The Ultimate Destruction of the US Dollar Will Not Happen

[Flopper]

If I were a currency trader looking at the charts, I certainly would not be selling the dollar at these levels. Rather, I would be looking to buy very soon.

 

[Mr Liberty]

I am all in on silver. Its run is spectacular. As I write this the price is 45.63 an ounce. The dollar spot price is 74.11. All fiat currency in history has gone to zero. The US dollar is no exception. All the money printed to save the financial sector has stalled the crash, not prevented it. Debasing causes oil to go up and this is critical for the economy. When a barrel of crude goes up by $10.00, a trillion dollar leaves the economy, This is felt immediately in higher prices of almost everything we buy. It will hit the poor most and this now includes those on unemployment.
Hyperinflation is the greatest threat to the economy. This means all commodities are a good investment and having emergency supplies like food and water is never a bad idea.
Her a link for your entertainment: http://geraldcelentechannel.blogspot.com/2011/02/dollar-collapse-one-scenario-china-oil.html

 

[konkon]

I am all in on silver. Its run is spectacular. As I write this the price is 45.63 an ounce. The dollar spot price is 74.11. All fiat currency in history has gone to zero. The US dollar is no exception. All the money printed to save the financial sector has stalled the crash, not prevented it. Debasing causes oil to go up and this is critical for the economy. When a barrel of crude goes up by $10.00, a trillion dollar leaves the economy, This is felt immediately in higher prices of almost everything we buy. It will hit the poor most and this now includes those on unemployment.
Hyperinflation is the greatest threat to the economy. This means all commodities are a good investment and having emergency supplies like food and water is never a bad idea.
Her a link for your entertainment: Dollar Collapse, One Scenario--China, Oil, Rationing | Gerald Celente Trends Blog

The overprinting of the USD will be an even bigger problem for the rest of the world in the long term, as the US, that still controls the structure of world markets, will restructure their economy and currency to best suit themselves, which could be disastrous for all other creditors and markets.

At the moment and for the foreseeable future, the US is the biggest (indirect) exporter of inflation to the rest of the world. As the currency devalues even further more and more inflation will hit the rest of the world including the US.

Buying protection like an inverse currency or commodity these days makes sense to a lot of investors, but this itself won't last in the long term as things could drastically change. Probably alright for the next year or more though, as not much will be done before the next US federal election.

The US will not go through hyperinflation like Yugoslavia or Zimbabwe did. These countries did not control the structural dynamics of nearly all asset classes. The US will restructure and most likely will not pay its creditors, may negotiate a lower settlement or offer a reasonable price with a newer USD, that is synthetically advantageous. As for there being technical consequences for not paying debt obligations etc? The US in the global market scheme is still judge and executioner. It won't punish itself by terminating its very existence as the number one economic superpower. The US (and even the algorithmic trading computers that it controls) will play a competing world currency like a fiddle.

The rest of the world stands to lose a lot more collectively from a falling USD; it might not be clear at the moment. The USD is just a tool that can and might be redesigned to suit its maker, the US; I'm not talking about redesigning the images on the notes, here.

 

[konkon]

It appears that some very influential elite organisations want the middle-classes' wealth transfered to their own, to a large extent. I think that the financial crisis of 2008 was one way to achieve this around the world. A triple-whammy for the elite as the transfer of wealth from middle to higher-end occurred, the elite banks then issued more debt to a struggling middle class, and to top it off, the middle class tax payer has future debt obligations to pay for 'too big to fail institutions'!

I'm kind of surprised that the FBI, etc etc including the military (CIA* etc) in the US, for example, doesn't have some shadow presence in 'Wall Street' to oversee and protect American interests. These institutions are America's last hope and best defense against the 'not in the US's interests' goings-on. I'm not talking about jurisdictional powers here. Just a presence and an opposing 'not in the US's interests' force. These organisations are the best at what they do covertly. Without a prosperous middle class and the transfer of wealth moving to a non patriotic (and to an extent, a non US) elite these government organisations might lose power and influence.

*I know that the CIA isn't meant to operate in the US, but these are desperate times and nothing really needs to be logged for Congress to oversee. Congress is made up of elected officials that probably take bribes from 'not in the US's interests' domestic and foreign organisations. These US high-end protective service government organisations are more patriotic and their long-term existence is dependent on a prosperous and innovative middle class.

 

[konkon]

I wonder if institutions etc will end up buying more and more protection in the form of precious metals and other commodities in the coming months and even next year?

