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OK,

It looks like is is a race to the bottom but what then? The US, UK, Euro, even the Japs again and again are at it, trying to remain competitive with ragards to exporting goods and services relative to the cheap labour of the BRIC nations. But how low can they go, how longs until the debt markets smell fear ansforce up rates of return on soveriegn debt?

Will the currency debasement go on and on, so rape cash savings, rape pension values, kill off anything valued in paper awell? If a house is worth £100k, and the currency is debased by 30%, then that house has fell by 30% relative to a currecy of purchase which remains at the initial constant value relative to the intitial 30% fall of the selling currency.

Will cash and pension, maybe investors have to take a haircut on their pot of honey should this lead to an investment house or bank collapse?

I understand the dash for commodoties, but they are in a QE bubble, surely if this bubble pops wages will not have to rise so rapidly, whereas if the commodity bubble keeps going up and up, then eventually wages will have to rise, so will interest rates, which will cancel out wage rises for the over indebted?

Cash, pensions, wages, they fall in line, they rise in line, the main issue is bank failure with no support from goverment so a hair cut?

Any thoughts............

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IMO everyone is on survival mode. The US needs to break out of a deflationary-recessionary cycle and are running up the Yen, Euro and Pound to maker US exports more competitive. Japan is fighting back but their 50-60BN $ efforts to sell Yen and buy dollars are puny when you are talking trillions traded on the FOREX daily.

I believe things will eventually spill over into the stockmarkets which should see a sizeable drop this side of Crimbo. Confidence is fragile and no one can predict what is goping to happen next so they all pile into gold. But how long will that PONZI last as more gold is being bought in a day thanis mined in 6.3 years.

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OK,

It looks like is is a race to the bottom but what then? The US, UK, Euro, even the Japs again and again are at it, trying to remain competitive with ragards to exporting goods and services relative to the cheap labour of the BRIC nations. But how low can they go, how longs until the debt markets smell fear ansforce up rates of return on soveriegn debt?

Will the currency debasement go on and on, so rape cash savings, rape pension values, kill off anything valued in paper awell? If a house is worth £100k, and the currency is debased by 30%, then that house has fell by 30% relative to a currecy of purchase which remains at the initial constant value relative to the intitial 30% fall of the selling currency.

Will cash and pension, maybe investors have to take a haircut on their pot of honey should this lead to an investment house or bank collapse?

I understand the dash for commodoties, but they are in a QE bubble, surely if this bubble pops wages will not have to rise so rapidly, whereas if the commodity bubble keeps going up and up, then eventually wages will have to rise, so will interest rates, which will cancel out wage rises for the over indebted?

Cash, pensions, wages, they fall in line, they rise in line, the main issue is bank failure with no support from goverment so a hair cut?

Any thoughts............

debased against what? if all currencies devalue at similar rates then little changes. Better to find assets that will hold their value if you believe this will happen and have a lot of paper. Am starting to wonder if even bricks and mortar are such a bad idea even now.

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so they all pile into gold. But how long will that PONZI last as more gold is being bought in a day thanis mined in 6.3 years.

Indeed. It won't last. When we reach the end game those holding paper will be destroyed. Real gold - the physical ounces - will be unobtainable. The price will go through the roof.

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Indeed. It won't last. When we reach the end game those holding paper will be destroyed. Real gold - the physical ounces - will be unobtainable. The price will go through the roof.

The same goes for Silver.

Nobody wants a strong currency, what does that tell you!? :ph34r:

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Relax and don’t worry too much. All that is happening is that there is a structural shift back to the historical norms whereby the East gets back to its rightful place in the world pecking order.

I actually think China is a dead end. Industrialisation which worked for us may not necessarily work for them, even if the status quo is kept in place.

Because they are using labour intensive jobs which overtime will be phased out for when things are demanded which simply cannot be made by hundreds of hands... Intel's 45nm microprocessors for instance. Even modern Japanese engines the engineering tolerances are so incredibly tight you can't use hand tools to make them or even things like lathes to make them.

Its gotta be a computerised and therefore probably a robot. Motorbikes copies are excellent examples of this. Chinese factories can copy the rubbish 50-150cc machines which are low compression low engineering tolerance items. With a lathe I could build one easily. Since technology rarely goes backwards, i.e. we won't demand VCRs and things get smaller more powerful and more efficient you got to automate the processes.

Thing is if China moves to these computerised and automated production methods, you have a massive unemployment problem which inturn affects its internal consumption get out method.

If they try to move to a consumption model people'll demand more $$$ they do this the factories go automated like the massive German carpet making machine. Again no jobs = no demand = bust... though they are left holding a lot of capacity.

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china can, they have CNC machines, i used to make video drums for VCR manchines, i used a CNC in a aircon (stable temp) room......in 1989 in St Helens i could produce hundreads a shift to a tolance of + or - 5 microns.....no trouble.

