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Imminent collapse of the US dollar

Discussions about the economic and financial ramifications of PEAK OIL

Re: Imminent collapse of the US dollar

Unread postby asg70 » Sat 12 Aug 2017, 14:15:34

"The world is now linked into an organizational structure that can literally fail in a few microseconds."

That's pretty much the mantra of a fast-crash doomer. That addiction to thinking that the other shoe can drop on a moment's notice. It becomes its own drug, a source of excitement in an otherwise drab existence.
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Re: Imminent collapse of the US dollar

Unread postby onlooker » Sat 12 Aug 2017, 14:57:22

So true. The world is now acutely vulnerable to an economic crisis of the kind described in the The Korowicz paper in which finance failures lead to a supply/trade contagion that puts a freeze on the just in time global network of trade. To think of how interconnected the world is now is truly frightening. How parties and counter parties exist in a network of debt, trade and currency synchronization. What is also frightening is the ever expanding Debt bubble that the Central Planners seem to feel cannot be allowed to end as it itself could trigger the price discovery that will set off a vast devaluation in all asset prices. Or other scenarios that are plausible to trigger this contagion are a geopolitical crisis, a panic run on banks or in the stock market, a particularly bad and large investment. a calling in of debt momentum etc. It leaves my mind numb to try and imagine all the scenarios that could ignite this final devastating crash of the world economy. And yes all in seconds with the pressing of a key.
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Re: Imminent collapse of the US dollar

Unread postby Newfie » Sat 12 Aug 2017, 16:23:54

Or a nuke attack by NK or the USA on NK.

Just saying a jolt like that could make the record skip big time.

I think Trump understands China understands that.
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Re: Imminent collapse of the US dollar

Unread postby SeaGypsy » Sat 12 Aug 2017, 19:16:22

Another credit crisis is a certainty, trigger events less so. The last one had plenty of run up, warnings galore- US housing derivatives & oil prices gave savvy investors loads of time to get their affairs in order. A more incisive trigger, such as a restart to the Korean war- would catch a lot more unprepared. Meanwhile the same fundamental financial structural issue is there & much bigger now than 8 years ago. Housing credit bubbles in the many trillions around the world, supported by stagnant wages, shrinking jobs markets- doesn't actually make sense, except for the principle of surplus capital created has to go somewhere- inflate something.

Considering what the last GFC looked like, the fact nothing meaningful has been done to prevent a repeat, spread of the exact same real estate credit circumstance throughout much of Asia, the prospect of hot war in the middle of the zone is a lot scarier than we are generally being led to believe.
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Re: Imminent collapse of the US dollar

Unread postby Outcast_Searcher » Sat 12 Aug 2017, 19:59:57

pstarr wrote:A quick glance tells me it's not nonsense. But then who am I? Just more nonsense I guess lol
Image

LOL indeed.

So in your world, a 20% decline in a highly volatile (over tiime) currency value over FOUR plus decades is proof of collapse?

You need to get some perspective. Hint: Inflation does a HELL of a lot more damage to the dollar than that, over time. And yet, since virtually all paper currencies are inflated away over time (at different rates), so what? It's the way the system is set up.

Realistic people deal with it by doing prudent things in investing in inflation hedges, such as the broad based stock market(s) long term.

But I know. Short term hard crash doomers don't do that since they're too busy spreading FUD laced with a strong dose of nonsense. And of course, the endless spin cycle of rinse, set another scenario, repeat, and pretend they're never wrong.
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Re: Imminent collapse of the US dollar

Unread postby EdwinSm » Sun 13 Aug 2017, 00:34:29

It is not a collapse, more like a correction of the last few years, but is this the way to make "America grate again"? :roll:

From "Why is the US dollar falling?" http://www.bbc.com/news/business-40853840
The US dollar, long a symbol of American economic might, has fallen steadily this year.

The value of the dollar index, which tracks the dollar against six major global currencies, has fallen about 10% since January.
....
The dollar, which surged in 2014 as the US economy gained strength, is hardly in danger territory. The index is running just a bit lower than it was a year ago.

......
"The weaker the dollar is, the poorer Americans are on average," says Mr Frieden. "That's not just rhetoric. That's the reality."
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Re: Imminent collapse of the US dollar

Unread postby baha » Sun 13 Aug 2017, 08:34:51

Outcast_Searcher wrote:Realistic people deal with it by doing prudent things in investing in inflation hedges, such as the broad based stock market(s) long term.


I agree and I do this to some extent. I discussed this with my mom's financial advisor and he agreed there was an alternative approach of buying and paying for things in today's money and riding it out.

Interest rates, returns on investment, inflation...these are all games bankers play with your money. If you buy your house and your power for the next 20 years, what difference does it make where the dollar falls...you already spent them :)

This is coming. The dollar will collapse. It's a good thing. then we can re-think.
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Re: Imminent collapse of the US dollar

Unread postby marmico » Sun 13 Aug 2017, 09:09:14

The dollar will collapse.


