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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: The Vet who wrote (67804)	8/19/2007 11:23:17 PM
From: Dale Baker	Read Replies (1) \| Respond to of 116555

Gold is pretty well accepted and recognised everywhere, Can you name a functional country where you can pay your hotel bill in krugerands over the counter, or where the bank will take gold for their local currency but not dollars at the foreign exchange desk? I have lived many places and never seen gold used as a medium of exchange for goods or services on the street. If the local currency is toilet paper, one of the strong western currencies becomes a substitute, sometimes dollars and sometimes not.

To: The Vet who wrote (67804)	8/20/2007 12:38:49 AM
From: ballsschweaty	Respond to of 116555

There is roughly $850 billion in U.S. dollar currency in circulation with most of that outside of the U.S. There is about $2.8 trillion in gold at current market value. I think it's safe to say that those is possession of U.S. dollars overseas don't owe any U.S. dollar debt. Let's say there is $300 billion in U.S. dollar currency in circulation within America. There is over $40 trillion in debt that has a claim on those precious few dollars in circulation. Given the demands placed on the precious few U.S. dollars in the form of debt service, tax payments and buying basic necessities, it's quite obvious to me that the dollar will be stronger than a mules breath once true credit contraction gets underway.