Skip to comments.For the dollar, a 'crisis' is relative. With no alternative, a USD collapse is unlikely
Posted on 04/23/2011 8:21:27 AM PDT by SeekAndFind
The greenback has been in decline for a decade, but the latest slide is setting off alarms. Still, a collapse seems unlikely given the lack of a real global alternative to the dollar's status.
Housing crisis, 2007. Banking crisis, 2008. Unemployment crisis, 2009. European debt crisis, 2010.
For 2011: a dollar crisis?
You will probably hear more warnings to that effect soon if the U.S. currency continues on its current path. Although the dollar has mostly been falling against its major foreign rivals since 2001, the slide this spring is taking it to levels that fit conveniently with a variety of doomsday predictions for the economy.
What better symbol of debt-hobbled America's decline than the collapse of the once almighty dollar?
Except the dollar isn't collapsing not yet, anyway. It is, however, weak and getting weaker. And you may be having your own personal dollar disaster if you were planning to take a foreign vacation soon. The greenback's loss of purchasing power in much of the world may scuttle more than a few overseas jaunts by Americans.
But the kind of dollar crisis envisioned in most doomsday scenarios would entail investors fleeing dollar-denominated stocks and bonds in a mad rush. And there's no sign of that.
The Dow Jones industrial average ended this holiday-shortened week at 12,505.99, its highest level since June 2008. Most broader stock indexes are within 1% of their recent highs.
In the bond market, yields on Treasury securities have mostly moved lower over the last two weeks. Ditto for yields on most corporate and municipal bonds. A selling binge would mean higher, not lower, yields.
Still, it's easy to see why the dollar's latest slump would set off alarms.
(Excerpt) Read more at latimes.com ...
the boomer generation inherited a great economy,
but they don’t seem too concerned about passing on a better economy to their children.
Obama is destroying the greatest valuable asset the US has.
The same kind of folks said real estate wasn’t a bubble back about 2006 or so.
Actually, I have my own personal dollar crisis every time I pull up to the gas pump.
That tends to happen when virtually every other industrial power is bombed/nuked back into the stone age, and your country is the only one left standing.....
All the majors currencies have been dying for years. The dollar included. But because they were all going down together and their strength of each is analyzed and reported relative to the others, it didn’t appear that the dollar was falling as badly as the others. It is like several planes in the sky that are all crashing toward the earth, but one plane is crashing less slowly, so compared to the other plans, it is still flying all right.
This has only been possible because the dollar is the world’s reserve currency and because so many other nations are so heavily invested in it that they didn’t want it to nosedive, so they’ve propped it up with loans upon loans.
Make no mistake about it. When these currencies crash, our way of life crashes. These currencies are being crashed on purpose so that all the world demands a new, global currency that is controlled by a global, centralized banking system. This will effectively put an end to national sovereignty and to our Constitutional way of life.
And if you think this is a good idea, study the Federal Reserve and learn what an awful job they have done in meeting their stating goals (low inflation, strong dollar, no recessions, etc.) and what a great job they have done in destroying our currency and wreaking havoc on our economy, which wreaks havoc on our daily lives. The dollar has lost 90% of its purchasing power since the Fed took over. Back in the 1950s and 1960s, one earner in a household could work and support the American dream. Now it takes both adults in a household working to support that same dream.
Now imagine this on a global scale. And imagine those global controllers being the same “-ism” group that hates America and Americans and the American way of life and thinks that “justice” is redistributing America’s wealth (better read that ‘earnings’ and ‘savings’) to other nations who are the ‘victims’ of American ‘theft’ and ‘oppression.’
Do not be misled. They aim to punish each and every one of us and to give us the third-world standard of living they believe is ‘justice.’
boy, ain’t that the truth. I just heard a commentator say that he thinks gas will go up to $6 a gallon this summer. I have at least 2,000 miles to drive in addition to all my usual driving this summer. Sheesh!
This is the cursed inflation foisted upon us the the collusion of the Fed-Gov and the Fed. Once I did a simple analysis with inflation (just at 1%-5%) and demonstrated that my (then) current income would eventually be surpassed by inflated cost of living, even with annual raises of income! The Fed via the Fed-Gov has been draining the value from us at a frog-in-slow-boiling-pot rate. It is as if a thief has been slowly changing the coins in my pocket from silver to worthless metal-no, uh, wait, uh...
This graph is typical of the house valuations in zip code 80917 - Right in the front yard of NORAD, Airforce Academy, Ft. Carson, Northern Command...
