PlayForKeeps

Why I Was Wrong About the Need for a New Currency

The longer the world allows the US dollar to exist as the worlds reserve currency, the longer that they support our irresponsible habits and the longer that they get repaid with inflated dollars worth less and less. It is in the best interest of China and Japan to move away from the US dollar, albeit slowly. Unfortunately for the US, when this happens and we are no longer subsidized by Asia, we will fall on some very dark days, economically. Additionally, China has made it quite clear that they have lost confidence in the US dollar and economy and have gone on record suggesting a move away from the dollar and into an alternative such as SDRs. It is only a matter of time, and the longer that it is put off, the harder it will be.

U.S. Dollar Reserves Increase

Granted it may take many years to transition to another reserve currency, but it seems extremely myopic to think that the rest of the world will acquiesce to the US dollar remaining as the global reserve currency in perpetuity. Agreeing with what Derryl mentioned above, ("I am not convinced that any national currency will replace the dollar") it would be just as foolish to create another reserve currency off from a single currency such as the yuan, as it would create the same problems as currently exist with the US dollars country specific risk. It may be a few years or a decade, but things are changing and you need to seriously question the logic behind any argument that rests on the idea that something will 'never' change. When the US dollar became the reserve currency, the world was very different and the US was much stronger relative to other economies. If it weren't for the obvious political issues involved, the US would already have had their debt downgraded. How much longer do you think the rest of the world and especially Asia will accept US debt and payments on that debt that are paid back with inflated and thus devalued dollars. The future of the reserve currency lies in SDRs which should be a combination of a number or currencies and possibly underlying commodities as well. I do believe this will take some time though, as it is a necessarily slow process. But listen closely to remarks from China - they are slowly dropping more and more hints that the gross mismanagement of the US economy is not acceptable with them and they (and other countries including Russia) will push more and more for a transition from the US dollar. When it happens, and it certainly will, the dollar will fall precipitously.

National Health Insurance, 'Cap and Trade': Two Steps in the Wrong Direction

@ sether -> The free market can solve everything save it having to compete against the government whose operations are not bottom line driven. As the author and other posters noted, the government can operate at a loss indefinitely and thus undercut all private competitors. It is a fundamental violation of capitalism and will destroy, not add, true competition and destroy our future growth. When the government is introduced as a competitor into these markets and has the power to affect all prices and can even undercut all 'competitors' you have a recipe for disaster. Can you truly not see this? This is what scares me is that some people have such a poor understanding of basic economic principles which results in dangerous beliefs that government intervention in private industries is beneficial. In reality, the government reaching into all areas of business will destroy the US as we now know it, and it is happening quicker than I even thought..
Im in Gold and silver, and maybe some alt energy investments once this market drops another 15ish percent.
---------
sether: If the free market can solve everything, why is it so afraid of a public healthcare option? Private healthcare is so great right now it should kick the ass of any public option, right? What harm can a little increased competition do to our health care oligarchs?