Relative to what - ruble, renminbi, yen, euro, gold, wheat, eggs, iPhones, netflix, natural gas, lithium, root canals, viagra, yadda, yadda?
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Re: Imminent collapse of the US dollar

Unread postby Outcast_Searcher » Sun 13 Aug 2017, 11:56:58

baha wrote:
Outcast_Searcher wrote:Realistic people deal with it by doing prudent things in investing in inflation hedges, such as the broad based stock market(s) long term.


I agree and I do this to some extent. I discussed this with my mom's financial advisor and he agreed there was an alternative approach of buying and paying for things in today's money and riding it out.

Interest rates, returns on investment, inflation...these are all games bankers play with your money. If you buy your house and your power for the next 20 years, what difference does it make where the dollar falls...you already spent them :)

This is coming. The dollar will collapse. It's a good thing. then we can re-think.

If you have no savings, then you're right, it makes no difference.

However, the general consensus of modern educated first world society is that it's prudent to save and invest and have a meaningful amount of capital to retire on. If that capital is destroyed if the dollar collapses (I'm not saying it will suddenly collapse -- I'm saying IF), because someone was holding a dollar based portfolio (say, in US treasuries and CD's and money market accounts), then that person's lifetime capital savings is destroyed. Not cool, to put it mildly.

So it really depends on how someone is set up. For people who have little savings and little income aside from Social Security and Medicare (which are supposedly protected from inflation, depending on how the feds define inflation (which keeps changing)), then what your mom's financial advisor is saying makes good sense.

(Good for you helping out your mom. I helped out my parents in their final 20 years. After all, they did lots for me during my first 20).

That's another reason, IMO for diversification. My stock portfolio is global, in all types of countries (small and large and well scattered geographically and all along the development status curve, and well diversified among industries). I worry about dollar destruction over time, due to inflation, due to congress making unsustainable promises to buy votes, and very unwise decisions in the short run, (you guessed it) to buy more votes. If I'm wrong -- no harm done, so I consider this attitude insurance.

The main difference between me and the "dollar will collapse" forecasters is generally the belief in how fast and how soon it is likely to happen.
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Re: Imminent collapse of the US dollar

Unread postby Outcast_Searcher » Sun 13 Aug 2017, 12:03:03

marmico wrote:
The dollar will collapse.


Relative to what - ruble, renminbi, yen, euro, gold, wheat, eggs, iPhones, netflix, natural gas, lithium, root canals, viagra, yadda, yadda?


This is a great point. One which very few of the collapse punditry generally (I'm not picking on baha here) makes very often. I think it's because for the pundits, the "dollar will collapse" meme is part of the general doom commentary, instead of based on actual economic data or trends. Just my opinion, based on observation. And I did say generally -- some folks are very specific, but if they make short term forecasts of collapse, thus far they are proven wrong, of course. Whether here or on doom/collapse blogs.

OTOH, for those selling products like the infamous "Y2K buckets, etc" of the Kunstler (and many others) variety, well, the motivation and profits for them are obvious.
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Re: Imminent collapse of the US dollar

Unread postby onlooker » Sun 13 Aug 2017, 12:56:31

Marmico and Outcast, Short already was clear that collapse will be universal among all currencies. I happen to agree with everything he said here:
The US dollar is, however, only one player in a world wide game of fiat. The major one for sure, but not the only one. The world's central banks are owned by a handful of people who run all of them on the same theory. The world economy is now in decline. We know that because the sum of world GDP increases are less than the sum of new debt formation. Presently almost 10 to 1. The only way that existing debt can be serviced is from the liquidity formation that is originating at the central banks. Otherwise the entire monetary/ financial system would collapse almost instantly from an avalanche of cascading defaults. $250 trillion of them!
Will the US dollar collapse? When it does it will be right along with all of the other same forms of currency. Being US centric is a very constrained point of view!

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Re: Imminent collapse of the US dollar

Unread postby baha » Sun 13 Aug 2017, 14:41:45

Ok, you got me :) I really don't know what 'the dollar will collapse' means either. I suppose I think of it in relation to the price of energy, or maybe calories. And the availability of manufactured goods.

We Americans are rich in energy and goods. We will always be rich in energy if we can process and distribute it. But we don't make many goods anymore...

The way I see it, when the petro-dollar crashes, we will lose our ability to pick and choose. We will have to make do with what we can get until we can make it ourselves. Kind of like the upper class in Venezuela. They're not starving but their options are limited.

We have dug ourselves a hole by relying on bankers to make our money. Instead we should be making new things. Like Lithium batteries. It's going to hurt when we discover there is nothing in that vault...
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Re: Imminent collapse of the US dollar

Unread postby marmico » Sun 13 Aug 2017, 15:13:44

But we don't make many goods anymore...


US is in 2nd place in total value added and 4th place in value added per capita.

https://www.mapi.net/blog/2015/09/china ... nufacturer

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Re: Imminent collapse of the US dollar

Unread postby Outcast_Searcher » Sun 13 Aug 2017, 15:25:34

onlooker wrote:Marmico and Outcast, Short already was clear that collapse will be universal among all currencies.

