Is the Collapse of the Dollar Inevitable? [W:98]

[specklebang]

Re: Is the Collapse of the Dollar Inevitable?

The Bush, Obama, Bersnakey Cartel have proven absolutely that the dollar can not be destroyed as long as it's kept out of the hands of the masses and give only to the classes.

Since I have more FRN dollars than I do real assets, I'm greatly relieved to learn this. They had me scared for a while there.

 

[ARealConservative]

Re: Is the Collapse of the Dollar Inevitable?

As one post after another at DP might suggest, there are a number oif unstable people on the loose, but the political system is actually just fine.

was the political system fine in 1971? you know, the period when were caught engaging in monetary fraud and couldn't actually make good on our promises?

What's your best case scenario for that actually happening?

political gridlock. a few more too big to fail style bailouts will likely lead to just the type of populist turmoil that will bring about some real change.

 

[jet57]

Re: Is the Collapse of the Dollar Inevitable?

The socialists and the Austrians are at opposite ends of the spectrum of views on inevitability. Socialists believe that the government can turn on a dime, veering away from economic collapse towards a socialistic paradise simply by giving the right person the authority to print money. And how would the Benevolent One accomplish this feat? According to the Debt Virus Theory, it is as simple as printing money and spending it directly into the economy, rather than buying Treasury Bills.

On the other hand, the Austrians believe that a “distortion-reversion process” is inevitable. Credit expansion is unsustainable and this, apparently, is true no matter how benevolent the chairman of central bank may be and no matter what he spends newly created money on, whether on social programs or in the discount of good bills, at not more than sixty days’ date.

Is hyperinflation the inevitable result of inflation? This is the question I address.

Is the Collapse of the Dollar Inevitable?

The only reason that the dollar will collpase will be the result of those who keep trying to reinvent it so that they can control it: ya'know; different colors and all that junk.

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

[fake Amero image]

Ha! Your no better than Hal Turner! REAL Ameros (to be issued after the NWO is ushered in during next season's American Idol finalé) will be in four colors, three languages, and have pictures of great North Americans such as Ricardo Montalban and Wayne Gretzky on them.

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

was the political system fine in 1971? you know, the period when were caught engaging in monetary fraud and couldn't actually make good on our promises?

Yes, it was fine in 1971 as well, a time when none of the things you suggest actually happened.

political gridlock. a few more too big to fail style bailouts will likely lead to just the type of populist turmoil that will bring about some real change.

Populist turmoil is the key, eh? How do you expect to counteract such forces as summer vacation, the NFL season, Christmas shopping, and March Madness that so typically, thoroughly, and consistently distract the very people you are counting on here?

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

The only reason that the dollar will collpase will be the result of those who keep trying to reinvent it so that they can control it: ya'know; different colors and all that junk.

Is it National Sympathy for Counterfeiters Week or something? One of the chief justifications for adding increased security to US currency has been the sophisticated counterfeiting operations of the Democratic People's Republic of Korea. Are you by chance some big fan of theirs?

 

[specklebang]

Re: Is the Collapse of the Dollar Inevitable?

If we manage to make ever more exotic currency, we'll force those damn Koreans to print the older versions. Oh, they already do that.

I always thought it would be much more effective to change the currency and invalidate all the old currency. You bring in the old to the bank and you get the new. If you seem to have a bit more than expected, you can explain to the nice policeman.

We used to do this in Korea every few years. Overnight, they would seal the base and reissue the money (MPCs). I'd watch the MamaSans throwing their now worthless bundles of old $ over the fence.

Since the old money circulates as freely as the new, redesigning it is a total waste of time, money and resources.

Is it National Sympathy for Counterfeiters Week or something? One of the chief justifications for adding increased security to US currency has been the sophisticated counterfeiting operations of the Democratic People's Republic of Korea. Are you by chance some big fan of theirs?

 

[ARealConservative]

Re: Is the Collapse of the Dollar Inevitable?

Yes, it was fine in 1971 as well, a time when none of the things you suggest actually happened.

aah, the ostrich in the sand approach. well played.

the truth is we did engage in fraud. We ended our agreements unilaterally because we couldn't meet our obligations and had no other recourse.

you can call it the nixon shock to lessen our deceit if you like, but that is the actual event that transpired.

since you can't be truthful in this regard, I see no reason to humor anymore of your deceits. adios comrade

 

[imagep]

Re: Is the Collapse of the Dollar Inevitable?

... summer vacation, the NFL season, Christmas shopping, and March Madness

and...

Raindrops on roses and whiskers on kittens
Bright copper kettles and warm woolen mittens
Brown paper packages tied up with strings
These are a few of my favorite things

Cream colored ponies and crisp apple strudels
Door bells and sleigh bells and schnitzel with noodles
Wild geese that fly with the moon on their wings
These are a few of my favorite things

Girls in white dresses with blue satin sashes
Snowflakes that stay on my nose and eyelashes
Silver white winters that melt into Springs
These are a few of my favorite things

...

