical assets on the other hand are worth their weight in gold.

Now is the perfect time to upgrade your home (save heat, electric) stock up on long term goods (food stuffs, toilet paper, house filters anything you might use in the next 5 or 10 years you otherwise might by monthly or as needed) ammo, fuel.

I have been doing this for the last 4 years.

Quote:
- basically transforming from "comsumer" to "aware citizen"



Pity there is not more of us, perhaps things would not be in the shape they are in.

Quote:
Although I could afford it easily, no more need for latest hardware, cellphone or any other unneeded tokens/gadgets.



Same here, used car, same phone the last 5-6 years, etc.

Quote:
No need to panic either, but not the right time to relax, thinking they (politicians) will fix anything - cause they won't !



Prudent precautions are never a bad thing and nothing I stocked up will go to waste (aside from some.. emergency items that are.. well for emergencys if things go to hell in a hurry)

I keep enough money in the bank to cover regular monthly bills (electric and phone), not a dime more.
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Re: Serious stuff: thoughts about our money system(s)
Reply #11 - 29.09.12 at 10:51:07
 
What do you do with the rest of your cash? Or did I read the post wrong. (The stocking of ammo bit did make me laugh)
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« Last Edit: 29.09.12 at 11:08:19 by Tim »  
 
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Re: Serious stuff: thoughts about our money system(s)
Reply #12 - 29.09.12 at 11:59:21
 
Tim wrote on 29.09.12 at 10:51:07:
What do you do with the rest of your cash? Or did I read the post wrong. (The stocking of ammo bit did make me laugh)


Not as funny as you think- I do a fair amount of shooting, you can burn through a lot of ammo in a weekend and it does have other uses aside from sport.

I suggest looking at other countries where the currency has gone bad, history has several examples to choose from.

Argentina is one of the latest examples, things got ugly very, very fast. Very sobering accounts how a once thriving country went to hell in a basket in a very short period of time.

Those who forget history are doomed to repete it.
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Re: Serious stuff: thoughts about our money system(s)
Reply #13 - 29.09.12 at 12:24:52
 
Tim wrote on 29.09.12 at 10:51:07:
What do you do with the rest of your cash?


Assuming you have paid off any loans, put into things you are going to use anyway- Look at consumables for the next several years and what sort of shelf life they have.

Gold and silver are nice but you can't eat them, they are good hedges after you cover other items though.
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Re: Serious stuff: thoughts about our money system(s)
Reply #14 - 30.09.12 at 19:00:42
 
Stocking on ammo makes alot of sense, where available.

I remember someone from the US stating he say a nice bumper sticker on a car in front of him :

I've got my gold, guns & freedom - you can keep the change!
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