Cannabis Prices & The Coming Devaluation of the Dollar

[draztik]

As far as oil being traded in gold?

No sorry that is a rumor I have heard recently. The rumor is the OPEC nations are saying if the dollar continues to devalue they may switch to gold to value oil.

 

[draztik]

This is the financial blog I read if anyone is interested. http://www.zerohedge.com/

 

[Milhouse]

Good post Whodare! Enjoyable and interesting read.

 

[draztik]

http://www.zerohedge.com/article/be...y-acceptable-system-post-civil-war-america--0

 

[eyes]

What's really burning me right now is that I don't think anybody understood about the economies of scale point I had made.

Right now in Cali, growers are pissed that they can't get more than $1,600-2,000 a lb. The state is FLOODED with cannabis. The other med states will follow, it's only a matter of time. That is economies of scale. The production of cannabis is getting cheaper with the large-medium sized operations popping up everywhere. Warehouses and large outdoor ops can afford to sell lbs for $1,600. The same way mom and pop grocery stores became a thing of the past, so will small time dealers... unless they have something unique to give them a competitive advantage... Say growing 20 week thai...

1600-2000 for top shelf/ dam,write me in for a few.

 

[MadBuddhaAbuser]

i love this thread

http://www.cnbc.com/id/41887217

US Standard of Living in Peril From Dollar's Weakness: Zell
Published: Thursday, 3 Mar 2011 | 10:37 AM ET
Text Size
By: Jeff Cox
CNBC.com Staff Writer

The US standard of living could drop 25 percent if the dollar loses its standing as the world's reserve currency, investor Sam Zell told CNBC.

"My single biggest financial concern is the loss of the dollar as the reserve currency. I can't imagine anything more disastrous to our country," the chairman of the Tribune Company as well as Equity Group Investments said in a live interview. "I'm hoping against hope that ain't gonna happen, but you're already seeing things in the markets that are suggesting that confidence in the dollar is waning."

As Zell spoke, the value of the greenback took yet another hit as European Central Bank President Jean-Claude Trichet indicated that an interest rate hike was possible next month if euro zone inflation continues to heat up. http://www.cnbc.com/id/41884073/

The dollar reached a four-month low against a basket of foreign currencies as well as the euro.
Trichet's remarks came a day after Federal Reserve Chairman Ben Bernanke addressed Congress and gave no indication the US central bank is preparing to exit its zero-interest-rate policy in place since the financial crisis began.

At the same time, the dollar was suffering under the weight of huge debt and budget deficits in Washington that threatened the currency's standing among its global trading partners.

Should trends not change, Zell said, the effects could be disastrous.

"I think you could see a 25 percent reduction in the standard of living in this country if the US dollar was no longer the world's reserve currency," he said. "That's how valuable it is."

Zell's comments echoed those of two other influential business leaders. On Wednesday, billionaire Warren Buffett told CNBC that the dollar will become "less important" over time as America's "dominance" of the world's economic system "diminishes."

And in CNBC interview on Thursday, Ray Dalio, founder & CIO of the hedge fund Bridgewater Associates, said the dollar's dominance in the world will diminish as emerging markets raise interest rates to slow their economies over the next 18 months.

"It's inevitable that the dollar's role as the world's currency will diminish from the dominant world currency to one of a few," Dalio said.

The dollar's reserve currency status offers a number of advantages, primarily in terms of purchasing power in the global marketplace. While there has been some saber-rattling about introducing other currencies into the mix, no move has been made yet.

"That's an awesome benefit that no other country in the world has," Zell said.

Financial pressures also should be reflected in the bond markets, which he said will be imperiled by inflation even though debt trading has resisted that pressure so far.

"I don't know who's buying 30-year fixed debt. I don't understand TIPS (Treasury Inflation Protected Securities) that are projecting 30 years of benign inflation," he said. "This is the tooth fairy coming back in spades."

