On 2007-10-18, Adam Corolla wrote:

"Ignoramus1624" wrote in message
...
On 2007-10-18, F George McDuffee
wrote:
Note: Iran has begun to require payments in Yen from Japan, and
Euros from Europe for their oil, and China and the other large
holders of US dollars and dollar denominated securities are
forming "sovereign investment" entities, to exchange their
virtual dollar assets for equities including land, buildings and
large shares of American corporations.

Just who do these foreigners think they are, demanding that the
US redeem their IOUs? If PIK [payment in kind, where you make
the debt payments with more paper debt] is good enough for the US
banks and hedge funds it should be good enough for China and the
Arabs.

Immediately after the "mission accomplished" vistory over Saddam, I
exchanged a substantial amount of our dollars into euros, and held
them ever since. A decision that I am not at all regretting. I feel
much better with cash in euros rather than in dollars, though I still
have quite a lot of dollar assets -- but not 100%.

i

You were smart to invest in Euros then. I didn't know about any of this
until recently.

You did not know about our trade deficit, mounting debt, and
artificially low interest rates?

Though I'm no expert in this, I have a feeling that a sudden, catastrophic
drop in the dollar's value could negatively impact the Euro as well, not to
mention the entire world economy. I'm not saying it would devastate the
world economy, just that it wouldn't be good.

It would be a good thing, in my opinion, though it will obviously lead
to higher interest rates here in the US. Since US foreign debt is denominated
in dollars (not typical), an option to av oid paying it is
inflation. Another outcome is a more responsible fiscal policy, and
more favorable trade balance.


To me, all currency is just an IOU which can be voided at any time. Of
course, nothing is 100% proof against loss, but I feel better putting my
money in hard assets.

Make sure that the "hard assets" earn you money while you are holding
them. Here, I am a little bit preaching to do what I say rather than
what I do, since for a few years I held 7 100 oz silver bars. But that
was because I thought that silver was underpriced.

i