Source
r/Silverbugs•
Silverpede

Keep stacking like no tomorrow Silverbugs!

I started stacking when we only had a little over 9k subscribers to this thread approx. 4 years ago and have acquired over 50lbs(800oz) of our beloved shiny. I want to ask my fellow bugs opinions.
My opinion first is I believe China will surpass U.S. GDP eventually and that’s real problem for the USD. Russia and other Countries are already jocking for this to happen. USA is trying to crush Chinas economy now to prevent this from happening and if they don’t succeed I expect a good chance of WWIII. Once this happens the dollar will be crushed! The Chinese currency will replace it or maybe a global currency, but either way the USD is doomed.

Anyone have similar thoughts? Opinions?

Thanks in advance!

Posted Nov 28, 2018, 10:52 PM UTC

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DixieSilver•

It's inevitable that China's GDP will eclipse the US's at some point within the next decade or so. But it's not as simple as that. In order to grow it's economy, China needs access to the US market for exports, so a full-on trade war isn't something they're too excited about. Also, social stability in China is still a big issue. If the economy falters, social unrest is very likely and could cause major problems for the Communist Party, perhaps even threatening its monopoly on power. To stay in power, the PRC needs to keep GDP growth at 6%+. What all this means is that the US has a lot of leverage that's not obvious to most. However, I think it's very clear to those at the top. That's why Trump has been so aggressive on China. He knows how desperately they want to avoid a trade war and that he can push them pretty far before they'd be willing to retaliate in force. If he pushes too far, though, it would be disastrous for the US and China, and heck, for the entire world.

What does all this mean for gold and silver? It's hard to say. Anything could happen since we live in an unprecedented interconnected world economy that's never existed before. That said, the reason you find me here is because, like you, I think there's a moderate-to-high likelihood of a decline in the USD, and having a PM hedge would be a comfort in that eventuality. That's my thinking on the subject, but it's just one guy's opinion.

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SilverpedeOP•

I agree with you and there is a lot more to the story also. I believe the strong dollar is allowing me to buy PMs cheap now and I do expect the dollar to turn south when the Fed stops raising rates.

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grimcow•

Word

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BF740•

In this day of age countries want each other to be somewhat stable. The last thing anyone wants is a WW. Economically we need to get our shit under control, but the dollar continues to be king.
This country is very resilient. Hell 30 years ago did anybody think we would be able to produce all the oil we use in our own country? Silver won’t save your ass if Nukes start flying but I congratulate you on your savings. It will and can get your ass out of a financial pinch at some point. I just may start stacking gold now if I was you. Its a lot lighter!

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SilverpedeOP•

Thanks and yes I would like to get into some gold. I just see silver being more undervalued so I haven’t accumulated much gold yet.

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welcmhm•

Even if/when the Chinese economy becomes larger than the US economy, I doubt the rest of the world will be interested in looking to a communist country's currency to be a reserve currency. I think the Euro and even the Swiss Franc would be in line before the Chinese Yuan.

Also, I don't believe that the current US administration is trying to crush China's economy. They're playing hardball to try to balance out how imports/exports are taxed and how China treats (ignores) the intellectual property rights of non-Chinese companies. In the long run, removing trade friction across the globe would be best for all economies (there would be winners and losers, but economic activity in the aggregate would increase), and I believe we'll head that direction, but sometimes it takes some hardball to get there. Most countries have taxes/tariffs/VAT which disadvantages US producers/exporters, and it'll take a while to knock those down.

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DixieSilver•

You make a lot of great points, and I agree that the US isn't trying to crush China. I also think it's very unlikely that we'll get into a kinetic war with China over this. Nobody wants that, and they aren't scared enough of us to risk war. Which is good. Russia on other hand, is more desperate and has less to lose.

On the reserve currency issue my thinking is a little different. One of the reasons the dollar is unchallenged as reserve currency is because of concerns over the stability of the Euro. There's real fear that a crisis in Italy or Spain will implode the Eurozone and take the Euro with it. I think this uncertainty makes it an unlikely successor as reserve currency, and my understanding is that capital is slowly migrating out of that area and helping to prop up both the market and the dollar. The Swiss Franc is golden but there's not enough of it to serve as the reserve currency. IMO a reserve currency requires two things. First, you need a currency that people believe in, one that's backed by something substantial. The dollar isn't backed by gold, but by the US's overwhelmingly dominant military force - it's backed by steel rather than gold. Second, you need A LOT OF IT. How do you generate a lot of currency? You issue debt. Lots and lots of dollar-denominated paper that's used as foundational capital all over the world. In some sense, large trade imbalances serve the US's interest in the dollar remaining the world reserve currency.

