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The Ultimate Destruction of the US Dollar and World Markets Will Not Happen

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dhukka said:
konkon, if you are going to copy and paste large chunks of text from other sites, wouldn't it be appropriate to provide a link and acknowledge the source?
Click to expand...

This is all my own work. Originally written on 'Notepad' and copied and pasted on this and some other sites.
 
The position of a market at a given time is to a large extent about net gains or losses between a multitude of opposing investment forces. There appears to be a largely one-sided effort to, for example, sell the USD and buy-up commodities, like gold, silver etc. Instead of allowing investors to keep making this largely one-sided trade, why don't those in charge of printing money, and pretty much anyone else (with power) that has a vested interest in saving the USD down the track, tilt the dynamics in their favor by any reasonable (or unreasonable) means necessary to make a fundamental paradigm shift in the pressures that ultimately decide which trade we stick to. So just turn the tables on those that want to keep bumping-up the price of commodities in a year or so, after inflation in those non US economies has played its part.

This has been achieved throughout history at various times and by various methods. Maybe this is a possible option down the track, and anyone long gold, silver etc in a year's time and beyond, might have to watch-out. We have been through this type of trade over and over before throughout history where investors ended up holding overinflated and overpriced commodities for decades even! The justifications were there like they are now.

Don't be surprised if the Federal Reserve and the US Government, and other senior interested parties end up turning the tables on this one-sided trade (in the future sometime), and you're all left holding just some overpriced commodity certificates.
 
The US's ability to influence all markets has not disappeared. They won't do it for a while though. And when it's time for the US economy to strengthen the dollar will begin to appreciate. The price of commodities will decline as they are priced in US dollars.

The rest of the world stands to lose a fair bit over the next year or more, with high inflation, high interest rates and a lot more volatility when QE2 ceases. A key move will be over the next few months when QE2 begins to be fazed-out. This most probably will send markets on a roller-coaster ride and volatility will be high. QE3 will be needed, but this has become a real political and election issue now and it will have too much opposition.

Commodities have always gone up and down throughout history; silver in 1980 hit around US$49 (http://www.silverinstitute.org/hist_priceuk.php) and then depreciated. Silver will have to find a ceiling in the distant future, but it could easily go back to under $20 in a few years time, even if it hits around +$60 this time round. In fact, it like other commodities has risen to such heights during Quantitative Easing. It may continue to go higher but it could easily depreciate. It just won't happen without speculation going the other way.

There will be a growing number of speculators bullish on the (to some extent, reinvented) US economy, USD etc in the future and their influence will dwarf interest in commodities and most variables, asset classes etc that are inversely related to the USD.

Bernanke can and just might increase interest rates in even a minute, if the circumstances granted such a move in a year or more. I can foresee a coordinated move by the Fed, US Government, US corporations and other powerful US and US-allied 'associates', to change the dynamics of market sentiment and back a revived US economy, in the future. What happened won't be reversed. A restructuring will occur, and the consequences of such a move will be aimed at favoring the US's economic regrowth, which most likely would mean a stronger USD. So commodity speculators better be prepared down the track, as they won't be able to withstand the onslaught of a resurgence in the United States economy. Just ask those that bought and held gold for decades to try and get their money back! Money just went into other asset classes, during gold's demise, and this will happen again.

Speculation in all kinds of markets could easily prop-up prices past 100% of values if there weren't the very influential 'sales-reps' behind such moves. People have to understand that collusion in markets and market prices is a very big thing and you can be assured that if there is a 'sure-thing' going on, like money being piled onto silver, for example, then you must understand those with hundreds of millions to invest might pile money onto those asset classes. Birds of a feather flock together; so you don't even have to go for silver. Pretty much any soft or hard commodity will do.

Unfortunately we live in a world where those that latently collude to price-fix end up to some extent (to a large extent in the last few years) sealing our economic fate. Sure it troubles people to hear this but it does go on. Just think of what you could do if you were 'networked' with half a billion to use, and there's hardly anyone to overhear you and your 'partners' colluding to corner markets. While this goes on, the proper authorities are too busy (through no fault of their own) looking the other way. And are our authorities and courts able to look-into, for example, complex derivative contracts and their validity or legality? When 'cloud exchanges' (merger of international exchanges) are up and running, what happens to jurisdiction on such and other complex matters?

