Replies to post #661406 on Zeev's Turnips Patch-No Politics (ZEEV)

[brightness]

Commodities like food and oil are internationally traded goods. If the dollar gets sliced in half in terms of purchasing power, producers of meats, fish, grain and oil will prefer to sell their goods to foreigners with greater purchasing power.

People may whine about us buying oil from overseas now, wait till the day when our lands get polluted in order to sell oil to foreign consumers!

[fabian]

postman...A few thoughts,


Consumers have benefited greatly the last 10 years by deflationary pricing of lower cost goods made overseas, especially those produced in China with a lot of very cheap labor.
That fact has acted to offset the gradually decreasing standard of living of the American Middle Class.
The future will not be like the past.
There is still cheap labor in Viet Nam, Indonesia, a fw other places but the world is going to run out of labor willing to work long hours for a wage barely qualifying as a wage.
China is going to experience a labor shortage and wages in China will be going up fast the next 15 years. [already are-ask Honda..strike for more wages and succeeded]
The only answer is clever machines that can replace that cheap labor and with some products, that is possible, in others, not.
In general, the American public will feel the brunt of weaker dollar much more than has been the case the last 10 years [assuming the dollar was weaker that whole time]
Also, the Yuan is undervalued vs. the dollar and over time even if nothing else changed, WalMart shoppers would be paying more. [but everything will not be the same...costs will be higher anyway].
2. If the stock market doubles...
The average American family does not have enough in the stock market to make much of a difference [plus "average investors" do not get market returns...they tend to be in at tops and more out at bottoms]
The rich do. The rich know what to do to protect assets and grow them. Well, they don't often know either, but if they are wealthy enough, they can obtain rare and truly good advice and guidance as to what to do [or hire them to manage their money] The rest of Americans, not wealthy, do not have that access whch is why it has been our goal for a long time to help try and help friends and others who do not have access to resources the wealthy have, so they can hopefully keep in front of the wave that is upon us [that will digest the American middle class and turn them into the "working class- already well underway].
Fabian
Trouble is we have found out in unmistakeable terms..
You can lead a horse to water but you can not make him/her drink.
Case in point...A good friend this morning for the first time ever inquired semi serously about...
"If I were to consider gold, what would be the options available?
This after we included all that information in emails giving options, reasons, every bit of information required...for years.
We'd bet a $100 Bill. He will not buy gold in the next 12 mo
This is his initial step that will take years to culminate in even a $10K take a baby step "plunge" into gold.
Funny thing how higher and higher prices increase confidence and buying interest.
The good thing about being a broker is the client hopefully admits they don't have a clue and they just trust...do what you think is right.
Plus they pay a good fee... not just "case of beer" or token amount"
It does not matter how good the advice, it is our experience that people are ****FAR**** more likely to take that advice if they pay a good amount for it.
Good advice for Free--few takers
That very same advice...
Charge $1,000/mo for it...many will take it.
The world is a funny place.

[skono4]

"how does a weaker dollar impact a family who is heavily invested in stocks but never travels farther from the US than Niagara Falls? If the dollar drops by half and the stock market doubles in dollar terms, the family I described above benefits, do they not? What am I missing?"
****************************
If you had zero income and depended wholly on your net wealth then in your scenario you are probably break even essentially------assuming the currency collapse stops there. That would really depend though on your particular purchasing needs and where inflation was rearing it's ugly head. While the dollar may drop 50% it doesn't mean all goods and services will double in lockstep inverse correlation. As we've seen over my lifetime (50) individual goods, services and commodities can scatter with the wind, zig and zag and explode pricewise in somewhat irrational and incoherent market frenzies.

So for example if you didn't own a home and were renting then what your concerns would be are housing costs. If you had health issues then health care inflation affects you disproportionately. Everybody has to eat but depending on your net worth the price of a sack of beans may not be significant. Some day the price of a sack of beans may be very significant. Let's hope not.

Since most famiies with or without assets in the stock market depend on income the purchasing power of the dollar is critical to their living standard. So it's going to be a very few instances of people "breaking even" where our currency collapses to half of today's value.