The stock market has risen a fair bit in the past year (and past few years), but in dollar terms, relative to other currencies etc, what would be the stock market's net gain (or loss)? If you're off to Vegas with the profits, great. But if corporations need to trade with other nations with stronger currencies etc, then you have a problem.

Corporations will have to hedge against these dynamics and there could be more protection-buying (buying inverse related commodities etc) in the future.

If the US didn't have such a debt crisis (that pretty much can't be solved with current methods) then the commodity play would be dead in the water. But commodities and other currencies will continue to appreciate over the next year or so given the unyielding position the US finds itself in.

 

[editec]

The debt crises much like everything else about our economy is manufactured.

Look who it serves best.

Now look at who pulls the strings of our shadow-puppet governments.

WAKE UP!

The divide in this nation isn't the Rs and Ds, neither is it the cons v libs.

It's the haves v the have-nots.

The haves are winning and will continue to win until they have won this nation to death.

 

[expat_panama]

...a sharp, quick, collapse, or a slow, drawn-out death. Either way, screwed. I am disgusted that this is our system. Wonder how long before the people, especially the young like me.. rise up

lol, up till the last part your take sounded more like that of the old!

Lots of people talk doom'n'gloom but the big surprise is that life is actually good and that the young are in fact taking over and making life better. The hard part isn't seizing power (that part's inevitable), it's deciding what we want. The easy part is figuring out how make what we want a reality.

 

[konkon]

The debt crises much like everything else about our economy is manufactured.

Look who it serves best.

Now look at who pulls the strings of our shadow-puppet governments.

WAKE UP!

The divide in this nation isn't the Rs and Ds, neither is it the cons v libs.

It's the haves v the have-nots.

The haves are winning and will continue to win until they have won this nation to death.

The 'haves' would have stripped themselves of their own future wealth too as their net gains from a prosperous middle class would mean net losses from a non existent middle class - no more grass to cut! I guess the elite can always resort to cannibalizing their own wealth.

Good to see the US going after speculators and the like (futures traders etc) by increasing the margins on futures trading contracts. Just goes to show how powerful the US really is when it wants to be. A commodity take-down in the making? An interesting year ahead.

I still think the USD's devaluation over the long term will mean commodities will appreciate in the future. BUT one shouldn't stand in the way of a giant. Imagine if the US got desperate and wanted to really move the markets one way or the other? Hard to know what to own and what to sell if we went through this again.

 

[konkon]

What a week! First that @#%#$#!@##$ in Pakistan and then those speculators that have caused a lot of problems around the world. The US (military, Obama etc etc) has done an amazing thing by fighting back on all fronts. This is the sort of thing that amazed me about Ronald Reagan. Republican, Democrat or whatever else, this is the right way forward. Partisan politics in congress is not.

Speculators might well be priced-out of their own futures trading environments/platforms. To hit silver speculators twice in a week with an increase in future contracts is, in my opinion, a deliberate and calculated move to go after speculators in general. Those birds of a feather will fly together, whether it be high or low. And they will not win Obama a next term or help get the US out of the #@#$%$ they're in; many must feel that speculators helped 'cause' the GFC.

The move this week on the markets is more than just a glitch or a correction. This is the US 'telling' all those that are betting against the United States economy and USD (and I do this occasionally myself ) that the US doesn't like having its back against the wall for too long.

The US will not give up its dominance of world markets and its status as the reserve world currency. I don't really include many on Wall Street as they aren't as concerned about a strong USD, for example. By the US, I mean high level government officials (Obama etc), the military, CIA, NSA, FBI etc etc. Wall Street will be made to play along. So will the Federal Reserve.

I can't help thinking that Obama etc and those in charge of the futures exchange and other key players planned this move to go after speculators. This was not a 'normal' correction this week. I thought we might have this later, from July onwards. But the US administration must be feeling like their backs are against the wall and it was time to go after those that were feeding-off a struggling USD and economy.

 

[konkon]

I do believe the end of QE2 and the lack of a QE3 will be disastrous for stocks, overall. The decision to, or not to, implement a QE3 (or something just like it) is perhaps the most important one of the year (and one I'm really anticipating).

I feel like the decision this week to 'price-out' many futures traders is:

1. a coordinated effort by Obama (indirectly) and his very powerful associates to try and get a grip on (or try and get their heads around) things, before other perhaps more extreme measures are implemented.

