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Death of the Dollar
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We’ve all done it, haven’t we? Chucked something in the wash and turned it on too high, only to see it pop out at the end of the cycle and it ends up the size of your hamster. Well, Obama has been doing the same. Except this time it’s not your winter woollies that he’s shrinking, it’s the greenback.
The US currency is shrinking as a percentage of world currency today according to the International Monetary Fund. It’s still in pole position for the moment, but business transactions are showing that companies around the world are today ready and willing to make the move to do business in other currencies.
The US Dollar has long been the world’s number one denomination in world currency supply. It represents 62% of total holdings in foreign exchange in central banks around the world. But, it is in for a tough race from up-and-coming strong currencies. The Japanese Yen and the Chinese Yuan are both giving the Americans a good run for their money. The Swiss franc is too (surprisingly). There is $6 trillion in foreign exchange holdings around the world at any given time, on average and the US Dollar represents almost two-thirds of that.
The fact that Brazil and China have also just signed a currency-swap deal worth something to the tune of $30 billion stands as living proof that the dollar may be further on the wane. China will exceed all expectations in the future as the world’s largest economy. The US will be overtaken. The Chinese currency will one day overtake the Dollar too. Has to be!
Although, it’s not quite there for the moment. China is not near being the world’s reserve currency yet. In order to be the world’s reserve currency there would be the need to produce enormous quantities of what the world wants. China has got that one off pat already. Then, countries holding the reserve currency would need to be able to spend that currency elsewhere in other countries or find a place to put it while waiting to do so. World capital markets are currently in dollars (40%), which means that there would be no possibility of using the Chinese currency. But, that’s only a matter of time. Some are predicting this will happen pretty soon.
The Federal Reserve has come in for some strong criticism over the unconventional Quantitative Easing methods that have resulted in 3 trillion spanking new dollars rolling off the printing presses. This has certainly brought about some degree of worry around the world that the dollar is not quite as safe as it might have been thought to be in the past. Is the world worrying that the dollar is not as safe a bet as it used to be in world domination. Are central banks worried that it will shrink in the wash and the colors will run?
Some are predicting that the dollar will shrink rapidly over the next two years and it will lose its top place as the world’s reserve currency by 2015. In the 1950s the dollar was 90% of total foreign currency holdings around the world. The dollar has definitely lost out to other currencies that are stronger. If there is a continued move and the dollar shrinks, then the resulting catastrophe that will ensue will have a spiral effect on the already enormous US budget deficit (over $1 trillion a year on average).
The only reason the Federal Reserve has been in a position to print more money recently is simply because they are in the strong position to be able to do so as the world’s leading reserve currency. If that changes, then the Americans won’t have the possibility of just hitting the button and setting the printing presses rolling. That means the US will be in no other position than to end up having to pay their debt back.
The US economy and the market are starting to show signs of recovery. Signs. It’s not sustained, hope as they might. If the dollar loses its attraction, then it won’t be used as the international reserve currency. Businesses will start using another currency and the dollar will lose out further still.
Some experts are saying that the problems of the dollar are like a time-bomb ready to explode. Ultimately, it will bring about the death of the dollar. As we stand on and watch, huddled around the coffin as it is lowered into the ground, we know it’s all too late. The flowers have been sent and the Stars and Stripes has been played in recognition of loyal service for the nation.
The QE methods are nothing more than aiding and abetting the already problematic situation of the greenback. We might look back in years to come and reminisce over whether it was the right (long-term) solution to use QE, whether printing bucks sent the greenback to an early grave, or whether it just reached the end of its life and croaked peacefully without making too much noise.
But, criticism of and worry over the dollar and its longevity have been hot topics for years now. The US dollar is a fiat currency that can easily lose status, deriving its value from government regulation and law. But, then again, so is the Euro. So, people living in Europe shouldn’t start throwing stones…they live in glass houses too…and that’s before they start.
Originally posted: Death of the Dollar
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I agree with you Tom but if you live in the SF bay area everything looks great.
Live near NSA office's worldwide life looks good.
Live near any SPY front company GOOG, ORAC, APPL, MS, FB, TWIT ... life looks great.
*
Life is only rough if your not part of the NAZI empire.
Now that is true. +1 Satoshi.
Cannot wait until the day the markets crash and people do not rush into the POS FRN but instead into gold. It is taking extraordinary interventionism and coordination by the Western banking cabal just to have it so that when markets crash people 'flock to the FRN'. Such BS.
The Roman Cesaer coins also went the way of the dodo bird, but they're worth a fortune now as 'antiquities!'
Yeah if humans are still around in 2000 years time I bet US paper dollars will be worth a fucking fortune ! Stack em up for your grand,grand,grand,grand..................................kids
Obama DID destroy that dollar.
yes and the tea party is gonna restitute it with austrian glühwein. Prost !
oups, I burped.
Now they're saying Bush III (Jeb) will be GOP nominee!?!?!
MSM has DESTROYED Ron and Rand Paul (as well as any Libertarian, Independent, Tea Party....) 3rd flavor.
no more bush
no more clint-on
we are tired
of being pissed on.
The MSM, and even Fox News, is trying to convince us that Killary is a shoo-in as the first female communist POTUS, if the Repugnicans don't run a constitutionally ineligible hispanic RINO for POTUS.
We are doomed!
Nixon, or even Wilson certainly share some blame.
But the FedRes deserves the most.
Is job of president of USSA, no? Destroyer-in-Chief.
Let me be clear; "All fiat is going to it's intrinsic value". This isn't just in the U.S. and in the dollar, it's every single fiat currency on earth.
It's the law of historical constants.
Alas.
Boris is not sophistication in investing, but know one thing, value of something is what other person is pay for something in future. Value of share of stock is what is worth some time in future. Value of currency is what future counter party is give in exchange. Determination of value is base only on belief of future counter party exist and is exchange item of real value.
... but what is Boris know!?
Boris, you know a lot...it's like the old farmer once told me, something is only worth what somebody is willing to give you for it. It's just that simple.
Thats why cute girls get taken to nicer restaurants than ugly ones. All women understand this equation. If Kisses were dollars, the girl that kisses too many, debases her currency.
the "too" pretty much says it; the rest is tautology.
maybe they get good at it too.
Those bastards using less greenbacks are all terrorists and need a good droning
Nobody should use greenbacks; only use crypto-currency.
2017: America secedes from Backdoor Barry, leaving him ruling only DC, NY and MA. CA returns to Mexico.
Ron Paul, president of the new US, issues Greenbacks.
My fantasy is fulfilled.
I don't get the hate around here for crypto-currencies. I always notice shittons of downvotes whenever someone even mentions it. For all the bitching and moaning (which I agree with, btw) about central banking and all of that, you'd think this would be an exciting prospect. I would never suggest any one currency be given "reserve" status, but instead a basket of currencies, including crypto and precious metals alike. I mean, why the fuck not? I don't think anyone is suggesting it become the law to use any one currency.
Eh, maybe this place just likes to bitch about the status-quo, but really doesn't want to do anything about it.
*scratches head*
Most of it is just because fonestar is a douche. And that is coming from someone who has been mining and holding bitcoin/litecoin for over three years.