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It’s a green back for a reason!!
Short of China converting to a democracy tomorrow and the European Union becoming the giant that every backpacking teenager wished it could be, the US will remain the currency of choice for Oil, gold, and any other commodity, raw material, and energy available on this pseudo green earth. Yes, aliens descending from MARS with technologies into the next millennium may make this a less compelling argument. For the time being, the bet is on the USD.
Take Japan for instance. In the early nineties numerous economists and analysts were suggesting the Yen will become the currency of choice after the Japanese binge of US assets in the late eighties and early nineties. The USD was on the “outs”. History proved this notion wrong. Not only did Japan not become the currency of choice, but the Yen became the center of what was commonly referred to as the carry trade of choice. The Japanese economy is only now hinting at an exit of the stagflation that took place during the 1990’s and 2000’s.
We know what is happening in Europe. Does the global economic power really want a currency that is mired in incongruous and possibly debilitating political strife, inefficient diplomacy, lack of sufficient job creation, to be the backing of all materials that contribute to global production and growth? For the time being, NO.
On to China. Yes, the Chinese have grown by leaps and bounds in the last 15 years. A little known fact, in the year 496 was China had 50% of global GDP. The Chinese have already surpassed Japan to be the 2nd largest economy. Even with “slower growth”, 7.3% growth per annum is nothing to gloss over. The problem with China, as every analyst, central banker, and hedge fund manager has commented is the reluctance of the Chinese government to reduce controls of the Yuan.
The reason for the control of the currency is the fact that China is a communist regime with capitalist tendencies. What is the probability that China will see the Western Light and convert to a capitalist democracy? Clearly, quite low. Does the G20 feel comfortable in readjusting the entire macro-economic mechanism to step away from the USD as a primary currency? You know the answer to this answer as well as I do.
Given crisis and after crisis, through crashes and market exuberance, the USD and the US treasury market has been the bastion of “perceived” security and caution. Grounded with the strength of an economy and a political system that by-in-large is able to sustain itself from little geo-political interventions. What other country and currency is able to offer a bit of security and comfort in a world of contortion, confusion, and malfeasance? Yes. That’s right. As I write this, we are getting word of a possible EBLOA case in NYC. So I am keeping my fingers crossed.
I challenge the central banker, manager, trader, and investors to manufacture and financially engineer a safer and better alternative to the USD.
E Pluribus Unum
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Yes indeed it is and here is one way to fix it.
Carry on!
http://investmentwatchblog.com/mining-ceo-calls-on-fellow-miners-to-halt...
Will the DOW get to 36,000 before the US national debt gets to $36 trillion?
Does he get paid to write this, and by whom?
So...this guy is pro debt.
What a fucknob.
Most idiotic article I have read this week!! Congrats.
I am patient. there is a race to the bottom between thhe $US and the Euro. ruble and the yuan are the wave of the future.
Yet another reason why 9/11 was funny.
And I challenge you to end the challenge.
"We know what is happening in Europe. Does the global economic power really want a currency that is mired in incongruous and possibly debilitating political strife, inefficient diplomacy, lack of sufficient job creation, to be the backing of all materials that contribute to global production and growth?"
Sorry, lost you there for a moment, thought you were talking about the Dollar, but you are in fact talking about the Yen, yes, ---no? the Euro, - no? errhh, what IS the difference?? It is all paper, it is all fraud, it is all a Keynesian wet dream, and it is all going to end. That is certain, when- that's the question.
It is the unobtrusive continuous stealth theft from everyone.
I have had enough, I buy gold, I don't care about Armstrong et al. I can smell a fraud when I see one, and if anything, this is it. So what, if I die before this is going to end? If nothing else, my kids will inherit the gold, and pay no taxes!
The Brooklyn Dodgers will never leave New York, the Titanic is unsinkable, unicorns are real, and the US dollar will last forever. Uh-huh.
quote
Um, gold? Silver? Lumber? How about ANY EQUITY AT ALL instead of DEBT?
Idiot.
