X Post: My thoughts on the coming dollar collapse

[ubiestmea]

[ QUOTE ]
Getting something for your dollars is better than getting almost nothing for your dollars. Owning a company or real estate, especially if you try to bet on companies that are unlikely to flat go under in a recession (like the NASDAQ), is better than holding onto dollars or waiting for those dollars to crash in value before unloading them. And trying to sell of dollar holding for Euro or Yen would likely kick off the crash of the dollar.

[/ QUOTE ]

Look at a chart, the dollar has been going down for quite awhile. Do you think that banks and business haven’t noticed yet and they will all suddenly realize it at the same time? Banks and business are constantly monitoring and adjusting their currency exposures through the forex market. What do you think accounts for the almost 13 trillion in monthly forex volume?

[ QUOTE ]
But you can sell them much later, once the situation has stabilized. Again, it's not a matter of making money. It's a matter of stopping bleeding.

The scenario I am describing has largely already happened in the late 70s and early 80s. Remember when everyone was hysterical that foreign companies were buying up American companies and real estate? The Japanese owned skyscrapers, companies, you name it. This happened because: There were a lot of dollars in foreign hands, the dollar was weak internationally, and since the US was already *in* recession, there was little direction to go but up for surviving US companies. Hence foreign investment went through the roof.

[/ QUOTE ]

Over the years, Japanese investors have established a strong presence in the United States. Japanese FDI in the United States surged in the 1980s and continued to increase in the 1990s. In the 1980s, Japanese investors acquired such high-profile U.S. assets as Columbia Pictures, Rockefeller Center, and Pebble Beach Golf Course. These investments followed surges in Japanese investments in the United States by Japanese consumer electronics firms and auto producers. (Many of these acquisitions were not profitable for Japanese investors.)

http://www.fas.org/sgp/crs/row/RL32649.pdf

[Borodog]

[ QUOTE ]
[ QUOTE ]
Getting something for your dollars is better than getting almost nothing for your dollars. Owning a company or real estate, especially if you try to bet on companies that are unlikely to flat go under in a recession (like the NASDAQ), is better than holding onto dollars or waiting for those dollars to crash in value before unloading them. And trying to sell of dollar holding for Euro or Yen would likely kick off the crash of the dollar.

[/ QUOTE ]

Look at a chart, the dollar has been going down for quite awhile. Do you think that banks and business haven’t noticed yet and they will all suddenly realize it at the same time?

[/ QUOTE ]

Isn't that what crashes are made of?

[ QUOTE ]
Banks and business are constantly monitoring and adjusting their currency exposures through the forex market. What do you think accounts for the almost 13 trillion in monthly forex volume?

[/ QUOTE ]

I'm sure this is true. But that doesn't mean there won't be a dollar crash.

[ QUOTE ]
[ QUOTE ]
But you can sell them much later, once the situation has stabilized. Again, it's not a matter of making money. It's a matter of stopping bleeding.

The scenario I am describing has largely already happened in the late 70s and early 80s. Remember when everyone was hysterical that foreign companies were buying up American companies and real estate? The Japanese owned skyscrapers, companies, you name it. This happened because: There were a lot of dollars in foreign hands, the dollar was weak internationally, and since the US was already *in* recession, there was little direction to go but up for surviving US companies. Hence foreign investment went through the roof.

[/ QUOTE ]

Over the years, Japanese investors have established a strong presence in the United States. Japanese FDI in the United States surged in the 1980s and continued to increase in the 1990s. In the 1980s, Japanese investors acquired such high-profile U.S. assets as Columbia Pictures, Rockefeller Center, and Pebble Beach Golf Course. These investments followed surges in Japanese investments in the United States by Japanese consumer electronics firms and auto producers. (Many of these acquisitions were not profitable for Japanese investors.)

http://www.fas.org/sgp/crs/row/RL32649.pdf

[/ QUOTE ]

Again, I'm sure this is true. But That doesn't prove there isn't a strong uptick in foreign investment happening right now (and not in treasury bonds, either), which is an observable consequence of my hypothesis.

These two points actually seem to *support* my hypothesis rather than argue against it.

[ubiestmea]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Getting something for your dollars is better than getting almost nothing for your dollars. Owning a company or real estate, especially if you try to bet on companies that are unlikely to flat go under in a recession (like the NASDAQ), is better than holding onto dollars or waiting for those dollars to crash in value before unloading them. And trying to sell of dollar holding for Euro or Yen would likely kick off the crash of the dollar.

