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Guest Post: Has The Perfect Moment To Kill The Dollar Arrived?
Submitted by Brandon Smith from Alt-Market
Has The Perfect Moment To Kill The Dollar Arrived?
The idea of “collapse”, social and financial, comes with an incredible array of hypothetical consequences ranging from public dissent and martial law, to the complete disintegration of infrastructure and the devolution of mankind into a swarm of mindless arm chewing cannibals. In an age of television nirvana and cinema overload, I have found that the collective unconscious of our culture has now defined what collapse is based only on the most narrow of extremes. If they aren’t being hunted down by machete wielding looters or swastika wearing jackboots, then the average American dupe figures that the country is not in much danger. Hollywood fantasy has blinded us to the tangible crises at our doorstep.
The reality is that collapse is not a singular event, but a process. It is a symphony of doom, composed of a series of exponentially more powerful crescendos. If the past four years since the implosion of the derivatives bubble have proven anything, it is that catastrophe has the ability to drown a nation slowly like a river of molasses, rather than sweep it away like a flash flood. That said, almost every recorded collapse of modern societies in the past century has been preceded by a primary trigger event; a moment in which the mathematical certainty of failure becomes clear, even if the psychological certainty is muddled.
In 2012, we still await that trigger event, which I believe will be the announcement of QE3 (or any unlimited stimulus program regardless of title), and the final debasement of the dollar. At the beginning of this year, I pointed out that we were likely to see such an announcement before 2012 was out, and it would seem that the private Federal Reserve is right on track.
Last month, the Fed announced that it was formulating a plan to “expand its tool kit”. This includes an openly admitted possibility of a third round of quantitative easing starting as early as September:
http://www.reuters.com/article/2012/07/24/us-usa-fed-tools-idUSBRE86N1G120120724
This timeline appears to coincide perfectly with the breakdown of the EU, which may also see a climax event in September. In that month, EU policymakers will return from summer holiday. German courts will make a ruling which could put an end to any chance that the country will support a eurozone rescue fund. The Dutch, which are anti-bailout, will vote in elections. Greece will be attempting to renegotiate its financial lifeline. And, the ECB will have to assess the impending chaos in Spain and Italy:
http://www.reuters.com/article/2012/07/29/us-eurozone-crisis-idUSBRE86S05J20120729
As far as the Fed’s ability to remedy the fiscal situation goes, let’s clear something up right here; the Fed has NO TOOLKIT. Sorry, but central banks have only two options when attempting to shift the tide of the economy: They can lower interest rates to zero, and, they can print-print-print. That is it. We’ve had TARP, numerous bailouts, QE1 and QE2, Operation Twist, and interests rates have been kept near zero for years! These so called solutions have been strapped like millstones around our necks and absolutely nothing has been accomplished since 2008.
Real unemployment still stands at over 20%. The housing crisis remains an unstoppable juggernaut. Europe is on the verge of meltdown (despite the trillions in American taxpayer dollars handed to EU banks). The national debt continues to grow at a pace far beyond what the Obama Administration and mainstream economists (who should have been fired long ago) predicted in 2010. There are no secret magic tricks up the sleeve of Ben Bernanke. Even if the Fed actually wanted to save our financial system, and our currency (which they don’t), there is nothing they can do except make the situation worse. Central banks are perhaps the most useless institutions ever devised, unless, of course, their true purpose is to diminish the financial health of a country and siphon away its economic sovereignty…
Enter the death of the dollar.
The IMF has been consistently calling for the end of the dollar as the world’s reserve currency, and for its replacement by the SDR (Special Drawing Rights):
http://money.cnn.com/2011/02/10/markets/dollar/index.htm
http://www.imf.org/external/np/pp/eng/2011/010711.pdf
The new president of France, Francois Hollande, has recommended the expulsion of the dollar as the go-to reserve, a deeper relationship between France and the BRIC nations:
http://www.atimes.com/atimes/Global_Economy/NE08Dj06.html
China has been demanding an end to dollar primacy for years:
http://online.wsj.com/article/SB123780272456212885.html
And so has Russia…
http://news.xinhuanet.com/english/2009-04/01/content_11109506.htm
And so has the UN…
It’s not as if it’s a big secret that the dollar is on everyone’s hit list. Until recently, alternative economists could only point out circumstantial evidence that this sentiment was a product of collusion between the world’s central banks and elements of various governments. Suggesting that China, Russia, the UN, the IMF, and the Federal Reserve were working in tandem to devalue the dollar and replace it with a global currency has always elicited at least a few jeers and the ever present standby catch-all accusation of “conspiracy theory”. However, the times they are a’ changen’…
With the exposure of the Libor Scandal, we now have definitive proof and even open confessions from international banks, the Federal Reserve, and the Treasury, admitting that the true debt problems of major institutions have been hidden, deliberately, in tandem with multiple agencies in multiple countries, from the general public, with the full knowledge of numerous governments. The most vital and shocking element of the Libor Scandal is that it shows, beyond a shadow of a doubt, that there is indeed a conspiracy which has melded the corporate world and the political world into a single ominous creature.
