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Strategies & Market Trends
The coming US dollar crisis
An SI Board Since May 2007
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Emcee:  Real Man Type:  Moderated
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.

fx.sauder.ubc.ca*&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."

mises.org
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59852in case you missed it. good piece by hudson via nakedcapitalism: --One of the fmarcher-5 hours ago
59851[graphic]The Pre Beakerite-yesterday
59850Well, yes we know about the BBC... thecanary.co as do millions of other BritiThe Pre Beakerite-yesterday
59849You can clearly see the Muslim Doctors in the photos, but they're not identiElroy Jetson-yesterday
59848You right. About half of them should of been either from India, Pakistan, and orThe Pre Beakerite-yesterday
59847The English press has obviously suppressed the photos of the American Doctor tenElroy Jetson-yesterday
59846The UK universal NHS is one move waaaay ahead of no medical cover as in certainThe Pre Beakerite-yesterday
59845I know how difficult it is to ascribe good motives to conservatives, but it doesElroy Jetson-yesterday
59844Mr Tobias "lets save the world from the terrorists" Ellwood, should nThe Pre Beakerite-yesterday
59843You see the sequence of these photos as the EMTs arrive and then police officer Elroy Jetson-yesterday
59842I heard the Saudi story too. Forgive my suspicious nature, but there seems to The Pre Beakerite-yesterday
59841Slashing a man's face with a knife is already pretty violent and unhinged. NElroy Jetson-yesterday
59840Strange that the detailed life of Kahlid Masood, aka Adrian Elm didn't incluphilv-yesterday
59839You have to admit Adrian Elm, the "Prep-School Rental Car Terrorist" wElroy Jetson-yesterday
59838amerika.....where war crimes are ooopsies.....-sigh- [youtube video]ggersh-yesterday
59837Part 2&3 ...Jesse larsschall.com larsschall.comggersh1yesterday
59836Only a few know who is in charge???? -nfg- qz.comggersh-yesterday
59835 London bombing. This is B/S foxnews.com laughable B/S if it wasnt for theThe Pre Beakerite3Saturday
598349/11 Terror Trading: Beware of a Limited Hangout, Part One larsschall.com Frobruiser981Saturday
59833amerika's version of Pravda so you tell me, ....can it be true? alexmg....ggersh3last Friday
59832Like at an ice cream parlour......"the flavour of the month" -sigh- “ggersh1last Friday
59831Nah... Can't be true can it? [graphic] Russia and the fighters operating iThe Pre Beakerite1last Thursday
59830Yeah, I think some elements of the public at large were close to becoming sympatThe Pre Beakerite-last Thursday
59829Most amerikans can't put 2 and 2 together. -sigh- war and their consequenceggersh1last Thursday
59828The London Tragedy heraldscotland.com and the civilians in Mosul are finding lThe Pre Beakerite-last Thursday
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