In sum, I don't see the dollar going away, but it may eventually have to share that status with RMB, which over time (years to decades) would erode its dominance and accordingly its value. Hence PMs as insurance.

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Atomsq•

Couldn't countries stop having to use dollar to buy petroleum using dollars and also countries dropping US debt affect this in a very negative way?

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atliia•

As long as a 1000 franc note exists the Swiss will not be a reserve currency. Too easy for drug traffickers, terrorist, and other bad guys to move money.

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BrodieDigg•

If there is a full blown WWIII it wont matter what dollar comes out on top, because it will be on top of a pile of radiated corpses.

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SilverpedeOP•

But what if there is not a war and China becomes the worlds largest economy, don’t you think the US dollar dominance will come to end?

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wm218•

the financial war currently taking place is burning the last bridges we have left with trade partners. In the long run I expect other countries to call bullsh*t on the US and actually force us to produce on our own. The USA won’t end, we do have a diverse country with innovative citizens and vast natural resources which we will be forced to finally tap into, but expect more balanced currency’s and in turn much higher prices in dollar terms for the things we currently take from third world countries for a fraction of what it would cost to produce in our country. I see a number of promises being broken equating to a massive domino effect as a part of the great American downfall - either defaulting or inflating the currency are the only options. Either way It ends, that is when every member of this great forum will retain purchasing power and finally come out on top!

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G-nZoloto•

No fiat money system has ever survived for long - they have all failed - 100%. The US$ is a fiat money system - it will fail. Why do they all fail? Human nature = greed, and machinery = printing presses. This is why we have happy citizenry (for the most part), 40% of wealth owned by 1% of the population, and a 21(?) trillion dollar debt. It will end ugly.

What will replace it? Chinese fiat - same eventual result. Petro$ - decreasing supply and prone to reserve manipulation. Crypto - doubtful without universal recognition. Gold/silver/rare metals - the only hope, and why forward thinking governments are building reserves as quickly as possible

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Elchup15•

I think the US vs China is a false dichotomy. Every country on Earth has a fiat currency and some form of fractional reserve banking. This leads to excessive debt in the name of growing the economy because the average person thinks growth = good. This is unsustainable. Here's a good article I read today:

https://www.oftwominds.com/blogoct18/depression10-18.html

In the past it was possible to have minor recessions, or stock market crashes that didn't result in recessions. Long story short, there is waaaaay too much debt in the world for things to work that way anymore. We are headed for disaster and gold and silver are better than fiat when the governments favorite response to economic downturns is "print more money".

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SilverpedeOP•

Thanks for the read and I agree.

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Atomsq•

We are headed for disaster and gold and silver are better than fiat when the governments favorite response to economic downturns is "print more money".

*cof cof Venezuela cof*

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Strawberry_666•

Wow man! 800 oz is a hell of a milestone! Very cool!!!!

About the GDP, don't bother with that too much. GDP does not reflect the status of the real wealth. For example. In Europe some countries count the income from illegal drugs and prostitution into the GDP statistics in order to "fluff up" the big picture and to continue sucking on Brussel's nipple. Also if you take into consideration that planned obsolescence of almost all produced goods are good for the GDP ( while being pretty bad for people and environment ), the picture begins to look different. It's prudent not to focus too much on statistics and mainstream news.

As much as Trump would like to bring back the industry from China to the US, the main reason why all those companies went East in the first place, is because of those yummy low wages that they HAD. There is only one way big companies will come back to the US; if the wage costs would be lower. No amount of taxbreak-fetish will do. Therefor the life standard in the US must decline. This is not an option, simply because Washington's politicians don't want to deal with the regular American people who are armed to the teeth. So the easiest way to preserve the current hegemony is to destabilise China and China's neighbours. You can see this trend everywhere. North Korea ( that has never attacked anyone ) get the full treatment from the media if they dare to even fart. Russia is the secret sauce that everyone uses as a scapegoat, while Russia wants to do business and solve internal problems. Etc etc etc. WWIII is a possibility, but Washington also knows that nobody in their right mind will use nukes. There are better weapons out there such as; financial warfare, propaganda, dumbing down of society, ... that work way better than any nuclear bomb.

As for the US dollar, yes it's a pretty bad situation indeed ( and that's why most of the folks here want to hold REAL wealth in precious metals ). That being said, we are still living in a Bretton Woods system and it never went away. The bloated and decaying carcass of the fiat currencies will stink for a few more years, simply because there's no other alternative at this moment ( that would work on a big scale ).

So don't worry about WWIII or the fall of the dollar. Be excellent to each other and stack silver. ;)

Sorry for any potential spelling errors. English is not my mother tongue.

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SilverpedeOP•

Thanks for your reply!

