Michael ([info]ikilled007) wrote,
@ 2008-05-01 20:19:00
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You Hear That Sound?
PLOP!!

So the Gulf States (the middle eastern ones, not the US ones) are going to:

1. Stop pegging their currencies to the US Dollar,
2. Stop making all oil sales in US Dollars.

See this: http://stocks.us.reuters.com/stocks/charts.asp?symbol=.RICIX

That's an index that measures a basket of commodities. It's not manipulated like the CPI (for some insight into that, read here among others: http://www.investopedia.com/articles/07/consumerpriceindex.asp). Anyway, see that index? It's going to the moon. At this point I don't think even legislation like the outlawing of private holdings of precious metals can stop it. The US Dollar is toilet paper in the next 2-3 years. It's wallpaper. It's shit.

Already, the metal in a pre-1983 penny is worth 4 times the face value (copper) of the coin. Think about that.

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[info]cluebyfour
2008-05-01 07:40 pm UTC (link)
I'm going to make a deal with my employer to start paying me in catalytic converters.

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[info]phanatic
2008-05-01 07:58 pm UTC (link)
Already, the metal in a penny is worth 4 times the face value (copper) of the coin. Think about that.

Okay, sure.

A penny's 2.5% copper and 97.5% zinc. A penny masses 2.5 grams. So that's .0625g copper and 2.4375g zinc.

Copper's currently trading on the NYMEX at $8.71/kg, zinc at $2.20/kg. $.00871 to buy a gram of copper, $.0022/g for zinc. (.00871*.0625)+(.0022*2.4375)=$.0059, or just over half a cent.

So the metal in a penny is worth nowhere near 4 times the face value of the coin.

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[info]ikilled007
2008-05-01 09:09 pm UTC (link)
1982 penny. Sorry.

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[info]phanatic
2008-05-01 09:27 pm UTC (link)
Well, geeze, why pick a pre-1983 penny? Why not a 1935 dollar coin?

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[info]rightc0ast
2008-05-01 10:59 pm UTC (link)
Because they commonly circulate. It is at the point where picking out pre-82 pennies has become quite profitable if you know the right person to melt them down. (some in 82 itself have the zinc in them and can be hard to spot to a novice).

There was a law passed last year making melting down pennies and nickels illegal. Most people mistakenly assume it always was, but I made some money in early '06 buying nickels at the bank and simply recycling them. The 75/25 alloy nickels are made of can be mixed directly with steel to make it stainless steel. I believe the law went into effect around Thanksgiving of '06 when a nickel was worth 7 cents at the recycler.

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[info]phanatic
2008-05-01 11:08 pm UTC (link)
It is at the point where picking out pre-82 pennies has become quite profitable if you know the right person to melt them down.

And your time isn't worth much.

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[info]rightc0ast
2008-05-02 12:57 am UTC (link)
I guess that is a joke, or a troll, because itf one happened to know the right recycler, and one felt like spending a Saturday driving home from the bank with about a grand in pennies, one could clear 800 bucks in a day. Look at your change next time. About 1 in 5 is a pre-82.

Not as easy as picking up a grand off of nickels for driving them from the 8 banks in town right to the recycler with no worry of any law, but still, pretty damn easy if one felt like doing it. Not paying taxes on it would be a bonus I suppose.

As a matter of fact, I honestly couldn't think of any easier way to make money period. It requires no thought, and minor hand eye coordination. Even selling pot you grew at home would be more labor intensive.

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[info]phanatic
2008-05-03 05:42 pm UTC (link)
About 1 in 5 is a pre-82.

Great. Do you expect the recycler to just trust you that "Yeah, 20% of these are pure copper," or have you determined some rapid method of sorting through 100,000 pennies to pick out the pre-83 ones? Can't do it with magnets, you know.

