Point of View

[fiddle-fart]

With the stock market fluctuating as bad as it is.

My question to all is

Depression
or
Recession


Mike

[Gabe]

Markets are bad, but are not "depression bad".

Nothing worse than a recession, if it even gets to one.

[eagames]

Until this week I would have said a recession and we're already near recovery but this week was like a couple of near fatal hits so I'm guessing it goes on, worse than recession but not like the depression in the 1929-1939 period.

LOL in 1933 I think the biggest denomination of coin the mints made was the dime (I think). So you know it's a real bad depression when quarters are no longer being made, maybe today that means they quit printing $20 bills.

http://en.wikipedia.org/wiki/The_Grapes_of_Wrath

[Earwig]

Well in my opinion the term recession really took off in the 70's when the government didnt want to use the nasty d word. So my opinion is recession. Its funny now that they dont want to use the r word and just call it an economic downswing

Regards
Eric

[KurtS]

I think there will be no recovery possible until the schedule of the mort resets (per the Credit Suisse report) work their way through the system. We're only 1/3 or so through that, and at this point nobody really knows how much illiquidity exists in banking (much is hidden)--nor how much further damage is coming. It's not just the US, but much of the world has run on poorly securitized debt for far too long. This is far worse than the early 90s recession--credit may largely disappear; not just for consumers--but more critically for business. Then we'll need to pick up the pieces and start again. (IMO) Sorry--I'm not upbeat this week, best wishes to all.

[Dick]

Kurt, don't feel bad. I have seen the depression, and went thru the "big one". I have little doubt that thinngs are going to get worse, before there will be any improvement. Don't be surprised if the dollar iddevalued. It has been "over inflated for many years, and it just can't keep going without something very unpleasant happening. the entire economy is over inflated to the point that very little pressure from anywhere, be it foreign, or domestic, will trigger a slide downhill, and it won't be pretty! The only thing that will stand up will be the precious metals, and even they will fall!. Gold will be sought after, just like it was right after the depression. Jus be prepared.
Dick

[fiddle-fart]

I thought I knew a lot, but thank you all for putting a different spin on things.
I pity the next President who has to try to get things on the right track again.
I'm still a young pup (54) and remember my parents talking about the "big one" . I know that precious metals is going to be life saver but if they will lose value when the dollar is revalued.
But my question would be for those of us that have mortages, would the value be the same as before the dollar is revalue or would it be revalued to the dollar?
Mike

[coppercoins]

Ed - it might help if they quit printing $20 bills for a while, but the Government's answer to this problem is to print MORE worthless money. Remember, money isn't backed by anything like it was back then.

The more they print, the more we head into a full-blown issue with inflation.

[fiddle-fart]

well would they go back using gold backing the dollar or will they use another precious metal
(they already used silver and gold )
Mike

[KurtS]

While gold/silver backing looks like it could have a stabilizing effect, the opposite would actually be true. We tried a bimetal standard in the 1800s, and the Treasury found their balance sheets subject to the whims of the metal markets. If the price of a metal crashes, so does the value of the dollar, the reserves of the government, and the accounts of every citizen. On a more practical level, if a silver dollar was issued pegged to say, $17/oz., what happens to your purchasing power when silver drops to $10? At some point, that devaluation will work its way through the system and price inflation ensues. Well, that's just my incomplete understanding from reading a few things.

[Dick]

I don't see where there would be any difference, whether the pprice of "silver", rose, or fell. The dollar is not trading against the price of silver. It works aith the world economy, and most of that, is based on what the dollar is worth. The price of the metals is independant of the dollar. The dollar, if it is backed by a metal, still is only a "dollar", and the metal has it's own value set by the laws of supply, and demand. See the situation with the Chinese, and India.I don't recall what the price of gold was during the depression, but it was not more than $8.00 or $12.00 dollars. Later, after we went off the gold standard, gold rose to $35. an ounce. And we were not able to legally "Hold" gold, except for the Kugerand. That restriction was later recinded. today, it is legal to "hold" gold, if you can adfford to buy it. Most are more likely to do what I used to do. Go prospecting. Gold is there, and it takles hard work to get it, once you find it.
Dick

[KurtS]

Dick,
I guess I was referring to recent sentiment that our money should reflect an equivalent worth in precious metals, which may be completely different than other points discussed here. If that was confusing, my apologies--because I'm confused too. I just seem to recall some turbulence due to silver devaluation in the late 1800s and its effect on the economy. I don't totally understand the reasons for economies decoupling currency from metal reserves--does anyone still back their currency this way? Outside of reading a few bits in history books, it's not a subject in recent news.

It just strikes me that before we can return to any semblance of currency stability, banks will need a hard, regulatory backstop on credit. It's hard to manage risk with excessive liquidity due to the natural temptation to leverage hard and fast for quick returns. So I don't see currency backed by metals as much as the issue as a proper regulatory framework. I feel the Fed (and other central banks) created this mess by simultaneously lowering the money rate to the gutter, while not enforcing proper default-risk reserves for banks. And the banks did their share of damage by deferring/selling risk to other parties, which was overrated and sold to investors. A lot of screwy monkey business ensued to keep retail mortgage volume high and enable the consumer to spend beyond their means. That's what happens when corporations got as addicted to credit as much as the consumer—everyone keeps the party going until it's impossible to continue. Guess what's happening now?

Apologies for the rant—it's a subject I've followed with caution ever since the tech boom/bust.

[Dick]

Kurt., That is, and I guess always will be the problem for the people, Too much credit, and too easy to get more. My position is that if one has the money, then buy what you need. Just because one has a lot of money, doesn't mean it has to be spent. I have never used a credit card as such. A debit card, yes. It is easy to control what one spends, that way, but, by rthe sametoken, it can get out of hand very easy, if one allows it. Other than a house, the car is the biggest expenditure that we normally need. That can be handled easily, if one is careful. The worst thing I have seen is the ease of getting a credit card, or a hand full of them! I guess it is a sign iof the times, but I sure don't go along with it.
Dick

[eagames]

It seems the average person has slowed spending, if the gov slows spending and gets through this will be best but I bet they print a few trillion $ to speed it up. They aren't good at resisting the easy sort term fix.

Anyway.... as bad as it is I haven't seen many bargain coins yet

[coppercoins]

One big problem is that if we tried to back the dollar with metal at this point we would suddenly realize just how poor this country is after a half century of printing money that had no backing at all. We as a country don't have NEARLY enough metal to cover the cash that's outstanding.