Given that "Liar Loans" and dishonesty were a central element of how the bubble got blown, it doesn't exactly inspire confidence in the calibration of the moral compass of those "leading" the Technocratic Military Industrial Oligarchy.
It's almost as if Yuri Bezmenov...
1. Ideological subversion is the process which is [a] legitimate, old word, and open. You can see it with your own eyes. All American mass media has to do is to "unplug bananas" from their ears, open up their eyes, and they can see it. There is no mystery.It has nothing to do with espionage. I know that espionage intelligence gathering looks more romantic. It sells more deodorants through the advertising. That's probably why your Hollywood producers are so crazy about James Bond types of films. But in reality the main emphasis of the KGB is NOT in the area of intelligence at all.According to my opinion, and the opinions of many defectors of my caliber, only about 15% of time, money, and manpower is spent on espionage as such. The other 85% is a slow process which we call either ideological subversion, active measures, or psychological warfare. What it basically means is: to change the perception of reality of every American that despite of the abundance of information no one is able to come to sensible conclusions in the interest of defending themselves, their families, their community, and their country.It's a great brainwashing process which goes very slow and is divided into four basic stages.The first stage being "demoralization"....---KGB DefectorYuri Bezmenov
...knew what he was talking about.
“the boomer generation inherited a great economy”
I’m a boomer and we may likely go down as the most self-absorbed generation in our storied history.
The problem is that the foundation of the US economy is quickly eroding. We have lost our manufacturing and engineering — we have lost our industry and are producing less and less. We are consumers and not producers.
Some think that this is okay — mostly the Left.
I’d like to think that we’d be able recover. When Americans are forced into a corner, we are very innovative and determined. Unfortunately, many on the Left are slowly killing what little initiative remains.
The Left tell us that mediocrity is okay and then tie both of our hands behind our back through regulation. And they remind us time and time again how evil America is. They only focus on the bad and not the good.
That looks like the kind of bubble graph that would get Barney Frank really excited.
This is, in my opinion, exactly what is transpiring.
"Exxxxxcellent. The fools suspect nothing!"
“The Left tell us that mediocrity is okay and then tie both of our hands behind our back through regulation.”
Because we let them. The time for disregarding their diktat, whether in the form of a suffocating PC miasma or threat of law and the inherent violence which lies behind each law, is rapidly approaching.
We must eventually turn and face them, as they will accept nothing less than totalitarian control. We must eventually defeat them or wear their yoke. There is no middle ground.
LAT carrying the commies water as usual.
The US dollar will collapse. Not due to printing but due to sovereign default.
The US Taxpayer will not pay back $14trillion...or eventually $20Trillion...or $30trillion...much less meet their supposed other obligations of $60-$100trillion of unfunded liabilities.
It's not going to happen, ever, because it can't. We don't have the money.
As the interest on that debt continues to grow with the principal, and worse, with a greater risk premium driving interest rates higher, the US Taxpayer/Voter will OFFICIALLY DEFAULT.
It's easy to imagine a scenario where our annual interest payment is $1 trillion.
Who in the right mind would pay that?
Unfortunately, we’ll need a major crisis to set things right. Americans are too warm and comfortable right now to do anything about it.
Not being able to get to work because gasoline is too expensive, not being able to feed our families because prices are way too high, not being able to heat our houses because energy prices are too high, not being able to find a decent paying job to pay for the necessities.....etc.
We will quickly find out that we can’t afford the extravagances of the Politically Correct and environmentalism when we are freezing and starving in the dark.
“a collapse seems unlikely given the lack of a real global alternative to the dollar’s status.”
What an idiot. Why is gold and silver going up so fast?
There’s always an alternative unless we let the IMF take over all currencies.
You are 100% correct!
“Given that “Liar Loans” and dishonesty were a central element of how the bubble got blow”
I went with a stated income when I bought my house, mostly because I own my own company and the paperwork is a nightmare.
The bank told me how much money I had in my account. How exactly would it be possible to lie about how much money I had?
The banks didn’t care, because they knew they could turn around and sell that loan for a huge profit.
As a member of the baby boomers I see first hand the spoiled stupidity of a generation who had everything handed to them. Not all, of course, but in general.
“All the majors currencies have been dying for years. The dollar included. But because they were all going down together and their strength of each is analyzed and reported relative to the others, it didnt appear that the dollar was falling as badly as the others. It is like several planes in the sky that are all crashing toward the earth, but one plane is crashing less slowly, so compared to the other plans, it is still flying all right.”
