Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

For the dollar, a 'crisis' is relative. With no alternative, a USD collapse is unlikely
Los Angeles Times ^ | 04/23/2011 | Tom Petruno

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 ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: collapse; devaluation; usdollar
Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-76 next last
To: LomanBill

“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.


21 posted on 04/23/2011 10:21:07 AM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
[ Post Reply | Private Reply | To 10 | View Replies]

To: ken21

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.


22 posted on 04/23/2011 10:29:16 AM PDT by ViLaLuz (2 Chronicles 7:14)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Ghost of Philip Marlowe

“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.”

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.


23 posted on 04/23/2011 10:39:30 AM PDT by BobL (PLEASE READ: http://www.freerepublic.com/focus/f-news/2657811/posts))
[ Post Reply | Private Reply | To 7 | View Replies]

To: ken21
the boomer generation inherited a great economy

They inherited a (mostly) free country, but they embraced the errors of socialism and license.

24 posted on 04/23/2011 10:58:16 AM PDT by PGR88 (I'm so open-minded my brains fell out)
[ Post Reply | Private Reply | To 2 | View Replies]

To: SeekAndFind

Yhe University Of Texas isn’t worried at all about the dollar.<>


25 posted on 04/23/2011 10:59:34 AM PDT by blam
[ Post Reply | Private Reply | To 1 | View Replies]

To: dhs12345

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.


26 posted on 04/23/2011 11:04:45 AM PDT by bert (K.E. N.P. N.C. D.E. +12 ....( History is a process, not an event ))
[ Post Reply | Private Reply | To 12 | View Replies]

To: SeekAndFind

Sleep peasants, the end is not near. Your masters will always care for you as we are compassionate.


Guards, take the suitcases to the private jet, we leave for Switzerland immediately.


27 posted on 04/23/2011 11:49:47 AM PDT by RicocheT
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

RE: Yhe University Of Texas isn’t worried at all about the dollar.<>

That’s a very cryptic remark that elicits the natural response -— “and why is that?”


28 posted on 04/23/2011 11:55:06 AM PDT by SeekAndFind
[ Post Reply | Private Reply | To 25 | View Replies]

To: BobL
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.

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".)

29 posted on 04/23/2011 12:03:24 PM PDT by aLurker
[ Post Reply | Private Reply | To 23 | View Replies]

To: SeekAndFind
RE: Yhe University Of Texas isn’t worried at all about the dollar.<> That’s a very cryptic remark that elicits the natural response -— “and why is that?”

The Univ of Texas endowment recently took possession of almost 1 billion dollars worth of gold bullion.

http://blogs.forbes.com/robertlenzner/2011/04/17/university-of-texas-endowment-holds-1-billion-gold-5-of-its-portfolio/

30 posted on 04/23/2011 12:41:38 PM PDT by Blennos
[ Post Reply | Private Reply | To 28 | View Replies]

To: SeekAndFind
"That’s a very cryptic remark that elicits the natural response -— “and why is that?” "

Gold...Laddie, a billion dollars worth.

31 posted on 04/23/2011 1:06:26 PM PDT by blam
[ Post Reply | Private Reply | To 28 | View Replies]

To: BobL

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.


32 posted on 04/23/2011 1:13:20 PM PDT by Ghost of Philip Marlowe (Prepare for survival.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: dhs12345

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.


33 posted on 04/23/2011 1:20:53 PM PDT by Ghost of Philip Marlowe (Prepare for survival.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: SeekAndFind

“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.


34 posted on 04/23/2011 1:45:42 PM PDT by CodeToad (Islam needs to be banned in the US and treated as a criminal enterprise.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: BobL; A message; dhs12345; VRW Conspirator

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.

http://www.freerepublic.com/focus/news/2709544/posts?page=1


35 posted on 04/23/2011 2:15:07 PM PDT by Ghost of Philip Marlowe (Prepare for survival.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: bolobaby


36 posted on 04/23/2011 2:24:24 PM PDT by Aquamarine
[ Post Reply | Private Reply | To 15 | View Replies]

To: driftdiver
>>The banks didn’t care

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"
--Argent Mortgage


37 posted on 04/24/2011 7:15:15 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
[ Post Reply | Private Reply | To 21 | View Replies]

To: Ghost of Philip Marlowe
[it may be too late to correct this economic crash by ‘sane’ economic policy]
 
The systemic corruption self-evident in our economic infrastructure is a direct result of a deliberate process...
 
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.
http://www.freerepublic.com/focus/news/2095202/posts
 
Exhibit A:  The "Fiscally Conservative" Log Cabin perverts infesting the government termite mound.
 
And it's not like this wasn't predictable - or hasn't happened before:

Rom 1:25-26
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...
NIV
 
[But the term “fascist”]
Meet the New Boss, same as the Old Ba'al
--The Who?
The state merger of commerce, governance, and religion is nothing new under the Sun.
 
 
 

38 posted on 04/24/2011 7:39:47 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
[ Post Reply | Private Reply | To 32 | View Replies]

To: driftdiver
[I went with a stated income when I bought my house, mostly because I own my own company and the paperwork is a nightmare.]

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 liar’s 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 liar’s loan,
---Orange County Register, April 28, 2008

http://mortgage.ocregister.com/2008/04/25/a-brief-history-of-the-liars-loan-and-a-poll/1069/

 

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?"
http://www.pbs.org/wgbh/pages/frontline/warning/view/
 
 
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."
NIV


 

39 posted on 04/24/2011 7:58:29 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
[ Post Reply | Private Reply | To 21 | View Replies]

To: bert

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.


40 posted on 04/24/2011 9:29:08 AM PDT by dhs12345
[ Post Reply | Private Reply | To 26 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-76 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson