All of these dollar skeptics are chasing windmills, truly. They decry the “dollar will be worthless one day”, all due to monetary policy and the absence of gold in treasury vaults.
What is gold? Just because some mining company enslaved a few thousand workers to procure something from a cave or ground, I am supposed to have faith in that?
I don’t think so.
You know what I have faith in? Drones.
I have faith in M1A1 tanks putting craters in your capitol. I have faith in a F-35B Lighting II fighter jet taking out your mint.
Money, as you like to call it, “fiat”, is backed by power. Power is supported by military might, which is fueled by ingenuity, productivity and of course hard work.
See the dollar is backed by something.
Now what is a bitcoin backed by? I see the price has “dipped” a bit from yesterday’s highs of $265, now trading at $65. Last I checked, the dollar has never declined by 75% in a single day.
Backers of the internet currency might argue that the bitcoin was trading at $40 last month and $2 a year ago. Therefore, today’s “volatility” is nothing more than a speed bump.
But I thought the bitcoin is an alternative currency, not speculative investment?
How is wealth created?
Believe it or not, wealth is primarily created through productivity, my grandfather busting his ass refinishing furniture for 12 hours and delivering it up 10 flights of stairs in a building without an elevator. The money he made was placed into a bank account, where he hoped it would retain its value.
A currency should store value, not create it.
Having said that, the dollar has been devalued over the years, which has fueled the “dollar is finished” cult. Look, the dollar is down because they want it to be down. We are currency reserve, a GDP sporting $16 trillion, bank accounts worth in excess of $50 trillion. That’s wealth, not some two bit internet currency being used as an “Occupy Wall Street” movement, only dumber.
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Agreed!
Well said.. I have a saying of my own I’ve Tweeted a few times:
“Never underestimate our willingness to use whatever force is necessary to maintain the Global reserve status of the US Dollar”
+1
agreud
“[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
– Warren Buffett
Then, scratch your head some more pondering these questions: Why does the U.S Government bother owning 8,133.5 tons of gold, and guard it with world’s most sophisticated security system and the world’s most powerful military?
Why does any central bank own gold?
Why don’t we just sell it all?
Call Dirty Warren and ask him what he thinks.
Warren says he has more money than you
Yet I’m sure Mr. Buffett owns plenty of gold.
Bang on
Get your share of the Billions
I was hoping Jay Z rap about Cuba would be posted here today. I think this Jay Z masterpiece shows the true strength of the American Empire. VIVA OBAMA!
Wisdom like this is why I come here.
All currencies require faith to hold their value, but the USD has the most powerful country in the world backing it. Compare that to a shaky digital currency supported (and destroyed) by hackers and there’s no contest.
Were you paying Rhino in Bitcoins?
America is the root of all terror. America has invaded sixty countries since world war 2.
In 1953 America overthrow Iran’s democratic government Mohammad Mosaddegh and installed a brutal dictator Shah. America helped Shah of Iran to establish secret police and killed thousands of Iranian people.
During Iran-Iraq war evil America supported Suddam Hossain and killed millions of Iranian people. In 1989, America, is the only country ever, shot down Iran’s civilian air plane, killing 290 people.
In 2003,America invaded Iraq and killed 1,000,000+ innocent Iraqi people and 4,000,000+ Iraqi people were displaced.
Now America is a failed state with huge debt. Its debt will be 22 trillion by 2015.
Oh please. You act like the world would be this peaceful place without us.
Yeah, those 2,000 years leading up to America were REAL peaceful…just roughly 4-5 wars every century, plus a few plagues.
America gets a bad name because we win every fight we get into. And we make sure we’re in every fight. That doesn’t make us global terrorists. It makes the world an unhinged place to live, and us the biggest kid on the block, not willing to put up with the bullshit.
People also get pissed off because their country outsourced their defense to the US and they can’t do anything about it.
Then they get pissed off when the US, who essentially provides defense for the entire western world, doesn’t take action in the things they care about.
Then they feel the need to criticize the US fiscal responsibility and question why they can’t fund programs their country already has because of a military budget of $0.
BINGO
oh yeah, we really, really won in Vietnam and Iraq and we will win in Afghanistan…
I don’t say this to many people but, you sir should… SHUT THE FUCK UP.
Mr. Smith, the US is a 16 trillion economy with a net worth in excess of 65 trillion. Interest payments on the national debt are a paltry 220b. It’s like someone who makes 16k a year with a 65k net worth paying 20 bucks a month. We are no where near broke or failed. 6th grade math.
Today, an astonishing 48 percent of first births take place outside marriage.
Fly, are you saying 48% bastard children going make this country great?
http://blog.heritage.org/2013/04/05/delayed-marriage-knot-so-great/
Time will tell.
Need I remind you that America is divided amongst classes?
One thing is certain, great men and women will make this country great – not the government. Now, if we continue to impede the achievements of great men and women, all in the name of “fairness”, then we will have a problem.
Just bought a 50 trillion Zimbabwe dollar bill on Ebay yesterday for 72 cents…bullish
LOL………..”Occupy Wall Street only dumber……….That’s difficult to imagine.
Is this a buying opportunity for refiners?
Pentagon: F-35 won’t have a chance in real combat
No flights for F-35s until 2018
F-35B: US$237.7M (weap. sys. cost, 2012)
Fly, you are living in a bubble. Dream on.
I don’t think Fly said anything wrong. He was critical of Bitcoin as a store of value or a means to create wealth. He said wealth was created by productivity. That is correct.
He said the US military has protected the USD as the world reserve currency. Correct.
What did he say that you disagree with?
