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    US economy downfall

    It is accepted that empires rise and then fall. In the past empires at their zenith must have at times looked invincible to their people just as America does to some today.

    We live in interesting times in that clearly the Americans seem to have problems. Even their ardent supporters would accept that. On the other hand we have China who has made breath taking advances over the last few decades. Even China's detractors would accept that.

    When we talk about the longevity of empires we can see that recent empires appear to fall from their peak to a trough quicker than say ancient empires. Just to emphasise this we can take the example of two empires the Roman empire and the British empire. The Roman empire took hundreds of year to fall from its zenith compared to the British empire which fell from its zenith within 50 years. The conclusion that I draw from this trend is that period between peak and trough is getting shorter. It would therefore not be unreasonable to assume that the American empire will fall lets say maybe being generous in 30 years or so from its zenith. Now I think no one would argue that the Zenith of American must have been in the early nineteen nineties with the fall of the Soviets and with China just waking up the decade before no one could challenge America lets say in Bill Clinton's first term. That would suggest that sometime in the next 10 years we will see in our lifetime the American empire fall.

    One of the problems that occurs when one country passes on the baton to the next country of premier power is often conflict. The reader may consider the Brits passing the baton peacefully to the Americans. However my assertion is that had it not been for the second world war their would have been a war between America and the British to establish American supremacy. In fact the Americans were preparing for just such an act in the nineteen thirties.

    http://www.dailymail.co.uk/news/arti...l-weapons.html


    Whether we see the baton passed to China peacefully is dependent upon whether Americans will accept their position in the what is already a multi polar world in 2012. If they wont we may see even more death and destruction from the Americans in a desperate last attempt to hold on to the vestiges of power.

    We are all aware of the systemic failure in the capitalist system in 2007 and 2008. America in my opinion has an unsustainable debt. The key ballast to the American empire is its economy which is being held together by the fact that no one has openly said the emperor has no clothes and that it is not possible just to keep having phases of quantitative easing aka printing paper currency. The irony that every country that has ever tried doing this has fallen to hyperinflation, The example of the Germans is fresh in history.

    My submission is that sometime in the next 9 years. I say nine years because I first proclaimed this last year the US dollar will hit the tipping point and will no longer be accepted as the reserve currency. When this happens a gallon of petrol in America will shoot up to $200 plus and Americans will not be able to afford the fuel to drive to their local MacDonalds never mind the fuel for their F16's and drones.

    I will now put posts up here some articles in the public domain which support my position and I invite those who disagree or support my submissions to comment

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    Last edited by Aryan_B; 12th July 2012 at 19:03.

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    this article is primarily about the the Euro and how it is not possible to have a unified fiscal policy without political union. I have highlighted the bits that I think are relevant to this discussion

    The Euro: That Procrustean Bed...


    Edited: 11 December, 2011, 21:28

    Efforts by European leaders to shoe-horn a range of diverse countries into a rigid financial cage are doomed to fail. But that’s all part of a long-term plan for a global super-currency which can only bring more hardship to ordinary working people.
    A question that more and more people are asking nowadays is, “What on Earth were the Europeans thinking when they agreed to have just one currency for all of Europe?”

    In Greek mythology, Procrustes was the son of Poseidon, God of the deep blue seas. He built an iron bed of a size that suited him, and then forced everybody who passed by his abode to lie on it. If the passerby was shorter than his bed, then Procrustes would stretch him, breaking bones, tendons and sinews until the victim fitted; if he was taller, then Procrustes would chop off feet and limbs until the victim was the “right” size…

    This ancient story of “one size fits all” seems to have made its 21st Century comeback when Europeans were coaxed into imposing upon themselves an oxymoron; a blatant and conceptual contradiction they call “the euro”.

    This common supranational currency invented by the French and Germans, boycotted by the UK, ignored by the Swiss, managed by the Germans and accepted by the rest of Europe in blissful ignorance, has finally dropped its mask to reveal its ugly face: an impossible mechanism that only serves the elite bankers but not the working people.

    It masked gross contradictions as large, far-reaching and varied as the relative sizes, strengths, profiles, styles, histories, econometrics, labor policies, pension plans, industries, and human and natural resources of the 17 eurozone nations, ranging from Germany and France at one end of the scale, to Greece, Portugal and Ireland at the other.