China has CNC & is making EVERTHING with them, hence why i have little to do all day but wonder at what point they CRASH the £ to force out China????

mike

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You are getting to far ahead of the situation. Don’t think that the Chinese can only produce lesser quality hand made products. China is right now in general terms making anything that any other country can make. Yes you can get badly burned with quality in China but if you know who you are dealing with you can mitigate this risk and you can get acceptable quality out of China. Automation will only accelerate their growth further not the opposite.

I know they can and will use automation and precision things.. Thing is these automated industries employ less people...

Although it has worked in the past where people retrain and or the lowered prices from automation thus restimulating demand, I'm not sure it'll work this time.. As automation is across the board and cycles where 'new jobs' created are automated or integrated so that they have incredibly short life cycles. 15 years ago making websites was livable, today due to software improvements and things like blogger anybody can do it.

And even if automation and new machinery produce new jobs how long can it last, 10 years? Remember 1996 the best chess computer was 11.5Gflops, today a cheap intel processor pumps out 66Gflops... along with standardisation (such as containerisation) and software breaking down complex tasks into simplier ones how long can it last?

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Thing is if China moves to these computerised and automated production methods, you have a massive unemployment problem which inturn affects its internal consumption get out method.

next stage for china thus has to be higher jobs - pilots, researchers, accountants, business leaders, technicians, grad engineers, surgeons, sociologists, planners

it is hard to see how this intellectual progress is likely without political freedoms, thinking people demand to be allowed to think freely, usually

Edited by Si1

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When we reach the end game those holding paper will be destroyed. Real gold - the physical ounces - will be unobtainable. The price will go through the roof.

The price AS MEASURED IN DEAD CURRENCIES will go through the roof.

The gold simply buys you then what it buys you today. Better than nothing, but not riches.

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IMO everyone is on survival mode.  The US needs to break out of a deflationary-recessionary cycle and are running up the Yen, Euro and Pound to maker US exports more competitive.  Japan is fighting back but their 50-60BN $ efforts to sell Yen and buy dollars are puny when you are talking trillions traded on the FOREX daily.

I believe things will eventually spill over into the stockmarkets which should see a sizeable drop this side of Crimbo.  Confidence is fragile and no one can predict what is goping to happen next so they all pile into gold. But how long will that PONZI last as more gold is being bought in a day thanis mined in 6.3 years.

RB,  reasonable factual analysis, but wrong conclusion.

This is a race to devalue, there is only one outcome and it isn't lower stock markets.

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next stage for china thus has to be higher jobs - pilots, researchers, accountants, business leaders, technicians, grad engineers, surgeons, sociologists, planners

it is hard to see how this intellectual progress is likely without political freedoms, thinking people demand to be allowed to think freely, usually

There aren't enough of those kinds of jobs to sustain the UK let alone China and most of them are ripe for automation too.

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OK,

It looks like is is a race to the bottom but what then?

Cash, pensions, wages, they fall in line, they rise in line, the main issue is bank failure with no support from goverment so a hair cut?

Any thoughts............

Some thoughts:

The Western debt is too big to be paid back in currency of value.

The bottom is when we can compete with international wages/productivity again.

I'm getting more and more scared of holding cash all the time. Since residential land prices have already crashed, I'll buy that rather than metals which is just another bubble IMO (although admittedly, it could be early stages).

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Indeed. It won't last. When we reach the end game those holding paper will be destroyed. Real gold - the physical ounces - will be unobtainable. The price will go through the roof.

What price do you think it will get to?

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Some thoughts:

The Western debt is too big to be paid back in currency of value.

The bottom is when we can compete with international wages/productivity again.

I'm getting more and more scared of holding cash all the time. Since residential land prices have already crashed, I'll buy that rather than metals which is just another bubble IMO (although admittedly, it could be early stages).

Come with me on a biking adventure... you'll trade your paper for some incredible memories and experiences.

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Come with me on a biking adventure... you'll trade your paper for some incredible memories and experiences.

Only if you guarantee its downhill all the way :)

I did my travelling in my 20's, lived abroad for a few years. Now is the time for family and kids.

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The price AS MEASURED IN DEAD CURRENCIES will go through the roof.

The gold simply buys you then what it buys you today. Better than nothing, but not riches.

i dont think that is correct, making the rather large and dubious assumption Errol makes then i cant see how gold would only retain its value if it remains valuable and not increase wealth as wealth is purely a relative mechanism of measuring yourself against another. If all cash is falling those holding are becoming poorer so by definition you are becoming wealthier i think

Edited by Tamara De Lempicka

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Only if you guarantee its downhill all the way :)

I did my travelling in my 20's, lived abroad for a few years. Now is the time for family and kids.