The collusion has become so brazen, central banks around the globe now institute policy initiatives within the same hour of each other:
http://www.reuters.com/article/2012/07/05/us-centralbanks-action-idUSBRE8640RN20120705
Years back, I wrote an article about the most important signs to watch for when facing a heightened state of collapse. One of those signs was the advent of openly admitted corruption on the part of the banks. When criminals become absolutely transparent and nonchalant about their criminality, it is usually because they no longer fear the threat of justice or reprisal. This is exactly the atmosphere we have in 2012. But, what could possibly have made the banksters so confident that they are willing to flaunt their racket to the world? I can only surmise that an event is on the horizon. One so distracting that the hucksters believe we will forget all about them.
Looking at it from another perspective; if I was a globalist hell bent on undercutting the dollar as the world reserve and replacing it with a centralized standard while turning the U.S. into a third world pit in the process, I would probably pull the plug soon. Here are some reasons why:
Drought Crisis Provides Inflationary Cover
The drought which has struck half of the U.S. agricultural centers and which has also hit Russian production is the perfect cover event for dollar devaluation. The full view of crop production and yields will be revealed this autumn, and according to the mainstream, the numbers will be dismal. Maybe they will be, maybe they won’t, but the likelihood of inflation in food prices all over the planet is high. If the Fed announces QE3 and sets an implosion of the dollar in motion, the price spikes this will cause in commodities, especially grains and other foodstuffs, can be easily blamed on drought, rather than the destruction of the greenback. At least for a time.
Syria And Iran Theater
If the UN pulls observers from Syria, expect an attack by either the U.S., Israel, or both is on the way. Expect Russia to be quite unhappy. Expect China to respond with financial warfare. Expect Iran to fulfill its mutual defense pact with Syria and come to their aid. Expect hard core catastrophe. I have been warning about Syria as a catalyst for global crisis for quite some time. Long before anyone ever heard the name “Assad”:
http://www.alt-market.com/neithercorp/press/2010/01/will-globalists-trigger-yet-another-world-war/
Every time I catch a glimpse of the MSM, whether it be MSNBC, CNN, or FOX, they are all spewing the same rhetoric: The U.S. should have invaded Syria months ago. It would seem that the American people are being psychologically prepped for a new war, but in reality, they are being prepped to be distracted from the banking sector’s primacy in the economic calamity that is about to unfold.
European Seesaw Of Destruction
With the EU in shambles, and only getting worse, the ECB has been attempting to work around the rules of its own charter which forbid the infusion of capital directly into governments. The latest weapon in the fight against the financial stupidity of EU member countries? European stimulus! That’s right folks, the U.S. is not the only country that will be raping its own currency this year! Be sure to catch the euro-sized version of QE:
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/03/maybe-draghis-speech-wasnt-a-disaster-after-all/
I believe, in keeping with the collusion central banks have already shown, that the Federal Reserve and the ECB will announce new stimulus measures very close to each other, if not in tandem. The continued devaluation of the Euro will help to hide the effect of the falling dollar as the two currencies seesaw back and forth, allowing for a delayed reaction from the public as well as investment markets. Investors looking for a safe haven currency will be scrambling in confusion.
