# Think Tank > Austrian Economics / Economic Theory >  Any Austrian/Sound Money Financial Advisers?

## Yukon Cornelius

Not looking for Investment Firms although financial advisers and investing usually go hand in hand...

I am looking more for someone I can talk to and/or sit down with, and they tell me, for example, take this much out of your paycheck a month and put it in this, this, and this for your kids...Retirement fund advice, stuff like that...

In other words how to better handle my money from an Austrian perspective.

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## Kelly.

> Not looking for Investment Firms although financial advisers and investing usually go hand in hand...
> 
> I am looking more for someone I can talk to and/or sit down with, and they tell me, for example, take this much out of your paycheck a month and put it in this, this, and this for your kids...Retirement fund advice, stuff like that...
> 
> In other words how to better handle my money.


if you find someone please let me know also,
i have been looking for someone like this for awhile. after walking out of a few advisers office ive stop taking suggestions from "traditionals"

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## Seraphim

Me...uh...in the intermediate length future.

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## juvanya

This seems like a great job opportunity...

The key question is are you investing or are you planning to use the precious metal as money?
—If investing, buy bullion and Eagles.
—If money, buy rounds and especially junk silver.

Really, I would recommend the latter across the board, but some people insist on thinking in fiat money. Youll get the same result either way, but if the US dollar collapses, your 100oz bar of silver wont be too useful. At least Eagles can buy you dinner or a few days worth of groceries.

And as always, if investing, diversify with gold and silver in different forms.

Here is a good guide as well: http://the-moneychanger.com/commandments.phtml

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## efiniti

4 words to live by: Live Within Your Means

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## enoch150

> This seems like a great job opportunity...
> 
> The key question is are you investing or are you planning to use the precious metal as money?
> —If investing, buy bullion and Eagles.
> —If money, buy rounds and especially junk silver.
> 
> Really, I would recommend the latter across the board, but some people insist on thinking in fiat money. Youll get the same result either way, but if the US dollar collapses, your 100oz bar of silver wont be too useful. At least Eagles can buy you dinner or a few days worth of groceries.


Depends on what you're buying. William Norman Grigg recalls "In 1979, as Carter-era stagflation plagued the national economy, our family relocated from eastern Oregon to southwestern Idaho. Shortly before our move, my father — a real estate broker — consummated a sale in which the closing costs were paid, in part, by a large quantity of silver in the form of bars as large as 100 ounces apiece."




> And as always, if investing, diversify with gold and silver in different forms.


That is not what is meant by diversification. http://www.investorwords.com/1504/diversification.html

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## sam9657

Why do you need a finacial advisor tell you what to do?

Its very simple. Here what I do.

1. Look at how much net income I have.
2. Put at least 1/3 into gold/silver stocks or physical bullion for retirement or rainy day. 
3. Opt out of government sponsered savings programs such as 401k and IRA.
4. Pay off any debt in which interest rate > inflation. I would say 5% to be safe.

I like to keep thing simple. It mostly comes down to spending less than you make.

Definitely willing to help of you have anymore questions.

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## cubical

> Why do you need a finacial advisor tell you what to do?
> 
> Its very simple. Here what I do.
> 
> 1. Look at how much net income I have.
> 2. Put at least 1/3 into gold/silver stocks or physical bullion for retirement or rainy day. 
> 3. Opt out of government sponsered savings programs such as 401k and IRA.
> 4. Pay off any debt in which interest rate > inflation. I would say 5% to be safe.
> 
> ...


why stay out of 401ks and IRAs.

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## sam9657

> why stay out of 401ks and IRAs.


Historically, retirement accounts are a sitting duck for broke governments. I do not want wake up one day to see my retirement savings been converted to US treasuries.

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## cubical

> Historically, retirement accounts are a sitting duck for broke governments. I do not want wake up one day to see my retirement savings been converted to US treasuries.


So the government will become the largest holders of PG, MSFT and AAPL over night? What good would that do them?

