[AlexdeLarge]

A short fictional account of what a currency collapse might look like.........

The Day the Dollar Died
http://johngaltfla.com/blog3/2009/11/18/the-day-the-dollar-died/

Mike was less than an hour from home in Minnesota after dropping his load off in Fargo but knew he needed to top his tank off this Sunday evening to insure his rig would make it home. He pulled into the Petro Truck Stop just outside of Fargo and hopped out of the cab into the bitter twenty below temperatures which he could not believe had already hit at ten o’clock at night. He slid his fuel card into the pump waiting for the next prompt when the “SEE ATTENDANT” message flashed in the screen. He blustered, figured it was another card problem and whipped out his Master Card and slid it in after the pump reset and again the “SEE ATTENDANT” message flashed up. “What the hell is going on?” he thought to himself as he wandered into the long line of drivers boisterously yelling at managers and clerks alike.

Tom finished up his shift on the docks ..........more

[mattduke]

Dang, he didn't share what happened to 30 year fixed rate. My guess: N.A.

[Don35]

Been preparing for that for several years!

[patience]

AlexdeLarge,
Rivetting! I also read the 2nd part, linked on the first page, upper right side. Too realistic to feel like fiction. Thanks for posting this.

I'm thinking the internet won't last long, at least there will be some holes in it pretty fast. It has been a matter of concern to me that I complete all the online buying I need to do while that still works. Otherwise, I'm in pretty fair shape, as far as I am able to do.

[IslandCrow]

Oh, it wasn't a review for a book by that name that I read about 30-35 years ago!

The dollar has been collapsing for a long long time

[Prince]

Interesting little anecdote, but I don't see it happening like that. The dollar and US economy will die, just has it has been for years--death by a thousand cuts.

As for the dollar's death, some would argue that happened on December 23, 1913 with the Federal Reserve Act. Since then the dollar's purchasing power has dropped some 95%. That's death.

[eXpat]

Very nice doomer porn and not unlikely, although of course reality will find new ways to surprise us.

[Geodesic]

Right wing paranoia at its finest. After a difficult period of readjustment America will reinvent itself as it always has. This is NOT Zimbabwe. After the corporate and military wh@res who sold this country to the highest bidder are hung we can move on.

[gollum]

The problems with the monetary system, among others are due to mismanagement by both major parties so please spare us the partisan rhetoric. There is a book about Weimar Germany called "The Death of Money", quite an interesting read. History doesn't repeat, but it rhymes.

[Don35]

The problems with the monetary system, among others are due to mismanagement by both major parties so please spare us the partisan rhetoric. There is a book about Weimar Germany called "The Death of Money", quite an interesting read. History doesn't repeat, but it rhymes.

Yeah, Bush 2 was in office and all the lefties cried collapse, deficit, big brother (aka the patriot act), blah blah. Now it's Obama and all the righties cry collapse, deficit, socialism (aka big brother), blah blah. Bush, Obama, left, right, liberal, conservative makes no difference. we are screwed regardless. Jesus could be in office and everyone would attack him. It is still too many people and not enough resources. Reality doesn't care about your politics, religion, ethnicity, etc. It just does what it does! Prepare!!!

[lowem]

Great story. By the way, USDX is currently at 75.115 which is not too far from the "event horizon" of 70 to 72 and below where everything goes poof. Something along the lines of what happens when you keep looking for a floor and instead find a black hole.

[IslandCrow]

What Does U.S. Dollar Index - USDX Mean?
A measure of the value of the U.S. dollar relative to majority of its most significant trading partners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies.

Investopedia explains U.S. Dollar Index - USDX
Currently, this index is calculated by factoring in the exchange rates of six major world currencies: the euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc. This index started in 1973 with a base of 100 and is relative to this base. This means that a value of 120 would suggest that the U.S. dollar experienced a 20% increase in value over the time period.

http://www.investopedia.com/terms/u/usdx.asp

Although one definition says the USDX is related to its most significant trading partners, this does not seem to include China. Because China has not allowed its currency to freely float, it has remained weak like the dollar..... given the high volume of goods from China to USA this would mean that if China was included in the basket of currencies the USDX would not be as low as it is now. Is this a major or a minor flaw in following the USDX?

[lowem]

Although one definition says the USDX is related to its most significant trading partners, this does not seem to include China. Because China has not allowed its currency to freely float, it has remained weak like the dollar..... given the high volume of goods from China to USA this would mean that if China was included in the basket of currencies the USDX would not be as low as it is now. Is this a major or a minor flaw in following the USDX?

The conventional USDX is constructed from the major traded currencies, one possible basis might be that these currencies are the ones that are traded the most in the forex markets.

Perhaps what you are looking for, instead, is the Trade Weighted US Dollar Index :

In the standard US Dollar Index, a significant weight is given to the euro. In order to more accurately reflect the strength of the dollar relative to other world currencies, the Federal Reserve created the Trade Weighted US Dollar Index, which includes a bigger collection of currencies than the US Dollar Index.

China is included in this one.

[eXpat]

By the way
Part 2:
http://johngaltfla.com/blog3/2009/11/19/american-hangover-the-day-the-dollar-died-part-ii/

and Part 3:
http://johngaltfla.com/blog3/2009/11/21/i-have-been-to-the-fields-of-gettysburg-the-day-the-dollar-died-part-iii/

[IslandCrow]

Iowem - Thanks.

This does not look so bad (index still over 100):

Source: http://research.stlouisfed.org/fred2/series/TWEXB

My guess is that this is a more important index if one wanted to follow 'the collapse of the dollar'. It shows a recent downward trend, but not to the lows of early 2008, and still a long way from the low of 1995. If this is a better index than USDX (and my initial thoughts are it is) then it may be that the collapse will not come so soon.

[heroineworshipper]

If no credit cards worked, Walmart wouldn't be selling anything & the price of everything would be 0. More likely the credit cards will get government loans once the banks switch to gold.

[patience]

I'm following the story avidly. Been wishing for something of the sort to help me think out what the future could look like.

Gerald Celente is saying to look for something of this sort the end of this year, or first quarter next year.
http://www.shtfplan.com/forecasting/ger ... 0_11232009

Not that much time, if he's right. And, he's been right too much to ignore totally.

[Tyler_JC]

The "trade weighted dollar" is a difficult thing to calculate because the "weighting" keeps changing. The composition of America's trade is a moving target.



The Canadian Dollar/US Dollar relationship appears to be mostly an oil story.

Another thing to consider:

If the US Dollar and the Chinese Yuan are pegged together, they move together (right?).

So when the Dollar loses value against the Euro, the Yuan loses value against the Euro.

China is actually becoming MORE competitive with Europe as the dollar declines. This is causing an explosion in the EU-Chinese trade deficit (160 billion Euro deficit in 2008).