Stocks Ready To Bust
Finally, it is very likely that the Fed will wait for markets to dive in the wake of faltering demand for goods and raw materials in all major economies, as well as declines in manufacturing. As I have said in the past, the Fed wants us to beg for QE3. The only reason this decline has not occurred yet is because investors that are still participating are salivating for new stimulus and expect it shower them with riches soon. So, to put this in perspective, the Dow is above 13,000 right now because investors have already priced in a QE package not just in the U.S., but in the EU as well. If they do not get it fast, they will pull out, and stocks will plummet. The market addiction to fiat injection is so pervasive now, I cannot imagine how they would react if the pipeline was cut off. It would probably induce a fiscal bloodbath.
What Will Collapse Really Be Like?
I expect the event will be spectacular in some ways, but subdued and subversive in many other ways. Triggers may be swift and startling, but the reactions of the populace slow, uncertain, and presumptive. There will be fissures in our foundation, but the complete extent of the danger may take a few more years to become evident. While the public continues to maintain its fixation on some Mad Max nightmare scenario, the real collapse will be taking place right under their noses in the form of 25%-50% increases in food and fuel, tightened job availability with pensions swallowed by austerity, food lines hidden by food stamps until the government finally defaults and pulls the rug out from under entitlement programs, etc. For a time, it will look and feel like a slightly darker version of today, and not the cinematic melodrama that we have come to envision. The worst of times that we often find extolled in the pages of history books come at the cost of years of almost equal disparity, and usually, the lead up is far more difficult to handle than the finale…
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Not to worry, the main purpose of the Olympics in modern times is to stoke up feelings of nationalistic pride.
That way it's easier to get people to go along with a new war "for the good of the nation" once they're still under the warm glow of celebrating their national superiority.
Certainly here in the UK they spent about £10 million "creating champions" per medal won and are definitelly doing their best to squeeze the nationalistic juice out of each of them.
And, while they are fired up on Nationalism, launch a Huge False Flag attack against the innocent jocks and fans.
"Grrrr, we must pay back those (fill in blank) bastards!"
Remember Big Ben!
Avanti!
Main point of the article is much agreed. Price mechanisms, when finally allowed to work, will dampen the outcome.
Late 1970's - early 1980's are the blueprint. Inflation and rising rates are the endgame, and the next cycle starts soon thereafter.
15% on the 10Y will cover a lot of sins of the dollar.
All governments print their fiat monies until they're worthless. USDinker dollar no different. Certainly human nature hasn't changed as with our goon platoon freak show not even trying to pass itself off as representive of we the people. lil scamBOs exec order for PEACETIME MARTIAL LAW SAYS IT ALL. It will be used! Get out the jack boots, black polish, and goose steppin music. This financial system could be knocked over by a feather anytime and anytime is upon us.
"pensions swallowed by austerity"
I think this article is spot on.. in The Netherlands - the country with some of the largest, if not the the largest, pensionfunds in the world - there is talk about stopping the current system and giving the money back to the people NOW so they can pay off their mortgages... everyone knows that the current pension system won't be able to survive for much longer.
Even without the current crisis there's a need for a complete overhaul of society - at least in Europe and Japan - caused by the inverted age pyramid.
Remember: Europe and Japan are highly xenophobic, they will not allow millions upon millions of immigrants to take care of the elderly and support "growth".
This does present great investment opportunities, think robotics and pharmaceuticals.
There are more whites who can pass as European - and plenty of non-white immigrants - than Asians who can pass as Japanese - not that they'll let them, for Asians, temp immigration for menial jobs is the reality in Japan, and unlike the rest of the Western world (and far beyond it), intermarriage is still a major taboo. Japan didn't just shoot itself in the foot, it hacked the whole leg off with a katana.
I stop reading at "real unemployment rate is at 20%".
Go whittle a yardstick. You'll feel better about unemployment and your manhood, too.
You're absolutely correct.
I believe the more accurate figure is closer to 24%.
SPY blasting off to new highs in many different currencies:
http://stockcharts.com/freecharts/candleglance.html?spy:FXE,spy:FXY,spy:...|D
Gold continues to get "chain-sold" in virtually every currency except the Euro and the Swissie
http://stockcharts.com/freecharts/candleglance.html?GLD:FXE,GLD:FXY,GLD:...|D
Thank you, you are a beacon.
So now they're putting beacons in cesspools?