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## Mark37snj

Whats the best strategy to do now to cash in a month or so after the dollar collapses. Meaning 5K worth of say: junk silver, gold coins, or Canadian currency. What will hold its value and be convertable back to US dollars after the dollar collapses. Example: 5K US Dollars -> 5K Canadian Dollars...Dollar Collapse... 5K Canadian Dollars -> 100K US Dollars. Im looking for an strategy whereby its easy to convert back and forth. For foreign currencty you can just goto a bank and convert either way. All comments are much appreciated.

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## cubical

Mark, you can buy foreign currencies by buying foreign stocks. You can also buy currency ETFs, for example FXA.

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## sam9657

> So the government will become the largest holders of PG, MSFT and AAPL over night? What good would that do them?


No, the government would sell off the holdings and buy US treasuries.

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## cubical

> No, the government would sell off the holdings and buy US treasuries.


Not possible. Do you realize what that would do to the global economy. You can't just sell off trillions and trillions of dollars in equities in a matter of days, weeks or even months.

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## Mark37snj

> So the government will become the largest holders of PG, MSFT and AAPL over night? What good would that do them?


The fed can print money because right now countries like China are buying them. But if China stops our goverment will need a new buyer. Your IRA/401K. The goverment will seize them, sell them off, pocket the money from the sale of your retirement account, and issue you US bonds. Or they could just thow it into the Social Security Trust  Fund. Deeming the redistribution of wealth the right thing to do. The Dems already tried this a few years back but failed.

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## Zippyjuan

> Historically, retirement accounts are a sitting duck for broke governments. I do not want wake up one day to see my retirement savings been converted to US treasuries.


Historically? Such accounts are a fairly recent thing. IRA accounts go back to 1974.

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## eric_cartman

> why stay out of 401ks and IRAs.


because it's easy for the government to steal it from you.  it's much harder for the government to get at your money if it's sitting in physical precious metals buried in your back yard... or you have your money in offshore banks or with a foreign brokerage account.

and if you think that the government can't take your 401k or your IRA.... well, sure they can.  why can't they? they have all the guns... they can do whatever they want.  clearly the rule of law and morality mean nothing to the government... they already steal most of your money anyways, why can't they steal your retirement funds? 

here's an interesting scenario to consider... i'm not really predicting this (because i think inflation will come) but what about this scenario: 

we have a massive deflationary collapse... all sorts of companies go bankrupt and lots of stocks lose 50%+ of their value.  So basically everyone's retirement accounts get hammered.  The government then blames wall st. and tries to help the citizens by allowing them to convert their 401ks into US treasuries at close to the original value of their portfolio.  So if you had $200k in a 401k, and it's value fell to $50k.... would you be willing to give up that last $50k in exchange for $200k of US treasuries that mature over your retirement period?  In this scenario, when a company goes bankrupt, the government can either let them fail, or they can take them over or bail them out and they become part of the government.  So the government will end up owning all this stuff.... and of the companies that survive, the government will end up owning all these companies because people sold them these stocks out of their retirement funds, so the government would then own most of the shares.  this way, the government gets to easily control everything before the government officially goes bankrupt and/or hyperinflates the currency.

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## Mark37snj

> Mark, you can buy foreign currencies by buying foreign stocks. You can also buy currency ETFs, for example FXA.


I don't want a taxable paper trail or be anywhere near a stock market. I want to be able to grab 1000 Canadian currency and convert it to say 10,000 US dollars after the collapse. Im concerned about precious metal vendors and the ability they will have to operate after the dollar collapses. They are gona be overwhelmed. Will they run out of money to buy? Will the goverment step in a try something drakonian? The ETF's is kinda what Im thinking of doing but the problem is it goes through Federally Visible Stock Market type companies. I don't want a middle man other than a bank that I have to worry about to connvert back.

