So When Will the Dollar Collapse?

[ALBballer]

At this point of historic debt, the mathematically questions is not if but when. Also discuss the ramifications of such collapse.

[knickballer]

Inb4 everyone says OP should put his tinfoil hat on

[OJ SIMPSON 2.0]

Never will. No other currency can ever replace the dollar as the world's reserve currency.

[Jello]

When the rest of the world start trading oil with a different currency.

[HarryCallahan]

Good luck trying to get a reasonable discussion out of ISH.

It certainly isn't an easy one to peg down, but if I had to put a year on it, i'd say 2029.

[B-Easy8]

Never will. No other currency can ever replace the dollar as the world's reserve currency.

The Yuan is actually the currency held most as reserves.

[DCL]

the dollar has so many reasons for people to dump, but there are NO alternatives. Euro was supposed to be the answer, but that dream was over a decade ago, and the euro is in a bigger shithole now with greece, spain, italy, etc possibly dragging it for another decade of austerity. the yuan has ambitions but it's not even freely convertible. and china still hasn't issued bonds for foreigners. they won't do that until they find a way to convert from an export to consumption-based economy. and the yen? they're still trying to recover form 1990. you heard of the lost decade, but with their stagnant debt up to their eyeballs, they're possibly looking at a lost double or even triple decade... the dollar sucks, but there are no alternative currencies. all are f--ked, but dollar may be the least pathetic, so that's the attraction.

edit: error of descriptions: japan has already experienced a lost DOUBLE-decade. early 90s till now = 23 years and counting. they ain't climbing out of their funk anytime soon.

[HarryCallahan]

the dollar has so many reasons for people to dump, but there are NO alternatives. Euro was supposed to be the answer, but that dream was over a decade ago, and the euro is in a bigger shithole now with greece, spain, italy, etc possibly dragging it for another decade of austerity. the yuan has ambitions but it's not even freely convertible. and china still hasn't issued bonds for foreigners. they won't do that until they find a way to convert from an export to consumption-based economy. and the yen? they're still trying to recover form 1990. you heard of the lost decade, but with their stagnant debt up to their eyeballs, they're possibly looking at a lost double or even triple decade... the dollar sucks, but there are no alternative currencies. all are f--ked, but dollar may be the least pathetic, so that's the attraction.

If China stopped depressing the yuan for the sake of exports, you'd see more dumping of $USD.

There are some decent alternatives, but not on a large scale. I'm talking about $AUD $NZD and even the peso is somewhat attractive.

[Sarcastic]

When America no longer has nukes.


That's the real answer.

[DCL]

If China stopped depressing the yuan for the sake of exports, you'd see more dumping of $USD.

There are some decent alternatives, but not on a large scale. I'm talking about $AUD $NZD and even the peso is somewhat attractive.


china's currency is highly restrictive. their system is far away from ever letting the currency be totally free. maybe they'll change when the whole world is finally completely dead broke from purchasing anymore of their cheap ass furniture and exports. lol

$AUD $NZD have better economies, but they're just too small for the global scale. multi-trillion $ moves would shake the bejesus out of a small place like New Zealand.

[HarryCallahan]

china's currency is highly restrictive. their system is far away from ever letting the currency be totally free. maybe they'll change when the whole world is finally completely dead broke from purchasing anymore of their cheap ass furniture and exports. lol

$AUD $NZD have better economies, but they're just too small for the global scale. multi-trillion $ moves would shake the bejesus out of a small place like New Zealand.

Same with the Swiss franc. Which is a shame really, because these are some of the better managed currencies.

[KevinNYC]

At this point of historic debt, the mathematically questions is not if but when. Also discuss the ramifications of such collapse.

If you're so sure, please provide your evidence.

Also why would the collapse not have happened during the depth of the financial crisis? Why would the collapse happen years later?

Also if the dollar was going to collapse, why is barely evidence of moderate inflation let alone high inflation let alone hyperinflation.

[fiddy]

When the rest of the world start trading oil with a different currency.
Saddam and Gaddafi tried, we all know what happened to them.

[I<3NBA]

when the US lose military power. we'll see fireworks before that happens.

[niko]

When America no longer has nukes.


That's the real answer.
That makes no sense.

[gigantes]

bwahaha... good luck with THAT, china.


De-Americanised' world needed after US shutdown
--China media

Beijing (AFP) - While US politicians grapple with how to reopen their shuttered government and avoid a potentially disastrous default on their debt, the world should consider 'de-Americanising', a commentary on China's official news agency said Sunday.

"As US politicians of both political parties (fail to find a) viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanised world," the commentary on state news agency Xinhua said.

In a lengthy polemic against American hegemony since World War two, it added: "Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated!

"A new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing."

