For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
Posted: Sat Oct 28, 2006 9:45 pm Post subject: Re: The Last Days of the Dollar?
Revi wrote:
I read the Spiegel article. Scary! After reading that I realized that the whole thing is very delicate. The thing that keeps it all from falling down is the fact that nobody wants to start a run on dollars because everyone has so many of them. Somebody is going to sell soon, though. It's irresistable to cash out early When they do, the value will go down, and then everybody will dump their dollars, driving the price still lower. Who will move first? Is some little country dumping their dollars on the market now? It makes me nervous...
There's usually a triggering event that gooses people into action, or reaction. Personally, I think that a pull out of Iraq could function as a trigger. Pulling out of Iraq will signify that the US can't impose it's will through military force. The strength of the dollar, stability of American domestic scene and the structure of international politics coalesce around this central idea. If the dollar isn't backed by gold, and the economy isn't being managed in a sane manner, it must be backed by guns. This is particularly true, when natural resources are becoming more and more dear.
The dollar will begin a death spiral, the domestic situation in US will deteriorate and international politics will restructure when the US gives up it's role as international bully.
Other than the obligatory peak oil trigger, are there anymore potential triggers that you can see unfolding fairly soon?
Posted: Sun Oct 29, 2006 3:49 pm Post subject: Re: The Last Days of the Dollar?
threadbear wrote:
Other than the obligatory peak oil trigger, are there anymore potential triggers that you can see unfolding fairly soon?
I will be watching the midterm election with great interest and I'll be holding my breath regarding the results.
It's an interim date that I'm using the prepare my finances.
I can envision some nasty scenarios.
If BushCo. steals the election again, perhaps there will be riots.
Martial law?
How will the global financial market react to a (more of the same) Republican victory? A Democrat victory is the House but not the Senate, which would lead to lots of political fighting and impeded action, and a really lame duck Pres.?
If the Dem's win will BushCo. pull the trigger on the economy and blame it on the Democrats?
Will the chickhawks bomb Iran as a distraction to the home front problems?
There really isn't any action the US is going to take in the near future that is not going to have a significant influence on the global financial markets.
Get ready everyone. _________________ Gravity is not a force, it is a boundary layer.
Everything is coincident.
Love: the state of suspended anticipation.
To get any appreciable distance from the Earth in
a sensible amount of time, you must lie.
Posted: Sun Oct 29, 2006 7:02 pm Post subject: Re: The Last Days of the Dollar?
Thanks! Seems like my little dollar selloff scenario was just the tip of the iceberg. I agree, almost anything could set it off. I'm stocking up on dry beans and rice. It's not so bad with a little tabasco...
Posted: Tue Oct 31, 2006 2:40 am Post subject: Re: The Last Days of the Dollar?
RE Iraq pullout causing the collapse of the dollar
To who's benefit? I assume the dollar must fall against one or more or a basket of currencies. Which countries are going to step-up and fill a security void in the ME that is slipping into sectarian violence and civil war? How will this benefit their own currencies?
As an aside, Germany is pulling back their foreign based troops after some losses here and a scandal there. They have just 10.000 troops scattered around various conflict zones in the world. Mostly performing policing activities. Who will replace these troops?
The EU's much vaulted 60.000 strong rapid response force still has not made it from policy paper to reality, and the EU lacks the hardware without NATO to even get those troops into and out of danger.
I assume any pullback of American troops would trigger a) more sectarian violence and civil war; b) embolden local war lords and terrorists; c) prompt unstable local governments to spend more of their own financial resources on security and the ability to make war on their own people; or d) out source those security needs to someone else. All that costs oil and money. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Thanks Tugboat, I was just getting worried about 2007/2008. Now I have even more reasons to do so. It doesn't look so great the next few years. Maybe we'll muddle through somehow, but there are more and more reasons that we won't.
Those stuck in steerage can hear the music playing up on the deck. They can comfort themselves with the knowledge that the whole ship is going down. Most of the survivors are going to be those who have a place on one of the few lifeboats. I plan on strapping as many deck chairs together as I can to make a raft. While the band plays and distracts everyone else in the middle class we are insulating our house, getting solar panels installed, cutting wood, installing woodstoves and building a solar car. We might even make it. God willing...
