Several professional economists are saying that the dollar shall soon cease to be the world's reserve currency, and when that happens, all of those extra dollars will come home and create hyperinflation. They say it will happen this year. Ron Paul, you were our only hope... and now it's too late.
I don't know when it will happen, but it seems that it's on the way. I think I bigger indicator will be when oil is no longer priced in dollars. I'm not as worried about hyperinflation as a result of losing our reserve currency status as I am the fact that if the dollar is not a reserve currency, the demand for dollars internationally shrinks, which means there will be less incentive for non Americans to buy US Treasuries. That means we can't borrow money on the international bond market, or at least not at the rates we've been used to. We'll be like Greece, unable to borrow all the money we need to keep going as usual.
Well, it's not likely that the US dollar will be completely replaced as the reserve currency. There's really nothing, in terms of fiat currency, in which to replace it. More likely, they'll go to a basket of currencies or perhaps start a new one that's based on others. The end of dollar hegemony means a lower standard of living as the rest of the world stops giving us their wealth in return for green paper, but a currency basket would soften the blow of heavy inflation.
Not to fear and cower. The USD has been holding steady against crap money for the longest time. If you go back to the begining of the decline of the USD (around 2001), you would find the answers you seek.
It's a certainty in my book although I don't expect the huge pressures to really come through before Obama's re-election . Is he a lucky guy or going to be judged by the clowns when the ship goes down as the most useless President ever? He will be picking up a chalice that is poisoned almost unimaginably .
Great post. The only positive thing from this debacle is that the leftist model of govt. will become unaffordable and will crash. Eighty years of leftism will be rolled back at one fell swoop. Most Americans will be destitute. It's sad that it came to this. Time to move on.
The problem with including the dollar in the basket of currencies is that the world can't trust America because this country will print dollars like there's no tomorrow.
Very well stated. Obama will be the last president of the United States to preside over the world's largest economy.
Well that's true. We'll have to learn to live within our means because we'll have no choice. But the transition will be painful. Much higher interest rates, which means much higher interest payments on our already bloated debt.
The topic of State and Welfare is a great one . It is popularly contended that the Arms race bankrupted Russia , Welfare bankrupted Europe and just plain greed will bring the US down . How does a Moral State afford proper care for the disadvantaged without going broke ?
Remember in the 80's when everyone thought the Yen would replace the dollar? This is just so much guessing combined with America bashing. I can, however, foresee a future when the entire system of monetary evaluation is revamped, but I don't see China as our enemy or ultimate replacement. Capitalism is still being invented or evolved if you will, it must meet the needs of the entire world now and a better system must replace this one.
Wouldn't a resultant hyper inflation be a lifeline for most Americans, considering they are stuck with their under-water mortgages? The dollar's loss of status may be bad for the banks, but the actual people is a completely different story, right?
You may perceive it as "America Bashing" but that's because , as a country , so many of you are still basically in total denial . It is ironic you Post in this vein when everything possible that is wrong financially in the Western World is crystallised in the State of California , that is so broke that you are at the begging bowl stage . And if you actually knew exactly what the facts and figures were , you would not be posting gibberish about how you imagine the planet is . You are living through the historical period where Capitalism as we have practised it is writhing in death agonies . It is not guessing and speculation . It is the simplest equation possible -- income versus spending . As a country , you owe over $100 trillion gross and there is no possible way of ever paying back even a quarter of that , whatever stunts you devise . And the rug will be pulled . And you will fall flat on your collective face . Period .
Ironically the US has effectively signalled a possible part solution . Except Military spending must be reduced by at least 50% How can this be done and not risk defence and security ? It seems land armies are now largely redundant for the future and that battles will be fought and won by Drones and Computers ( Cyber Warfare) . Also Special Forces Elite Operations will increasingly be vital Example . How to stop Iran 's enrichment programme ? Kill everybody associated with the operation --- Scientists and Plant key managers -- as per present US and Mossad actions . Also develop worms like Stuxnet which have done huge damage in at least two Iran plants
Most Americans are simply ignorant of these facts. They have graduated from a public school system which has not trained them to think critically. Many other Americans do understand the truth but can't bring themselves to accept it. Denial is one of the stages of grief. I welcome the end of America as we have known it. There is no other way of getting rid of the death grip of the American left on this polity. It's too bad it's come to this. Some leftists understand the truth and accept it. Some of them have approached me about what WE can do to solve this problem. The schadenfreude is unbearably wonderful.
There is no solution. Eliminate the military budget altogether and debt service on existing and projected indebtedness will still be unpayable. No nation can have what it can't pay for.
Mathematically , you are right . But as per Greece , and in the next few days , Portugal , won't there be a " hair cut" operation which rubs out a defined amount of debt --- isn't it presently 50% with Greece --- providing other procedures and policies are strictly adhered to ( austerity obviously) ? America would allowed to renege on debt ( devaluation in polite terms) --- along similar lines to the major South American countries in the eighties . The US would scrape through but the Empire would go .
The problem is so much greater than the military budget. We won't be able to afford anything else than entitlement programs unless we can tame them.
There isn't enough money on earth to pay America's unfunded liabilites even if they are written down. The Baby Boom generation will not accept any write down. None. Instead the young will be enslaved so that their futures are utilized to pay for present consumption. The young will resist. A generational conflict along with an ideological and racial conflict means that America will come apart at the seams. I live in California along the coast. It's a wonderful place if one has sufficient diversified assets. The middle class is disappearing. Some poor whites have been reduced to begging and dumpster diving. California is a third world state which pretends that it can afford a first world government. The internal inconsistencies are breathtaking. When I go to the ATM I am accosted by desperately poor Mexican women carrying infants with signs written in English begging for a dollar. This is astounding because it is unusual for Mexicans to beg. It's time for people to abandon the idea of America and simply go their separate ways in peace. The alternative is violence. The result will be the same either way.
The greatest generation, the war babies, the baby-boomers, the millenials, et al., have been accused of not caring a bit for the predecessors or the successors in our country. They are all "the sky is falling mentality". Not one generation wishes to kick another generation to the curb. That's just the selfish, greedy white man mentality speaking. I guess Mexicans have a better time begging here in the USA than they would in Mexico. Plenty of people are doing without and that's just the way the IRAQ war is getting paid for and brought to us by the BUSHES. The economy ALWAYS goes into the dumpster when the Republicans take office.
think of about 6 trillion dollars all coming home at the same time bidding up prices...thats hyper-inflation as for the timing? I have always said either 2012 or 2013
Be very glad you are not young. Your generation has sown the wind. The young will reap the whirlwind. If I were young I would be pizzed off too.
