US dollar crashing

[joekrish]

Nope if anyone is ignorant it is you. In the last 6 months China has done swaps with several countries. They and the world are moving away gently and slowly (exactly because they would hurt themselves as well if they did it overnight) from the US dollar

Do you have anything to support your statement?

 

[shuttler]

That's the important part. Nothing else matters. Ever thought about WHY that currency was a reserve currency? Don't believe the BS, we know the truth: oil. If the Arabs run out or if the world moves to new energy sources guess what happens.

Partially correct. But it is not the alternative energy that will the world be less dependent on oil. The next alternative energy is nuclear energy and most industrial nations except China has stopped or scaling it down. Others like wind. solar, methanol, sea waves are miniscule contributions in comparison. One thing, though, is the discovery of huge shale gas and combustible ice reserves that may have an impact. But I think the demand for oil from Mid east still sustains as the growth of China and others whose improvement in quality of living will keep the oil pumps busy.

 

[RKhan]

Remember this, We go down so does every other country on the planet.

 

[FairAndUnbiased]

Partially correct. But it is not the alternative energy that will the world be less dependent on oil. The next alternative energy is nuclear energy and most industrial nations except China has stopped or scaling it down. Others like wind. solar, methanol, sea waves are miniscule contributions in comparison. One thing, though, is the discovery of huge shoal gas and combustible ice reserves that may have an impact. But I think the demand for oil from Mid east still sustains as the growth of China and others whose improvement in quality of living will keep the oil pumps busy.

That's why if they start running out, that currency is in trouble. Recent years since 2007, oil fluctuates at +/- 5% production per year even as prices shoot up, proving that peak oil is coming close. If they could pump more oil, they would since the price has been increasing since 2009's crash.

Shale gas is not oil, it is a gas, Shale oil is unconventional heavy oil, hard to mine and process, and the return on investment is very small, only 3:1. Regular oil is 15:1.

 

[shuttler]

That's why if they start running out, that currency is in trouble. Recent years since 2007, oil fluctuates at +/- 5% production per year even as prices shoot up, proving that peak oil is coming close. If they could pump more oil, they would since the price has been increasing since 2009's crash.

Shale gas is not oil, it is a gas, Shale oil is unconventional heavy oil, hard to mine and process, and the return on investment is very small, only 3:1. Regular oil is 15:1.

As of November 2010, OPEC members collectively hold 79% of world crude oil reserves and 44% of the world’s crude oil production capacity

OPEC - Wikipedia, the free encyclopedia

the above data will support the usd turnover as long as OPEC is still using usd as the denominating currency.

And the oil reserve will not be dried up any time soon because Saudi Arabia still has 60% of proven oil reserve ( Ref 1) and Venezuela, the new no kid on the oil block which has a large expandable oil extraction and production potential and where 65% (Ref 2) of its oil export to USA

Ref 1: "Production" Oil reserves in Saudi Arabia - Wikipedia, the free encyclopedia

Ref 2: "Today and the Future"Venezuelan_oil_industry

Oil prices is rather inelastic to supply (production) due to the corresponding political / governmentadjustment and because it is a necessity (see chart):

I agree shale oil/ gas etc are difficult to extract and process. This only strengthens my argument that dependence on oil will not be diminished in the near future.

 

[Zabaniyah]

It is funny.

True, the US dollar is getting weaker. But there are countries (like mine) whose currency value is going down against the dollar at the same time. I'd say, we are doing something terribly wrong on our part.

 

[shuttler]

It is funny.

True, the US dollar is getting weaker. But there are countries (like mine) whose currency value is going down against the dollar at the same time. I'd say, we are doing something terribly wrong on our part.

It has to do with the fundamentals of one's economy against the dollar one on one and one against suppliers (foreign importers) preference! And the development of the global trends such as the current crisis of the Euro which has caused speculators / investors to stay away from risk

Dollar hits 22-month peak vs euro

 

[FairAndUnbiased]

OPEC - Wikipedia, the free encyclopedia

the above data will support the usd turnover as long as OPEC is still using usd as the denominating currency.

