Thread: US dollar decline, or collapse?

^ ok, I will be nice and give it a try see my questions below

Originally Posted by Panda

Inflation can occur when economies overheat in boom times when everyone has money and competition for things increases.

Competition of what ? competition doesn't make price increase, it's marginal cost when there is an increase in demand. Competition is a concept for an Industry Market environment (supply), not demand. So please enlighten me on what you meant exactly. I have an idea of what you meant to say but it sounds so ridiculous, it's an embarrassment to post it.

Originally Posted by Panda

Governments increase the interest rates then to slow down the demand for money and thus the economy.

Government do not increase interest rates, they don't have that power. It's the role of the Federal Reserve or a Central Bank.

Originally Posted by Panda

Inflation can also occur when commodities become scarce, which again drives up competition and thus the price of things. EG: Zimbabwe.

oh boy, tell me what was in your mind when you wrote that

Originally Posted by Panda

The common denominator there between the two is an imbalance between the supply of goods and money. Either too much money or too few goods will cause inflation. Both together is a disaster.

now, where should I start ? Supply of Goods as Potential GDP ? and supply of money as "Investment Savings" or Money Supply from the Federal Reserve ? please enlighten me, this should be very interesting

Originally Posted by Panda

Right now the world (and USA) has plenty of goods but not enough money, hence the drop in prices and the lowering of interest rates to get things going.

and how did you come to that conclusion ? again Money Supply or Money Demand ? what do you mean by money ?

ok let's see what you can come up with on that round, and I will add more questions for the rest

ok Round 2

Originally Posted by Panda

But the clincher here for USA is that their economy has been based on debt rather than productivity and by creating all this new money to improve domestic productivity, it will increase foreign debt even more.

big words here

creating money doesn't increase productivity, and the creation of money is not linked to foreigner debt. Foreigner debt can be a direct consequence of Import - Export and an increase in Capital Inflow, 2 different events.

Originally Posted by Panda

Somewhere down the line the credit has got to run out. The tradable value of the $US will plummet and imports will go up markedly in price for Americans. Without a domestic source of cheap goods combined with a flood of paper money on the market, inflation is assured as too much money chases too few goods.

ok you got it half right, but how is the USD going to plumet ? and why would it ? Cheap goods is not a determinant of inflation, and too much money would mean too much demand for goods which would put inflation pressure on national Output, but not if we were in a recessionary gap, inflation would be extremely stable. But again, what are you trying to say above since only half of it make sense and the rest is pure speculative garbage. For now, your causes and effects just don't add up.

I cant make any sense of that stuff you are spouting above. If anyone else can, I hope they add it into the debate here in a more rational manner as all views are welcome so long as they are put in a coherent manner.

Do you suffer from Bipolar syndrome?

Originally Posted by Panda

I cant make any sense of that stuff you are spouting above.

I am not surprised you don't you have no fucking clue of what you are talking about. Did you even attend Econ 101 ever ? I have a feeling no

Originally Posted by Panda

Do you suffer from Bipolar syndrome?

yeah, and how is that adding substance to the topic ?

True or not?

^ are you bi-polar ? I have no fucking idea

but again why don't you answer my questions above, some are very simple

In the year to date, only 57% of US Federal Government expenditure has come from income, such as tax receipts. The remaining 43% has been printed or borrowed. This is despite the fact that this includes the part of the year that includes the greatest tax income - namely when Americans settle their annual tax bills. The annual figure, without any immediate policy changes, will doubtless surpass 50% of expenditure being simply printed.

Anyone with any kind of financial or economic knowledge at all would know that this can only result in dollar collapse and severe inflation. Alas, this latter prerequisite naturally excludes Butterfly, who believes that such policies are quite normal.

Originally Posted by TSR2

Gold is on it,s way up again $955 oz

Now $975oz

Sounds great but the dollar has declined esp against the Pound

result

If I sell my Gold stock I will lose money (GBP 1.62/$)

Not very clever eh!

It will need to pass $1000 oz and beyond to make any sense but then the Dollars steady decline will erode any benefit

^ Dont count on a "steady" decline in the $US. Its had a couple of pretty wild swings in the last year. It was up, then it went well down, then it went well up again and now it is going down again. My guess is that we will see a few more false starts like this before it finally slips over the edge and drops like a rock.

^Correct. Each plunge will be met with howls of anguish from VIs of all types from every corner of the world. Rearguard action will be taken every step of the way and those same VIs will fight tooth and nail to retain the status quo, even as it slips from their grasp.

The death spiral will be ugly, bitter and bloody, as all tools at the desposal of the VIs will be used to prevent gravity taking effect.

Stage 9 is upon us:

https://teakdoor.com/us-domestic-issu...ml#post1070050

well if interest rates are going through the roof like "some" are saying here, USD will go right up, not down

and high interest rates will basically kill businesses and put us in a bigger recession, hence killing inflation in the process

so much for any reasonably justified arguments from our 2 experts above, Panda and Bkka

Originally Posted by Panda

^ Dont count on a "steady" decline in the $US. Its had a couple of pretty wild swings in the last year. It was up, then it went well down, then it went well up again and now it is going down again. My guess is that we will see a few more false starts like this before it finally slips over the edge and drops like a rock.

