Is The Us$ Destined To Collapse?

[badge]

There seems to be an awful lot of discontent in views towards the US$, both at home and as a global default currency.

Ive seen various reasons for a supposed collapse, and in recent years its arguable that the collapse has happened.

What reasons do people have - however obvious they may seem - to believe the US$ will collapse, or crash, or even just continue going down?

[badge]

Its certainly seen better days

[lannarebirth]

Its certainly seen better days

Some even better than those days. Rapid decline of 50% not unprecedented. Still it is a nation gifted in it's geography, climate and resources. If it does "collapse", which I don't expect, it will come charging back.

[Chunkton]

As this relates to the US Dollar let's quote a famous American:

“The Central Bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an enemy to all banks discounting bills or notes for anything but coin. If the American people allow private banks to control the issuance of their currency, first by inflation, then by deflation the banks and corporations that grow up around them will deprive the people of all their property, until their children will wake up homeless on the continent their Fathers conquered.” - Thomas Jefferson.

”Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if they have any, in manufacturing, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits. Profits which are the price of no useful industry of theirs.” (1813) - Thomas Jefferson.

Since its insipid formation the private bank owned Federal Reserve has been eroding the value of the US Dollar. It created a system unsurprisingly where banks (it's owners) are able to earn enormous profits essentially lending money that doesn't exist. A recession allows an economy to correct itself, the Fed though wont allow this as it is politically unpopular, so they keep creating bubble after bubble, many believe they created one too many.

Some economists are suggesting the US dollar will get another appreciation yet, however when the US economy finally implodes it is probably looking worrisome. It is also suggested that the only way the US can hope to repay their astronomical debt debt is to devalue the currency and jack up inflation. Many countries are now suggesting The dollar will lose its reserve currency status before too long. In all fairness though most of Europe seems to be doing just as good a job of destroying their economies. Keep those printing presses running. I think we are in the right part of the world for the future, Thailand still has potential if it can sort out its infighting.

And finally let's quote a current honest US politician:

“The Federal Reserve in collaboration with the giant banks has created the greatest financial crisis the world has ever seen. The foolish notion that unlimited amounts of money and credit created out of thin air can provide sustainable economic growth has delivered this crisis to us. Instead of economic growth and stable prices, (The Fed) has given us a system of government and finance that now threatens the world financial and political institutions. Pursuing the same policy of excessive spending, debt expansion and monetary inflation can only compound the problems that prevent the required corrections. Doubling the money supply didn’t work, quadrupling it won’t work either. Buying up the bad debt of privileged institutions and dumping worthless assets on the American people is morally wrong and economically futile.” Representative from Texas Ron Paul questioning Federal Reserve Chairman Ben Bernanke

[InterestedObserver]

The US will eventually have to repudiate its debts or start printing inflated dollars to cover that debt. As long as China and other investors keep buying US bonds, that day can be postponed indefinitely. When the bond sales dry up, then yes the dollar will collapse. The US Treasury has already started to monetize US debt, have you checked out total amount of Treasury bond and note sales lately? The US Treasury is secretly repurchasing some of its own debt instruments.

Edited August 27, 2009 by InterestedObserver

[el jefe]

China can't afford to let that happen.

[lannarebirth]

^^ Where do you think the money will go when they start selling the UST's?

[badge]

Its certainly seen better days

Some even better than those days. Rapid decline of 50% not unprecedented. Still it is a nation gifted in it's geography, climate and resources. If it does "collapse", which I don't expect, it will come charging back.

Sharelynx is a great site for long term charts is'nt it.

One would imagine theres some serious diveregence on a monthly/weekly chart going back that far.

[lannarebirth]

Its certainly seen better days

Some even better than those days. Rapid decline of 50% not unprecedented. Still it is a nation gifted in it's geography, climate and resources. If it does "collapse", which I don't expect, it will come charging back.

Sharelynx is a great site for long term charts is'nt it.

One would imagine theres some serious diveregence on a monthly/weekly chart going back that far.

Why, yes there are, since you mentioned it:

Not sure I'd go long with a 4 pip stop however.

[badge]

Not sure I'd go long with a 4 pip stop however.

LONG!

Well there has'nt been many votes in the header Poll, but thus far its far from damning; 6 out of 14 suggesting the US$ may collapse.

I was expecting more pessimism really.

Thus far the arguments for weakening US$ have essentially been, that the FED are printing more money, and thus diluting US$s and so there worth should decrease? Is that correct?

Also the FED is supposedly a private bank, yet I havent been able to open an account, plus the President just re-elected the chairman of the FED? Thats not normal practice for a private bank? He didnt elect Lloyd Blankfein for example?