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## cubical

> because it's easy for the government to steal it from you.  it's much harder for the government to get at your money if it's sitting in physical precious metals buried in your back yard... or you have your money in offshore banks or with a foreign brokerage account.
> 
> and if you think that the government can't take your 401k or your IRA.... well, sure they can.  why can't they? they have all the guns... they can do whatever they want.  clearly the rule of law and morality mean nothing to the government... they already steal most of your money anyways, why can't they steal your retirement funds? 
> 
> here's an interesting scenario to consider... i'm not really predicting this (because i think inflation will come) but what about this scenario: 
> 
> we have a massive deflationary collapse... all sorts of companies go bankrupt and lots of stocks lose 50%+ of their value.  So basically everyone's retirement accounts get hammered.  The government then blames wall st. and tries to help the citizens by allowing them to convert their 401ks into US treasuries at close to the original value of their portfolio.  So if you had $200k in a 401k, and it's value fell to $50k.... would you be willing to give up that last $50k in exchange for $200k of US treasuries that mature over your retirement period?  In this scenario, when a company goes bankrupt, the government can either let them fail, or they can take them over or bail them out and they become part of the government.  So the government will end up owning all this stuff.... and of the companies that survive, the government will end up owning all these companies because people sold them these stocks out of their retirement funds, so the government would then own most of the shares.  this way, the government gets to easily control everything before the government officially goes bankrupt and/or hyperinflates the currency.


This is also not possible. If stocks fell from 200k to 50k and the government offered you 200k in treasuries then two things would screw this up. As mentioned before liquidating stocks on such a massive level will screw up global markets on a level never seen. Also, if the government was offering you a 300% return on your money, the $$ value would decrease by 50% or more overnight.

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## cubical

> I don't want a taxable paper trail or be anywhere near a stock market. I want to be able to grab 1000 Canadian currency and convert it to say 10,000 US dollars after the collapse. Im concerned about precious metal vendors and the ability they will have to operate after the dollar collapses. They are gona be overwhelmed. Will they run out of money to buy? Will the goverment step in a try something drakonian? The ETF's is kinda what Im thinking of doing but the problem is it goes through Federally Visible Stock Market type companies. I don't want a middle man other than a bank that I have to worry about to connvert back.


If you are expecting something on that level, you should just buy gold. It will do better than any fiat currency.

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## eric_cartman

> This is also not possible. If stocks fell from 200k to 50k and the government offered you 200k in treasuries then two things would screw this up. As mentioned before liquidating stocks on such a massive level will screw up global markets on a level never seen. Also, if the government was offering you a 300% return on your money, the $$ value would decrease by 50% or more overnight.


have you ever known government to make good economic decisions? the government's previous policies have already screwed everything up... don't you think they could take actions in the future that are even more insane? after all, in this future unprecedented crisis, the government will have to take unprecedented action because "the dangers of not acting will be too great".  besides, they can claim that a weaker currency will be more valuable... then they'll just blame high consumer prices on high oil prices, which they'll blame on the problems in the middle east and justify going to war again.

yes, this would screw things up... but things will already be screwed up.  and we also don't know what interest rates are, so if you flipped $50k of stocks into $100k worth of Treasuries, then it might pay you out the $200k over the next 15 years because of the high interest rates.  but there's nothing stopping the government and/or the Fed from doing this... it sure would buy you a lot of votes... especially if the government "pays" for this by taking control of the banking system and putting in more "regulations" to prevent the evil free market from ripping them off again.  maybe they'll even hang a few rich CEOs out to dry and take their millions of dollars that they got in bonuses.

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## Mark37snj

> If you are expecting something on that level, you should just buy gold. It will do better than any fiat currency.


Yeah your probably right but I don't have to go with the best option. Keeping it out of the hands of the goverment, the ability to convert to dollars when everything is in chaos, not relying on an industry where the goverment can easily throw a monkey wrench into the works are important. The goverment is gona try something with gold, I know it. Just like they put the 600.00 requirement in the healthcare bill. What if every transaction over 500.00 gold sellers/buyers now have to report it? What if they levy extra tarrifs on gold as well? I guess Im looking for a not so obvious and easily targeted, a sneak attack, convert back and no one is the wiser. Heck even buying the gold may leave a paper trail where the goverment knows you have gold.

