World Prepares to Dump the Dollar, page 1

What do China, India, Brazil, Russia, France and Germany have in common? These countries most often can’t agree on anything. But they are united in one strange—and ominous—way. They blame the United States for wrecking the global economy. And they think the dollar is the wrecking ball.

One rock-solid, foundational belief underpins almost all economic theory in America: faith in the dollar’s unassailable status as the world’s reserve currency. Foreigners hold so many dollars that they can’t afford to stop buying them, the theory goes. Therefore the dollar’s status as the world’s reserve currency is sound. But the dollar is now coming under a concentrated attack. Are American economists about to get schooled?

The irony is that America is completely blind to the catastrophe heading its way. As the economic crisis unfolded at the end of last year, investors made a mad rush out of global stock markets and into other assets. The biggest beneficiary of the panic was the one market large enough and liquid enough to handle the trillions of dollars being moved: the U.S. dollar market. This caused the dollar to surge in value.

America grossly misdiagnosed the demand for dollars as a vote of confidence in the U.S. economic system. In fact, it was primarily a case of investors looking for a place they could quickly and easily get their money in—and out.

Now that the initial panic has subsided, the dollar’s international purchasing power has resumed its former downward trajectory. Since the post-crisis high in March, the dollar has fallen by a portfolio-shredding 10 percent.

America’s foreign creditors are again questioning the wisdom of holding so many U.S. dollars. And they’re looking for a way out.

America’s leaders seem blind to the looming dollar revolt. Global economies are in crisis. Unemployment rolls are soaring. People want answers and solutions. The jobless will demand action, and culpable politicians will look for scapegoats and distractions. The first step, blaming the U.S. and its currency for the global recession, has already begun.

A new global currency—and leveraging it to knock the U.S. down—will be the solution.

The highly trained economic theorists who keep telling us that foreigners can’t afford to stop supporting the U.S. are about to get reeducated at Reality U.

www.thetrumpet.com...

I know I sound like a broken record but take heed of what is happening in foreign markets. The king of the castle is about to get ousted and those asleep at the wheel will feel the sting alot worse than those who are prepared.

[edit on 24-7-2009 by warrenb]

reply to post by mikerussellus

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something like that?

Q: What does a weaker currency mean?

A: In many ways, a country's currency is considered a barometer of its economy and standard of living. If debt levels are increased, as the U.S. has done with its stimulus and bailout packages, international investors will find the currency less attractive and start putting their money in other assets — which, in turn, weakens the dollar.

This has an immediate impact on businesses. Companies that do business with a weaker currency will have to pay more for the same products. Those added costs usually get passed on to the consumer.

That's why the drop in the dollar has some economists worried.

"Over the next several years, we're probably going to have more inflation in the United States," said Fred Fraenkel, the Chairman of Investment Policy at Beacon Trust Company and former head of global research at Lehman Brothers.

www.washingtonexaminer.com...

In other worlds things get more expensive for the consumer bringing the feared signs of inflation.

When you need vast amounts of money to pay for ever day needs.

The only reason we have not seen inflation in a larger scale is due to the Fed manipulation of interest rates.

reply to post by mikerussellus

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This time is going to be a new ball game all together as our nation economic problems has reached hight never seen before due to our incredible and unsustainable national deficit and the US government foreign borrowing to keep the nation afloat.

We didn't have that during the first depression.

reply to post by marg6043

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When/if China starts cashing in on our debt to them, I understand enough to realize our rating will sink, but what kind of manipulation (if any) can the FED do to keep our economy propped up?
I realize dumping more money into the system is bad. Another stimulus package would tank us. But for the people that are still working, they aren't spending. Hell, every extra dime I have goes to gold. (canadian maple leafs, american eagle 5$)
So the Fed is going to HAVE to dump more money into the economy because people like me aren't spending.
But then that will create a scenario where the dollar will devalue further, causing people like me to save even more, which (in turn) will cause the Fed to dump EVEN MORE money into the economy. . . . .


. . . . . . basically, we're screwed aren't we?

Have I got it right?



-sigh- it's only 9 am here, and I need a drink-

reply to post by warrenb

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I think the one thing ALL of us need to remember is this...There are SEVERAL countries that are forming alliance’s/block’s. If you look around you in the current “news” or even in “print” you will see that ALL countries are forming block’s/group’s of countries that can support each other without any one from the outside stepping in to add something to the pot.
. Now WHY would these said countries be hoarding together if not to ride out “something”?. The answer is simple in order to bring about a global court and a global currency based on a sound system (to them) of over sight, regulation and global law. They must choose who their partner’s in play are going to be. It is that simple if you would just sit down and go over it you could see it too.

What you are seeing in the financial industry today is no longer just another consolidation of the mass of financial and commercial companies. It has indeed turned into who is going to ride this out with who. The trick is that while you are choosing who your best and brightest are you must also choose those who are going to benefit you and the rest in the group.
If one simply look’s at said country “blocks” one can see that each has what the other needs to make it through no matter what. Say one country has a mass of oil the other food and yet another the facilities for medical care production etc. You get the idea????

They aren’t just banding together to bring about the “downfall” of the US dollar they are banding together so that when they ALL “dump it” and are out trillions of dollars; they have the partner's they need to make it through. They have what they need to keep their own perspective “block’s” alive and running in a somewhat sane manner till thing’s are able to be straightened out and running well.

All of this talk of the new world order is nothing more than the old world order realizing that without “blocking” together with like minded countries that can support each other with commerce etc. they are all going to be done away with in the VERY short term.
Think of it this way... you are out with some friends and all of the sudden a large group of thug’s come and want to cause you harm. Now would you rather be standing there alone or would you rather have several “friends” standing with you willing to defend you with what they have to offer? It may stink to high heaven but when the last shoe drops and they are ALL left with their hands in their pockets they won’t be wondering what to do to survive. This simply because they have already set themselves up with the “friends” they need to make it through.

By the time this thing FINALLY gets to the end of the game; we are going to have a very different scene to be looking at. ALL the conspiracies about the EU the NWO and all of it aren’t going to hold even a dim lamp to what we are going to be left with when this is done and over with!
Each block is going to have their own set of rules for in house upkeep and a second set they must adhere to on a global scale; the world court.
A little tid bit for you it already exists! Think about who it is that calls together ALL countries that are “members” to come to a general agreement on how to deal with those who step out of line
Now all the need is to make public who it is that is going to be in control of the NEW monetary system and the day to day operations of it...yes you guessed right again the IMF/WORLD BANK. They got those names for a reason and it isn’t for aesthetics.!.

What they need to help with the governance and finance/commerce is already in place! What they need to make the rules and keep all blocks adhered to it is in place!

What you are seeing is who is going to be banded with who and into what block’s . World currency you say.?. well guess what it is here already. The players are just choosing their perspective corner’s.

reply to post by mikerussellus

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Or start buying our own debt that is what the Fed did recently and about to do again because our lenders were not buying enough this year.

Can you blame them?, that is why now is fears of the dollar collapse.

Still the Fed is doing a lot to keep the nation from inflation.

Now the health care bill with all the reassurance that Obama is giving into not making it part of the deficit he is lying, either that or he expect to squeeze the tax payer into supporting it.

And on top of that another stimulus is in the future as our economy is not responding well to the last two.

reply to post by RetinoidReceptor

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Or they get away with having no only the dollar as the worlds main currency but others also.

That is what China wants to prop their currency along side the dollar.

We have to understand that China is buying vast amounts of natural resources the only reason they are doing that is to be able to have material wealth to back their currency.

The way the US used to do back in the days with the gold now all US have to back its currency is the good will of the American people.

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