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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Sparky
We're confusing crises, here. (A crisis identity crisis?)
During the fall of 2008, when the shippers were not accepting Letters of Credit, it was because they wanted dollars and there weren't enough dollars. They no longer wanted pieces of paper, they wanted FRNs! Do you see the irony?
It wasn't that the shippers weren't accepting liners of credit, it was that the lines of credit weren't being extended to the purchasers of the goods being shipped.
Which is why the buyers had nothing to "pay" the shippers with. The shippers would have gladly accepted credit as payment had the buyers been able to offer it to them.
What that all came down to is that the creditors lost confidence and no longer wanted to continue extending credit to those who relyed upon that credit to continue bringing in new supplies.
Think of it like this.
You import widgets and because of decades of inflation you've come into the habit of using credit to purchase widgets because you know that you'll be able to re-sell them for more in the future thereby making your widget purchases easier to pay for because you're now able to use tomorrows inflated dollars to pay for yesterdays shipments.
Once your creditors see that your debt is going up faster than your anticipated future ability to pay, the credit stops and you're left waiting for widgets you can no longer get, but that you needed to get in order to be able to pay for the last shipment. At which point you go into default.
That's why the credit crunch of '08 happened. Creditors lost confidence and as a result, the gov in all our names, gave the creditors what amounted to ernest money so that the creditors might again have enough confidence in our future ability to pay, to resume extending credit.
How they actually did that was by agreeing to buy the bad debt the creditors had gotten burned by. The creditors were "once bitten, twice shy".
It's the same reason why people in general are having a harder time aquiring credit at all these days.
We're just not seen as being "worth it" as much as we collectively had been in the past.
Which is what will eventually drive up interest rates.
i.e. at some point the creditors will eventually demand higher rates in order to keep extending credit.
BTW, when you say they wanted FRNs instead, are you implying that there's a difference between digital dollars and physical {frn} dollars? They're both nothing more than evidence of past debts.
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From July 2008 through the October panic, the US Dollar Index soared 22%, from 72 to 88 in less than five months. Gold plummeted 30% from $1000 to $700. The entire world rushed to US dollars as a safe haven.
And what were they really investing in? Our govs ability to tax us in the future because the us gov was seen as too big to fail, and therefore a seemingly safe bet in the short-term.
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Now, I agree that we may be facing Just in Time distribution problems with food and other essential goods. And I agree our system is F'd up, and there is going to be a painful shakeout, and there's going to be a lot of people shocked when the curtain comes down.
But it ain't gonna be because of a USD collapse. At first, it will likely be due to a dollar shortage, where dollars become too valuable because people don't have enough of them. And then after they flood the system with dollars to meet the demand, it will lead to an eventual dilution of the dollar's buying power, perhaps over an entire decade. But expect it to be more insidious than a collapse. Expect it to lose 5-15% per year over an entire decade, so that in ten years it will have lost half of its current buying power. Simultaneously, other fiat currency may lose 60-80% of it's buying power over the same time, leaving the USD as the reigning currency champion, in a tournament of losers.
That 5-15% lose in value represents an increasingly smaller and smaller amount over time in a system that has, over time, been relying on taking bigger and bigger bites out of that value. Those two facts are on a collision course.
Also, keep in mind that dollars increasing in value is but a symptom of less credit having been previously extended.
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The dollar can't collapse unless all fiat currency goes away (which is an implausible scenario), or unless some other fiat currency takes its place.
They don't have to "go away" for a collapse of the dollar to occur. All that takes is a lack of confidence on the part of our creditors in our over-all ability to pay in the future.
In the '30s the dollars went away to the point of causing destitution and it didn't "collapse". Rather, it went on to become the World reserve currency.
In a collapse you could have a boatload of them and they'll do you no more good than monopoly money would.
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The only scenario I see of another fiat currency taking its place would be through some orchestrated effort by other countries to topple the dollar, perhaps involving China and Russia. Even if the USD lost this currency battle, it would still be a competitive fight, and it would not render the USD crippled. More likely, it would end up like the British pound sterling of the past 75 years, wounded but not dead.
This is happening right now. Loses are starting to be cut., and that will continue at an ever accelerating rate until it reaches a point of critical mass and everyone realizes that the Club is on fire and then rush to the exits.
We, the people of America paid extra for front row seats, if not backstage passes.
i.e. we'll be the last to see that we've actually been using monopoly money to buy stuff with.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Sparky
Now, I agree that we may be facing Just in Time distribution problems with food and other essential goods. And I agree our system is F'd up, and there is going to be a painful shakeout, and there's going to be a lot of people shocked when the curtain comes down.