What doesn't help is when organisations like ASIC are stripped of their powers and are downsized.
 
The increase in salaries gradually is key to a recovery.

There are many issues the United States can tackle and the orchestration of a commodity (speculation) take-down in the future is just one of several options. Another option would be to adopt an increase in wages policy across the board, but fazed-in gradually. Food will not drop in price. So the US has to match this with higher salaries. Enough of this importation of cheap labor in eg. the hospitality industry. The minimum wage must increase and matched with small and reasonable periodic increments.

The US has to get more proactive, offensive and much less defensive. If you increase wages across the board then housing will become more affordable. Sure there will be opposition from large corporations and employers because of lower profit margins. But take the fight to them! No one will allow these sort of changes without a fight (not in the physical sense, of course). I think that a more proactive potential US President (or even Obama himself) with a higher wages policy, starting with addressing the minimum wage, will win the support of the people. This is the fight big corporations cannot compete with! The electorate most probably will vote this guy (or gal) in even with all the opposition from big-business. Big-business had a hand in the financial crisis and this is a compromise to compensate, and restrengthen the US economy. If you expect the US consumer to help 'fix' the economic problems, then pay them more!

If your printing record volumes of money, then make it worth while. Channel a large portion to growth and regrowth areas that will reinvest in the US economy. For example, if the minimum wage (especially in the private sector) increased an initial amount of 20% and then increments of 5% every year for three years to start off with, then you would enable those who never could buy into the housing market to purchase a property, with all the strict regulatory requirements, of course.]

Higher wages, will bring inflation, but you're going to get this anyway. Higher wages will mean more tax revenue to continue paying for all those important public service jobs. They're also going to be paying tax too. So you're addressing the domestic debt issue to some extent. Every bit helps. Never underestimate the growth potential from a confident US consumer that's back in his/her own house and is paying their bills and is investing in more ways than one for the future.

As for (a largely narrow-minded) big-business (large corporations etc) that will oppose such a move, can you imagine how much revenue you will eventually receive from a prosperous US consumer that can consistently pay its bills?

If the US doesn't increase salaries across the board, then they won't be able to keep up with higher national and state debts, higher costs for food, energy etc and higher inflation. All those nasties that have to be matched with higher wages.

Don't forget that higher US wages and higher interest rates in the US down the track means lower commodity prices in the US, as they are priced in US dollars. The best thing is it will take the commodity speculators out of the market. There may not be as much inflation as you think. Inflation with real and strong growth is better than inflation with negative growth (what the US is going through now).
 
The run-up in commodity prices this year is alarming. The pressure on other asset classes must be quite high. Last night's trade on Wall Street was a little alarming and a sign of things to come. At least two things surprised me. One being the heavy selling of USDs overnight and another (serious) move was the buying of stocks around the world, as if the USD's move down is in some vacuum and it shouldn't impact other asset classes.

I think that in the months to come, and most likely next year, the heavy selling of USDs in a session will bring markets down with it.

The commentary on finance channels was over-optimistic, I think. Are they oblivious to what a serious correction of the USD might do to stocks or am I missing something?

I also see North Melbourne beating Richmond with ease and made the most of the generous odds. Am I missing something here too?
 
hi konkon,
you raise some really interesting points on this thread and i really enjoyed reading your (and others) posts on the issue,

with regards to your(?) view that there may be a cabal of extremely wealthy individuals deliberately manipulating world markets, currencies, commodities etc (the elusive NWO as some call it)
well recently i found this gem of an animated doco on youtube aimed at educating the 'laymen' about how things really work behind the scenes in the global financial world...

http://www.youtube.com/watch?v=tGk5ioEXlIM

while perhaps it may be abit too "americanised" i really enjoyed it and really think it should be made mandatory viewing in all schools! i hope you enjoy it as much as i did! cheers... the bandicoot!
 

The overprinting of the US$ is turning it into trash and the US to a banana republic. How it exactly plays out is anyones guess but it will not be nice on any of us. Cant' happen, we will see.

