The US devalues the US$.. $6000 now is $1000..what will you do

reply to post by OBE1


So would you (as someone I actually respect regarding economic matters) say that I am correct, or near enough in the right direction in my hypothesis..

A devaluation would be a last ditch attempt to save the currency. But the reasons outlined by the OP make no sense at all.. if there were to be a devaluation it would be for other reasons than to just knock off a zero on our debt.

Originally posted by Rockpuck
A devaluation would be a last ditch attempt to save the currency. But the reasons outlined by the OP make no sense at all.. if there were to be a devaluation it would be for other reasons than to just knock off a zero on our debt.

Hi RP. By design (entitlements pay-outs - gov pensions - current account deficit , etc) , the authorities have been relatively successful at managing an orderly $ devaluation....up to this point (pre stimulus effect/QE). But leaving debt relief aside , yea , I agree that the major incentive for a one-off , formally crafted emergency devaluation would be to put a floor under Uncle Buck...preempt a chaotic currency event - free-fall $USD.

Additionally , theory says the US economy would benefit in a couple of respects. US industry becomes more competitive globally. The resulting trade advantage means increased export production = jobs , and , the rising cost of foreign imports translates to increased demand for domestically produced goods (even more jobs) , but , with the decline in our manufacturing base , we'd have to suffer the inflationary effects of an enormous amount of repatriating dollars...chasing a limited amount of domestic production.

Naturally , the big losers would be all those 'unpatriotic' savers , treasury holders , folks living on fixed incomes. The inflationary impact of the overnight spike in major , dollar denominated commodities like oil & grains...would be global.

GOLD
silver too

As you already know , the respect is mutual RP.

thanks for your insight on CS. I tend to put a ration of salt on his journals as well. However, tied with the other insights linked how can I see any other graceful, in the sence to prevent civil war, end to the dollar other than devalue and reissue another currency.
Rumors and "conspiracy therorists" have been all over this for years.

I really like to stay focused on things that I can control, but these links I stumbled on seemed important enough to share.

My intention is to purchase remaining "survival" needs although by nature I like to have savings as a fallback. Should this devalue occur, I would kick myself in the hind end for not following the high potential outcome vs the learned prudent behavior.