[Naam]

the US-Dollar will collapse by Christmas! what year? how would i know?

[churchill]

the US-Dollar will collapse by Christmas! what year? how would i know?

at the same time as gold hits $10,000 plus

Edited August 27, 2009 by churchill

[sibeymai]

The US will keep borrowing which will tend to keep the dollar strong.

Paying back the debt will tend to weaken the dollar.

How to keep the dollar strong ? Keep borrowing and don't repay debt.

If the US were to start repaying debt who would the world's creditors lend to ?

[Naam]

The US will keep borrowing which will tend to keep the dollar strong.

Paying back the debt will tend to weaken the dollar.

How to keep the dollar strong ? Keep borrowing and don't repay debt.

If the US were to start repaying debt who would the world's creditors lend to ?

when was your last medical check-up Sibey?

[Naam]

the US-Dollar will collapse by Christmas! what year? how would i know?

at the same time as gold hits $10,000 plus...

...per grain

[sibeymai]

The US will keep borrowing which will tend to keep the dollar strong.

Paying back the debt will tend to weaken the dollar.

How to keep the dollar strong ? Keep borrowing and don't repay debt.

If the US were to start repaying debt who would the world's creditors lend to ?

when was your last medical check-up Sibey?

Bananas....dollars...what's the difference ?

[sibeymai]

The US will keep borrowing which will tend to keep the dollar strong.

Paying back the debt will tend to weaken the dollar.

How to keep the dollar strong ? Keep borrowing and don't repay debt.

If the US were to start repaying debt who would the world's creditors lend to ?

when was your last medical check-up Sibey?

Bananas, dollars. What's the difference ?

The logic goes like this: The US borrowing dollars requires lenders to hold dollars to lend. Lender's actions to acquire dollars increases demand for dollars thereby strengthening the dollar. US repaying dollars causes a surplus of dollars weakening the dollar.

Edited August 27, 2009 by sibeymai

[Abrak]

The US will keep borrowing which will tend to keep the dollar strong.

Paying back the debt will tend to weaken the dollar.

How to keep the dollar strong ? Keep borrowing and don't repay debt.

If the US were to start repaying debt who would the world's creditors lend to ?

when was your last medical check-up Sibey?

Bananas, dollars. What's the difference ?

The logic goes like this: The US borrowing dollars requires lenders to hold dollars to lend. Lender's actions to acquire dollars increases demand for dollars thereby strengthening the dollar. US repaying dollars causes a surplus of dollars weakening the dollar.

Dont you think you are insulting the word 'logic'?

[Naam]

The US will keep borrowing which will tend to keep the dollar strong.

Paying back the debt will tend to weaken the dollar.

How to keep the dollar strong ? Keep borrowing and don't repay debt.

If the US were to start repaying debt who would the world's creditors lend to ?

when was your last medical check-up Sibey?

Bananas, dollars. What's the difference ?

The logic goes like this: The US borrowing dollars requires lenders to hold dollars to lend. Lender's actions to acquire dollars increases demand for dollars thereby strengthening the dollar. US repaying dollars causes a surplus of dollars weakening the dollar.

what exactly did the doctor say Sibey? is it serious or is there a cure?

[nakachalet]

it is very strange....

my american friend kobie does not seem very concerned at all about all the fuss about the possibility of rapid depreciation of usd, as so strongly expressed by so many intelligent posters here....

his quiet response sets me back a few paces....

he said that--yes, absolutely, he is in agreement with so many of us on thaivisa....

if you do not have enough usd, and if the usd is depreciated.... you'll be very concerned, cause you'll have less to buy even less....

however, if you already have enough usd (whatever that means....), if and when it is depreciated.... you still have enough to buy what you need....

i just wonder, do all kennedy business school graduates talk like this--going around and around.... lol

[badge]

http://www.usdebtclock.org/

[badge]

Well Sibeymai has his own reasoning(?) for thinking US$ will appreciate(?), or at least remain bouyant whilst credit is continually created. Thats a view at least.

There hasnt been many others suggesting US$ will move in either direction?

Naam, Abrak, anyone else wish to offer a sensible opinion?

[SantiSuk]

So to those 45% who think 'yes - the dollar is going to collapse', how many of you have moved your assets out of dollars and into (presumably) the euro, or at least rebalanced in that direction? It's easy to have strong opinions on paper, but when it comes to backing them up with actions not many do. I have lost so much money in a long investing career by having strong opinions that proved to be correct, but doing nothing about them in my financial planning.

