ajzepp Posted March 11, 2012 Share Posted March 11, 2012 (edited) For all you financial gurus out there, I keep hearing really scary projections about the economic future of our government and it's really freaking me out. I've been hearing about our national debt since I was in grade school, but obviously things have changed quite a lot since then. I keep hearing about how the US dollar will lose its status as the world's reserve currency, which would be a huge kick in the balls in terms of our ability to even pay the interest on our debt. The potential ramifications of that are very scary, of course. What concerns do some of you guys have and what steps need to be taken to right this ship? How likely do you think it is that the dollar will no longer be the world's reserve currency? Does anyone know any good ways to begin learning how to speak Chinese? Edited March 11, 2012 by ajzepp Link to comment Share on other sites More sharing options...
3rdnlng Posted March 11, 2012 Share Posted March 11, 2012 For all you financial gurus out there, I keep hearing really scary projections about the economic future of our government and it's really freaking me out. I've been hearing about our national debt since I was in grade school, but obviously things have changed quite a lot since then. I keep hearing about how the US dollar will lose its status as the world's reserve currency, which would be a huge kick in the balls in terms of our ability to even pay the interest on our debt. The potential ramifications of that are very scary, of course. What concerns do some of you guys have and what steps need to be taken to right this ship? How likely do you think it is that the dollar will no longer be the world's reserve currency? Does anyone know any good ways to begin learning how to speak Chinese? Rossetta Stone. Link to comment Share on other sites More sharing options...
LeviF Posted March 11, 2012 Share Posted March 11, 2012 For all you financial gurus out there, I keep hearing really scary projections about the economic future of our government and it's really freaking me out. I've been hearing about our national debt since I was in grade school, but obviously things have changed quite a lot since then. I keep hearing about how the US dollar will lose its status as the world's reserve currency, which would be a huge kick in the balls in terms of our ability to even pay the interest on our debt. The potential ramifications of that are very scary, of course. What concerns do some of you guys have and what steps need to be taken to right this ship? How likely do you think it is that the dollar will no longer be the world's reserve currency? Does anyone know any good ways to begin learning how to speak Chinese? Chinese for Dummies Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted March 11, 2012 Share Posted March 11, 2012 Do like I did. Spent every last dollar. When you got nothing you got nothing Link to comment Share on other sites More sharing options...
3rdnlng Posted March 11, 2012 Share Posted March 11, 2012 (edited) Do like I did. Spent every last dollar. When you got nothing you got nothing That and you can administer your "One Step Program For Mexicans" without fear of being sued. I'm figuring that I only need enough to get me deep into this coming October. Edited March 11, 2012 by 3rdnlng Link to comment Share on other sites More sharing options...
/dev/null Posted March 11, 2012 Share Posted March 11, 2012 Do like I did. Spent every last dollar. When you got nothing you got nothing Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted March 11, 2012 Share Posted March 11, 2012 That and you can administer your "One Step Program For Mexicans" without fear of being sued. I'm figuring that I only need enough to get me deep into this coming October. I have never been sued. I always keep my distance Link to comment Share on other sites More sharing options...
Dave_In_Norfolk Posted March 11, 2012 Share Posted March 11, 2012 Invest in the stock market Link to comment Share on other sites More sharing options...
DC Tom Posted March 11, 2012 Share Posted March 11, 2012 For all you financial gurus out there, I keep hearing really scary projections about the economic future of our government and it's really freaking me out. I've been hearing about our national debt since I was in grade school, but obviously things have changed quite a lot since then. I keep hearing about how the US dollar will lose its status as the world's reserve currency, which would be a huge kick in the balls in terms of our ability to even pay the interest on our debt. The potential ramifications of that are very scary, of course. What concerns do some of you guys have and what steps need to be taken to right this ship? How likely do you think it is that the dollar will no longer be the world's reserve currency? Does anyone know any good ways to begin learning how to speak Chinese? The predictions of the dollar's demise may or may not be premature...but it's got to happen sometime, since nothing lasts forever (100 years ago, the world's reserve currency was the Pound. Things change.) But the biggest thing supporting the dollar's reserve currency status is simply that there's nothing out there to replace it. Of the large, stable economies in the world with a currency that could compete with the US, there's...China. That's about it. And because of Chinese policy (basically: the yuan is fixed and not tradeable against other currencies - others here can explain all this better than I can), it won't be accepted as a reserve security by most economies. The "second-biggest" thing supporting it is that OPEC sets production against pricing targets that are in dollars. In other words: oil supports the dollar, and as long as oil's priced in dollars, economies need a reserve of dollars (or some other reasonable stable currency easily convertable to dollars - pound, Euro, yen). So until another currency steps up, and/or OPEC accepts it (which will happen eventually), the dollar's pretty safe. Link to comment Share on other sites More sharing options...