Americans just learned this week that 500,000,000 eggs contaminated by salmonella were NEVER inspected by any government agency. Half a billion eggs and not one FDA or USDA inspector.
Think about that.
Think about that again.
http://online.wsj.com/article/SB1000...googlenews_wsj
:oo-->
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Re: what are some possible scenario's when the dollar crashes?
I remember when back in high school when i worked at the supermarket we were just about to receive a shipment when a huge storm hit and the trucks could not get up the mountains. milk and most dairy was out that night. two days later most produce was out. people were furious
its just amazing how the JIT system relies on split second transportation and delivery and if something happens it all comes crashing down
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Originally Posted by gunDriller
during the banking crisis in September October 2008, it got to a point where shippers would not accept a Letter of Credit (LoC) at the docks in Long Beach.
the LoC is sort of like a purchase order, it's an agreement to pay, backed by a bank.
so shipping companies refused to unload cargo, including food destined for LA.
i think the dollar crash and the associated banking crashes will result in more stuff not getting unloaded, at the docks.
if i ran a shipping company, i'd keep some money in gold in order to keep my product moving at the dock.
Mike Ruppert sometimes uses the term, "LA is a city of 12 million people living in the middle of the desert, with a 3 day supply of food."
the dollar crash will interrupt our Just-in-Time society.
i remember the justification for Just-in-Time sometime in the '80's, when it was first pushed in the US. "it can lower our inventory costs".
this accounting concept, when applied in LA, creates a real interesting situation when that supply chain gets interrupted.
People get whiney when their blood sugar gets low.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Book
Americans just learned this week that 500,000,000 eggs contaminated by salmonella were NEVER inspected by any government agency. Half a billion eggs and not one FDA or USDA inspector.
Think about that.
Think about that again.
http://online.wsj.com/article/SB1000...googlenews_wsj
:oo-->
That's cause they're all too busy inspectin' the people who want to sell 5 eggs from the chicken coop in their backyards.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Joe King
It wasn't that the shippers weren't accepting liners of credit, it was that the lines of credit weren't being extended to the purchasers of the goods being shipped.
Which is why the buyers had nothing to "pay" the shippers with. The shippers would have gladly accepted credit as payment had the buyers been able to offer it to them.
What that all came down to is that the creditors lost confidence and no longer wanted to continue extending credit to those who relyed upon that credit to continue bringing in new supplies.
The important point, in relation to the OP, is that nobody predicted this, and in fact nobody could even figure out what had happened until quite a while later. The details of a collapse are always unpredictable; if it were not so, it could be prevented.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Saul Mine
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Originally Posted by Joe King
It wasn't that the shippers weren't accepting liners of credit, it was that the lines of credit weren't being extended to the purchasers of the goods being shipped.
Which is why the buyers had nothing to "pay" the shippers with. The shippers would have gladly accepted credit as payment had the buyers been able to offer it to them.
What that all came down to is that the creditors lost confidence and no longer wanted to continue extending credit to those who relyed upon that credit to continue bringing in new supplies.
The important point, in relation to the OP, is that nobody predicted this, and in fact nobody could even figure out what had happened until quite a while later. The details of a collapse are always unpredictable; if it were not so, it could be prevented.
There were people who saw it coming. They just weren't listened to.
I'd say it should have been obvious that our creditors would do what they did once it became obvious to them that our future ability to pay could not keep up with debts previously incurred. It was also obvious 5 years ago that we were rapidly approaching that point.
Back in 2005-2006 it was clear that housing and real estate in general was the "asset" that was driving the Nations consumption and that real estate ws in a bubble.
If a little guy like me could have seen it coming just based upon the information readily avaliable at the time, why couldn't the big guys?
I told lots of people back in '06 that we were about to have a big recession. Told people not to buy a house then, but to wait. Didn't do any good though.
But if you're talking about knowing exactly what firms would crash/need bailouts and on what day, or what day the market would crash, probaly no one knew those details for sure. Just that it was imminent. {although on a hunch I did in fact pick 10-01-08 as crash-day back in January of that year}
It's just like back in '99 when anyone should have been able to realize that the stock market was primed for a crash.
I mean, just how many non-earning, grossly over valued companies does it take for people to realize they've been sold pie-in-the-sky?
...but of course the ones who bought it couldn't see it as it would be admitting they were wrong, and their profits depended upon them being right.
The reason these things have happened all comes down to what you always say about too many people being infected with the spirit of stupidity.
And you're dead-on when you say that, because there really is a spirit of stupid in this Nation and it blinds people by filling their eyes with $ signs.
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Re: what are some possible scenario's when the dollar crashes?