Very good, you figured it out. I wish I had before sinking money in the Euro and Yen...lost a bit there. But now I’m in oil and have it back. The idea of a simultaneous crash, I think, is too much for our geniuses in economic planning to comprehend, because it doesn’t fit any of their PRECIOUS models. It simply hasn’t happened before and therefore is not credible today (kinda like when we said Iraq wouldn’t invade Kuwait in 1990 because they hadn’t invaded Kuwait in the past).
I had to finally think it through (after losing my money) and figure it out. You have the Euro taking a dive because of the freeloaders in the South (that’s what got me), and you have the Yen taking a dive because the HUGE Japanese debt (twice our size, per-capita). So the two currencies we compare ourselves to are in deep, deep, trouble. The Chinese Yawn, which should be skyrocketing, but isn’t deceives us...and the Chinese will not let it skyrocket - which is the only reason why it doesn’t.
So then what? What if all of the major currencies in the West crash at the same time. Well, you’d see oil prices soar, gold soar, food soar....get the point, it’s already going on. Prices for REAL commodities are soaring, because their is so much currency chasing them.
But the end result is that we will all be in wretched poverty, once the credit spigot from Japan and China dries up, and I doubt very much we make it through this year without that happening. And I also very much HOPE that we have this crash before the 2012 election...so we just might straighten ourselves up and start pulling out of this mess.
As to avoiding the real crash, FORGET IT. Half of the older people on this site are not ready to give up their PRECIOUS Social Security, Medicare, or other ‘entitlements’ (and believe me, I’ve had enough people scream enough at me here to know what I’m talking about), which is the ONLY way to prevent the crash, which also means 90% of the older people in the country feel the same way - no cutting entitlements. So there is NO WAY to avoid the crash - just hope it is quick and real fixes get made to end the mess.
They inherited a (mostly) free country, but they embraced the errors of socialism and license.
Yhe University Of Texas isn’t worried at all about the dollar.<>
A lot of it is balderdash. We still produce and in quantity but not the same stuff
Until the housing debacle we were operating at more than full employment with the beyond 100% made up by illegals.
Sleep peasants, the end is not near. Your masters will always care for you as we are compassionate.
RE: Yhe University Of Texas isnt worried at all about the dollar.<>
That’s a very cryptic remark that elicits the natural response -— “and why is that?”
I reached the same conclusion a while back after reading some freeper comments here on articles about the unsustainability of SS/Medicare. We are toast.
I read an unintentionally funny article a couple of months ago about how such an economic collapse could never happen here since (wait for it!) for that to happen, "the congress would have to stand by and just watch it occur, without doing anything to stop it", which of course, the author assured, could never happen. Yeah, I got a good laugh when I read that. (And that was before the recent "budget showdown".)
The Univ of Texas endowment recently took possession of almost 1 billion dollars worth of gold bullion.
Gold...Laddie, a billion dollars worth.
About the crash happening before the 2012 elections...
One of my main concerns since the TEA party started its ascent is that it may be too late to correct this economic crash by ‘sane’ economic policy. That if we do everything that we should do, it will still crash. And then the left will blame us (true capitalism and the free-market system) for the crash. They’ll say, “See, we saved us from a depression, we were in recovery, but you conservatives took over and ruined it.”
It will all be a lie, of course, but it won’t matter, because we will be in the crash and people will be screaming for handouts.
I’d like to note one other pet-peeve that is driving me crazy. I hate the term “Crony Capitalism.” This is a term invented by leftists/socialists to smear big corporations. Here’s why it bothers me. True capitalists and free-marketers understand that competition is what drives efficiency, good product, good service, and the lowest cost to the consumer. What every business owner in their heart-of-hearts would like to do is eliminate all their competition so that they can charge what they want. In short, what they’d like is a monopoly. To defeat your competition by out-performing is fine. But to collude with the government (as GE has done with Obammie and his Commies) is to abandon free-market principles for the sake of monopoly.
When any type of business entity does this (I don’t care if they are a Leviathan like GE or a two-employee shop), the cease being capitalists and become socialists. The correct term for these is “Corporate Socialists” NOT “Crony Capitalists.”
And in terms of the technical definitions used in economics, this is actually a facet of fascist economic policies, not socialist. But the term “fascist” has been so abused by the left in order to launch ad hominem attacks on anyone who they want to demonize as “extreme” in their viewpoints (anyone to their right, that is), that the term “Corporate Fascists” would also be used to demonize capitalism and the free market.
You’re right. A large part of the reason our economy is falling apart is that we’ve shipped our best jobs overseas. What few fail to realize is that what this really means is that America doesn’t really have much to sell.
