What Are The Drivers For Dollar Strength?

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EconoD
Posts: 59
Joined: Fri Oct 17, 2014 8:37 pm

What Are The Drivers For Dollar Strength?

Post by EconoD » Fri Oct 17, 2014 11:06 pm

The idea that the Dollar will collapse at some point is gaining in popular opinion, but I'm wondering about the economic forces that will prevent that from happening?

A system that is designed to expand the money supply (from nothing by private institutions) and charge interest for it (increasing future demand for money) at some point will exceed the capacity of the economy to take on more debt and servicing the debt becomes unfeasible i.e. the Minsky Moment that Steve Keen has been a proponent of: http://www.debtdeflation.com/blogs/2014 ... pe-minsky/

QE has propped up asset values, but for how long? With wages lagging way behind, the fuel for more debt is lacking, cue governments to step in and fill the gap. But all this has it's limit too and when it turns the deflation will be brutal and the Dollar will rise, perhaps shockingly fast, as the world scrambles to liquidate assets in order to payback on loans, liabilities and interest payments?

Thoughts?

MaxcoinBeliever
Posts: 30
Joined: Mon Oct 13, 2014 12:52 am

Re: What Are The Drivers For Dollar Strength?

Post by MaxcoinBeliever » Mon Oct 20, 2014 12:55 am

I believe it will reach a tipping point soon enough. When the world sees that deflation is ripping them apart they will be forced to seek other assets to preserve wealth. Slowly at first, then exponentially. It could be a flee to precious metals and cryptocurrency that forces the world to realise that the debt based system should be voluntarily abandoned and return to a barter system outside of the paper world that will be collapsing with ever increasing interest rates or money printing.

I have been a proponent of inflation as my justification for investing in crypto and silver, but it doesn't need to be inflation that kills the system and makes crypto and precious metals soar. With deflation, growing wealth inequality and slowing wage growth we could realise quite quickly that we need to seek an alternative form of money. This in itself would have the hallmarks of runaway inflation in the true "value" of alternatives.

It ends with a whimper or a bang. The only questions remaining is how long, and what will the highest powers do if we disobey them? We may never have our money revolution without other revolutions.

EconoD
Posts: 59
Joined: Fri Oct 17, 2014 8:37 pm

Re: What Are The Drivers For Dollar Strength?

Post by EconoD » Mon Oct 20, 2014 11:50 pm

In deflation, "cash is king" as they say, the dollar being the reserve currency and top of the tree, but what people forget is gold and silver are money and now we have crypto: so you may well see the dollar getting stronger but also getting beaten by precious metals and crypto?

EconoD
Posts: 59
Joined: Fri Oct 17, 2014 8:37 pm

Re: What Are The Drivers For Dollar Strength?

Post by EconoD » Wed Oct 22, 2014 1:18 pm

There's an interesting video here by Jim Rickards - "The Death Of Money", he's obviously trying to sell you something at the end (although it's a freebie, maybe MoneyMorning trying to get your subscription?) , but some of the points he makes have been mentioned on this forum. One interesting point he makes is being able to see predictors of international political situations, e.g. the bond sell off by Russia and China and the Crimean situation :


GN912457
Posts: 24
Joined: Mon Oct 20, 2014 5:23 pm

Re: What Are The Drivers For Dollar Strength?

Post by GN912457 » Wed Oct 22, 2014 1:31 pm

Yeah seen it before good interview, Currency wars and Death of money are to great books anyone not seen it watch it and anyone not read them should do so quickly. I cant find the video but it was done by USA watchdog, but they were talking about an upside down pyramid with stocks/derivatives at the top going down into corporate bonds then into government bonds then Cash and correctly stated the Dollar is world reserve so people think dollars are best. However this massive top heavy monster with almost countless money in it all rests on gold. There's not enough gold in the world, no not at this price.

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