    As we said in a recent article, the euro carries an expiry date; perhaps the eurocrats who were its midwives a decade ago expected that it would live a little longer, maybe even come of age… But they certainly knew that, sooner or later, the euro would die; that it was meant to die.

    Because the euro is not an end in itself, but rather a transition, a bridge, an experiment in supranational currency earmarked for replacement by a far more ambitious and powerful global currency issued by a global central bank, controlled by a cabal of global private bankers, obeying a New World Order blueprint emanating from a private Global Power Elite.
    The problem today is that what impacted Europe as a financial ripple effect in 2008 has now grown into a veritable financial tsunami threatening to swamp the whole euro system… And more big trouble lies ahead!

    In fact, today’s euro-troubles are nothing more than one of many variations of sovereignty-troubles. Because when a country’s leaders irresponsibly cede a part or all of its sovereignty – whether monetary, political, financial, economic, judicial or military – it had better take a really good look at what it is doing and what the implications are for the medium and long term.

    Ceding national sovereignty means that somebody else, somewhere else, will be taking decisions based on other people’s interests. Now, as long as everyone’s interests coincide, then we are OK. But as soon as the different parties’ interests diverge, then you are confronted with a power struggle. And power struggles have one simple thing in common: the more powerful win; the weaker lose.

    Now, we have a huge power struggle inside the eurozone. Who do you think will win? Who will impose new policies – Germany or Greece? France or Portugal? Britain or Spain? Germany or Italy?

    And that is just on the public scene. You also need to look at the more subtle, less media-highlighted private scene, which is where the real global power decisions are made.

    Will the new Italian PM, Mario Monti, cater for the needs of the Italian people or for the mega-bankers’ lodge sitting on the powerful Trilateral Commission of which he himself is European chairman? The same question goes for Greek president Lucas Papademos, also a Trilateral member. The same question goes for all the governments of the EU member states where the real power brokers are the major bankers, industrialists and media moguls sitting on the Trilateral, Bilderberg, World Economic Forum and Chatham House think-tanks and private lobbies.

    Global elites will do everything to keep the euro on its transitional path towards a global currency that will eventually replace both the euro and the US dollar. This entails engineering the controlled collapse of both currencies, whilst preparing the yellow brick road for a “Global Dollar” or some such new oxymoron.

    The US dollar will be easy to collapse: all that is needed is for the mainstream media to yell, “The dollar is hyper-inflated!!” and the Naked Emperor Dollar will fall swiftly. The euro, in turn, will simply break up as its member nations revert to the old days of pesetas, lire, francs, escudos and drachmas…

    Is the time ripe for that? Maybe not… yet. So, no doubt we will still see more “emergency treatment,” more “financial chemotherapy” to “bail out the euro” just as we’ve seen them “bail out the banks,” even though most banks and the Oxymoron Euro cannot be salvaged but just kept artificially alive, like the “Living Dead…”

    So, here’s a question for Greeks, Italians, Spaniards, Portuguese, Irish, even the French and Germans: will you accept the invitation by your Procrustean Leaders in Brussels to lie down on their bed?

    Adrian Salbuchi for RT

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    Synopsis:
    It is not yet clear if a U.S. military expedition will occur in a desperate attempt to maintain petrodollar supremacy. Regardless of the recent National Intelligence Estimate that down-graded Iran’s potential nuclear weapons program, it appears increasingly likely the Bush administration may use the specter of nuclear weapon proliferation as a pretext for an intervention, similar to the fears invoked in the previous WMD campaign regarding Iraq.

    http://www.energybulletin.net/node/7707

    If recent stories are correct regarding Cheney’s plan to possibly use another 9/11 terrorist attack as the pretext or casus belli for a U.S. aerial attack against Iran, this would confirm the Bush administration is prepared to undertake a desperate military strategy to thwart Iran’s nuclear ambitions, while simultaneously attempting to prevent the Iranian oil Bourse from initiating a euro-based system for oil trades.

