If one reviews the history of ALL fiat currencies they all end up with the same fate, which is worthless.
The US Dollar is no exception.
When the USD was made the world's Reserve currency, it was backed by Gold.
Nixon took the US Dollar off of the Gold standard in 1971 closing the gold window due to the devaluation of the USD. The USD as a result of borrowing
and printing of dollars to finance the Vietnam war was no longer equal to an ounce of gold.
We've been printing fiat (worthless) Dollars with the value steadily dropping ever since.
Dollar collapse scenario in 2003 Financial Times, page 1
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Topic started on 27-10-2009 @ 09:25 AM by behindthescenes
This is nothing more than an interesting footnote to history. The Financial Times ran a column in 2003 that talked about the problem of the U.S.
versus other countries in terms of exchange rates of the dollar.
At the time (certainly not as drastic as today) the dollar was falling.
The writer of The Dangers of the Dollar's Decline gave three scenarios as to how the then situation could play out.
The first is that our dollar would rise as the Euro and the Yen depreciated due to excessive buying by Asian countries to finance America's debt because of short-term attractive exchange rates.
The next, and in his view, best scenario would be for Asia to shun accumulating any more dollars and instead let their currencies rise against the dollar, thereby shrinking our deficit.
Unfortunately, it seems our leaders have elected to follow the third, and most disasterous course. I'll put it in his words:
Hmmm...that pretty much described the past five years.
At the time (certainly not as drastic as today) the dollar was falling.
The writer of The Dangers of the Dollar's Decline gave three scenarios as to how the then situation could play out.
The first is that our dollar would rise as the Euro and the Yen depreciated due to excessive buying by Asian countries to finance America's debt because of short-term attractive exchange rates.
The next, and in his view, best scenario would be for Asia to shun accumulating any more dollars and instead let their currencies rise against the dollar, thereby shrinking our deficit.
Unfortunately, it seems our leaders have elected to follow the third, and most disasterous course. I'll put it in his words:
The second possibility is for members of the capital-account zone to join
the Asian mercantilists in supporting the US currency. The monetary
consequences would be expansionary. But though such an expansion
would be welcome, it would be insufficient to reduce the US current
account deficit. The result would be a faster global economic expansion,
probably ending in worldwide overheating and a dollar collapse.
Hmmm...that pretty much described the past five years.
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