Negotiations over how to end the budgetary impasse have shifted to the US Senate after House Representatives failed to strike a deal with President Obama on extending borrowing authority ahead of an October 17 deadline.

Beijing has in recent days issued warnings as well as appeals for a deal, all the while emphasising the inseparable economic ties that bind the world's two biggest economies.

"The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonised," said the commentary.

China is the biggest foreign holder of US Treasury bonds, worth a total of $1.28 trillion according to US government data.

"Instead of honouring its duties as a responsible leading power, a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas," but equally stoked "regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies" the commentary said, referring to Iraq.

It added that emerging economies should have a greater say in major international financial institutions the World Bank and International Monetary Fund and proposed a "new international reserve currency that is to be created to replace the dominant US dollar".

China has only slightly more weight than Italy at the IMF, which has been headed by a European since its creation in 1944.

A governance reform has been in the works for three years but its implementation has been blocked by the effective veto of the United States.

http://news.yahoo.com/americanised-world-needed-us-shutdown-china-media-053014967.html
(exclamation mark and bold added by me)

[niko]

bwahaha... good luck with THAT, china.


(exclamation mark and bold added by me)
Unless China at some point is going to let it's currency ebb and flow with the natural market, I'm not sure how they complain about anything nor can get a larger role in anything.

[MavsSuperFan]

When the rest of the world start trading oil with a different currency.
This

Never will. No other currency can ever replace the dollar as the world's reserve currency.
Thats what the british thought


The Yuan is actually the currency held most as reserves.
incorrect. The chinese government purposefully suppresses the value of the yuan to boost their appeal as an exporter. Even they dont trust the yuan. why they try to maintain such a high amount of US debt/treasury bills

http://en.wikipedia.org/wiki/Reserve_currency#United_States_dollar

The United States dollar is the most widely held currency in the Allocated Reserves today. Throughout the last decade, an average of two thirds of the total Allocated foreign exchange reserves of countries have been in US dollars. For this reason, the US dollar is said to have "reserve-currency status", making it somewhat easier for the United States to run higher trade deficits with greatly postponed economic impact or even postponing a currency crisis. Central bank reserves held in dollar-denominated debt, however, are small compared to private holdings of such debt. In the event that non-United States holders of dollar-denominated assets decided to shift holdings to assets denominated in other currencies, there could be serious consequences for the US economy. Changes of this kind are rare, and typically change takes place gradually over time; the markets involved adjust accordingly.[11]
However, the dollar remains the favorite reserve currency because it has stability along with assets such as United States Treasury security that have both scale and liquidity.[12]
US dollar dominant position in global reserves is very much challenged currently, because of the growing share of unallocated reserves, and because of the doubt regarding dollar stability in the long term.[


The Chinese yuan or renminbi (RMB) cannot be used as a reserve currency as long as the Chinese government maintains capital controls on the conversion of its currency.[37] Holding the currency would not be attractive to central banks unless China develops a strong open bond market.[38] The Bank for International Settlements estimates that in 2010 around 0.9% of all currency market transactions were carried out in renminbi.[39]
Former Chinese President Hu Jintao said that it would be a long process before the yuan would be accepted as a global currency.[40] However China has taken modest steps in this direction with currency-swap agreements with a few western Pacific nations.[41]
During the Chinese Banking Liquidity Crisis of 2013, American dollars began to be more widely accepted inside the PRC

IIRC the actual market value of the chinese yuan should be about double what it actually currently is. But the chinese government suppress it because a high currency value would make their exports more expensive and cause importers like america to explore cheaper options in south east asia, latin america and africa (there is this lie our politicians tell us that if china didnt manipulate their currency, we would resort to domestic production. We wouldnt, but we would explore cheaper options in developing countries). We dont import from the chinese because we like them or they have high quality products. We do so because they are cheap and reasonably reliable. The minute that ceases to be true we move on.

[MavsSuperFan]

If China stopped depressing the yuan for the sake of exports, you'd see more dumping of $USD.

There are some decent alternatives, but not on a large scale. I'm talking about $AUD $NZD and even the peso is somewhat attractive.
How would the chinese stop depressing the yuan, while not causing massive unemployment and the resulting societal problems that come with it?

The PRC government is a dictatorship. One of the main reasons the population of China accepts them is, that to be fair, since Deng Xiaoping took over they have been arguably the most competent government in the world. Their economic miracle is based on exports. If they stopped depressing the yuan their government in the long term risks being overthrown.

[MavsSuperFan]

If you're so sure, please provide your evidence.

Also why would the collapse not have happened during the depth of the financial crisis? Why would the collapse happen years later?

Also if the dollar was going to collapse, why is barely evidence of moderate inflation let alone high inflation let alone hyperinflation.