Who says China wants it...? All they want is for more nations to trade with them and use ~Their~ currency. Maybe they're tired of Bagel & Kerry making threats in their back yard every other week, or telling them how they should conduct themselves in their own back yard/s (Russia included). Maybe they'd like to see the U.S. whacked down a notch or two on the global stage - you know, 'behave'... The bottom line in all this $USD talk is that we are only a foreign policy blunder or three away from finding out just how 'reserve' (read: value via purchasing power of imported goods) our currency is, AND just how much ~Gold~ China really has in its vaults... When that tide goes out, we're going to find out once and for all who's standing - in all their dimpled cottage-cheese nakedness, Alone in the sand.
Totally relying on small rectangular pieces of paper (at best) or zeros and ones on spinning hard drive platters seems somehow flawed as a way of enabling humanity to flourish.
Call me funny
Recently released minutes from the last Federal Reserve meeting confirmed growing concern about the pressure a stronger dollar is putting on other currencies around the world. Bottom-line is other currencies are under assault because both economies are weak and countries are buried in debt they can never repay at real market interest rates. When investors become unwilling to buy the bonds of heavily indebted nations causing the bond bubble to burst the values of currencies in those countries will tumble.
While there are not many Bond Vigilantes there are a slew of Currency Vigilantes and they are ready to make their presence known. Recent weakness in the value of the Yen, Pound, and Euro must not go unnoticed. The Currency Vigilantes are acutely aware of when a currency is overvalued or ready to be re-pegged and pounce on the weak currency to tear it apart. The article below questions just how stable the currency markets really are and may be a signal that currency trading is about to get very wild. Please note, this may also be sending a signal that the whole system is unstable and the stock market is about to drop like a stone.
Many people are looking for a "dis-inflationary crash" and it is possible or we may see money shift from bubble to bubble. I have pondered the possibility that what we are and have been going through is the "major deflationary period" that occurs before the storm. When we stand on the abyss central bankers will be forced to print so much worthless paper the money will act as a cushion to our fall and usher in the final stage which is hyperinflation. Note that hyperinflation paves an easier transition to a replacement currency and a reset of the system.
http://brucewilds.blogspot.com/2014/10/fed-concerned-that-stong-dollar.h...
This article is a dead cat bounce in the progression of the US Dollar Fiat Currency....
You wrote, “I challenge the central banker… to manufacture and financially engineer a safer and better alternative to the USD.”
All currency (as cash or bank reserves) is collateralized (backed) by promises of the US Treasury to collect confiscatory taxes from following generations of Americans. In less obscure words, the value of the dollar is dependent on the Treasury’s ability to financially cannibalize following generations of Americans.
It is an insignia of a society that cannot survive, and does not deserve to survive. I mean, what less can be said about it?
How difficult can it be to engineer a currency that does not require those that use it to guarantee the destruction of their children and grandchildren?
I designed such a currency; and when the DoJ finally realized what I was doing, it perpetrated a classic inquisition against my customers and me; some people would call it a show trial. There was no evidence, no witnesses, no victims, no discovery, no jury, all my resources were seized during this sham, and there was no trial. The DoJ felt so threatened by what we were doing, it obtained a summary (unconstitutional) judgment for a crime that never happened. (A very short bio)
Civilized and intelligent men do not allow such a currency to come into existence. They take matters into their hands and make those guilty of imposing such a currency on the nation accountable for what they have done.
As it turns out, Americans have the power to redress any grievance that could be named – and thus, exercise sovereignty; but they REFUSE to use that power. There are three main reasons for this failure: one is that they have no knowledge of such power; the second, they’ve been herded into a kind of impotent stupor by medication and indoctrination; the third, that they aid, benefit or were complicit in such evil (full article).