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## Mark37snj

Given a Dollar collapse what foreign currency would retain most if not all of its value, maybe even increase in value?

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## sam9657

> Given a Dollar collapse what foreign currency would retain most if not all of its value, maybe even increase in value?


Yuan

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## Zippyjuan

> Yuan


Given that it is currently loosly pegged to the dollar, do you think they will actually allow it to float?  Otherwise it would move down with the dollar if the dollar were to fall. China does not want their currency to be stronger against the dollar- that would hurt their exports and in turn their economy.

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## sam9657

> Given that it is currently loosly pegged to the dollar, do you think they will actually allow it to float?  Otherwise it would move down with the dollar if the dollar were to fall. China does not want their currency to be stronger against the dollar- that would hurt thei exports and in turn their economy.


Lol, have you read nothing from these forums

Why would China want to keep exporting to us and get nothing in return? They will be much better off consuming the benefits of their own labor.

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## Zippyjuan

So you think that China does want a stronger yuan? A stronger yuan makes their exports to the US more expensive (and a weaker dollar makes US exports to other coutries more attracive by making them cheaper). China gets nothing from the US?  Only economic growth and jobs which takes off political pressure to create more jobs.  That and about $300 billion a year.  They are trying to increase domestic consumption as well. To do that, they need people earning more money.

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## low preference guy

> Given that it is currently loosly pegged to the dollar, do you think they will actually allow it to float?


If the U.S. dollar goes through hyperinflation, what is the more likely action China will take, keep their currency pegged to the dollar or allow it to float?

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## sam9657

> So you think that China does want a stronger yuan? A stronger yuan makes their exports to the US more expensive (and a weaker dollar makes US exports to other coutries more attracive by making them cheaper). China gets nothing from the US?  Only economic growth and jobs which takes off political pressure to create more jobs.


The entire purpose of exporting is so that a country can import. Thus benefitting both parties. If one country simply chooses to export without importing, all they get is inflation while importing country get all the benefits. This is really no different then a subject country paying tribute to its ruling country.

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## Zippyjuan

First I am doubtful about hyperinflation (that gets tossed around here a lot- that is prices going up by 30% or more every month or maybe ten percent A DAY or more). Not saying inflation won't happen but not hyperinflation.  I don't see any reason for them to change their peg thought they could certainly change their minds. Nobody knows the future for certain.

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## Zippyjuan

> The entire purpose of exporting is so that a country can import. Thus benefitting both parties. If one country simply chooses to export without importing, all they get is inflation while importing country get all the benefits. This is really no different then a subject country paying tribute to its ruling country.


We do export to China- we just buy more from them than they buy from us. Why do you think they would release the peg on their currency if the dollar became devalued?  It would harm themselves and not offer them any benefits.

Exports to China have been soaring. 
http://www.businessinsider.com/chart...o-china-2011-2

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## low preference guy

> Not saying inflation won't happen but not hyperinflation.


Quoted for the record

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## Zippyjuan

> Quoted for the record


Cool.  Do you have a time frame for when you think "hyperinflation" may happen? People have been saying that ever since the start of the economic crisis (that I noticed- it may have been going on long before that).

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## Mark37snj

The Russians spent their economy into oblivian, the same will happen to the US if Ron Paul doesn't get elected President. It may happen before the 2012 election if Congress does not put a halt to all this spending, and it's not looking good right now. I believe I have settled on converting my US currency to Canadian currency. Their currency should remain relatively stable when the dollar tanks and if for some reason I have to make a run for their border to cash in it is not that far away. I don't want to deal with commidity brokers/dealers, stock markets, etc. Its too easy for the goverment to intervene and screw people. My goal is not to hold onto gold, its to cash in, convert when the dollar hits its low mark. Remember just because the dollar tanks and everything gets more expensive it will not effect your car loan or mortgage. They will be the same and some prudent moves and timing could drastically improve ones financial situaition.

