What is the dollar's actual breaking point?

originally posted by: IgnoranceIsntBlisss

originally posted by: visitedbythem
Lack of Confidence

That would be an ultimate example. As I enjoy being able to say cynically, when it fits, "if you beLIEve it I beLIEve it".



a reply to: AgarthaSeed

Good question!

I recall a 10 years ago, in America: Freedom to Fascism, Aaron Russo explained that since the founding of the Federal Reserve, the value of the dollar had been stripped down to being worth $0.04. I've never seen that claim contested.

That was before the housing collapse. That was when the national debt was about half of what it is now.

That's true, more or less, but income has also increased. We're just dealing with larger numbers. Ratios matter, numbers do not. $1,000 in credit card debt is tragic if you earn $600/year, but it's barely noticeable if you earn $100,000/year.

The US Debt to GDP ratio has gotten significantly worse in the past 10 years, though it's leveled off the past several years because the economy has grown.

I'm not saying certain aspects haven't gotten worse over the years, but it's nowhere near as bad as people think. People generally think the debt situation is worse than it is because they look at the national debt in terms of dollars, rather than in terms of debt:GDP.

A: China

Why would you believe the Dollar is in any danger of collapsing?

It will in almost certainly lose some of its international dominance over the coming years, but that is not the same as collapsing.

a reply to: lordcomac

Very thorough insight. Thanks!

I guess a follow up question would be how much does credit actually matter with a fiat currency? Since our money is printed out of thin air, isn't credit created that way too since the banks aren't backing up credit and loans with any tangible commodity?

So in other words if you rack up $1 million in debt, then the dollar collapses, to whom and what do you really owe?

originally posted by: ScepticScot
Why would you believe the Dollar is in any danger of collapsing?

It will in almost certainly lose some of its international dominance over the coming years, but that is not the same as collapsing.

I'd say because the BRICS alliance is stockpiling commodities and forming an organized plan to replace the dollar.

You have to remember, BRICS makes up the majority of the world in:
-population
-GDP
-overall net worth

originally posted by: AgarthaSeed

originally posted by: ScepticScot
Why would you believe the Dollar is in any danger of collapsing?

It will in almost certainly lose some of its international dominance over the coming years, but that is not the same as collapsing.

I'd say because the BRICS alliance is stockpiling commodities and forming an organized plan to replace the dollar.

You have to remember, BRICS makes up the majority of the world in:
-population
-GDP
-overall net worth

Organised plan to replace the dollar as what? The main reserve currency?

The EU has a bigger population and GDP than the US yet the Euro hasn't replaced the dollar. Even if the BRICs nations did form a currency block (and they won't) it would take decades to come close to the status of the dollar.

Also even if the dollar did lose its status as the main reserve currency that would not mean the collapse of the dollar.

The USD breaking point will happen on the heels of the September 4th G-20 meet-up in China... where China will remind everyone at the Table that October 1st, 2016 will see the SDR accept the China Renminbi/Yuan into the respected group of world-wide reserve currency (along with USD/YEN/EURO/POUND-STERLING)

before 2017 China will strategize on getting all the 4 present, western currencies to have a goodly portion of GOLD backing and will unveil the fact that China will back their Renminbi with 20,000 tonnes...On The Condition that the Dollar/Yen/Pound/Euro do a similar amount of Gold backing--->
OR have their currencies degraded in relation to the Yuan/Renminbi...

so a USD might buy 2 Yuan instead of 6+ that it trades for right now
same with Yen/Pound/Euro on similar ratios


the World already is dissing USDs, so the confidence is already damaged beyond repair

remember the first-shot-across-the-bow of the USA by China will be during the Sept 4th G-20 meetings...
then the next steps by China will be after 1 October 2016... as the metals exchanges go East leaving only a skeleton framework left in London...
and the BRICS replacement of the USA monopoly on SWIFT Code for bank money transfers gets replaced by the China-Russia banking funds transfers Code by 2017


also expect China to lead the world in changing from a 'globalization' paradigm to a more 'Nationalistic' paradigm where each nation will rebuild infrastructure to promote a broad-spectrum, total sustainable economy, in each nation instead of the present specialization paradigm assigned to certain nations in the global command structure


China & BRICS will replace the western empires as the overseers of this global makeover/redirection

a reply to: St Udio

China's debt is 250% of it's GDP. While the Federal Reserve and ECB are creating a weaker dollar to artificially make the economy look better than it is, there really isn't a better option at this time than the US Dollar.

It can't last forever, but Russia and China know it will take some kind of huge disaster in the West or a war between the West and East to cause the balance to shift to the East.

China and Russia's standoffish and provocative actions are meant as catalyst and attempts to nudge the West into war so the East can be the dominant world player.

a reply to: St Udio

Quite apart from the problem that China doesn't actually have anything like 20,000 tonnes of gold in reserve.

What you are suggesting is that China has a cunning plan to make its export led economy totally uncompetitive and devalue it's own huge reserves of foreign currency.