Misleading government data is fooling investors into believing there is no inflation, said Zell, who pointed out that 42 percent of the Consumer Price Index the government uses to gauge inflation is housing, where costs have been flatlining or falling. In the meantime, energy costs are up 9 percent and food is up 12 percent.

"If you adjusted the CPI to reality I think you'd be looking at 5, 6, 7 percent inflation today," he said.

China may soon call time on Western quantitative easing. More worryingly, the language she is using is far from friendly.

In a report issued last month, the Dagong Global Credit Rating Company praises "emerging creditor countries" for preventing the collapse of "debtor economies" during the recent crisis, but stresses the "vulnerable position" of America, whose "excess issuance" of dollars has triggered a "global credit war" that "arouses all the countries in the world to take various credit resources as a financial weapon to safeguard the national interests."

Dagong Global Credit Rating Co. Industry Financial Services
Founded 1994
Headquarters Beijing, China
Key people Guan Jianzhong (Chairman)
Website dagongcredit.com

Dagong Global Credit Rating is a credit rating agency based in China. It is one of the only notable non-US based credit rating agencies.[1] It is recognized as a credit rating agency which gave the US debt a lower credit rating than that given by the three traditional rating agencies Moody's, Standard and Poor's and Fitch.[2]

Dagong blames QE for increasing exports of capital and raising international commodity prices, causing price and asset inflation in developing countries where, according to a cited World Bank estimate, net capital flows to stockmarkets soared by 42% and to bond markets by 30%.

Signalling that a US Treasury bond sell-off is a "financial weapon" that China may be prepared to use in its defense, Dagong notes that creditor nations stabilised the situation in 2010 not only by "continued buying" of treasury bonds but also because they "continued to hold" them.

China is by far the biggest holder of US Government debt - $891.6 billion at December 2010, according to the US Treasury. This is about the same as a year before, but ignores possible purchases via intermediary nations. In 2009, ex-Roubini associate and now NEC adviser Brad Setser plausibly argued that much of the British buying was on behalf of the Chinese.

This is all the more credible because of the UK government's own deep and long-standing financial troubles: Why would one near-bankrupt lend to another? In December 2010 the ostensible UK holding was $541.3 billion - triple the figure from 12 months earlier. Setser's January 2009 estimate was that taking US Treasuries and Agencies together, China controlled $1.425 trillion-worth.

The UK has since increased "its" stake in Treasuries by over $360 billion, though China appears to have been reducing its exposure to Agencies for some time, according to a July 2009 report from the Congressional Research Service:

Data from the Department of Treasury indicate that in recent months China has sought to reduce its holdings of LT U.S. agency debt, while increasing its holdings of short-term U.S. Treasury securities.

This shift from Agencies to Treasuries, and from long- to shorter-date debt, is itself a subtly troubling trend.

Total Chinese foreign exchange reserves - mostly denominated in dollars, one understands - were $2.45 trillion in June 2010 and the current figure may be over $2.8 trillion. The effect of currency depreciation on its foreign assets is massively expensive to the People's Republic, and it is little wonder that she should be reconsidering her investment - and musing on using her leverage to further other objectives.

Officially, China repudiates the notion of using its foreign exchange reserves as an "atomic weapon", but the use of an ostensibly unconnected agency to convey diplomatic messages would not be out of character. Founded in 1994, Dagong is based in Beijing, and in 2008 its chairman Guan Jianzhong received a "special government allowance" - not merely a monetary prize but a sign of governmental approval.

America still has the world's largest economy, but of developed nations it is also one of the most dependent on refinancing in 2011 - third in GDP terms (27.6%) after Japan and Iceland, and first in absolute terms.

As early as 2007, Brad Setser gave evidence about the US' economic vulnerability to foreign sovereign wealth funds, to the USCC. The US-China "Strategic Economic Dialogues" also began that year and one suspects that some home truths were being told even then. Now the noises are being made more publicly and discordantly, if still at one remove from official sources.

