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Imminent collapse of the US dollar

Discussions about the economic and financial ramifications of PEAK OIL

Re: Imminent collapse of the US dollar

Unread postby GHung » Wed 11 Oct 2017, 20:00:16

Subjectivist wrote:
vtsnowedin wrote:
Outcast_Searcher wrote:
The US dollar is only worth a tiny fraction of what it was in 1900, for example.
.

In 1900 they adopted the gold standard which pegged the dollar at $20.67 for an ounce of pure gold. The median wage at the time was $10 per fifty five hour work week.($0.18/ hr) So it took 110 hours of average work to buy an ounce of gold.
Today the median income is $55,000 a year or $27.50 per hour and with today's gold price of $1293/ troy ounce you can buy one with just 47 hours of average labor.
So the dollar is both easier to come by and you can get more for your dollars based on how hard you had to work for them.


$55,000 median where? It sure as heck isn’t that high around where I live. I suspect those figures might be valid in LA or NYC, but Toledo, Detroit or Cleveland are a whole different fnancial environment.


Median income is pretty misleading. The average income of the bottom 90% is around $30k and has been falling in real adjusted dollars.

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Re: Imminent collapse of the US dollar

Unread postby vtsnowedin » Wed 11 Oct 2017, 20:01:50

Subjectivist wrote:
vtsnowedin wrote:
Outcast_Searcher wrote:
The US dollar is only worth a tiny fraction of what it was in 1900, for example.
.

In 1900 they adopted the gold standard which pegged the dollar at $20.67 for an ounce of pure gold. The median wage at the time was $10 per fifty five hour work week.($0.18/ hr) So it took 110 hours of average work to buy an ounce of gold.
Today the median income is $55,000 a year or $27.50 per hour and with today's gold price of $1293/ troy ounce you can buy one with just 47 hours of average labor.
So the dollar is both easier to come by and you can get more for your dollars based on how hard you had to work for them.


$55,000 median where? It sure as heck isn’t that high around where I live. I suspect those figures might be valid in LA or NYC, but Toledo, Detroit or Cleveland are a whole different fnancial environment.

You are correct. In Ohio it is just $52,334 which is below the national average of $56,277. Now understand it is a median so half the people around you are making less then that. If you don't move around in more affluent circles you might not know anyone that makes more then the median beyond your doctor and the Vet. and the owner of the local plumbing business etc.
https://www.census.gov/content/dam/Cens ... r16-02.pdf
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Re: Imminent collapse of the US dollar

Unread postby vtsnowedin » Wed 11 Oct 2017, 20:09:19

GHung wrote:
Median income is pretty misleading. The average income of the bottom 90% is around $30k and has been falling in real adjusted dollars.



Really G ?? That has to be one of the stupidest things anyone has said here in years. If your in the bottom (fill in whatever percentage you want) you of course are making lees then the median or average. By definition that is why you are on the bottom.
There is a big difference between median and average.
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Re: Imminent collapse of the US dollar

Unread postby GHung » Wed 11 Oct 2017, 20:36:19

vtsnowedin wrote:
GHung wrote:
Median income is pretty misleading. The average income of the bottom 90% is around $30k and has been falling in real adjusted dollars.



Really G ?? That has to be one of the stupidest things anyone has said here in years. If your in the bottom (fill in whatever percentage you want) you of course are making lees then the median or average. By definition that is why you are on the bottom.
There is a big difference between median and average.


Not sure what happened in your life which brings you to display such poor character. Must suck, having such hubris and ego.

Yes. There is a big difference between median and average. That was my point, if you can rise above your assholiness.
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Re: Imminent collapse of the US dollar

Unread postby creedoninmo » Wed 11 Oct 2017, 20:50:12

We are placing sanctions on Venezuela, Russia and Iran and relations with Turkey are tense. The rest of the world needs to come up with a currency to replace the petrodollar. The question is can they.
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Re: Imminent collapse of the US dollar

Unread postby Outcast_Searcher » Wed 11 Oct 2017, 21:52:33

vtsnowedin wrote:
Outcast_Searcher wrote:
The US dollar is only worth a tiny fraction of what it was in 1900, for example.