Probably the Chinese would vote yes too - and do nothing about it!

I voted no BTW and I have 20% of my portfolio in US stocks, which is above average weighting in a balanced worldwide portfolio for a Brit. I'm expecting the sheer doggedness of the US (they're not that bright but they're motivated and never take holidays you know - woops sorry mods - joking honest, I love the States) to work it's usual wonders coming out of a worldwide recession.

[midlifecrisis]

Its certainly seen better days

Yes but it has actually seen worse days!

Take China's + India's GDP combined and they are below that of the USA. Roughly $11+ Trillion combined to $14+ Trillion for the USA (from 2008)

https://www.cia.gov/library/publications/th...ok/geos/ch.html

https://www.cia.gov/library/publications/th...ok/geos/in.html

https://www.cia.gov/library/publications/th...ok/geos/us.html

America has current problems. What nation now doesn't? The demise of the USA has been predicted by Igor Panarin of Russia for over a decade:

http://blogs.usatoday.com/ondeadline/2008/...nited-stat.html

This is what started this craze. It is good to know sometimes the source of predictions of doom and gloom. They are often usurped with others with agendas similar in nature.

Sorry America haters, we will be around for you to hate for a very long time still. And no Prof. Panarin, Alaska ain't going to be yours again any time soon.

As to currency collapse, speculators like George Soros, who crashed the British Pound, can do whatever is in their financial interest. It has nothing to do with governments interacting with other governments or the IMF or any responsible entity. I hedge to some foreign currencies to hedge against inflation. For a person on a fixed income, inflation is the most locigal thing to be concerned about.

Edited August 27, 2009 by midlifecrisis

[flying]

So to those 45% who think 'yes - the dollar is going to collapse', how many of you have moved your assets out of dollars

Probably the Chinese would vote yes too - and do nothing about it!

As for doing nothing about it......Events of the past year would suggest the opposite.

Edited August 27, 2009 by flying

[Naam]

Well Sibeymai has his own reasoning(?) for thinking US$ will appreciate(?), or at least remain bouyant whilst credit is continually created. Thats a view at least.

There hasnt been many others suggesting US$ will move in either direction?

Naam, Abrak, anyone else wish to offer a sensible opinion?

my personal opinion is that the dollar will per se not "collapse". i am however rather bearish and reduced the dollar denominated holdings in my portfolio to a ridiculously small percentage (and that for the first time in many years). i would still hold many more dollars if there hadn't been the chance and alternative reaping in fat profits in €UR.

i'm not a currency trader but i have never hesitated to go (BIG) long or short any currency through forwards depending how the pendulum swings and i am keeping an eye on the dollar.

[britmaveric]

$ will go on a bull run. Tis in the cards.

[sokal]

There seems to be an awful lot of discontent in views towards the US$, both at home and as a global default currency.

Ive seen various reasons for a supposed collapse, and in recent years its arguable that the collapse has happened.

What reasons do people have - however obvious they may seem - to believe the US$ will collapse, or crash, or even just continue going down?

592 trillion dollars in OTC derivatives........(BIS. org OTC table) what happens when those dollars come home to roost ?

[sokal]

Its certainly seen better days

Yes but it has actually seen worse days!

Take China's + India's GDP combined and they are below that of the USA. Roughly $11+ Trillion combined to $14+ Trillion for the USA (from 2008)

https://www.cia.gov/library/publications/th...ok/geos/ch.html

https://www.cia.gov/library/publications/th...ok/geos/in.html

https://www.cia.gov/library/publications/th...ok/geos/us.html

America has current problems. What nation now doesn't? The demise of the USA has been predicted by Igor Panarin of Russia for over a decade:

http://blogs.usatoday.com/ondeadline/2008/...nited-stat.html

This is what started this craze. It is good to know sometimes the source of predictions of doom and gloom. They are often usurped with others with agendas similar in nature.

Sorry America haters, we will be around for you to hate for a very long time still. And no Prof. Panarin, Alaska ain't going to be yours again any time soon.

As to currency collapse, speculators like George Soros, who crashed the British Pound, can do whatever is in their financial interest. It has nothing to do with governments interacting with other governments or the IMF or any responsible entity. I hedge to some foreign currencies to hedge against inflation. For a person on a fixed income, inflation is the most locigal thing to be concerned about.

I don't hate America, I never have. I am worried that the US books are so fuct that Canada will lose the US as its army. I don't want to lose the US army. Get your head out of the sand, take it as a friendly warning from your neibours to the north.

[sokal]

$ will go on a bull run. Tis in the cards.

are you putting your money where your mouth is ?.................I doubt it.