    However, as members of the U.N. Security Council; China, Russia and E.U. nations such as France and Germany would likely veto any U.S.-sponsored U.N. Security Resolution calling the use of force without solid proof of Iranian culpability regarding a terrorist attack in the U.S. A unilateral military strike on Iran would isolate the U.S. government in the eyes of the world community, and it is conceivable that such an overt action could provoke other industrialized nations to strategically abandon the dollar en masse.

    Indeed, such an event would create pressure for OPEC and Russia to move towards a monopoly petroeuro system in an effort to cripple the U.S. dollar and thwart the U.S. global military presence. I refer to this in my book as the “rogue nation hypothesis.” (A similar tactic was used by the U.S. to end the 1956 Suez crisis.)

    While central bankers throughout the world community would be extremely reluctant to ‘dump the dollar,’ the reasons for any such drastic reaction are likely straightforward from their government’s perspective – the global community is dependent on the oil and gas energy supplies found in the Persian Gulf.

    Hence, industrialized nations would likely move in tandem on the currency exchange markets in an effort to thwart the neoconservatives from pursuing their desperate strategy of dominating the world’s largest hydrocarbon energy supply. Any such efforts that resulted in a dollar currency crisis would be undertaken – not to cripple the U.S. dollar and economy as punishment towards the American people per se – but rather to thwart further unilateral warfare and its potentially destructive effects on the critical oil production and shipping infrastructure in the Persian Gulf.

    Barring a U.S. attack, it appears imminent that Iran’s euro-denominated oil bourse will open in March 2006. Logically, the most appropriate U.S. strategy is compromise with the E.U. and OPEC towards a dual-currency system for international oil trades.


    Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes...known instruments for bringing the many under the domination of the few…No nation could preserve its freedom in the midst of continual warfare.
    – James Madison, Political Observations, 1795

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    Report by the UNCTAD Secretariat Task Force on Systemic Issues and
    Economic Cooperation: Executive summary

    http://unctad.org/en/docs/gds20091overview_en.pdf

    My simple summery this downturn is a systemic failure. The failure is due mainly down to de-regulation and failure to enforce rules. Capitalism is based on supply and demand, as well as risk and reward. If one takes the risk of cheating and gets away with it, he gets a reward, this leads to more cheating (heard about Mr Ponzi). By not properly regulating the system, cheaters got rewards. Multiply this by several million, and you get our current issues. If regulations had been implemented, this would never have happened. Instead, we might have had another mild recession.
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    1) According to the US Census Bureau ,today , 1 in 2 persons in America is already living at Poverty or Near Poverty levels .

    That is a whopping 50% of the American population living a life of shambles , starvation , and utter desperation .

    http://newssun.suntimes.com/business...ow-income.html


    http://www.cbsnews.com/8301-201_162-...or-low-income/


    It is so bad in the States that , even the illegal migrants are leaving the USA en masse !

    http://caffertyfile.blogs.cnn.com/20...r-better-life/

    Yes, The Illegal aliens find that Mexico has a better quality of life !!! ( CNN's Jack Cafferty )

    Illegal aliens leaving U.S., returning to Mexico for better life? – Cafferty File - CNN.com Blogs

    http://www.msnbc.msn.com/id/38961638...-us-declining/

    Number of illegal immigrants in U.S. declining - US news - Immigration: A Nation Divided - msnbc.com



    2) Europeans emigrating en masse


    Many are even venturing to Mozambique, Angola and Brazil .
    (Huh ? Did you say they are migrating to Africa ? Africa ?? Yes, according to the European Foreign Ministry ...it seems that Africa has a better quality of life....at least 100,000 Portuguese citizens seem to think that Angola has a far better quality of life than Europe )

    http://www.guardian.co.uk/world/2011...ish-portuguese


    3) Many Europeans trying desperately to get into Brazil, Argentina , some even working ILLEGALLY there .


    Argentina opens doors to migrants, but settling elsewhere is harder | World news | guardian.co.uk





    There seems to be a massive disconnect - Why are these people leaving ? Did someone forget to remind these people ....
    Don't they know that "Western Economies have massive energy resources, R&D, cutting edge technologies, universities, infrastructure, stable political systems ?"
    Then why are they leaving ???

