Is The Us$ Destined To Collapse?

[sokal]

I recall the story was USD? The Guardian and the Telegraph are the most diametrically opposed newspapers in Britain.

Theyre both respected broadsheets however.

from what i see both have degenerated over the last decade just a tat above "The Sun".

You have grasped the concept of dilution. Why does this USD in Iraq story piss you off but you have no problem with banana ben printing them ?

[Naam]

I recall the story was USD? The Guardian and the Telegraph are the most diametrically opposed newspapers in Britain.

Theyre both respected broadsheets however.

from what i see both have degenerated over the last decade just a tat above "The Sun".

You have grasped the concept of dilution. Why does this USD in Iraq story piss you off but you have no problem with banana ben printing them ?

dollars in Iraq do not piss me off but there are indeed a few things that piss me off such as:

-phone calls from the Americas or Europe at 03.00 in the morning when i sip my first cup of coffee.

-one of my dogs bothering me at 03.20 in the morning when i sip my second cup of coffee because he/she wants to go for a pee in the garden.

-both phases which power the two aircons in my study are off or have a deep brownout and i have to move my TV-room and watch news.

-when i have to recalibrate my computerised chemical dispenser because the H²O² content or the pH of my pool water is either too high or too low.

-when my wife and the housemaid complain the water is too hard and that this is not good for their hair and skin and i have to niggerrig the watertreatment in my pumphouse which is not airconditioned.

-when my wife and the housemaid complain the water is too sof and that this is not good for their hair and skin and i have to niggerrig the watertreatment in my pumphouse which is not airconditioned.

-if at breakfast the yolks of my fried eggs are not liquid because the cook was careless.

-when i catch my wife's driver using hard and low pH well water when washing the cars.

-when i catch my wife's driver using carefully treated water to hose down the driveway and the carport.

-when the gardener has not removed any dog poo by latest 08.30 hrs.

-when my wife tries to force me to have lunch with her when i'm not hungry.

-if the thai green curry, which i am eating once a day, does not have enough added chilis.

-if my favourite brand of nam pla is not available in the shops and the supply is exhausted.

-when my wife thinks it's time to have some small talk and tries to explain some results of her latest anthropologic research and i am in the middle of a trading session.

-when the dogs make a noisy racket in the evening when i want to watch an old episode of Startrek to relax.

next!

[flying]

Senate sends $1.1 trillion spending bill to Obama

The spending bill combines six of the 12 annual appropriation bills for the 2010 budget year that began Oct. 1. Obama has signed into law five others.

The final one, a $626 billion defense bill, will be used as the base bill for another catch-all package of measures that Congress must deal with in the coming days. Those include action to raise the $12.1 trillion debt ceiling and proposals to stimulate the job market............................

Ouch......

Congress must soon raise the debt ceiling, now at $12.1 trillion, so the Treasury can continue to borrow, and Democratic leaders are eyeing a new figure close to $14 trillion, pushing the issue past next November's election.

Full article at link above

A trillion here a trillion there...Soon it adds up to real money

Remember not too long ago a billion was a big number?

A BILLION SECONDS AGO IT WAS 1959.......

A BILLION MINUTES AGO JESUS WAS ALIVE.

A BILLION HOURS AGO DINOSAURS WALKED THE EARTH.

Now that pales in comparison to a Trillion

A trillion seconds is 31,688 years

One trillion seconds ago – 31,688 years – Neanderthals stalked the plains of Europe.

Edited December 14, 2009 by flying

[badge]

DXY has support at 75.6, 74.5 and 74

Low thus far has been 74.18 and there has been a 200pip bounce.

Close to my last cited support, but close enough?

Yes, seems close enough

DXY could of turned anywhere, yet it turned up .18 from my 74 support level, cited 11 weeks prior to its trade there, and has now reversed 450 points rather swiftly. My corresponding EURUSD short is up little over 10c

[badge]

for now I have EURUSD support just above .4000 and a little cluster around .3645-65, with USDCHF having resistance - assuming it breaks above its recent high at .0505 - around .0725 then .0875 J

[badge]

The above areas of expected 'reaction' should coincide with resistance on the cash USD Index(DXY) at 79.25, 80.50, 80.85 and 81.10

[Pakboong]

I get paid in dollars so perhaps my view is just wishful thinking. Everything I read suggests the dollar is doomed. The x-factor is that the US still has the means to bully much of the rest of the world and take from those they bully, what they need to get by. A capability that few others have.