It is getting more serious, and Dagong is not hopeful:

The United States, as the biggest country involved in sovereign debt crisis around the world, will continue its quantitative easing policy when the country is in danger, and the world credit war will be escalated due to the overflow of US dollars.

Clearly we are still at the shot-across-the-bows stage, but we have come a long way from four years ago.

 

[bobblehead]

All I have to say is I'm happy I built up my seed collection before this whole thing happens... I just watched Collapse... and now I know how it's all gonna happen. I'll buy myself a small farm, with a green house off the back of the house.

 

[Bobby Stainless]

Gotta love Gold. There use to be a really awesome thread about buying gold.....

 

[statusquo]

1980: The Hunt Brothers tried to corner the market, IIRC.

There wasn't any radical shift in fiscal policy in 1980 to justify the rapid spike in silver. There was a major shift, however, in 1971 (1972?) when President Nixon put the USA completely on a fiat (no precious metal backing) currency.

OTOH, the US Treasury and NY Federal Reserve have put at least $4 Trillion USD into the marketplace, vastly expanding the M3 money supply. Very little of this money has reached Main Street to ease the current credit (lines of credit) crisis -- the TBTF|TBTJ Banksters and Wall Street are hanging onto that "new money", propping up crony corporations and foreign central banks which coincidentally are also private for-profit banks. The Federal Reserve refused to inform Congress about exactly how much money they have released, nor to whom. As the double-dip recession begins to bottom out, these Banksters will be buying up Main Street USA and the residential & commercial real estate at pennies on the dollar.

Without fundamental changes, including tightening regulations on commodity futures speculation and increased central bank backing of local bank lines of credit to Main Street, the economic meltdown of September 2008 will be repeated, although it will likely be worse than that of the Great Depression. This would still only be the equivalent of a band-aid on a gushing arterial wound. The fiscal fundamentals of the American economy are unsustainable. Major economic change is on it's way.

The Obama regime, chock full of Banker lobbyist/advisors, has merely been "kicking the economic credit/debt crisis down the street". This is the only way that the USA government can continue to justify the tremendous fiscal drain of maintaining 3-1/2 overseas conflicts, the Departments of Defense & Homeland Security and the National Intelligence infrastructure. Without the prospect of propping up the American Exceptionalism mercantile colonial empire that is based on Oil, the USA dollar as the world's reserve currency will end. When it does end, this country will experience hyper-inflation.

All of this sounds so familiar! haha. I really hope people take the time to do some basic research into economics and the US. Frontline PBS has a couple great documentaries on the Federal Reserve, derivative markets etc. Netflix instant stream has all of the frontline docs i think. Zeitgeist 1 has a good section as well relating to the federal reserve (but also tying in a lot of other related issues (youtube); e.g. a similar round of company buyouts during the great depression where corporations went under and were swooped up for pennies).

I also recommend at least doing basic research into Austrian Economics. Keyseniasm = sham to pull the wool over peoples' eyes so that we literally worship consumerism ("story of stuff" is a great 20 minute documentary about our worship of materialism and the impossibility of sustaining a linear system with finite resources) and war. All the while the bankers supply both sides and become rich. Our consumerism also ties heavily into the Fed pumping fiat currency in as "easy money" so that it can be invested resulting in a short-term bursts in capital goods. "As the boom matures, business costs rise, interest rates readjust upward, and profits are squeezed. The easy-money effects thus wear off and the monetary authorities, fearing price inflation, slow the growth of, or even contract, the money supply."* We need to convince the sheeples that buying is great. Hence all the ridiculous credit shit and the housing bubble etc etc. Keynsianism depends on consumerism; it was even explicitly said that the people of the US would need to be changed so that they measure their self-worth by the amount of material goods they have; this is one of the main drives of our economy.

