The demise of the US dollar

Watchman · Oct 6, 2009

The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

TeeKee · Oct 6, 2009

nonsense china still has trillions of ameri-debts.

you think they want to screw themselves?

Watchman · Oct 6, 2009

We waiting for China to fall next .

Unsustainable amount of BS notes and bonds !

Paying ourselves out with a bubble after a bubble

hockbeng · Oct 6, 2009

Watchman said:
The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

Where is that person who said that the strength of the USD is on the "software or something".

The truth is, no one could careless about your software. We all want our reserves pegged to something tangible like gold/commodities etc.. Who wants the "software"? Look at their trillion dollar deficit spending for years to come, with unconstitutional Gov intervention in the free markets and a non-independent federal reserve.

Dump all USDs you have before its too late.

Sperminator · Oct 6, 2009

Something to offer to everybody.

http://www.trendsresearch.com/

this website have predicted "THE GREATEST DEPRESSION"

the DEVALUATION of USD to toilet paper.

Anyways, I believe that the USD will go kaput, not so soon, but perhaps by next year or 2011...

these things takes time...

And many countries really hold alot of USD treasuries bonds, etc... in terms of Trillions and Trillions of USD... this is really a difficult to tell...

China hold about 2 Trillions USD Treasury Bills if I am not mistaken.

Need a financial expert to share the light here.

From my small research over the Cho bo lan days for the past 8 months of non-business activities, I realized that the USD is going to go kaput, and forecasted a total of USD 53 Trillion in debts by 2012... OBAMAGADON as what Gerald Celente have said...

I just hope that this is BULLSHIT, but when this actually happen... it'll be the greatest depression of USA.... and we are here to witness this doomsday scenario...

I thought that the great depression, and the oil crisis, and the asian crisis and whatever fuck crisis have prepared the world for this... never did I know that the modern economics theory is entirely flawed.... powered by greed and deception, packaging debts as investment instruments to the public... we are living in a merry go round world... quite funny when you think of it....

at the end of the day, everyone is chasing an idea... a value that is worth something on a peace of paper, which we all call money... it's just a representation....

Goh Meng Seng · Oct 6, 2009

Ironically, it is pure economic theory that dictates the fall of US dollars. I am surprised that the US dollar is still holding its position quite well up till now after the US government has announced measures that implies trillions of dollars being printed and injected into the world economy.

Inflation in US will come and subsequently the collapse of US dollars would be eminent. The Americans have been enjoying life in deficits basically because governments in the world are willing to absord the increasing US dollars as their reserve currency. It is an absurd situation actually. Countries that are productive and hardworking are keeping US dollars as their reserve currency just to show how much "surpluses" they have. By keeping more and more US dollars, it would mean that they themselves are printing more and more of their own currencies. It would only mean creating inflation in their own countries.

In Asian countries, this is especially so where excess liquidity has found its way to create bubbles in their stocks and property market. Japan was the first to explode, followed by Hong Kong and Singapore. Koreans and Taiwanese have spent their US dollars on very expensive weapons and armory.

The Japanese became smarter by using their US dollars to buy up American companies and high end properties. The oil-rich Arabian countries also ended up buying up all sorts of properties and stocks in America. The Americans have survived for the past 5 decades of high deficits simply because others are willing to hold their debts in terms of US dollar based foreign reserves and their ability to create valuable enterprises and properties for sales. However, I suspect that the bubbles in US stock and property markets in the past was also partly due to companies like Sony and sovereign funds buying them up.

This cycle cannot go on and on without end, especially so when the US government has basically printed money to prevent its whole economy from collapsing. It is not a matter of if but when will the melt down will come.

They Americans thought they were special that Economic theoretical norm will not apply to them. They might get the worst shock since the 1929 Great Depression in time to come.

Goh Meng Seng

Sperminator · Oct 7, 2009

Goh Meng Seng said:
This cycle cannot go on and on without end, especially so when the US government has basically printed money to prevent its whole economy from collapsing. It is not a matter of if but when will the melt down will come.