Does anyone seriously think that Iran, among others, has not prepared for the coming attack. Not by hardening its missile and nuclear sites but by planting WMD in a variety of locations around the world. Not nuclear WMD - too easy to detect. And not high-tech WMD either. But germs and gas can be easily hidden and made virtually undetectable - especially if they were planted years ago before satellite surveillance was as sophisticated as it is today. Most people seem to imagine America's high tech arsenal as invulnerable - shock and awe and all that - and in the process we ignore the possibilities of a few pesticide spraying companies in a few US cities - landscaping companies etc - that could simply take a midnight drive around the beltway spraying as they go, And that's just one scenario.
The whole world's only had 67 years to figure out how to sink a US aircraft carrier (and Japan got pretty good at it in WWII).
What do we think will happen when somebody actually tries to sink one?
Apropos, I saw a good documentary on the Battle of Midway, June 1942, last nite on PBS. To think that the U.S. was involved in a life or death battle for air/sea supremacy a "short" (for the Pacific) distance from Hawaii-- that is where the American Century, in Luce's term, was born. One attack wave of American torpedo bombers was completely wiped out in about 6 minutes by the Japanese. Another found the Japanese main carriers by sheer luck (like looking for a penny somewhere on a football field, and failure means no gas = crash).
But-- carriers are to 2012 what dreadnoughts were to 1938. Big, shiny symbols of power. But the real battlefield, if WWIII happens, will be in space. Our satellites zapping your satellites.
4GW > Empire
It appears our masters have become quite "hubristic."
How long do they think the Russo-Sino-Iranian bloc will refrain from a response to an attack on Syria or Iran?
Seems to me an economic tsunami would be perfect for striking that last dying blow of Empire on a Hail Mary pass to Shock and Awe a 10% chance of victory.
Anyway, most of us will be dead from gas, radiation, or eaten by O'Bama Zombies.
Go down fighting, Bitchez!
So.....QE is coming but when it doesn't the stock market will collapse? And....the collapse is coming but we won't really notice it? This article really answered a lot of questions!
Without a change in the power struture there will not be a change in the outcome, only the timelines.
A new fiat currency will be introduced to replace the obsolete currency and save the pension funds (ie the stock market). This will be gladly embraced by most. The oligarchs will be the first inline to receive the greatest sums of the new currency.
The current fiat cycle has lasted 40 years, the new cycle will likely not last as long. It won't matter though as we will always gladly trade our liberty for the security of the next daily meal.
Some practical advice for the remainder of the year:
Leave only enough cash in your bank account to bill pay.
Eliminate any money market accounts. Even though you are covered by FDIC, even a 2 day"run" would bankrupt the system. And, money market accounts, unlike regular checking accounts, have far more counterparty risk.
Close any safety deposit boxes
Keep at least one month's needed cash and foodstuffs at home.
Keep your car(s) gas tank full.
QE3 will be initiated at the point of another acute EU crisis. This stratgy banks on the hope that investors will flee EU to USD as a flight to safety thus offsetting the potential inflationary results of more money printing.
The stock market won't decline, since the Fed is buying stocks with both hands and has been for some time. They learned their lesson in 2009 and won't let that happen again in a fragile economy.
You make a good point. Most Americans think the stock market is a barometer for the US economy. It's sad that people can't connect the dots between record deficits and record corporate earnings.
Wow MDB you truly live in the land of HOPIUM.
'In order to get elected, politicians need to withstand the objective scrutiny of a thoroughly moral and knowledgeable American public'
Right there - that is the funniest line you've typed yet.
Some other takes on the subject
The U.S. Dollar Is Not Going to Zero Anytime Soon! Here’s WhyAre fiat currencies headed for a collapse?
The Yen will die long before the Dollar.
To be replaced my the Asian Monetary Union's Wang. . . or whatever they'll call it.
Hyperinflation, the dollar collapse, etc. is NEVER going to happen in the United States. Not while wealth continues to be consolidated in the hands of fewer and fewer people.
The dollar is the most secure currency on the planet. It is backed not just by faith in the US government but also by the biggest fucking military that is many times larger than anything else out there.
The dollar is fucking power and people who have power are not likely to ever walk away from it.
HFCS foods are cheap, plentiful and will continue to be.
The american standard of living is wonderful -even for the poorest among us.
This gun-toting, hardon-driven prepper doom fantasy is never going to happen. Never.
Who wants to live in a post-collapse world anyway?
We are, as a country, never going to pay back our national debt.
