The world economy in 7 years ?

This one is for you gold bugs that think gold is so great. You don't understand the fact that when you have "money", as in capital, you should INVEST IT. Sure, if you hold dollars and don't invest it in profitable ways and just keep it under your mattress, gold will outperform your uninvested dollars, BUT...wait for it, what if you prudently invested that "worthless fiat" in companies and businesses that produce stuff humans need?

The stock investor would have turned his $10,000 into $5.6 billion. The bond investor would have turned his $10,000 into $8 million, and the gold investor would have turned his $10,000 into $26,000. That is statistically significant.

www.joshuakennon.com...

Originally posted by babybunnies

I think you're dreaming. The United States will get weaker and weaker over the next 7 years as US politicians bicker and argue back and forth over how to reduce the deficit, meanwhile the debt will have grown to over $25 trillion.

I don't think you know what the debt will be in 7 years.

When you have massive debt and don't reduce spending or make efforts to pay back debt, there is no way that this makes you stronger.

Massive is a strong word. Our debt to GDP ratio isn't that high compared to many other nations.

In 7 years, over 70% of the US budget will be going to debt payments only, and that's at current rates of spending, not allowing for anything extra.

Interesting if true.

US military superiority won't mean a thing in a war with China, as China will kill the US economy overnight liek a bug if there is a confrontation. Personally, I can't see a war with China happening any time soon.

Why do you believe this? The Chinese have already unloaded some treasuries. They simply don't hold enough to make much of a difference...especially if the fed decides to near-instantly purchase a ton to make up the difference!

USA economy is going to look like Italy or Ireland within a few short years, probably not quite as bad as Spain or Greece, but pretty close.

Maybe so, maybe not! I'm going with: unlikely

reply to post by unityemissions


Excellent points. And these comparisons of the United States (a world superpower that can issue it's own money and people lap it up like mother's milk) to Greece, or post WWI Germany (I love that one - comparing the United states to a country that was defeated in a world war), or Zimbabwe, are so off base it's not even funny.

www.forbes.com...

Originally posted by babybunnies


US military superiority won't mean a thing in a war with China, as China will kill the US economy overnight liek a bug if there is a confrontation. Personally, I can't see a war with China happening any time soon.

Just in terms of Navy power alone: The United States has 11 nuclear carrier battle groups. China just built their 1st one and it isn't even operational. Submarine fleet? The United states has 71 nuclear submarines. China has 10.

Air Force capability: Have a look.

en.wikipedia.org...

en.wikipedia.org...

How you came up with your conclusion that the Chinese would squash the United states like a bug is beyond me. And I agree, a war with china won't happen anytime soon because they know they'll get their asses handed to them, especially if they want to try another cold war.

I think alot of responses missed my point and if we don't change the way we think and live very soon our wonderfull inventions are going to come back and bite us or we will end up in a soylent green like world. I dont care what country can beat who or who's fault what is we are so stupid at holding on the useless anger it leads the so called grreatest nations to do horrible acts.

If we can stop letting greed and fear lead our way we might have a chance but 7-15 years of this system we currently have is going to lead to trouble.

Just talking off the top of my head...

I read a long while ago about a German economist that was asked his opinion of the German Empire under the Kaiser and their future.

He responded that in 10 years the German Reich would be in utter collapse. "Ah, so the future is bleak for Germany?"... he replied.

No, actually 10 years later, Germany will be a major world player and expanding it's territory. "Ah, so the destiny of Germany is good and we will be on the verge of rulling Europe?"

No, Germany will be defeated as a nation and we will suffer at the hands of our neighbors. "So the future is grim and Germany will be in decline."

No, another 15 years after that, Germany will be one of the strongest nations on earth and a diplomatic, economic, and military power. "So Germany will be leader of the world?"

No, we will be defeated and reduced to a second rate country.

The economist was later forced into an insane assylum and condemned crazy.

My point is we simply do not know what our future is. I would like to think the USA overcomes it's problems and we re-emerge as a successful world economic and world power.

Unfortunately, history shows us that any country that gets to this point economically goes into permanant decline as a republic. What ensues is reinvention of itself as a semi or full totalitarion government... a democracy in name only.

Or it destroys itself in terrible civil war or is invaded and defeated.

Frankly, either we go to war with China and lose a bulk of our oversea holdings but no mainland invasion and basically go the route of England. OR we decline into Civil War and an ensuing Balkanization of the USA OR we forego our Constitution and turn into a totalitarian regime along the lines of Germany circa 1936.

Originally posted by Drew99GT
BUT...wait for it, what if you prudently invested that "worthless fiat" in companies and businesses that produce stuff humans need?

Then you are taking on capital risk. No matter how prudent you are there is always risk when investing. The global economy has so much increasing risk that the only way out now is through currency devaluation.

"There is clear evidence that, under an elastic, fiat currency regime, the deflation endgame is, paradoxically, inflationary."
www.financialsense.com...

In seven years the global economy will be similar to today with sovereign nations accounting for monthly trade using fiat currency exchanges but after the coming massive currency devaluation that same fiat will no longer be used as the premier store of value due to the risks involved. Hint: America is a net-consuming nation so they get no say in what the net-producing nations choose as their store of value reserves assets.

How do you save your purchasing power in a world of increasing capital risk of stocks, bonds and currency devaluation risk? Answer: Outside the increasing risk of a mal-investing financial system with physical gold close by.

Originally posted by Drew99GT
Take a look at mutual fund and ETF performance currently, and you'll find that the top performing sector is LONG TERM TREASURIES.

Top performing because:
1. For over 30 years more stuff being imported than exported.
features.blogs.fortune.cnn.com...
-and-
2. Dollars are accepted as a store of value instead of real stuff.
"As a current account deficit nation, the US government can appropriately be thought of as a net currency exporter. This means that we send pieces of paper over to foreign nations in exchange for goods and services."
themodernprogressive.org...

What is the LONG TERM view for TREASURIES over the next 7 years?