US Dollar will crash during 2007

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vespax

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Opinion on this article.

Article

Sent to me by a family member in the states who seems to be getting worried. He has always been a die-hard Bush supporter, so it is strange that he sent me this article which is critical of the Bush policies.

What does everyone think of this stuff? How bad would it affect emerging markets like SA Rand if it did happen? Etc...
 
I've just skimmed the article (I'll read it in full later), but what I have read is stuff I've heard elsewhere. The dollar's value would crumble the second it's not being used as the defacto currency for oil trades.

I had forgotten about Iran's plans to sell its oil on an Iranian oil bourse which traded in euros.

As for the effects upon the world market, when the dollar does eventually collapse it is going to be VERY ugly, for everyone.
 
Xarog said:
As for the effects upon the world market, when the dollar does eventually collapse it is going to be VERY ugly, for everyone.
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except those who have bought physical gold.
Big battles happening in the gold arena at the moment. Closed at $666.70ish on Friday. Apparently from a technical level this is good, as it will then make an assualt on the $720+ attained last year. Goldbugs are jumping up and down believing that 2007 is their year...
 
Coal made more in 2006 than Gold.

air said:
except those who have bought physical gold.
Big battles happening in the gold arena at the moment. Closed at $666.70ish on Friday. Apparently from a technical level this is good, as it will then make an assualt on the $720+ attained last year. Goldbugs are jumping up and down believing that 2007 is their year...
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There is a lot of speculation about Gold at the moment.
Even if it did reach $700 or more, what does that mean for our economy?
South Africa is not dependent on Gold Exports and as far as I know it contributes far below 5% of our export pool.
People invested in Gold will be happy as many gold shares like Anglogold Ashanti have been trading sideways on the JSE and some Gold Shares like Harmony, downwards. Don't even mention Durban Deep as the company may even fall down it's own mine shaft according to Dr Roffey. :D

Platinum has done far better in the last year and Coal Shares made more money than Gold Shares.

One of the problems with Gold is there is no cooperation between Gold Producing Countries to limit the sale of Gold to keep the price up like OPEC tries to do with Oil with limited success. Or De Beers does with Diamonds.
Gold would be easier to control than Oil, I think?

The Dollar may lose ground against the Euro and the Pound and probably a few others like our Rand, but I don't think that is a bad thing for the USA.
The USA needs to start producing products and even exporting them, whereas at the moment the country is getting fat and lazy by importing everything from poorer countries. There is still value in some of the big cap shares on the NYSE according to analysts.
If the dollar loses value, US Investors may buy into currencies like the Rand to Hedge against losses. This may be OK for the short term and our bourses (JSE) will be boosted by the gains, but when these same investors take back their money it may cause our Rand to lose value. A bit of a catch 22.

If the Dollar does "crash" it will signal the beginning of the end of the USA's enormous expense on keeping it's armed forces all over the world for no real apparent gain other than keeping companies back home in business.

Old Putin from Russia made some remarks about the US and the way they have gone about putting their noses into everyone else's business and in a way I must agree with him. The Russians also have a score to settle I think on the economic front. North America and Investors from those pools have speculated many a currency including our own. Put that in the back of your mind when I say the Russians have a score to settle.

People go on about China etc, but don't throw away the Russians, they can become a very strong economic power within a decade or two or less.
Even Carte Blanche travelled to Moscow recently and did a tour, also meeting Gorbachev.
I thought it was quite interesting that Russia is now becoming "westernised".

If Gold does go up this year, many analysts will just say I told you so.
I am more bearish to the metal and if the price does go up, it may only be later this year or even come down first in the interim.

A Dollar "Collapse" will shake the tree, like 9/11 did.
Anyone got a Crystal Ball? :rolleyes:
 
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yeah, good old DRD, Clive has been punting this share for ages now. Seems to have some of the worst luck eva, I think it is unhedged, their results are coming out end Feb, could get interesting.

re. $ crash, I'm very sure myadsl member ---> Cage Rattler, could give you a very informed opinion!
 
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air said:
except those who have bought physical gold.
Big battles happening in the gold arena at the moment. Closed at $666.70ish on Friday. Apparently from a technical level this is good, as it will then make an assualt on the $720+ attained last year. Goldbugs are jumping up and down believing that 2007 is their year...
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This is missing the point.

Capitalism as en economic system requires constant growth in order to remain stable. Note how worried they were worried back in 2001 in yankland with the looming worries of a recession. When a capatalistic economy starts shrinking it sets off a chain reaction which in turn causes an implosion. It's just such a chain event that caused the great depression - people lost money which in turn meant they couldn't buy as much which in turn meant that there were less people to supply with goods which in turn meant that businesses had to retrench large portions of their workforce as they couldn't sell enough of their products to keep them all employed... And then these workers were also out of a job so they couldn't buy anything which meant businesses had even less customers... and so on.