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    http://www.bbc.co.uk/news/business-16330574

    http://www.bbc.co.uk/news/business-16239232

    Whats china doing with her currency?
    I have noticed that china is doing currency swaps left right and centre.

    I wander if any of this will effect US dollar in the future lol



    http://tribune.com.pk/story/311206/p...wap-agreement/

    icle543048.ece

    http://www.channelnewsasia.com/stori...173068/1/.html

    icle543048.ece


    http://arabnews.com/economy/islamicf...icle543048.ece

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    The U.S. will be on the brink of losing its status as the world’s reserve currency. Printing more money has been the preferred tactic of the Feds during our meltdown. We can do that because there’s a demand for the dollar by investors who believe in the stability of us paying our debts and because most international trading is done by converting the currencies of the two foreign countries into the dollar as a standard acceptable unit. As our debt spirals out of control, so does our ability to repay; once we’re not able to repay, investors will no longer buy the dollar and our country’s credit line will be cut. Once that happens, the dollar will no longer be an acceptable safe haven.


    http://www.ocregister.com/articles/y...ncial-top.html

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    Re: The US dollar will be easy to collapse
    Wall Street Warns Tim Geithner That The Dollar Is Starting To Lose Its Reserve Status
    Submitted by Tyler Durden on 08/03/2011 13:50 -0500

    Ben Bernanke Ben Bernanke China Fitch Goldman Sachs goldman sachs None Reserve Currency Tim Geithner Treasury Borrowing Advisory Committee Volatility


    The Treasury's Borrowing Advisory Committee, chaired by such luminaries as JPMorgan and Goldman Sachs, which according to some (and by some we mean anyone who cares about such things) is the brains behind the decision-making process of US debt issuance has released its quarterly minutes, in which it has issued one of the most stark warnings about the fate of the US Dollar to date. While it is now a daily occurrence for China and Russia to bash the dollar, for the most part still powerless to provide an alternative (but rapidly gaining), the same warning coming from Jamie and Lloyd has to be taken far, far more seriously. Which is precisely what happened today. As Bloomberg reports, "The Treasury Borrowing Advisory Committee... said the outperformance of haven currencies and those from emerging nations has aided in the debasement of the dollar’s reserve status, according to comments included in discussion charts presented ahead of the quarterly refunding. The Treasury published the documents today.



    http://www.zerohedge.com/news/wall-s...reserve-status

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    Contrary to the way the financial world may be presented in the mainstream media, the Fed is at the head of the global central banking syndicate that runs the show Don Vito Corleone style, where should any foreign central banks get out of line, will soon be in for a currency markets massacre as they see their currencies soar against the dollar and thus destroying their ability to export, which their economies are addicted to drug addicts style, as the official policy of the U.S. since the midst of the cold war has been to control the worlds financial system by means of operating a continuous large trade deficit, as covered at length in the October 2010 article (12 Oct 2010 - USD Index Trend Forecast Into Mid 2011, U.S. Dollar Collapse (Again)?).

    Whilst many in the mainstream press have finally clocked onto the fact that the Fed intends to inflate (about a 18 months behind the curve), what no one appears to have clocked onto so far is that the BIG SECRET is that the Fed intends on INFLATING THE WHOLE WORLD ! It is pushing the worlds governments reliant on exporting to the U.S. into devaluing their currencies by means of printing money (See Ebook QE section).

    Thus against the Fed INFLATE or DIE policy, all foreign central banks are fighting hard to maintain their pegs to the downwards spiraling U.S. Dollar, which effectively means that all currencies are spiraling lower hence the whole world is inflating at the Feds whim. For instance emerging markets such as Brazil repeatedly cry out that they are being flooded with too much foreign capital that is driving up their currencies, therefore they are forced to print and debase their own currencies i.e. INFLATE! (are you listening delusional deflationists ?) THE FED IS INFLATING THE WHOLE WORLD!

    How can the US Fed get away with printing money and inflating the whole world ?

    You may wonder that the dollar's strength (lack of collapse) in the face of money printing and ever expanding debt accumulation is as a consequence of underlying US economic strength or huge amounts of (Invisible) gold reserves at Fort Knox. The real reason why the US is able to get sway with printing unlimited amounts of money is the US Military, as the US remains the worlds sole hyper military power following the collapse of the soviet union and increasingly relies on global military power to back up the dollar as the worlds primary means of exchange, as any country that chooses not to comply will likely be on the receiving end of a 1000 tomahawk cruise missiles as Libya is experiencing today or even worse as Iraq has experienced during the past 8 years.