They've already fucked around with the currency too much...the dollar, as it was known in its heyday, or King Dollar, is available as a collectible from coin dealers, as full paper units that say Silver Certificate, large round 90% silver coins, or smaller 90% coins. Safely entombed in plastic, and graded. Today's 'dollar' (ALL currency) is an ever-changing thing...how's this off-center Jackson look? The new colors? And I'm sorry, but how many fucking different designs do we need on quarters? And what's with the stupid dollar coins almost the exact same size as quarters? They're making them out of recycled beer cans anyway, why not splurge and go for the old Eisenhower-sized round? It's gotten to the point where I'm tempted to go out and try to spend all those Chuck E Cheese and Astroland tokens...tell the cashier "It's the new dollar coin..."
What do you want to bet it can be done?
Whenever I fly back from the Philippines I make sure to have a pocketful of the quarter sized peso coins ,, the work great in airport vending machines...
To remain number one you must constantly challenge and question your methods, your results, and the sustainability of your position. It’s something every central banker, manager, trader, and investor should constantly be doing.
Now wouldn’t it be nice if someone besides you and a handful of ZH readers was actually doing it?
Gold.
The greenback is backed by nothing, other than the U.S. Military Industrial Complex, the FED debt powered printing press, and the Ponzi manipulated dark pool margin debt derivative casino.
Survived the Civil War. Now have a direct attack on Canada's Parliament and people "fence jumping" part Deaux.
No worries though! Nothing but Lone Wolf Blitzers here!
.....and all "terrorists" .
He's right, for now. All the other countries have been conditioned over the years, they want to hold US McDollars. For now.
One day we (the U.S.) will incite one rebellion too many, bomb some little country everyone else likes, knock off a beloved elected leader somewhere or just steal the wrong people's gold, and all this will change.
The other countries will get the red ass and dump all their treasuries, or maybe just stand for all the silver there is, and it's on like Donkey Kong.
I think the US has already bombed or cheated most of the worlds countries allready, and now quite possibly killed many with the spread of Ebola.
I think the ice is very thin for the US dollar, the BRICS will prove this very soon.
I myself do not want anything to do witht he US. I certainly dont want to be a tourist, or be frisked on the street or death by cop, or asked by a police officer if I have any money!
The US people were worried about Ron Pauls ideas and thought his policies were Isolationism, but really, ask any foreigner if they want anything to do witht the US. They are isolating themselves with their abusive policies.
The writer is not stating that fiat currency is not doomed to fail. He is stating if I read the article correctly that the Greenback will remain the worlds reserve currency for a long time. I tend to agree with that for the simple reason no other country really wants it, not even China. I do think the use of the Greenback will indeed diminish because of our action in the middle east and the meddling with the SWIFT system. Coupled with our use of military force and the world is getting tired of it.
It is one thing to punish a government, it is another to screw the general population of a country. This is why I think the use of our currency will indeed diminish. You do not have to be the worlds reserve currency to use your own currency trading with other countries if they both agree to it. Of course if your some small country with no nukes your basically screwed. It is all about force and the willingness to use it. As clearly demonstrated in the USA, we will definitely use it and that is why we will remain the worlds reserve currency. Nothing more.
I read your article but think you are wrong. The system which is enabled by the unbacked USD is doomed to fail. No fiat currency has ever lasted for a long time, if we are truly looking at long term. If it were to go back to a gold and silver standard, letting the price of gold and silver rise as the currency is devalued via printing more currency, then I would agree. Otherwise, you are a dreamer.
Uh, So how does the big G-77 meeting earlier this year fit into all this..??
With 134, of so, country reps present...
Hmmm..
Maybe a little spin-doctoring going on here..??
Why...? Why do you want a safer and better alternative. I mean - how will you be able to manipulate that safer and better thing. Because that´s one of the pillars holding this up.
Writer is coming from an interpretation that states Democracy is good for money, money and commerce flock to democracy. There is no proof for the statement.
There also is no reason that we need a Reserve currency, very easily the US can lose dominance and many currencies are used. One of those might become a defacto reserve but probably not.
World reserve currency is a recent invention that will probably end badly. Previous Reserve currencies existed not by treaty just because of trade.
Reserve currency is not by design but by default, the most capitalistic economy by size, with stable legal system will be the default reverve currency. The more anarchy, failed states the more Gold will be used.