Zell: Dollar's Global Fall Will Be 'Disastrous' for US Living Standard

Zell: Dollar's Global Fall Will Be 'Disastrous' for US Living Standard

www.moneynews.com

Billionaire real-estate magnate Sam Zell warns that Americans should brace for a "disastrous" 25 percent decline in the standard of living if the U.S. dollar’s reign as the global reserve currency ever ends.

He says that there are signs in the market that it could eventually happen. As it is now, a Korean manufacturer who wants to sell to Brazil must first buy dollars to complete the deal. If countries decide to bypass the dollar, the effect would be a disaster, Zell says.

“Frankly, I think we’re at a tipping point. What’s my biggest single financial concern is the loss of the dollar as the reserve currency,"

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Interesting comments...

A 25% decline in the standard of living? And very quickly occuring, should this come to fruition...

Not like we haven't ALREADY seen our living standards plummet over the past decade dramatically, but this is something to pay attention to imho, and perhaps prepare for, as much as possible.

I find it odd however, that no mention of fed policy is talked about here, as they are literally STEAMROLLING the value of the dollar into oblivion as of late with their continued print and bail-out, non-stop combo.

This guy seems to think we are at the tipping point of going over the edge from bad, to a WHOLE LOT worse, if something doesn't change quick.

Fear mongering? Or are we truly at this point? There does appear to be quite a bit of posturing, rhetoric, and proposals on the global stage in terms of currency wars and a push to a NEW reserve currency in light of a dollar which appears to be weakening quite substantially due to endlessly failed policy...

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It's time to the rest of the world to gain financial freedom, the dollar will lose some power hopefully, the economy its too tied to the dollar and that's dangerous to other countries economies.

Originally posted by elpistolero1
It's time to the rest of the world to gain financial freedom, the dollar will lose some power hopefully, the economy its too tied to the dollar and that's dangerous to other countries economies.

edit on 6/3/11 by elpistolero1 because: (no reason given)

Freedom? Haha, exactly the opposite is going to happen. A few evil men will tighten the grip of the financial system and we'll all be enslaved. Bad thing for Americans is that they lose their privileges, they will join the rest of the world on the very same boat.

What if they (the ubiquitous "they") gave a "Dollar Crash Party" and no one came? With all of the hype about an imminent dollar collapse I am wondering if since it is so widely expected that it will be difficult for it to happen as they plan. One, the Stansberry video that has been circulating for several months regarding his prediction for a day this year when the dollar will be removed as the world's reserve currency and Two, the popular post on Zero Hedge last fall about a dollar crash into an early March 2011 cycle low. Generally when an event in the market is that widely anticipated it gets discounted ahead of time and the prerequisite event (dollar crash into a low) doesnt happen or we dont get the panic reaction widely expected if it does (change in world reserve currency status) happen.

We are 2.6 yrs into a 7+/- yr UP CYCLE in the US$ (since the 2008 low). Granted it has been a big trading range and not a clear, sustained uptrend. And we are coming into that other cycle low for March 2011. Time to take the opposite side of the trade??

Originally posted by CosmicCitizen
What if they (the ubiquitous "they") gave a "Dollar Crash Party" and no one came? With all of the hype about an imminent dollar collapse I am wondering if since it is so widely expected that it will be difficult for it to happen as they plan.

Widely expected? I doubt a single percent of the world population expects it to happen. Most sheep are clueless and will remain so until it's too late, but hey, this annoying kid Justin Bieber is more important than your future, not?

As currently construed, no immediately viable alternatives to a dollar regime are fully satisfactory, either. Therein lies the rub. The economies underpinning the yen and the euro (the only two alternatives even theoretically large enough to shoulder the dollar's burden at the moment) are both basket-cases for a combination of different reasons. China won't even let the yuan float on the markets, nevermind taking on a global reserve role. Could they? Sure, maybe sometime in the future but not rapidly enough to handle the immediate trainwreck. The IMF-style SDR/ "basket of currencies" solution? Again, theoretically possible but look how much trouble they are having even keeping the euro together...looking realistically at the situation, the consensus needed just isn't there and the panic is upon us already.

