/finance/ - Finance

>>53 (OP) 
As someone living in the funnier part of Europe, I've warmed up to the idea of joining the eurozone, because in practice it would mean a lot less inflation and lower interest on loans. The European central bank has a policy of doing absolutely nothing for the most part, so we don't even have to worry about some sinister plot on their part. And if worst comes to worst, we can always just switch back to our own currency, but it would be backed by an economy that could grow stronger over the years due to the aforementioned lower inflation and interest.

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A remnant of French colonialism that there a ton of African states that use one of two currencies pegged to the Euro, the West African Franc and the Central African Franc. Originally both of them were pegged to the French Franc, and you need 100 of either to get one a single French Franc. Then in late the 90s it was time to introduce the Euro, and so the franc was pegged to it at 6.55957 to €1. This means to this day 1 Euro is worth 655.957 of either African francs, so 1 eurocent is the equivalent of 6.55957. 

Honestly, this might not be that bad of a deal for them. True, they can't just do whatever they want with these currencies, but they don't have to worry about inflation, and doing nothing is usually the best economic policy.

>>68
https://en.wikipedia.org/wiki/Maltese_scudo
There is one more currency pegged to the Euro: the Maltese Scudo. It is the official money of the Knights of Malta (Malta itself uses the Euro). It is worth exactly €0.24, which is a bit strange until you read that it is also subdivided to 12 tari, therefore it would be better to say that a single tari is worth 2 eurocents.

Today american dollar surpassed euro in value.

I guess it has two parts: for one, investors would rather keep their money in the currency of a superpower, as opposed to the currency of a glorified economic alliance with a war on its doorstep and mounting problems caused by shortages. The other part is that European countries suddenly have to import a lot more energy from new sources, and the world market prefers burgerpesos over europesos, so they have to exchange a lot of the latter for the former. Add these two together, and there's a lot euro for sale. I don't think that we'll have a sudden and dramatic collapse come winter, but I can imagine it steadily losing even more of its value.

>>115
Maybe I'm just awfully optimistic, but the current situation of switching to non-Russian oil&gas might only cause a relatively short disturbance overall. There's plenty of both under the North Sea, the Black Sea, and the Mediterranean Sea, and the former two are currently untapped. It'll cause quite a lot of geopolitical arm wrestling, but once they offshore rigs are there and the pipelines are ready, cheap hydrocarbons will be back on the European menu. Until then, we will have to either put up with a big recession or a small collapse as governments around the continent toppled.

Of course, I might be completely wrong about those untapped resources, and by next year I won't be posting here because I'll have no electricity.

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Turkey and Russia are about to make some deals where the Turks pay in Roubles.

The britbongs did a Margaret Thatcher and the pound dropped again.

>>182
What did they do exactly? I know that they are in the process of replacing all the paper banknotes with polymer ones, and then soon they will replace those with the ones that have the head of the new honcho, but I assume you are not speaking about either of these.

>>185
The Truss Admin. cut taxes on the wealthy in the middle of record high inflation, leading to even more inflation as spending increased, citing what basically amounts to "it'll trickle down". I don't know anything about britbong politics, but even her own party seems to hate the idea

>>186
So that's what's up. I've seen headlines criticizing "tax cuts" to the point that the IMF is publicly telling them it's a terrible idea, but I had no idea what had gotten everyone so worked up about it, given that I thought I'd also seen a bunch of other countries cut taxes without any fuss as a way to ease cost of living.
But now I read that these particular tax cuts come in the form of eliminating the highest income tax bracket and removing a cap on bonuses for bankers.

By all indicators, the local economy here is about to hit a brickwall at high speed, and both the government and the national bank are run by clowns, and yet the local monopoly money is actually getting stronger. It's still around 10% weaker against the €uro compared to January, but not that long ago the difference was more than 20%. I of course had to invest in € some of my monopoly money, and as it stands I'm actively losing money with that investment.

Can someone confirm my understanding on historic american money/finance is correct? 

Silver and Gold Certificates were paper notes that various private banks would ask the Treasury for directly, when they had a dearth of notes but did have the silver and gold to back them up. Anyone who had one could ask for the equivalent amount of gold or silver and the bank in question was legally required to give them the gold or silver (assuming they had it on hand).