And the oil reserve will not be dried up any time soon because Saudi Arabia still has 60% of proven oil reserve ( Ref 1) and Venezuela, the new no kid on the oil block which has a large expandable oil extraction and production potential and where 65% (Ref 2) of its oil export to USA

Ref 1: "Production" Oil reserves in Saudi Arabia - Wikipedia, the free encyclopedia

Ref 2: "Today and the Future"Venezuelan_oil_industry

Oil prices is rather inelastic to supply (production) due to the corresponding political / governmentadjustment and because it is a necessity (see chart):

I agree shale oil/ gas etc are difficult to extract and process. This only strengthens my argument that dependence on oil will not be diminished in the near future.

crude in venezuela is Heavy Oil which is extremely hard to process. It doesn't matter how central oil is to our economy, it WILL decrease as a proportion of total energy and it IS running out.

oil production is inelastic in the sense that it has a ceiling imposed by physical limits, but no floor. it can arbitrarily decrease. if there was no ceiling imposed by physical limits, then as prices rise oil production should rise as well... but it doesn't:

Saudi has little surplus reserve left that it can use to increase production. It's barely hanging on. The numbers given by the regime are total lies. Facts say it all: despite oil prices rising, what's happening to the production?

Also, the rate of decline in existing fields is outrunning the addition of new fields:

Yes, oil will become more important, but only because it gets more scarce. Due to the dual pressures of natural depreciation due to overprinting and oil becoming scarce, the currency will quickly inflate and possibly go to hyperinflation if their sole remaining grip on the system fails.

Conventional oil has peaked and is already declining and low return low quality unconventional oil is increasing its share. What is important is not all liquids, what is important is conventional oil because that's the high return stuff. The unconventional oil has a lower return on investment than solar panels.

 

[T90TankGuy]

The Real Crash | Euro Pacific Capital

The Real Crash

By: Peter Schiff
Tuesday, May 22, 2012

I first came to national attention back in 2008 and 2009 when the housing and credit markets imploded. I became known as the guy that other market “experts” laughed at when I warned of trouble brewing in the seemingly indestructible American economy. After the wheels ground to a halt in mid-2008, people noticed that my book Crash Proof, originally released in early 2007, read like a detailed preview of many of the events that eventually unfolded.

Three years later I am now catching heat from many who assume that my predictions actually fell short. They argue that I was able to anticipate the crash but that I severely underestimated the resiliency of the American economy. They admit that we took an “unexpected” blow to the chin, and that it left a lingering bruise, but they argue that we never hit the canvas like I predicted we would.

However, they mistakenly assumed that the crash I was warning about was solely a housing led credit bubble. While that was part of it, I never saw it ending there. The crash that most concerned me was the one that would result from the government’s response to the initial crisis. My concern was not that our economy would succumb to the disease that I had diagnosed, but instead would be taken down by the “cure” that the government unleashed to combat it.

When the government’s delaying tactic, which involves continuous borrowing and money printing is no longer tenable, the dollar could collapse, interest rates and consumer prices could soar and the U.S. economy could implode. That’s the real crash that I was warning about, and the one we all need to be worried about now.

This is the subject of my new book “The Real Crash: America’s Coming Bankruptcy, How to Save Yourself and Your Country.” For now it is just a prophecy but as with my first book, it soon may be regarded as history. Unfortunately, the policies of both the Bush and Obama administrations, and the Ben Bernanke led Federal Reserve, have vastly raised the chances that my catastrophic view will come to pass. However, it’s not all gloom and doom — I devote a large majority of the book to solutions. The real crash may be inevitable, but what we do in response is not. We can follow on the path that I recommend back to prosperity, or we can continue on our current course which I believe will lead to economic ruin.

When looking back from a point in the future, I believe that the years immediately after the credit collapse of 2008 will stand out as a period of dangerous economic negligence. We have bought ourselves some time by sweeping enormous problems under the rug. Through a combination of political cowardice, economic ignorance, and false confidence, we are digging ourselves into a hole so deep that it may take generations to crawl out.

Most people assume that half way through 2012 we have made some important positive strides since flirting with the brink of economic catastrophe in the dark days of 2008. Although no one is wildly celebrating the below trend 2 to 3 percent GDP growth, we are continuously reminded that we have turned the corner and that our situation is better than many other regions around the world. But what has really changed?

Immediately prior to the crash, the United States economy was experiencing unprecedented consumer debt levels, persistently high trade deficits, historically large government budget deficits, high-energy prices, and a moribund manufacturing sector. Four years later, all of these problems have gotten worse. And unlike four years ago, we are now saddled with the highest unemployment rate in generations and levels of public debt that would have been unimaginable then. Yes we are no longer technically in recession. But I believe that is just an illusion created by perhaps the cheapest, and most obvious, trick ever devised.