They Americans thought they were special that Economic theoretical norm will not apply to them. They might get the worst shock since the 1929 Great Depression in time to come.

Goh Meng Seng

Dear Mr. Goh Meng Seng,

Thank you for your explanation to a financial illiterate like me.

I would really appreciate to understand the following projections.

CASE 1 Scenario : What would happen when there is a GLOBAL MELT DOWN of the USD becoming absolutely worthless?

CASE 2 Scenario : What will happen to the massive trillions of USD debts owned by nations like CHINA, RUSSIA, BRAZIL, INDIA, etc???

CASE 3 Scenario : Would War Arise, when USA declares bankruptcy, Chap 11 as a nation, and no body to bail them out, use what to pay back? as debts could not be payable?

CASE 4 Scenario : Would the rest of the world's economy be affected due to the defuncted USD? if yes, how bad...

CASE 5 Scenario : What happens to SINGAPORE? would there be a DOOMSDAY scenario that all of us should look out?

These are questions on my mind, and they are not some jokes, I find these projections interesting, and hopefully with some knowledgeable person's reference answer, I could do some preperation of my own....

thanks in advance Mr. Goh.

eatshitndie · Oct 7, 2009

one of the reasons why the dollar is still holding up has to do with americans stashing cash (and chinese stuck with us bonds). savings accounts here have been at historic highs. the extra printing that is going on at the mint provides new liquidity to the gov for funding much of the stimulus bill, auto-buyouts, new spend, bloated bureaucracy, wars, and keeping banks afloat. sooner or later, the excessive printed notes (backed by virtually nothing) will come back to haunt the economy.

when masses are saving and stashing, it's time to spend and invest. do opposite what lemmings do, and you should be fine.

TeeKee · Oct 7, 2009

singveld · Oct 7, 2009

if i am USA, i find an excuse to start another world war. in the second world war, they immerse to become the richest and strongest country, just after their worse economic crisis much like the one started last year.

the last time, they did not print money, now they print massive amount of money. therefore we have a very very mild depression so far.

shelltox · Oct 7, 2009

The scariest scenerio would be when no one wants the us dollars, the us army would be stranded overseas as no countries would want to touch the us dollars with a ten foot pole.
When there's a pandemic, the us is going to run out of vaccine bcos they got no money to buy them. No one trust the US dollars any more.
There's would be chaos , ,massive unemployment all over the whole world and governments would fall.
During these periods of chaos, charismatic leaders would rise( Hilter type) and the world would be at war. The above scenerio is predicted by Nostradamus and I hope it would never come true but it will.

Watchman · Oct 7, 2009

USA devaluing itself to pay for the war ! Just to win !

GoFlyKiteNow · Oct 7, 2009

TeeKee said:
nonsense china still has trillions of ameri-debts.

you think they want to screw themselves?

I don't know , what this talk about ditching or dumping US dollar is all about. Usually this is the product of half baked reporters and analysts.

This dollar dumping is just not possible.

The fact is also..the Americans are not asking others to take and keep their dollars.

It is the others who go around and take up all this dollar bonds and treasury notes etc.

After that they bitch about the US dollar.

Well, if any country don't want to have the US dollar, then all they
got to do is put their money in another currency of their choice.

Lol

Hope · Oct 7, 2009

Goh Meng Seng said:
Ironically, it is pure economic theory that dictates the fall of US dollars. I am surprised that the US dollar is still holding its position quite well up till now after the US government has announced measures that implies trillions of dollars being printed and injected into the world economy.

Inflation in US will come and subsequently the collapse of US dollars would be eminent. The Americans have been enjoying life in deficits basically because governments in the world are willing to absord the increasing US dollars as their reserve currency. It is an absurd situation actually. Countries that are productive and hardworking are keeping US dollars as their reserve currency just to show how much "surpluses" they have. By keeping more and more US dollars, it would mean that they themselves are printing more and more of their own currencies. It would only mean creating inflation in their own countries.