Sure, it will go downhill from day one.... psychologically..... the time I got to Kansk I was psychologically drained and my morale had hit rock bottom.... I then had to ride through the mud hell (notice how googlemaps it appears as if there is no road from Kansk to Irkutsk in many places) where I regularly dropped my bike fell over into puddles, got splashed by lorries covered in knee deep mud. While at the same time having Giardiasis, and campobacta poisoning. And thus unable to keep food down and being absolutely exhausted with shot knee and ankle joints.

Those were tough horrible days.... strangely I remember them quite fondly.

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Indeed. It won't last. When we reach the end game those holding paper will be destroyed. Real gold - the physical ounces - will be unobtainable. The price will go through the roof.

If gold becomes unobtainable no one will be able to obtain it and the market will collapse. Something Tautologous Tim might say?

Now that gold has, in the minds of some, officially shifted into a new paradigm (its a deflation and an inflation hedge) the price can only rise. If uit is immune to the broader economy how can it fail to rise? As long as people believe and have faith it cannot fall in value. If, on the other hand, the market decides to take profits all in one go we might see the Tulip effect kick in.

Paper money can never be destroyed all the time the issuing country has GDP+. Purchasing power is what it is all about. The value of any given currecny is based on GDP+military strength+natural resources+demographics=credit or purchasing power. Lay all of those to waste and the currency is valueless. Zimbabwe was a good example of how close a country can come when it has virtually nothing going for it. In the real world does anyone really think the major Western economies fit in, or even come close, to being economies without GDP+ etc.?

I suspect gold is very near a top now that it is a "sure thing" or in a "new paradigm" with the Western world about to collapse etc. The only question for investors is whether to settle for whatever profit has been made or to try to time the top and maybe lose it all? I think it was Buffett who said that many an investor has lost it all trying to squeeze that last few percentage points and sell at the top. On another gold thread some are saying they have sell points at $1350. The hard part is sticking to that if the price zooms past $1350 and onto $1379 at the close. Just one more day...........

Edited by Realistbear

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If gold becomes unobtainable no one will be able to obtain it and the market will collapse. Something Tautologous Tim might say?

Now that gold has, in the minds of some, officially shifted into a new paradigm (its a deflation and an inflation hedge) the price can only rise. If uit is immune to the broader economy how can it fail to rise? As long as people believe and have faith it cannot fall in value. If, on the other hand, the market decides to take profits all in one go we might see the Tulip effect kick in.

Paper money can never be destroyed all the time the issuing country has GDP+. Purchasing power is what it is all about. The value of any given currecny is based on GDP+military strength+natural resources+demographics=credit or purchasing power. Lay all of those to waste and the currency is valueless. Zimbabwe was a good example of how close a country can come when it has virtually nothing going for it. In the real world does anyone really think the major Western economies fit in, or even come close, to being economies without GDP+ etc.?

I suspect gold is very near a top now that it is a "sure thing" or in a "new paradigm" with the Western world about to collapse etc. The opnly question for investors is whether to settle for whatever profit has been made or to try to time the top and maybe lose it all? I think it was Buffett who said that many an investor has lost it all trying to squeeze that last few percentage ponts of a return. On another gold thread some are saying they have sell points at $1350. The hard part is sticking to that if the price zooms past $1350 and onto $1379 at the close. Just one more day...........

What if gold is being viewed less as a commodity trade now and more of a haven currency? Many believe that gold has effectively been monetized and is being regarded as a haven behind the dollar and the euro.

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If gold becomes unobtainable no one will be able to obtain it and the market will collapse. Something Tautologous Tim might say?

Now that gold has, in the minds of some, officially shifted into a new paradigm (its a deflation and an inflation hedge) the price can only rise. If uit is immune to the broader economy how can it fail to rise? As long as people believe and have faith it cannot fall in value. If, on the other hand, the market decides to take profits all in one go we might see the Tulip effect kick in.

Paper money can never be destroyed all the time the issuing country has GDP+. Purchasing power is what it is all about. The value of any given currecny is based on GDP+military strength+natural resources+demographics=credit or purchasing power. Lay all of those to waste and the currency is valueless. Zimbabwe was a good example of how close a country can come when it has virtually nothing going for it. In the real world does anyone really think the major Western economies fit in, or even come close, to being economies without GDP+ etc.?

I suspect gold is very near a top now that it is a "sure thing" or in a "new paradigm" with the Western world about to collapse etc. The only question for investors is whether to settle for whatever profit has been made or to try to time the top and maybe lose it all? I think it was Buffett who said that many an investor has lost it all trying to squeeze that last few percentage points and sell at the top. On another gold thread some are saying they have sell points at $1350. The hard part is sticking to that if the price zooms past $1350 and onto $1379 at the close. Just one more day...........

:rolleyes:

if you'd put your STR fund in gold when you started posting on this site you could have bought a nice house with it by now!

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  • 149 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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