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More on the Fed's dollar dilution from The Telegraph's Liam Halligan, who warns that if things...

More on the Fed's dollar dilution from The Telegraph's Liam Halligan, who warns that if things get out of hand and the greenback goes into freefall - it could be the genesis of the next global financial crisis.
Comments (32)
  • CreatvLgic
    , contributor
    Comments (3) | Send Message
     
    Really? I had NO idea.
    1 May 2011, 07:37 AM Reply Like
  • D. McHattie
    , contributor
    Comments (1844) | Send Message
     
    Which is exactly why hyperinflation is a very real threat.

     

    Hyperinflation does not require upward spiralling wages or an 'overheated' economy.

     

    Hyperinflation is a crisis of confidence in a currency.
    1 May 2011, 08:21 AM Reply Like
  • buybuybear
    , contributor
    Comments (389) | Send Message
     
    I still can't quite my head around that the USD is a global reserve currency yet the USA can influence it for obviously domestic reasons. Shouldn't the world give buy in for any change in it's value?

     

    It's like one country deciding that an inch is now in fact 10% shorter because that's more convenient for them!

     

    Greece would love to weaken the value of the Euro, but it can't. The US shouldn't be allowed to weaken the value of the world reserve currency, if they want to weaken the dollar, then fine, but no more world reserve currency status
    1 May 2011, 08:35 AM Reply Like
  • Reel Ken
    , contributor
    Comments (4432) | Send Message
     
    Simply declaring your currency as the world reserve currency is not how it works.

     

    Reserve currency status is achieved only because, and as long as, OTHER countries place more value in it than any other currency.

     

    Right now, we are simply the best of a bad lot. If we over-abuse our status it will change through market forces.

     

    Your analogy to inches is off target. The rest of the world does not measure in inches. Your example illustrates, rather, that the world follows its best interests, regardless of what is convenient to us.
    1 May 2011, 09:31 AM Reply Like
  • kmi
    , contributor
    Comments (4311) | Send Message
     
    Wow the alarmists out in full force this weekend.

     

    Watch out everybody, the weather station just ran a report that the sky is falling...
    1 May 2011, 08:55 AM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    No, but last I looked gold touched $1570 on Friday. So you know something is up. KMI...no really, do you honestly believe there is nothing even remotely "concerning" about the current state of global affairs re: sovereign debt? Where do you think we are logically headed when all CB's are running the press 24/7?
    1 May 2011, 07:00 PM Reply Like
  • apberusdisvet
    , contributor
    Comments (2946) | Send Message
     
    The FED Committee on Economic Destruction wants an incremental decline of the USD to take place over at least a decade. The problem they have is that the rest of the world doesn't want to ride this train as it is heading for an actually visible cliff on the horizon.
    1 May 2011, 09:10 AM Reply Like
  • kmi
    , contributor
    Comments (4311) | Send Message
     
    Hilarious, here's my take, at some point within this decade of which you speak the euro will be a vastly different currency, China will be in recession, and there will be a large 'pop' as every investment dollar gets sucked back into the US, and that will be the end of that.

     

    It's a great big game and the US will win since the US -is- the house, at least for now.
    1 May 2011, 09:25 AM Reply Like
  • spald_fr
    , contributor
    Comments (2803) | Send Message
     
    vet: "The FED Committee on Economic Destruction wants an incremental decline of the USD to take place over at least a decade."

     

    Would you please cite the source of this analysis?
    1 May 2011, 11:31 AM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    He's quoting me!
    1 May 2011, 07:01 PM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    Yea...the Euro will go away as 1/2 the countries are kicked out...and become their own printing presses again. But you fail to take into consideration that on the way, France and Italy will be taken down by the other PIIGS. The UK and US are in deep kimchi.

     

    China will definitely lose steam...the US will be forced to stop buying their goods as they become increasingly more expensive due to dollar depreciation.

     

    All holders of US debt will scramble for the exits. And many will remit debt in favor of some US hard asset such as a nearby lake, river, stream, national monument, like Escalante Grand Staircase sitting on the second largest known reserve of low sulphar coal, etc.

     

    In the process, the US will lose its sovereignty and become part of ....you guessed it...the NWO. Engineered by the banksters.
    1 May 2011, 07:06 PM Reply Like
  • fxmaven
    , contributor
    Comments (1455) | Send Message
     
    The mafia will never allow Italy to go under or to be taken over by Brussels. France & Spain also for that matter.