I had argued that our economic growth prior to the crisis was largely a function of the real estate bubble. When that bubble popped, I knew that the economy would have to shrink. And that’s just what happened. From 2008 to 2009 our national GDP (of around $14 trillion) contracted by $212 billion. To prevent any further dips, the government aggressively spent, borrowing heavily to do so. To the relief of just about everyone, these moves did stop the nominal contraction. From 2010 to 2011 the U.S. GDP expanded by $502 billion, and from 2011 to 2012 it added an additional $508 billion. All told, from the end of 2008 the U.S. economy added a cumulative $798 billion in GDP. But those gains came at a very high price.

The combined federal deficits for the same time frame come in at a staggering $4.2 trillion! In 2009 alone the feds chalked up a chart breaking $1.4 trillion in debt (the deficit was a mere $161 billion in 2007). In other words, we borrowed five times more than we grew. This “strategy” for growth is no different from an individual who loses half his income, but continues to spend by running up credit card debt. Could this be described as economic growth? But that’s just how we are describing our current economy, and for the large part, expert economists, politicians, investors, and academics all agree.

I felt certain before writing Crash Proof that the government would never let the economy contract far enough to restore balance and sustainability. I knew the spending and deficits would head off the charts. I thought those realities would push down the dollar and cause foreign creditors to shun American government debt. However, I did not factor in the reprieve we have gotten from the false perception that Europe is in even worse shape than we.

As the curtain eventually falls on the drama unfolding in Europe, the world will refocus its attention on the more spectacular events in the U.S. The sovereign debt crisis that is now playing out in Europe will cross the Atlantic, and when it opens here The Real Crash may indeed finally begin. The average American will have a front row seat but will hardly enjoy the show.

Stocks, euro fall on fears of Greek euro exit

The Associated Press: Stocks fall on Wall Street as Spanish bank teeters

WRAPUP 3-Spain region, Greek exit warnings rattle euro zone | Reuters

of all the people in the world , you should hope and pray its doesn't crash , after all you have 2 trillion of their paper . don't you?

 

[Chinese-Dragon]

of all the people in the world , you should hope and pray its doesn't crash , after all you have 2 trillion of their paper . don't you?

Around $1 trillion, and dropping.

It would definitely suck to lose $1 trillion (that's if the dollar collapsed completely).

However, we would still have the largest currency reserves on Earth by a very significant margin, i.e around $2 trillion.

And we could mitigate much of the loss by seizing assets of American multi-nationals that have operations in China. That's what happens when you can't pay your debts, your assets get seized.

 

[shuttler]

FAU: the premise of the thread is USD crashing. That depends on within what kind of time frame!?! The shorter the time the less likely USD will crash barring another major war/ devastating disaster on the us soil. The longer the time the more senseless and inaccurate the prediction.

And the usd's status also depends on numerous factors - not just on oil alone. Of course the wells will dry up but as I said not anytime soon

Around $1 trillion, and dropping.

It would definitely suck to lose $1 trillion (that's if the dollar collapsed completely).

However, we would still have the largest currency reserves on Earth by a very significant margin, i.e around $2 trillion.

And we could mitigate much of the loss by seizing assets of American multi-nationals that have operations in China. That's what happens when you can't pay your debts, your assets get seized.

Well unfortunately the companies are not owned by the us government. if we do that all of FOEs will leave China in an exodus manner

Having said that the US' corporate citizens are still very rich and also the us government can sell their state owned assets to pay for their debts

Though China is US' # 1 foreign creditor but a majority of US debts are owned by Corporate or individual investors, retirement funds, social securities, charitable orgs, university endowments, US allies. It will be the dumbest for Bernanke / Geithner to kill China but too late to find out they are also amputating 9/10 of their bodies in the process!

 

[fallstuff]

Peter Schiff is the guy who predicted the Credit Crunch. However, he has a serious obsession with America collapsing in the immediate future, which I don't think is likely to happen.

The most likely thing, is that America will continue to muddle along, albeit at a much reduced growth rate.

He is also selling books and financial products. But as long as the $ remains in the basket of reserve currency, they will print it.

 

[lem34]

Do you have anything to support your statement?