Posted: Tue Oct 31, 2006 3:27 pm Post subject: Re: The Last Days of the Dollar?
btw, been noticing some strange behaviour in foreign exchange rates the last week and continuing today.
at around 3pm GMT all major currencies spike up in unison (by different percentages) and then stay there, or dirft down slightly till the end of the day. This spike appears to happen with out any FED drivle (which usually causes these spikes when their press release is announced)
it also appears as the spikes are getting larger. Starting with the Fed's meeting last week (24th) we have
0.2% 0.2% 0.3% 0.5% 0.0% 0.5%
These are just the spikes, it appears that most currencies (except our loonie ) have risen a total of 1.5% - 2% over this time
ultimately it looks like some large player(s) is dumping the USD at the same time every day (market open/close?). However the effect is so large and predicatble that if somebody has started dumping the dollar in such large amounts the race for the exits will begin any minute now
Joined: Jun 15, 2006 Posts: 106 Location: Gothenburg, Sweden
Posted: Tue Oct 31, 2006 3:49 pm Post subject: Re: The Last Days of the Dollar?
As the Mike Whitney points out itīs almost irrelevant that the dollar plummets as long as itīs the reserve currency. If the IOB and RTS variant kicks off itīll be a difference. I seriously doubt anyone but the neocons will entertain the notion of that scenario continuing come a dollar collapse. Supposing this theory holds it will be a dual attack of dumping the dollar and switching to another petro-currency or more likely a basket of them.
Posted: Tue Oct 31, 2006 4:00 pm Post subject: Re: The Last Days of the Dollar?
RdSnt wrote:
threadbear wrote:
Other than the obligatory peak oil trigger, are there anymore potential triggers that you can see unfolding fairly soon?
I will be watching the midterm election with great interest and I'll be holding my breath regarding the results.
It's an interim date that I'm using the prepare my finances.
I can envision some nasty scenarios.
If BushCo. steals the election again, perhaps there will be riots.
Martial law?
How will the global financial market react to a (more of the same) Republican victory? A Democrat victory is the House but not the Senate, which would lead to lots of political fighting and impeded action, and a really lame duck Pres.?
If the Dem's win will BushCo. pull the trigger on the economy and blame it on the Democrats?
Will the chickhawks bomb Iran as a distraction to the home front problems?
There really isn't any action the US is going to take in the near future that is not going to have a significant influence on the global financial markets.
Get ready everyone.
Good to get your opinions, RdSnt. I agree that the US is doomed if they do and doomed if they don't, as far as the Iraq war goes. A pull out=massive loss of confidence in the loser's currency, but if they stay the course, massive deficit spending. Both will cause dollar value die off.
If the dems gain control of congress and senate, Iran will be safe. If they don't, more carnage, more deficit spending, and the most dire manufactured oil supply crunch imaginable. (How cheery!)
Joined: Dec 06, 2005 Posts: 833 Location: Stopped at the border.
Posted: Thu Nov 02, 2006 3:26 am Post subject: Re: The Last Days of the Dollar?
I think the current fall in the dollar is due to the world wide interest rate environment. Foreign central banks are in a tightening mode. The BOE is projected to go up a quarter of a point in a few days, we'll see. Anyway, I think the smart money is saying that the Fed will not raise rates in response because of what is happening in housing.
More than a quarter point and the Fed might be forced to act no matter what is going on in housing. I think they are leaving themselves room for acting in their policy statements. Maybe because of that and maybe because of the unpredictable speed of change in other areas.
Things could get even worse if the Chinese accelerate their timeline for floating the yuan. Imagine if the stuff at Walmart got that much more expensive not because the dollar went down per se, but because the yuan went up. Yeah, imagine that relationship vis a vis the dollar but not the European currencies because those currencies are rising too. In that case the Chinese would be seeing the rapid expansion of one market while another, its biggest slowed. They wouldn't have that much reason to ameliorate the speed of currency value change, nor, if you think about it, a very effective mechanism. And besides, why would they want to when the American consumer is so willing to take on debt in order to soak up any price increase.
