The decline of the dollar

[Chris Fleming]

[chud]

"We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power." (Alan Greenspan, when asked whether the Federal Reserve can guarantee Social Security payments)

[chud]

Everything is spinning out of control

[chud]

More people living out of cars

[Teazer]

They're a little vague regarding what they mean by "collapse". There is no reason the dollar should go into any kind of free-fall unless it is first actively supported by the Fed, or if the US decides to default on its debts. Instead it will continue to decline gracefully. As a consequence, over time imports will decrease & exports increase, reducing the balance of payments deficit. Sure there'll be some kind of recession every now and again, particularly if the government is not proactive in dealing with the transitions as people shift to different industries. Equally likely that people in the US won't have the same level of financial security they had before due to global competition.

So, despite what the video says, the chances of any kind of dollar crash are minimal. Though, as we all know, "million to one chances come up nine times out of ten." !!

[steelincotton]

More people living out of cars

The real scary thing is, this is all pre-planned. For us to become a fascist entity, this HAS to happen. Take away the common man's hope, dreams, and dignity. Then, take away the guns (prevents any uprising or revolution), and the rest is easy as 1 - 2 - 3. The process has already begun, it's just too darn bad that most Americans let the Bush/Cheney fascist regime dig their heels in so deep. I know fear it is too late to turn back, even if Obama does become president.

Check this out webpage out.....
http://www.oldamericancentury.org/14pts.htm

[chud]

They're a little vague regarding what they mean by "collapse". There is no reason the dollar should go into any kind of free-fall unless it is first actively supported by the Fed, or if the US decides to default on its debts. Instead it will continue to decline gracefully. As a consequence, over time imports will decrease & exports increase, reducing the balance of payments deficit. Sure there'll be some kind of recession every now and again, particularly if the government is not proactive in dealing with the transitions as people shift to different industries. Equally likely that people in the US won't have the same level of financial security they had before due to global competition.

So, despite what the video says, the chances of any kind of dollar crash are minimal. Though, as we all know, "million to one chances come up nine times out of ten." !!

So what do you think about the depletion of our banks' reserves, and the replacement of those reserves with credit from the Fed?

Also, check out this story: FDIC hiring back retirees with bank failure experience

[Chris Fleming]

They're a little vague regarding what they mean by "collapse". There is no reason the dollar should go into any kind of free-fall unless it is first actively supported by the Fed, or if the US decides to default on its debts. Instead it will continue to decline gracefully. As a consequence, over time imports will decrease & exports increase, reducing the balance of payments deficit. Sure there'll be some kind of recession every now and again, particularly if the government is not proactive in dealing with the transitions as people shift to different industries. Equally likely that people in the US won't have the same level of financial security they had before due to global competition.

So, despite what the video says, the chances of any kind of dollar crash are minimal. Though, as we all know, "million to one chances come up nine times out of ten." !!

Graceful decline?

So is that why for the first time in U.S. history we see a new trend in food stamp recipients--people with masters degrees.

[chud]

Yep, buy gold and silver now, before hyperinflation hits.

[chud]

Royal Bank of Scotland issues global stock and credit crash alert (so much for "graceful decline")

[Teazer]

So what do you think about the depletion of our banks' reserves, and the replacement of those reserves with credit from the Fed?

I think this:
http://blogs.wsj.com/economics/2008/02/08/non-borrowed-reserves-false-alarm/
is a reasonable explanation

Also, check out this story: FDIC hiring back retirees with bank failure experience

and the well discussed trouble in the credit markets, while a big factor in current international financial turmoils, does not necessarily lead to the precipitous decline of the dollar.
The assorted pundits are assuming that at some stage inflation will start spiking and the Fed won't respond for fear of a recession. That, I think, is quite unlikely. On the cosmic scale of things, inflation is still on the low to average side of things.

http://en.wikipedia.org/wiki/Image:US_Historical_Inflation_Ancient.svg

[chud]

I think this:
http://blogs.wsj.com/economics/2008/02/08/non-borrowed-reserves-false-alarm/
is a reasonable explanation

That article doesn't make me feel any better, it's full of double speak.
"The drop is purely technical..." (C'mon, a drop is a drop).
"The Fed has chosen a new way to classify money lent through its new Term Auction Facility" (Credit is credit, they're still lending money to banks to help them make up their reserves.)
And my favorite: now the banks get to use a "wide range of collateral" (morgage-backed securities, made up of sub-prime loans, are part of the problem)

Look again at this Fed chart ( click ). Scroll down and look at the negative numbers, and see how large they are. Ask yourself if you're comfortable with banks currently having no deposits (reserves). Ask yourself if you're comfortable with the Fed giving them more credit to make up for that lack of reserves.

[Teazer]

That article doesn't make me feel any better, it's full of double speak.
"The drop is purely technical..." (C'mon, a drop is a drop).
"The Fed has chosen a new way to classify money lent through its new Term Auction Facility" (Credit is credit, they're still lending money to banks to help them make up their reserves.)
And my favorite: now the banks get to use a "wide range of collateral" (morgage-backed securities, made up of sub-prime loans, are part of the problem)

I'm waiting to hear how any of your concerns have anything to do with the hypothetical crash/collapse of the dollar mentioned in the video.

[chud]

I'm waiting to hear how any of your concerns have anything to do with the hypothetical crash/collapse of the dollar mentioned in the video.

Nice way to deflect my points, you must practice Tai Chi.

The Fed, and the rest of the banking system, affect the money supply. Bernanke isn't called "Helicopter Ben" for nothing.

[Teazer]

Nice way to deflect my points, you must practice Tai Chi.

Just trying to stay on topic!

The Fed, and the rest of the banking system, affect the money supply.

and they have increased the money supply, and inflation has gone up a bit and the value of the dollar has gone down a bit. Just as we would expect. So, where's the crash/collapse of the dollar they talk about in the video?

As yet, nobody knows (except perhaps the FOMC members) how the Fed will respond to a dramatic increase in inflation since it hasn't happened yet. I would suggest, however, that they are well aware of the long term costs of policies leading to excessive or volatile inflation.