This downturn is a systemic failure. The failure is due mainly down to de-regulation and failure to enforce rules. Capitalism is based on supply and demand, as well as risk and reward. If one takes the risk of cheating and gets away with it, he gets a reward, this leads to more cheating (heard about Mr Ponzi). By not properly regulating the system, cheaters got rewards. Multiply this by several million, and you get our current issues. If regulations had been implemented, this would never have happened. Instead, we might have had another mild recession and your cyclic suggestion would have resulted.

UN report on the matter:


http://www.unctad.org/en/docs/gds20091overview_en.pdf

doubt you will read all this but there you go.

In 2012 :


1) According to the US Census Bureau ,today , 1 in 2 persons in America is already living at Poverty or Near Poverty levels .

That is a whopping 50% of the American population living a life of shambles , starvation , and utter desperation .



Census shows 1 in 2 people are poor or low-income - BusinessWeek

This story no longer exists - BusinessWeek


Census data: Half of U.S. poor or low income - CBS News

http://www.cbsnews.com/8301-201_162-...or-low-income/


It is so bad in the States that , even the illegal migrants are leaving the USA en masse !

Yes, The Illegal aliens find that Mexico has a better quality of life !!! ( CNN's Jack Cafferty )

http://caffertyfile.blogs.cnn.com/20...r-better-life/


Number of illegal immigrants in U.S. declining - US news - Immigration: A Nation Divided - msnbc.com

Number of illegal immigrants in U.S. declining - US news - Immigration: A Nation Divided - msnbc.com

 

[Last Hope]

Even Indian currency has taken a surprising deep fall. So has many currencies.

I fear the world is coming towards a common and huge spread recession.

 

[lem34]

I wonder if this will effect US dollar

Pakistan, China sign currency swap agreement – The Express Tribune

Pakistan, China sign currency swap agreement – The Express Tribune

China's yuan trades big in Singapore - Channel NewsAsia

China signs currency swap deal with Thailand| Thailand|chinadaily.com.cn

Japan, China in discussions for massive purchase of government bonds | The Japan Times Online

China's yuan trades big in Singapore - Channel NewsAsia

Japan, China in discussions for massive purchase of government bonds | The Japan Times Online

http://arabnews.com/economy/islamicf...icle543048.ece


4. The U.S. will be on the brink of losing its status as the world’s reserve currency. Printing more money has been the preferred tactic of the Feds during our meltdown. We can do that because there’s a demand for the dollar by investors who believe in the stability of us paying our debts and because most international trading is done by converting the currencies of the two foreign countries into the dollar as a standard acceptable unit. As our debt spirals out of control, so does our ability to repay; once we’re not able to repay, investors will no longer buy the dollar and our country’s credit line will be cut. Once that happens, the dollar will no longer be an acceptable safe haven.

Top 10 Things I Expect in 2012 | years, financial, top - Analyst - The Orange County Register

Source:Top 10 Things I Expect in 2012 | years, financial, top - Analyst - The Orange County Register

This article may be a stupid one...

Since last year Dollar has appreciated for a long time.
Dow Jones still in high line while others down many.
The whole world money slowly return to US, it is a fact.

Someone laugh at China holding so many US Treasury bonds and dollar.
But since europe crisis, the only major assets appreciation just these two.


I just invest in stock and futures market, and see US futures and stock market every night,

The major companies of US profit making reach a new high, such as Apple....google.....
Obama really did well in the last two years.

Do you guys not understand appreciating against something that is itself depreciating faster will make the US Dollar look as if it is appreciating when it is not.

The dollar will be a strong and stable currency as long as China, Japan, Saudi Arabia and other Far Eastern countries keep their forex reserves in American financial system.

But in earlier posts I have given sources which suggests that countries like Japan and China are reducing their reliance

I agree with S-19 (King Solomon) post because dollar is actually doing well since last couple of months. It has been appreciated strongly not only against the Euro but almost every currency in the world. The economic data released in the USA is also positive and the unemployment rate and other factors are also very satisfactory.

If the thread title was "Euro" crashing I would have said may be yes but dollar is no where close to crashing in fact it is among the very few currencies willing to stay strong against any battle and remain a champion in the long run


.

I refer you to earlier post the US dollar is only appreciating against others that are going down even faster. Is that a really complex matter that you do not understand

Currency swap and barter trading are two good options but the implementation of either option is a very slow procedure. It might take decades for China to completely reduce her dependency from the dollar and that means 'may be' US dollar will crash after I am an old man and not any time soon...

Wrong again its speeding up you have access to google the rate of increase of swaps is accelerating