[/ QUOTE ]

Look at a chart, the dollar has been going down for quite awhile. Do you think that banks and business haven’t noticed yet and they will all suddenly realize it at the same time?

[/ QUOTE ]

Isn't that what crashes are made of?

[/ QUOTE ]

Yes that is what crashes are made of, but everyone from Warren Buffet to thousands of posters on internet forums have been calling for everything from a sell off to a crash for over a year now. There has been no shortage of stories in every form of media predicting the demise of the dollar. Every crash I am aware of came as a surprise, can you point to a single instance of a crash that occurred after it was publicly called for by so many people for so long a time?

[kyleb]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Getting something for your dollars is better than getting almost nothing for your dollars. Owning a company or real estate, especially if you try to bet on companies that are unlikely to flat go under in a recession (like the NASDAQ), is better than holding onto dollars or waiting for those dollars to crash in value before unloading them. And trying to sell of dollar holding for Euro or Yen would likely kick off the crash of the dollar.

[/ QUOTE ]

Look at a chart, the dollar has been going down for quite awhile. Do you think that banks and business haven’t noticed yet and they will all suddenly realize it at the same time?

[/ QUOTE ]

Isn't that what crashes are made of?

[/ QUOTE ]

Yes that is what crashes are made of, but everyone from Warren Buffet to thousands of posters on internet forums have been calling for everything from a sell off to a crash for over a year now. There has been no shortage of stories in every form of media predicting the demise of the dollar. Every crash I am aware of came as a surprise, can you point to a single instance of a crash that occurred after it was publicly called for by so many people for so long a time?

[/ QUOTE ]

dotcom

[eastbay]

[ QUOTE ]
Every crash I am aware of came as a surprise, can you point to a single instance of a crash that occurred after it was publicly called for by so many people for so long a time?

[/ QUOTE ]

Umm, housing? The calls for a sharp decline started around 2003 and didn't materialize until last year or this year, depending on the market.

.com also comes to mind. A lot of people were saying "hey wait, this doesn't make sense, this can't be sustainable" and it took several years for everybody else to "get it."

eastbay

[Fishhead24]

.......and housing is expected to keep declining well into 2008 and beyond.

[Acein8ter]

[ QUOTE ]
FWIW, I think Borodog is correct here. This is likely what will happen if the dollar devaluates much more in the short term. This isn't necessarily a bad thing though.

[/ QUOTE ]

As the dollar drops, consumables that you purchase on a daily / weekly basis will rise. Gas & Food will continue to rise... Not a bad thing? Same paycheck, but your paying ~50% more for your grocery's and gas... I'm not too positive on the depreciating value of the dollar.

[Woolygimp]

[ QUOTE ]
[ QUOTE ]
FWIW, I think Borodog is correct here. This is likely what will happen if the dollar devaluates much more in the short term. This isn't necessarily a bad thing though.

[/ QUOTE ]

As the dollar drops, consumables that you purchase on a daily / weekly basis will rise. Gas & Food will continue to rise... Not a bad thing? Same paycheck, but your paying ~50% more for your grocery's and gas... I'm not too positive on the depreciating value of the dollar.

[/ QUOTE ]

This is absolutely incorrect.

Only imported goods will rise in price such as a Benz, and then 50% is way too high of a figure. You're really looking at 2-3% increase in price.

[im a model]

[ QUOTE ]
[ QUOTE ]
FWIW, I think Borodog is correct here. This is likely what will happen if the dollar devaluates much more in the short term. This isn't necessarily a bad thing though.

[/ QUOTE ]

As the dollar drops, consumables that you purchase on a daily / weekly basis will rise. Gas & Food will continue to rise... Not a bad thing? Same paycheck, but your paying ~50% more for your grocery's and gas... I'm not too positive on the depreciating value of the dollar.

[/ QUOTE ]

hey maybe this guy is smart... oh, maybe not.

to be fair though, it was clear you werent smart before that, saying that everything gets %50 more expensive in absolute terms.

[nineinchal]

LMAO...

Do you really think people are just dying to buy those rubels from the Ruskies and Yuan from the Chinese?

Try getting a free marketplace if it wasn't for Uncle Sam providing and protecting the free marketplace.

Worst case scenario, your dollars will have less purchasing power; to buy more cheaply produced foreign goods; but what do you really care since you are playing poker to get yours?