Gold and silver are currencies (substitutes for paper currencies among those that don't trust them long term, and given history and the way governments inflate currencies over time, rightfully so). Will gold and silver collapse as part of "all currencies"?

There may or may not be a rapid collapse of debt, eventually. But that can't be timed, even if it occurs. And it could well be that for any timeframe that matters for us (say, the next hundred years), that it will just be ongoing inflation. What good does the collapse meme do then, except to score points on internet boards about how "right" collapse folks are viewed to be by their peers? (My sister's family enjoys a nice farm life 10 miles from any town, including growing and hunting a lot of their own food on their own land, without calling it a doomstead. I suspect they'll be nearly as ready for "collapse" as the collapseniks, given all the guns and food my brother in law likes to keep on hand. Yet no hand wringing about society collapsing. Funny how that works.)

Meanwhile, in the real world, being able to retire comfortably and enjoy life to the best extent possible, even beyond when one is physically fit enough to, say, maintain a doomstead and grow and harvest one's own food year around, has lots to recommend it. (I can say this from experience, including retiring in middle age instead of working for "the man" into old age).

And in the off chance if fast collapse happens, it happens. It's not like we can control everything, including the health of ourselves or our loved ones beyond trying to live a healthy lifestyle.

If life can't be enjoyed beyond hunkering down and projecting doom every waking moment, what's the point?
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Re: Imminent collapse of the US dollar

Unread postby baha » Sun 13 Aug 2017, 15:59:33

Good question OS, where do gold and silver fit in? You can't eat it...but people seem to like it :)

I know you are not picking on me but I will say, just like your family, being self-reliant doesn't make you a collapse-nik. And I am not wringing my hands...I am having a blast.

I genuinely fear these skills will be lost. I watched my grandparents run a farm and can food and was un-impressed. It was many years later that I found that interest for myself. I really enjoy learning new skills. When I can't do them anymore, I will teach.

I'm sure you know, the point is living your life however you want. But finding a way to enjoy it no matter what :)
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Re: Imminent collapse of the US dollar

Unread postby Outcast_Searcher » Sun 13 Aug 2017, 23:14:54

baha wrote:Good question OS, where do gold and silver fit in? You can't eat it...but people seem to like it :)

I know you are not picking on me but I will say, just like your family, being self-reliant doesn't make you a collapse-nik. And I am not wringing my hands...I am having a blast.

You're not in the class of the perma-doomer depressives I'm talking about. I get that. That's why I mentioned I'm NOT talking about you re that group, even though I responded to you talking about the collapse of the dollar.

I think it's really great to see you both doing and learning about solar applications -- AND having a blast, all at the same time.

Hopefully the planet will think it's great when the end result of efforts of folks like you, and Musk and tens of thousands of other "pioneers" (with many millions of users to follow) reduce the amount of hydrocarbons burned in 50ish years to a trickle compared to today.
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Re: Imminent collapse of the US dollar

Unread postby asg70 » Mon 14 Aug 2017, 08:21:28

baha wrote:I'm sure you know, the point is living your life however you want. But finding a way to enjoy it no matter what :)


Doomerism is just a way of life for some people.

Socially speaking it gives people an air of superiority to keep saying the end is nigh, although they usually wind up relegating such repetitive pronouncements to friendly territory, so it ain't that useful as a warning.
Hubbert's curve, meet S-curve: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Imminent collapse of the US dollar

Unread postby shortonoil » Mon 14 Aug 2017, 10:41:55

Doomerism is just a way of life for some people.


Doomerism? More troglodyte pig Latin New Speak? We are inspired!
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Re: Imminent collapse of the US dollar

Unread postby pstarr » Mon 14 Aug 2017, 13:38:36

So right onlooker, short!

All the currencies expect future wealth to increase, thus driving demand for more products. But currencies are ultimately IOU's on future work. And work is ultimately the expenditure of energy upon natural capital, ie real commodities from the planet earth . . . minerals, fresh water, petroleum and timber. Economic efficiencies and substitution will not mulitply null commodities.

Our financial ponzi expects both natural capital and efficiencies to improve forever. Wrong. Financial instruments are not discounting current prices properly because the assumptions are WRONG. The financial punditry doesn't understand the difference between information, retail goods and services, labor . . . and real commodities. It doesn't comprehend and can't price the limits of this earth.

Cybernetic dreams of neural networks fusion power space travel GMO foods are BS. Science is over. The Techtopians needs to go to jail for crimes against humanity. Busted by Moore's Law. Entropy is the da judge.
Haven't you heard? I'm a doomer!
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Re: Imminent collapse of the US dollar

Unread postby baha » Mon 14 Aug 2017, 14:07:57

pstarr wrote:Our financial ponzi ... can't price the limits of this earth.


That's good Pstarr, the base of our problem. Finance cannot address intrinsic value.

But science is not over. It's happening whether we understand it or not. Entropy is science...but I know what you mean. The people who have no respect for the Earth or the Environment should go to jail. Scientist and Engineers should get paid the Big Bucks :)

In reality the Earth is a big recycle bin. It may take a while but she will eventually compost us and start again with something new. Is that Doomerism?
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