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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: JF Quinnelly who wrote (7767)	1/3/2003 8:11:27 AM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 306849

nondefault is not the issue. the US just prints the money it needs so it will never default. the euro can do the same. in fact, any sovereign with a nonpegged currency can do it. what matters is not repayment per se, but the value of the currency at the time of repayment. American Treasury bonds have never defaulted. That's since 1789 open up your monetary history to the chapter on Continentals and you'll see that the American Colonies did in fact have a currency that they effectively defaulted on. Continentals issued at par in the late 1770s were later paid off at the rate of ONE PENNY ON THE DOLLAR. then, as now, the US operated on a fiat money system that was wholly reliant on the faith of bagholders in the money's "value". therefore it is short-sighted to ignore factors that will drive long-term currency value. do you think a $450BILLION current acct deficit makes the USD more attractive? People flocked to gold and the Swiss franc in the late 70s. Where would you be had you put your money in gold in the late 70's, early '80s? better off than if you'd put your money in internet stocks 1999 or 2000. this comparison is a nonstarter because you're just cherrypicking the peak of an asset class (gold) while ignoring the peak of another (US dollar).