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Strategies & Market Trends
The coming US dollar crisis
An SI Board Since May 2007
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62921 374 0
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.*&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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62921The last straw for me is when she claimed that she was under fire while leaving Sawdusty13 hours ago
62920SMFH [graphic]Matt Taibbi?Verified account @mtaibbi ggersh-3 hours ago
62919I think the last Scottish Referendum was possibly rigged. I say that as I was thLitore Lapis13 hours ago
62918Hillary has friends in all sort of places apparently. Some of them seem to be Litore Lapis-3 hours ago
62917If Scotland leaves the UK, Labour will have to be resurrected as a Blair witch pElroy Jetson-3 hours ago
62916Yep, she tried twice and was a miserable failure both times, ameriKans really doggersh13 hours ago
62915Hilary had her shot and blew it. Time to fade into the woodwork and enjoy her mSawdusty24 hours ago
62914Even better? [youtube video]ggersh24 hours ago
62913We will see. If an election is announced... I will be checking on the Labrokes oLitore Lapis-5 hours ago
62912Blairites dwindling? Why isn't he in jail? Some labour MP's dont want aggersh-5 hours ago
62911[graphic]Litore Lapis-6 hours ago
62910Yep I signed his petition to have voting monitors on site when the next ScottishLitore Lapis-6 hours ago
62909What a sham the uk/us govt's are, the fascists are in charge craigmurray.orggersh211 AM
62908Michael Gove today "provided assurances" that the UK will not be grindElroy Jetson-yesterday
62907well, looks like Boris and co are hanging real tough... my golly. "Govt rLitore Lapis-yesterday
62906Brought to you courtesy of Rupert & co. 'I'm reassured that, despLitore Lapis-yesterday
62905What is it with you and Amazon?Elroy Jetson-yesterday
62904amazon the terrible: amazon: break the addition, use ebay... or go marcher2yesterday
62903I'm glad I have your confidence. It makes all the difference. -g-.Litore Lapis1yesterday [graphic]ggersh3yesterday
62901UK labour shortage has left thousands of tons of ripe fruit and veg are mulchinElroy Jetson-yesterday
62900I'm sure the independent nation of United Midlands will eventually go on to Elroy Jetson-Sunday
62899Victories and Defeats are usually overstated. -g-Litore Lapis-Sunday
62898The Scots will obviously apply for membership in the EU. It's only bloody foElroy Jetson2Sunday
62897I thought the Brexit delay was a done deal. I thought democracy had won for a mLitore Lapis-Sunday
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