Treasury Notes were issued to banks directly who asked for them (like the certificates), except the banks didn’t need the equivalent gold or silver to back them up and any individual who held them couldn’t request an equivalent amount of gold or silver from a bank (individuals could obviously trade gold and silver with them if they wanted to, just weren’t legally required to accept it).

Federal Reserve Notes are issued by the Fed to banks who ask for them as a loan, and in return those banks are required to pay interest to the Fed with the hopes the interest will offset inflation. 

Is this right?

>>214
And in the weeks and months since that it turned around to the point that I'm losing money by keeping it in euro. 
>>222
As far as I understand you are correct, but American banking is the kind of mess where you can get lost for a lifetime, and I don't have any actual books on this subject.

I have seen some posts about one US bank in California going through some problems. I doubt this is enough to influence the of the banking sector or trigger anything 2008 level. Why are people so excited about it?

>>226
Because after COVID and the whole Ukrainian happening the world economy is in a bit of a disarray, so people except bad things to happen, therefore they are looking for the signs of those bad things finally starting to happen. Apparently this is what happened:
>the bank in question kept nearly all of its money in bonds
>bonds have a fixed interest rate*, a face value and a market value
>the face value and a market value are different, because bonds released at different times can have different interest rates, and you don't want to pay $100 for a bond with a face value of $100 and a 5% interest rate if you can instead pay for a bond that has a face value of $100 and an interest rate of 10%
>if a central bank raises the interest rate then bonds released after the raise have to have a higher interest rate
>this means that bonds released before the raise go down in market value simply because they are not as good an option
>in this case you can either keep your old bonds and accept that you get less money overall
>or sell them at a discount to someone who doesn't mind the lower interest rate, and use the proceedings to buy newer bonds
Now, the bank wanted to sell its older bonds and buy newer ones, but doing so would have lead to some temporary losses as they'd have to sell them at a discount. To make up for that loss they wanted to sell some of their shares, except that investors assumed they must be in trouble, and so they too started selling the shares, turning it into a self-fulfilling prophecy. 

*The actual interest rate might be tied to something else, so it can fluctuate overall, but again, it is tied to something else, and it's not just up to the whims of whoever release the bonds to randomly set a new interest rate, so you can have some expectations about how much those kind of bonds might pay down the lane.

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>>224
The euro doesn't have a good future. I can't get rid of my euros fast enough.

>>226
SVB was basically THE bank to go to for vaporware and tech company loans. They also heavily used ESG in determining if you got lending money or not. Roughly 90% of their customers were tech businesses who shouldn't have qualified for FDIC. Them alone collapsing isn't a big deal but SVB has caused all the other woke nonsense banks to reassess their assets which is causing runs on the banks.

While not apparent at the time of your post, the feds have also promised people with money in SVB UNLIMITED INSURANCE for all their bad decisions which incentivizes the Chinese and other bad actors to buy into SVB in order to try and buy American debt on the cheap.

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>>230
> bad actors
You already have the baddest of actors in charge of the State Department and Federal Reserve. What the chinese do or don't do won't have any significant effect in the grand scheme. At most they'll manage to make a few bucks and maybe afford to buy some more tonnes of gold to shore up their BRICS system.
In fact, Biden just veto'd a new bill that was against ESG investing. So expect the woke stuff to remain in place all across the board in american firms.
Credit Suisse also just went bust, but it was being badly managed for a long time, so it's not a big surprise. And also it has the woke virus.

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Have you guys heard about "Goldbacks" at all?