What helped us build our economy after WWII was having a massive industrial capability. Everything we built was high quality.
After we shipped manufacturing offshore, we then sent the next best jobs we have: white-collar jobs (computer and other high-tech) and now we’re sending other white-collar jobs.
These jobs and the money/income that goes with them leave our country and do not come back.
So I ask you, with no product to sell and with fewer and fewer services to sell and a true credit-worthiness so low that if America were a person he/she couldn’t borrow $10 from their neighbor, just what exactly is the value of our dollar based on? Almost all of it is based upon our military strength and the roll we play as the world’s cops (a role I no longer support but one that is fast becoming the only “service” we will be able to “sell”) and because the US dollar is the world’s reserve currency.
I’ve heard arguments from both sides regarding the dollar will or can be dumped as the world’s reserve currency. Both are sound arguments and I have no way of knowing the final outcome or the timing of that outcome.
But one point cannot be denied, there are massive and powerful forces trying very hard to dump the US dollar as the world’s reserve currency. The BRICS nations is the primary culprit. Notice that those countries include two nations that are taking most of our manufacturing and jobs.
“Collapse” comes in many forms. I call a massive devaluation a collapse. Inflation is that devaluation. We still have a weak economy and that keeps prices down but a crippled dollar is about to make inflation a reality just at a time we can least afford it.
I just read this excellent and, in light of our recent exchanges, remarkably timely article by Mark Steyn. He hits on a few of the critical points that we’ve been discussing.
One-time Subprime Mortgage leader Ameriquest/Argent Mortgage wasn't a bank. They had no deposits over which to exercise fiduciary responsibility.
They were part of the pirate armada that sailed out of defunct Long Beach Savings - where Roland Arnall, the Godfather of Subprime (and W's ambassador to the Netherlands), refined the craft of predatory lending.
All of Ameriquest's fraudulent "AAA" A$$paper was dumped into the economic pipeline where it poisoned the investment pond for everything from insurance companies to retirement funds - all entities looking for a high rate of return.
"We didn't change the mortgage industry - we revolutionized it"
1. Ideological subversion is the process which is [a] legitimate, old word, and open. You can see it with your own eyes. All American mass media has to do is to "unplug bananas" from their ears, open up their eyes, and they can see it. There is no mystery.It has nothing to do with espionage. I know that espionage intelligence gathering looks more romantic. It sells more deodorants through the advertising. That's probably why your Hollywood producers are so crazy about James Bond types of films. But in reality the main emphasis of the KGB is NOT in the area of intelligence at all.According to my opinion, and the opinions of many defectors of my caliber, only about 15% of time, money, and manpower is spent on espionage as such. The other 85% is a slow process which we call either ideological subversion, active measures, or psychological warfare. What it basically means is: to change the perception of reality of every American that despite of the abundance of information no one is able to come to sensible conclusions in the interest of defending themselves, their families, their community, and their country.It's a great brainwashing process which goes very slow and is divided into four basic stages.The first stage being "demoralization".--KGB Defector Yuri Bezmenov.
25 They exchanged the truth of God for a lie, and worshiped and served created things rather than the Creator who is forever praised. Amen.26 Because of this, God gave them over...
Meet the New Boss, same as the Old Ba'al--The Who?
That's a legitimate use of a tool created for that purpose. But...
The essence of the issue was captured in a 2008 article published by the OC Register:
"Gimein traces the history of the liars loan, which began as a way for those who earned commissions or owned businesses or otherwise had unpredictable incomes to get loans. Yet it ballooned into a huge part of the mortgage industry during the latter years of the boom. The fallout is widely felt, he writes:
(C)onsider the position of borrowers in markets where close to half the people taking out mortgage loans were lying. Keep in mind that in some places (for instance, San Diego), half the people in the market were taking out stated income loans and so bidding up prices to points where almost any house became impossible to finance for someone who did not lie."
---A brief history of the liars loan,
---Orange County Register, April 28, 2008
Once upon a time, lying when engaging in a financial transaction was called "Fraud" -- but evidently that was before...
"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"Hos 12:7-8
7 The merchant uses dishonest scales;he loves to defraud.
8 Ephraim boasts,
"I am very rich; I have become wealthy.
With all my wealth they will not find in me any iniquity or sin."
What industry do you work in? I am in High Tech and have seen huge changes lately. I have watched several oursourcings including my latest job in which I was laid off.