    The U.S. Military Empire targets all those bastions of mediums of exchange that compete against the dollar, which is why the literally super sweet oil rich state of Libya presents such an ideal target for not just the U.S. but also the competing imperialists of Britain and France, regardless of the fact that they are choosing to back and about to arm rebels of North East Libya, an area that ranks as the Al-Qeeda recruitment capital of the world (as a proportion of population) as per the 31 page West Point Study that analysed the backgrounds of captured foreign guerrilla fighters in Iraq during 2006-2007.

    Unfortunately, the death of all empires comes in the form of a short-lived super nova explosions of military expenditures, which is the path that the US appears to have chosen and hence the tendency to increasingly use shock and awe military force around the globe as the military industrial complex remains the only significant growth industry to restock the missiles and bombs and equipment expended



    http://www.walayatstreet.com/

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    Death of the dollar

    Death of the dollar

    By Chan Akya

    There is an old joke from Israel at the time of the first Gulf War, after national radio announced that the chances of any Israeli being hit by a Scud missile launched by Saddam Hussein was about the same as the probability of winning the national lottery. "Oh yeah," deadpanned a comic, "but they didn't tell us there would be three draws daily".

    Amidst all the hoopla of the Olympic games, bankers in London will probably be thinking something similar after the scandals around Barclays and HSBC (see my previous articles "Who put the lie in Libor", Asia Times Online, July 7, 2012, and "Laundry of your choice", Asia Times Online, July 21, 2012) have now led to a scathing report about London-based bank Standard Chartered involving alleged violations of United States sanctions on Iran. The Department of Financial Services (DFS) in New York, one of the alphabet soup of banking regulators in the US, went so far to declare the bank a "rogue institution".

    This is sensational stuff, but unfortunately also sensationalist in my opinion. Firstly, Standard Chartered is a well-run bank with an excellent top cadre of managers most of whom have been promoted from within the ranks of what is essentially an emerging markets bank with a strong focus on Asia and Africa. In that respect the bank is very similar (but arguably not as solid) to the core management principles of HSBC, another London-based giant.

    Secondly, the amounts involved in these alleged breaches are miniscule: some US$14 million in remittances that were not fully compliant with the US rules and "may" have violated sanctions, according to the bank. The DFS statement of course claims much larger sums - up to $250 billion (casting aspersions on the entire gamut of a type of remittance from the Middle East) - and alleges other irregularities such as in "know your customer" policies and (perhaps most damaging) that the bank wailfully attempted to circumvent US sanctions.

    Thirdly, I personally find it distasteful that US regulators are able to make allegations public without having to subject their suspicions to rigorous court processes. While a number of such allegations do end up with convictions, there is also growing evidence that banks in particular simply choose to settle the issues with the regulators albeit without admitting guilt while paying financial penalties (Goldman Sachs and Citibank are two US-based banks that certainly appear to have a history of such settlements).

    The problem with such settlements of course is that we as members of the public never really know if the settlement was intended by the banks to repair potential reputational damage from a long-drawn out court trial, or was guilt actually involved. More troubling, once you have one bank or company agreeing to such a settlement, regulators are usually incentivized to pursue the same strategy with other targets even when the body of actual evidence is quite small and inconclusive.

    As an example, the DFS has cited the outburst of a particular employee of Standard Chartered from their London office who abused Americans, and questioned the need for the rest of the world following US sanctions. This is an entirely logical point of view for non-Americans to have and by itself doesn't mean that a "crime" is being committed against the US. More importantly, the fact that the DFS played up this particular juicy titbit appears (to me) to suggest a strategy to sensationalize a case where actual evidence on the ground may be sparse.

    I don't know much more about the details of the case, nor do I wish to speculate on how it may all turn out for a pretty good bank that seems to find itself in the cross-hairs of the US regulators.