[cloudhopper]

FWIF from Mish:

"US Dollar Positives

Japan demographics as noted above (net sellers of their public debt)

Greece bailout

Spain property bubble

Baltic state currency collapse

Savings rate in US headed north

Extreme bearish US dollar sentiment

Pending implosion in the UK

Canadian property bubble bursting

Australian property bubble bursting

Hard landing in China, collapse of the RMB

Moreover, I would like to point out that the Massachusetts special election is likely to be US dollar positive. After the special election Democrat massacre, there will be little sentiment for more bailouts but there will be increasing calls for more fiscal prudence and less government spending. It will be much tougher to pass stimulus bills, or bills of any kind."

[flying]

Moreover, I would like to point out that the Massachusetts special election is likely to be US dollar positive. After the special election Democrat massacre, there will be little sentiment for more bailouts but there will be increasing calls for more fiscal prudence and less government spending. It will be much tougher to pass stimulus bills, or bills of any kind."

Seems true at least till about noon today...here in the US

Funny too that all the talking heads on TV the day of the election were saying....

If Brown wins we think the markets will go up tomorrow....

Boy were they wrong Dollar up markets down.....

[badge]

for now I have EURUSD support just above .4000 and a little cluster around .3645-65, with USDCHF having resistance - assuming it breaks above its recent high at .0505 - around .0725 then .0875 J

The above areas of expected 'reaction' should coincide with resistance on the cash USD Index(DXY) at 79.25, 80.50, 80.85 and 81.10

DXY surpassed 79.25, with 80.3 tagged earlier today and 80.5 in sight. EURUSD tested the upper end of the 3645-65 support area, and USDCHF blew through 0725 this morning during a 3 minute 130pip jump presumably orchestrated by the SNB to take advantage of the thin liquidity in the Asian session.

In anycase I hope none of these levels hold, and recent trends continue with DXY plodding towards 81.1

[badge]

We're Screwed!

ShadowStats.com founder John Williams explains the risk of hyperinflation. Worst-case scenario? Rioting in the streets and devolution to a bartering system.

Thursday, December 31, 2009

By Phil Maymin

http://www.fairfieldweekly.com/article.cfm?aid=16014

[badge]

Some views on Greece

http://www.zerohedge.com/article/collapse-...-bbc-miniseries

[churchill]

China orders retreat from risky assets

I don't see how this can be good for the $ but ..

"Mr Redeker said this will have the paradoxical result of boosting the dollar. Flight from risk can lead to an automatic rise as hedge funds, banks, and investors across the world cut back leverage on dollar balance sheets.

David Bloom, head of currencies at HSBC, said the explosive dollar rally over the last six weeks has been the reversal of the dollar carry trade. "It has been short, sharp, and vicious. People borrowed in US dollars to invest in places like Brazil, Turkey, and New Zealand and now it is unwinding."

"We don't think the dollar rally is going to last much beyond the first quarter because we're in a new world of rotating sovereign crises where politics matters again. It's Greece right now but it could be the UK next, and then US which has yet to take any steps at all to tackle it fiscal deficit," he said. "

http://www.telegraph.co.uk/finance/china-b...sky-assets.html

[badge]

[...]

In anycase I hope none of these levels hold, and recent trends continue with DXY plodding towards 81.1

81.1 surpassed with a high printed thus far of 81.3 bfore a pullback ensued.

DXY appears to be consolidating under this recent high, drifting lower.

Next level of potential resistance - on a break above 81.3 - I have lies at 83.50. Although for now if or how it'll get there im unsure.

[manarak]

Voted no.

There are far too much interests in the USD for it to collapse.

It is destined to decline. Progressively and inexorably.

[britmaveric]

Bigger/Better days await the mighty yank dollar!!!

[mark45y]

Bloomberg reported today the confidence in the US dollar is at an 18 month high. I guess they didn't read this thread.

[PeaceBlondie]

On the opening post, the US dollar was 34.25. It is now 31.54. Not a collapse.

[Abrak]

FWIF from Mish:

"US Dollar Positives

Japan demographics as noted above (net sellers of their public debt)

Greece bailout

Spain property bubble

Baltic state currency collapse

Savings rate in US headed north

Extreme bearish US dollar sentiment

Pending implosion in the UK

Canadian property bubble bursting

Australian property bubble bursting

Hard landing in China, collapse of the RMB

Moreover, I would like to point out that the Massachusetts special election is likely to be US dollar positive. After the special election Democrat massacre, there will be little sentiment for more bailouts but there will be increasing calls for more fiscal prudence and less government spending. It will be much tougher to pass stimulus bills, or bills of any kind."

Ok so I basically buy the dollar is the least crappy arguments but I will still stick with hard currencies like the baht.

