Originally posted by cyberr1981:
—-—-—-4sg-—-—-—But here the perplexity.
If the G20 starts to create another global currency to replace the dollar, what’s there in Uncle Sam’s pocket to pull out the trillions for countries like China, Japan etc to convert their lots, from the Dollar to the new currency?
But this the irony, isn’t it?
—-—-—-—-—-—--There is already a “global currency” – gold.
Did you know alot of americans are buying gold bullions now? as they are beginning to realise their USD has fallen 98% (1 USD now real value is 2 cents only! – quoted from a US forumer)
Yes gold is a storage of value, esp in hard time.
But we are talking about the trillions of dollars China, Japan have investment in US treasury bond.
How in the world US ever going to return the money to them? Except by devaluation of the Dollar.
Originally posted by cyberr1981:
—-—-—4sg-—-——-
Yes gold is a storage of value, esp in hard time.But we are talking about the trillions of dollars China, Japan have investment in US treasury bond.
How in the world US ever going to return the money to them? Except by devaluation of the Dollar.
—-—-—-—-—-—-by gold bars??
That’s why so many people are ditching the printed money for REAL money nowadays, which caused the gold to be so expensive today. In past few years, gold was only in the USD 200-300 range.
While gold is a good storage of value, it is not a good medium of exchange.
The Dollar is and still remains the medium of exchange.
People are ditching the printed money for gold simply said - money is more than a representative of value. It is also a representative of confidence.
In today context people, more and more people are lossing confidence over The World Trading Currency - the Dollar. Therefore the hoarding of Gold.
But be careful, what goes up will eventually comes down - timing is everything if one wants to join in the fun - else tears will ensure.
Gold was currency in the olden days.
Originally posted by cyberr1981:
—-—-—4sg-—-——-
Yes gold is a storage of value, esp in hard time.But we are talking about the trillions of dollars China, Japan have investment in US treasury bond.
How in the world US ever going to return the money to them? Except by devaluation of the Dollar.
—-—-—-—-—-—-by gold bars??
That’s why so many people are ditching the printed money for REAL money nowadays, which caused the gold to be so expensive today. In past few years, gold was only in the USD 200-300 range.
After World War II, the Bretton Woods system was set up, which pegged the value of the United States dollar to 1/35th of a troy ounce (888.671 milligrams) of gold (the “gold standard”) and other currencies to the U.S. dollar. The U.S. promised to redeem dollars in gold to other central banks. Trade imbalances were corrected by gold reserve exchanges or by loans from the International Monetary Fund. This system collapsed when the United States government ended the convertibility of the US dollar for gold in 1971.
The Bretton Woods Agreement had to be abandoned because there was no longer enough gold to cover all the paper money in circulation. The Federal Reserve had printed far more money than they had the gold to back. Although their Federal Reserve notes were nonconvertible to gold for U.S. citizens, foreigners could still redeem gold with them. They did so to avoid losing out as the Federal Reserve printed even more money, making the money they owned less valuable due to its abundance. After the Bretton Woods agreement was abandoned, and the U.S. dollar was no longer convertible to gold, the dollar fell violently in exchange for other currencies, reflecting the decreased demand for the currency. The price of gold rose relative to the dollar during this period of time.
http://en.wikipedia.org/wiki/Fiat_currency
Ever since, the US has been printing money not backed by gold - money backed by confidence.
Once this confidence evaporates like smoke - where to find the gold bar as you put it?
---------------4sg---------------- While gold is a good storage of value, it is not a good medium of exchange. The Dollar is and still remains the medium of exchange.
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I hope too, I don't wish to see the day when I've to buy a house gold with bars/coins..... as I cannot pay with currency as it's getting too worthless (like case of zimbawe, whatever that country's name is spelt)
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People are ditching the printed money for gold simply said - money is more than a representative of value. It is also a representative of confidence.
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But that confidence is now broken.
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In today context people, more and more people are lossing confidence over The World Trading Currency - the Dollar. Therefore the hoarding of Gold. But be careful, what goes up will eventually comes down - timing is everything if one wants to join in the fun - else tears will ensure.