David said 3 1/2 conflicts we are involved in...well, that's true for the amount of 'hot' conflicts (Libya here we come...) but the U.S. has military presence in over 100 countries. We have a new form of imperialism that is not physical in nature. We send economists over to developing third world countries, loan them a bunch of money and prop up dictators in exchange for natural resources, permission to install military installments and discrete control over the nation as a whole. Check out "Confessions of an Economic Hit man" for an amazing book explaining this phenomenon.

Sorry for the disorganized rant!

On a side note I was hoping to get some of your guys' thoughts on my conspiracy theory! haha. So, federal reserve is just pumping money into the system at a ridiculous rate. I contend that it is way worse than what we even suspect...'money' isn't even backed by paper anymore it's literally some dildo just adding zeros in a computer. This money is then discreetly (no federal reserve audit...) channeled into the cayman-island-type bank accounts of friends and family. Keep in mind the BoFA wikileaks (don't really hear anyone talking about wikileaks ever...not in real life and not here. I think this is a whole different issue that the government is busting its ass to silence/cover-up but that's for another time) and the other story about the FIVE TRILLION in monies hidden for tax evasion purposes (and who knows what other reasons) at just one bank in the cayman islands. When one studies what the bankers and the U.S government have done in cahoots it doesn't seem far fetched at all...in fact it would be a split from the norm. Every war in the last century we have purposefully orchestrated an event so that we could enter the war without being the aggressors to save face. Also notice how each war gets longer and longer and now we are fighting an idea...it's perfect...you can't ever beat an idea so we could be at war with terrorism indefinitely! This means HUGE money for the arms business, military, bankers not to mention an excuse for the federal government to greatly expand its powers while the sheeples AND politicians beg them to....(look how many politicians voted no to the Patriot Act the first time not to mention it was supposed to be a few year act that just got renewed a few weeks ago).

NOW end rant hahaha. If I have time later I'll edit for clarity <_<
*http://fee.org/wp-content/uploads/2008/12/greatmythsdepression2008feemcppfinalweb.pdf

 

[Bobby Stainless]

I don't see anything wrong with the Federal Reserve. They don't need to be audited, because I am sure they are on the up and up. Ben Bernanke said so.... And Alan Greenspan....

 

[medicalgreen]

seriously, against which currency has the dollar lost significant purchasing power?

It does not matter much, which currencies it loses value against, because that's only relative. What matters is the fact that you work for one day at $10/hour and $80 will buy you only 1/3 of what it did 10 years ago. That's what's important, and what matters, not the dollar in relation to other devalued currencies.

 

[HUGE]

wholly shit. this is the best thread on icmag right now.

 

[whodare]

link it every where people need to be aware of whats going on... might even start a thread on the topic...

 

[bobblehead]

It does not matter much, which currencies it loses value against, because that's only relative. What matters is the fact that you work for one day at $10/hour and $80 will buy you only 1/3 of what it did 10 years ago. That's what's important, and what matters, not the dollar in relation to other devalued currencies.

I guess what I'm trying to get across is that it's not just the dollar losing purchasing power. It's the world monetary system as a whole. Saying it's the dollar leads people to believe it's just a domestic issue. Many other countries are falling faster than the US.

 

[draztik]

I guess what I'm trying to get across is that it's not just the dollar losing purchasing power. It's the world monetary system as a whole. Saying it's the dollar leads people to believe it's just a domestic issue. Many other countries are falling faster than the US.

Great point

 

[medicalgreen]

I guess what I'm trying to get across is that it's not just the dollar losing purchasing power. It's the world monetary system as a whole. Saying it's the dollar leads people to believe it's just a domestic issue. Many other countries are falling faster than the US.

This issue is slightly irrelevant, though. Just because a small group of bankers are influencing the world monetary systems, are we to avoid looking at the issue itself, being our own situation, in relation to the US dollar and cannabis prices. That is the issue at hand.

