Strategies & Market Trends
The coming US dollar crisis
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Persistent high trade deficit of the last few years,
extremely high level of USD reserves in foreign central banks,
and the recent series of interest rates cuts by US Federal reserve
have led to the dollar crisis, a sharp drop of our currency.

Any currency crisis eventually involves much higher 10-year and
30-year interest rates and a meltdown of all asset classes,
with the possible exception of precious metals. This thread
will focus on the discussion of ongoing USD currency crisis,
and the ways to survive it.

Long-term target (~ 3-5 years) if the Fed stays the course:

US asset prices may skyrocket, in dollars, along with commodities,
if these actions are taken to the extreme (as they were) and the country falls
into hyperinflationary depression. US asset prices will fall sharply
priced in sound currencies and gold.

Hyperinflation chart - USD in gold OZ, monthly, is a straight line that
goes to zero in 2011.*&fd=1&fm=1&fy=2001&ld=31&lm=12&ly=2009&y=monthly&q=volume&f=png&a=lin&m=0&x=

Current tentative scenario: A double dip recession, with the second deeper dip
happening as the Fed tries to battle inflationary result of enormous bailouts. For it
to unfold, US has to come out of recession this year. Realistic scenario for USD:
Similar to 1985-95. The dollar will drop to new lows again and will probably bottom
in the 60-s. The grounds: US external net indebtedness is not that high.
$20 Trillion US assets held by foreigners, $17 Trillion foreign assets held by USA.
A genuine recovery after 2011-12 driven by manufacturing (optimistic scenario).
Hyperinflation for decades (pessimistic scenario).

"There is no means of avoiding the final collapse of a boom
brought about by credit expansion. The alternative is only
whether the crisis should come sooner as a result of voluntary
abandonment of further credit expansion, or later as a final
and total catastrophe of the currency system involved. The
breakdown appears as soon as the banks become frightened by
the accelerated pace of the boom and begin to abstain from
further credit expansion."

-- Ludwig von Mises

The Dark Side of the Credit Boom

"Against this backdrop the crucial question is: where is the borderline between a "good" and "bad" rise in debt-to-GDP ratios? To Austrian economists the ratios spell danger. They maintain that today's government-controlled paper-money systems have decoupled credit expansion from the economies' productive capacities: "circulation credit" feeds a "credit boom" that is doomed to end in severe economic, social and political crisis. Austrians fear that the collapse of the credit boom will lead to the destruction of the currency through a deliberate policy of (hyper-)inflation, destroying the free-market order."
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60673I looked back at the history of that legislation and there was very little opposzzpat-Thursday
60672Bretton Woods gave amerika control, we went for empire (corruption, greed)ratherggersh-Thursday
60671You have a false understanding of how the global money transfer system operates.Elroy Jetson-Thursday
60670> the propaganda machine never holds republicans accountable even after they Doren1Wednesday
60669To me it seems like having to convert your currency to US dollars in order to puHorgad1Wednesday
60667--According to a new report published today by the New England Complex Systemsmarcher2Wednesday
60666I like looking at why things fail. You know why a plan didn't work, why a przzpat-Tuesday
60665As Jonathan E. discovered, you get what you pay for. Free "news" is nElroy Jetson-Tuesday
60664I read books on things that interest me which you assume means I'm not as gozzpat-Tuesday
60663You clearly receive the full value of nothing from the "free news sources&qElroy Jetson-Tuesday
60662You're right. I can't find any reference that you cited from another sozzpat-Tuesday
60661I bet you didn't spend $1.95 to read the truth story of the Tournament of RoElroy Jetson-Tuesday
60660"It is no exaggeration to say that just about everything has changed since zzpat-Tuesday
60659Remember the Maine. Another of what you humorously call a "CNN story"Elroy Jetson-Tuesday
60658Are you suggesting the endless of coverage of one man by the entire corporate owzzpat-Tuesday
60657I believe journalistic standards and integrity have improved greatly with the imElroy Jetson-Tuesday
60656"Reporters don'tneed stories handed to them, but they certainly prefer Horgad2Tuesday
60655Reporters don'tneed stories handed to them, but they certainly prefer to havElroy Jetson-Tuesday
60654I stated a fact that CNN created the need to have profits in all news. You'zzpat-Tuesday
60652Hatches are battened down, decks cleared. I like a bit of wind and rain. We jusThe Pre Beakerite-Tuesday
60651The Tournament of Roses Parade in 1890 was created in response to the real estatElroy Jetson-Tuesday
60650I imagine most pawn shops not near refiners are packaging up and shipping out scHorgad-Monday
60649It all sounds like a full time job -g/ng- "I actually had good luck buyingggersh-Monday
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