Eh?
The Future of the US Dollar
Why did the Roman republic need money?
The Republic needed money to pay the legions, to build roads, sewers, aqueducts, and arenas, and to pay for the welfare programs that fed the poor. To get this money Rome created a system called tax farmers.
The Republic needed money to pay the legions, to build roads, sewers, aqueducts, and arenas, and to pay for the welfare programs that fed the poor. To get this money Rome created a system called tax farmers.
Are you saying that money is useful to pay for goods and services?
Fuck - this is an entirely new concept. Why has noone come up with this before?
Fuck - this is an entirely new concept. Why has noone come up with this before?
-
- OneTrickPony
- Reactions: 64
- Posts: 1640
- Joined: Tue Aug 20, 2019 12:48 pm
If only we could keep the taxes to pay for the welfare systems instead of using the majority of it to also fund the MIC and the stock market. What next? More dollar debasement to pay bankers bonuses for doing such a great job?
Up the workers!
-
- OneTrickPony
- Reactions: 64
- Posts: 1640
- Joined: Tue Aug 20, 2019 12:48 pm
No, he not talking about money. He's talking about fiat. There is a distinction, you know.
And with good reason. I still don't understand how the government are going to pay the navy if everyone loses faith in the dollar? Isn't that what has brought many a civilization down? Money debasement.
Up the workers!
The U.S. dollar is not a fiat currency. For all intents and purposes, it's backed by oil. It's been that way by design since the 1970s.
-
- OneTrickPony
- Reactions: 64
- Posts: 1640
- Joined: Tue Aug 20, 2019 12:48 pm
Yes, the petro dollar. There have been certain moves by countries away from this arrangement. All that dodgy bailed out US fracking that has been running at a huge loss, too. I guess they had better get a war in quick before everyone loses faith and they won't be able to afford it.
Up the workers!
- Starving Pelican
- I am a Special Snowflake !!?!
- Reactions: 83
- Posts: 5850
- Joined: Sun Jun 04, 2006 1:21 pm
- Location: Cat Food Paradise
Since the departure of telesales, and the booting of certain others, KFF has taken the position of 440's resident annoying whackjob.
kungfufighter wrote: ↑Tue Jun 09, 2020 10:10 pm
No, he not talking about money. He's talking about fiat. There is a distinction, you know.
And with good reason. I still don't understand how the government are going to pay the navy if everyone loses faith in the dollar? Isn't that what has brought many a civilization down? Money debasement.
My mistake. When he wrote several times about money I rashly assumed he meant money.
-
- OneTrickPony
- Reactions: 64
- Posts: 1640
- Joined: Tue Aug 20, 2019 12:48 pm
I've read that the central banks are busy buying up gold, but LBMA banks are selling to China etc who are taking possession of physical. There is also some concern by traders and analysts that gold warrants in bank vaults have several people's names on the same gold bar and that if people are looking to buy gold in the states, they are just printing as many contracts as they can sell, knowing there is a low risk of the customer wanting to take possession of the physical. Kind of reminds me of the FED on the IOU printing. There hasn't been a proper full public audit on US held gold for over 25 years. So, I wouldn't necessarily be counting on gold much.
Up the workers!
-
- OneTrickPony
- Reactions: 64
- Posts: 1640
- Joined: Tue Aug 20, 2019 12:48 pm
A Crash in the Dollar Is Coming
The world is having serious doubts about the once widely accepted presumption of American exceptionalism.
By Stephen Roach
9 June 2020,
Excerpts from article:
...
Covid-19, and the economic crisis it has triggered, is stretching this tension between saving and the current-account to the breaking point. The culprit: exploding government budget deficits. According to the bi-partisan Congressional Budget Office, the federal budget deficit is likely to soar to a peacetime record of 17.9% of gross domestic product in 2020 before hopefully receding to 9.8% in 2021.
A significant portion of the fiscal support has initially been saved by fear-driven, unemployed U.S. workers. That tends to ameliorate some of the immediate pressures on overall national saving. However, monthly Treasury Department data show that the crisis-related expansion of the federal deficit has far outstripped the fear-driven surge in personal saving, with the April deficit 5.7 times the shortfall in the first quarter, or fully 50% larger than the April increment of personal saving.
In other words, intense downward pressure is now building on already sharply depressed domestic saving. Compared with the situation during the global financial crisis, when domestic saving was a net negative for the first time on record, averaging -1.8% of national income from the third quarter of 2008 to the second quarter of 2010, a much sharper drop into negative territory is now likely, possibly plunging into the unheard of -5% to -10% zone.
And that is where the dollar will come into play. For the moment, the greenback is strong, benefiting from typical safe-haven demand long evident during periods of crisis. Against a broad cross-section of U.S. trading partners, the dollar was up almost 7% over the January to April period in inflation-adjusted, trade-weighted terms to a level that stands fully 33% above its July 2011 low, Bank for International Settlements data show. (Preliminary data hint at a fractional slippage in early June.)
But the coming collapse in saving points to a sharp widening of the current-account deficit, likely taking it well beyond the prior record of -6.3% of GDP that it reached in late 2005. Reserve currency or not, the dollar will not be spared under these circumstances. The key question is what will spark the decline?
...
The coming collapse in the dollar will have three key implications: It will be inflationary — a welcome short-term buffer against deflation but, in conjunction with what is likely to be a weak post-Covid economic recovery, yet another reason to worry about an onset of stagflation — the tough combination of weak economic growth and rising inflation that wreaks havoc on financial markets.
