Some scary stuff about the dollar

[Borodog]

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please explain how a dollar "collapse" is different that the dollar just continuing to slide down as it has for the last several years?

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Currently there are trillions of USD being held outside of the US. As the USD slips, those holdings lose value. So all those holding them have a depreciating asset. At some point, the rats are going to desert that ship. This will precipitate the sell-off of USD, and their international value will literally plummet (imho of course).

Once the international value tanks, people are going to be stuck with all these devalued dollars. They will try to recoup their losses. How will they do that? They will buy up anything and everything they can get their hands on that they can buy with USD. But the only place that will be will be the United States. Exports will skyrocket. Foreign investors will buy up American real estate and companies, you name it. The trade deficit will become a trade surplus (which is not a good thing, no matter what Lou [censored] Dobbs thinks). All of those dollars flowing back into our economy will creat massive double digit inflation.

Meanwhile, our inflation-bubbled economy is certainly going to pop at the same time, meaning we will get a massive recession. We'll have massive inflation and a recession, just like the 1970s.

The value of gold will skyrocket as people look to get out of USD that are losing value daily. This happened at the end of the 70s as well. Gold hit $800 per ounce in late '79. In today's inflated dollars that's like $2400. Currently it's at like $735 and climbing _fast_.

Central banks prevented gold form spontaneously remonetizing in 1980 by instituting massive gold dumping to crash the market value of gold and convince people that their inflation hedge bet had failed. It worked. Central banks have been gold dumping off and on for 30 years to control the price of gold.

But my gut feeling is that there is not enough gold left in the central banks of the entire world to prevent it again. So the dollar will crash, we will get a massive recession + massive inflation and a flight to gold. The price of gold will double or triple or quadruple. Central banks will dump gold, but it will fail. If they do try this, and the price of gold crashes, you should buy as much as you can, because when they do this they will be putting real money back into circulation and you want to have as much of it as you can get. Gold will spontaneously remonetize, and the world fiat currency order will collapse.

That's my theory.

[Victor]

so boro, you contributed to the brainwashing of my friend?

[Borodog]

We were probably brainwashed by similar people.

[WhoIam]

As an American living abroad, what can I do to limit my losses as the dollar plunges? Right now all of my accounts (poker, savings, ewallets) are in dollars.

I just started typing out a detailed description of my situation and realized it wasn't relevant. Saving or investing in, say, euros is probably not an option because I would need to convert between that currency and dollars and the associated fees would probably eat up anything I save.

[haakee]

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We should change the president's on the face and call them something new just to shake things up.

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Brilliant! Sacajawea was played out anyway.

[Jcrew]

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so i have a question...

if i am in a massive amount of debt (at a fixed interest rate), and the dollar suddenly gets totally devalued, this is a relatively good thing for me, right? i mean people who have a net worth >0 get fux0r3d, but my real debt actually shrinks!

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Only helps if there is wage inflation. Possible scenario is that wages stagnant,cost of living inflates and most people's standard of living goes down.

[Gildwulf]

more scary dollar stuff...oil-rich countries are switching to other currencies:

Venezuela (Citgo) dumps the USD
http://www.bloomberg.com/apps/news?p...d=aZ62iRNzmRo0
Sept. 16 (Bloomberg) -- Venezuelan President Hugo Chavez instructed Petroleos de Venezuela SA, the state oil company, to convert its investment accounts from dollars to euros and Asian currencies to reduce risk. Chavez, speaking in his weekly address on national television, said the U.S. has bought goods from around the world, paying with paper that is ``a bubble.'' ...


Iran moves to ditch U.S. dollar
http://www.upi.com/International_Securit...us_dollar/6990/
WASHINGTON, Sept. 10 (UPI) -- Faced with U.S. economic sanctions and a weak dollar, Tehran is demanding foreign energy companies do business in yen and euros, despite increasingly desperate need for investment.

In a deal announced last week, Japan’s Nippon Oil agreed to buy oil from Iran using yen instead of the traditional U.S. dollars. The agreement comes after years of Iranian efforts to shift its petroleum exports away from dollars and toward yen and euros..

[Kneel B4 Zod]

most importantly, this sucks for my upcoming Europe vacation [img]/images/graemlins/frown.gif[/img]

I remember working there about 5 years ago, and the Euro was worth about $.75

yikes

[Holybull]

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Only helps if there is wage inflation. Possible scenario is that wages stagnant,cost of living inflates and most people's standard of living goes down.

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This is exactly what's been happening for years.


[ QUOTE ]
more scary dollar stuff...oil-rich countries are switching to other currencies:

Venezuela (Citgo) dumps the USD
http://www.bloomberg.com/apps/news?p...d=aZ62iRNzmRo0
Sept. 16 (Bloomberg) -- Venezuelan President Hugo Chavez instructed Petroleos de Venezuela SA, the state oil company, to convert its investment accounts from dollars to euros and Asian currencies to reduce risk. Chavez, speaking in his weekly address on national television, said the U.S. has bought goods from around the world, paying with paper that is ``a bubble.'' ...


Iran moves to ditch U.S. dollar
http://www.upi.com/International_Securit...us_dollar/6990/
WASHINGTON, Sept. 10 (UPI) -- Faced with U.S. economic sanctions and a weak dollar, Tehran is demanding foreign energy companies do business in yen and euros, despite increasingly desperate need for investment.

In a deal announced last week, Japan’s Nippon Oil agreed to buy oil from Iran using yen instead of the traditional U.S. dollars. The agreement comes after years of Iranian efforts to shift its petroleum exports away from dollars and toward yen and euros..

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Some people have written that this is one of the main reasons for the current war. To ensure that the USD remains the currency for the oil trade.
http://www.ratical.org/ratville/CAH/RRiraqWar.html

Petrodollars Wikipedia