As you can see, the result is rather disasterous. Many global economies have been growing with American debt, if those debts are defaulted upon or the dollar loses too much value then suddenly all these various industries will have to shut down some of their factories, which in turn starts another worldwide chain reaction.

Having a bunch of metal in your safe isn't going to help you very much in such circumstances.
 
I'm not an expert, but my own opinion, I don't think there will be any disastrous crash. There will likely be a period of correction, but I don't there'll be any massive recession and don't think the world will abandon dollars. (For what anyway? The Euro is the only serious contender, but although Europe may have a similarly-sized economy its growth rate is smaller than the US's, its economy more stagnant, and there are worrying trends such as struggling to get the younger workforce employed and low birth rates amongst the economically productive.) Why? Well, for one, there is some interplay of variables: a weakening currency promotes manufacturing and exports. But mainly, I think the article seriously exaggerates the level of "consumption" of Americans - Americans may consume a lot, yes, but they don't just sit around and mainly consume, they are still highly productive and even today they still MAKE a sh-tload of stuff. They are a hard working, resourceful, and adaptable people - and THIS is what ultimately backs American debt, and what folks like investors (and debtors) ultimately like to see. Their GDP is incredibly huge (and thus very robust), growth is relatively good, unemployment is very low in spite of some "hollowing out" of manufacturing (due probably mainly to outsourcing to countries with cheaper labour, not a purposeful attempt by the elite to disempower American labour as the article suggests). In spite of some political problems they are still a basically free country where free trade rules, the country is politically stable and peaceful, the infrastructure is good, they are fully industrialised and still able to make basically everything that anyone else can make, they have massive numbers of hard working educated people - all these things suggest that America remains a good long-term bet economically. Their economy just seems far larger and more robust than it was at the time of the Great Depression. Also Bush isn't going to be around much longer either (and there is talk of withdrawing from Iraq, which would be an absolute disaster for Iraq and leave an incredible bloody mess and probably civil war for years to come, but will also put a stop to all this spending on foreign country invasions - the Dems will never bomb Iran).

It does seem to be the case that something's gotta 'give' at some point, but I don't think it'll be a major crash, more like some bumpiness, and then some gradual shifts/changes/rebalancing in the global economy.
 
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Even Nosi saw it floating in his little bowl :)


VIII .XXVIII

The copies of Gold and Silver which after theft were thrown in the Lake. At their discovery all is exhausted and dissipated by the debt. All Scripts and bonds are wiped out.
 
DragonLogos said:
Even Nosi saw it floating in his little bowl :)


VIII .XXVIII

The copies of Gold and Silver which after theft were thrown in the Lake. At their discovery all is exhausted and dissipated by the debt. All Scripts and bonds are wiped out.
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cos that has to be referring to the crash of the US$ :rolleyes:
 
Turtle said:
I'm not an expert, but my own opinion, I don't think there will be any disastrous crash. There will likely be a period of correction, but I don't there'll be any massive recession and don't think the world will abandon dollars. (For what anyway? The Euro is the only serious contender, but although Europe may have a similarly-sized economy its growth rate is smaller than the US's, its economy more stagnant, and there are worrying trends such as struggling to get the younger workforce employed and low birth rates amongst the economically productive.)
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The real risk is that dollars have been vastly over-valued due to the fact that they are the defacto currency for trading oil. If oil is traded in Euros then people are going to start buying euros in order to buy oil. If that happens the dollar's value will re-adjust and it will be doing so violently.
 
Natas said:
Well why do you think that America keeps invading other countries?!?!
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Outside of the Oval Office the US contains a vast wealth of intelligence - I'm not buying the notion that invasion was the best way they could come up with to save the economy.
 
bwana said:
Outside of the Oval Office the US contains a vast wealth of intelligence - I'm not buying the notion that invasion was the best way they could come up with to save the economy.
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Invasion sure saved the US weapons industry
 
bwana said:
Outside of the Oval Office the US contains a vast wealth of intelligence - I'm not buying the notion that invasion was the best way they could come up with to save the economy.
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What else do you htink they could have done? Dont you think that their system may have gotten to the point where they currency is so oil dependant, that there is no possible way to revise their system. What I mean to say is that the AMerican currency, or at least its value, is so strongly based on oil, that there is no possible way they can change this? IE..they're just fcuked! heheeheh

well IF they did think that an invasion was the answer, I am sure that hindsite has proved them wrong!!
 
Natas said:
Well why do you think that America keeps invading other countries?!?!
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Massive destructive expenditure doesn't help an economy any more than me smashing the windows in my house will help my finances, but if I smash several of my neighbours' windows and my best friend happens to be in the glass business, well ... that's crony capitalism for you, not economics.
 
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