Oil's energy contribution has declined by about 12% since 1999. The world's economies have also declined by about 12%. (Using conventional metrics, which are time delayed determinations, this will only be seen in hind sight). The massive destruction of asset values now occurring testifies to it happening.
Peak is well behind us, world economies have peaked and will continue to decline.
Posted: Fri Sep 19, 2008 3:35 pm Post subject: Death of the Dollar
There used to be some long debates about how long the dollar could remain the world's reserve currency. They were interesting, often heated debates, but informative nonetheless.
I believe I speak for most people to say that after years of debating PO and a whole host of other issues, that the events of the last 7 days have done more to damage the world's belief in the "full faith and credit" of the United States than all the other issues we ever debated that could lead to a devaluation of the dollar.
As one US trader said on t.v. last night, he was not investing at all anymore. When there are no rules, when new rules are promulgated in the dark of the night without any notice or comment, only to be announced the next morning, its a fools game. If this trader who is a regular on prime time US MSNBC has lost all faith, I can only imagine every trader in the world feels the same.
Ultimately, people have invested in the US because they believed in the stability of its economy and the stability of the rules of the game, capitalism, with due process. If anything leads to a death spiral of the dollar, it will be more like this week which rock the very foundations of why people have believed in the US is a safe place to take risks.
Posted: Fri Sep 19, 2008 3:39 pm Post subject: Re: Death of the Dollar
+1
It's not a market anymore. It's a circus. _________________ "We were standing on the edges
Of a thousand burning bridges
Sifting through the ashes every day
What we thought would never end
Now is nothing more than a memory
The way things were before
I lost my way" - OCMS
Posted: Fri Sep 19, 2008 3:43 pm Post subject: Re: Death of the Dollar
+2
[For the record, I pulled all of my long term investments today. What's the point of having long term investments if the U.S.S.A government makes clear that the investments are subject to nationalization at a moment's notice?] _________________ Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.
Last edited by Cashmere on Fri Sep 19, 2008 3:53 pm; edited 1 time in total
Joined: May 27, 2007 Posts: 1776 Location: The Post Peak Oil Historian
Posted: Fri Sep 19, 2008 3:53 pm Post subject: Re: Death of the Dollar
Asia Rethinks American Investments Amid Market Upheaval
Tremors from Wall Street are rattling Asian confidence, leading many investors to question the wisdom of being invested in the United States to the tune of trillions of dollars.
Asian investors were starting to show hesitation even before the financial earthquake of the last week. Now, a wariness toward the United States is setting in that is unprecedented in recent memory, reaching from central banks to industrial corporations, from hedge funds to the individuals who lined up here to withdraw money from the American International Group on Wednesday.
Asia’s savings have, in essence, bankrolled American spending for decades, and an Asian loss of confidence in American financial institutions and assets would have dire consequences for both the United States government and American taxpayers.
Little-noticed data released by the Treasury Department on Tuesday showed that a sharp shift in international capital movements began in July. Private investors pulled a net $92.9 billion out of the United States, after putting $46.8 billion into American securities in June.
Central banks, mainly Asian, did continue buying American securities in July. But they did so at a slower pace than usual. They made net purchases of $18.2 billion, compared with an average monthly purchase of $22.3 billion in the first half of this year, according to the latest Treasury data.
The central banks also changed the allocation of their purchases. They bought short-term Treasury bills while slowing their purchases of longer term Treasury bonds and American corporate bonds. And they abruptly switched from being large buyers of bonds from government-sponsored enterprises, like Fannie Mae and Freddie Mac, to becoming net sellers — one of many factors that contributed to the Bush administration’s decision to put Fannie Mae and Freddie Mac into conservatorship.
link _________________ In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell
It riles them to believe that you perceive the webs they weave. - Moody Blues
Posted: Fri Sep 19, 2008 3:56 pm Post subject: Re: Death of the Dollar
Cid_Yama wrote:
Asia Rethinks American Investments Amid Market Upheaval
Tremors from Wall Street are rattling Asian confidence, leading many investors to question the wisdom of being invested in the United States to the tune of trillions of dollars.
Asian investors were starting to show hesitation even before the financial earthquake of the last week. Now, a wariness toward the United States is setting in that is unprecedented in recent memory, reaching from central banks to industrial corporations, from hedge funds to the individuals who lined up here to withdraw money from the American International Group on Wednesday.
