U.S. Dollar Collapse - IMMINENT!!!???

[NOWIAM]

With the increasing stock market problems, George Green's gloomy predictions and the end of the U.S. fiscal year coming September 30th what is in store?

What happens when the dollar collapses?

Answer: Many things, most of them bad. When foreign investors and central banks stop demanding dollars, U.S. bond prices will fall, which is another way of saying that U.S. interest rates will rise. Mortgage and credit card rates will soar, bursting the housing bubble. Home prices in hot markets like California and New York will fall by 50% or more in a matter of months, bankrupting millions of over-extended homeowners. The U.S. government will respond by opening the monetary floodgates, printing as many paper dollars as necessary to keep the economy from collapsing. This surge in supply will send the value of the dollar through the floor. Prices for most things will skyrocket, and people whose life savings are in cash, bank CDs or dollar-denominated bonds, will be wiped out. Most U.S. consumer finance companies will be ruined, along with their stockholders.

THEN the Dollar Disease will go global. The only reason Japan or Europe have been able to generate their current meager rates of growth is the willingness of U.S. consumers to buy their Hondas and BMWs. As the dollar plunges, Asian and European goods, priced in suddenly-appreciating currencies, will become prohibitively expensive for U.S. consumers, who will respond by buying U.S.-made alternatives or nothing at all. Correctly interpreting this change in buying patterns as a threat to their vital export sectors, European and Asian leaders will respond with the only weapon they have left: monetary inflation. They’ll cut interest rates and buy dollars with their currencies, flooding the world with euros and yen the way the U.S. now floods the world with dollars. The result of these “competitive devaluations” will be a death spiral for all major fiat currencies, in which European and Japanese bonds will, eventually, fare as badly as their U.S. cousins.

[GodLover]

Thanks for this thread. Today in the morning was wondering what the collapse really means and as I logged in found the answer!

[sprocket]

Correct me if I'm wrong but the only non-fiat currency of note is the Swiss franc, meaning the euro, sterling and yen are no better off than the US dollar! The major difference of course is that over 70% of global trade is still carried out in US dollars, (if memory serves, this has continued to fall over the years, mostly in favour of the euro, which now accounts for about 27%, versus the USD's 72%) which means that every nation on earth is compelled to hold USD accounts and pay off their USD debts (ie. the bulk of their trade) in US dollars - any USD shortfalls having to be bought from the National Reserve, who can and does print as much as required, out of thin air, which at most will cost them the price of the paper & ink!!! Anyone else see anything wrong with this picture???

btw, while this may appear that 'America' has an unbelieveably unfair trading advantage (legal counterfeiting!) this is not the case - the only ones benefiting here is the National Reserve, a group of world banks who view America as nothing more than another trading partner! They lend as much of this worthless currency as the corrupt US governmant wants, demanding high rates of interest in return - which you guessed it, is left to the American tax-payer to pay...

Finally, do people realise that the already gigantic US national debt of over $9.5 trillion was instantaneously, at the stroke of a pen, increased by 12% when the US government agreed to baleout fanne mae/freddy mac to the tune of $800 billion? What happened to the free market and survival of the fittest?

The fiat-currency model does not work - period! Alan Greenspan admitted as much at one time, but suggested it was the most palatable option - maintain the air of normalacy for as long as possible, right up until the whole system implodes! Afterall, no-one of 'importance' gets hurt, just the tax-payers...

[Morphious]

I dont know NOWIAM but that is one freaky pic you got there !! lol

[Jacqui D]

Interestin nowiam,i'm english and i am watching your news what happens there will follow here.
Hey i agree that is a freaky pic am i seeing things r does it move?