The one argument that doesnt make sense to me is the hard landing in China, collapse in RMB. The RMB is pegged to the US$ and keeps it permanently over valued by buying its junk bonds and generating surpluses. Essentially what is considered now an undervalued current causes the US$ to be overvalued.Presumably it would work vice versa.

[12DrinkMore]

Ok so I basically buy the dollar is the least crappy arguments but I will still stick with hard currencies like the baht.

:D

Nice one!

Wish they would give us a bit more interest though.

But I suppose that zero interest is the price you pay for stability and security in well capitalised banks located in a surplus generating country.

Urrgsh unless it is the price you pay to bail out the UK and US banks.

[Abrak]

Ok so I basically buy the dollar is the least crappy arguments but I will still stick with hard currencies like the baht.

:D

Nice one!

Wish they would give us a bit more interest though.

But I suppose that zero interest is the price you pay for stability and security in well capitalised banks located in a surplus generating country.

Urrgsh unless it is the price you pay to bail out the UK and US banks.

12D,

I think you slightly miss the exceptional value in zero interest.

First, it doesnt matter as the currency is appreciating.

You should also remember that the game is a race to the bottom so having an interest rate risks the fact it might be reduced. It also has a certain beauty in that probably at least 50% of people understand that rates will not be cut from zero. When you are coming last in the race to the bottom at zero interest rates you are in trouble. Imagine what would happen to capital inflows if they raised rates. It appears that Tarisa having broken all the rules in how to sterilize your currency isnt doing it as much or has been asked to stop. Unfortunately they are moving to a less interesting game - allow the currency to appreciate which makes it much more difficult to predict (ultimately when you spend so much money suppressing it you know it will appreciate in the end) and I think they will let inflation increase (a 6% inflation target - that is a fairly effective way of suppressing speculation against your currency but it is not allowed.) While the currency is appreciating more than any other they are coming last in the race to the bottom. And they really dont stand a chance they are just too responsible.

There are two interesting questions on the baht that I have no idea what the answer is. (1) How do you unwind sterilization and (2) what will the Chinese do. But there is not much risk by some calculations it is still undervalued 50% on a PPP basis. And you should ignore all TV comments that it is grossly overvalued until at least one of them explains one possible reason why.

[flying]

I think you slightly miss the exceptional value in zero interest.

First, it doesnt matter as the currency is appreciating.

This is something I have actually come to appreciate ( no pun intended ) myself this past year.

On the opening post, the US dollar was 34.25. It is now 31.54. Not a collapse.

I believe most who foresee the bigger problems all have said 2011-2013 as time frame.

[britmaveric]

+100 years or so maybe there might be a decline.

[Abrak]

There are actually two relevant questions.

1) Will it collapse. No devaluing is very difficult and Bernanke is quite an expert

2) Should it devalue and does it need to. Yes the structural unemployment cannot be cured unless the US is made more competitive. Assuming it was an indepedent country I would 'guess' a 40% devaluation would be large enough to restore growth.

Why it wont collapse. As a central world reserve currency there is always demand for dollars to fill their reserves. It is essentially providing liquidity. so the capital account surplus leads to a current deficit and increased borrowings normally a deficit would cure itself by s dprecistion of you currency but the US deficit is compensated for by China, Thailand etc who a re generating surpluses and buying US debt. Ultimately a central reserve currency cannot provide global liquidity without taking on debt and destroying its currency luckily there lots of buyers for dollar related loan or oil imports.

Debt will obviously increase, structural unemploymrny invcreas until the central reserve currency is no longer acting as one. Its value can only be maintained by countries with large surpluses assume their responsibility to reduce them. China knows this but maintains an undervalued one which prompts other currencies that are tied with the Yuan to do the same and the central reserve currency (remember the UK). Actually it just gets worse and worse the US deficits go up and other surpleses rise.

This will continue until the Country with the central reserve currency is destroyed. The real answer is an SDR independent currency or a major revaluation of China. Ithink China will revalue but not enough. If an SDR central reserve currency was introduced the dollar would collapse and sustainable growth restored. No revaluation and trade sanctions are inevitable.

[Naam]

On the opening post, the US dollar was 34.25. It is now 31.54. Not a collapse.

that is correct but the picture looks different compared to 4½ years ago when i bought land, built house and bought cars at an average of 41.50.

