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No Way Out: A Fifty Percent Dollar Devaluation

 
Anonymous Coward
User ID: 65489
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01/13/2007 09:46 PM
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No Way Out: A Fifty Percent Dollar Devaluation
Artificial Economics, the brainchild of the Master Planners, has focused on building an economy where debt -- not income -- pays for goods and services. The emphasis upon debt instead of income via hyper-inflating the money supply in stealth fashion, has destroyed the dreams of millions of Americans. Artificial Economics is a silent economic disease. A coming significant devaluation of the dollar is a likely and necessary consequence.

The use of hyper-inflated money supply to postpone a recession over recent years has served to create an imbalance between income and assets. Debt covered the gap for a while, but now debt is extreme, with a limited useful life. With high paying jobs being exported, and a limit to what is essentially slave labor from illegal immigrants, future productivity gains which translate into income are almost entirely technology dependent. If technology fails us, then the debt-to-income imbalance, then the asset-toincome imbalance must be reckoned with. Undoubtedly, that reckoning will either be a nasty recession/ depression -- where asset values drop below debt levels, leaving us with an imbalance between both assets and debt, and income and debt -- or a significant and sudden devaluation of the dollar.

What is accomplished by a significant and sudden dollar devaluation? It is a way to pay off debt with suddenly-more-available dollars; cheaper dollars. We have been witnessing a slow meticulous devaluation of the dollar over the past two decades, with an acceleration over the past decade. This has come from an increase in the money supply via the credit creation route -- debt. But that has served to replace income, and postpone a recession, at the great cost of hyperinflation of real estate, related taxes, and just about everything you buy. The result is debt. Once the debt creation train stops, then there will be no way to pay for things; no way to pay off that debt. There will soon be a point of no return, with an inevitable sudden and significant dollar devaluation as the only solution. It would require the Treasury printing an amount of money equal to the current entire money supply, more than 11 trillion dollars, and literally handing it out to each household so that the broadest spectrum of people have the ability to payoff their debt. Debt does not rise in value as the dollar devalues. It is a contracted amount in former-dollar-value, notional terms. Thus, if we suddenly hand several hundred thousand dollars to each and every household, a dollar will become worth 50 cents in real terms, but in debt terms, it will still be worth a dollar, and folks will have more of them.

Dollar devaluation would require mandated cost-of-living wage increases, but also would require issuance of a brand new currency. Call it the liberty instead of the dollar. If you tied the liberty to gold, the U.S. currency could keep its world reserve status and survive the dollar devaluation tsunami. It would require a liberty to be worth the equivalent of two dollars, where there was only one dollar in circulation before the fifty percent devaluation event. A gold-backed liberty would stabilize inflation, and bring monetary stabilization back, but in a new economic order where debt is substantially reduced, both private and government. Government debt would be reduced as folks are required to pay taxes on the dollar-devaluing household-handout. Of course, this means Gold would have a bright future. I don't see any other way out. Thank Artificial Economics for this -- the economics practiced for the past decade in this nation that wasn't mentioned in your child's college economics textbook.

more at link
[link to www.safehaven.com]
edited to 50%

Last Edited by SPUD on 09/07/2011 09:26 AM
Mack

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01/13/2007 10:15 PM

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Re: No Way Out: A Fifty Percent Dollar Devaluation
If the dollar reaches down as far as 75 it will begin to recover and return to the neighborhood of the mid 90's in about a year.
Anonymous Coward
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01/13/2007 11:10 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
>>Thus, if we suddenly hand several hundred thousand dollars to each and every household, a dollar will become worth 50 cents in real terms, but in debt terms, it will still be worth a dollar, and folks will have more of them.


Didn't bush already do that?
Anonymous Coward
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01/13/2007 11:43 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
If the dollar were to devalue that much nobody would want it. The Euro would be the reserve currency.
Anonymous Coward
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01/14/2007 12:10 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
If the dollar were to devalue that much nobody would want it. The Euro would be the reserve currency.
 Quoting: Anonymous Coward 181662


Euro banks and Oil countries are moving their reserve to euros.
Dr. Au fait
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01/14/2007 08:57 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
euros are becoming popular. But how is it's long term

stability?
Shadow

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01/14/2007 09:52 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
I don't think the US's creditors would be too happy to have the value of their investments halved. And I seriously doubt there is enough unencumbered gold to back a new currency [link to www.gata.org] . But the banks sure are pushing the debt on people, it's unreal the amount of money available for the asking.
Thanks OP good article.
Over the side and damn the barracuda
F.B. Nyte
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01/14/2007 09:59 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
If the dollar reaches down as far as 75 it will begin to recover and return to the neighborhood of the mid 90's in about a year.
 Quoting: Mack



My best chart ever!!!!