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gold was $20 per ounce 100 years back, don't think it will go back to $20..ever :lol: it falls abit but rise alot more. but thankfully, SGD is still stronger than USD. that's why not 100% of my wealth is in gold. ;)
but thankfully, SGD is still stronger than USD. that’s why not 100% of my wealth is in gold.
SGD is stronger than USD? You must've yet read the news that the Singapore govt is preparing to weaken the SGD aganst the USD.
Or rather against a basket of currencies - as they always like to put it.
To whoever it may concern the SGD is not stronger than USD be it by PPP or real terms as the current exchange rate is floating between US$1 to SGD$1.48-1.53. Gold is understandably the best storage currency in times like this and particularly as a reserve currency due to the mounting US$ deficit causing a lack of liquidity for countries holding the dollar as reserve currency.
However the possibility of a replacement reserve currency remains to be more of a future plan as it will take at least 10 years for the conversion to be complete. Yes there is more short run gold hoarding, but do not forget that gold is not entirely as liquid as holding monetary currency as their source of demand stems from primarily speculative sources and for other investment purposes (or wealth storage). Whereas for the US$ it is still a pervasive form of 'global currency' traded today. Commodity prices are often priced in terms of US dollars. By overturning the US dollar as a resource currency, the immense financial implications for countries to convert their reserves does not just end there. There must be considerations for the use of the money for import purposes, for liquidity in purchasing commodities etc. The greenback has been with our financial system for many years and the implications of using it has a pricing global currency has reached deep into our economies. Whilst its practical to start thinking of backup plans now, it may be sometime before we see real action happening.
Originally posted by speakup-:To whoever it may concern the SGD is not stronger than USD be it by PPP or real terms as the current exchange rate is floating between US$1 to SGD$1.48-1.53. Gold is understandably the best storage currency in times like this and particularly as a reserve currency due to the mounting US$ deficit causing a lack of liquidity for countries holding the dollar as reserve currency.
However the possibility of a replacement reserve currency remains to be more of a future plan as it will take at least 10 years for the conversion to be complete. Yes there is more short run gold hoarding, but do not forget that gold is not entirely as liquid as holding monetary currency as their source of demand stems from primarily speculative sources and for other investment purposes (or wealth storage). Whereas for the US$ it is still a pervasive form of 'global currency' traded today. Commodity prices are often priced in terms of US dollars. By overturning the US dollar as a resource currency, the immense financial implications for countries to convert their reserves does not just end there. There must be considerations for the use of the money for import purposes, for liquidity in purchasing commodities etc. The greenback has been with our financial system for many years and the implications of using it has a pricing global currency has reached deep into our economies. Whilst its practical to start thinking of backup plans now, it may be sometime before we see real action happening.
Well said speakup. I don't see anything coming closer to replace the roles of the Greenback, certainly not with gold.
-------------------speakup---------------------
To whoever it may concern the SGD is not stronger than USD be it by PPP or real terms as the current exchange rate is floating between US$1 to SGD$1.48-1.53. Gold is understandably the best storage currency in times like this and particularly as a reserve currency due to the mounting US$ deficit causing a lack of liquidity for countries holding the dollar as reserve currency.
However the possibility of a replacement reserve currency remains to be more of a future plan as it will take at least 10 years for the conversion to be complete. Yes there is more short run gold hoarding, but do not forget that gold is not entirely as liquid as holding monetary currency as their source of demand stems from primarily speculative sources and for other investment purposes (or wealth storage). Whereas for the US$ it is still a pervasive form of 'global currency' traded today. Commodity prices are often priced in terms of US dollars. By overturning the US dollar as a resource currency, the immense financial implications for countries to convert their reserves does not just end there. There must be considerations for the use of the money for import purposes, for liquidity in purchasing commodities etc. The greenback has been with our financial system for many years and the implications of using it has a pricing global currency has reached deep into our economies. Whilst its practical to start thinking of backup plans now, it may be sometime before we see real action happening.
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you wrote: "gold is not entirely as liquid..."
