The dollar hits a new low against the Euro :(

You fail to factor in increasing technological advances that might make it cheap to create gold, therefore effectively making it worthless and no longer needing to be mined - i.e. atoms of gold have been created in the lab, admittedly its still cheaper to mine the stuff, but it shows that the old alchemists dream it actually possible to achieve - further technological advances might bring down the price of such scientific processes.

I do agree with you that the middle class in most western nations is being destroyed - by increasing housing costs and taxes more than through the effects of inflation. Governments take approximately 50% of every dollar you earn (here in Australia 33% income tax, 10% Goods tax, tax on petrol, local council rates, fees, charges, fines - in truth their take is probably closer to 60% - this is worse than the feudal system).

Most families now need two incomes to survive - this was not the case previously where one income was enough to support most families.

I'm on one income and just get by - its my internet businesses that hold my families best chance for moving up the economic scale - not my day job. Hence why I recommend every one start some sort of home based business and why I prefer not to work overtime.

 

Even Ronald Reagan realized that our economy was in trouble back in the 1980s. This is why he started a commission that came to be known as the Grace Commission:http://www.freecanadian.net/articles/grace.html.

Ronald Reagan realized that the U.S. government wastes a lot of money. He realized that there was a problem, but he decided to hire the top corporate executives in the country to take a look at the government's spending to see how they could reduce waste an increase efficiency.

What the Grace Commission found was that the U.S. government wasted a bunch of money, and if they just not wasting money in certain areas, the government could solve its problems without even having to cut out any social programs.

The Grace Commission predicted mathematically that if the U.S. didn't make changes to its monetary policy and spending, eventually the U.S. would face an economic collapse. So far, their math has tracked perfectly from the 1980s into the 2000s.

The problem is, once the Clinton Administration got in office, they abandoned the Grace Commission and its recommendations. I'm not trying to take sides with Republicans or Democrats, because both parties are largely controlled.

The point I'm trying to make is, Ronald Reagan saw a coming problem with our economy, and he took steps to fix it.

 

This is the absolute truth, and I can't say that at some point in the future technology won't become available to cheaply produce gold or silver in the lab. I believe anything is possible.

In a situation like this, the price of Gold and Silver will fall dramatically, and they will lose their role a traditional stores of value, since they are commodities just like anything else. However, I do believe that once this happens, their will be something to replace it, maybe Platinum, Rhodium, who knows?

One thing that I'm sure of is that right now, the price of Gold and Silver is going up, and the value of the dollar is going down, so to have all your money in paper is very dangerous. If I'm still alive to see the day that Gold or Silver is cheaply replicated in the lab, I will be sure to get rid of my gold and silver holdings and switch to another store of value. One thing that is certain is that at the end of the day, paper money is nothing but paper.

It sounds as if you're talking about nanotechnology, and the only thing I can say is that nanotech is a wild card, and will change the world in a manner that is unprecedented. In fact, I think nanotech could bring about the next industrial revolution. There is no way for me to predict what this will bring about in our societies, it is like us living before the first industrial revolution trying to wonder what life will be like after it. It is so hard to tell. Everything will change. In a way, that scares me, though I'm comforted in knowing there will be opportunities available.

 

Uranium perhaps?! It has value as a store of energy. (of course an advance in fusion energy creation could too make this worthless).

 

Well, I doubt Uranium because its radioactive and can be used to make nuclear weapons. The situation with Spain is one of the rare example of when Gold may have failed, but compared to paper, Gold is far more superior. Another problem with Uranium is that if Gold can be produced synthetically in lab, then Uranium can be too, because they are both essentially comprised of atoms at the most basic level.

Land is pretty valuable, and I agree, this is something that definitely stands the test of time. With nanotech, I don't know what the future holds. Because if they can produce Gold in the lab, they can probably produce anything, and if that happens, I don't know......

To say that Gold could be created from scratch in a lab is almost like saying the Mona Lisa can be created in a lab. If that happens, the Mona Lisa would lose value, but when you think about it, you would have an original and then the lab created version. It all depends on if you can tell a difference between the two. If there is no real difference between hypothetical gold created in the lab, and gold mined from their earth, Gold would decline. But who knows, I don't know what the future holds, I only see the present and the past, and how things have existed.