In 1900 they adopted the gold standard which pegged the dollar at $20.67 for an ounce of pure gold. The median wage at the time was $10 per fifty five hour work week.($0.18/ hr) So it took 110 hours of average work to buy an ounce of gold.
Today the median income is $55,000 a year or $27.50 per hour and with today's gold price of $1293/ troy ounce you can buy one with just 47 hours of average labor.
So the dollar is both easier to come by and you can get more for your dollars based on how hard you had to work for them.

Sorry, but I don't understand your point.

I'm saying that with almost 120 years of cumulative inflation, the dollar has
depreciated tremendously since 1900. I stand by that.

Using the prices of gold you give, it takes $62.55 today to buy as much gold as $1 would in 1900. Common things people need like food and housing, similar story. For labor, I get a ratio of 152.77, again using your figures.

You seem to be talking about wages. I'm talking about the value of the US dollar -- in terms of what one will buy.

If I'm missing something super obvious, please clue me in.
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Re: Imminent collapse of the US dollar

Unread postby Outcast_Searcher » Wed 11 Oct 2017, 22:01:38

GHung wrote:It's clear that each unit of new debt we add is having a declining return in terms of real growth. I find arguments that it doesn't matter, or that there can't be an abrupt end to this process, to be denialism, likely born of cognitive dissonance.

Except that debt may not be the primary driver of the problem. (It may be a consequence of a variety of problems, for example).

Peak oilers assume that oil is at the center (or close) of all problems. Other folks assume it's debt.

I've been reading lately about technology and labor and what looks like very bleak prospects for many jobs in the coming decades. They point out many problems, all in terms of technology hacking labor slowly to death.

I'm not denying we have problems. I'm just not convinced debt is the ultimate issue, or cause, any more than I am that it's peak oil.

Generally, all our fancy technology may well be creating problems faster than we can fix them (usually trying to use more technology, of course). The sorcerer's apprentice analogy.

We sure as hell aren't going to fix them if the global population continues to grow rapidly, causing much more stress on resources.
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Re: Imminent collapse of the US dollar

Unread postby GHung » Wed 11 Oct 2017, 22:25:48

Outcast_Searcher wrote:
GHung wrote:It's clear that each unit of new debt we add is having a declining return in terms of real growth. I find arguments that it doesn't matter, or that there can't be an abrupt end to this process, to be denialism, likely born of cognitive dissonance.

Except that debt may not be the primary driver of the problem. (It may be a consequence of a variety of problems, for example).

Peak oilers assume that oil is at the center (or close) of all problems. Other folks assume it's debt.

I've been reading lately about technology and labor and what looks like very bleak prospects for many jobs in the coming decades. They point out many problems, all in terms of technology hacking labor slowly to death.

I'm not denying we have problems. I'm just not convinced debt is the ultimate issue, or cause, any more than I am that it's peak oil.

Generally, all our fancy technology may well be creating problems faster than we can fix them (usually trying to use more technology, of course). The sorcerer's apprentice analogy.

We sure as hell aren't going to fix them if the global population continues to grow rapidly, causing much more stress on resources.


