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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. "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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