Asia’s savings have, in essence, bankrolled American spending for decades, and an Asian loss of confidence in American financial institutions and assets would have dire consequences for both the United States government and American taxpayers.
Little-noticed data released by the Treasury Department on Tuesday showed that a sharp shift in international capital movements began in July. Private investors pulled a net $92.9 billion out of the United States, after putting $46.8 billion into American securities in June.
Central banks, mainly Asian, did continue buying American securities in July. But they did so at a slower pace than usual.
The asians are even dumber than the Americans.
After all, it's understandable that the stinky man doesn't know he stinks, but it's incomprehensible that the man adjacent the stinky man can't place the source of the overwhelming stench. _________________ Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.
Posted: Fri Sep 19, 2008 3:58 pm Post subject: Re: Death of the Dollar
seahorse2 wrote:
There used to be some long debates about how long the dollar could remain the world's reserve currency. They were interesting, often heated debates, but informative nonetheless.
I believe I speak for most people to say that after years of debating PO and a whole host of other issues, that the events of the last 7 days have done more to damage the world's belief in the "full faith and credit" of the United States than all the other issues we ever debated that could lead to a devaluation of the dollar.
As one US trader said on t.v. last night, he was not investing at all anymore. When there are no rules, when new rules are promulgated in the dark of the night without any notice or comment, only to be announced the next morning, its a fools game. If this trader who is a regular on prime time US MSNBC has lost all faith, I can only imagine every trader in the world feels the same.
Ultimately, people have invested in the US because they believed in the stability of its economy and the stability of the rules of the game, capitalism, with due process. If anything leads to a death spiral of the dollar, it will be more like this week which rock the very foundations of why people have believed in the US is a safe place to take risks.
Sounds like some of what I heard on Glen Beck last night. Not that I'm 100% in agreement with any talking head, but there were some points made.
This isn't a link from last night, but I still think Ron Paul has some reasonable things to say.
Joined: Oct 15, 2004 Posts: 2258 Location: Arkansas
Posted: Fri Sep 19, 2008 4:07 pm Post subject: Re: Death of the Dollar
Anyone who keeps investing in any kind of retirement account thinking the US gov't won't change the rules of the game by the time you want to retire is making a foolish bet. Our grandparents lots a lot of money and faith during the great depression. I suspect we are getting ready to relearn the same lessons.
Posted: Fri Sep 19, 2008 4:15 pm Post subject: Re: Death of the Dollar
The news is a lot like Lehman announcing a reorganization or AIG borrowing money from itself minutes before the implosion. The feds R pressing their suits, polishing their sunglasses, & recharging their earplugs outside....pennsylvania Ave. _________________ People first, then things, then dollars.
There will be enslavement, cannibalism, & zombie invasions.
Joined: Aug 06, 2008 Posts: 80 Location: 3rd Rock from the Sun
Posted: Fri Sep 19, 2008 6:08 pm Post subject: Re: Death of the Dollar
seahorse2 wrote:
There used to be some long debates about how long the dollar could remain the world's reserve currency. They were interesting, often heated debates, but informative nonetheless.
I believe I speak for most people to say that after years of debating PO and a whole host of other issues, that the events of the last 7 days have done more to damage the world's belief in the "full faith and credit" of the United States than all the other issues we ever debated that could lead to a devaluation of the dollar.
As one US trader said on t.v. last night, he was not investing at all anymore. When there are no rules, when new rules are promulgated in the dark of the night without any notice or comment, only to be announced the next morning, its a fools game. If this trader who is a regular on prime time US MSNBC has lost all faith, I can only imagine every trader in the world feels the same.
Ultimately, people have invested in the US because they believed in the stability of its economy and the stability of the rules of the game, capitalism, with due process. If anything leads to a death spiral of the dollar, it will be more like this week which rock the very foundations of why people have believed in the US is a safe place to take risks.
I agree but why did da market go up today? So people DID fall for it, and isn't PERSPECTION everything???
Joined: Mar 12, 2007 Posts: 1009 Location: As close as I can get to the beginning of the pipe.
Posted: Fri Sep 19, 2008 6:16 pm Post subject: Re: Death of the Dollar
Schiff says don't get caught in the stampede. It will be a sight to behold as quite a few people try to squeeze through a narrow doorway getting out of the dollar, and into physical assets.