Because for a currency to replace the dollar as the reserve currency they have to be better than the dollar. The European's economy is ****ed. (thank god for greece and spain :lol they probably saved our asses and ****ed over Germany)

The chinese are artificially manipulating the Yuan downwards. The japanese are still in their economic stagnation they have been in since the 90s. Japanese debt is 200+% of their GDP.

The world has to use the USD because there are no alternative. The USD is like a husband that beats his wife, but she doesnt work and would rather not live on the street.

[senelcoolidge]

If I were you guys I'd pay attention to your bank accounts. You may even want to take everything out now.

[Dresta]

Same with the Swiss franc. Which is a shame really, because these are some of the better managed currencies.
Agree with the Swiss Franc, but the Australian dollar is going to go the same way as all the other currencies. They currently have unsustainable inflation and that problem won't solve itself and shows no sign of being rectified. Inflation is just too politically convenient, and so the short-term political parties really couldn't care less about getting it under control.

That is really the problem in almost ever country nowadays: no one gives a shit about the long-term.

[gigantes]

If I were you guys I'd pay attention to your bank accounts. You may even want to take everything out now.
if the banks collapse, i'm not bullish on the value of much of anything. even basic commodities would just be targets for thieves and / or mobs. no, i think the ones who are truly ready would be the ones in remote areas, off the grid, self-sustaining... people who prepared long ago. even so, that sounds like a fairly paranoid life to lead once they they learn about a mega-depression all around them.

then again, maybe i'm overestimating the effect of a default...

[Dresta]

Because for a currency to replace the dollar as the reserve currency they have to be better than the dollar. The European's economy is ****ed. (thank god for greece and spain :lol they probably saved our asses and ****ed over Germany)

The chinese are artificially manipulating the Yuan downwards. The japanese are still in their economic stagnation they have been in since the 90s. Japanese debt is 200+% of their GDP.

The world has to use the USD because there are no alternative. The USD is like a husband that beats his wife, but she doesnt work and would rather not live on the street.
Not really anything to do with Greece and Spain per se. The eurozone was a structural failure that was always going to fail: you can't have a currency union without effective labour mobility and commonality of destiny. This hubristic experiment was the equivalent of building the roof of a house before bothering to build the walls and it simply could not have worked (any economist who couldn't recognise this, quite frankly, should not have a job).

[macmac]

Just buy gold. Forget all these controlled currencies, invest in solid physical gold that you can store. Long term can't miss

[KevinNYC]

Because for a currency to replace the dollar as the reserve currency they have to be better than the dollar.

This is not the same as a collapse of the dollar.

[MavsSuperFan]

Not exactly a comparable situation. They were a small Island nation that went broke trying to pay for 2 world wars and trying to maintain one of the biggest empires in the history of mankind (people don't really realize this but economically empirial colonialism wasn't really a profitable venture)
The US's debts are disturbing but not as disturbing as most of the developed worlds. They're probably more stable than any other Western nation not named Germany (even that is pretty questionable though)
At the time when the USD surpassed the Pound Sterling (IIRC) 1890 or 1900s Great Britain and America's populations were not incomparable.

Great Britain had about 36 million people in the 1890s and america had about 60 million in 1890.

The British Empire was economically successful for the vast majority of its history. It was more about free trade, establishing markets, than stealing resources.

I do agree that the debt isnt that big a deal, but this is also due to the fact that the world has no choice but to use the USD as a reserve currency. Its like an abused housewife with no better options.

[MavsSuperFan]

This is not the same as a collapse of the dollar.
I thought we were just talking about when the USD would stop being the reserve currency of the world. Obviously it will never collapse completely. The pound sterling still is valuable.

[KevinNYC]

I thought we were just talking about when the USD would stop being the reserve currency of the world. Obviously it will never collapse completely. The pound sterling still is valuable.

This why I want the OP to defend his assertion.

[secund2nun]

Never will. No other currency can ever replace the dollar as the world's reserve currency.

You can't really believe that? The dollar has gone massive inflation. A worthless currency won't stay world's reserve currency for long.

[gigantes]

This why I want the OP to defend his assertion.
there was an assertion involved?

[Godzuki]

i would just love for u doom and gloom predictors to give a date. i mean its been year after year for what seems like a decade on ISH of predicting the end of our economy, country, and still nothing.....so please say something where you are sure we're going under by then. thanks.

there are soooo many factors to us not being the basis of the world economy that just looking at the deficit is extremely ignorant, but i still would love for some of you to actually be definitive for once, instead of purposely vague so you aren't held accountable to your pessimisic doom and gloom predictions.

[Godzuki]

You can't really believe that? The dollar has gone massive inflation. A worthless currency won't stay world's reserve currency for long.


give a date...

[HarryCallahan]

If I were you guys I'd pay attention to your bank accounts. You may even want to take everything out now.

You smell a potential Cyprus-style "bank-holiday" coming too?