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alstry (35.69)

Will the Dollar be WORTHLESS?

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August 03, 2009 – Comments (24)

Dollar Trades Below CAD$1.07, First Time Since Oct '08

USD Index Drops Below 78.0, First Time Since Mid Dec '08

Let's think about this for a second, practically every industry in America is experiencing collapsing sales except for those industries that are recipients of government spending.  The two most visible are health care and defense.  Here is a link to a great article on the rise of defense spending vs. decline in other spending by Mish:

http://globaleconomicanalysis.blogspot.com/2009/08/military-vs-non-military-durable-goods.html

THE IS ONLY ONE PROBLEM, THE REVENUES TO GOVERNMENT IN AMERICA IS EVAPORATING....SO GOVERNMENT IS SPENDING MONEY IT DOESN'T HAVE AND HAS LITTLE PROPECT OF EVER GETTING WITH CURRENT ZOMBULATION POLICIES.

Why would anyone want to hold U.S. dollars when it is getting clearer and clearer that those dollars will be diluted to incredible amounts in the near future if current spending without inflow of revenues continues?

Will Americans keep working for dollars if they soon perceive that those dollars will have little value?

Will foreigners continue accepting our dollars simply produced from deficit spending when they could accept their own currency under the exact same circumstances and promote even more growth in their own nation?

We are entering very interesting times.....it pays to pay attention.

24 Comments – Post Your Own

#1) On August 03, 2009 at 8:59 AM, alstry (35.69) wrote:

Gold tops $960 for first time in 7 weeks on dollar

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#2) On August 03, 2009 at 9:11 AM, portefeuille (99.78) wrote:

USD Index Drops Below 78.0, First Time Since Mid Dec '08

Let's think about this for a second, practically every industry in America is experiencing collapsing sales except for those industries that are recipients of government spending.

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a weak currency helps exports (sales!). so maybe the "collapse" of the dollar is a feature, not a bug.

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#3) On August 03, 2009 at 9:14 AM, alstry (35.69) wrote:

But if your wages are constrained by international pressures, and the prices of everything in your nation doubles or triples due to a crashing currency, your economy collapses.

Maybe that is the goal?

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#4) On August 03, 2009 at 9:21 AM, alstry (35.69) wrote:

Round and Round She Goes...........

Natural gas futures up 7% at $3.91 per mln BTUs

Oil futures up 3% at $71.50 a barrel on Globex

Now if we keep this nonsense up of simply printing money with little offsetting tax receipts......at what rate will foreigners demand to loan us money when they can simply loan their citizens money with much better prospects of repayment?

Could we see double digit interest rates again?  What will that do to housing prices?

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#5) On August 03, 2009 at 9:29 AM, portefeuille (99.78) wrote:

... the prices of everything in your nation doubles or triples due to a crashing currency ...

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that is part of it. a weak currency has the tendency to "increase exports and decrease imports" thus leading towards a greater trade surplus (or smaller trade deficit if you don't like negative numbers).

 

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#6) On August 03, 2009 at 9:33 AM, alstry (35.69) wrote:

but your citizens die of exposure becuase they can't afford to heat their homes or drive their cars or finance their homes?

Interesting trade off........

Just for a little trade bump?

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#7) On August 03, 2009 at 10:11 AM, portefeuille (99.78) wrote:

The problem is the lack of adequate protection for the "poor".

This is not exactly on the same topic but you might "get a feeling".

Socialist Babies

maybe the best post ever written here ...

 

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#8) On August 03, 2009 at 10:16 AM, whereaminow (78.85) wrote:

portefeuille,

The adequate protection for the "poor" merely increases the number of "poor."  See every government intervention in history.

David in Qatar

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#9) On August 03, 2009 at 10:16 AM, kaskoosek (98.49) wrote:

Anyhting Alstry says should be disregarded

 

Now he is changing sides, all the time he had been shouting deflation and defending the dollar. I do not want to link to the idiotic peices he has written.

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#10) On August 03, 2009 at 10:17 AM, alstry (35.69) wrote:

Under your scenario, over 90% of America will be poor by current definitions.  You think Americans are prepared to exist like third world citizens without being mentally prepared.

My guess is that rape and murder will increase by at least 1000% based on my past work in the criminal justice system and understanding the effect of stress on human nature.

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#11) On August 03, 2009 at 10:20 AM, portefeuille (99.78) wrote:

And more on the topic.

It is not that a government or a group of governments decide what the exchange ratios are. It is mainly "driven by supply and demand". It is a good thing that the currency of a "weak" economy loses value because that makes it more competitive. This is a simple example of negative feedback which is "a good thing" as it stabilises the system. Things you don't want are positive feedbacks that lead for example to asset bubbles or "deflation death spirals".