I'm asking because I just left a coin convention today, and found some of the venders there selling these things. One of them handed out a "half-back" for free, and I spent $17 getting two different versions of the 1GB denomination. The "sales pitch" for them is that these things are 24 karot strips of gold (With the different denominations tied to their size, and their increased amount of gold in said strip contributing to said increase in size and hence denominational value) that are suppose to be used as an alternative method of payment. This entire project comes to us from a company based out of Utah who have allied with other precious metal dealers such as Alpine Gold. Apparently it's already accepted widely in Utah, and Florida just passed a law back in July that eliminates the tax on precious metal transactions altogether and further solidfying this as a possible concept. You can find their website here: www.goldback.com

From what I understand of it, the idea "seems" sound. However the reservations I have with the implementation is (1) cash is not as widely used as much as it really should be which hampers the concept of an alternate method of making payments being a physical currency that you have to hold in your hot little fists (Though still I would back this idea anyday to absolutely anything having to do with cryptocurrencies where the value is nothing except data on a computer) and (2) there's the monopolistic problem that only one company is making these things (And thereby meaning that they have the sole control over the market viability and future of the Goldbacks). Outside of an outright de-dollarization, I don't see anything really addressing my first complaint, which would mostly relegate these to primarily existing as collector's items. However the second complaint I could see being lessened if there was at least another company or two in the market making these (As it would both back the legitmacy of the concept as more companies are making them, and require them to keep each other in check to prevent the in-the-future market for these from collapsing), if for no other reason that I can finally have an "official" currency using anime pictures (The current images they have are nice and pretty, but I feel like there is just little variety).

But those are my thoughts. What are you're guy's takes on the concept?

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>>445
Maybe it makes sense to buy them in Utah or wherver they're currently being accepted in circulation. Otherwise they're just high premium collector pieces.
I believe there's another company that makes similar gold leaf "notes" but they're not called Goldbacks, they have another name (sorry, I don't remember it). I think their art was a lot better too.
But the format itself is apparently a problem, because you can't fold them like paper bank notes without damaging them (from what I heard). It would have probably been better to just make them in standard credit card size, at least that way they'd fit a wallet easily.
But anyway I'm in europe and there's no traction for this kind of thing here whatsoever. If I wanted small gold, I'd just buy a combibar, or even the 1g individual pieces (but you get lower premiums when buying the combibar). For anything less value than 1g gold, I'd just buy silver coins instead.
Pic are swiss 1 Franc coins, 5g of .835 purity, so 4.175g of silver per coin. There are french and belgian ones that are very similar, to the same specifications, and they're all very common. They also made 50 cent and 2 Francs versions, at half and double the weights. That was long ago, when coinage was still made of silver, and before the Euro currency.

>>445
>>446
Holdbacks are definitely a speculative investment. The speculation is as to whether the concept gains traction. If it does, those who get in ahead stand to gain quite a bit (as hyperinflation continues its march).
>Folding them damages them
Only if fully creased, if bent gently, not at all. The lamination is pretty high quality from what I've seen, but I wouldn't be comfortable carrying it in my wallet. They do sell custom wallets for them, but they aren't in common use right now so it doesn't matter. The real value of the goldback is as an answer to the small coin "problem" in a collapse scenario.
I personally am not spending any money (besides a single windfall I happened on) on them, and am instead putting credit card rewards into them. For the most part, people are better off investing in coins and bars.

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>>447
>The speculation is as to whether the concept gains traction.
Bought a few items with a couple of these yesterday, and found another problem with it gaining any validity. It stems from the fact that people are still tying the value to items to a certain number of dollars. Like I could get three of 1GB Goldbacks back when they amount 1GB was worth $7, watch as it's value raises to $9, and then walk into a store that accepts Goldbacks and walk out with $8 more in items than I could when I initially bought them. 

This is sort of confusing so let me explain. Let's say you're a person with a couple of chickens, and those chickens have produced 1 dozen eggs (Or 1DE). You sell that carton of a dozen eggs (Worth 1DE) for a price that you have pegged at $10. And let's say that something like the Goldback comes along, which you accept as payment. And in this scenario, the 1GB is also currently valued at $10. Now, something happens that causes the price of the Goldback to go up from $10 to $20. This screws you over because now you're receiving a 1/2GB instead of 1GB since you pegged the price of your eggs (1DE) to $10 despite the fact that the value of the eggs (Worth 1DE) hasn't changed. All that has changed is the value of the dollar, and you were too "slow" to pay attention.