Joe, you say that there were people who saw it coming. But isn't that just survivorship bias? we have 6 billion people on this planet that could make 1000s of "warnings". That someone might "predict" something and say they saw it coming is usually not useful without the context of all of the rest of their predictions and warnings. And then there are the folks that will say that prognosticator so-and-so has predicted the last x number of crashes. Again, this is useless without context. I am with Taleb on this, saddly, most are simply 'fooled by randomness'.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Gknowmx
Joe, you say that there were people who saw it coming. But isn't that just survivorship bias? we have 6 billion people on this planet that could make 1000s of "warnings". That someone might "predict" something and say they saw it coming is usually not useful without the context of all of the rest of their predictions and warnings. And then there are the folks that will say that prognosticator so-and-so has predicted the last x number of crashes. Again, this is useless without context. I am with Taleb on this, saddly, most are simply 'fooled by randomness'.
I'm not saying to "predict" it in fortune teller kind of way, just that IMHO it was easy to see that an implosion was coming.
All you needed to see was our collective level of debt rising faster than our collective earnings, while realizing that mostly everything was being financed by ficticous real easte prices.
I realized then that unless some other form of obtaining easy credit manifested itself, the party would soon be over.
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Re: what are some possible scenario's when the dollar crashes?
Joe, your explanations clarify why lack of faith in future ability to pay can cause a disruption to distribution and availability of product.
However, this is completely different than lack of faith in the currency itself. That seems to be what is being confused in this discussion.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Sparky
Joe, your explanations clarify why lack of faith in future ability to pay can cause a disruption to distribution and availability of product.
However, this is completely different than lack of faith in the currency itself. That seems to be what is being confused in this discussion.
IMO, lack of faith in credit is lack of faith in the currency as the currency itself is based upon debt. Which requires confidence to enter into to begin with.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Sparky
Joe, your explanations clarify why lack of faith in future ability to pay can cause a disruption to distribution and availability of product.
However, this is completely different than lack of faith in the currency itself. That seems to be what is being confused in this discussion.
I think what's being confused is the dollar and credit. There won't be a dollar collapse any time soon but we may very well experience a global collapse of credit. And credit constitutes the vast majority of what we call the money supply. The majority of high-powered banks are running on government sanctioned accounting fraud to keep their doors open and it's just a matter of time before it all catches up with them, and with us.
So Sparky is right, we shouldn't worry about a dollar collapse, we should be worrying about credit collapse, which will be far more pervasive and devastating.
.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Carl
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Originally Posted by Sparky
Joe, your explanations clarify why lack of faith in future ability to pay can cause a disruption to distribution and availability of product.
However, this is completely different than lack of faith in the currency itself. That seems to be what is being confused in this discussion.
I think what's being confused is the dollar and credit. There won't be a dollar collapse any time soon but we may very well experience a global collapse of credit. And credit constitutes the vast majority of what we call the money supply. The majority of high-powered banks are running on government sanctioned accounting fraud to keep their doors open and it's just a matter of time before it all catches up with them, and with us.
So Sparky is right, we shouldn't worry about a dollar collapse, we should be worrying about credit collapse, which will be far more pervasive and devastating.
.
.
I wasn't saying we should worry about a dollar collapse first. IMHO that'll come last when everyone finally sees it for the monopoly money it is.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Joe King
All you needed to see was our collective level of debt rising faster than our collective earnings productivity, ...... I realized then that unless some other form of obtaining easy credit manifested itself, the party would soon be over.
Fixed it for ya ;D
We have to realize that we need to produce more than we consume.
A monetary system crash is cooked in the books; like flipping a coin and calling heads or tails (inflation/deflation), we don't know which outcome we got until the coin lands; but we KNOW the coin WILL land, it is part of the game. So isn't the production of the coin in the first place. Right now instead of using an honest silver quarter, the coin flippers have convinced us to call "heads" or "tails" (inflation/deflation) with a chocolate coin on a hot day at noon on an asphalt parking lot. When the coin melts, everyone knows the game is over regardless of whether it landed heads or tails up.
Can we come to this realization before the crash or after? We need to get out of the sun, off the asphalt, and back to work and stop playing games. If we dont produce more than we consume, no monetary system is going to work.
A critical component of any monetary system more complex than bartering is the concept of time; beyond the present tense. If all we focus on is present consumption without a realization of the importance of producing with the future in mind, the world will become a very ugly place; There is a monetary system that IS even simpler than bartering…… plundering for the moment.