You misunderstand me. Debt is a symptom of a much broader systemic issue, as are things like Donald Trump. 21st century debt is merely an attempt to cheat limits to growth. Debt is what lets us keep pretending.
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Re: Imminent collapse of the US dollar

Unread postby vtsnowedin » Thu 12 Oct 2017, 08:27:46

Outcast_Searcher wrote:
If I'm missing something super obvious, please clue me in.
What you are missing is that money is just a medium of exchange and has no value itself. It's value lies between what you have to do to get it and what goods and services you can buy with it. You can't look at what computers or I phones cost in 1900 as they hadn't been invented yet but you can look at the cost of labor as a guide. It is clear to me that even though they moved the decimal point over a couple of notches so that a laborer who used to make ten dollars a week now makes a thousand that on average people have more money and can afford many more things then their grandparents could in 1900.
That so many have borrowed way beyond their means to spend on things that don't have enduring value is another thing all together and is the real problem not the value of the dollar.
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Re: Imminent collapse of the US dollar

Unread postby asg70 » Thu 12 Oct 2017, 08:32:25

vtsnowedin wrote:It is clear to me that even though they moved the decimal point over a couple of notches so that a laborer who used to make ten dollars a week now makes a thousand that on average people have more money and can afford many more things then their grandparents could in 1900.


All you need to see to know that is how obese everyone is today, including the poor.
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Re: Imminent collapse of the US dollar

Unread postby marmico » Thu 12 Oct 2017, 08:49:59

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Everything From This 1991 Radio Shack Ad You Can Now Do With Your Phone

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Re: Imminent collapse of the US dollar

Unread postby marmico » Thu 12 Oct 2017, 09:06:29

shssh, don't tell ghung.

On a inflation adjusted per capita basis, US household debt is relatively flat since 2004.

https://www.newyorkfed.org/microeconomics/hhdc.html

Ooops, don't forget near record low financial obligations ratios.

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Re: Imminent collapse of the US dollar

Unread postby Newfie » Thu 12 Oct 2017, 15:08:07

"You misunderstand me. Debt is a symptom of a much broader systemic issue, as are things like Donald Trump. 21st century debt is merely an attempt to cheat limits to growth. Debt is what lets us keep pretending."

GHung,
Not sure we agree on the "broader sstemic issues", he'll, not sure I understand them myself. Otherwise I think you are spot on.
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Re: Imminent collapse of the US dollar

Unread postby Outcast_Searcher » Thu 12 Oct 2017, 20:33:36

vtsnowedin wrote:
Outcast_Searcher wrote:
If I'm missing something super obvious, please clue me in.
What you are missing is that money is just a medium of exchange and has no value itself. It's value lies between what you have to do to get it and what goods and services you can buy with it. You can't look at what computers or I phones cost in 1900 as they hadn't been invented yet but you can look at the cost of labor as a guide. It is clear to me that even though they moved the decimal point over a couple of notches so that a laborer who used to make ten dollars a week now makes a thousand that on average people have more money and can afford many more things then their grandparents could in 1900.
That so many have borrowed way beyond their means to spend on things that don't have enduring value is another thing all together and is the real problem not the value of the dollar.

Ok. I see. Thanks for the explanation.

I'm not saying AT ALL that the dollar depreciating is even a problem. I was merely stating that is has depreciated a LOT since 1900. And thus part of that "mountain of debt" folks are worrying about so much is due to that shifting of decimal points you so correctly mentioned.

I would agree that values are a huge portion of our problem. I don't know how we fix that. It's like the vast majority of Americans were raised FAR differently than I was, re how much spending and debt they have. And ironically, this includes my sister, that near as I could tell, was raised just like I was.

"Myths of Rich and Poor: Why We're Better Off Than We Think" is a decent book that really gets into this. People have far more choices and far more stuff, generally, than they did as recently as the 70's.

So clearly, salaries buy more stuff, but as you say, not stuff of value. Or as I say, not happiness.

In this context, "The poor will be with you always" makes a lot of sense."
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Re: Imminent collapse of the US dollar

Unread postby Newfie » Thu 12 Oct 2017, 20:51:29

Interesting discussion above.

On the one hand I look at the value of money as a measure of TRUST. If you trust in the fair exchange, that both parties uphold their agreements, then it works.

But this gets very confused when we mix in stock valuation. Just because someone pays $100 for a share of stock today does not mean that my 100 shares of stock is truly worth $10,000 dollars. That is a hypothetical. Nor is it a statement of value for tomorrow when I may only get $10 for a share.