Let's see. 100,000 pennies. 20,000 are pre-83. Let's be generous and say you can pick a penny from the pile, look at it, and discern the stamped date in half a second. It'd take you 13 hours to go through that grand of pennies, assuming no coffee breaks, no bathroom breaks, no lunch.

Yeah. You get right to that. Anyway, I'll stick with working on helicopters.

Not to mention that the bank's not likely to just give you a random sack of pennies. It's possible, but I think it's more likely that if you walked into a bank and wanted $1000 in cents, you'd wind up with a nicely stacked, wrapped, and arranged set of bright-shiny-new zinc discs.

Edited at 2008-05-03 05:50 pm UTC

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[info]rightc0ast
2008-05-04 01:16 am UTC (link)
I haven't detirmined a way, but there is a cheap machine (I would like to mention I don't own).

You are right. This is dumb. I don't do this.

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[info]street_person
2008-05-01 11:20 pm UTC (link)
Does this mean you're willing to place a larger wager right now on the price of some commodity or group of commodities in US Dollars exactly 3 years from now?

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[info]ikilled007
2008-05-02 03:34 pm UTC (link)
I guess you missed the part where I was right about the implosion of the financial sector? The problem with betting is that there are no limits to the way government can manipulate things as they deteriorate. For instance the Bears Stern bailout. They could outlaw private holdings of gold or suspend commodities trading altogether. Anything like that would work in your favor. I'm content just to continue being right.

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[info]street_person
2008-05-02 09:20 pm UTC (link)

I didn't miss it at all. If you recall, I was the guy who was trying to make a $10,000 bet with you on the matter. The bet was to be about whether in X months (I think X was 3, not sure) the stock price of a list of companies that you provided would be less than 50% of the price on the day we agreed to the bet. I proposed that we each wire $10,000 to ljuser=candid to hold until the end of the X months. You then stopped responding to my attempts to arrange the bet.

At the end of the 3 months or whatever the stock prices of the relevant companies were such that I would have won if we had gone through with the bet. So, you were not right about the extent of the "implosion" that you predicted.

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[info]rightc0ast
2008-05-24 01:03 am UTC (link)
Reading through archives here. Wouldn't you have to say that the market itself has actually trended upward these past few months (since that bet I actually remember he never responded to either)?

I was thinking the same thing at the time as Michael pointed out above.He would have been a fool to take that bet for many reasons. One, it was super risky from any angle for him, and almost no risk to you. I was also considering what he said above at the time though. It would be near impossible for him to win that bet. Even if market theory would have been showing him trending toward a win of that bet, the entire job of the PPT is to literally make sure that a bet like that can not be won.

It turns out they didn't need to do anything as drastic as suspend trading or outlaw privately held gold. They simply had to gut the dollar and help the market trend slightly upward.

I'd assume you aren't investing in dollars or shorting oil at the moment.

I do think that there may be a chance to get in on cheap US real estate and business if the economy doesn't collapse. I don't think it will anytime soon myself. I'm of the opinion Michael is right, and the supply side Laffer BS that has dominated the last 25 years is not sustainable, but I don't think it falls as fast as he does. Perhaps when the Boomer bills come due in 15 years or so.

I'm not even convinced that most industry isn't going to just be nationalized within 25 years to prevent things the free market rightly would implode over. Things like what David Walker was talking about last year in that Fiscal Responsibility tour.

Unlike Michael, I hope and think things might be able to be "saved". Shit's fucked up right now though, for lack of a kinder way to put it.

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[info]whip_lash
2008-05-02 01:13 am UTC (link)
There's some politics here.

Kuwait already doesn't have a dollar peg. It's the only country in the region that doesn't. As a result it's also the only one that may be left out of the unified Gulf currency set to debut next year. It's a lot easier to unify currencies when they're already pegged to the same thing.

So when you see the Kuwaiti minister saying shit like this it's just a form of public pressure on his neighbors, who stand to make a lot more on the interchangeable currency than they're losing on the dollar peg at the moment. Next year, though, all bets are off.

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