The monetary system shenanigans will continue until there is a human energy crisis as energy is the currency of all life. The ultimate currency correction is rapidly approaching and it is very clear that as a civilization we are doing far too little to preserve our civilization as 6 billion humans know it. The ultimate currency correction may deflate humanity by 90%. This may not be a bad thing-for the 10% that make it to the next civilization.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Heimdhal
preps and barter are for during SHTF
PMs are for AFTER SHTF when things begin to normalize, so you have a vehicle to transfer your pre-SHTF wealth into the new system.
I dont know why people think theres going to be this mass junk silver trading going on. How many people in your daily life do you know that even has a clue as to what a silver merc is or what its worth today? What makes you think they are going to have any after SHTF to give you to buy some beans off of you? Are you going to sell your last pound of rice for 5 mercs and a 1/10 panda?
Common goods will be traded for common goods. You've got and excess of rice, I've got an excess of flour, we swap. This is assuming a total collapse of any currency trading. Maybe youll get some jewlery if you're lucky.
Eventualy a new currency system, whether fiat or not, will ineveitably take over. This is what your PM's are for.
I don't see the supermarket taking silver for food.
May not be much food there anyhow
But there will be folks like Ponce that will take silver for TP.
That's why I like silver dimes :)
Thats said, I don't think the Dollar will completely collapse...But it can't hurt to (try to) be prepared
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by StackerKen
I don't think the Dollar will completely collapse...But it can't hurt to (try to) be prepared
Military script. When the black market gets too out of hand they announce you have a week to turn them in or else they become valueless. Have too many of them and questions will be asked "how did you get so many" and "did you get them by legitimate means".
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by palani
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Originally Posted by StackerKen
I don't think the Dollar will completely collapse...But it can't hurt to (try to) be prepared
Military script. When the black market gets too out of hand they announce you have a week to turn them in or else they become valueless. Have too many of them and questions will be asked "how did you get so many" and "did you get them by legitimate means".
If that were to happen, people who have "too many" will make a mad rush to try to convert them into some type of tangible asset in an attempt to preserve their "wealth".
Unless of course all commodity transactions are banned for that same week.
Really though, if you want to get technical about it aren't we already using script?
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Gknowmx
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Originally Posted by Joe King
All you needed to see was our collective level of debt rising faster than our collective earnings productivity, ...... I realized then that unless some other form of obtaining easy credit manifested itself, the party would soon be over.
Fixed it for ya ;D
:) Eh. Whichever way you prefer it is fine by me, because in my book they're the same.
i.e. you can't earn if you're not producing something someone else wants. Be it an automobile, or an earnings report for Google. Or anything in between.
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We have to realize that we need to produce more than we consume.
Most definitely.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Joe King
if you want to get technical about it aren't we already using script?
This is my point. A FRN is military script.
If there is a rush to commodities to get rid of soon to be worthless paper then the ONLY motive a seller of a commodity would have to accept paper before the deadline is that he would believe he could convert it legally to the new system. There is a degree of risk involved for the holder of the commodity.
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Re: what are some possible scenario's when the dollar crashes?
Fekete had something to say about this: http://www.professorfekete.com/artic...tsOverlook.pdf
For those here thinking in linear terms (ie slow condinued devaluation of the dollar), Fekete offers a non-linear explanation worth considering.
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Re: what are some possible scenario's when the dollar crashes?
Good GRIEF!
Total monetary collapse? Take the Rodney King riots and extrapolate them out times 1,000 in every major city in America.
Grocery store accepting silver?
Stores will be stripped bare in HOURS.
Fires - nobody to put them out.
Rampant crime, murder, robbery, theft, looting - no cops.
No trash collection.
No infrastructure maintenance (streetlights, potholes, water/gas mains).
Power outages - nobody to bring it back online.
There are not even enough military to enact Martial Law in every major U.S. city, let alone everywhere.
If your plan is to 'bug in', all I can say is, good luck!
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by Kregener
Stores will be stripped bare in HOURS.
Fires - nobody to put them out.
Rampant crime, murder, robbery, theft, looting - no cops.
No trash collection.
No infrastructure maintenance (streetlights, potholes, water/gas mains).
Power outages - nobody to bring it back online.
http://i242.photobucket.com/albums/f...bondsofGor.jpg
http://i242.photobucket.com/albums/f...RogueofGor.jpg
Yippie!
:D
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Re: what are some possible scenario's when the dollar crashes?
It might be foolish to assume that TPTB haven't prepared for the collapse of the dollar. I would assume that they already have a Plan B that they will trot out immediately when it becomes obvious that the dollar is dead. I'm not assuming it's the government that is planning this. The government is planning to deal with chaos and dissent--FEMA and Homeland Security perhaps being the main actors here. TPTB work through the secret government--the 'advisors' and 'thinktanks' like the CFR and the Brookings Institution and even more subtly through the Tavistock Institute which originates the propaganda that supports their agenda.