[flying]

Why it wont collapse. As a central world reserve currency there is always demand for dollars to fill their reserves. It is essentially providing liquidity. so the capital account surplus leads to a current deficit and increased borrowings normally a deficit would cure itself by s depreciation of you currency but the US deficit is compensated for by China, Thailand etc who a re generating surpluses and buying US debt. Ultimately a central reserve currency cannot provide global liquidity without taking on debt and destroying its currency luckily there lots of buyers for dollar related loan or oil imports.

This will continue until the Country with the central reserve currency is destroyed. The real answer is an SDR independent currency or a major revaluation of China. Ithink China will revalue but not enough. If an SDR central reserve currency was introduced the dollar would collapse and sustainable growth restored. No revaluation and trade sanctions are inevitable.

I kind of agree but......... Just because say a person is providing liquidity by counterfeiting would others continue happy with that?

If there comes a time when the others decide it is a shell game & what supposedly gives this counterfeit power is a lie or has been a lie for quite some time....Is it still preferred due to the gimme that it is a world reserve currency?

If China & others decide that they ( the world reserve/liquidity provider ) are buying their own debt to give the illusion of stability....Will they still stand for it? Perhaps if it benefits them....I guess

What about oil? What if the middle east decides they have had enough of the military complex way of doing things & decide to sell oil in something other than this highly liquid world reserve currency?........I know I know

I hear my pal Herr Naam already scolding me for thinking what if............

Yes I agree the USD has a good chance of being the last fiat standing but,,,, As you said...

This will continue until the Country with the central reserve currency is destroyed.

The trick will be determining when something is destroyed or merely standing dead in the water giving an illusion of well being.

I never once thought of the USD being a total collapse as it will never happen. But it can be destroyed slowly from the inside out in purchasing power.

Making it just about as useless for many.

[sokal]

Bloomberg reported today the confidence in the US dollar is at an 18 month high. I guess they didn't read this thread.

thats a good indication that bad times are ahead.

[sokal]

FWIF from Mish:

"US Dollar Positives

Japan demographics as noted above (net sellers of their public debt)

Greece bailout

Spain property bubble

Baltic state currency collapse

Savings rate in US headed north

Extreme bearish US dollar sentiment

Pending implosion in the UK

Canadian property bubble bursting

Australian property bubble bursting

Hard landing in China, collapse of the RMB

Moreover, I would like to point out that the Massachusetts special election is likely to be US dollar positive. After the special election Democrat massacre, there will be little sentiment for more bailouts but there will be increasing calls for more fiscal prudence and less government spending. It will be much tougher to pass stimulus bills, or bills of any kind."

The only thing that will pop CAD and AUS property bubbles is higher interest rates which start at the FED so there is no way that those bubbles can pop without having bigger probelms in the US.

[sokal]

[...]

In anycase I hope none of these levels hold, and recent trends continue with DXY plodding towards 81.1

81.1 surpassed with a high printed thus far of 81.3 bfore a pullback ensued.

DXY appears to be consolidating under this recent high, drifting lower.

Next level of potential resistance - on a break above 81.3 - I have lies at 83.50. Although for now if or how it'll get there im unsure.

Nobody with a basic understanding of macroeconomics can be bullish on the USD long term, its not possible. Its mathematically impossible.

[sokal]

There are actually two relevant questions.

1) Will it collapse. No devaluing is very difficult and Bernanke is quite an expert

2) Should it devalue and does it need to. Yes the structural unemployment cannot be cured unless the US is made more competitive. Assuming it was an indepedent country I would 'guess' a 40% devaluation would be large enough to restore growth.

Why it wont collapse. As a central world reserve currency there is always demand for dollars to fill their reserves. It is essentially providing liquidity. so the capital account surplus leads to a current deficit and increased borrowings normally a deficit would cure itself by s dprecistion of you currency but the US deficit is compensated for by China, Thailand etc who a re generating surpluses and buying US debt. Ultimately a central reserve currency cannot provide global liquidity without taking on debt and destroying its currency luckily there lots of buyers for dollar related loan or oil imports.

Debt will obviously increase, structural unemploymrny invcreas until the central reserve currency is no longer acting as one. Its value can only be maintained by countries with large surpluses assume their responsibility to reduce them. China knows this but maintains an undervalued one which prompts other currencies that are tied with the Yuan to do the same and the central reserve currency (remember the UK). Actually it just gets worse and worse the US deficits go up and other surpleses rise.

This will continue until the Country with the central reserve currency is destroyed. The real answer is an SDR independent currency or a major revaluation of China. Ithink China will revalue but not enough. If an SDR central reserve currency was introduced the dollar would collapse and sustainable growth restored. No revaluation and trade sanctions are inevitable.

Are you aware that the US dollar was not acceptable in Europe for a 24 hour period in the 70s ?