Debt does not matter - Dick Cheney was right. So fuck you Tea Party! Right now, the government should be spending its ass off, because like I said, debt does not matter. The Fed can buy and hold all our fucking debt - who cares? There is no limit to how much they can buy.
Nothing is ever going to collapse the fucking dollar.
So keep exchanging your dollars for those cans of beans, ammo, guns, shelters, silver, gold, water filters and Alex Jones pay-per-view.
All your spending is really helping to prop up a shitty, cyclical economy.
Thanks!
That was the same group think about housing. Thanks for confirming.
never say never; and logic is not your forte.
But "might is right" sits in your lap like the proverbial cheshire cat!
Beware of the ides of march... is all I can say to men who feel the rubicons are made to be trampled and crossed again and again. Hitler and Nappy had their Moscow moments... and they were unbeatable; until they weren't.
falak pema
Hitler and Nappy had their Moscow moments... and they were unbeatable; until they weren't.
You are so correct sir, but the world has gone down a path that can never be done away with.
MAD
The only way to win, is not to play.
And the sun never sets on the British Empire, not to mention the French, Spanish, Byzantine, Roman, Greek, Persian, Mesopotamian and Egyptian Empires.
LucasATX - Your phrase "We are, as a country, never going to pay back our national debt." hits it out of the park, but not in the way YOU think it does.
Who do you think you idiots (I'm not american btw) owe the money too? The lowsy 1 Trillion to China? No my friend, you americans owe many, many Trillions (and counting) to some UNKNOWN shadowy banking cartel who you WILL NOT be allowed to just writeoff. If they could write it off dont you think they would have by now, reset it to ZERO, raise interest rates (which would now be safe to do since no more debt) and voila, instant recovery via your cyclical economy. Savings, investments all headed to the moon again.
No,you OWE Trillions to someone who is in CHARGE of you. They OWN your AZZ and all americans (hell most of the world as far as I can tell). They will collect one way or another. They are collecting as we speak (buying up TONS of real-estate all over the world). You have been sold a line my friend, we are all cattle that have grown too fat and time to thin the herd (financially and I hope not but possibly numbers wise as well). Devalue all the housing and buy it up for pennies on the dollar. I see a future of 100% renters (serfs) with no true ownership cause its all owned by 'someone'.
As for the preppers and such, unfortunately I see them fighting it out with the dumb military/police while the rich/owners sit back and watch the fur fly. Regardless, they never get hurt or involved. Just think the last time A Bush, Reagan, Putin, Thatcher, Windsor etc family member was EVER in the military in harms way. Never gonna happen.
Anyways, my rant for the day. Remember, lifes about the journey, who the hell knows where it'll end up.
Peace
Hello 'LucasATX'.
Though I admire your spirit I'm afraid you must be wrong.
Added to the now forgotten 'invincible empires' mentioned below; I would also add the USSR.
The Soviets could have said,'We ain't every gonna pay our debts so screw you!' as well. Look what happened there.
I feel sure you misunderstand the purpose of the debt. The international financial power does not WANT you to pay the money back.
What for? What would they do with the money if it was all paid back?
What good is money to them?
They want to control your entire world using debt as the tool to take control.
Think about 'smart meters' and the coming CO2 regulations/Cap 'n Trade. There, in time; goes your freedom to eat what you want, travel where you like build a house or build a boat etc etc.
Undr agenda 21, the UN takes control of the physical & ecological capital of the United States. That includes everything. Did you know that UN signs are now all around your...er...THE Grand Canyon?
With 'hate crimes' your freedom speech and of expression is gone. Same coordinated agenda across the Western world.
They don't need you to 'pay back' any debt.
They just want to own your world.
The question only remains will you wake up and fight to get it back.
Regards.
Yes... very soon after the MASS ARRESTS occur, the Federal Reserve Note will go the way of the dinosaur and Constitutionally-legitimate PM/commodity-backed Treasury Notes will make a roaring comeback. The little guy citizens will get a 1:1 exchange and the paper millionaires and banksters will get pennies on the dollar or prison time. http://tinyurl.com/cd5cyjo/
Note to keyboard jockey fear-bots: don't even try it. The FRN has had a bullseye painted on it's back for a very long time. Powerful forces inside and outside the U.S. are poised to strike a death blow... at the FRN, at the FED, the NWO, and the illegitimate U.S. federal government. Mankind is about to move beyond debt-slavery and the warfare-welfare state. The future is so bright... I've gotta wear shades.