While this is happening, our government is accumulating huge debt. Debt that will be impossible to pay back due to the lack of high paying, high revenue, jobs. 50,000 McDonalds minimum wage jobs are nice but they aren’t going to pay off a 14 trillion debt.
The only remaining industry is Medicine and that will be changing soon once Obamacare kicks in.
The difference between bank and mortgage company is a technical difference. Both had their large share of corruption and fraud.
“A lot of it is balderdash. We still produce and in quantity but not the same stuff”
What will we produce? Once people are forced into a different career, lack start up funding, and lack a viable market where will go turn to produce?
One thing that we have going for us is that we are huge consumers. We have the infrastructure to support consumption. This is important to countries like China who sell us junk.
Consumption feeds upon itself. But it will eventually fail when the dollar loses it’s value and we can consume less and less. Probably analogous to the air leaking out of an over inflated balloon. When demand drops off so does our economy.
Fiduciary responsibility is much more than just a "technical" difference.
It's a legal and moral obligation...
Sponsors Pirates of the American Dream
....neither of which applied to Roland Arnal's Sub-prime pirate armada where...
...mortgage fraud, drugs, sex, and money, money, and more money. My friend and manager handed out crystal methamphetamine to loan officers in a bid to keep them up and at work longer hours. At any given moment inside the restrooms - cocaine and meth was being snorted by my estimates more than a third of the staff, and more than half the staff manipulating documents to get loans to fund and more then 75% just completely made falses tatements on 1003s regarding stated income etc to get loans funded. A typical welcome aboard gift was a pair of scissors, tape, and white out, three things a loan officer or financial professional should never need.. Of course no where in training OR in management training did this 20 year old ever learn that false statements on a 1003 were a federal offense....
“Fiduciary responsibility is much more than just a “technical” difference.”
Both mortgage companies and banks have a fiduciary responsibility defined by law.
Both mortgage companies and banks have a fiduciary responsibility defined by law.
What Does Shadow Banking System Mean?
The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight. The shadow banking system also refers to unregulated activities by regulated institutions.
Unregulated? Hmmm. Let's ask the good Lutheran question - what does this mean?
[While this is happening, our government is accumulating huge debt.]
I recently had a class with a Master Software Architect who told me he'd seen a list of classified software projects that were all 100+ Million dollars -- and all in failure mode. The list was several pages long.
Reminds me of the time when executives of a certain mortgage company were also executives of an east-Asian outsourcing firm... a firm which received substantial funds, related to a loan processing system with a rumored cost in the neighborhood of half a billion dollars -- that failed... ASAP.
Nothing to see there, just a little curryous washing being done at the H1B laundromat, evidently.
To: MLee [at] innercitypress.org
From: [Name withheld]
Sent: Thu, 21 Sep 2006 1:23 AM
Dear Mr. Lee: I was previously employed by Argent Mortgage for two and a half years and managed, among other areas, the corporations fraud investigation, borrower complaints and repurchase departments. There are currently over 568 open fraud investigations involving hundreds of brokers and hundreds of millions of dollars in fraudulent loans that are being covered up by top executives in the company. If a broker sustains a certain monthly volume, Argent management looks the other way and, not only does not suspend the bad brokers, but knowingly sells these fraudulent loans on the secondary market to unwitting investors.
I was terminated today and left with just my purse in tow, but I have names of individuals in the company who need to be served with subpoenas to enable them to turn over their spreadsheets and boxes full of documentation and evidence of all the fraud they have found that is being covered up by Argent Mortgages executive management. The state regulators need to know the truth about the blind eye Argent turns to the fraud perpetrated on innocent consumers by high volume brokers. They also need to be aware that Argent knowingly bundles these fraudulent loans and sells them as mortgage-backed securities on Wall Street, thereby compromising the SEC, as well as our countrys economic stability.
At a recent fraud seminar attended by hundreds of mortgage lenders in Washington D.C. a week ago, an attorney who works for Argents retained law firm, Buchalter Nemer, stood up and told the seminar attendees that the wholesale lenders in the audience had better beware, unless their name is Argent. Argent is safe from investigation because the government got their $325 million settlement from Ameriquest and wont be looking into Argent, per the settlement agreement. I hope this isnt true because Argent Mortgage funded over $50 billion in 2005 and is gearing up to fund well over $80 billion dollars of fraudulent loans in 2007.
Evidently not all of them.
So this person knowingly committed fraud, didn’t report it, and is somehow honorable?
“Both mortgage companies and banks have a fiduciary responsibility defined by law.
What part of my statement is bs? For you to argue that point shows your ignorance.