     

    The rest (Ireland, Portugal, Greece) are finished.
    1 May 2011, 07:32 PM Reply Like
  • Andy Harless
    , contributor
    Comments (95) | Send Message
     
    Halligan's mechanism is a little contorted. It's not the fall in the dollar per se but the "snap back" that causes the crisis. It's a reasonable argument for managed exchange rates, perhaps, but it doesn't strike me as much of a case against easy money.
    1 May 2011, 10:03 AM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    Here's a case against easy money...it's called currency debasement. Thanks for making the $6000 I had saved to buy a Porsche back in the 70's worth enough to buy 4 tires for a Porsche.

     

    My first house in the 70's cost $15 a square foot. Now you are looking at over $100. I used to buy gas for $0.49 a gallon. Now $4.00. So what's that mean....easy money is a good thing? No...it's a means by which capital is taken from places it belongs and put in places it doesn't. It's a PERVERSION of capitalism.
    1 May 2011, 07:10 PM Reply Like
  • Andy Harless
    , contributor
    Comments (95) | Send Message
     
    The value of the money you saved to buy a Porsche depends on how you invested it. You weren't constrained to hold it as money, and if you did, there shouldn't be any presumption that it would retain its value. In fact, quite the contrary: money is not a productive investment, and there's no reason that people should be encouraged to hold it by making it safe. The existence of money as an ostensibly safe asset is a perversion of capitalism.
    1 May 2011, 10:44 PM Reply Like
  • djn21
    , contributor
    Comments (77) | Send Message
     
    "there shouldn't be any presumption that it would retain its value."

     

    Isn't that Fed mandate #1?? A stable currency. Which just points once again to uselessmess of the Fed and the banking cartel.

     

    Obviously, it's lip service only as the Fed has never wanted a stable currency. We've developed a financial system dependant upon debt, and debt maintainancr requires inflation. Punish savers, reward debtors and call it "productive use of capital.". I call debt slavery.

     

    But your statement that I quoted at the top is priceless. Spoken like a true Tool of the system.
    2 May 2011, 08:53 AM Reply Like
  • Andy Harless
    , contributor
    Comments (95) | Send Message
     
    The Fed has a mandate for price stability, which is subject to interpretation and potentially in conflict with its other mandate for maximum employment. In my opinion, the dual mandate should be replaced with a single mandate to maintain a steady path for nominal spending, and there should be no presumption of price stability, which is not necessarily a good thing.

     

    Under some circumstances, when they are refusing to help an economy that needs help, savers deserve to be punished. (I don't think this was the case in the 1970's, by the way. That was just a lot of policy mistakes.) There is no inherent virtue in saving. "Lay not up for yourselves treasures upon earth," someone once said. That Yeshua ben Yosef, what a tool!

     

    No, it is you, Sir (or Madam), who are a tool of the system and a pawn of the banking cartel, which has everything to lose from inflation and everything to gain from deflation, and which is happy to recruit patsies such as you to rail against it while at the same time supporting its true interests.
    2 May 2011, 10:37 AM Reply Like
  • djn21
    , contributor
    Comments (77) | Send Message
     
    Deflation benefits savers. It means the money I save today is worth more than the money I can earn or save tomorrow. I am incentivized to save rather than spend. If I'm saving rather than spending, it means I can build capital and am less likely to need to borrow it. That is not good for the banking cartel as it lessens their power.

     

    "Lay not up for yourselves treasures upon earth" has nothing to do with fiscal or monetary policy, but it's pretty funny of you to throw it in there. It's about where you place faith and trust, not what you do with financial resources. But again, I credit you with providing a good laugh.
    2 May 2011, 11:11 AM Reply Like
  • Andy Harless
    , contributor
    Comments (95) | Send Message
     
    Putting money in the bank reduces the power of bankers?
    3 May 2011, 10:51 AM Reply Like
  • djn21
    , contributor
    Comments (77) | Send Message
     
    "If I'm saving rather than spending, it means I can build capital and am less likely to need to borrow it. That is not good for the banking cartel as it lessens their power."

     

    I think you may have been looking at the wrong part of that equation. Deposits don't reduce banking power, nor do they enhance it. Desposits in and of themselves are, imho, irrelevant. Borrowing money, however, empowers the lender. Having individuals, businesses, and nations indebted to them are where banks derive power, imho.