Over all the world is bound to be characterized by a higher interest rate environment rolling forward because the Chinese need to both strengthen their banking system and slow down their rate of economic growth. The huge amount of debt that the US has to roll over every day is so much obesity given this situation. The only hope that the US has is to back the petro-dollar concept and to ingratiate US corporate interests to the Chinese infrastructure so that as it grows high interest rate profits are skimmed off and sent back to buy US treasuries. In this way the fortunes of both China and the US become intertwined.
Would a US withdrawal from Iraq upset the petro-dollar concept? It might but the answer to that isn't certain. For sure any military loss, however, comes with a certain consequence.
All ya favorites and more in one place _________________ Let us make him who shall nourish and sustain us. What shall we do to be invoked; to be remembered in the earth.
We have tried with our first creatures but we could not make them venerate us.
So let us try to make obedient respectful beings who shall
China's Central bank president is in Frankfurt and has made it clear that over the next few years China will continue to diversify its dollar reserves into other currencies.
Posted: Fri Nov 10, 2006 10:45 pm Post subject: Re: The Last Days of the Dollar?
MrBill wrote:
gego wrote:
If the US dollar is in trouble, then the British Pound, Austrailian Dollar, South African Rand and Canadian Dollar in even bigger trouble over the next two years. I think that only the Swiss Franc and the Japanese Yen will do better than the dollar during this time frame.
Of course all measured against gold and silver should do poorly.
Just my take on it.
What are the reasons behind your argument? AUD, CAD, ZAR could be commodity plays, if your view is that prices are headed much lower? But why the GBP? I/R differentials still support the GBP over the USD or EUR and the BOE is still tightening? Why the JPY? Their ZIRP policy is still in effect and the BOJ/Min Fin would not like the JPY to appreciate against the dollar and hurt exports, while the JPY is already at record lows against the EUR, so I am not sure why you're bullish on the JPY? I can see the CHF as a safe haven investment, but then interest rates there are also very low, so I am not sure it is a natural play unless you're thinking about global problems, but then it seems to me that those kinds of conditions would support commodities, so again the AUD, CAD, ZAR would be also supported? Just trying to get inside your though process? Thanks.
The British pound won't last much after the dollar. The main problems affecting the dollar also effect the pound...extensive use of credit and personal loans borrowed against inflated house prices. The Pound's value is high because of the high interest rates (2 % higher then euro rates) the UK offers to secure investments to cover their debts.
The British had to increase the interest rate in order to keep the cash coming in.
The currencies that will survive the dollar crash will be those that don't have excessive debt weighing them down.
One thing that could trigger a dollar crash would be for the ECB to increase eurozone interest rates to match those of the UK and US. The dollar and pound can't compete with the euro on equal footing.
Posted: Sun Nov 12, 2006 8:58 pm Post subject: Re: The Last Days of the Dollar?
I just happened to pick up a copy of The Economist and thumbed to the dollar index in the back. The past few years it has said that the dollar was losing around 20% a year. This time I was shocked to see that it has lost over 37%. Something is going wrong. There is no investment apart from precious metals that can keep up with 37%. Basically that told me that anyone who holds on to dollars is losing at least 30% per year, over the past year, and that's assuming you can find an investment that'll give you 7% interest. Much better to turn dollars into solar panels, silver or something. it can't keep going down like this can it?
Posted: Mon Nov 13, 2006 10:59 pm Post subject: Re: The Last Days of the Dollar?
Revi wrote:
I just happened to pick up a copy of The Economist and thumbed to the dollar index in the back. The past few years it has said that the dollar was losing around 20% a year. This time I was shocked to see that it has lost over 37%. Something is going wrong. There is no investment apart from precious metals that can keep up with 37%. Basically that told me that anyone who holds on to dollars is losing at least 30% per year, over the past year, and that's assuming you can find an investment that'll give you 7% interest. Much better to turn dollars into solar panels, silver or something. it can't keep going down like this can it?
Are you sure you are quoting the Economist correctly? The dollar vs which currency? The dollar is down, but I don't think that much...
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) have risen a total of 1.5% - 2% over this time