I'm not going to say it is impossible for too much Gold or Silver to be available, but compared to paper, they are so much more powerful.

 

Taxes, Food, Land and Energy are about the only things the government control people through which is why they fear sources of free energy.

Imagine if you will a world with nanotechnology to work your land combined with sources of free energy - you would then beholden to no one to meet your basics - food, water, shelter.

I personally wish a country existed with no tax and a government that aimed to keep interference to a minimum - almost amish like paradise (p.s. utube weird al yankovic for a classic 'living in an amish paradise' very funny - http://www.youtube.com/watch?v=GsfVw9xxoNY

Anyone keen on joining me in conquering a new country with a new set of rules - perhaps Greenland - hear land is fast warming up there!

 

This is an interesting scenario you bring up, and I agree, the government largely controls us through food, and definitely energy. They are afraid of alternative energy technologies, and when you read in history books about all the crap guys like Nikola Tesla, Henry T. Moray, and Viktor Shauberger went through with their discoveries, you're right, I think there is a cover up there.

Nikola Tesla was harassed, and his ideas were taken, and he died in poverty. The government stole Shauberger's ideas, and he died penniless. Henry T. Moray was shot at and threatened by government operatives.

Yeah, they don't want us having alternative energy. Personally, I HATE the power company in my city. They treat us like trash, and act like they own us, and in a sense they do, because all they have to do is turn off the power, and we are in a lot of trouble.

I don't like being dependent on monopoly power companies that control the energy that comes into my homes..........I feel that I'm at risk. I would like nothing better than to unplug from the electrical grid and use my own energy supply.

 

Prices have declined because there is a there is an over abundance of "supply". The larger the supply, the less the demand. Basic economic theory. To large an inventory (supply) is why prices have dropped and demand has fallen. Money and credit have little if any influence on the buying habits of a consumer in a market that has too much supply.

But alas, this is Bush's fault, right?

 

This is only going to get worse. The cheaper the dollar the cheaper it is to pay off foreign debt.

 

supply is part of it, but for people who live in place like where I live where the houses are expensive, anther thing is the new restrictions on jumbo loans, loans over 417k

http://abclocal.go.com/kgo/story?section=business&id=5669730

lol, yeah and no one was buying houses with no money down, low or no doc loans, or pay the interest only loans, which are all disappearing

As credit tightens you will have less buyers, which just adds to the price drops from the over supply.

 

things will change sooner or later again. Now the problem is China and the greed of western businesses to make as much profit as possible for the lowest investments for which the Chinese cater pretty well.

The dollar low now means loss for the Chinese govt that has set a fixed exchangerate, just to turn them around and not to interfere.

 

The purchasing power of the dollar has declined at an 18% compounded annual rate since 2002.

When you consider the facts, the dollar is on the road to weaken further.

US M3 Growth is currently 10.7 percent and reaching the inflationary levels of 1976 to 1980 when the M3 growth rate averaged 11.4%

The US current account deficit jumped by 8.2% to a record $856.6bn in 2006. The US is exporting dollars and foreign banks are buying US debt and creating a housing bubble. The intrinsic value of a house is the rent that it can generate and historic value of a house is equal to 10 times its annual rent.

Over the last few years the price of oil, commodities, and housing have doubled. Either the wages of workers will have to rise (inflation) or the US Federal Reserve will have to raise interest rates to contract money supply.

The current economic climate is similiar to the 1907 Bankers' Panic. The stock market fell nearly 50% from its peak in 1906, the economy was in recession, and there were numerous runs on banks and trust companies. The severity of the downturn was such that it eventually pressured the United States Congress to accept the proposal by a group of bankers to create, buy the shares, and own the Federal Reserve System in 191

 

I wonder if now these wonderful bankers will propose instead of foreclosure on millions of home owners and repossess their now valueless home to instead convert the mortgages "temporarily" of course to interest only loans - effectively turning everyone into a tenant and a life long slave to the banks.

Hey at least this time slavery won't discriminate - everyone will be slaves, white, black, whatever.