An admission of possible US default????

[dixiegrrrrl]

Does this sound as if traders trust the dollar anymore????

"U.S. credit default swaps currently trade in euros.:wtf:

After all, if the U.S. defaults/b], who will want payment in devalued U.S. dollars?

The euro recently weakened relative to the dollar, and market participants are calling for contracts that require payment in gold.
If they get their way, speculators on the winning side of a price move will demand collateral paid in gold.


the guys who got us into this mess, and then Europe in the same mess, are now saying they only want gold for their trades.
(Is this why the IMF sold off so much gold???)

link to article at HuffPo.
Article title is:
Washington must ban UD Credit Derivatives as Traders Demand Gold

http://www.huffingtonpost.com/janet-tavakoli/washington-must-ban-us-cr_b_489778.html

[upi402]

1. The GBPound isn't doing so well, and the Euro

is swirling the drain. What's this say about the USD? I bought more gold last week and it killed me to pay almost double what I paid earlier. But I think that if Obama returns the US to reporting the M3 I will cash in my annuity ASAP and take the tax hit to buy gold.

At least some of Asia isn't looking so bad, discounting China with their games.

[dixiegrrrrl]

2. gold and framland, I think Dr. Doom said in an earlier post.

Gosh, even the gamblers are bailing on the dollar.

Gulp.

[upi402]

3. Should I put down my calendar

and start looking at my wristwatch?

I want to get out so badly but I have a child and a house. I want to sell my house for whatever and cash out my annuity, but feel it's too late. I never used to buy what the doomsdayers said much before.

[dixiegrrrrl]

4. Don't know where your housing market is

but most markets are not doing well.
If you have a lot of equity and can pay off the house, that might make more sense.

The annuity..depends on how big a hit you will take with penalties, taxes ( state and local)
and the 15% capital gains....at least the gains tax is low this year, going to go up next year.

I am buying seeds and flour, not gold.

[cutlassmama]

12. bought seeds, flour, and gold this week

[global1]

6. Kind Of A Naive Question - But What Will You Do With Your Gold?.....

really - I'm being serious here - how liquid is it? Do you actually have possession of your gold? Is it in coins? If the dollar, euro (money in general) goes south - how do you use gold? Will you buy food with gold? Will you pay your bills with gold? Will whomever you are dealing with be able to make change for you should your gold be more than what the merchandise you are purchasing is?

I never really understood what people do with gold once they have it. And I'm not being funny here. I seriously want to know.

[dixiegrrrrl]

7. In all seriousness, post your question here in the forum.

There are all sorts of gold buffs who can give you good answers.

[A HERETIC I AM]

17. There aren't any good answers, that's the problem.

Let's say you sell every single investment you have, from stock mutual funds to money market and buy physical gold with the cash. By that I mean you buy something like these that is 23 carat or better or coins that are 99% pure;


OK...so now you have a shitload of the above metal. What do you do with it? While it is true that it can be exchanged for any paper currency in the world, how the hell is the average American doofus going to get Yen or Aussie Dollars or Euro or British Pounds for it? Do you expect there will be a Queenslander on every corner of small town America looking to make a trade? And if the American Dollar goes the way of the Zimbabwe dollar, what makes you or anyone else think that the rest of the paper money in the world won't follow the same path?

I mean, really, what the fuck is the point?

People that think Gold is the be all to end all of safe investments fail to realize that, at the end of it all, it is STILL A DEBT INSTRUMENT. For gold to be of any use in an economic catastrophe, it has to be tradeable for something worthwhile by more than the next two parties in the chain. If I am a farmer with 50,000 pounds of rice I need to unload, the last thing I really need is a metal whose marketability is questionable. What I need is meat.

The "gold buffs" never tell you THAT part.

Gold is useless in an utter collapse.

BTW, edited to add; Unrecc'd for being yet another in a long line of alarmist threads that do nothing but get peoples panties in a twist.

