The “flight to safety” in the dollar reminds me of the “flight to safety” up the rising stern of the Titanic.
They may be correct!! It's a whole new ball game!!!
unhn...to what, the Euro? Nobody's that stupid. Nobody with any real money, that is.
It doesn’t sound as though anyone has any confidence in the new Obama administration. America may go down, but damn! We’re going to look good in the eyes of the world while we’re doing it!
Industry, indeed, provides the
subject which parsimony accumulates.
But whatever industry might acquire,
if parsimony did not save and store up,
the capital would never be the greater.
The Wealth of Nations, Book II, Chapter III
Great nations are never impoverished by private, though they sometimes are by public prodigality and misconduct. The whole, or almost the whole public revenue, is in most countries employed in maintaining unproductive hands... Such people, as they them-selves produce nothing, are all maintained by the produce of other men's labour... Those unproductive hands, who should be maintained by a part only of the spare revenue of the people, may consume so great a share of their whole revenue, and thereby oblige so great a number to encroach upon their capitals, upon the funds destined for the maintenance of productive labour, that all the frugality and good conduct of individuals may not be able to compensate the waste and degradation of produce occasioned by this violent and forced encroachment.
The Wealth of Nations, Book II, Chapter III
Look for a 2 or 3 TRILLION deficit before the imbeciles that put him and the socialists into power start to starve.
USSA Greetings to you Comrade!
Our prosperity is built on our own real productivity, and not on anything the rest of the world does for us. Quite the contrary.
Our savings rate might take 6-12 months to tick up, and the period of adjustment might be rocky for a spell, but it won't make any fundamental difference to our prosperity.
The entire world spent the last 5 years predicting dollar hyperinflation and got deflation instead, with their ridiculously high commodity prices in dollars not sticking at all. If they want to short the dollar enough to lose another $30 trillion on top of what they just lost on that decidedly incorrect bet, they can. It is their funeral.
The only way to save the US Dollar is World War.
Echoes from the past.
These are general observations. They are not aimed at anyone in particular.
1) I believe it is foolish to casually dismiss a warning from someone with the credentials of Willem Buiter.
2) Gerald Celente, Peter Schiff, Max Keiser, Jim Rogers, Marc Faber, and similar people are all saying the exact same thing Willem Buiter is saying. They have been saying it for some time now.
3) Rising and falling prices is not the real danger to our economy. Supply vs demand is not the real danger to our economy right now.
4) If demand falls off far enough, we will have a demand-collapse depression. Many people believe we are there now. But we have survived one demand-collapse depression before. We can survive another one.
5) The size of our money supply is the real danger to our economy right now. The size of our money supply is growing at a frightening pace. So frightening that other nations holding our dollar-denominated debt, along with foreign private investors holding our dollar-denominated debt, are becoming frightened that the value of the dollar may collapse at some point, Weimar Republic style, which means the value of the dollar-denominated debt they are holding collapses as well.
6) People look at M2, see a mere 8% increase from last year, and come away thinking the money supply is not growing at a frightening pace.
7) However, M2 does not include bank and other financial institution reserves, which is where the bulk of the 8.5 trillion in new money created by the Fed Oct - Dec has gone. The Fed believes said money is technically not in circulation, and therefore should not be included in M2.
8) Other nations holding our dollar-denominated debt, along with foreign private investors holding our dollar-denominated debt, DON’T CARE if said money is considered to be in circulation or not. The mere existence of it is viewed by them to be part of our overall money supply, which would make our money supply approximately double the size of one year ago. That is not just inflation. That is hyperinflation in their eyes. Weimar Republic style hyperinflation.
9) When will these people suddenly decide they need to dump their massive dollar-denominated debt holdings? Who knows? Who can say when it will happen?
10) All of the people mentioned in #1 and #2 are saying it WILL happen at some point. None are saying when it will happen, because it is impossible to say when it will happen.
11) When it happens, the value of the dollar on world monetary markets will rapidly collapse. The value of every dollar-denominated asset in existence will collapse along with it.
12) We did not have this dollar-collapse danger in the ‘30s depression. The dollar was quite strong back then.
13) Many people, me included, believe the combination of demand-collapse depression and hyperinflation of the money supply will be too much to deal with, and the US economy will collapse completely.
14) What other currency may be turned to is academic. Lack of consensus on another currency to replace the dollar will not prevent nor delay the inevitable collapse of our economy from the one-two punch of demand-collapse depression and hyperinflation of the money supply with it’s inevitable collapse of the dollar.
15) Other nations are already quietly making moves to get away from the dollar.
This is when it will collapse...when the baby boom, which is the last generation in the US with a measurable degree of wealth, become Federal Dependents.
“Our nation is turning into a third world country, only without a youthful populace. And without even a common language. Only 50% of the kids in the LA Unified School District even speak English.....”
http://www.freerepublic.com/focus/f-news/2160790/posts
This is not a cohesive national or cultural group capable of generating a cohesive economic contribution to the world.