Moreover, to the extent a weaker dollar is symptomatic of an exploding current-account deficit, look for a sharp widening of America’s trade deficit. Protectionist pressures on the largest piece of the country’s multilateral shortfall with 102 nations – namely the Chinese bilateral imbalance — will backfire and divert trade to other, higher-cost, producers, effectively taxing beleaguered U.S. consumers.
Finally, in the face of Washington’s poorly timed wish for financial decoupling from China, who will fund the saving deficit of a nation that has finally lost its exorbitant privilege? And what terms — namely interest rates — will that funding now require?
...
Continue reading
https://www.bloomberg.com/opinion/artic ... -is-coming
The world is having serious doubts about the once widely accepted presumption of American exceptionalism.
By Stephen Roach
9 June 2020,
Excerpts from article:
...
Covid-19, and the economic crisis it has triggered, is stretching this tension between saving and the current-account to the breaking point. The culprit: exploding government budget deficits. According to the bi-partisan Congressional Budget Office, the federal budget deficit is likely to soar to a peacetime record of 17.9% of gross domestic product in 2020 before hopefully receding to 9.8% in 2021.
A significant portion of the fiscal support has initially been saved by fear-driven, unemployed U.S. workers. That tends to ameliorate some of the immediate pressures on overall national saving. However, monthly Treasury Department data show that the crisis-related expansion of the federal deficit has far outstripped the fear-driven surge in personal saving, with the April deficit 5.7 times the shortfall in the first quarter, or fully 50% larger than the April increment of personal saving.
In other words, intense downward pressure is now building on already sharply depressed domestic saving. Compared with the situation during the global financial crisis, when domestic saving was a net negative for the first time on record, averaging -1.8% of national income from the third quarter of 2008 to the second quarter of 2010, a much sharper drop into negative territory is now likely, possibly plunging into the unheard of -5% to -10% zone.
And that is where the dollar will come into play. For the moment, the greenback is strong, benefiting from typical safe-haven demand long evident during periods of crisis. Against a broad cross-section of U.S. trading partners, the dollar was up almost 7% over the January to April period in inflation-adjusted, trade-weighted terms to a level that stands fully 33% above its July 2011 low, Bank for International Settlements data show. (Preliminary data hint at a fractional slippage in early June.)
But the coming collapse in saving points to a sharp widening of the current-account deficit, likely taking it well beyond the prior record of -6.3% of GDP that it reached in late 2005. Reserve currency or not, the dollar will not be spared under these circumstances. The key question is what will spark the decline?
...
The coming collapse in the dollar will have three key implications: It will be inflationary — a welcome short-term buffer against deflation but, in conjunction with what is likely to be a weak post-Covid economic recovery, yet another reason to worry about an onset of stagflation — the tough combination of weak economic growth and rising inflation that wreaks havoc on financial markets.
Moreover, to the extent a weaker dollar is symptomatic of an exploding current-account deficit, look for a sharp widening of America’s trade deficit. Protectionist pressures on the largest piece of the country’s multilateral shortfall with 102 nations – namely the Chinese bilateral imbalance — will backfire and divert trade to other, higher-cost, producers, effectively taxing beleaguered U.S. consumers.
Finally, in the face of Washington’s poorly timed wish for financial decoupling from China, who will fund the saving deficit of a nation that has finally lost its exorbitant privilege? And what terms — namely interest rates — will that funding now require?
...
Continue reading
https://www.bloomberg.com/opinion/artic ... -is-coming
Up the workers!
The collapse of the dollar remains highly unlikely. Of the preconditions necessary to force a collapse, only the prospect of higher inflation appears reasonable. Foreign exporters such as China and Japan do not want a dollar collapse because the United States is too important a customer.
Roach suggests the dollar could weaken by as much as 35 percent
i.e. fearmongering, sensationalism
Roach suggests the dollar could weaken by as much as 35 percent
i.e. fearmongering, sensationalism
-
- OneTrickPony
- Reactions: 64
- Posts: 1640
- Joined: Tue Aug 20, 2019 12:48 pm
This an interesting chart.
M2 velocity v core CPI prediction.
As you can see it tracks pretty closely.
M2 velocity v core CPI prediction.
As you can see it tracks pretty closely.
Up the workers!
Who would have that we might see deflation as the world economy tried to restart after a being shut down for months? There has been no demand artificially for months kff - of course prices will be low to restimulate spending. Fuel prices are a perfect example and fuel prices are a major driver of inflation.
Why not take the time to think through these things for yourself instead of relying on videos and articles to represent your lazy-arsed opinion?
Why not take the time to think through these things for yourself instead of relying on videos and articles to represent your lazy-arsed opinion?
-
- Similar Topics
- Replies
- Views
- Last post
-
-
Future of Pattaya - the options
by Expatissimo » Wed Sep 15, 2021 8:49 am » in Thailand, Vietnam, Myanmar and Lao forums - 0 Replies
- 1130 Views
-
Last post by Expatissimo
Wed Sep 15, 2021 8:49 am
-
-
-
Future of Xinjiang China Uyghur People
by marukai » Thu Nov 14, 2019 12:10 pm » in Cambodia Speakeasy - 16 Replies
- 5072 Views
-
Last post by Orichá
Thu Jan 02, 2020 12:46 am
-
-
- 29 Replies
- 1432 Views
-
Last post by MarkinAston
Tue Jun 20, 2023 7:25 am
-
-
Cambodia’s NagaWorld Casino Expansion Delayed, Company Ponders Future
by Bong Burgundy » Tue Jun 06, 2023 11:38 am » in Cambodia News - 3 Replies
- 458 Views
-
Last post by schlarry
Tue Jun 06, 2023 6:42 pm
-