US Gov NPV

There are some who believe some branches of the government already do that - benefit from dealing drugs. Especially the goverment department whose name starts with “C”. Why? Because this is a nice source of revenue totally off the books and not from taxpayers.

Comparing China to the USA in terms of market manipulation and transparency is laughable IMO

Also, the national gov gets taxes off of pot.

Serious?

yes. and the CHF is the next best currency. the RMB will never be the next best…

Murrika!

How many CHFs are there actualy out there to buy? The whole world can’t plow into switzerland at once, can it??

Agree that China has only the level of transparency that it feels like having.

Did you account for real options? The US Government is under no obligation to pay for any sort of social programs like Social Security, Medicare, Medicaid, etc…

Long Antarctica, thanks to their large strategic reserve of penguins which will serve as the next alternative currency. Penguins are not as easy to manipulate as dollars. Also, they would be comfortable in the cold war for obvious reasons.

This has already happened once: http://www.npr.org/blogs/money/2011/08/19/139791374/the-friday-podcast-switzerlands-too-strong-for-its-own-good

Switzerland’s economy is in great shape. Low debt. Low unemployment. Tons of exports.

In recent months, this economic strength has created a huge problem for Switzerland. Panicked investors around the world, who see Switzerland as a safe haven, have been buying Swiss francs like mad.

That made the value of the franc shoot up — which in has caused big problems for Switzerland.

On the show today, we look into the franc’s crazy rise. Charles Wyplosz, an economist at the Graduate Institute in Geneva gives us the big picture:

The Swiss are proud of being politically neutral, but there is no economic neutrality. In a big part, their good economic health is directly due to fact that they are integrated in the world economy and that they are exporting all over the world. So the fairness is that if your customers are in deep, deep trouble, it would probably not be quite natural that you stay in top impeccable situation, while everyone around you is in deep trouble. I mean the Swiss dream of isolating themselves from trouble is just an impossible dream. They are part of the whole thing.

Are you not familiar with federal excise taxes? The feds collect about $10 billion per year on alcohol and about $18 billion on tobacco products.

Exactly, the Swiss economy had trouble with just a hiccough in commitment to the USD. There’s no way it’s economy, which is around 1/25th the size of the US’s can handle a mass stampede out of USD into CHF.

It’s fine if you or I want to stash our personal accounts there, but if major pension funds, or central banks suddenly have the same idea, there’s no capacity to absorb that demand.

They could print more CHF…

:slight_smile:

what’s the alternative to the CHF then? flock to the EUR at a time of financial instability and thus raised doubts of EUR and Eurozone longevity? JPY? hell no. flock to the CNY although it is de facto pegged to the USD and its government is corrupt and financial markets a mess? the CAD will have trouble as it is a USD neighbor. the AUD will be in trouble as global trade will be in the tank. what else is there? india? brazil? russia? the pound? stick with the CHF and let the Swiss defend it. if the USD explodes, and any one of a million scenarios unfolds, it’ll still be one of the top 2 currencies, and you can’t say that for any other currency.

^Gold

^guns, missiles

let’s be honest. it’s basically the end of the world if the USD is no longer the go-to currency.

The truth is that there really is no alternative to USD. I’d say gold before CHF.

Things have to get more than ugly before it makes sense to flee the USD, things have to get truly horrific - i.e. coup d’etat in the US or true hyperinflation (none of that puny 10% stuff we saw in the late 1970s). Or something that completely guts the ability of the US economy to produce anything of value.

For something to be that horrific, it’s almost guaranteed that it is going to come out of left field and probably affect many other countries too. Which means that it’s hard to predict what the right strategy would be, because it would be something so different from recent experiences that we would have to be thinking out of the box anyway.

I’m curious…what exactly does it mean to be a “reserve currency”? In theory, a Central bank can pretty much hold anything it wants - Euros or gold if it desires…