Raindrops on roses and whiskers on kittens
Bright copper kettles and warm woolen mittens
Brown paper packages tied up with strings
These are a few of my favorite things

Cream colored ponies and crisp apple strudels
Door bells and sleigh bells and schnitzel with noodles
Wild geese that fly with the moon on their wings
These are a few of my favorite things

...

Girls in white dresses with blue satin sashes
Snowflakes that stay on my nose and eyelashes
Silver white winters that melt into Springs
These are a few of my favorite things


More lyrics: Rodgers And Hammerstein Lyrics

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

the truth is we did engage in fraud. We ended our agreements unilaterally because we couldn't meet our obligations and had no other recourse.

The truth is that your ship of fool's gold was on its way (at last) to the bottom of the sea. Germany and Switzerland had already walked out of Bretton Woods. Speculators ("price-gougers" in the parlance of the day) were having a field day against the dollar. If nobody wants to play by the rules anymore, it makes no sense at all to play the game. Not so many smarts are needed to figure that out.

Like soybeans or porkbellies, gold is a mere commodity. Whatever monetary role it was able to play in the 19th century had long since been lost in the 20th. Only fools shackle themselves in the chains of their ancestors.

you can call it the nixon shock to lessen our deceit if you like, but that is the actual event that transpired.

Ever tried connecting the Nixon Shock to the Marshall Plan and ensuing years of US-dependent European growth? What was the deal there? I mean nothing really happens in a vacuum. How were those first 25 postwar years all tied together in economic terms?

since you can't be truthful in this regard, I see no reason to humor anymore of your deceits. adios comrade

How easily Austrians find some excuse to run away.

 

[Lakryte]

Re: Is the Collapse of the Dollar Inevitable?

Exactly. All national currency and all national debt are backed by, and are simply markers for, the supply of real goods and services produced by the economy that issued them. The US dollar and US Treasury securities will collapse into worthlessness when US GDP collapses to zero. Right now, we produce about 22% of all the real goods and services that are produced anywhere in the world, so we have quite a ways to go before we reach zero.

The economy does not issue US dollars, the government does. The dollar has lost 96% of its value since 1913, despite the economy increasing in size. The dollar is not backed by anything, it is simply used in exchange for things. It has value as long as people are willing to use it in exchange. As more money is created, however, each individual dollar becomes less valuable.

This by the way is what actually happened in Zimbabwe. Printing a lot of money had all but nothing to do with it. Through wars, genocides, rioting, looting, incompetence, and persistent emigration resulting from all of those, their GDP fell to next to nothing. Who would want to hold coupons (currency) good only in a store that would have nothing on the shelves when you got there, even assuming that you could avoid being killed on the way there?

To suggest that the massive inflation of the currency had nothing to do with hyperinflation in Zimbabwe is simply absurd. The productivity of Zimbabwe did not just suddenly stop. It had always been weak, and the currency was used just the same. The massive expansion of the money supply is what devalued their currency. Why would store owners accept a currency if it was so carelessly created at will? Its just paper. The Weimar Republic is an even clearler example of this.

 

[Matt Foley]

Re: Is the Collapse of the Dollar Inevitable?

The collapse of the dollar is inevitable, only because of Free Trade.

All currency exists to serve as a medium for trade. To suggest free trade causes the collapse of a currency is counterintuitive.

First you say currency exists to serve as a medium for trade, then you say that something bad that happens to a currency isn't the result of trade.

 

[Lakryte]

Re: Is the Collapse of the Dollar Inevitable?

Was the Weimar Republic producing 22% of world GDP at the time? No? What about Zimbabwe or Argentina, or any of the other totally worthless and not at all comparable cases that people of a certain persuasion like to bring up? No for any of them either? Wow...

The US has a far larger GDP than Great Britain, but the pound is valued higher than the dollar. How can this be if GDP determines the value of a currency? Money only has value insofar as people are willing to accept it in exchange. But each individual unit of money loses value if more of it is created. This is basic supply and demand. Zimbabwe, the Weimar Republican, and all the other examples of hyperinflation involve sudden and massive changes in the money supply. The USd has been on a far more gradual decline, taking 100 years to lose 97% of its value.

 

[Lakryte]

Re: Is the Collapse of the Dollar Inevitable?

The collapse of the dollar is inevitable, only because of Free Trade.



First you say currency exists to serve as a medium for trade, then you say that something bad that happens to a currency isn't the result of trade.

I am referring to free trade. If people refuse to trade in a currency, of course something bad will happen to it. Allowing more people to freely use a currency in exchange is not going to devalue to currency.

 

[Canell]

Re: Is the Collapse of the Dollar Inevitable?

