The dollar standard is ending

[alloytoo]

That is one dangerous game they are playing, given the scale and significance of the dollar. The consequences could (and will be IMO) dire.

We obviously approach this from differing angles. My contention is that much of this is engineered, rather than the bungling errors of economic halfwits, which I suspect is how you approach this.

There are no more economic levers to pull, they can't afford to effect substantive stimulus, they cannot reduce interest rates. A dose of high inflation might be what their economy needs.

What action could they take to prevent the collapse?

Buy them Yankee dollars.

Remember the Chinese need markets and the US represents the largest richest market around.

 

[empirex]

There are no more economic levers to pull, they can't afford to effect substantive stimulus, they cannot reduce interest rates. A dose of high inflation might be what their economy needs.

Yip, there is nothing more they can do now but print more "monopoly money" by the billions and hope for the best.
I'm afraid a collapse is inevitable.

Buy them Yankee dollars.

Remember the Chinese need markets and the US represents the largest richest market around.

Not a chance. If anything the Chinese are looking to get rid of dollars.

China, not to mention the rest of the BRICS nations and Japan are looking to dump dollars.
They see the US as a sinking ship, they aren't going to plough money into the currency in an attempt to save it. It's a waste. China's on the verge of becoming the world's superpower; they won't bet on useless dollars in a hope they pay off.

They tried that, investing billions into the dollar in the past, never dreaming that the US would deliberately devalue their currency.

Now that investment is being eroded. They got burned once, now looking to cut their losses, not invest more.

 

[McSack]

Dollar standard has been dying for about as long as Cobol has been dying ... expect both to be around for a few more 100 years

 

[Arthur]

Countries have been moving away from the dollar standard for a while now. This is not new news. Returning to the gold standard would be retarded. The fiat system works better. The gold standard was one of the main reasons for the Great Depression.

Brilliant. This has to rank as one of the loopiest statements ghoti has ever made. Keep 'em rolling!

 

[Cius]

My issue with the US dollar crashing (or even declining in a major way) is that it would probably cause major havoc in the rest of the world via increased inflation and under performing stock markets. Pensioners and people close to retirement in particular will be hard hit would imagine. Fortunately for us if the dollar does die a miserable and messy death gold prices will go through the roof and that will help the JSE and our SA pensions via gold companies share prices reversing the market somewhat. SA is actually in a pretty sweat spot for this scenario.

 

[alloytoo]

Yip, there is nothing more they can do now but print more "monopoly money" by the billions and hope for the best.
I'm afraid a collapse is inevitable.

You can't dodge market forces forever. Adjustments are not a sign that capitalism is broken, on the contrary it's an indication that it's working.

Not a chance. If anything the Chinese are looking to get rid of dollars.

China, not to mention the rest of the BRICS nations and Japan are looking to dump dollars.
They see the US as a sinking ship, they aren't going to plough money into the currency in an attempt to save it. It's a waste. China's on the verge of becoming the world's superpower; they won't bet on useless dollars in a hope they pay off.

They tried that, investing billions into the dollar in the past, never dreaming that the US would deliberately devalue their currency.

Now that investment is being eroded. They got burned once, now looking to cut their losses, not invest more.

It's really a question of consumption. To keep the Chinese population employed, China requires a market (likewise most emerging nations) What happens to their economies when "Outsourced" jobs begin to return to the US (or Europe), simply because it has become cheaper to service and manufacture there?

China is simultaneously faced with the problem that their cost of production is real terms is increasing (or normalizing) They can no longer rely on cheap labour to drive growth, they need to develop premium brands to compete on the global stage.

 

[alloytoo]

My issue with the US dollar crashing (or even declining in a major way) is that it would probably cause major havoc in the rest of the world via increased inflation and under performing stock markets. Pensioners and people close to retirement in particular will be hard hit would imagine. Fortunately for us if the dollar does die a miserable and messy death gold prices will go through the roof and that will help the JSE and our SA pensions via gold companies share prices reversing the market somewhat. SA is actually in a pretty sweat spot for this scenario.

In a prolonged global depression the only economies which will show any resiliance will be net food exporters, as food has the most inflexible demand curve.