Cinga Posted March 11, 2012 Share Posted March 11, 2012 For all you financial gurus out there, I keep hearing really scary projections about the economic future of our government and it's really freaking me out. I've been hearing about our national debt since I was in grade school, but obviously things have changed quite a lot since then. I keep hearing about how the US dollar will lose its status as the world's reserve currency, which would be a huge kick in the balls in terms of our ability to even pay the interest on our debt. The potential ramifications of that are very scary, of course. What concerns do some of you guys have and what steps need to be taken to right this ship? How likely do you think it is that the dollar will no longer be the world's reserve currency? Does anyone know any good ways to begin learning how to speak Chinese? I think some of the remarks in your thread, while outa left field, can help you going forward. But.... I'll go further than the snide remarks... Google is your friend, so try, "monetizing debt", and quantitative easing" for starters... Link to comment Share on other sites More sharing options...
TPS Posted March 11, 2012 Share Posted March 11, 2012 The predictions of the dollar's demise may or may not be premature...but it's got to happen sometime, since nothing lasts forever (100 years ago, the world's reserve currency was the Pound. Things change.) But the biggest thing supporting the dollar's reserve currency status is simply that there's nothing out there to replace it. Of the large, stable economies in the world with a currency that could compete with the US, there's...China. That's about it. And because of Chinese policy (basically: the yuan is fixed and not tradeable against other currencies - others here can explain all this better than I can), it won't be accepted as a reserve security by most economies. The "second-biggest" thing supporting it is that OPEC sets production against pricing targets that are in dollars. In other words: oil supports the dollar, and as long as oil's priced in dollars, economies need a reserve of dollars (or some other reasonable stable currency easily convertable to dollars - pound, Euro, yen). So until another currency steps up, and/or OPEC accepts it (which will happen eventually), the dollar's pretty safe. This is about what I said in the paper I wrote 7 years ago. The only possible replacement at this point would be a true international currency which is what the SDR was supposed to be, but the US made sure it would not supplant the $. While an international currency could be used as a unit of account (pricing global commodities for example), you need a highly liquid currency with broad financial markets to meet the store of value function--especially when there is a flight to global safety. As for your second point, while I made that same point in the old paper, here's the argument I made in a presentation Friday: Financialization of commodity markets now makes it possible for anyone to bet on commodity prices. Financial interests have flipped the futures market, and now dominate price determination in the short run (position limits had constrained financial interests to 20% of the market historically, but through innovations and deregulation they now represent 80%). The quantity of money flowing in from non-commercial (financial) interests really took off around 2004 via swaps, ETFs, ETNs, ETPs, etc. This has allowed the recent dollar-oil relation to emerge. If you look prior to 2004, you can't find a trend in the correlation between oil prices and the dollar--there were periods of negative correlation and periods of positive correlation. Since 2004 the correlation has averaged -0.82. The second necessary component is a widespread belief that the FED is debasing the dollar via QE1-?. Combine the two and you get this "financial fad." Traders have it programmed in--when the dollar falls, oil rises, or vice versa. Oil has become an alternative to gold in this way too. The difference and problem is that oil prices are subject to underlying demand and supply at some point, so these guys will get burned once in a while like last May's drop. The $ was steady, but the oil price bubble created a glut which popped fairly dramatically that first week of May 2011. Btw, regarding the price of oil post, the most recent and best study I've seen (published last month by Fed researchers) measured the impact from financial interests at 15% of the price. It's a Wall Street tax. Link to comment Share on other sites More sharing options...