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## sam9657

> We do export to China- we just buy more from them than they buy from us. Why do you think they would release the peg on their currency if the dollar became devalued?  It would harm themselves and not offer them any benefits.
> 
> Exports to China have been soaring. 
> http://www.businessinsider.com/chart...o-china-2011-2


Of course we do export to China. That is not the point, the point is that we import a lot more from China than we we export to China. Given this imbalance this is what we get vs. what China gets.

US - cheap goods and in general a higher standard of living
China - Inflation, loss of capital and resources. Also the jobs that are "created" are not real jobs in terms of creating economic benefit for the Chinese people, they need to be subsidized by the rest of the economy.  IE like a lot of our government jobs. 

Also once China de-pegs from the dollar they will be able to import more and consume more. Leading to a higher standard of living while at the same time lowering American's standard of living.

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## Zippyjuan

> Of course we do export to China. That is not the point, the point is that we import a lot more from China than we we export to China. Given this imbalance this is what we get vs. what China gets.
> 
> US - cheap goods and in general a higher standard of living
> China - Inflation, loss of capital and resources. Also the jobs that are "created" are not real jobs in terms of creating economic benefit for the Chinese people, they need to be subsidized by the rest of the economy.  IE like a lot of our government jobs. 
> 
> Also once China de-pegs from the dollar they will be able to import more and consume more. Leading to a higher standard of living while at the same time lowering American's standard of living.


Actually if China depegs it will HELP the US in the long run.  That is why we have been trying to get them to do so.  As I mentioned, their exports to us get more expensive and our exports to them become cheaper- this is how free trade is suppposed to work.  The currency is supposed to be allowed to fluxuate and that helps balance trade. Then our exports would rise (helping create more jobs here) and imports decline.  China would then be importing more goods from the US and exporting fewer items to us. China is not losing capital or resources.  Their trade surplus is providing them with capital they are using to aquire more resources and increase production. They have been experiencing some inflation but that is due to their economic growth. Demand for things are increasing.

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## low preference guy

> Cool.  Do you have a time frame for when you think "hyperinflation" may happen? People have been saying that ever since the start of the economic crisis (that I noticed- it may have been going on long before that).


Sure. 10 years to be safe. Most goods cost double what they cost now in 5 years, not including computers and such products for which technology is advancing rapidly.

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## sam9657

> Actually if China depegs it will HELP the US in the long run.  That is why we have been trying to get them to do so.  As I mentioned, their exports to us get more expensive and our exports to them become cheaper- this is how free trade is suppposed to work.  The currency is supposed to be allowed to fluxuate and that helps balance trade. Then our exports would rise (helping create more jobs here) and imports decline.  China would then be importing more goods from the US and exporting fewer items to us.


US been able to import less at higher prices is good for us? No, this is bad for us and good for China.
US having to export more to China and consuming less is good for us? Another no, this is bad for us and good for China.
Also the main causes of our high unemployment is not because are currency is "too strong". Just look at Zimbabwe or any S America country that has experienced high inflation. The main causes of our high unemployment is the fact that we have the highest corporate tax rate in the world (we are pretty much neck and neck with Japan), high litigation costs of doing business, over-regulation and that the fact that we pay people to not work (unemployment insurance, welfare, food stamps, etc.)




> China is not losing capital or resources.


Then please explain to me why China holds almost a trillion dollars of our debt.




> They have been experiencing some inflation but that is due to their economic growth. Demand for things are increasing.


If you have read any Austrian economics you should know that economic growth does not cause inflation, increase of the money supply is the main driver of inflation. In fact economic growth means things get cheaper as people's productivity increases. Just look at the price of LCD TVs over the last 10 years.

