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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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60816As usual the key word is missing "best" being that word pretty much oggersh1Wednesday
60815The Russians also spend less than a 1/20th that the US does on military, but stiHorgad3Wednesday
60814These Russians spent nearly spent $1:20 in influencing the UK Brexit referendumThe Pre Beakerite2Wednesday
60813[graphic]ggersh2Tuesday
60812James Seagrove was actually trying to use the word proscribe, but he clearly doeElroy Jetson-Monday
60811> that it does not prescribe the conduct of private individuals Yeah but thDoren-Monday
60810Brexit talks stumble as British leader faces anger at home On issues ranging frElroy Jetson-December 4
60809Jesse[graphic]ggersh-December 1
60808We are in the age of "Monopolies/Oligarchies". Yes and with no net neggersh-November 29
60807Business as usual in the US...holding up or even reversing progress to cater to Horgad1November 29
60806Losing net neutrality......some of the many unintended consequences that might bggersh3November 28
60805Well duh, no one is perfect...James Seagrove-November 27
60804“Today, when a concerted effort is made to obliterate this point, it cannot be rJames Seagrove-November 27
60803Humorously it just occurred to me that Rand, who died from cardiovascular diseasDoren-November 27
60802> Rand < He he. I've been a LIBERtarian since the last days of VietnaDoren5November 27
60801Message 31367226 Didn't Ayn take SS and Medicare?ggersh-November 27
60800A tale of a Bigfoot sighting in Pike CountyJames Seagrove-November 27
60799I have not read Rand. I never said I was a scientist either. I have no desire tozzpat1November 27
60798You have no opinion, you have never read anything Rand wrote. You are not the James Seagrove-November 27
60797Rand is an idiot that Ryan says he likes but look at his budgets. He said his rezzpat1November 27
60796“Pride is the recognition of the fact that you are your own highest value and, lJames Seagrove-November 27
60795Once in awhile, I ask republican voters what their party has done that make themzzpat2November 27
60794Republican voters are very bad. I vote you get two votes to equalize this unfairJames Seagrove-November 26
60793In Switzerland you voluntarily buy health insurance, or go to jail until you forElroy Jetson2November 26
60792[graphic]ggersh-November 26
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