Gold is in fact the most liquidable assets. I can now take my gold to any pawnshops and get cash immediately. No persuasion, no advertising... :lol:
------------------4sg--------------------
Well said speakup. I don't see anything coming closer to replace the roles of the Greenback, certainly not with gold.
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Well, I certainly don't wish any currency to be ousted and replaced by gold (which is not what my topic is about).... besides it will speaks of the economy being really really bad than now!!
It is also very troublesome to take 1 gram gold bars to the hawker centre to buy chicken rice. Authorities may have to come up with 0.1gm gold bars as 1 full gram gold bar for 1 packet of chicken rice is too overpriced. :lol: :lol: :lol:
Or maybe, that's when the fiat currency comes in -- for cheaper purchases. :lol:
Originally posted by cyberr1981:------------------4sg--------------------
Well said speakup. I don't see anything coming closer to replace the roles of the Greenback, certainly not with gold.
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Well, I certainly don't wish any currency to be ousted and replaced by gold (which is not what my topic is about).... besides it will speaks of the economy being really really bad than now!!
It is also very troublesome to take 1 gram gold bars to the hawker centre to buy chicken rice. Authorities may have to come up with 0.1gm gold bars as 1 full gram gold bar for 1 packet of chicken rice is too overpriced. :lol: :lol: :lol:
Or maybe, that's when the fiat currency comes in -- for cheaper purchases. :lol:
You entertaining, you know that?
-----------------4sg------------------
You entertaining, you know that?
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I always like to deal with serious topics with a touch of humour. :lol:
Anyways, the case for zimbawe is very real, and bad. The currency is likened to ''toilet paper'' by many people.
if I'm living in zimbawe, 80% of my wealth will be in gold (for wealth protection), 20% in USD (as ''petty cash'' for daily needs). ;)
----------------4sg-----------------
SGD is stronger than USD? You must've yet read the news that the Singapore govt is preparing to weaken the SGD aganst the USD.
Or rather against a basket of currencies - as they always like to put it.
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I missed this msg.....
Time to take 1 day leave next week to make a trip down to UOB to buy some more gold! ^_^
Originally posted by cyberr1981:----------------4sg-----------------
SGD is stronger than USD? You must've yet read the news that the Singapore govt is preparing to weaken the SGD aganst the USD.
Or rather against a basket of currencies - as they always like to put it.--------------------------------------
Hypocritical and meaningless. Singapore govt always wanted to strengthen SGD to USD previously and it caused inflation in unprecended levels, now they want to devalue it? hahaha!
Yes you can take your gold to the pawnshop for cash now but imagine a few hundred thousand people doing it at one go? Or perhaps a country trying to cash out to oil or some commodity, trying to exchange a few hudred million at one go? Gold is not as a pervasive a form of currency as paper money and i meant illiquid in that sense.
Worldlybusinessman do you understand the economics behind valuation and devaluation and the subsequent impact on inflation? How can a stronger SGD to USD cause inflation? You obvious have no idea what you are saying. Im not saying inflation did not happen when they appreciated our currency, what Im saying is that the appreciation is not the cause.
Simple economics. When you appreciate the SGD, US goods become cheaper to buy in terms of domestic currency as 1 SGD now buys more goods than previously. Such appreciation is particularly crucial to a economy such as Singapore as we do a lot of re-export and our economy is very open. Thus there is a need to maintain a suitable strong currency as a hedge against inflated inflation. So obviously your reasoning is wrong.
In times of weakening economic growth however, a strong domestic currency hurts export competitiveness. Thus the depreciation of the SGD would restore some competitive advantage to our domestic exporters in the international market as our goods would be sold more cheaply.
Because you dont seem to understand the mechanism, dont be so quick to pass judgements on policy decisions. What you have shown has just undermined much of your criticisms about the government and whatsoever as it proves you do show instances of talking without understanding the topic. The policies, particularly monetary policy in Singapore, do happen for a reason.Go find out the reason before you criticize please.
--------------speakup-------------------
Yes you can take your gold to the pawnshop for cash now but imagine a few hundred thousand people doing it at one go? Or perhaps a country trying to cash out to oil or some commodity, trying to exchange a few hudred million at one go? Gold is not as a pervasive a form of currency as paper money and i meant illiquid in that sense.
