We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  For example, here is how to disable FireFox ad content blocking while on Silicon Investor.
Strategies & Market Trends
The coming US dollar crisis
An SI Board Since May 2007
Posts SubjectMarks Bans
62651 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."
Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):
ReplyMessage PreviewFromRecsPosted
62651[graphic] bradblog.comggersh4yesterday
62650It's only a matter of (BYOV) bringing your own Valium or whatever it is thaggersh1yesterday
62649Better have a few Emotional Well being Councillors standing by.Litore Lapis-yesterday
62648popcorn and soda requiredggersh1yesterday
62647So, this thread could actually become topical. Better put out some extra chairs,Litore Lapis1yesterday
62646Yes the end is near
62645It's a rumour getting around. He hasn't posted it here on this thread yLitore Lapis-yesterday
62644Yep, that shit shouldn't happenggersh-Saturday
62643I have a US friend who worked in Africa and didn't pay US Social Security pElroy Jetson-Saturday
62642One of the problems Brexit will introduce is British retirees living in Spain orElroy Jetson-Saturday
62641Many countries have a "Foreign Earned Income Exclusion". In 2018 this Elroy Jetson1Saturday
62640UK citizen has been out of the country for a year and a day. No, it's muchLitore Lapis1Saturday
62639The tax havens are everywhere but the City of London. Representatives of tax haElroy Jetson-Saturday
62638kool. City of London too? We need to nail those fuks as well. devon-cornwall-fiLitore Lapis1Saturday
62637Facebook is trying to profit from an online criminal money-laundering operation Elroy Jetson-Saturday
62636This is fairly close. cnet.comLitore Lapis-Saturday
62635There's a good chance this brings down the entire British monarchy if the coElroy Jetson-Saturday
62634Can't get past firewallggersh-Saturday
62633Facebook’s Libra backers look to distance themselves from project ft.comLitore Lapis-Saturday [graphic] Due to public outcry of skepticism about the Jefggersh2Saturday
62631It could go too... planned... or maybe even unplanned... who's to know? FiLitore Lapis-Saturday
62630Easy easy......ROFLMAO Hot Topics >>ImmigrationShop to Suppggersh-last Friday
62629Whoopsie daisy In Unprecedented, Shocking Proposal, BOE's Mark Carney Urgesggersh1last Friday
62628OMFG......riots are needed pretty much global neoliberalism/capitalism has to bggersh1last Friday
62627Grenfell update. Lapis-last Friday
Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):