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## Zippyjuan

Doubling in five years is not hyperinflation. In Zimbabwe prices were doubing on average about every 17 days- peaking at about every 24 hours. At the worst in Germany it was every two days. 

Longer time frame, eh?  A bit less confident about it "coming soon?"  No worries. John Williams of Shadowstats said it could begin this year. You can search for his video if you want to see what he has to say.

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## low preference guy

> Doubling in five years is not hyperinflation.


Of course. I didn't say that. There are two different predictions. Can you read? You attack positions I didn't argue for often.

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## sam9657

> Of course. I didn't say that. There are two different predictions. Can you read?


Or reason? All Zippyjuan does is regurgitate what he hears on the MSM. Pretty sad.

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## Zippyjuan

> Then please explain to me why China holds almost a trillion dollars of our debt.


That is because they have excess capital - not a shortage-  and need to do something with it.  Keeping it in dollars is how they keep their currency exchange rate pegged.

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## Zippyjuan

> Of course. I didn't say that. There are two different predictions. Can you read? You attack positions I didn't argue for often.


Agreed. Sorry.  Just took the opportunity to further indicate how sever hyperinflation is compared to more "normal" inflation. Doubling in five years is a more "normal" rate of inflation (though it is a bit high).

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## sam9657

> That is because they have excess capital - not a shortage-  and need to do something with it.  Keeping it in dollars is how they keep their currency exchange rate pegged.


So why don't they just use that excessive capital to to buy resources and store them? or better yet buy up American companies? The fact that they lend the money back to us, which obviously will never be paid back means that they have waited labor and resources exporting to us. Thus we have benefited from the Chinese labor without giving them anything in return.

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## Seraphim

Very good advice. A big part of fiscal success.




> 4 words to live by: Live Within Your Means

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## Zippyjuan

> So why don't they just use that excessive capital to to buy resources and store them? or better yet buy up American companies? The fact that they lend the money back to us, which obviously will never be paid back means that they have waited labor and resources exporting to us. Thus we have benefited from the Chinese labor without giving them anything in return.


They are using their capital to purchase resources. They are buying up resources and making investments all over the world. 

http://economictimes.indiatimes.com/...ow/7155406.cms



> BEIJING: Chinese investment abroad is expected to top 50 billion dollars this year as the country pumps more money into overseas energy , mining and agricultural projects , state media reported on Friday. 
> 
> China -- which is expected to receive 100 billion dollars in foreign direct investment this year, up 11 percent on year -- wants domestic companies to spend more money overseas to help reduce trade frictions, the China Daily said. 
> 
> *That goal also fits with Beijing's stated aim of reducing the country's heavy reliance on investment within its borders to drive its economy, now the second-largest in the world.* 
> 
> Non-financial outward direct investment -- not including investment by banks, insurers and securities firms -- is likely to exceed 50 billion dollars compared with 43.3 billion dollars last year, Commerce Minister Chen Deming was quoted as saying. 
> 
> *China was the world's fifth-largest investor in terms of outward direct investment in 2009, the report said.* 
> ...

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## Zippyjuan

Back to the original question I asked if will China let their currency rise against the dollar and how would that impact them. The comments in this article are from Chinese officials who expressed concern about its impact on exports and their own economy. 
http://www.reuters.com/article/2010/...6860MZ20100907



> BEIJING | Tue Sep 7, 2010 12:43am EDT 
> 
> BEIJING (Reuters) - China must resist external pressure for yuan appreciation because a stronger exchange rate would take a big bite out of economic growth, according to a pair of senior government researchers.





