[stu]

Before the stampede

Increasingly ominous clouds are gathering in what could soon be the perfect storm against the United States dollar and against the present dollar-centric global financial order.

This is not shaping up to be a storm that anyone is trying to initiate, not even those who are actively driving for a new global financial order that is no longer centered on the dollar. Instead, it will result from a correlation of forces arising out of the deepening global financial and economic crises, coupled with recurring and conspicuous miscalculation on the part of some of the world's political, financial and economic leaders.

The storm has the potential to cause upheaval on a grand scale, opening the door to swift, and largely uncontrolled, fundamental transformation.

The not-so-safe haven

Official and popular analysis of the predicament facing the US dollar has for the most part been distinctly unwilling to come fully to grips with the stark truth about the real nature of this deepening crisis and the escalating risks that are surfacing. Far too much optimism and wishful thinking, and scarce courageous realism, is a recipe for an even worse disaster than the one we're suffering at present.

China inoculates itself against dollar collapse

There is mounting evidence that China's central bank is undertaking the process of divesting itself of longer-dated US Treasuries in favor of shorter-dated ones.

There is also mounting evidence that China's increasingly energetic new campaign of capitalizing on the global crisis by making resource buys across the globe may be (1) helping its central bank to decrease exposure to the dollar, while (2) simultaneously positioning China to make much greater profit on its investment
of its reserves into hard assets whose prices are now greatly beaten down, while (3) also affording it greatly increased control of strategic resources and the geopolitical clout that goes with it. This is turning out to be a win-win-win situation for China as it capitalizes upon the important opportunities afforded it by the present global crisis.

[mefistofeles]

I don't know if the dollar will collapse,I've always thought so , but recently I've started to change my mind on this subject. From what little I've read the European banking system is in worse shape because of large loans to Eastern Europe and the developing world. Austria banks lent the equivalent of something like 70% of GDP to Eastern European nations.

Eastern Europe needs to roll over $400 billion dollars,1/3 of GDP, this year. The bad loans in Europe are on the order of 10 trillion dollars.

The good part about Eastern Europe and the developing world is that if they do restart economic growth I think its going to strong.

I think the dollar storm will come when the Europeans figure a way to clean up their bad loans,or if the US figures out a way to reinflate its economy,creating another bubble and asset crash.

[bencole]

I think the dollar storm will come when the Europeans figure a way to clean up their bad loans,or if the US figures out a way to reinflate its economy,creating another bubble and asset crash.

I think the US imay be eyeing a potential infrastructure bubble as a means to reinflate, which carries quite a risk if it pops I've been told

[stu]

I'm no economics expert but apparently a dollar collapse is just a matter of time. It may be next year or it may be 5 years. The massive debt that the US has built up since the crisis began on top of previous debt and with more debt to come must surely sink the dollar.

Either that or I've been reading too many dollar collapse articles since I joined this forum.

Is there are a scenario whereby the dollar stays as the worlds currency in a world that becomes ever more multipolar or will it just gradually weaken to become part of a future basket of global reserve currencies with the yuan and the euro?

[mefistofeles]

I think you need to move that timetable up to a matter of months now:

http://www.bloomberg.com/apps/news?pid=20601083&sid=aB32nn3eSCts&refer=currency

The Fed is running the printing presses at full blast.

[patience]

Looks to me like it is time to make those moves to hedge against inflation, if you have not already. The govt is going to screw everybody with the "inflation tax" to bail out their banker buddies, and to try to hold on to the reins just a little longer.

If you plan to buy goods to hedge inflation, start soon, because it takes some time to do it right. You want USEFUL stuff, not just anything. Think it out. What can you pay ahead? What do you regularly buy that you can buy and store, so you don't have to pay more later?

I've been expecting this for some time, and working on our own hedges, but time is running out. The FED said today it plans to buy long term Treasuries and more bad debts. See the related thread here in Economics.

[vision-master]

Looks to me like it is time to make those moves to hedge against inflation, if you have not already. The govt is going to screw everybody with the "inflation tax" to bail out their banker buddies, and to try to hold on to the reins just a little longer.

If you plan to buy goods to hedge inflation, start soon, because it takes some time to do it right. You want USEFUL stuff, not just anything. Think it out. What can you pay ahead? What do you regularly buy that you can buy and store, so you don't have to pay more later?

I've been expecting this for some time, and working on our own hedges, but time is running out. The FED said today it plans to buy long term Treasuries and more bad debts. See the related thread here in Economics.

Ammo has already been nicked.

[alokin]

I have got a piece of paper laying around were I note everything I could buy in advance.
Often these are little things like shoelaces or hair clips, things we use in daily live.
The list is sorted by the shops were I get the stuff.
All these things give you time to learn different ways.
I.e if you buy some bottles of shampoo, the time you have to learn about different ways will be later.
Don't forget basic medical things: band aids, eucalyptus oil,
a comb for head lice and some bottles of hair conditioner for the same purpose.
I am not an economist, but this message scared the hell out of me.
I will go back to my list and do a shopping tour tomorrow.

[starsky]

Those of you who believe this will be deflationary are saying one, or both of the following two things:

- The bailouts and stimulus packages never happened, it's all a media hoax. The Fed and US gov't aren't really borrowing money from the Chinese, Saudis etc., nobody is buying T-bills (US debt). The Fed isn't digitizing money out of thin air. It's just not happening.
- The Fed has discovered what greedy people have been looking for throughout time, the Infinite Wealth Creation Machine™, because they can print endless trillions and the US dollar just keeps going up-up-up in value. Because of this revolutionary discovery, the Fed will eventually buy up the world, and become the new world empire. All hail Bernake!

Shiver me timbers, I'll have me some of that Kool-Aid!

Good luck.

[outcast]

The big winner out of this crisis without a doubt will be China.

[ReverseEngineer]

The big winner out of this crisis without a doubt will be China.

Yup. With 1.3 BILLION people and insufficient arable land to feed them, they are for sure here going to be a BIG winner. Drink some more Kool Aid.

Reverse Engineer

[outcast]

I think someone has been drinking the doomer-aid a bit too much.