This is uncharted water.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
~~Ludwig von Mises
http://www.freerepublic.com/focus/f-news/1053684/posts
Squanderville versus Thriftville (Warren Buffet)
fortune ^ | oct 2003 | Warren Buffet
Posted on 01/07/2004 11:35:03 PM EST by dennisw
By Warren E. Buffett, FORTUNE
I'm about to deliver a warning regarding the U.S. trade deficit and also suggest a remedy for the problem. But first I need to mention two reasons you might want to be skeptical about what I say. To begin, my forecasting record with respect to macroeconomics is far from inspiring. For example, over the past two decades I was excessively fearful of inflation. More to the point at hand, I started way back in 1987 to publicly worry about our mounting trade deficits -- and, as you know, we've not only survived but also thrived. So on the trade front, score at least one "wolf" for me. Nevertheless, I am crying wolf again and this time backing it with Berkshire Hathaway's money. Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in -- and today holds -- several currencies. I won't give you particulars; in fact, it is largely irrelevant which currencies they are. What does matter is the underlying point: To hold other currencies is to believe that the dollar will decline
This is the deal. Our perceived military strength is a major prop to the USD. As in we defend Japan from China and that’s why J will never dump USD
Anyways .... A major wasting of Iran nuclear facilities will make the USD go up. Of course there will be fallout and Russia&China just might back up the Iranians
But a strong military props up your currency