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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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59573with donald free speech might become endangered didn't she want to blow us ggersh-25 seconds ago
59572 From materialist to terrorist. independent.co.ukThe Pre Beakerite-an hour ago
59571Luntz, nope ggersh yepggersh-yesterday
59570Is that more Frank Luntz? Never say "Hedge Fund" . . . . instead sayElroy Jetson-yesterday
59569When you see a picture of a Bitcoin, it's a photo of plastic advertising tokElroy Jetson-yesterday
59568on O's last day we say goodbye to America the hedge fund tomorrow with Trumggersh1Thursday
59567If the velocity of money is constant and the money supply increases than inflatistsimon-Thursday
59566So where is the "money" created, in that I mean the digital money in tDoren-Thursday
59565Interesting chart... I think I've seen that or something similar... Note thDoren-Thursday
59564The Fed targets two interest rates. The first is the "Discount Rate" fElroy Jetson-Thursday
59563One scenario I've noticed: This would be a long term extraction of money frDoren-Thursday
59562From my understanding the Fed regulates interest on interbank transactions... crDoren-Thursday
59561SLABS in the news today. $300 billion worth. Navient split off from Sallie MDoren-Thursday
59560It's all one big happy family twitter.com Follow [graphic]Lee FangVggersh1Wednesday
59559yep. it's another of many talk-things that will be on the observational follmarcher-Wednesday
59558Talk is cheap. As long as the Fed continues to raise interest rates and there isstsimon2Wednesday
59557Of course. The rich get good treatment the rest not so much just like USA Pogeu Mahone-Tuesday
59556Trump sends shiver through stock market with shot across dollar’s bow One of thDoren-Tuesday
59555I suspect it's going to be called "The Trump Dump".Elroy Jetson-Tuesday
59554In Australia Medicare covers all of the cost at some facilities where Doctors tyElroy Jetson1Tuesday
59553that sounds right to me. --pico seconds-- well, long ago, my second car was a marcher-Tuesday
59552There have private doctors in the UK at least since the 90's that you paid ggersh-Tuesday
59551Concierge Doctor is not covered by the NHS of course. Elroy Jetson-Tuesday
59550Concierge Doctor: Private GP London |Visiting Doctor www.conciergedoctor.co.uk/Pogeu Mahone-Tuesday
59549Investors are bracing for a massive stock-market selloff Demand for February VIDoren-Tuesday
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