TMFC,
I listened to the interview yesterday and I found it very compelling. It was worth the three hours to hear a message that was positive for once. The idea that there would be real accountability for bad behavior brings hope to my heart. However, I cannot say for sure whether the mass arrests will happen or not, and I cannot rest on the hope that they will. Either way, I guess we shall see soon enough. I shared the link with two others and I'm waiting to hear back from them. Thanks again for the link.
As I recall, the actual purpose of creating the Federal Reserve Bank was to consolidate power for the bankers involved. They may have unsuccessfuly lied and tried to sell it to the US people/government as having mandates for low unemployment and low inflation ... but those were the words of the candidate before it was elected and its actions have been completely different.
Up to the second world war, there was a growing awareness that the people and government had been had. A depression, a few well placed assassinations and a war later the remaining people and government were almost completely distracted and cowed. Evil feels no restrictions on how it accomplishes its goals.
Now we have a resurgence of people who understand that we have "been had" and that it never was about helping the people and country but about consolidating global power. And, the US has been USED as a blunt instrument of that consolidation. Our sons and daughters are just slaves to that consolidation. It is sad, but also we learn and grow through adversity, not sloth. The untested become weak and those who must overcome become strong.
The Chinese want more power? They will get it. The "Ark" moves always westward to return back to its starting point and that is ostencibly when the world will be united under our creators (not so much creators as manipulators, genetically and socially ... I wonder if the secret that all geneticists know, but are afraid to speak, that we cannot possibly be "completely" from this earth because we have a different number of chromosomes than everything else on this earth will be revealed before we are cast down) and/or we will have the apocalypse and armageddon.
IMO, a financial collapse and third world war against the US to make us weak and seal our place in the order will not be the final battle.
Sweet! I can't wait for the economy to collapse!
MY BODY IS READY.
USD no longer reserve currency? Fine. We outlaw FOREX and tell every one holding USD "You can only spend it here and buy our shit."
I'm ready for the collapse
I'm ready for the collapse
Very interesting essay.
(I live a short distance from the current site of Olympia. I must confess that I am somewhat relived that this area has not (yet) provided the 'primary trigger event' mentioned above.)
It is certainly springtime for criminals and this in turn presages our Fall.
I would add that as white collar criminals and corrupt politicians are allowed to flourish; a similar policy is in effect for everyday rapists, thieves & murderers.
Here in the UK a couple of weeks ago, a teenager walked free from court with a 'Youth Supervision Order'.
His crime?
Raping a four year old child.
The excuse used by the Judge was that he had been 'warped by pornography'.
It must be at least possible that the Powers that Be have deliberately poisoned the concept of the State providing justice. This would dismay the decent majority and corrode their faith in the existing order.
Therefore, they would be more prepared to welcome a New Order for the World. This further explains the application of insane and immoral 'Human Rights' laws in the UK.
Banking and finance are vital, but only one aspect of the controlled collapse.
I just assumed such things were due to a very high-level policy of selectively breeding us for sociopathy. More minions when they need them, and sociopathy is easier to control, it gives juice to Lucifer, and it gets the middle class to demand a more vigorous police state. Honest people cannot be trusted, so they must be thoroughly destroyed, and all their honestly earned wealth must be consumed by sociopaths at all levels.
Your explanation makes sense too. Maybe both are correct. They always have multiple reasons for doing things.
"Your explanation makes sense too. Maybe both are correct. They always have multiple reasons for doing things."
Agreed, it would be strange if only one strategy were pursued to effect their policy.
What strikes me is that the excuses used by judges to force dangerous and violent predators back onto the streets grow weaker and weaker.
In the UK convicted offenders have ridiculed judges to their face from the dock. Must try it some time..........
Regards.
I don't agree with the trigger as QE3. If so why not QE1 or QE2? Or why has Japan been able to maintain their currency while remaining a decade ahead of the US in QE policies?
To the chagrin of some ZHers waiting for vindication I see no reason to believe that the US could not go 10-20 years before the "event". In reading historical accounts of Austria and other countries who did see the end of their currency it is usually the same trigger. Demand for equities in a leveraged economy eventually ascedes to demand for debt, which gives way to demand for cash which in the end (the "event") is swallowed up in an avalanche demand for hard assets.