Is the Collapse of the Dollar Inevitable?

You can print money as much as people want them and cause no inflation since there is demand. America has been doing that for the last 40 years. But when demand is zero and more over, money start flooding America back, that's when the real "show" begins. :roll: Brace yourselves. :damn

 

[ARealConservative]

Re: Is the Collapse of the Dollar Inevitable?

price gougers ~ lmfao.

Yes, speculators were speculating that our claim to have money as good as gold was a crock of ****. they rightly demanded payment in gold that was promised as they had no interest accepting depreciating dollars from our over spending on wars and entitlements.

Only an ass would be proud of our actions in that era. If a lesser country unilaterally voided agreements with us, we would not accept such terms.

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

The economy does not issue US dollars, the government does.

Governments are both parts of their home economies and their legal agents versus both the foreign and domestic segments of rest-of-world.

The dollar has lost 96% of its value since 1913...

Only if you had put one in a coffee can and then left it there for a hundred years. Such a loss would have had much more to do with the value of not being stupid than the value of a dollar.

The dollar is not backed by anything, it is simply used in exchange for things.

A US dollar -- however held -- is an enforceable claim against the real goods and services output by the US economy. It is a debt instrument. That debt can be pressed and collected against any other actor in the economy.

It has value as long as people are willing to use it in exchange.

It has value as long as there are goods and services to exchange it for. The regard that loonies may have for the currency doesn't enter into it. Those at the outer fringe can drop out and "go off the grid" all they like. The rest of us will simply continue to enjoy such things as the fact that we can make a phone call and have a fresh hot pizza show up at the door minutes later if only we give the guy who brings it some of these little pieces of paper. No pizza, no Chinese, no subs, and no pho? Now there are fewer things that can show up and the value of these pieces of paper goes down. If there were no things available at all, then we would be Zimbabwe, and dollars would be worthless.

As more money is created, however, each individual dollar becomes less valuable.

So what? Do you care if your allowance is $10 a week and a movie ticket is $2 versus your allowance being $15 a week and a movie ticket costing $3?

To suggest that the massive inflation of the currency had nothing to do with hyperinflation in Zimbabwe is simply absurd.

No, it is entirely factual. You have apparently been reading sources that are happy to associate only X with Y when there were 25 things more strongly correlated with Y than X was. In my line of work, we call those sources propaganda pushers. Okay, sometimes just liars. The government simply printed currency because it had looming debt payments to make and no longer had any other means of raising funds. Do you know what levels of revenue result when there are no more incomes and no more transactions to tax? How about no more property owners? Currency was printed and debts were paid. End of story. The currency was collapsing beforehand and it still was after. For entirely unrelated reasons.

The productivity of Zimbabwe did not just suddenly stop.

No it took some time. How is that relevant? And consider the fact that in the worst economic collapse in 75 years, real GDP here fell peak-to-trough by less than 3.7%.

It had always been weak, and the currency was used just the same.

None of the countries in the area has ever compared well with Switzerland. Why did what happened in Zimbabwe happen in Zimbabwe? Why was flight into the not at all Swiss franc-like currencies of neighboring states such a feature of the decline in Zimbabwe?

The massive expansion of the money supply is what devalued their currency. Why would store owners accept a currency if it was so carelessly created at will? Its just paper. The Weimar Republic is an even clearler example of this.

Your history is even worse than your economics. Heal thyself...go read something that doesn't have the Mises Institute Seal of Approval on it.

 

[JP Hochbaum]

Re: Is the Collapse of the Dollar Inevitable?

The socialists and the Austrians are at opposite ends of the spectrum of views on inevitability. Socialists believe that the government can turn on a dime, veering away from economic collapse towards a socialistic paradise simply by giving the right person the authority to print money. And how would the Benevolent One accomplish this feat? According to the Debt Virus Theory, it is as simple as printing money and spending it directly into the economy, rather than buying Treasury Bills.

On the other hand, the Austrians believe that a “distortion-reversion process” is inevitable. Credit expansion is unsustainable and this, apparently, is true no matter how benevolent the chairman of central bank may be and no matter what he spends newly created money on, whether on social programs or in the discount of good bills, at not more than sixty days’ date.

Is hyperinflation the inevitable result of inflation? This is the question I address.

Is the Collapse of the Dollar Inevitable?

How can you be so good at math and so bad at economics? This is what happens when ideology gets in the way of logic and reasoning and morality.

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

The US has a far larger GDP than Great Britain, but the pound is valued higher than the dollar. How can this be if GDP determines the value of a currency?

Really? How do you know that? How can you tell which currency has a higher value other than by expressing each in terms of some common real good or service? Say a box of prunes. If forex markets are being efficient and effective today, a box of prunes would end up costing very nearly the same thing in both economies. Otherwise, international prune lovers would bid up the currency that provided the lower price and vice versa. I begin to wonder whether you understand how any of this actually works.