    Doubts about London
    There are a number of questions now confronting London's status as a financial center: firstly, it is clear that politicians in continental Europe would like nothing better than destroying the city's pre-eminent position in financial services. Partly this effort is so that European politicians could push through certain anti-market principles such as the financial transactions tax (the so-called Tobin tax being promulgated by the French) and a ban on certain types of financial transactions such as sovereign credit default swaps that they believe are centered in London.

    There is of course the deep envy that German regulators feel about the sheer irrelevance of Frankfurt as a global financial center, not to mention the deep resentment felt in France that even banks that survive due to government bailouts end up having significant operations, particularly those involving higher-paying jobs out of London.

    Then there is the whole question of how financial regulators have operated in the UK, essentially being accused by their colleagues elsewhere in the world (Switzerland, the US, Germany, Italy to mention a few) of allowing roguish behavior from bankers peddling fairly dangerous financial instruments (collateralized debt obligations, or CDOs, structured investment vehicles - SIVs - and whatever else have you) to unsuspecting investors elsewhere in the world. I have personally heard a couple of central bankers echoing those very thoughts about the UK's Financial Supervisory Authority.

    More recently, US regulators have taken to blaming lax supervision in London for the travails of JP Morgan and its multi-billion losses on bets taken by the chief investment officer.

    So, on paper at least, a number of points can be made that appear to highlight a systemic collapse of regulatory oversight in London - at least that's where the non-UK financial media appear to be pointing in their summary of the Standard Chartered case.

    This is a tempting conclusion but also an intellectually lazy one.

    Let us take the issue of the CDOs and SIVs that proliferated out of London but ended up damaging investors in the US, Germany, Switzerland and elsewhere. The suggestion behind the train of thought of course is that the British exported a financial opium that the rest of the world got pulled into without realizing the full costs. This is nonsensical, firstly because UK banks also suffered from the fallout - Northern Rock, RBS, Halifax - to name but a few. Even the ones that survived - Barclays, HSBC - did so mainly because of their global strength, even as their specific operations out of London were damaged massively.

    More importantly, the investors in SIVs and CDOs were themselves lazy - by depending purely on a rating agency assessment of quality rather than doing their own homework, these investors simply failed to observe and follow the core principles of investing. If it hadn't been CDOs that blew them up, it could well have been something else.

    The discussion around the role of London in promoting such exotic financial products also masks the regulatory and supervisory failures in the US, Germany and Switzerland to name but a few countries that were damaged. The central banks of these countries simply failed to monitor their "wards" and allowed reckless gambling on financial instruments that was eventually to fell many hundreds of thousand jobs.

    Similarly, on the JP Morgan case it is clear that US regulators had nothing but praise for the London-based chief investment officer when they were making outsize profits (over 15% of the bank's total profits in some quarters) - indeed the sheer size of such profits should have invited intense scrutiny but did not because US regulators were and still are in awe of the bank and its senior management.

    The case against London is weak. That doesn't of course mean that it won't succeed - if anything, I would say that chances of a knee jerk reaction from UK regulators to protect their global reputation may be quite high, with the resulting regulatory over-reach helping to destroy the city's financial services business rather effectively.

    Status of the US dollar
    The decline of London though may actually end up hurting the US and particularly the position of the US dollar as the global currency of choice.

    There are a number of structural and geopolitical reasons for the dollar to lose its position, not the least of which is the country's yawning budget deficit and its lost wars in Iraq and Afghanistan. The effect of the George W Bush / **** Cheney "War on Terror" is such that Muslims around the world feel rather inclined to avoid the US currency entirely. Poor Muslims may prefer the US dollar to their own currencies controlled by tottering dotards; however, there is enough evidence that rich Muslims have simply diversified from US dollar bank accounts into British pound and euro accounts not to mention physical gold.

    Among exporters of oil, the dichotomy is increasing: Russia, Iran and Venezuela all prefer to avoid oil payments in US dollars entirely; getting paid in Chinese yuan through bilateral currency swaps for example. As other countries such as Libya and Iraq re-emerge as oil exporters, it is quite possible that the influence of Islamists would help to initiate similar anti-US dollar policies.

