Is The Us$ Destined To Collapse?

[badge]

For example everyone is happy with the status quo as long as folks are making money. The $62Trillion unregulated OTC CDS market was fine up until a few years ago, but when it was seen to cause problems, suddenly now its an issue.

Likewise the USD; whilst people are still prospering its dominance is assured, if sufficient turmoil ensued the USD could be questioned.

[flying]

Seems a rather petulant question Flying

USDs dominance is far too prolific to dethrone. It would take such almighty chaos in financial markets to induce a switch, that under those circumstances its likely everything would crumble, even perhaps jewelry metal.

Im sure USDs day will come, but not in our lifetimes. And if it were, it wouldnt be nice.

I do believe you are the first person I have heard use the word petulant

I agree that the downside of the fall of the USD is going to be a terrible time for the whole world. But I feel the house of cards is shaky far beyond what most believe.

I can only come to the conclusion that we are in fact crashing even now but the band plays on.

I see it as going one of two ways. The US in a last ditch effort introduces some new currency defaulting on the old. Bringing with it all the problems....angry countries...angry citizens etc. ( it would not be the first time )

The other way although more likely probably ends worse. Some false flag cause for a war.

Of course I will be happy if as you say we just muddle along & nothing happens but, I'm sure anytime a major currency has failed they said the same as you do now....Not in our lifetime.

Edited September 26, 2009 by flying

[Naam]

check other currencies, compare with USD,

Switzerland,

1933 4.0265 Franc = $1

2008 1.0816 Franc = $1

Germany ( hard to compare Euro took over )

1950 4.1950 Deutsche mark =$1

1999 2.0840 Deutsche mark =$1

But I know what you mean.

1.Yes many other fiats have gone the same way as the USD.

2. So you agree with BM then? USD king for decades to come?

1. true!

2. i don't agree with someone who has nothing really to say. especially not with somebody who uses for USD the expression "king for decades" which indicates clearly what kind of fundamental knowledge he possesses

the "king" has been already dethroned as well as derobed but his existence and use is -due to prevailing circumstances (which are common knowledge)- guaranteed for years to come. the latter however does not necessarily protect the "royal" currency from losing value.

by the way, i recently subscribed to a free (german) daily "goldbug letter" which forecasts scenarios for fiat currencies, especially USD and sends shivers down the backs of an average ignorant citizen. for me it's some kind of amusement and once in a while i even laugh out loudly

quite disappointing is that the "letter" has not yet forecasted any future prices for bakeries

[Naam]

I see it as going one of two ways. The US in a last ditch effort introduces some new currency defaulting on the old.

Flying, puleeeeezzzze!

[britmaveric]

It's pretty obvious most people do not understand how fx markets work - everything is cyclic. I've been hearing doom/gloom year after year and nought changes. Oh this is the year $ is finished and not surprisingly the $ never is finished.

I think people need to wake up and use their brain - yank $ is not going down anytime soon. Just enjoy the bashing because at the end of the day that is all you have. (entertaining, but no closer to reality)

Edited September 26, 2009 by britmaveric

[teletiger]

Murphy has a different take on that.

Regards.

[flying]

Basically what I am hearing from many here then is that the USD is too big too fail

[britmaveric]

If it fails - everyone is fked no matter where you are in the world. So its demise is not in the interest of anyone.

[flying]

If it fails - everyone is fked no matter where you are in the world. So its demise is not in the interest of anyone.

That may be true I know the US thinks very highly of itself but I do not believe that sentiment is shared by all... both in & out of the US. As the paper IOU's become more & more worthless we will see what the world thinks is best for them.

Of course there will be pain & thrashing just like anytime in history a collapse of a one time great power occurred.

[flying]

Future of the Dollar?

http://www.cnbc.com/id/15840232?video=1275511738&play=1

[Abrak]

Future of the Dollar?

http://www.cnbc.com/id/15840232?video=1275511738&play=1

When considering the dollar how much do you think you should consider yuan as part of the money supply. I mean theoretically if you peg your currency to another you have no monetary policy BUT that assumes no capital controls. So say the collapse of M2 and M3 in the US is one thing combine it with yuan money supply and it is another.

Or put another way broad band US monetary aggregates are pointing to deflation especially of asset markets but can Chinese monetary expansion export its way back into the US when there are capital controls?

[mommysboy]

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?

Hmm! Bananas

Still anything is better than some doomongers of a drinking persuasion

[mommysboy]

If it fails - everyone is fked no matter where you are in the world. So its demise is not in the interest of anyone.

That may be true I know the US thinks very highly of itself but I do not believe that sentiment is shared by all... both in & out of the US. As the paper IOU's become more & more worthless we will see what the world thinks is best for them.

Of course there will be pain & thrashing just like anytime in history a collapse of a one time great power occurred.

Possibly the greatest understatement in the history of......all history

[SNGLIFE]

Anyone who thinks the USD is too big to fail is either ignorant or clueless. Anyone who is ignorant need only research the economic collapse which occurred during the fall of the Roman Empire. The socio-economic and political parallelisms to what is happening today are breathtaking.