Historically the first phase (equity demand) can last decades, the second ten or more years, the third (demand for cash) several years and the final phase appears historically to happen overnight. The whole affair closely following the Kondreitiff Cycle.
I think we're going from a demand for debt to demand for cash and while the final phase could be triggered tomorrow it could also be ten years away! There will be signs when the final phase is occurring. MB or monetary base will have NO bearing on the last phase. MB expansion is a central bank tool with little effect on the typical citizen/consumer who ultimately decides a currency is worthless. MB allows the status quo to last longer while also filling the coffers of the investment industry. M1 is the key to the "event". Only when M1 skyrockets will the final phase be occurring. M1 increasing at 10-20% is not the indicator of the event - it would be more like 100-200%. The US M1 increased at a very high rate in 2008-2009 and the currency survived.
The final phase of the death of the Dollar will be preceded by a divergence in M0 money supplies from M1 money supplies. Deposits will be decreasing and hard currency will be increasing. This is happening now but no more than in 2008/2009. If the Dollar surviced then it can possibly survive now.
Typically the trigger in the divergence between deposits and hard currency is when the public begins to doubt the reserve banking system. Most people know that if they ALL wantd their money at the same time the banks wouldn't have it. But like a friendly game of musical chairs as long as the music plays everyone is okay. EVEN IF there is a run on banks currencies usually survive and we are probaly a few years away from testing the reserve system and actual government money printing capabilities (M0) not phoney money printing (MB).
The interesting thing for the Dollar now is something that has not been a factor in past history - electronic debits/credits. In the past in a reserve banking system people needed hard currency (M0) for transactions. For the first time in reserve banking history that is not the case. As long as people have electronic credits and as long as vendors accept them there would never be a run on banks to claim hard cash. While most think that QE is the last tool of central planning I believe this is the last tool and could even provide 2-5 years of status quo attainmnet by the government.
Bernanke will not be dropping dollars from a helicopter but the governent resources will go from MB expansion to maintaining the flow of EFT for consumers. In the past the govenment would head off bank runs by driving trucks full of money to the affected banks. Now the government will be funnelling electronic debits/credits where needed so the system doesn't break and so that people never think they need cash. Much like MB expansion has brought inflation to financial assets this policy will bring inflation to consumer assets but not necessarily hyperinflation. The failure of the electronic debit/credit system in my belief will trigger the end of the dollar.
* the end will be preceded by laws REQUIRING vendors to take electronic debit/credits after premiums are placed on consumer transactions in cash/gold by vendors
* the end will be preceded by M0 diverging from M1 more so than it did in 2008/2009
* the end will be preceded by a breach in the non-physical gold holdings - either ETFs or soveriegn holdings. Some store of gold will be found to be WAY less than on the books either through tungsten replacement, theft or accounting malfeasence. This will place a premium on physical gold of 50& to 100% of derivitive gold
While the math is unassailable that the dollar will eventually fail I believe it could survive 5-10 years or longer. It's really useless to arugue the demise until you've gotten a FREE electronic credit to your personal savings/checking account compliments of the Fed/Treasury - which will happen and will preceed the death of the dollar but could be years away.
http://www.youtube.com/watch?v=hyWJCd1GYhw
Very Fitting
I'll tell you what collapse looks like. You'll get a debit card in the mail and it have a gold American eagle stamped on the front alongside the SecTreas signature, but it's that magnetic strip on the back that will solve the Triffin dilemma.
www.tradewithdave.com
If someone could state one viable reason why the FED would want to destroy the currency of the US, and the banks, and the governments ability to finance itself at reasonable rates, this article might have a shred of relevancy.
Otherwise, not so much.
In other words, why would the most powerful central bank in the world shoot itself, it's constituency, and it's government, in the head?
Vinz Klortho
For the same reason all the rats leave the ship before the Corzine's scuttle them. The cheese was gone
To issue a new currency is why they'd destroy the dollar. After a decade of an undervalued USD on the global stage, as Americans compete for purchases of vital necessities (food, drugs, materials), they'd welcome it.
I believe there will be a major pension failure of a major national union. That will start the ball rolling. Since most Americans are not in unions they will not pay attention until the riots start. Even then people wont care until the gas runs out or no food in safeway ect. jmo.....