    A second set of reasons for the decline of the US dollar is the diminishing influence, globally, of US financial institutions. A number of household institutions - Lehman Brothers, Bear Stearns, Citibank, Wachovia, Merrill Lynch - all have fallen by the wayside while amongst the survivors such as Bank of America and Wells Fargo there is a clear tendency to go "back to basics", ie the core US business, while eschewing their non-US presence. A number of financially strong institutions such as Morgan Stanley and Goldman Sachs no longer have the same access to global deals (and dealmakers) as in the days before the crisis.

    As a financial center, London actually has been a gateway for a huge number of transactions that pump capital into the US economy. Bond, currency and rate markets essentially operate out of London - hence the recent fracas about the London Interbank Offered Rate, or Libor - while key segments of global financial services including insurance and hedge funds are based in the city. Reduce the role of London and it is very likely that the worst affected will be US financial markets as a number of market participants who are shut out of the market end up trading in other currencies such as the pound or euro, far from the prying eyes of US regulators.

    A large number of Chinese, Russian and Middle Eastern banks operate out of London and evidence suggests that a large portion of this business ends up touching the US markets either through trade finance or capital transfers to US companies. Shut down their London operations and those banks will simply start using currencies other than the US dollar; they will simply not risk moving those businesses directly under the nose of US regulators.

    Meanwhile the US stock market is itself in bubble territory, with underlying economic weakness being masked by one-off gains in profits and remittances that have helped to flatter results. Weakness in Asia and Europe has not been fully factored into US earnings; I therefore expect a significant downturn in equity valuations over the next six months or so.

    Political rhetoric in the US isn't helping matters either, as the upcoming presidential election appears to cast further aspersions on US attitudes towards China. Already, there is clear evidence that China has been selling its US dollar furiously; any move towards trade wars (candidate Mitt Romney promises to label China a "currency manipulator" on the first day of his Presidency) only makes matters worse for the US dollar.

    I wrote on the subject a long time ago (see "Dead Dollar Sketch", Asia Times Online, March 4, 2008). In the intervening years, the decline of the euro has helped to increase global acceptance of the US dollar as the next easy choice. History reminds us though that, time and again, the lack of alternatives is never a sufficient reason for the status quo to remain intact.

    Asia Times Online :: Asian news and current affairs

    Its good to see more and more people come over to my way of thinking about the US dollar
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    Aryan, I heard that people should exchange their paper money for Gold and Silver in order to keep them safe should the dollar go into freefall. Have you heard about that?

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    Administrator Aryan_B's Avatar
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    Quote Originally Posted by Zarvin View Post
    Aryan, I heard that people should exchange their paper money for Gold and Silver in order to keep them safe should the dollar go into freefall. Have you heard about that?
    I have clearly commodities should be part of any well balanced portfolio. when the US dollar hits the rails the places to suffer the most will be Israel UK and US.

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    Quote Originally Posted by Zarvin View Post
    Aryan, I heard that people should exchange their paper money for Gold and Silver in order to keep them safe should the dollar go into freefall. Have you heard about that?
    US dollar is to stay here as long as it is backed up by US mighty military power and economic power house .

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    Quote Originally Posted by Batman View Post
    US dollar is to stay here as long as it is backed up by US mighty military power and economic power house .
    That maybe true, but that price of Gold and Silver has multiplied several times since 2001, if I bought some then I would've been many times wealthier now, so it seems like a good investment if we are to assume that the dollor will devalue in the near future too with the plans of going to War in Iran and Pakistan.
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    The dollar is devaluing all the time. What do you think they do when they are implementing for quantitative easing aka printing money
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    Quote Originally Posted by Aryan_B View Post
    The dollar is devaluing all the time. What do you think they do when they are implementing for quantitative easing aka printing money
    Gold and Silver is real money. When you have paper money, it has a expiration date of about 80 years and then you have to change currency, it will continue devaluing itself not matter what as we'll always print more money.

    I'm not an expert but that is what I understood from my research.

    We should all go back to real wealth.
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    I would say that Indians having become a proxy for America find it difficult to accept that they were wrong to accept the world as unipolar with the demise of the soviets and they are still stuck in a rut. This thread I started sometime ago shows with evidence that American dollar is clearly on its way out:


    http://www.pakistanaffairs.pk/u-s-af...n-9-years.html
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