Anyone who is clueless need only follow those who GOT IT RIGHT. Two easy-to-read sites which make my argument are:

www.jsmineset.com

www.europac.net

I started preparing for the collapse when W took office (paid off all debt, moved to Thailand, and began saving in earnest). Being a conscious voter (i.e. not one of the mindless drone citizens), I did my research and knew the guy was an idiot and nothing good could come of it. At the end of the Clinton years, the greatest comeback in US (and possibly World) history, we had consecutive years of record surpluses and would be able to pay off the National Debt that Reagan and Bush Sr. f#kd us with within 20 years. It would take a complete idiot to f#k that up in a single term. W did it within 30 days after taking office (research it yourself).

Well, here we are again! Republicans f#kd up the economy and the Democrats are again stuck with cleaning up the mess (I am a life-long Independent, BTW). However, the mess is so HUGE now and the domino effect so extreme that the ONLY way we will be able to get out of the economic death spiral is to inflate our way out of debt and then jettison the USD.

What happened this past year was just a tremor. The quake is yet to come.

IMHO, Obama needs to LET THERE BE PAIN! We need Volker on steroids, not this helicopter Bernanke BS. Printing more fiat money as the ONLY solution is unsustainable. Let the large banks and industry giants collapse and nurture the smaller ones which will inevitably rise up in their place. Let there be more competent, not just more, regulation to police the economy and not let it happen again.

In the meantime, I am just tickled to watch everyone dance around the fact that "You must deal with reality, or reality will deal with you".

EDIT: AND, my friends, do not lose PERSPECTIVE. The US has been the dominant global power FOR LESS THAN 3 FULL GENERATIONS!!!! In the context of world history, and metaphorically speaking that is about the equivalent of a month or so out of your entire lifetime!

Edited September 27, 2009 by SNGLIFE

[britmaveric]

Ahh let me get you your tin foil hat!!!

[lannarebirth]

Anyhow, as regards the $USD. Updating my prior post I'm looking for 80 week cycle lows centering around the 25th of September. If it is the second 80 week cycle of the 4.5 year cycle I expect higher lows than were seen in March'08. If that occurs my expectation is that $USD Index moves to at least 95. This forecast is based on the presumption that March '08 marked the low of the 18 year cycle. Window is +/- 4 weeks. If lower lows are made than in March '08 I'll update, but that is not my expectation at this time. All FWIW and OCICBW blah blah.

Plenty of resistance above. I'd like to see a weekly close above 79.5 to feel better about it.

[SNGLIFE]

http://www.europac.net/externalframeset.as...amp;type=schiff

September 25, 2009

The Price of Pretense in Pittsburgh

As another G20 meeting rolls around, this time on home soil, the time comes once again for the economically curious but politically unconnected to wonder what is really happening behind closed doors. But while admiring the pageantry, chuckling at the awkward group photos, and parsing the joint communiqués like newly found Dead Sea scrolls, the overwhelming majority of observers will miss the meeting’s dominant theme: hypocrisy.

Everyone agrees that the principal agenda item in Pittsburgh will be the need to rein in the ‘global imbalances’ that created the late economic crisis. Everyone also agrees that these imbalances involve too much spending and borrowing by Americans and too little of both by the Chinese and other developing nations. In his remarks this week at the United Nations, President Obama used his peerless rhetorical skill to frame the issues clearly and plainly. Noting that a return to pre-crisis economics is impossible, the president assured the world that his administration will pursue policies to increase savings and decrease spending at home and challenged his Chinese counterparts to enact measures with the opposite effect in their own country.

While this is roughly what needs to happen, President Obama is actually doing everything in his power to prevent it. In point of fact, every policy move undertaken by his administration has exacerbated the very imbalances he supposedly wants to curtail. To so seamlessly profess one goal while simultaneously undermining it is an impressive piece of political theater. Unfortunately, this particular drama is likely to have an unhappy ending – and the ticket price will be staggering.

What exactly are the federal fiscal stimuli other than deliberate, but clumsy, efforts to get people, companies, and governments to spend money they don't have? Programs like tax credits for new homebuyers or ‘cash for clunkers’ are intended to encourage consumers to spend money that they otherwise might have saved. Grants to municipalities allow them to hire workers and spend money locally that they otherwise would have forgone.

Federal intervention in the mortgage and credit card debt markets, where they are now nearly the sole buyer, has been specifically undertaken to keep interest rates low and financial firms solvent – so that Americans can keep buying homes and using their credit cards. While the Fed will continue to hand out free money to any and all borrowers for an “extended period,” the abysmally low interest on deposits that such a policy creates disincentivizes personal savings even further.

