Just how much longer do you think it will take to lose the last few cents worth of it?Quote:
Originally Posted by Sparky
The long slow devaluation has been on-going for a long time as it is. We're fast approaching "end game".
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Just how much longer do you think it will take to lose the last few cents worth of it?Quote:
Originally Posted by Sparky
The long slow devaluation has been on-going for a long time as it is. We're fast approaching "end game".
It will take 1-2 generations for a viable alternative to the U.S. reign on fiat currency. So I'd say this could go on for 20-40 years, which would be one more complete economic cycle. So I say we get through this crisis painfully over the next 5-10 years, and then maybe our sovereignty will be at risk some time in the middle of this century.Quote:
Originally Posted by Joe King
Our crumbling economic infrastructure is enormous. There's a lot of inertia to overcome.
You don't see buildings dismantled brick by brick these days. Once the foundation and support has been breached gravity will take care of the inertia.Quote:
Originally Posted by Sparky
Whether a frog is microwaved or slow boiled the result is the same.
Exactly. It's slow at first, but eventually reaches a pont where it all just suddenly falls apart.Quote:
Originally Posted by palani
^^ That is funny.Quote:
Originally Posted by Gknowmx
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.
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?
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.
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.
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.
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.
http://www.gutenberg.org/etext/6949
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"You can, indeed, arrange it so that
the people shall be forced to take a thousand _livres_ in paper for a
thousand _livres_ in specie; but you can never arrange it so that a
man shall be obliged to give a thousand _livres_ in specie for a
thousand _livres_ in paper,--in that fact is embedded the entire
question; and on account of that fact the whole system fails."
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Thus came a collapse in manufacturing and commerce, just as it had
come previously in France: just as it came at various periods in
Austria, Russia, America, and in all countries where men have tried to
build up prosperity on irredeemable paper.
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This great debtor class, relying on the multitude who could be
approached by superficial arguments, soon gained control. Strange as
it might seem to those who have not watched the same causes at work at
a previous period in France and at various times in other countries,
while every issue of paper money really made matters worse, a
superstition gained ground among the people at large that, if only
_enough_ paper money were issued and were more cunningly handled the
poor would be made rich.
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It decreed that any person selling gold or silver coin,
or making any difference in any transaction between paper and specie,
should be imprisoned in irons for six years:--that any one who refused
to accept a payment in _assignats_, or accepted _assignats_ at a
discount, should pay a fine of three thousand _francs_; and that any
one committing this crime a second time should pay a fine of six
thousand _francs_ and suffer imprisonment twenty years in irons.
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On August 1, 1795, this gold _louis_ of 25 _francs_ was
worth in paper, 920 _francs_; on September 1st, 1,200 _francs_; on
November 1st, 2,600 _francs_; on December 1st, 3,050 _francs_. In
February, 1796, it was worth 7,200 _francs_ or one franc in gold was
worth 288 _francs_ in paper. Prices of all commodities went up nearly
in proportion.
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He who in 1790 had borrowed
10,000 _francs_ could pay his debts in 1796 for about 35 _francs_.
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Nothing could better exemplify the saying of one of the most shrewd of
modern statesmen that "There will always be money."
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As a natural consequence a great debtor class grew rapidly, and this class
gave its influence to depreciate more and more the currency in which
its debts were to be paid.
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It ended in the complete financial, moral and political prostration of
France-a prostration from which only a Napoleon could raise it.
Comments on the French experiment with fiat that ended prior to the U.S. (un)civil war. Seems we are doomed to repeat history. Wonder who will represent Napoleon?Quote:
we shall see still more clearly the advantage of meeting a financial
crisis in an honest and straightforward way, and by methods sanctioned
by the world's most costly experience, rather than by yielding to
dreamers, theorists, phrase-mongers, declaimers, schemers, speculators
or to that sort of, "Reform" which is "the last refuge of a
scoundrel."
Jeez - nice clear explanation !Quote:
Originally Posted by Sparky
in 2010 when people fled to the dollar, it wasn't quite as traumatic for gold. looks like they fled to gold too.
wonder what will happen next ... :o