My best guess is that they will initially try to 'reboot' the current privatized monopoly on the creation of fiat money, rebranding it as something 'new and improved'. They will also try to introduce a global currency in a system that has the same defects as the current system. The MSM will filter out any competing ideas, and the sheeple will acquiesce without asking too many questions, thinking that the 'authorities' know what they are doing. If that pans out for them, they will likely have bought themselves another hundred year monopoly on the creation of worthless money backed up only by peoples' willingness to work for this script.
It seems to me the upcoming dollar collapse is a golden opportunity to develop an alternative money system that is free of the defects of the current system. The one feature that needs to be eliminated is the creation of money through 'debt' aka 'charging interest for a loan'. Creation of money needs to become a public utility, and no one should be allowed to charge for that service any more than it cost them to create that money. Certainly no one should be allowed to charge interest on the loan of money that one conjures up for free. The entity that creates money should not be allowed to charge interest for that loan. Anyone else who does not create money should be allowed to charge interest if they lend money that they earned through 'endeavor'. Banks should only lend money at interest that is deposited with them by savers. If they lend out more money than that, they should not be allowed to demand collateral, nor charge interest for such loans, and only reasonable service fees. Banks should not be allowed to do any financial transactions other than loans. There should be simple, easy to understand laws regarding lending and borrowing of money.
These simple (hah) reforms would remove the power of the banksters and create a system that has long term sustainability (provided the usurers are unable to subvert it). There would of course need to be additional reforms to deal with monopolistic private corporations who would step into the shoes of the banksters. Corporations should not have the rights of persons before the law. The government should have the power to dissolve corporations that violate public trust. If there are laws that insure an arm's length relationship between corporations and the government, we would not need to worry about the emergence of fascist regimes.
We should use the opportunity of a painful dollar collapse to fix not just the money system, but the legal system as well.
I know I'm just farting in the wind because the current system is too well entrenched to allow any of these things to happen. But if these things don't happen, we don't deserve to call ourselves civilized.
Hatha
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by
kregener
Good GRIEF!
Total monetary collapse? Take the Rodney King riots and extrapolate them out times 1,000 in every major city in America.
Grocery store accepting silver?
Stores will be stripped bare in HOURS.
Fires - nobody to put them out.
Rampant crime, murder, robbery, theft, looting - no cops.
No trash collection.
No infrastructure maintenance (streetlights, potholes, water/gas mains).
Power outages - nobody to bring it back online.
There are not even enough military to enact Martial Law in every major U.S. city, let alone everywhere.
If your plan is to 'bug in', all I can say is, good luck!
Global stocks plunged with the Emini locked limit down for the longest period on record, crude oil tumbled as much as 33% as WTI plunged as low as $27.34, and the yield on the 10Y Treasury crashed to an all time low of 0.31% after Saudi Arabia launched a price war with Russia, sending investors already panicked by the coronavirus fleeing for safe assets.
:)
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Re: what are some possible scenario's when the dollar crashes?
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Re: what are some possible scenario's when the dollar crashes?
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Re: what are some possible scenario's when the dollar crashes?
You get forced into Equity which operates on any random thought flitting through the chancellors mind because Law is incompetent. Law is incompetent because it does not interfere in maritime affairs. Your contracts are maritime because paper money is maritime. Like all insurance is maritime.
Non-paper money instruments that are not substance based do not cure this defect.
There is a solution. It is called 3036 one dollar Fox stamp. When I started buying them they were $4 each. They are now $15. For the function they perform (removing your contract from Equity) they are worth much more.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by
ziero0
You get forced into Equity which operates on any random thought flitting through the chancellors mind because Law is incompetent. Law is incompetent because it does not interfere in maritime affairs. Your contracts are maritime because paper money is maritime. Like all insurance is maritime.
Non-paper money instruments that are not substance based do not cure this defect.
There is a solution. It is called 3036 one dollar Fox stamp. When I started buying them they were $4 each. They are now $15. For the function they perform (removing your contract from Equity) they are worth much more.
I was in the Chilean Embassy in Los Angeles several years ago. I notice that they had some special stamps on their paperwork. Perhaps for the same reason.
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Re: what are some possible scenario's when the dollar crashes?
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Originally Posted by
monty
I was in the Chilean Embassy in Los Angeles several years ago. I notice that they had some special stamps on their paperwork. Perhaps for the same reason.
Don't ever discount the power of the post office. WW2 was a postal action. Australia uses their Navigator series stamps for the same purpose as the Fox.