So what does that leave? Commodities, various assets (paper and otherwise)...good for the first movers, but highly socially destablizing as prices for necessities skyrocket. It will be a two-one punch...first the dollar collapse craters the already-punchdrunk buying power of the US consumer; then the real price of vial necessities shoots through the roof as flows of hot speculative liquidity pour into basic commodities and resource-related investments. This is the point at which you get serious civil unrest. Human blood sugar falls sharply with an inturrupted diet, increasing aggressiveness and all-around capacity for rage.

if we truly have to hit rock bottom like a crackhead for us to realize that we need to come together and save our country then so be it...it hasn't happened yet, but when it does I will welcome it as the first step towards a nation that is actually in the hands of the people and not the tyrannical government or banksters...

It's too bad that it will take the suffering of many, including myself, for us to truly come together and work out the solutions to problems we've had for so long that have just been getting worse

Is this really a surprise to anyone?

the use of hte US$ as the standard reserve currency means the US gets to print billions of them for free effectively - it can run a deficit because everyone else wants to buy $$'s - regardless of how useful or cheap US products are. There's a theory called the Triffin Dilema that summarises it.

There's an old conspiracy theory about the Iraq war that reckons one of the things that made it inevitable was that Iraq was moving to take Euro's for oil instead of $'s - Iran did so too.

china holds about $2 TRILLION (WSJ article) in US$ denominated reserves - cash, treasury bonds. Other nations about another $600 billion by the look of het graph in that article.

And like eth ever-increasing house price & share markets that burst, hte US$ one will have to too.

Eventually the US will have to actually get competitive in manufacturing and other "real wealth" generation, and not rely upon being able to print $$'s.

If I was in the US I'd be buying gold!

Sam seems like he is qualified to see something coming...What do he have in the dollars favor. Oil trade is on the dollar, DOW is on the dollar.. Hey DD what was the dollar compaired to the Euro and Yen 10 yrs ago. That would answer the question of are we all in the same boat.

Sam sees the investor moving away from our markets. USA and Europe are the importing consumers but USA is way more dependant. Yep we are in a jamb. When will China close the vault. China and India will be big losers. The standard of living isnt the only issue here. Our National Security is vulnerable also with further down trend.
I agree this isnt fear mongering this looks to be a reality...think about it. Wake up tomorrow and there is a line at every place where we go the BUY. The gas station, the mini-mart , the grocery store. Grid lock, nobody working. Imagine tap water stops toilets stop working, cause nobody is getting to work and face it why work for dollars that dont buy....Government steps in for a minute. Its broke. That will start it all, USA broke and nobody is lending USA any money.

The emerging new power hub is Asia. Indonesia, and India and the Philipines are becoming the consumers and their lifestyles are on the rise. China can cut the U.S. apron Strings or does China become our Momma?

reply to post by DimensionalDetective


Well, we did see it coming. But thanks for the info and update.

S&F&

The fall of dollar is going to happen and it will lose its status as the worlds reserve currency. Its just a matter of time when other countries decide to stop using the dollar. Once the find out that we have been printing trillions of $ to pay of our debts they will quickly move to other forms of currency. Once the Dollar loses its status as the worlds reserve currency the fed will not be able to print money any more and we will not even be able to afford the interest on our debts. endofamerica36.com lays it all out.

The fall of the dollar is apart of the elites plan to institute a one world currency and government. Once things get so bad here in the US and other parts of the country we will have no other choice but to accept a one world currency and government. In fact, things will get so bad that the masses will probably even beg for it.

reply to post by silent thunder


I was reading an article within the last month from Daily Finance. It stated the Global banking System already has a Universal currency ready for this to happen.
When it does happen, I expect the dollar to tank more than Zell thinks.