Stick with your punt on the football.
 
America is the only country that went from barbarism to decadence without civilization in between.
Oscar Wilde
 
konkon said:
I've been reading up on the possible demise of the US dollar and have viewed many Youtube documentaries (many of which are quite good)
Click to expand...

This is where you went wrong. Youtube docos are mighty entertaining and that sucks you in to believing thier logically presented facts. Turns out they are not facts, its just a load of rubbish.
 
Too late - it's already happening!

What we have to remember is that the other side of the $USD trade is.....everything! If it goes down everything else goes up - MAD - Mutually Assured Destruction! Otherwise known as inflation, and the feeble, behind the curve attempts to stop it (China), or in Bernankes' case, to totally deny it exists?

Exhibit #1 commodities - combined with stimulis & QE to create artificial global demand ie China GDP figures to order, irrespective of the demand or need for anything in particular?
Closer to home, all of the BER projects have completed or will be completed within the rest of the year. Now combine this with the latest poor, abysmal actually, building starts, both resi & commercial, and you have the foundation for substantial job losses, and possibly interest rate cut's, although the market is pricing in more rises. There is a shadow recession going on around the world but when has the real economy mattered when it comes to the illusion of 'green shoots' & a 'global recovery' that manifests itself in a rising stockmarket?

Exhibit #2 FX - while the RBA sit's on it's collective hands & doesn't intervene in the hollowing out of export & manufacturing we will eventually end up with only 1 money maker - several thousand holes in the ground. Other CB's actively intervene to make their currency competitive for their economies - while our noble boofheads uphold some sort of 'level playing field'!

And when China finally implodes under the weight of it's own QE (now finished & trying to contain rampant inflation) and US Fed QE (ditto) then we will be comprehensively stuffed. The question should be which country will blink first - the US or China, both having a firm grip on each others financial genitals...

The US Fed is now between a rock & a hard place as far as any further ammunition to fight the lost battles in upholding it's 2 (really 3 ie the stock market) mandates. It simply can't afford to raise rates.

Have a look here, read it a few times to understand why........

Charles Plosser and the 50% Contraction in the Fed’s Balance Sheet

Exhibit # 3 stock markets - several indications are in place signaling either overbought or extreme levels compared to the fundamentals. Trading on margin is a record - if there is indeed a substantial market sell-off, ie more than just the usual 200 drop, then margin calls will melt the market down, or until the market is halted. Insider sales are still at record & or elevated levels.

Exhibit # 4 - global debt max-out - the US debt ceiling will be breached in the next few weeks - they have no choice but to raise it and continue the sham. They are technicall y insolvent already!

etcetera etcetera....... the global financial system is just one gigantic Ponzi scheme - last one out turn the lights off....


Physical cash, & more gold after the lemmings have to sell it to fund their margin calls.....
 
I am also worried that as the US turn off the stimulus and contract government spending, they will go back into recession. Major attacks on collective bargaining will further reduce wages, also reducing spending.

The good thing the US has on its side is that exports are taking off. I reckon as long as China holds out, things will be OK but I agree the world is fragile at the moment. Another big shock might tip it over.
 

I am downloading this video and am looking forward to watching it.

Where there's a void there will be occupation.

The second law of thermodynamics (which suggests that things will over time get less organised) doesn't really allow for there to be so much 'worldly' and uniformed order in the direction of all types of markets. Those markets are by nature unpredictable and chaotic, but appear to be more orderly and predictable (for now!) considering what took place in 2008 and the increasing perpetual debt issues etc that we all face. I don't like the name New World Order, but this cloud organisation does exist and it was created and is controlled by a shadowy western elite, whose influence and power extends into numerous leadership roles in most countries on Earth; the gatekeepers but not the decision makers. The decisions are left to only a few US and European higher-end members. And yes, I do believe they have an unfair advantage in controlling world asset-classes.

The global financial crisis of 2008, I believe, saw a large part of the so-called NWO and nearly everyone else adversely affected. The repositioning straight after that would have given the world a glimpse of the NWO, as they scrambled to be the first out of the gates to reposition itself. I have my own theories as to who some of the elite members of the NWO are, and I'll just keep this to myself.
 