In 2009, despite the tilted playing field, the American people have heroically managed to increase their savings (although clearly not as much as they would have in a free market). But President Obama’s runaway deficit spending is undermining their efforts. The simple truth is that government debt is our debt. So if a family manages, at some cost to their lifestyle, to squirrel away an extra $1,000 in saving this year, but the government adds $20,000 in new debt per household (each family’s approximate share of the $1.8 trillion fiscal 2009 deficit), that family ends up owing $19,000 more than they did at the beginning of the year!

So much for our end of the bargain. How about on the other side of the Pacific? Will the Chinese restore balance by increasing their spending? How can they while they are lending us all their money? Remember, any money the Chinese spend is money they cannot loan to us. So, if China really wanted to spur domestic consumption, the best way to do so would be to stop buying our debt. Even better, they could sell Treasuries they already own and distribute the proceeds to their citizens to spend.

However, the Obama administration is heavily lobbying the Chinese to get them to step up to the plate and buy record amounts of new Treasury debt. Obama cannot have it both ways. He cannot claim he wants the Chinese to spend more, but then beg the Chinese government to take money away from Chinese consumers and loan it to the United States Treasury.

In the end, Obama will get precisely what he publicly claims to desire but privately dreads. The Chinese government will come to its senses and stop buying Treasuries. This will cause the U.S. dollar to collapse, but it will also allow Chinese citizens to fully enjoy the fruits of their labor.

Once the Chinese begin consuming more of their own products, those products will no longer be available to Americans. Once they start spending more of their incomes on themselves, those funds will no longer be available for us to borrow. Unfortunately, that is when our real economic crisis will begin. The worst part is that the longer these imbalances are allowed to continue, the larger they grow and the more painful the ultimate adjustment process becomes.

But for now, it’s all pomp, circumstance and hypocrisy in Pittsburgh. Why yes, Madam Finance Minister, I'd love another of those crab cakes!

[SNGLIFE]

This topic summed up in a picture. Same can be said for the USD trade:

[Naam]

heavy intervention today by BoJ selling JPY and buying USD!

[lannarebirth]

heavy intervention today by BoJ selling JPY and buying USD!

Bless them, they're doing God's work.

[flying]

heavy intervention today by BoJ selling JPY and buying USD!

Bless them, they're doing God's work.

probably the same two JPY guys caught trying to get through Italy with 134 B

[flying]

Well, here we are again! Republicans f#kd up the economy and the Democrats are again stuck with cleaning up the mess

Same strings different puppets.

Folks who still believe there are two parties are under a spell.

[Naam]

heavy intervention today by BoJ selling JPY and buying USD!

Bless them, they're doing God's work.

they forced me to close my USD short

[flying]

they forced me to close my USD short

All the kings horses & all the kings men

[lannarebirth]

heavy intervention today by BoJ selling JPY and buying USD!

Bless them, they're doing God's work.

they forced me to close my USD short

I understand your attraction to the Dark Side, I was a sinner once myself. As penance say 10 Our Fathers, 10 Hail Marys and chant "get thee behind me Satan"!

[Naam]

Well, here we are again! Republicans f#kd up the economy and the Democrats are again stuck with cleaning up the mess

Same strings different puppets. Folks who still believe there are two parties are under a spell.

you are partially right Flying but the fact remains that republicans fàcked up much more than democrats. that applies especially to the eight years when the village genius and victorious warlord Jorge pequeño de Tejas was the puppet.

[skipvice]

Well, here we are again! Republicans f#kd up the economy and the Democrats are again stuck with cleaning up the mess

Same strings different puppets. Folks who still believe there are two parties are under a spell.

you are partially right Flying but the fact remains that republicans fàcked up much more than democrats. that applies especially to the eight years when the village genius and victorious warlord Jorge pequeño de Tejas was the puppet.

Oh Please, its congress who made and passed laws that messed up the economy, ask yourself who was in control of congress for the last decade ???

[flying]

heavy intervention today by BoJ selling JPY and buying USD!

I have looked for news on this & have not found any?

Where did you see/hear it?

[lannarebirth]

Well, here we are again! Republicans f#kd up the economy and the Democrats are again stuck with cleaning up the mess

Same strings different puppets. Folks who still believe there are two parties are under a spell.

you are partially right Flying but the fact remains that republicans fàcked up much more than democrats. that applies especially to the eight years when the village genius and victorious warlord Jorge pequeño de Tejas was the puppet.

Oh Please, its congress who made and passed laws that messed up the economy, ask yourself who was in control of congress for the last decade ???

An ignorant, greedy, short sighted citizenry? Yeah, I think so.

[flying]

Oh Please, its congress who made and passed laws that messed up the economy, ask yourself who was in control of congress for the last decade ???

An ignorant, greedy, short sighted citizenry? Yeah, I think so.

Actually the ignorant would be the working class that is to busy working & lack the power to influence congress anyway.

The greedy is the ones that do have the power to influence congress.

Short sighted? I tend to think that would be the greedy because of course if they have what they want they need not any further long view as they made theirs & the rest can eat cake.

Given those things I think I agree with skipvice on this one.

Edited September 28, 2009 by flying