Posted on 02/10/2009 5:37:35 AM PST by arthurus
1. Will the collapse be an absolute failure of the dollar and the U.S. economy, or will the dollar retain some value? 2. Regardless of the answer to the last question, will some other form of currency compete with, or even replace the dollar completely? 3. What am I doing to prepare for the events I predict? Am I shorting the dollar, or is there a better way to capitalize on the move?
(Excerpt) Read more at seekingalpha.com ...
Any attempt to replace the dollar in our country will result in Washington being burned to the ground. Not advocating it, just telling you.
They probably have them all ready to distribute.
To wit, the flippant and frivolous premise contained herewith.
Now, having expressed these sentiments, it occurs to me that there was probably not so ripe a time brewing as is brewing these days for the superimposition of a global payments system, its widespread adoption being assured by pandemic desperation and the allegedly imminent failures of mammoth, global financial institutions; an imposition which would necessarily bring with it a "membership" or "citizenship" in a completely new "virtual community," which might be a proxy for a defacto world government.
Let's hope they f**k it up too much for it to ever work.
Bamabucks
That’s a good one. If we have hyperinflation, we can call a US bill “ZeroDollars” (because that’ll technically be what they are worth.)
The article was not well enough written to get my attention and cause me to read it. Barter is has worked in times of high taxes. Stock up on Gold now. Silver coins are more valuable. Tools, guns, ammo,food will be the new capital.
Obama Commemorative Coin
FranklinMintObamaCoin.com
ObamaCoinCollection.com
You can get one EVERY night.
L
Those with bartering skills, and the ability to offer a “needed” service, will not starve.
Nothing is certain. The short of a lifetime will be preceded by the short squeezes of a lifetime. The extra cash that the Fed creates to buy long bonds can be rapidly modulated, first hammering down long rates, then squeezing short term cash supplies. There's no doubt the Fed will figure out novel ways to stuff dollars into the long end of the yield curve while preventing any semblance of inflation. Just like the PPT has managed to save up normal market drops and turn them into last year's (and this year's) plunges, the manipulators of gold and currency will prevent the normal readjustment of currency to goods. When that finally blows up the results will be nothing short of amazing, but that day will be postponed for quite a while. Putting the horse back in front of the cart will be impossible at that point.
Already it is fairly obvious that any type of long term investment is out, and the hot money is speculating on deflation and inflation alternating over the short and medium terms. That also starves the real economy. It stole the energy last spring so legitimate business were squeezed or crushed (e.g. independent trucking). Then the deflation squished the makers of goods as people postponed purchases. Soon we will switch back to inflation mentality, use or lose the dollars, and yet another squeeze on anyone who buys things, especially businesses that need things. The end result is that the inflation rallies and deflation slumps will get larger and stronger and the Fed will be forced to resort more and more to inflation.
The politicians will start to realize the end game and start wage-push inflation (for unions, minimum wage, etc). That will be the start of hyperinflation. We won't need 90% unmployment like Zimbabwe nor will we end up with 250,000,000% inflation like theirs. But ours will be just as devastating to the real economy.
“What’s Going to Replace the Dollar?”
Nothing.
Right now for about 15 paper dollars you can buy one silver dollar, the “Eagle.” Each contains an ounce of silver bullion, and the best of the breed have numismatic value as well. Perfect exemplars minted in 1995 sell for 4,000 paper dollars. When paper becomes worthless, silver dollars will still buy things. (Gold too but silver is cheaper and handier.)
Methinks that common calibers of ammunition will also have value as “currency.”
I'm also thinking the Yen too, I don't think it has to be a 1:1 par for the dollars to start being drained out of America. China has the infrastructure for actually manufacture stuff and not just selling information or service oriented jobs. Once China allows Christianity to exist within its boarders legally the flow of people and money out of the US will start. It will be a slow movement but it will start when things start really getting bad over here. Jesus in the great commission told the disciples, Matt 28:19-20..."Go therefore and make disciples of all the nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit, teaching them to observe all the things that I have commanded you; ......"
There has been small movements here and there with the gospel being taken to other nations, but the major movements of the gospel spreading in my opinion have been preceded by economic/political troubles and/or religious persecution. Economic troubles brought on by religious persecution is what brought the pilgrims and puritans over to America, I believe it will happen again but this time the Christian will leave America willing or maybe not so willing, never the less it will be God that fulfills the great commission through those that are his through trails and tribulations.
But hey I may be wrong about China it could be Africa(longshot) but never the less I think within America God will bring us trails and tribulations just to get Christians to work together and not just be individualistic, and materialistic.
There are a few major twists and turns to the future of the dollar.
To start with, a dollar is only good as long as it is cash in hand. You may have a million dollars in a bank, but if the bank is having a “bank holiday”, not permitting electronic transfer, you have no money. Other nations own billions of dollars of US debt, on computer, that can be defaulted on instantly. There is only a tiny amount of US paper currency overseas that the US has to recognize.
The zinger to this is that paper money is clearly labeled “This note is legal tender for all debts, public and private”. Electronic money doesn’t say that. So nobody has to accept electronic payment for anything. Another twist to this is in the “for all debts” part of that phrase. If you have a *debt*, then whoever it is *in the US*, is obligated to take paper dollars for payment.
However, nobody is obligated to *make* a debt in exchange for paper money. That is, a sale cannot be forced by law, just because you have paper money.
All of this matters terribly much right now, because the US Bureau of Engraving and Printing has to work at 100% capacity in its two printing offices, just to maintain a backing of only 5% of our daily retail economy. 95% of our daily retail economy is electronic. And that money, too, can just be canceled as well.
But can’t the US just print more paper money, or higher denominations of money? Not really. Right now, there are about 500B in $1 bills in circulation, but only 160M $100 bills floating about, many of which are saved, so far fewer are in circulation.
To print more money of any kind, the US would have to open a whole group of high security printing offices and obtain the security note paper and ink. This could take a year or two. And if they tried printing even $1000 bills, nobody could make change for them. There aren’t enough $100 bills to do that regularly.
This is very different indeed from just telling a computer that the number $10,000,000,000 is actually $0, or visa versa.
On an unrelated note, just because the US dollar is the only legal tender in the US, doesn’t mean it is the only way to conduct commerce. Right now, the California government is issuing IOUs, traditionally called “scrip”, to its employees, because it does not have the cash to pay them.
If there are major currency fluctuations in the dollar at home, States should be encouraged to float their own scrip, as a “complementary currency” to the dollar. This achieves many things, keeping local and State governments functioning, keeping commerce flowing in the State retail markets, and it helps the State government concentrate the dollars it has to import goods from other States that it needs.
And importantly, scrip is a big help in stabilizing the dollar as well.
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