[link to www.freeimagehosting.net]
Anonymous Coward
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01/14/2007 10:00 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
euros are becoming popular. But how is it's long term

stability?
 Quoting: Dr. Au fait 163242


The euro is just another fiat currency, like the dollar. Th
W199i

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01/14/2007 10:12 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
fed reserve notes are something of a magic feather; when we are rid of them people will realize we never needed them in the first place
Anonymous Coward (OP)
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01/14/2007 10:20 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
fed reserve notes are something of a magic feather; when we are rid of them people will realize we never needed them in the first place
 Quoting: W199i

January 05, 2007
The World's Reserve Currency

by Ron Paul

The financial press reported last week that the euro, the new currency created only five years ago and used by most European nations, has supplanted the U.S. dollar as the most widely used form of cash internationally. There are now more Euros in circulation worldwide than dollars.

This alone is not necessarily troubling, as the dollar remains the world’s most important reserve currency. About 65% of foreign central bank exchange reserves are still held in dollars, versus only about 25% in euros. And the European Central Bank faces the same inflationary pressures that our own Federal Reserve Bank Governors face, including a growing entitlement burden that threatens economic ruin as both societies age. European politicians want to spend money just as badly as American politicians, and undoubtedly will clamor to inflate-- and thus devalue-- the euro to fund their creaky social welfare systems.

Still, the rise of the Euro internationally is another sign that the U.S. dollar is not what it used to be. There is increasing pressure on nations to buy and sell oil in euros, and anecdotal evidence suggests that drug dealers and money launderers now prefer euros to dollars. Historically, the underground cash economy has always sought the most stable and valuable paper currency to conduct business.

More importantly, our greatest benefactors for the last twenty years-- Asian central banks-- have lost their appetite for holding U.S. dollars. China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever. Foreign central banks understand that American leaders do not have the discipline to maintain a stable currency. When the rest of the world finally abandons the dollar as the global reserve currency, both Congress and American consumers will find borrowing money a more expensive proposition.

Remember, America can maintain a large trade deficit only if foreign banks continue to hold large numbers of dollars as their reserve currency. Our entire consumption economy is based on the willingness of foreigners to hold U.S. debt. We face a reordering of the entire world economy if the federal government cannot print, borrow, and spend money at a rate that satisfies its endless appetite for deficit spending.

At some point Americans must realize that Congress, and the Federal Reserve system that permits the creation of new money by fiat, are the real culprits in the erosion of your personal savings and buying power. Congress relentlessly spends more than the Treasury collects in taxes each year, which means the U.S. government must either borrow or print money to operate-- both of which cause the value of the dollar to drop. When we borrow a billion dollars every day simply to run the government, and when the Federal Reserve increases the money supply by trillions of dollars in just 15 years, we hardly can expect our dollars to increase in value.

Dr. Ron Paul is a Republican Congressman from Texas.
Anonymous Coward
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01/14/2007 10:21 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
Every moment brings us closer, not farther, from a DOW JONES BLOODBATH.
[link to 64.29.208.119]
me too
User ID: 181865
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01/14/2007 10:27 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
the fiat-dollar magic show will continue until the snake handlers get bit in the ass by their own stupidity...that point is approaching,,,but first we have to see the grand finale of the show....the Weimar-terminal-hyperinflationary blow off ! Since 1913 we are 94 years into this disgusting display of men and their folly,,,but it has been done so many times before, with the exact same end result....so......nothing is new under the sun.....
and what has been, will be again....

me too
Anonymous Coward
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01/14/2007 10:30 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
The Federal Reserve Note (a real "dollar" is 371.25 grains of .999 silver according to the US Coinage Act) has already been devalued 98% since it was introduced in 1913

Your buying power has already been stolen from you

yet you blame Bush
Anonymous Coward (OP)
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01/14/2007 10:38 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
Every moment brings us closer, not farther, from a DOW JONES BLOODBATH.
[link to 64.29.208.119]
 Quoting: Anonymous Coward 169050

upcoming presidential election and the 2008 beijing olympic games will keep the markets alive for the balance of 2007. 2008 is another story entirely.

ps
watch for gold and silver fireworks in 2007 as smart money continues to move out of paper and into tangible assets.
Anonymous Coward
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01/14/2007 10:43 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
>>Thus, if we suddenly hand several hundred thousand dollars to each and every household, a dollar will become worth 50 cents in real terms, but in debt terms, it will still be worth a dollar, and folks will have more of them.


Didn't bush already do that?
 Quoting: Anonymous Coward 173412


"folks will have more of them."?????
Sorry. I didn't see a penny of it on my paycheck, and I'm not holding out much hope for more. Wages are frozen. This is a pay-cut.
Anonymous Coward (OP)
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01/14/2007 11:18 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
Banks buying gold, not dollar based financial instruments.

Banks ordered 162 tonnes of gold from producers in 2006

MOSCOW. Jan 10 (Interfax) - A total of 42 commercial banks signed contracts to buy 161.9 tonnes of gold from producers in 2006, a source at the Gokhran or precious metals and gemstones repository told Interfax.

Not all of the gold will have been delivered by the end of last year, so there could be some discrepancy between the amount of gold ordered and actually received, the source said.

A total of 43 commercial banks signed contracts to buy 176.6 tonnes of gold from producers in 2005. Russia produced 168 tonnes of gold in 2005.

The Russian Gold Producers' Union has said it expected Russia to produce 165 tonnes of gold in 2006.

The Gokhran source said that 18 banks had so far ordered 56.3 tonnes of gold for 2007. "Some banks are already signing contracts for 2011," the source said.

