The dollar isn't going anywhere because there is nothing else to replace it with.
It's the least ugly of a bunch of ugly currencies.
We may see a coordinated global devaluation, but the idea that the dollar is going to crash and the rest of the garbage fiat currencies around the world are still going to be around isn't realistic.
PeakOil is You
Treasurys are 'still the place to be'
Re: Treasurys are 'still the place to be'
by Gerben » Tue 22 Sep 2009, 10:56:01
$this->bbcode_second_pass_quote('BigTex', 'T')he dollar isn't going anywhere because there is nothing else to replace it with.
It's the least ugly of a bunch of ugly currencies.
We may see a coordinated global devaluation, but the idea that the dollar is going to crash and the rest of the garbage fiat currencies around the world are still going to be around isn't realistic.
It's the least ugly of a bunch of ugly currencies.
We may see a coordinated global devaluation, but the idea that the dollar is going to crash and the rest of the garbage fiat currencies around the world are still going to be around isn't realistic.
I disagree. Some currencies are significantly stronger than the US dollar. I've seen the dollar slide down for the last few weeks again (although it's too early to conclude that this is It). The stronger currencies will be increasingly popular as the dollar crashes. When all else fails people can always pay with bullion coins, just like the early settlers who used thalers. The US produces its own bullion coins (eagles). I still have some old Dutch silver guilders (I know: a contradictio in terminis) and daalders (thalers/dollars).
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Gerben - Tar Sands
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Re: Treasurys are 'still the place to be'
by BigTex » Tue 22 Sep 2009, 16:45:18
$this->bbcode_second_pass_quote('Gerben', '')$this->bbcode_second_pass_quote('BigTex', 'T')he dollar isn't going anywhere because there is nothing else to replace it with.
It's the least ugly of a bunch of ugly currencies.
We may see a coordinated global devaluation, but the idea that the dollar is going to crash and the rest of the garbage fiat currencies around the world are still going to be around isn't realistic.
It's the least ugly of a bunch of ugly currencies.
We may see a coordinated global devaluation, but the idea that the dollar is going to crash and the rest of the garbage fiat currencies around the world are still going to be around isn't realistic.
I disagree. Some currencies are significantly stronger than the US dollar. I've seen the dollar slide down for the last few weeks again (although it's too early to conclude that this is It). The stronger currencies will be increasingly popular as the dollar crashes. When all else fails people can always pay with bullion coins, just like the early settlers who used thalers. The US produces its own bullion coins (eagles). I still have some old Dutch silver guilders (I know: a contradictio in terminis) and daalders (thalers/dollars).
Think through what you are saying.
You are saying that the world is going to sit by and allow U.S. manufacturing to gain an advantage through devaluation of the U.S. dollar.
You are saying that the world is going to come up with an alternative to the dollar as a reserve currency (which will also be just another fiat currency).
Which currencies do you think will strengthen compared to the dollar over the next 5-10 years?
The yen? As a percentage of GDP, the Japanese have three times the public debt of the U.S.
The euro? A reserve currency with no bond market or sovereign behind it? I doubt it.
Any talk of Canadian, Australian, Swiss, Chinese or British currency is hard to take seriously, given the complete lack of necessary liquidity for world trade. The Chinese currency doesn't even trade.
Note that bullion is not a currency in competition with the U.S. dollar. No international trade is conducted in bullion today (nor is it likely to be in the future).
The idea that the U.S., with the largest manufacturing economy in the world, would be served up a gift from the rest of the world in the form of dollar devaluation is hard to believe. Think of the enormous political pressure in other countries to devalue in tandem with the U.S. dollar (which is actually what we have been seeing for the last 12 months or so).
When Bernanke goes to sleep at night, he has sweet dreams of dollar devaluation. When other central bankers around the world go to sleep, the same scenario is a nightmare.
The absolute best case scenario for the U.S. right now would be dramatic devaluation. Unfortunately, this would also be the best case scenario for most debt-saturated industrial economies around the world.
Thus, I think we are likely to see simultaneous devaluations worldwide in coming years (and the dollar will remain the least ugly of the bunch). Gold should do quite well.
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BigTex - Intermediate Crude
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Re: Treasurys are 'still the place to be'
by sparky » Wed 23 Sep 2009, 04:53:08
.
BigTex
" When Bernanke goes to sleep at night, he has sweet dreams of dollar devaluation. When other central bankers around the world go to sleep, the same scenario is a nightmare. "
pretty much agree with the above and the central position of the dollar ,
even drug and arms dealers prefer to use them !
the price of energy / raw materials are denominated in U.S.$ ,
China would see their prices climb and increase cost
up to a point it make sense to burn $ to keep trade stable ,
the Chinese have probably accepted an haircut of some magnitude ,
they are now the biggest exporter in the world , trouble is not in their interest
.
BigTex
" When Bernanke goes to sleep at night, he has sweet dreams of dollar devaluation. When other central bankers around the world go to sleep, the same scenario is a nightmare. "
pretty much agree with the above and the central position of the dollar ,
even drug and arms dealers prefer to use them !
the price of energy / raw materials are denominated in U.S.$ ,
China would see their prices climb and increase cost
up to a point it make sense to burn $ to keep trade stable ,
the Chinese have probably accepted an haircut of some magnitude ,
they are now the biggest exporter in the world , trouble is not in their interest
.
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sparky - Intermediate Crude
- Posts: 3587
- Joined: Mon 09 Apr 2007, 03:00:00
- Location: Sydney , OZ
Re: Treasurys are 'still the place to be'
by Gerben » Wed 23 Sep 2009, 05:54:40
$this->bbcode_second_pass_quote('BigTex', 'T')hink through what you are saying.
You are saying that the world is going to sit by and allow U.S. manufacturing to gain an advantage through devaluation of the U.S. dollar.
You are saying that the world is going to sit by and allow U.S. manufacturing to gain an advantage through devaluation of the U.S. dollar.
Yes. This it will help balance trade, which is essential. The effect on trade will not be that huge. Cut US wage cost in half by taking 50% off the dollar and wages are still higher than in many countries. You have a long way to go.
$this->bbcode_second_pass_quote('', 'Y')ou are saying that the world is going to come up with an alternative to the dollar as a reserve currency (which will also be just another fiat currency).
Which currencies do you think will strengthen compared to the dollar over the next 5-10 years?
The yen? As a percentage of GDP, the Japanese have three times the public debt of the U.S.
The euro? A reserve currency with no bond market or sovereign behind it? I doubt it.
Any talk of Canadian, Australian, Swiss, Chinese or British currency is hard to take seriously, given the complete lack of necessary liquidity for world trade. The Chinese currency doesn't even trade.
These currencies are already being used as reserve currency. Their share as reserve currency will increase as the dollar devaluates.
$this->bbcode_second_pass_quote('', 'N')ote that bullion is not a currency in competition with the U.S. dollar. No international trade is conducted in bullion today (nor is it likely to be in the future).
Bullion is a logical replacement of paper money for local trade if the system collapses. It's also a logical start for whatever replaces the dollar. When the Dutch took their old paper guilders out of circulation after WWIII, they replaced it with new paper. The old (bullion) coins remained valid.
$this->bbcode_second_pass_quote('', '[')...] The absolute best case scenario for the U.S. right now would be dramatic devaluation. Unfortunately, this would also be the best case scenario for most debt-saturated industrial economies around the world.
Agreed. But don't forget: when there is a debt, it's always owed to sombody else.
$this->bbcode_second_pass_quote('', 'T')hus, I think we are likely to see simultaneous devaluations worldwide in coming years (and the dollar will remain the least ugly of the bunch). Gold should do quite well.