It doesn't matter that other countries are going through the same devaluation, in the US, we are the ones who have to deal with the direct affects of the devaluation of the dollar, and the potential for serious hyperinflation.

I'm proposing the idea, that possibly cannabis prices will rise along with other important commodities, and that holding cannabis or medicines are going to be an actual value, in relation to the dollar, if the dollar drops.

We can discuss all the other issues that affect this, and argue whether or not it will happen, but at least, lets try to deal with the actual issue of this thread. The rest is like dressing on the salad, or icing on the cake.

Many of us only hold cannabis, and silver and gold are not always the most interchangeable commodity. I think cannabis might be a more flexible commodity in certain circles. For instance, if everything suddenly goes the way of the rainbow families and people have to gather on the land, grow their own foods and have no choice, they will need to come together more. Gold and silver will of little use to those of us who are truly, disconnected to the world trading system.

Only when we deal with certain issues like rent, or electricity or certain bills, money, or rather, an interchangeable commodity is necessary. But if you need food, and the farmers need good cannabis seed stock, there you go....you have something of value to trade for food. If they have no more medicine left for the winter, and you do, i'm sure you won't be starving through the winter. But if you need to exchange that for a real commodity of interchangeable value, you would probably ask a lot more, like $6000 lb, because the dollar has devalued by 50%. So, even if you trade that cannabis for food, a lb would get you the value close to $6000 of food, at the inflated rate of the dollar. So, in a way, it will hold it's value, just like silver or gold would.

Can anyone here PLEASE address this particular issue and whether or not you think it would happen this way, or another. Maybe i'm completely off base here, but if I am, can you please lay out the groundwork for your theories as to why i'm wrong in this assessment.

 

[draztik]

This issue is slightly irrelevant, though. Just because a small group of bankers are influencing the world monetary systems, are we to avoid looking at the issue itself, being our own situation, in relation to the US dollar and cannabis prices. That is the issue at hand.

It doesn't matter that other countries are going through the same devaluation, in the US, we are the ones who have to deal with the direct affects of the devaluation of the dollar, and the potential for serious hyperinflation.

I'm proposing the idea, that possibly cannabis prices will rise along with other important commodities, and that holding cannabis or medicines are going to be an actual value, in relation to the dollar, if the dollar drops.

We can discuss all the other issues that affect this, and argue whether or not it will happen, but at least, lets try to deal with the actual issue of this thread. The rest is like dressing on the salad, or icing on the cake.

Many of us only hold cannabis, and silver and gold are not always the most interchangeable commodity. I think cannabis might be a more flexible commodity in certain circles. For instance, if everything suddenly goes the way of the rainbow families and people have to gather on the land, grow their own foods and have no choice, they will need to come together more. Gold and silver will of little use to those of us who are truly, disconnected to the world trading system.

Only when we deal with certain issues like rent, or electricity or certain bills, money, or rather, an interchangeable commodity is necessary. But if you need food, and the farmers need good cannabis seed stock, there you go....you have something of value to trade for food. If they have no more medicine left for the winter, and you do, i'm sure you won't be starving through the winter. But if you need to exchange that for a real commodity of interchangeable value, you would probably ask a lot more, like $6000 lb, because the dollar has devalued by 50%. So, even if you trade that cannabis for food, a lb would get you the value close to $6000 of food, at the inflated rate of the dollar. So, in a way, it will hold it's value, just like silver or gold would.

Can anyone here PLEASE address this particular issue and whether or not you think it would happen this way, or another. Maybe i'm completely off base here, but if I am, can you please lay out the groundwork for your theories as to why i'm wrong in this assessment.

It's hard to say since it's a black market item. You could live off cannabis if that's what your getting at. The seeds are filled with protein.

 

[MadBuddhaAbuser]

This issue is slightly irrelevant, though. Just because a small group of bankers are influencing the world monetary systems, are we to avoid looking at the issue itself, being our own situation, in relation to the US dollar and cannabis prices. That is the issue at hand.