Russia's biggest gold buyers are Vneshtorgbank (RTS: VTBR), Sberbank (RTS: SBER), Rosbank, Zenit, UralSib, Gazprombank, Nomos Bank, Soyuz, Expobank, Lanta Bank and Khanty-Mansiisk Bank. pr

oil and gold will rocket

A senior Iranian officer warned that if the West continues to threaten Iran's economy over its nuclear program, Teheran will discontinue the flow of oil via the Strait of Hormuz, Israel Radio reported Monday.

According to the officer, 40% of the world's oil is transferred through the strait, and the world is dependent on Iran for a source of energy and a stable economy.

Iran's spiritual leader, Ayatollah Ali Khamenei, added that Iran cannot allow itself to give up the right to develop its nuclear technology program.
Anonymous Coward
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01/14/2007 11:38 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
the rich make more money in debt schemes like these by first letting the whole thing collapse, resulting in deflation and a scenario where "cash is king" ... after they use all the money they've accumulated to buy up assets for pennies on the dollar, only then do they hyperinflate to get things going again.

Good luck!
Ripped off American
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01/14/2007 11:48 AM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
For anyone advocating a return to a gold backed currency you may want to consider inventorying the US gold reserve first. Something that has not been done since Eisenhower.
You may want to back your new currency with something you actually possess.
Eagle # 1
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01/14/2007 12:00 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
OP's article SAID you would have to make the new 'libery dollar' worth TWO of the present dollars.

As I said YEARS ago, one Friday evening, you will hear the following announcement on all TVs and radios.....

" As of NEXT Friday, the present dollars in circulation will NO LONGER be acceptable for purchases or debt reduction. You MUST turn in TWO one dollar bills for a SINGLE new Liberty dollar, or they WILL become worthless by next Friday."

Therefore, the banksters WILL win again, as you will have only HALF the NEW dollars to pay on your loans/debts, AFTER you obtain the NEW 'funny' money.
Isn't that the way they ALWAYS planned it ? Total slavery for the masses, as the FED has reduced your wealth by ONE HALF in a single stroke AND DOUBLED your indebetedness !

THINK about it !!!

ANY reason for gold/silver to go UP in price when the NEW currency is backed by same ? DOWN is MORE likely !

Eagle
Anonymous Coward
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01/14/2007 12:00 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
France is talking about getting out of the euro..so I
guess that being currency king is kinda not going to happen. Alot of european countries that use the euro are
starting to shake in its support.
NCCCPC

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01/14/2007 12:00 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
The future = computerized/biometric money. We're not going back to the gold standard - that would be like regression.
Anonymous Coward
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01/14/2007 12:06 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
And that is cheap.

I would go for total default on
all the US foreign undertakings = BANKRUPTCY.

Once foreigners stop using the greenback as means of payment,its done for the US.

There is no other way!
Anonymous Coward
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01/14/2007 12:08 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
Dollar devaluation would require mandated cost-of-living wage increases, but also would require issuance of a brand new currency. Call it the liberty instead of the dollar. If you tied the liberty to gold, the U.S. currency could keep its world reserve status and survive the dollar devaluation tsunami. It would require a liberty to be worth the equivalent of two dollars, where there was only one dollar in circulation before the fifty percent devaluation event. A gold-backed liberty would stabilize inflation, and bring monetary stabilization back, but in a new economic order where debt is substantially reduced, both private and government. Government debt would be reduced as folks are required to pay taxes on the dollar-devaluing household-handout. Of course, this means Gold would have a bright future. I don't see any other way out. Thank Artificial Economics for this -- the economics practiced for the past decade in this nation that wasn't mentioned in your child's college economics textbook.

 Quoting: Anonymous Coward 65489


Maybe instead of the Liberty, they will call it the Amero.
Future Girl
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01/14/2007 12:13 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
In 2017, a new global currency was issued to replace all nations currencies. Paper money died.
Anonymous Coward
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01/14/2007 01:04 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
Your buying power has already been stolen from you

 Quoting: Anonymous Coward 181709

bump
Anonymous Coward
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01/14/2007 01:38 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
In 2017, a new global currency was issued to replace all nations currencies. Paper money died.
 Quoting: Future Girl 176677


So what happened, we run out of trees?
Agent 00

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01/14/2007 02:08 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
In 2017, a new global currency was issued to replace all nations currencies. Paper money died.
 Quoting: Future Girl 176677


I'm curious, what would be the consequences of going to a global currency backed by gold or silver?
F.B. Nyte
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01/14/2007 02:11 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
US$ index
[link to goldseek.com]
Anonymous Coward
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01/14/2007 02:20 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
Why do people think gold is something to invest in if a currency collapses.. If im a farmer, and you came to me offering gold for my food, I would laugh.. Gold is meaning-less and as worthless as paper money.. The real value is in a persons skill and ability to work (labour). Ill feed you as a farmer, but fuck your gold and money... Go build me a barn as payment...
F.B. Nyte
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01/14/2007 02:20 PM
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Re: No Way Out: A Fifty Percent Dollar Devaluation
[link to stockcharts.com]

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