And I feel like this is one SIGNIFICANT factor I don't think people have actually taken a step back and realized. There's this local game store I go to that has had dozens of games sitting on it's shelf for years on end and have been valued at $10 since before Corona-chan. If the guy actually priced his items accordingly to inflation, he should be relabeling those games as NOW being worth $13 (Now extend that to the entire store). But how do you think this is going to effect his business? He's already complaining about how he isn't making enough money and just trying to ride thinks out until his lease expires, so what's going to happen if he reprices his game to account for inflation? If you weren't already going to be buying Fantavision for $10, how about now when it's $15? But like I said, this is part of the problem, because he's tying to the value of the games in his story to his trust in the dollar's value.

So if anything is going to come along to replace or being an alternative to a local currency, whether it be Goldbacks or cyrpto or something else, one of the things that needs to happen is that people need to start assigning alternate valuations to items that is disconnected from the local currency's value. In addition, there's also the problem of trying to explain this concept to the idiots who think that this prices "just" go up simply because people are "evil" and "greedy".

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Any idea why silver is shooting up to $70?

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I think all the shop owner has to do is list two prices for each item. One is the silver price that never changes, and the other is the fiat price that's always increasing. And then people will start to ask the right questions, like >>451

>>451
Lately there hasn't been enough silver bullion to meet demands. They tried to play accounting games where they shipped bars between COMEX, LBMA, and Shanghai, but in the end that's just an accounting trick and it doesn't fulfill any actual silver needs for industry or any other customers that wants the real deal (as opposed to investors just using paper contracts for speculation). And then China said fuck this and decided they're not going to export silver anymore in the near future (I forgot the exact date). And also quite recently, retail chinese customers have been buying shitloads of 15 kilo bars. I guess before they could buy the Panda coins, but those are actually a PITA to store because they don't even come in tubes, they each have individual capsules and the two sides of those capsules aren't even flat, they're  convex and that's why they're packed in trays instead of tubes, and crates instead of monster boxes. The whole thing is goofy and takes up lots of space. But the 15 kilo bars that are popular in China now, those are very compact and easy to store anywhere. In the west this doesn't really matter too much, but in China there's a much higher population density and they don't have as much space in their apartment or wherever they're living. But anyway, yeah a whole lot of chinese are buying silver now.

>>451
Just about to hit $80

>>451
>>452
>>453
I think I found one of the reasons why silver is spiking:
>Trump’s 401(k) changes could dramatically impact your retirement account in 2026. Here's what you need to know
https://archive.ph/pPTQ3
<In August, an executive order signed by President Donald Trump (1) opened the door for certain “alternative assets” like private credit, private equity and cryptocurrencies to be included in 401(k)s, expanding what Americans can hold in their 401(k)s and other tax-advantaged retirement accounts.
<...
<Traditionally, some alternative assets — such as private equity and hedge funds — were restricted to "accredited investors” who either had a net worth of more than $1 million (excluding their primary residence) or annual income exceeding $200,000, according to the U.S. Securities and Exchange Commission (2).
<However, the alternative asset landscape has changed over the years, and retail investors are showing growing interest in these investments. A survey by market research firm Opinium found that 21% of retail investors have considered alternative assets, and another 5% plan to invest in them (3).
<...
<For instance, gold is often viewed as an alternative asset that can offer your portfolio greater stability if stocks are shaky. The precious yellow metal is also on a historic bull run, with the spot price hitting a high of about $4,300 per ounce in October (4).

>Trump’s new 401(k) rules could shake up your 2026 retirement savings — are you ready?
https://archive.ph/hbSG9
<Alternative assets in 401(k): A recent US executive order now permits alternative assets like private credit, equity, and crypto in 401(k)s, offering diversification beyond traditional stocks and bonds. While proponents highlight broader investor access, experts caution about complex risks and limited liquidity. Financial advisors suggest a cautious allocation, typically 5-10%, to navigate these new opportunities.

This is pure speculation on my part, but it seems like Trump's plan to "save" the economy is getting everyone invested in everything and anything instead of having them rely ENTIRELY upon stocks and bonds. So unlike in '08 when all it took was the housing bubble to collapse and took everything with it, the economy is going to be far more diversified in where their wealth is located, which will soften any "major" shake-ups that occur (Like, I don't know, the AI bubble popping, or a PLA Invasion of Taiwan).