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

price gougers ~ lmfao.

We report, you decide.

Yes, speculators were speculating that our claim to have money as good as gold was a crock of ****. they rightly demanded payment in gold that was promised as they had no interest accepting depreciating dollars from our over spending on wars and entitlements. Only an ass would be proud of our actions in that era. If a lesser country unilaterally voided agreements with us, we would not accept such terms.

Crock alert. As already noted, both Germany and Switzerland preceded us in walking away from the failed Bretton Woods system, and what we had overspent on was European recovery. At that, inflation of any note did not occur until the oil price shocks that began in 1973. Not sure how that would have played a role in mid-1971. I'm afraid that the dead horse you are beating was in fact already dead when you bought it. Gold is meanwhile a simple commodity. Being a bright, shiny object does not give it any magical properties or powers at all. See salt, wampum, and beaver pelts as commodities with a similar and also ultimately failed history.

 

[ARealConservative]

Re: Is the Collapse of the Dollar Inevitable?

Crock alert. As already noted, both Germany and Switzerland preceded us in walking away from the failed Bretton Woods system

crock alert is right. Neither Germany nor Switzerland promised foreign holders of notes of any gold conversion, so their decision to remove themselves did not equate to a unilateral contractual abandonment.

, and what we had overspent on was European recovery.

crock alert part two, not that it matters. the fact is we did overspend and was unable to fulfill the obligations we previously promised.

 

[ab9924]

Re: Is the Collapse of the Dollar Inevitable?

The socialists and the Austrians are at opposite ends of the spectrum of views on inevitability. Socialists believe that the government can turn on a dime, veering away from economic collapse towards a socialistic paradise simply by giving the right person the authority to print money. And how would the Benevolent One accomplish this feat? According to the Debt Virus Theory, it is as simple as printing money and spending it directly into the economy, rather than buying Treasury Bills.

On the other hand, the Austrians believe that a “distortion-reversion process” is inevitable. Credit expansion is unsustainable and this, apparently, is true no matter how benevolent the chairman of central bank may be and no matter what he spends newly created money on, whether on social programs or in the discount of good bills, at not more than sixty days’ date.

Is hyperinflation the inevitable result of inflation? This is the question I address.

Is the Collapse of the Dollar Inevitable?

Hyperinflation is an excellent opportunity to clear out unserviceble debt. It works if your debt is in your own currency. Luckily, the US is in this situation, although not for long, western finances will not stand up to a semi-planned system such as the Chinese financial policies, in the long run.

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

crock alert is right. Neither Germany nor Switzerland promised foreign holders of notes of any gold conversion, so their decision to remove themselves did not equate to a unilateral contractual abandonment.

LOL! We were merely the last ones to do it. At the start of WWI, every major economy was on the gold standard. By the end of WWII, only the US still was. Bretton Woods was supposed to define a new sort of order. Do know how it worked? Other major currencies were pegged to the dollar, but the dollar was pegged to gold. By definition, everyone was in fact still pegged to gold. The contractual promise abandoned by Germany and Switzerland was one to support the peg between their currencies and the dollar. As I noted earlier, only a fool continues to play a game in which the other players no longer have any respect for the rules. As the result, the gold pool was shut down in 1968, and the window for central banks was closed in 1971. It all should have happened much sooner. Gold is a long ago outdated monetary flop.

 

[Cardinal Fang]

Re: Is the Collapse of the Dollar Inevitable?

Hyperinflation is an excellent opportunity to clear out unserviceble debt. It works if your debt is in your own currency. Luckily, the US is in this situation...

All our debt has always been and will always be denominated in dollars (unless of course we switch to the Amero). Otherwise, we don't and won't have another currency available. Other countries of course face the same limitation.

...although not for long, western finances will not stand up to a semi-planned system such as the Chinese financial policies, in the long run.

Hmmm. What is it about China that makes them "semi-planned"? How do these things make their system something that western finances will not be able to stand up to? In the long run...

 

[Matt Foley]

Re: Is the Collapse of the Dollar Inevitable?

Crock alert. As already noted, both Germany and Switzerland preceded us in walking away from the failed Bretton Woods system, and what we had overspent on was European recovery. At that, inflation of any note did not occur until the oil price shocks that began in 1973. Not sure how that would have played a role in mid-1971. I'm afraid that the dead horse you are beating was in fact already dead when you bought it. Gold is meanwhile a simple commodity. Being a bright, shiny object does not give it any magical properties or powers at all. See salt, wampum, and beaver pelts as commodities with a similar and also ultimately failed history.

A sudden clarity Clarence moment:

"Libertarians cling onto conspiracy theories like the Gold Standard because they cannot admit that their globalist utopia of open borders and free free trade actually causes economic devastation."