DaveinElma Posted March 11, 2012 Share Posted March 11, 2012 what steps need to be taken to right this ship? Vote out every Democrat at every level of government. Link to comment Share on other sites More sharing options...
Fingon Posted March 12, 2012 Share Posted March 12, 2012 Don't bet on Chinese currency. Their economy is based on cheap manufacturing, but all that disappears as the standard of living rises. The Chinese bubble will burst sooner or later. Link to comment Share on other sites More sharing options...
/dev/null Posted March 12, 2012 Share Posted March 12, 2012 Don't bet on Chinese currency. Their economy is based on cheap manufacturing, but all that disappears as the standard of living rises. The Chinese bubble will burst sooner or later. I agree But when that happens don't expect all those jobs we sent there to come back home. They'll just find another 3rd world country to call home until that country's standard of living rises and then on to the next 3rd world country, etc rinse and repeat Link to comment Share on other sites More sharing options...
B-Large Posted March 12, 2012 Share Posted March 12, 2012 For all you financial gurus out there, I keep hearing really scary projections about the economic future of our government and it's really freaking me out. I've been hearing about our national debt since I was in grade school, but obviously things have changed quite a lot since then. I keep hearing about how the US dollar will lose its status as the world's reserve currency, which would be a huge kick in the balls in terms of our ability to even pay the interest on our debt. The potential ramifications of that are very scary, of course. What concerns do some of you guys have and what steps need to be taken to right this ship? How likely do you think it is that the dollar will no longer be the world's reserve currency? Does anyone know any good ways to begin learning how to speak Chinese? Until big money is outlawed by Consitutional Amendment in our country, nothing will change whatsoever.... the same results have come from both the major political parties in our country.... and they have no real reason to change their behavior. China is going to have their own problems in the near future... people are going to gets wise to better lives and bigger paychecks, they are also going to wants rights and protections that we enjoy in this country.... it will be interesting to see how unrest goes over in China... we have seen the solutions in the past.... Link to comment Share on other sites More sharing options...
ajzepp Posted March 12, 2012 Author Share Posted March 12, 2012 Thanks for all the responses guys...much appreciated. Link to comment Share on other sites More sharing options...
Magox Posted March 13, 2012 Share Posted March 13, 2012 (edited) This is about what I said in the paper I wrote 7 years ago. The only possible replacement at this point would be a true international currency which is what the SDR was supposed to be, but the US made sure it would not supplant the $. While an international currency could be used as a unit of account (pricing global commodities for example), you need a highly liquid currency with broad financial markets to meet the store of value function--especially when there is a flight to global safety. As for your second point, while I made that same point in the old paper, here's the argument I made in a presentation Friday: Financialization of commodity markets now makes it possible for anyone to bet on commodity prices. Financial interests have flipped the futures market, and now dominate price determination in the short run (position limits had constrained financial interests to 20% of the market historically, but through innovations and deregulation they now represent 80%). The quantity of money flowing in from non-commercial (financial) interests really took off around 2004 via swaps, ETFs, ETNs, ETPs, etc. This has allowed the recent dollar-oil relation to emerge. If you look prior to 2004, you can't find a trend in the correlation between oil prices and the dollar--there were periods of negative correlation and periods of positive correlation. Since 2004 the correlation has averaged -0.82. The second necessary component is a widespread belief that the FED is debasing the dollar via QE1-?. Combine the two and you get this "financial fad." Traders have it programmed in--when the dollar falls, oil rises, or vice versa. Oil has become an alternative to gold in this way too. The difference and problem is that oil prices are subject to underlying demand and supply at some point, so these guys will get burned once in a while like last May's drop. The $ was steady, but the oil price bubble created a glut which popped fairly dramatically that first week of May 2011. Btw, regarding the price of oil post, the most recent and best study I've seen (published last month by Fed researchers) measured the impact from financial interests at 15% of the price. It's a Wall Street tax. Edited March 13, 2012 by Magox Link to comment Share on other sites More sharing options...
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