Quote:
"While it is dizzying to predict how this plan will be implemented, it is fairly simple to foresee the macroeconomic consequences. The U.S. dollar will be shattered beyond repair. The government simply has no means to make good on the trillions of new liabilities. Interestingly, while both Paulson and President Bush acknowledge that the plan will put "significant amounts of taxpayer dollars on the line," they did not mention any tax increases. Given the politics, no such move is forthcoming. The printing press is their only solution.
The government has also decided to insure all money market funds, adding trillions more in unfunded liabilities to the Federal balance sheet in the blink of an eye. Of course, since bad real estate loans are not the only toxic assets on the balance sheets of financial institution, we will also need to absorb other classes of asset-backed securities, such as those backed by credit card debt and auto loans. So while the move ensures that depositors will not lose money, is does insure that the money itself will lose value. Is the trade-off really worth it? Washington thinks so.
Further, since I assume the plan will apply to all mortgage debt, U.S. taxpayers will also be on the hook to bail out foreign institutions that loaded up on the financial sludge. However, once the government takes them off the hook, do not expect them to re-invest the windfall back into other U.S. dollar denominated assets. This get-out-of-jail free card will likely scare them straight. The global mass exodus from the U.S. dollar and Treasury debt is about to begin: do not get caught in the stampede."
Joined: Sep 16, 2004 Posts: 4936 Location: Southwest WI
Posted: Fri Sep 19, 2008 6:23 pm Post subject: Re: Death of the Dollar
Its like me going to one of the local Indian casinos. The odds are against me no matter what game i play... I'm not touching a stock with a 10 foot pole. I'll just keep buying "stuff" and keep a modest amount of cash and that is it. The rich can have it...and herpes. _________________ Clothing should be optional.
Joined: Sep 09, 2008 Posts: 153 Location: Hobbiton, but it's looking more like Mordor by the day...oh! hey Sauron, I didn't see you behind me!
Posted: Fri Sep 19, 2008 6:35 pm Post subject: Re: Death of the Dollar
messageinabottle wrote:
I agree but why did da market go up today? So people DID fall for it, and isn't PERSPECTION everything???
I agree that PERcepTION has a lot to do with it, moreover it is the sad state of affairs that most people cling to a very strong belief system founded in the misconception that the US of A is the most powerful economic force on our little rock, this false and even asinine perception has clouded the issue of a decaying market of deceit and the effects are unfolding before us even as the last few days have furthered the above referenced belief that "it will all be okay!" I have heard that so many times this afternoon I want to vomit...
News Flash! This is not what okay looks, feels, or tastes like...
This is where delusion takes hold, close your eyes...what do you see...exactly...(shaking of head from side to side implied)
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Fri Sep 19, 2008 6:50 pm Post subject: Re: Death of the Dollar
The value of the dollar, more specifically the value of the dollar as a reserve currency, is the weak link in the exponential expansion of the world money base this week.
All actions this week by the PTB were taken to avoid a systemic US financial crash. However there is one thing they won't be able to prevent - a crash in the US dollar. Therefore the PTB may have differed a financial crash but brought forward a dollar crash.
Keep in mind that even foreign central banks this week mostly increased the supply of dollars (through swap agreements), and not their own currencies. With so many extra dollars suddenly floating around the world, and maybe not wanting to stay in the US - especially after a contrived stock market rally - the dollar could suddenly come under intense selling pressure by money looking to be invested elsewhere.
The main defense against a currency crash is sharply raising interest rates. Will the US eventually choose to raise interest rates while liquidating trillions $ in assets from F & F - and the new RTC like federal entity - or just let the dollar fall in value?
All of our financial system rescues have been used up; they won't be able to stop the coming dollar meltdown once it starts. _________________ It's already over, now it's just a matter of adjusting.
Posted: Fri Sep 19, 2008 6:59 pm Post subject: Re: Death of the Dollar
bkwillia wrote:
Nothing has changed. The feds just bought some more time. There is money to be made from a falling dollar, if you like making money...
I do, and I hope you're right. Got UDN? _________________ "We were standing on the edges
Of a thousand burning bridges
Sifting through the ashes every day
What we thought would never end
Now is nothing more than a memory
The way things were before
I lost my way" - OCMS
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