In this way, because we base wealth in stock valuations, we tend to think of the top 1% as far wealthier than they truly are. If Bill Gates tried to sell all his stock tomorrow the valuation would drop and he would get pennies on a dollar.

Worse yet would be if all our pension funds tried to liquidate.

Trust is a human experience and such is a volition element. My personal belief is that ancrisi of trust could cause a global financial system collapse, and it could happen very suddenly. Not saying it will let alone when or why. Just saying that the potential is there.
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Re: Imminent collapse of the US dollar

Unread postby vtsnowedin » Fri 13 Oct 2017, 00:26:54

Outcast_Searcher wrote:So clearly, salaries buy more stuff, but as you say, not stuff of value. Or as I say, not happiness.


I think I need to add a bit of clarification here. The increased salaries dose let us live at a higher standard. Steak for dinner instead of hamburger or mac and cheese, college for your kids instead of working in sales etc. Nothing wrong with that as long as you pay for it as you go. What I rail against is running up credit card balances with their high interest rates for things like cruises or ski vacations or a closet stuffed with clothes and the annual pile of plastic toys under the Christmas tree that the children have more fun playing in or with the boxes they came in then they do the actual toy.
Interest charges are a drain on your income and family wealth and unless they are for a durable product like a house or car needed to commute to work they should be avoided like a plague.
Yes I'm cheap, but my bills are paid and I owe nothing beyond next months utility bills.
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Re: Imminent collapse of the US dollar

Unread postby Revi » Sat 14 Oct 2017, 04:48:06

They are talking about a bit of inflation coming in the new year. I guess it's inevitable with the situation we find ourselves in. Hard to tell. They are trying to get inflation to happen, but we'll see if they succeed and if they can control it next year when the Fed starts bumping interest rates.

https://finance.yahoo.com/news/inflatio ... 41386.html
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Re: Imminent collapse of the US dollar

Unread postby onlooker » Sat 14 Oct 2017, 06:33:41

Newf, I think by systemic issues is talking about Limits to Growth issues especially how our huge world population and modern world is unsustainable
Revi, the scary thing is if/when interest rates go up, this may unwind much debt and lead to a true asset price discovery causing cascading defaults as balance sheets are exposed and consequently lending will dry up.
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Re: Imminent collapse of the US dollar

Unread postby shortonoil » Sat 14 Oct 2017, 08:03:49

We are placing sanctions on Venezuela, Russia and Iran and relations with Turkey are tense. The rest of the world needs to come up with a currency to replace the petrodollar. The question is can they.


The majority of the world's debt is denominated in dollars. When the dollar gets stronger that debt gets more difficult for the holders of it to service. When it gets weaker, easier. Dollars are placed into world circulation as a result of US balance of payment deficits. When the US economy is strong imports go up, and the dollar goes down as more dollars enter the world market. That makes it easier for dollar denominated debt holders to service their debt.

If the Petrodollar fails, so also will much of the US economy. Imports would fall, and dollars would become more difficult for foreign debt holders to acquire. The dollar would go up in value, and many of those dollar denominated debt holders would go bankrupt. The rest of the world can only replace the dollar if they are willing to accept immense financial disruptions to achieve it. Generally, politics would not allow that to happen.
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Re: Imminent collapse of the US dollar

Unread postby onlooker » Sat 14 Oct 2017, 09:20:24

Short, couldn't they do a reset and new valuation in another currency or medium ie. bitcoin, crypto etc. ? What really stand out also if the US economy goes down is all the trade and debt holdings that would cease and default. Not to mention all the knowhow and expertise of US corporations. I too see it as highly unlikely that the rest of the countries in any scenario would seek the demise of the US economy. Yes, they are seeking a more fair distribution and power scheme but not the destruction of the US economy. A currency collapse of the US dollar would be in effect a collapse of the US economy.
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