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That shows that fiat currency is only as good as the plastic/paper it is printed on..... sorry to put it so bluntly. :lol:
Originally posted by speakup-:Worldlybusinessman do you understand the economics behind valuation and devaluation and the subsequent impact on inflation? How can a stronger SGD to USD cause inflation? You obvious have no idea what you are saying. Im not saying inflation did not happen when they appreciated our currency, what Im saying is that the appreciation is not the cause.
Simple economics. When you appreciate the SGD, US goods become cheaper to buy in terms of domestic currency as 1 SGD now buys more goods than previously. Such appreciation is particularly crucial to a economy such as Singapore as we do a lot of re-export and our economy is very open. Thus there is a need to maintain a suitable strong currency as a hedge against inflated inflation. So obviously your reasoning is wrong.
In times of weakening economic growth however, a strong domestic currency hurts export competitiveness. Thus the depreciation of the SGD would restore some competitive advantage to our domestic exporters in the international market as our goods would be sold more cheaply.
Because you dont seem to understand the mechanism, dont be so quick to pass judgements on policy decisions. What you have shown has just undermined much of your criticisms about the government and whatsoever as it proves you do show instances of talking without understanding the topic. The policies, particularly monetary policy in Singapore, do happen for a reason.Go find out the reason before you criticize please.
Again well said speakup.....
In times of depression, depreciation of currency to bring about more competitive export. Ceteris paribus, generally more inflationary pressure.
In times of growth, appreciation of currency to bring about more competive import. Ceteris paribus, generally more deflationary pressure.
Originally posted by speakup-:Worldlybusinessman do you understand the economics behind valuation and devaluation and the subsequent impact on inflation? How can a stronger SGD to USD cause inflation? You obvious have no idea what you are saying. Im not saying inflation did not happen when they appreciated our currency, what Im saying is that the appreciation is not the cause.
Simple economics. When you appreciate the SGD, US goods become cheaper to buy in terms of domestic currency as 1 SGD now buys more goods than previously. Such appreciation is particularly crucial to a economy such as Singapore as we do a lot of re-export and our economy is very open. Thus there is a need to maintain a suitable strong currency as a hedge against inflated inflation. So obviously your reasoning is wrong.
In times of weakening economic growth however, a strong domestic currency hurts export competitiveness. Thus the depreciation of the SGD would restore some competitive advantage to our domestic exporters in the international market as our goods would be sold more cheaply.
Because you dont seem to understand the mechanism, dont be so quick to pass judgements on policy decisions. What you have shown has just undermined much of your criticisms about the government and whatsoever as it proves you do show instances of talking without understanding the topic. The policies, particularly monetary policy in Singapore, do happen for a reason.Go find out the reason before you criticize please.
Dont u ever rebuke me . U think i dont understand the difference between currency inflation and domestic inflation?
So are u saying there is no inflation in singapore? Appreciating the currency to match USD , who will pay for it?
...Costs will rise, to make up for the appreciation. We dont have any natural resources to offset this rise. So who will have to pay for it? It is u and me.
What now if it has depreciated, has the costs gone down? No, we still paying for it ..
Now this time to offset the depreciation.
Dude I din rebuke you, you yourself did. I just pointed out the lack of understanding in what YOU posted thats all. What you posted speaks for itself there was no need for me to rebuke you or whatsoever. And you just made the same mistake again by saying costs rise to make up for the appreciation. It doesnt. Appreciation already cut the prices of imported raw materials etc. which we are so reliant on and thus reduces imported inflation. So where does the cost increase come from? And judging from the support that I get from 4sg (appreciate it man ;)), I cant be that far off actually. At least I know my concepts are sound. 4sg do correct me if Im wrong but I think his latest post just demonstrated his misconceptions again.
Never did i say there was no inflation. I explicitly said that there is inflation but Im targetting your explanation for its cause. Dont believe me just go look at my post again. Im just trying to tell you that appreciation alleviates inflation, not worsen it.
Krypton kills Supermen.
It's gotta be the best.