In Asian countries, this is especially so where excess liquidity has found its way to create bubbles in their stocks and property market. Japan was the first to explode, followed by Hong Kong and Singapore. Koreans and Taiwanese have spent their US dollars on very expensive weapons and armory.

The Japanese became smarter by using their US dollars to buy up American companies and high end properties. The oil-rich Arabian countries also ended up buying up all sorts of properties and stocks in America. The Americans have survived for the past 5 decades of high deficits simply because others are willing to hold their debts in terms of US dollar based foreign reserves and their ability to create valuable enterprises and properties for sales. However, I suspect that the bubbles in US stock and property markets in the past was also partly due to companies like Sony and sovereign funds buying them up.

This cycle cannot go on and on without end, especially so when the US government has basically printed money to prevent its whole economy from collapsing. It is not a matter of if but when will the melt down will come.

They Americans thought they were special that Economic theoretical norm will not apply to them. They might get the worst shock since the 1929 Great Depression in time to come.

Goh Meng Seng

You would be even more surprised that USD would actually strengthen once Fed decides that enough is enough and start to raise interest rate,I believe that it would be the second after Austraian Resserve bank,the first in the world which just made the announcement.

I am quite surpirse at yr explanation on this USD problem.My humble comment is that

You have to be more down to earth,text book theory does not work in real world!

Seee3 · Oct 7, 2009

Fully agreed. All those garbage text book theory. If they are true, the stock market cannot have rebounded today. If they are true, US dollar will be "banana money" by now.

GoFlyKiteNow · Oct 7, 2009

Seee3 said:
Fully agreed. All those garbage text book theory. If they are true, the stock market cannot have rebounded today. If they are true, US dollar will be "banana money" by now.

Whoever has the Creative, Innovative and technological lead in this world will always be the dominant economic power.

Right now, the USA is the unquestioned leader in this. Plus the USA has a very mature software in terms of political, legal and legislative institutional infrastructure to provide the essential confidence back up to its monetary system and economic base.

Countries China are far far away downstream.
Decades away.

Mere GDP volumes do not substantiate anything at all.

Hope · Oct 7, 2009

I concede that the global inbalance cannot go on forever,but the final soln is hard to predict,one possibility is as China has suggested,a new international momnetary unit,but who knows

hockbeng · Oct 7, 2009

I'd like the US to raise interest rates.

Then their housing bubble will come tumbling down. Their banks will all collapse cos their profits are dependent on low interest rates and cheap money supplied by the fed.

Our SGD interest rates will also rise since it is dependent on USD rates as well.

Then our own housing bubble will also collapse. This will then make homes more affordable for young sporeans. Also, our return on savings will also go up. Same for CPF interest rates.

Yes! I'm hoping for interest rates to rise. But I think all central banks worldwide dont have the BALLS to raise them. Except Australian Central Bank.

hockbeng · Oct 7, 2009

Seee3 said:
Fully agreed. All those garbage text book theory. If they are true, the stock market cannot have rebounded today. If they are true, US dollar will be "banana money" by now.

The stock market has rebounded because of inflation; and pple moving out of cash into other assets. (Due to super low interest rates set by central banks, and printing massive amounts of paper money).

A rising stock market is not equal to a recovery. A rising stock market, and rising gold and commodity prices and rising home prices = Inflation!

hockbeng · Oct 7, 2009

GoFlyKiteNow said:
Whoever has the Creative, Innovative and technological lead in this world will always be the dominant economic power.

Right now, the USA is the unquestioned leader in this. Plus the USA has a very mature software in terms of political, legal and legislative institutional infrastructure to provide the essential confidence back up to its monetary system and economic base.

Countries China are far far away downstream.
Decades away.

Mere GDP volumes do not substantiate anything at all.

USA = worlds largest debtor nation. How can they be economic power?

Creative and innovative yes! But its not enough to support american consumption. Remember, in order to import, we have to export something in return. If we dont, we are running a trade deficit.

All the americans have exported to the rest of the world is massive amounts of USD and hence exported to our shores massive amounts of inflation.

The demise of the US dollar

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