2. a warning to others involved in speculating on inversely related commodities, currencies etc (to the USD) that more counteractive measures will be incorporated if needed.

3. the United States pretty much showing who still controls markets (debatable, like everything I've posted, but I believe this).

4. testing the waters with other agencies, like the Federal Reserve, to see who is with us! The Obama Administration might be checking to see what changes it needs to do (maybe after the next election, if it gets in). *

5. the first of many (surprise) moves or 'attacks' on those that don't see eye-to-eye with long-term US economic interests. I bet there will be more surprises and not just for US investors.

I also don't think Obama needs Wall Streets support like other Presidents might have, this time round. He needs the support of the middle class. Obama might have the Fed on notice, and I think Bernanke is feeling this a little. I think Bernanke will gravitate towards the Obama Administration more than Wall Street this time round. But it won't be official, of course, like most of the points raised by me above.

Does Bernanke's 'transitory inflation' comments last week mean that he knew about the effort to reign-in speculation in commodities? Did the ECB's decision yesterday to not raise European interest rates in the foreseeable future (which took many by surprise), mean that the ECB is part of this coordinated effort to reign-in speculation in futures markets? We won't be told officially, but I think there is a very good chance that this (all of the above) is the case.

* (The attacks on the Libyan government also tested the waters a little too; to see which countries were with the allied US and European nations).

 

[editec]

In about 20 mintes the employment numbers for April will be announced.

That might make for an interesting day on the market, eh?

If unemployment is down, I'd expect to see that as supporting commodity prices EXCEPT for gold and espeically silver.

Of course those markets might have already been discounting those prices on the assumption of the numbers will be positive, too.

 

[expat_panama]

... markets might have already been discounting those prices on the assumption of the numbers will be positive, too.

Unemployment's up and so are stock indexes. My take is that most traders (like myself) expected the increase and are now ready to move on.

 

[Toro]

Stocks are up because nonfarm payrolls were better than expected after selling off on weak initial claims on Wednesday v

 

[konkon]

Just have a look and see what a commodity take-down might look like. It's kind of happening right now. The US still controls the world's markets and is giving us a glimpse of what it can do in such a short amount of time. Imagine if it got serious and desperate? Another reason why the USD will continue to be the reserve currency.

 

[itsanote]

Hope you're right!

 

[konkon]

Raising the price of futures contracts is really making the dominos fall. Perhaps there are more types of commodities to go after. Birds of a feather will flock together too. They're all going down a fair bit if the price of a futures contract increases on a wide range of commodities.

 

[sparky]

So this thread is really about traders speculating on their position vs. actual concern for the dollar tanking.

Economic musical chairs imho

history would seem to call that tune>



Fiat Currency

 

[editec]

I am all in on silver. Its run is spectacular. As I write this the price is 45.63 an ounce. The dollar spot price is 74.11. All fiat currency in history has gone to zero. The US dollar is no exception. All the money printed to save the financial sector has stalled the crash, not prevented it. Debasing causes oil to go up and this is critical for the economy. When a barrel of crude goes up by $10.00, a trillion dollar leaves the economy, This is felt immediately in higher prices of almost everything we buy. It will hit the poor most and this now includes those on unemployment.
Hyperinflation is the greatest threat to the economy. This means all commodities are a good investment and having emergency supplies like food and water is never a bad idea.
Her a link for your entertainment: Dollar Collapse, One Scenario--China, Oil, Rationing | Gerald Celente Trends Blog

"Markets can remain irrational longer than you can remain solvent."

JMK

 

[dvinman]

Imagine a country that spends and prints trillions to patch up any problem.

Now imagine another country where there is no central Treasury, meaning that bail-outs are less easy, and which has a central bank that has mopped up liquidity over the past year, rather than engage in quantitative easing.

Why does it surprise anyone that the latter, the eurozone, has a stronger currency than the former, the US? Because of peripheral countries’ debt refinancing issues? And the potential for contagion? These are real and serious issues, but in our assessment, they should be primarily priced into the spreads of eurozone bonds, not the euro itself.
FT.com / Markets - Dollar in graver danger than the euro

 

[expat_panama]

...the eurozone, has a stronger currency than the former, the US? Because of peripheral countries’ debt refinancing issues? And the potential for contagion? These are real and serious issues...

That's what everyone seems to be saying these days, but--

--I'm guessing the reason they don't mention the Euro's fallen since the end of '09 (when it fell from where it was the year before) is because they're selling their weak Euros, they hate America, or they're fooled by those who are or do.