So in the case of feedback (as in the case of a pregnancy test or a biopsy) negative is usually good and positive is bad ...

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#12) On August 03, 2009 at 10:20 AM, alstry (35.69) wrote:

kas,

I am still neutral as to inflation or deflation...it could go either way and I have said that all along.  As long as I am neutral, I will continue to argue both sides.

That is why I have consistently said cash and metals are a good hedge.......you can go back and confirm.

One thing you can say about Alstry is that he is obnoxiously consistent in addition to be simply obnoxious.

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#13) On August 03, 2009 at 10:23 AM, alstry (35.69) wrote:

port,

You may want to go study Wiemer Germany on how a postive feedback currency inflationary spiral can destroy the greatest nation on the earth at the time.

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#14) On August 03, 2009 at 10:28 AM, InflationSilver (99.97) wrote:

Yes, it very well may be...

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#15) On August 03, 2009 at 10:35 AM, portefeuille (99.78) wrote:

#13 No need to study it again. I am German. We have that in 5th grade or so.

As I said. Positive feedback is usually bad.

You are to some extent subject of comment #5 here.

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#16) On August 03, 2009 at 10:56 AM, leohaas (94.53) wrote:

alstry: Just send me all your worthless dollars!

portefeuille: if you are German, how come you did not pick up on "Wiemer Germany"?

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#17) On August 03, 2009 at 10:58 AM, aqua2 (< 20) wrote:

#7 and Socialist Babies

Have one question.  Why is it that when I trip to Bangkok, I find so many Europeans seeking healthcare.  Not minor issues, many I have talked with were there for very serious or life saving treatment and I sensed a real bitterness in them to their home country due to refusal of treatment.  Maybe what it really comes down to is a baby equals future tax revenue, an asset and an older person is just a liability?  Hate to be that cynical but what else could account for the difference. i don't know what to think of the conflicting reports on socialized healthcare.

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#18) On August 03, 2009 at 11:57 AM, portefeuille (99.78) wrote:

#17 Where did they come from. Probably not from Spain, France, Italy, Sweden, Germany, Luxembourg, Switzerland, ...

I don't know how the situation is in Eastern Europe.

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#19) On August 03, 2009 at 12:05 PM, portefeuille (99.78) wrote:

portefeuille: if you are German, how come you did not pick up on "Wiemer Germany"?

I did respond to his suggestion (comment #13 above) in comment #15 above. 

And to whoever cares. The city is called Weimar (-> Weimar Republic).

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Weimar is one of the great cultural sites of Europe, having been home to such luminaries as Goethe, Schiller, and Herder; and in music the piano virtuosi Hummel (a pupil of Mozart), Liszt and Bach. It has been a site of pilgrimage for the German intelligentsia since Goethe first moved to Weimar in the late 18th century. The tombs of Goethe and Schiller as well as their archives, may be found in the city. Goethe's Elective Affinities (1809) is set around the city of Weimar.

---------------- 

(from here)

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#20) On August 03, 2009 at 12:15 PM, whereaminow (78.85) wrote:

Nice deflection.  You're a doozy.

David in Qatar

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#21) On August 03, 2009 at 12:40 PM, mikecart1 (99.41) wrote:

Yeah dollar already is worthless.  Food cost a lot now.  You can't get anything decent for a dollar.  Even vending machines soda is $2.  Water is $1.50.  Taking a dump at my place cost like $0.10 so I can only take about 10 dumps a week to maintain the $1.00 of sewage bills.  3 stamps cost more than a dollar.  A decent meal at a restaurant cost over ten dollars. 

Why do they even have change?  The smallest denomination should be the dollar.

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#22) On August 03, 2009 at 1:02 PM, jesusfreakinco (29.62) wrote:

Alstry,

You may want to go study Wiemer Germany on how a postive feedback currency inflationary spiral can destroy the greatest nation on the earth at the time.

Welcome to the reality that Jim Sinclair has been speaking of for several years.   Glad to see you finally caught on.

Soon you will realize the only consequence of the Weimar experience is hyperinflation.  When you stop talking about deflation as a possibility, I'll realize you finally get it.

Regards,
JFC

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#23) On August 04, 2009 at 1:59 AM, aqua2 (< 20) wrote:

Portefeuille,

You are correct.  But my sample is not complete, naturally I seek out English speakers.  So it is mostly UK'ers with a smaller number of Danes and a few so bitter I didnt even want to find out.  Will confess, I carry a high deductible on my insurance so get some work done there myself time to time. 

 

 

 

 

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#24) On August 08, 2009 at 8:36 PM, brianc410 (37.70) wrote:

Corn is the same price now as it was in the 1940's.

 

Think about it.

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