Dr. Hans F. Sennholz, Advisor to Central Fund of Canada Limited has written a brilliant essay entitled: " A Perilous Dollar Standard." His observations in respect to Y2K include the sentence: "The situation is not likely to change for the better given the global electronic infrastructure which will be at severe risk of collapse in the coming year." The essay and other sound economic insights may be found at: www.sennholz.com/current.html

-- Stefan Spicer (sspicer@nas.net), November 03, 1999

Answers

Link

-- Jack (jsprat@eld.~net), November 03, 1999.

A basket of commodities (grains, meats, metals, oil ...) would make an ideal reality based currency base. But, as Sennholz says, agreement on what would constitute the basket would not be forthcoming. (So gold again, by default.)

But those few of you who have the bucks can construct their own "basket". (I wouldn't do it until several months in Y2K, to see if we still have a market and communications, by which time it may be too late, but that's the gamble).

Besides e-gold (http://www.e-gold.com) where you can construct your own metals "basket" (gold, silver, platinum, palladium), you can play the futures market.

The danger in the futures market is that a small deposit (say $500 to $2000) controls a contract worth tens of thousands of dollars to over $100,000. So a modest adverse move, due to the leverage, wipes you out. But, you can control your leverage. If you yourself deposit more per contract, you can withstand a larger adverse move with getting a margin call or liquidated. So you can stay in the market indefinitely, rolling over your contracts to another month for $15 or $25, whatever.

A favorable move due to tanking of a currency would give you more of the currency, keeping your purchasing power the same, more or less.

Now, some brokers at least, accept stocks as margin deposit. If your margin deposit was stock in something Central Fund of Canada gold and silver fund (CEF) or even maybe the Franklin gold fund, you would have some insulation from tanking of a currency.

What do you think?

-- A (A@AisA.com), November 03, 1999.