> Writing in the latest issue of the Chinese-language Reform magazine, Li and Yu also said that Beijing should enhance the yuan's flexibility if the euro depreciates -- in effect, suggesting that the yuan should be allowed to fall against the dollar in those circumstances.
> 
> While their comments do not necessarily reflect official thinking, they do underscore how many high-level economists in the government think that a strong currency could deal a serious blow to China when the global economy is still on shaky ground.
> 
> "If imports by the United States, Europe and Japan slow sharply and the renminbi appreciates strongly at the same time, the concentration of these negative factors *will lead to a steep correction for our economy*," Li and Yu wrote.
> 
> China lifted the yuan, also known as the renminbi, from a nearly two-year de facto peg to the dollar on June 19 and vowed to steer its currency regime toward greater flexibility.
> 
> But nearly three months on, the promises appear to have amounted to little. The yuan has gained just 0.6 percent against the dollar since the depegging, even if the pace of appreciation has increased a touch in recent days. <CNY/>


They have been willing to have a slow change in the value of the yuan to try to fight domestic inflation which has been rising, but resist larger changes which would lead to economic shocks at home.

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## efiniti

Hmm, sounds like we'll still get cheap Chinese goods for a while.  The Chinese are cracking down on their population early.

Now time to start watching Germany.

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## realtonygoodwin

What about http://www.europac.net/ ? Surprised no one has mentioned them in this thread (unless I missed it)

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## efiniti

> What about http://www.europac.net/ ? Surprised no one has mentioned them in this thread (unless I missed it)


If you have $25k lying around and aren't sure where to invest it I envy you!  :P

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## realtonygoodwin

Not yet, but I am following the Total Money Makeover (Dave Ramsey), so it shouldn't be terribly long!

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## enoch150

> So the government will become the largest holders of PG, MSFT and AAPL over night? What good would that do them?


They might count on private investment in the stock market to continue being large enough to absorb the stocks that they sell off in chunks, as they need money to fund SS. The government just got some practice at this, most recently with GM. But the sales of so many stocks as this would be drawn out over decades. They might hold dividend payers a bit longer and collect some cash that way. 

A half dozen countries in Europe have started messing around with private retirement funds over the last year or two, and I think Argentina did back in 2001.

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## Mogambo Guru

> Given that it is currently loosly pegged to the dollar, do you think they will actually allow it to float?  Otherwise it would move down with the dollar if the dollar were to fall. China does not want their currency to be stronger against the dollar- that would hurt their exports and in turn their economy.


I believe the Yuan has appreciated about 20% against the $$ over the last 5 years..  Not too bad for just saving(not speculating), considering our option of saving in $$'s robs you over time.

Zippy, how does a person today just go about saving his/her labor to be used at a future date, say like retirement..(or even a mid life vacation or whatever, saving now for future spending)  without being robbed over time?  
&
Is it different today than it was say from 1800 to 1900 whereby you could just save money for the future and in fact slightly increase your purchasing power, while at the same time be able to buy nicer things?  Can this be said for the last 100 years or so?


*I would also note that currency does not play as big a role in imports/exports as most would have you think..  I think a better indicator is if you are underconsuming or overconsuming..  Inflation is just a way to artificially keep people underconsuming...  the whole sympton and disease type arguement.  It can look like inflation helps exports, and it may do so for a short period, but eventually input costs change.  If your currency is weak, raw materials cost more = more dollars in the end product..  the one variable is how much you consume, or if our wages dont go up at the rate of inflation...  Meaning we are poorer and in turn consuming less.  
If we go through an inflationary period, it makes us poorer and consume less in a stealth manner.  I would say people should understand better and be more open about what we need to do.  And that is not to inlfate our currency, but to produce more and consume a little less.  Pretty simple really, currencies and Inflation/Deflation are just stealth ways to accomplish this.

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## Zippyjuan

I have not checked the historical value of the yuan- you may be right on that. How much has the dollar depreciated against other currencies?  Although it has not been stated as such, I think that one of the Fed's goals of QE2 is to lower the value of the dollar to help stimulate imports to help the economy (problem is that it takes time - months or even a couple years or so- for imports or exports to adjust to changing exchange rates). You are right that I probably made the impact on imports/ exports sound more significant than it actually is- but I was talking longer term, not short term.  The announced goal is lower long-term interest rates but why? If US interest rates are lower than other countries, then investors will be more likely to want to invest in those countries- lowering demand for US dollars and in turn lowering the international value of the dollar.  This makes US exports cheaper which will hopefully lead to increased exports and more US productivity.  But that also means more expensive imports.  When that applies to goods competing against US made goods, that is good for US producers.  When that applies to resources that producers need, like oil, that is not such a good thing and that can be a negative for the economy. 