[Mira]

8. Gold storage

Physical gold is a small power packing portable insurance that's awfully good to have.
Unless the government calls it in you can have it in your pocket.
You can turn it into cash in coin shops. If there are any.

In Europe you can walk into any bank and cash it in on the spot.

You can store it in a hidden fire proof safe/ built-in in your house, a safety deposit box at the bank, or in a coffee can in your flower bed.

Gold's negative is that it brings no interest, the positive is that it holds its value, whereas the dollar and the Euro, not so much.

Right now, because of the Euro being weak and gold being strong the gold/Euro ration is the best EVER.

Many Europeans are tempted to sell.
My poor Mom in Germany has a Krugerrand and a couple of 1/4 ounces of gold I gave her years ago, so she always has something to bail her out of a tight spot, on the spot.
She is 84 and wants to come visit. I told her the gold would pay for her trip.

She was quiet a long time, and then she said:
"But after that I won't have it any more".

I'm still laughing.

Seriously, if you believe that money is not holding it's value, and if you are able to spare some cash, buying gold, maybe quarter or half ounces on some dips is not a bad idea. Because in spite of fluctuations it will always be worth money.

It surely, at this point, brings no interest just like the dollar which goes down in value while gold trends up.

type in : silver and gold reports and start reading.
Or go to Kitco.com and start reading.

I hope it's OK I took you seriously!

[global1]

11. Thank You - But If The Dollar And/Or Euro Lose Value - What Good Is Going Into A Bank.....

and cashing it in? You are back to dollars or euros again. I can see buying gold as a hedge to the weak dollar - but if the dollar crashes and all I have is gold - how do I use it? Again - I'm not trying to be funny.

You talk about many Europeans are tempted to sell. That's because there still is a market for euros to gold and gold to euros or dollars to gold and gold to dollars.

But if the currency fails and the dollar becomes virtually worthless - how do I then use gold?

And in the commercials I hear promoting the purchase of gold - it appears that you are buying gold and someone is holding it for you. How can you trust these gold holding houses. Again - if the currency fails - how are you going to get your gold from these houses?

If I have a Krugerrand in my pocket and I want to buy something with it - if the common currency of the country has failed - how do I use my gold?

It's not like back in the gold rush days where you could walk into a general store and pay in gold dust being weighed on a scale. Is it?

Again I'm not trying to be funny. I just don't get it.

[Mira]

13. I suppose

the answer lies in what kind of trouble there is.
If there is a complete collapse of everything and we are in basic survival mode and no food is available and all commerce stops your gold is also useless.

Then a big dog or many (I can't advocate guns) land, fences, seeds, are all that may pull you through.
Like Dixiegrrrrl says.

But if you have your gold, and need money, then the gold you have stashed may bring you more dollars when you cash it in than you paid for it.
Which means with the dollar going down your gold has gone up.
You bought it for a thousand, and get 15oo, now even against a falling dollar that's solid interest.

Europeans, individuals I'm talking about, are tempted to sell because they could get a substantial amount of Euros more right now than they paid, because the Euro is so weak. If they need money for buying stuff, they might want to cash in their profits, and pay down debt if they are smart, or take a cruise if they aren't.

:)
To your Krugerrand question, if the common currency has failed, then it's back to HOW BAD are things?
If there are no banks, no stores, there will still be bartering going on. Your gold piece might get you something you need in exchange.
My Dad traded a large sack of potatoes and 2 pounds of butter for an old piano that is still in our family in 1943.

That's why I like quarter ounces better. Or silver.

I also have a lot of single dollar bills, in case of a bad storm disruption for instance.
I've seen it happen that a single store was open after a bad electrical storm, and if you wanted change for your 20 they just did not have it,
but you needed the milk.....