TabJockey said:
This is where you went wrong. Youtube docos are mighty entertaining and that sucks you in to believing thier logically presented facts. Turns out they are not facts, its just a load of rubbish.
Click to expand...

You need to find something that, at least, begins to make sense to you. The mainstream media doesn't anymore. They use to but most of what is reported in the mainstream media is either or a combination of: spin from the right or left, infotainment, a complete waste of time ('ducks crossing the road' stories on prime-time), stories about blue-collar crime and rarely about serious high-end white collar crime and scams. And the list goes on and on. Some of this is designed to make us all look the other way! So point the finger at the poor sod that's running away with a stolen can of soda, while high-end corporate scams and fraud etc is adversely affecting your future. Their sponsors are no longer going to report this, so it's left up to blogs and visual entries on the internet to help enlighten us further.
 

I am also concerned about the end of QE2. Who else will buy US treasuries? A very serious issue and perhaps the biggest one of the year. I think they need the Fed to implement a QE3 or something equivalent to sure-up markets and for someone to help the USD form sinking further.

I think the US needs to raise the minimum wage by up to 25% with further periodic (yearly) increments of around 5%. Inflation will eventually hit the US regardless. How do you keep up with higher prices all round? With more money especially in the private sector. In fact, the private sector is where it should be done mainly. But this checkered move will not be allowed I'm sure. But the public service is a real burden on the US taxpayer at the moment, not always of course.
 
explod said:
The overprinting of the US$ is turning it into trash and the US to a banana republic. How it exactly plays out is anyones guess but it will not be nice on any of us. Cant' happen, we will see.

Stick with your punt on the football.
Click to expand...

The overprinting of the USD will be an even bigger problem for the rest of the world in the long term, as the US, that still controls the structure of world markets, will restructure their economy and currency to best suit themselves, which could be disastrous for all other creditors and markets.

At the moment and for the foreseeable future, the US is the biggest (indirect) exporter of inflation to the rest of the world. As the currency devalues even further more and more inflation will hit the rest of the world including themselves, but the US still has a greater purchasing power than most countries and it can withstand more inflation.

Buying protection like an inverse currency or commodity these days makes sense to a lot of investors, but this itself won't last in the long term as things could drastically change. Probably alright for the next year or more though, as not much will be done before the next US federal election.

I think that the US's restructuring and rise once again, even if it takes a long time, is a safer bet than North Melbourne beating Richmond.
 
explod said:
The overprinting of the US$ is turning it into trash and the US to a banana republic. How it exactly plays out is anyones guess but it will not be nice on any of us. Cant' happen, we will see.

Stick with your punt on the football.
Click to expand...

I read somewhere if the $US collapses, think of it like John Holmes raping a 10 y.o.

Ok - found it: http://answers.yahoo.com/question/index?qid=20110302235211AAFvm4b

Here's another perspective of how it could pan out.

http://www.stansberryresearch.com/pro/1103PSIEOAVD/LPSIM3CH/PR

I've got my silver - have you?
 
It took decades of decline to get to the point the US is at now. That's not going to be reversed overnight, or even within a decade. From a practical perspective, most of the advantages the US once had in its favour have either disappeared or reversed.

It's hard to think that the US was once the world's dominant oil producer and manufacturer with a huge middle class. Today it guzzles through more oil imports than anyone else, sources most goods from overseas and is home to a vast underclass with a small minority holding almost all the wealth. The US in 2011 is virtually the opposite of what it was 40 years earlier. Everything it had in its favour then, is gone or against it now.

I can believe that the US may well be back on top someday. But I can't see it happening anytime soon, at least not in a genuine sense that benefits the majority of ordinary Americans.
 

A restructuring is in the process. The US Government, Federal Reserve, Treasury, military etc will not allow China or anyone else to steal its thunder. You're right about a transfer of wealth from the middle class to the upper class. This is going on around the world too. But a future restructuring might hand over more wealth to a future middle class, as this is needed to support a healthy and functioning economy.
 
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