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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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62560Try to keep the Brexit drama going. I love the value of the Pound. I continue Elroy Jetson-last Saturday
62559Yep, best get everything manufactured over in China then.... Its capitalism or iThe Pre Beakerite2last Friday
62558In China they solve the problem of mentally ill homeless people by using them faElroy Jetson-last Friday
62557This is where Pompeo et al, should visit before they start sounding off about VeThe Pre Beakerite-last Friday
62556Pompeo is just the standard sock puppet doing what he bidden... and Joe Biden isThe Pre Beakerite-last Friday
62555US Secretary of State Mike Pompeo pledges not to wait for Britain’s elections toElroy Jetson-June 9
62554He always hated women, and then he decided to kill them -- washingtonpost.com SElroy Jetson1June 7
62553u.s. cultural delusions: --Yet in fact, the poor (the bottom 20%) work roughly marcher-June 6
62552neoliberal physicians harming u.s. residents... in violation of professional ethmarcher2June 6
62551Negative Yield Debt Now 20 Percent of Entire Market central banks buy bonds to delmatador1June 3
62550neoliberals create wealth inequity...and early death. via jesse: --... regardedmarcher2June 1
62549Between a Rock and a Hard Place Can Hong Kong Retain its USD Peg? seekingalpha.celmatador2May 29
62548kitco.com Gold Price Not Going Back To $1,900, It’s Going To $3,000 Or Higher -ggersh-May 11
62547He got it right at first HFT would cannibalize trading Jesse sidebar jessescroggersh1April 28
62546Investment Style: WTF bot them BSC puts?ggersh-April 24
62545The FED's Dirtiest Bailout [graphic] wallstreetonparade.combruiser982April 24
62544That these 3 clowns are in control is all we need to know as to how fucked we aggersh-April 2
62543The Problem With "Modern Monetary Theory" Is That It's True forbebruiser981March 28
62542For any who might care [graphic]ggersh1March 27
62541Evil resides all over NYC WS/tRump/Hedge funds/PE/FEDggersh-March 27
62540more neoliberal opportunism: The UN’s housing advisor has accused...Blackstone marcher-March 26
62539well, if janet lets-make-the-rich-richer-and-the-majority-poorer yellen doesnmarcher1March 26
62538Yep.. MMT makes the case for land, guns, butter and gold.. Those with land andThe Black Swan-March 26
62537Former Fed Chair Yellen says bond market could be hinting need for rate cut — nobruiser98-March 26
62536Former Fed Chair Yellen says bond market could be hinting need for rate cut — nobruiser98-March 26
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