Ignorant question.

What will this mean for people living inside of the US working for US dollars?

TIA.

Originally Posted by Milkman

Originally Posted by Panda

^ Dont count on a "steady" decline in the $US. Its had a couple of pretty wild swings in the last year. It was up, then it went well down, then it went well up again and now it is going down again. My guess is that we will see a few more false starts like this before it finally slips over the edge and drops like a rock.

Ignorant question.

What will this mean for people living inside of the US working for US dollars?

TIA.

Imports will get really expensive. Exports from the US (farm, timber. . .um, whatever else the US exports) will get really cheap.

Originally Posted by robuzo

Imports will get really expensive. Exports from the US will get really cheap.

which eventually will bring back the balance to the USD currency rate, as exporters would get paid in USD, and less imports would mean less USD "currency supply" looking for other currency

it's really a game of balance, each negative event is being counter-balanced with a positive one,

that's why the fools making all those predictions that everything will go ALL negative or ALL positive have no fucking clues.

Originally Posted by Milkman

Originally Posted by Panda

^ Dont count on a "steady" decline in the $US. Its had a couple of pretty wild swings in the last year. It was up, then it went well down, then it went well up again and now it is going down again. My guess is that we will see a few more false starts like this before it finally slips over the edge and drops like a rock.

Ignorant question.

What will this mean for people living inside of the US working for US dollars?

TIA.

Its going to mean reduced spending power as prices for all imports (including oil) go up. Overall standards of living will decline in order for the country to get back to living within its means. Prices go up and spending power goes down. Same result as if there was a reduction in wages. Sometimes known as inflation.

Thats exactly what the world economy needs and exactly what the US government is trying to engineer through their spend, borrow, print policy. But of course Obama cant tell the American public everyone is going to need to be a bit (? a lot) poorer to get out of this mess.
Americans want a quick and painless fix, and thats certainly not going to happen.

But on the UPSIDE, as I have stated many times before, it will mean a reduction in unemployment as manufacturing jobs that have been shipped overseas come back home when they eventually get the industrial infrastructure up and running again.
Everything from tourism to the auto industry will eventually benefit from a reduction in the trading value of the $US. And of course inflating away the US international debt at the expense of the lenders.

As far as the Phoenix rising again out of the ashes to once again take over the world economy through a process of debt based financial hegemony, -- well that simply wont happen. The world got suckered into the $US hegemony once back in 1971 and they wont fall for it again. USA and UK are on the wane. China and India are on the rise. World economic power is a dynamic thing. Not to say that the USA wont be a leading world economic power for a very long time to come, but their place in the greater scheme of things will have slipped.

The people of USA will have to accept a reduced standard of living compared to the debt based glory days of the past few decades. Basically, they are going to have to work harder for less to get back living within their means.

And for a country with such a relatitively wide gap in the division of wealth between rich and poor, and a country with such relatitively poor social services, that could lead to some civil unrest while things are sorting themselves out.

Got an interesting punt on the Dollar re Bonds and their viability

Trouble being that any US citizen is betting on the collapse of their currency

I ain,t an American

Originally Posted by robuzo

America could stop being such materialistic, consumerist spendthrift debtor nation for a couple of years.

they need to stop their silly consumption of oil by "crowding out" the rest of the world

Originally Posted by robuzo

If reduced US demand because of the recession does not have the effect of keeping oil prices down, get ready for a big,

definitely, it will keep shifting the demand curve to the left, increasing price in the short run, forcing businesses to shutdown as their margin becomes negative, and so on, basically pricing us out of the economy, all thanks to greed, stupidity and speculation. But eventually, with no demand, price will collapse, even in real terms. Someone will need to pay some bills, and when nobody is buying oil, how are they going to run all those expensive extraction facilities ?

we are in a 1970s style scenario, but worst

China buying mines in Australia and buying raw material (mainly metal) for future production.
Of course paying with USD which the seller has to get rid of quickly if he doesn't want to remain with Black Peter in the end.
I don't think any country wants to have a surplus of USD right now so they have to pass on the hot potato.
The irony would of course be if most of their USD surplus ended up i Saudi Arabia

I reckon the Chinese are concerned about the Dollars they own

Yer man from the fed is over there trying to placate China,s jitters

I repeat I am going to short the dollar for the nexy 12 months

Originally Posted by lom

for future production.

yeah, that's the irony actually. Future production when world demand is collapsing ? the Chinese are securing materials they don't need now and overpaying. Eventually, that will make them less competitive with rising costs, not a good thing when Demand is already low.

Originally Posted by TSR2

I repeat I am going to short the dollar for the nexy 12 months

Starting now? Shorting the U$D here? Not a very good entry point, early March was the time. Your chasing the trade from here.

When I started reading this thread I was quite confused about the world financial situation. Now I am totally lost.