Article from Forbes discussion on USD collapse

[GON]

Article from Forbes implying the massive rise in Bitcoin and gains in gold is in reference to a future USD collapse.

Over the past months, I have tried to understand this, without clear comprehension. One thing I speculate is that all the worlds currencies are being printed, so devaluing all currencies masks the printing of USDs.

What I can't figure out is the Kuwait Dinar. One of the worlds strongest currency, by a nation that's exports more than it imports- yet Kuwait also has inflation, and the buying power of their Dinar is not static.

I can't find an example in history where a nation devalues it currency, imports more than it exports, and spends more than it takes in, that has a happy ending. The Roman empire is a good case study.


https://www.forbes.com/sites/digita...reum-xrp-and-crypto-price-boom-to-rival-gold/

 

[dishdude]

Ridiculous.

 

[dubber09]

US is in shambles, borrowing money to pay interest on borrowed money. USA lost control of its money when US dollar got replaced with Fed reserve dollar, then it was just matter of time. This will affect world economy, mostly Western world thou, BRICS countries saw it coming.

 

[dishdude]

I've been hearing about the USD collapsing my entire life, invest in gold and silver, get back to the gold standard. Usually from someone trying to sell you something and scare tactics seem to really work with some people.

 

[daves87rs]

Well, with the continued rise in prices might be a hint….

 

[dubber09]

Another way to look at it - continued drop in dollar value...

 

[daves87rs]

Yep!

 

[raaizin]

I've been hearing about the USD collapsing my entire life, invest in gold and silver, get back to the gold standard. Usually from someone trying to sell you something and scare tactics seem to really work with some people

100% ,Gold is a terrible investment. Look at a portfolio 100% invested in gold vs one in the S&P 500 and tell me which one you would rather have. It's not even close.

 

[cptbarkey]

This is what I would call a "drive by" article with little substance but plenty of validation for those who were looking for such things.

I do regret not buying bitcoin back in 2011, but the lack of government regulation has more or less turned it into a criminal global money laundering scheme. Good luck if you are a current "investor."

 

[GON]

Does that mean the US taxpayers will not be required to bail out Bitcoin holders during challenging times; the US taxpayers have bailed out many US government regulated financial organizations over the past 50 years.

Disclosure- I own no bitcoin and have no plan to ever consider a bitcoin or any crypto coin purchase.

 

[SC Maintenance]

The international bank of settlements did a paper around the GFC to study the collapse of currencies, all the way back to Roman times. Their conclusion is there is no standard predictor - some fail at 30% debt to GDP and Japan is now at 300% debt to GDP and still going. However what they did find is it has to do with trust in the currency, and once collapse starts, it happens quickly. I read the paper back then but can't find it now. I think one of the authors was Dennis Reinhardt. John Mauldin covers it in one of his books, but I don't recommend his books, long winded - don't say much.

When the federal reserve came to be there was discussion about limiting the increase in money supply by some fixed amount, that way you could minimize run away inflation. Of course they did not.

At the end of the day its about confidence, and simply a countries ability to service the debt. The US can tax and pay the interest on their debt. You must use the USD because its the legal tender to pay your taxes, and if you don't you go to prison. The US has the biggest economy and the biggest military, and are willing to run a forever trade deficit - which is required if the rest of the world is going to have enough dollars to use for trade. So by definition, whomever has the world reserve currency has to run a trade deficit, which is why the BRIC's currency will never work, not enough stable supply of money.

As for Kuwait, the simple answer is the world believes it can continue to service its debt. Hence the currency remains stable.

No modern country will ever actually pay off their debt. Where that ends is anyone's guess.

​

 

[SC Maintenance]

Does that mean the US taxpayers will not be required to bail out Bitcoin holders during challenging times; the US taxpayers have bailed out many US government regulated financial organizations over the past 50 years.

Disclosure- I own no bitcoin and have no plan to ever consider a bitcoin or any crypto coin purchase.

There can be an argument for bailing out Bitcoin if it affects the US banking system - like they used to bail out AIG in 2008. However it would likely be the federal reserve - not the treasury. The Fed is "independent". Were likely not allowed to discuss whether it is or not here.

Of course I would not advocate to do so, but some might.

 

[Dave Hess]

BRICS might control the world in 25 years the way things are going.

 

[fdcg27]

Crypto is not an investment, just as precious metals aren't investments.
These things are stores of value that generate no return unless there is a rise in market price and can just as easily lose market value as has been the case with both cypto and gold over any reasonable timeframe. Part of the massive moves you see in the values of these things is based upon their relative scarcity, so a small change in sentiment can bring a big change in apparent value since it only takes a few transactions to do so. In the case of crypto, blockchain is also a ludicrously wasteful way in which to record transactions.
Too much of the world holds its reserves in USD for there to be any collapse in the value of the currency.
Take a look at current exchange rates and you'll see the strength of the USD.
What does some selectively quoting journalist know that the world's currency traders don't?

 

[SC Maintenance]

What does some selectively quoting journalist know that the world's currency traders don't?

I agree with this statement, however I think there is some validity in the Treasury issuing $2T in debt (the entire GDP of Canada) in under 200 days, and the fed chairman saying the debt growth is unsustainable. All in peacetime under the best economy ever say some. I don't think either of those has ever happened before.

 

[The_Jeff]

Does that mean the US taxpayers will not be required to bail out Bitcoin holders during challenging times;

It depends on if the top 0.1% owns it, same as actual equities (for lack of a better term.)

Warren Buffet hates BTC and doesn't hold any.

The US Dollar is safe as long as we have our stuff together better than the EU and China. And we do-- They've had worse inflation over the last couple years. A fiat currency is still worth the capability of the underlying economy to produce, and a functioning government to tax the producers. We've still got that, in fact there are categories of people and business that somehow elude most taxation. Turn down the doom and gloom.

 

[MasterSolenoid]

100% ,Gold is a terrible investment. Look at a portfolio 100% invested in gold vs one in the S&P 500 and tell me which one you would rather have. It's not even close.

I agree.
But on the TV commercials, Chuck Woolery compares gold to CASH (sitting in a safe).
Just that there shows me the commercial is trying to mislead people.

For the average person, Vanguards Index 500 is the way to go.

 

[bullwinkle]

Issue with gold is-can’t eat it, doesn’t have enough industrial worth, can’t be turned into cash quickly without taking a hit off spot price. And when (if?) the USD collapses either it will get propped back up, or it’ll happen so fast it can’t be reacted to quickly enough.

 

[SC Maintenance]

Issue with gold is-can’t eat it, doesn’t have enough industrial worth, can’t be turned into cash quickly without taking a hit off spot price. And when (if?) the USD collapses either it will get propped back up, or it’ll happen so fast it can’t be reacted to quickly enough.

I agree that gold is not an investment (its an unproductive asset) - but it is a store of value. Your looking at it from a USD perspective, and the USD is very strong. If you owned Argentinian Peso's or Turkish Lira's a year ago I bet you wish you had converted some of it to gold now.

 

[Passport1]

How did you go bankrupt? Two ways, slowly then suddenly. E. Hemingway

If you are interested in what a monetary collapse looks like from ground level get a copy of this book published in around 1975.

good reads