> Zippy, how does a person today just go about saving his/her labor to be used at a future date, say like retirement..(or even a mid life vacation or whatever, saving now for future spending) without being robbed over time? 
> &
> Is it different today than it was say from 1800 to 1900 whereby you could just save money for the future and in fact slightly increase your purchasing power, while at the same time be able to buy nicer things? Can this be said for the last 100 years or so?


We have never been free of inflation anywhere and people have always struggled with it.  Putting money in a coffee can or under the mattress is not a solution.  The best one can hope for is to try to find some investment (gold, stocks, bonds, etc) which will hopefully at least keep you even or better yet grow at a rate higher than the inflation rate. There has been no monetary system which has managed to avoid inflation. Nor should one. Prices should be free to change to reflect relative scarcity. Fixing prices leads to undesirable production levels (either too high or too low).  Changing prices allows the supplies and demands to adjust to their proper levels. 

Historic US Inflation: 

http://en.wikipedia.org/wiki/File:US...on_Ancient.svg

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## enoch150

> I have not checked the historical value of the yuan- you may be right on that. How much has the dollar depreciated against other currencies?  Although it has not been stated as such, I think that one of the Fed's goals of QE2 is to lower the value of the dollar to help stimulate imports to help the economy (problem is that it takes time - months or even a couple years or so- for imports or exports to adjust to changing exchange rates). You are right that I probably made the impact on imports/ exports sound more significant than it actually is- but I was talking longer term, not short term.  The announced goal is lower long-term interest rates but why? If US interest rates are lower than other countries, then investors will be more likely to want to invest in those countries- lowering demand for US dollars and in turn lowering the international value of the dollar.  This makes US exports cheaper which will hopefully lead to increased exports and more US productivity.  But that also means more expensive imports.  When that applies to goods competing against US made goods, that is good for US producers.  When that applies to resources that producers need, like oil, that is not such a good thing and that can be a negative for the economy. 
> 
> 
> 
> We have never been free of inflation anywhere and people have always struggled with it.  Putting money in a coffee can or under the mattress is not a solution.  The best one can hope for is to try to find some investment (gold, stocks, bonds, etc) which will hopefully at least keep you even or better yet grow at a rate higher than the inflation rate. There has been no monetary system which has managed to avoid inflation. Nor should one. Prices should be free to change to reflect relative scarcity. Fixing prices leads to undesirable production levels (either too high or too low).  Changing prices allows the supplies and demands to adjust to their proper levels.


Fluctuations in supply and demand can cause changes in prices, but changes in prices are not the definition of inflation typically used in this forum. Inflation is defined as an increase in the money supply. The result of that can be a general rise in prices, but not necessarily so. If the inflation of the money supply is kept inline with economic growth and advancements in productivity, there would be no noticeable change in prices. But even if that were the case, that would still constitute theft, since it robs savers of the value of their stored wealth. Prices that would have otherwise declined, increasing the purchasing power of money saved, instead would be kept constant by increasing the money supply.

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## Mogambo Guru

^exactly, $1 in 1800 saved until 1900 would buy you a better product in 1900 because of our increased productivity and advancement in technology.  

Not to mention that if you had it in the bank, you would gain a %...  over time that % cancelled out inflation.. now that % on savings is a net loss.  I dont think its the right direction...
What if you were born in 1945, and your parents gave you $100 as a gift to start your savings account for the future.. what is that worth today in purchasing power??  squat even after interest if you were to compare that same $ amount and put it in the bank from 1835-1900.

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