     

    Banks provide a service - lending. Without lending, they are irrelevant. There are plenty of ways to store cash or get ROI without a bank.
    3 May 2011, 11:04 AM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    And how'd that investment you made in a house do for the past 30 years...not bad prior to sale, but then you get taxed on the gain ( you inflated dollar gain) and after it's all said and done, you have been debased.
    6 Jun 2011, 03:40 PM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    Putting money in the bank reduces the power of bankers...pray tell, how do you figure that out? A bank exists only to borrow money from a saver and lend it to a borrower at a positive margin. Inflation aids the banker ensuring his loan can be repaid. Deflation is sure death to the banker as collateral will always depreciate relative to the outstanding note.
    6 Jun 2011, 03:43 PM Reply Like
  • axelrod608
    , contributor
    Comments (1611) | Send Message
     
    The approaching Bernankruptcy may well eclipse the recent Greenspanruptcy. This is what happens when you put ivory tower, Ivy league brainiacs in charge of monetary policy rather than employ seasoned business professionals with real world experience in making things work.

     

    A while back, the economists at the World Bank studied every national financial disaster over a thirty year period. Among their conclusions was that the length and depth of the ensuing recession following a financial disaster was directly related to the amount of money the country spent trying to "fix" the problem before allowing the markets to rebalance. Based on the amount of money US "leaders" have dumped into this mess, this recession should exceed even the two decades the Japanese have been waiting for a recovery..

     

    Or, worse, Bernanke's bubble may well blow up the entire global economy. It's too soon to tell. But, as the old Chinese proverb goes, "we live in interesting times".
    1 May 2011, 10:15 AM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    I, for one, believe this economic situation is engineered. If you want to understand why, read FOFOA's blog on deflation and hyperinflation.

     

    fofoa.blogspot.com/201...
    1 May 2011, 07:13 PM Reply Like
  • enigmaman
    , contributor
    Comments (2686) | Send Message
     
    Its always something isnt it
    1 May 2011, 10:25 AM Reply Like
  • Guardian3981
    , contributor
    Comments (2170) | Send Message
     
    I personally do not think there will be a QE3 anytime soon and without one the dollars fall will slow or even reverse.
    1 May 2011, 10:28 AM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    From now on, QE will not be announced. It will be stealth. You MAY see it watching the FED's balance sheet...maybe not. But you can rest assured, that behind the scenes, they will be printing...

     

    You can tell that by one simple measure....how large is the US deficit, and how fast is the debt growing. The only people buying US debt will be other Central Banks....go figure...I wonder where they get to money to do that?
    1 May 2011, 07:15 PM Reply Like
  • stocknerd
    , contributor
    Comments (1349) | Send Message
     
    What happens when the end of the economic world doesn't happen as the conservatives hope? You can't have a depression AND hyper inflation. Gold and silver prices are a BUBBLE.
    1 May 2011, 02:16 PM Reply Like
  • bearfund
    , contributor
    Comments (1534) | Send Message
     
    And so are cotton, coffee, corn, copper, taconite, soybeans, oil, live cattle, platinum, sugar, wheat, cocoa, and hogs? That's an awful lot of bubbles, even in goods that are privately contracted (no evil speculators there)! Maybe there's some simpler explanation, considering that most of those can't even be stored, and therefore aren't really suitable monetary substitutes. Yes, something is coming to me now, it's the dollar. The dollar is in free fall. No bubble, just the dollar. So much easier to explain ONE thing changing in price than dozens of things, don't you agree?
    1 May 2011, 02:48 PM Reply Like
  • djn21
    , contributor
    Comments (77) | Send Message
     
    You most certainly can have both depression and hyper inflation together. Hyper inflation - caused by currency collapse (not spiraling wage/growth) - would CAUSE depression as purchasing power is snatched away from the great swath of consumers. If you reject Austrian economic theory you may disregard this outcome as an impossibility. But I suspect you'll get to witness it, no matter what you choose to call it.
    1 May 2011, 02:50 PM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    Stocknerd...please tell me you don't think Germany's hyperinflationary economy was "robust". Do you understand why hyperinflation occurs?

     

    Here, go read this:

     

    fofoa.blogspot.com/201...
    1 May 2011, 07:17 PM Reply Like
  • WMARKW
    , contributor
    Comments (10690) | Send Message
     
    Yep! I agree. Let me say that again....I AGREE !!!!!!
    1 May 2011, 07:18 PM Reply Like
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