3 ms·

We won't see wealth redistribution with Trump, not even minimum wage hikes. So I guess the take away is: buy gold. Because after the next crash, the Fed won't

by jopsen 9y ago

We won't see wealth redistribution with Trump, not even minimum wage hikes. So I guess the take away is: buy gold. Because after the next crash, the Fed won't be able to bail out the economy by lowering the interest rate. Am I wrong?

sputknick 9y ago
They could return to printing money right? That will work until another countries currency becomes more powerful than ours? I'm assuming that any recession in the US would more-or-less be a global recession.
yourapostasy 9y ago
> Because after the next crash, the Fed won't be able to bail out the economy by lowering the interest rate. Am I wrong? I suspect you might be wrong with this next crash, as the USD would have to get trashed to a degree and on a short timescale no one thinks possible today before we hit gold-scale monetary reset bottom scenarios. What surprised me about the 2008 crash was it revealed to an extent I never thought possible before how invested traders over the entire world are in USD denomination. I thought there would be ferocious push-back manifesting in the FX and bond markets, with knock-on downdrafts on US equities, from the QE's and bailouts. I was wrong. Some people rail against "regulatory capture", but I think "model capture" is overlooked; so much of our economic infrastructure is so heavily entwined with a USD-based economic representation model that a short, sharp shock is apparently unlikely to happen. We'll likely see a decades-long transition to another model like when the GBP was displaced by the USD, this time hopefully not with punctuated and moved along with horrific world wars and economic dislocations like last time. This is ironic to me, because I had thought with all the computer-aided modeling we have available today, that contingency plans are in place at the large trading houses to relatively quickly (within 3-5 years) switch away from USD-denominated transactions, should the US start to monkey around too much with the money supply.
KGIII 9y ago
If it reaches the point where the USD isn't a viable trade mechanism, your gold isn't going to help you. Someone is just going to take your food and water. They won't bother with the gold. I guess you could melt it into bullets.
- jopsen 9y ago
  I wasn't suggesting an end-of-world scenario. Merely that no investments are going to hold their value.
  - KGIII 9y ago
    If your investments hold no value then everyone else will have come down in a similar proportion - assuming you're diversified. So, you might have a lower total number but your value will still be pretty similar, as will your buying power. Right? I may be missing something, but that's kinda what I recall from econ. To be clear, that was 1982 that I last took an econ class.

by jopsen 9y ago

sputknick 9y ago

They could return to printing money right? That will work until another countries currency becomes more powerful than ours? I'm assuming that any recession in the US would more-or-less be a global recession.

yourapostasy 9y ago

> Because after the next crash, the Fed won't be able to bail out the economy by lowering the interest rate. Am I wrong? I suspect you might be wrong with this next crash, as the USD would have to get trashed to a degree and on a short timescale no one thinks possible today before we hit gold-scale monetary reset bottom scenarios. What surprised me about the 2008 crash was it revealed to an extent I never thought possible before how invested traders over the entire world are in USD denomination. I thought there would be ferocious push-back manifesting in the FX and bond markets, with knock-on downdrafts on US equities, from the QE's and bailouts. I was wrong. Some people rail against "regulatory capture", but I think "model capture" is overlooked; so much of our economic infrastructure is so heavily entwined with a USD-based economic representation model that a short, sharp shock is apparently unlikely to happen. We'll likely see a decades-long transition to another model like when the GBP was displaced by the USD, this time hopefully not with punctuated and moved along with horrific world wars and economic dislocations like last time. This is ironic to me, because I had thought with all the computer-aided modeling we have available today, that contingency plans are in place at the large trading houses to relatively quickly (within 3-5 years) switch away from USD-denominated transactions, should the US start to monkey around too much with the money supply.

KGIII 9y ago

If it reaches the point where the USD isn't a viable trade mechanism, your gold isn't going to help you. Someone is just going to take your food and water. They won't bother with the gold. I guess you could melt it into bullets.

jopsen 9y ago
I wasn't suggesting an end-of-world scenario. Merely that no investments are going to hold their value.
- KGIII 9y ago
  If your investments hold no value then everyone else will have come down in a similar proportion - assuming you're diversified. So, you might have a lower total number but your value will still be pretty similar, as will your buying power. Right? I may be missing something, but that's kinda what I recall from econ. To be clear, that was 1982 that I last took an econ class.