It doesn't matter that other countries are going through the same devaluation, in the US, we are the ones who have to deal with the direct affects of the devaluation of the dollar, and the potential for serious hyperinflation.

I'm proposing the idea, that possibly cannabis prices will rise along with other important commodities, and that holding cannabis or medicines are going to be an actual value, in relation to the dollar, if the dollar drops.

We can discuss all the other issues that affect this, and argue whether or not it will happen, but at least, lets try to deal with the actual issue of this thread. The rest is like dressing on the salad, or icing on the cake.

Many of us only hold cannabis, and silver and gold are not always the most interchangeable commodity. I think cannabis might be a more flexible commodity in certain circles. For instance, if everything suddenly goes the way of the rainbow families and people have to gather on the land, grow their own foods and have no choice, they will need to come together more. Gold and silver will of little use to those of us who are truly, disconnected to the world trading system.

Only when we deal with certain issues like rent, or electricity or certain bills, money, or rather, an interchangeable commodity is necessary. But if you need food, and the farmers need good cannabis seed stock, there you go....you have something of value to trade for food. If they have no more medicine left for the winter, and you do, i'm sure you won't be starving through the winter. But if you need to exchange that for a real commodity of interchangeable value, you would probably ask a lot more, like $6000 lb, because the dollar has devalued by 50%. So, even if you trade that cannabis for food, a lb would get you the value close to $6000 of food, at the inflated rate of the dollar. So, in a way, it will hold it's value, just like silver or gold would.

Can anyone here PLEASE address this particular issue and whether or not you think it would happen this way, or another. Maybe i'm completely off base here, but if I am, can you please lay out the groundwork for your theories as to why i'm wrong in this assessment.

One of the best things about this thread (and one that seperates it from most others)is that even the side discussions has been of incredible note, and everyone should do themselves a favor and study these points and do more research and come up with your own opinion.


However, if you talk about the dollar merely "losing it's edge" as the leading monetary standard as opposed to completely falling apart, then no, I don't see weed going anywhere but the steady slow decline it is on.

In a bad case of $12 a gallon gas, etc, people who are only occasional smokers will prob quit, or just smoker cheaper shit, or get drunk more or something. Most of us will be growing, even many who cannot right now because busting cannabis growers will be low on the list when there are borderline riots for essential goods. some people will still buy pot, but I do not see the average family man trading medicine or food for weed.

 

[medicalgreen]

I'm starting to envision a Cannabis Futures Exchange coming soon...
Black Market, or rather.....Green Market of course.

I can see it now.

Indoor and Outdoor Futures, obviously separated.

Nov. Futures this Year look pretty low, compared to Indoor...at least in Cali....Trading at $1400 for a LB. But Organic Indoor is keeping it's pace ahead of the crowd at a steady $3400.

But February begins the upswing......

I'll buy mine NOW!

Greenexchange.com anyone? lol

 

[Chamba]

so long as the USA controls or dominates the air, land, space and the sea as it does and has been doing for decades (especially the oceans trade routes that carry goods!. cos that' swhat it's all about) with it's military ...and is the biggest single consumer market, is the most innovative and entrepreneurial etc etc , the US$ will continue to be the world's currency....what is happening now is just a down segment of the cycle. The sky is not falling, put down that shovel, stop digging that fall-out shelter, err, I mean survival cave and get out there and start breeding (the first 20 minutes is fun, the next 25 years is usually challenging!!).

In 20 years time, we will hear the same panic talk, the older I get the, the less I'm concerned about the next big upcoming predicted calamity......or as things do, we will see an unexpected, sudden and shocking change will happen just like what happened in the Soviet Union as it suddenly imploded.

as far as the price of pot goes, it has only only way to go -> downwards.......think tractors, acres and selling by the ton if you are serious about being a cannabis producer in 5, 10 or 20 years time.