Friday, November 07, 2008

US Dollar to Collapse in 2-4 yrs

Chris Laird says (from the Prudent Squirrel) says the USD only has 2-4 years left before collapse:

Snippets Below:

Just because the USD happens to be rallying now (with weekly fluctuations) does not mean that its fate is not bleak. There are many reasons the USD is rallying right now. They include flight to cash in general during market liquidations in all areas, but also cash hoarding because businesses cannot roll over the short term credit they use to do payrolls and ongoing operations. Then we have the usual end of year cash surge for businesses and financial institutions. Then of course there is flight to the USD for safety, and then finally, other countries currencies are adjusting to the slowing world economy, and the once hot foreign markets are cooling and there is lots of money moving out of the ‘emerging’ markets.

But, we are going to be facing two particular problems in 09 that none of us is really used to, that we really have never seen. The world is going to have a severe recession bordering on an economic depression. Essentially no one alive today knows what that is like. Only the oldest of us have lived through that experience.

But then, on top of that, at some point later the USD will finally collapse. This is not something way way out there in the future. This issue is becoming a near term threat.

What has held the USD up and why that’s going to change

The primary reason the USD has held up so well in the last decades, in spite of ever worsening US trade and budget deficits that add to over $1 trillion a year combined, is that the US was an export economy’s dream customer. Because the US was such a good customer to the world, they bought our US Treasury bonds, and lent trillions in other ways to the US consumer. As long as the US consumer could carry that process out, our trade partners could make bank on the US and USD.

However, once the US consumer is tapped out, and cannot effectively make a return on investment of our trade partners, the rationale for the continuation of the USD goes away. All that remains after that is a budget busted US Federal government. At that point, why would our trade partners continue to buy all the US treasury bonds and such, and debase their currencies, if the US cannot be such a good customer anymore? At that point, the USD will rapidly fall into a devaluation crisis.

None of us in the US has ever dealt with the twin threats coming our way in the next few years. The first is a real economic depression. The second will be the demise of the US dollar, or at the very least, its severe devaluation like 70% or more (at first).

Yhe US faces an economic depression AND a currency crisis soon after. How far off is this? See full article:

Tough Sledding Ahead,Surviving A Coming USD Collapse


Virgo said...

Two to four years? Probably won't make it that far. This is a clip of Ron Paul on the Alex Jones Show discussing the Nov. 15 meeting and the new reserve currency that will be announced (maybe sometime in January). Also see the clip of Colin Powell on Meet the Press. He talks about a crisis on January 21st or 22nd that will come along 'that we don't even know about'. Hmmm.

FOFOA said...


I agree. And so do a lot of other people. I'm looking at more like 2 to 4 months. Something is happening right now which is akin to a quickening. Normally, changes come at a snails pace, but at certain times in history they change at the speed of light. I wrote a blog post that addresses this and it includes a snip from Chris Lairds excellent article. It is called The 100 Year Clearing.