I have faith in M1A1 tanks putting craters in your capitol. I have faith in a F-35B Lighting II fighter jet taking out your mint.
F35 was an analogy.
It was a poor analogy. I could not image Fly is such an fool.
FFIV up 2.75 today after Seeking Alpha story pumping it as an attractive acquisition for either Cisco or Oracle among others. Oversold rally as well. We’ll see how it goes the next few months.
The US Dollar has been backed by power for many years but that won’t last forever. Too many other big nations are now moving away from the USD and the US military can only do so much to keep the USD as the world’s reserve currency.
While gold has little utility, it has served as a store of wealth for thousands of years and governments & central banks continue buying it for some reason and will go to great lengths to take it from other less powerful nations.
While the value of gold may not seem to hold much logic, I guess it’s all about perception and the perception has been and continues to be that gold is valuable.
One can make arguments to the contrary but a 1 oz gold coin still sells for close to $1,600. Is that a bubble or can the government create wealth with a printing press? If they can, why should anyone work for a living?
If the dollar collapses at some point, it wouldn’t be the first time something like that has happened.
In those instances where it did happen, did gold retain its value?
I would love to hear about all the times a country who’s currency freely floated on exchanges, with no foreign denominated debt, suffered from a currency collapse.
The only times it has happened is in Peru and in Germany. And if memory serves me correctly, Germany lost a war or two.
Productivity gives a currency utility, not military might. Military might comes into play in that our industrial concerns are protected here and abroad by it, allowing our corporations to span the globe with ease and saftey. Our productivity makes our military might possible in the first place. We’re still the world’s reserve currency because, before the EU, we were the largest unified economy on the planet. It takes a around a decade to lose reserve status (if Sterling’s decline is any indication), and that assumes your competition keeps outgrowing you. As EU production is on the decline, we’re likely to stay in the #1 spot for a while longer. Our fiscal and monetary systems, for all their flaws, are still the best (when combined) around.
Metal
Wishful thinking.
On a different topic…..China can you please hurry up and BITCH SLAP THE HELL OUT OF JAPAN already. This Yen QE is killing your exports and you don’t want those cheap Japan imports messing with your slowing economy…CHINA SHOW JAPAN WHAT KINDA OF PIMP DADDY YOU ARE.
Hah! Sorry my good nymph, but SHINZO! shall raise the Japanese Empire from the sea.
A nuclear plant for every home.
lol…with there own Nuclear rats.
No question about the dollar, and gold, and where “they” want it to be.
The reality is, no so much that the dollar is so f-cking great, but the system is now controlled now in it’s entirety by the Fed, and by extension, the various world banks the Fed has influence over.
In turn, the Fed has a fiat military system, where a single fighter now costs close to a billion dollars. (Big deal, we just print more fighters!)
Drones are truly evil, and Americans would be wise to worry a bit more about there use here in “ze Homeland”
Today they flying in Oklahoma, able to detect if you are carrying a gun or not from 20,000 feet.
The cabal runs the world now, and they will value precious metals accordingly.
Enjoy the ride.
I suppose the quality comments are residing within the ppt.
USD-
We have to first ask how the USD became the world reserve currency. Answer: in the years following WWII the US was the world’s largest creditor nation, a production based economy, and possessor of the largest hoard of GOLD.
The entrepreneurial spirit and innovative way of America, on top of the productive, manufacturing based economy, is what allowed for the buildup of stuffs – including M1A1, fighter jets, houses, etc
We have since exchanged our productivity based economy for a consumption driven economy and in turn morphed from a creditor nation to a debtor nation, yet the USD is still the reserve currency. Why?
Answer: we still, for the time being, possess the largest hoard of GOLD and have been exporting it in exchange for oil and manufactured stuffs. The proof can be found in FT900 documents released by the US Census Bureau and highlighted in a recent Sprott article: http://www.sprottusa.com/markets-at-a-glance/maag-article/?id=7497
Conclusion –
Since we have mostly done away with our manufacturing base and are steadily exporting our GOLD hoard, it’s only a matter of time before we no longer have anything of value to exchange with the rest of the world. And while there may be a lag where we can still dominate based off our existing military stuffs, without further capital accumulation, from either our own domestic production or from directly importing it (which won’t be possible once our GOLD is finally depleted), the US will no longer have ANYTHING to back a world reserve currency and the jig will be up! Our people will no longer be able to live beyond their means and our standard of living will revert back to match our productivity.
BINGO
Rome was once powerful, so too was Britain.
America will suffer the same fate, and sooner than many think.
Every country outside the US of A is filled with incompetent, lazy, disorganized cretins. Europeans are especially lazy yet pretentious pricks. Canadians, although good natured, are complete fairies, Middle easterns are barbaric and should live in caves whilst bashing each others skulls in with rocks. Russians still wear Adidas jumpsuits. Chinese adults run around in diapers on television shows for entertainment. Everybody else deserves to be on a Sally Struthers commercial.
The illustrations above are the reason why the US dollar is the reserve currency. If you have never traveled outside the US of A,, STFU.
True…. but you guys have Honey Boo Boo…
Since you felt qualified to hold forth on the topic of comedy, I will ask you, sir, which of your comedic inventions will be lasting? Twenty years from now, will anyone recall so much as a single comedic quote from you? One hundred years? None leap to mind at the moment.
Stephen King once criticized TV as a “bottomless pit of shit”. One might say the same about daily bloggery. Rage on with your arrogance, but please abandon your comedic efforts until such time as you are willing to put some thought into them. And that is if such an effort is possible at all; perhaps you have not suffered enough to endure. Good day, sir.
Correct.