I would not trust the gold holding houses in a collapse.
That's when I would like my stuff close by.
It depends on what eventuality you want to prepare for.
And it depends on what you personally think the possibilities are you want to guard against.
And as far as gold goes, it depends on what you personally think the trend is. Up or down.
One never knows, it's a crap shoot.
I believe the trend is up because of all the other factors.

I hope this helps.

I just re - read the books:
"The second after" and "Lucifer's hammer".
Great stories, but they will scare the bejeesus out of you and get you thinking about what it could be like in a total physical collapse.

[dixiegrrrrl]

16. MY security comes from having the tools and know how to use them.

Depending on where you live, barter is going to be a good bet.
I have been studying up on how other people survived the collapse of their country.
Argentina for example, in 2000.
Might be time to more of that.

Waving any form of money around might invite unwelcome visitors, btw....

[JDPriestly]

15. If there is a crisis, you will get more dollars for your gold.

Also, if you have to flee to another country, or if merchants begin to refuse dollars, you have something you can trade to a private person, something of worth.

In the 1930s, Jews fleeing the NAZIs were lucky if they had portable valuables, including, at that time, real jewelry (not costume stuff), gold even watches. When people are bartering food for other edibles or vital services, gold can get you a long way.

We hope that a crisis that severe won't happen, but it has happened in the past.

I don't have an opinion as to whether we are headed into such a drastic crisis. I'm just explaining what I know about the past.

[northernlights]

18. gold is for the wealthy

who already have farmland, seeds, gardeners, cooks, etc. Something to do with their *extra* money. I see way too many people at my job with a couple thousand dollars in mutual funds forced to cash it out for everyday emergencies. Investment money should be well over and above everyday and emergency cash.

For the average person, it is more important to be able to grow as much of your own food as possible and heat your home as much as possible.

I'm still hoping to dump my house this spring/summer. I own it outright, but it's less land and more house than I ever wanted *and* it has no woodstove.

I want a few acres to grow on and a few acres of firewood trees, minimum. More if possible. A smaller, more efficient house with either solar or wind or both.

The less you have to buy, and the more you are able to barter, the better off you'll be. no matter *what* the economy does.

[upi402]

9. We're clearing the way to leave the country

And I want to maintain present-value. I have some binds to be worked out first. I don't think gold will be liquid but plan to sell it to private citizens when they finally panic and I'm ready to leave. I have bought gold privately before and people are selling it on craigslist and ebay.

I'm finished listening to smart people claiming to be more rational and reasonable. I missed $100K when I took my house off the market because I let 'smart people' dissuade me when I saw the RE collapse coming. It's not easy to give up on your life's labor and I was reluctant to act anyway. Easier to pretend they might be right.

[Mira]

5. Currencies at large are terribly weak, and the Euro is suffering

specifically from the problems with Portugal / Ireland / Greece and Spain. I think once the Germans bail out Greece for real it will stabilize a bit again.
Very tricky, when you don't trust any of the currencies, but it's been that way for a while.

Gold as always will fluctuate, but the trend is definitely up, as we've been watching.
It used to be as the dollar goes, so goes Gold inversely.
Now there is no such barometer, except oil. As Oil goes gold parallels it usually.

No matter what, we are in such trouble world wide.

http://money.cnn.com/2010/02/05/news/economy/financial.hotspots.fortune/

[upi402]

10. Seems Germany is not talking, but that's an improvement

for Greece. The rest of the EU is ready though. Does he speak for Germany then? I doubt the court case(s) would sink any bailout, but don't know.

"French President Nicolas Sarkozy yesterday said the 16- nation euro region is ready to rescue Greece should the government struggle to fund its budget deficit, arguing that the country is “under attack” from so-called speculators."

http://www.businessweek.com/news/2010-03-08/greece-bail-out-by-eu-would-face-suit-by-german-euro-opponents.html

[Mira]

14. I believe Germany will do what it takes to prevent a dive of the Euro if they can.

They just want to sweat them into doing all they can for themselves.
But that's just what I think, not what I know.