Dollar Will be "Utterly Destroyed": Strategist

won't work, as of now, there is no viable reserve currency. i agree with a previous poster, that there will be a slow erosion of the dollar over time, with the slow ascension of an alternative reserve currency. sorry, but on this world stage, america is to big to fail. we still have an economy that is 5 times larger than china. couple that with the fragility of other countries economies, and there is simply no where else to go. for the near term, anyway.

The bigger they are the harder they fall. There is no visible reserve to back the U.S. currency this is true but the expression "all the gold in Fort Knox" exists because there was once gold in Fort Knox! Where has that gold gone and who took it? Congress was authorized by Constitution to print and coin money but not at all authorized to squander the nations wealth and if that gold was stolen by private bankers then a crime has been committed on the American people and it would be prudent to put justice in and retrieve that gold so that it would once more be visible to back the U.S. currency.

I met a man in 1972 that told me he had worked inside Fort Knox and that hardly anyone would believe it but there is a very minute amount of real gold there.

At that time I had my doubts but it now seems more plausible. Johnson supposedly "salted" the gold with lead and sent the real gold to England. Clinton then replaced the rest of it with tungston plated with gold.

Originally posted by Jim Scott
We have the greatest economic minds in history working on the problem.

. My ribs hurt from laughing so hard.
You mean the same "great" economic minds that got us into this mess in the first place?

You mean the great economic minds like Alan Greenspan and all of his pupils currently running the economy in Washington?

Good old Al admitting he was wrong all along after the collapse. Oops I guess I was wrong, sorry...

Greenspan was testifying in front of the House Committee of Government Oversight, when he declared, "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," and said his free-market ideology was flawed-- "I don’t know how significant or permanent it is. But I have been very distressed by that fact... I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”
gothamist.com...

Alan Greenspan referring to himself as a "free market advocate" is like Hitler referring to himself as a pacifist. You can't serve as Chairman of the Federal Reserve and claim to be a free market advocate at the same time and only fools would buy that he was.

"There aren't enough lifeboats. Someone is going to die. So you might as well enjoy the champagne and caviar!"

-Jamie Dimon, CEO of JPMorganChase, the night before Lehman filed for bankruptcy.

Anyone who doubts the dollar is in serious trouble need only contemplate the following facts.

1) The federal budget deficit this year is $1.4 trillion, which is nearly a trillion dollars more than last year. In other words, the deficit has ALMOST TRIPLED IN A SINGLE YEAR.

2) Already, INTEREST ALONE on the debt takes up about 1/3 of tax recepits. Imagine holding so much debt that 1/3 of your salary had to go to paying off ther INTEREST on the debt, never mind even attempting to pay down the principal.

3) At some point in the next 20 years (probably much sooner since stats are constantly massaged), the cost of servicing the interest will actually exceed all possible tax income. Again, this is similar to point #2 above, but much, much worse. To use an analogy, imagine you earn $50,000 a year and have debt of $5 million with an interest rate of a mere 1%. Basically, every penny of your income would be used paying off the the interest...even at the super-low rate of 1%. Any rational lender who realizes this would demand higher interest rates. Imagine if interest rates got jacked up into the double-digits like they did in the early '80s. Then in this scenario, you'd be earning your "respectable" salary of 50K a year but be on the hook to pay, say, 500K or more a year in INTEREST ALONE...never mind paying down your five-million-dollar debt itself. This is the position that the US will find itself in quite soon.

4) Suppose you were the person in the analogy described in #3 above. You would have only one choice: to default on your insane debt. Because you literally would be unable to service the interest alone (to say nothing of the underlying debt itself). In the case of the US government, this default would likely take the form of printing massive amounts of currency...in other words inflation/hyperinflation. Given the huge gap between the money owed and the ability to pay, the scenario would tend more towards the "hyperinflation" than the "inflation" model.

5) Add to the above the fact that millions of baby boomers are just beginning to retire and demand extra benefits, to say nothing of possible future bailouts that might be necessary, "stimulus spending," national healthcare, and other fiscal pipe-dreams.

Given all this, how could anyone NOT imagaine a collapse of the dollar?

[edit on 11/20/09 by silent thunder]