I don’t worry about WWIII nobody wants it and highly unlikely. Smaller scale conflicts or business as usual for the military complex is just fine and that will continue to satisfy their needs.

In my opinion, Dollar devaluation in the near future will be catalyst to send PMs much higher!

Keep stacking,

Cheers!

2
Strawberry_666•

The dollar can go both ways. As much as I'm hoping that silver bulls are right, I'm still being realistic that we live in a dollar world. It could take a few decades before it SLOWLY changes. As for silver I'm very optimistic indeed and stacking as much as possible!

1
grimcow•

I heard a story on npr about how a war now might consist of hacking type weapondary which we really don't know what it's totally capable of much like the machine being created and dominating ww1. A new large scale war between superpowers could unleash some scary shit on this world. I know this doesn't directly link to your post but reminded me of it and thought it was interesting enough idea to share. Like imagine if our power grid went down across the whole US or something, think of the chaos.

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SilverpedeOP•

The US power grid has already been hacked.

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SilverpedeOP•

Look it up Russia already has hacked the U.S. power grid! Might even still have control capabilities they still investigating situation.

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grimcow•

I heard about this but imagine it like.. constantly

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WIZARD_OF_TROY_OZ•

I think US diplomats have already made it clear that taking down the US power grid is a nukeable offense.

3
kdavidsmith1•

I highly doubt this. The USD is far more stable and isn't controlled at the behest of a dictator. More likely than not China is going to burn itself out and collapse under it's own weight of corruption, waste, and market manipulation. Just search China's empty cities.

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towerninja•

China does not want to have the world reserve currency. Because of the Triifin paradox. They are more interested in being a regional power and bypassing the dollar. Either way though the dollars days are numbered. I think we will either see a crypto world reserve currency or we will see the IMF sdr become the world reserve currency

1
Atomsq•

I really don't think crypto will be as big as a lot of people think it will, I mean, it's very easy to lose your crypto, you can either loose your wallet or someone can delete the pointer to your wallet and just not be able to access your crypto anymore, between other simillar things that could happen

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towerninja•

Crypto is still an experiment at this time. It has potential though. I agree though its missing things to work. Like we need a way to spend money. Without a electronic device.

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MeatRack•

If thats what you believe you should probably invest in a fallout shelter instead of precious metals.

0†
SilverpedeOP•

So all you took from that was WWIII? Thats worse case senerio WWIII and could come in many forms.

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MeatRack•

USA is trying to crush Chinas economy now to prevent this from happening and if they don’t succeed I expect a good chance of WWIII.

If this is what you believe, there are two possibilities

  1. The US succeeds and retains status as world currency as the Chinese economy falters, in which case, holding dollars is preferable.
  2. The US doesn't succeed and WW3 between two nuclear powers and their nuclear allies ensues, in which case, gold, silver, dollars, and everything else will be irradiated, or just heavily bombed with non-nuclear ordinance.

You presented two options that don't support your conclusion, I was merely pointing towards a more logical conclusion consistent with your beliefs.

​

*Edit* My additional thoughts below

​

If you're curious, I don't really think the US is actually trying to crush China's economy, and I also don't think that they can do so anymore since the establishment of CIPS and several Shanghai commodity and monetary exchanges. China's next step is simply to switch to internal consumption of their own production goods. The richer chinese citizens become the more capable they become at consuming what they produce themselves, the US has little power over China as an export partner and has less with each passing day. China's economy has many problems, but ultimately they are much more capable of withstanding a trade war than the US is, it is much easier to bring demand to meet existing supply than it is to create supply to meet existing demand. Also the US simply lacks the military capability to offensively strike China, all that the US military can and is willing to do is to block Chinese colonial expansion into the middle east, Africa, and South America through the strategic deployment of US troops (which we're doing now with only mild success). But ultimately China isn't really dependent on those neo-colonial outposts since all they really represent are export centers for China's raw goods (steel, coal, etc). The US will never use its nukes, and US armed forces are really only an anti-insurgent force at this point and management of the armed forces is too caught up in political correctness and virtue signaling to make a really good offensive invasion force. China is already armed with many high tech anti-ship and anti-air missiles and they already know how to spot our stealth bombers. Then there's the sheer numbers of their fighting force of infantry and cavalry (tanks, vehicles). We simply wouldn't be able to land an invasion on their landmass much less deal with their army. So we are left with just attempting to blunt their economic expansion outside of their borders, and we're doing a poor job at that even. You can look at our military bases and troop deployment in Africa, and then look at which countries China has public works projects, investments, and an economic presence in and its pretty obvious how China and the US have split up Africa. China most certainly got the better parts of Africa while the US seems to be stuck in countries with "insurgent" armed populations. One type of expansion is sustainable, the other isn't, I'll leave you to guess which one is which.

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