# the Dollar era is over ( acording to Merrill Lynch )



## Hip_Shot_Hanna (Apr 2, 2005)

According to a Merrill Lynch note to clients, weâre in the begginings of a global readjustment that will end the dollarâs dominance as the âgold standardâ currency for the worldâs economies. The dollar is likely entering a long, slow decline - followed by a crash.
http://ftalphaville.ft.com/blog/200...ng-slow-collapse-and-a-central-bank-firesale/

From the horses mouth !
Methinks the smart money like Elvis has left the building , leaving the rest of us with piles of worthless paper .


----------



## Ernie (Jul 22, 2007)

I dunno ... I can't think that the falling dollar means anything but good for Americans. 

Just imagine ... manufacturers suddenly find that Americans are cheaper labor than can be found in India and Mexico. Which will be useful when they're selling cheap goods to the rich suburbs in Bejing and Hong Kong. 

All we need is raw materials and food and we'll survive as a country. It worked the first time around, it can work the second time around as well.


----------



## elkhound (May 30, 2006)

you mean i have worked my tail off to save a million of these things and now they are worthless?? does anyone want this useless paper?? oh well..guess not...i think i will hang on to mine for awhile longer.


----------



## uyk7 (Dec 1, 2002)

"I dunno ... I can't think that the falling dollar means anything but good for Americans."

Seems to me that with a weaker dollar, oil prices will skyrocket, fuel prices will go up, and the price of everything we buy will go up. Doesn't seem too good to me.


----------



## TexasArtist (May 4, 2003)

uyk7 said:


> Seems to me that with a weaker dollar, oil prices will skyrocket, fuel prices will go up, and the price of everything we buy will go up. Doesn't seem too good to me.



hmmm sounds like a perfect time to learn bicycle repair and open a bicycle shop


----------



## Aintlifegrand (Jun 3, 2005)

uyk7 said:


> "I dunno ... I can't think that the falling dollar means anything but good for Americans."
> 
> Seems to me that with a weaker dollar, oil prices will skyrocket, fuel prices will go up, and the price of everything we buy will go up. Doesn't seem too good to me.



It works both ways and must be carefully balanced...the fall in the dollar might spur the renewed purchasing of US goods overseas thus creating jobs :shrug: ( My concern is the downsizing of manufacturing that occured before this might hinder any real growth in maufacturing) as well as it might balance the current astronomical trade inbalance...( but then there are those who are holding many US dollars who won't be too happy with us..not to mention the competition on the world market for cheap goods..namely China) The weakening dollar will raise the cost of oil for the US and if OPEC begins trading oil in Euros because of the weak dollar...we could have a free fall of the dollar that can't be controlled as others no longer need to hold onto the dollars to purchase oil...the balance is so delicate that it wouldn't take much to send it all crashing IMO.


----------



## strider3700 (Feb 2, 2007)

The weak dollar also may scare away some of the foreign governments that currently purchase US debt in the form of treasurys. Worse then them not buying more would be if they start selling them effectively calling in the loans.


----------



## Aintlifegrand (Jun 3, 2005)

strider3700 said:


> The weak dollar also may scare away some of the foreign governments that currently purchase US debt in the form of treasurys. Worse then them not buying more would be if they start selling them effectively calling in the loans.



Isn't that what's happening now?


----------



## strider3700 (Feb 2, 2007)

Aintlifegrand said:


> Isn't that what's happening now?



They haven't started dumping treasuries on the market yet. They have slowed their purchasing however. 

The dollar has declined lately but nothing serious. If china decides to dump it's trillion or so dollars on the market the US dollar will be worthless paper overnight. It's nowhere near that point yet.


----------



## Aintlifegrand (Jun 3, 2005)

strider3700 said:


> They haven't started dumping treasuries on the market yet. They have slowed their purchasing however.
> 
> The dollar has declined lately but nothing serious. If china decides to dump it's trillion or so dollars on the market the US dollar will be worthless paper overnight. It's nowhere near that point yet.



No not yet...but the rise in oil to nearly 89.00 and predicted to go to 100.00 by year end though is a pretty good indicator as to where the $ is headed...I mean if the dollar continues to weaken and the price of oil doesn't rise to compensate OPEC won't they back away from requiring oil in dollars only...which might begin the dumping of dollars?


----------



## Aintlifegrand (Jun 3, 2005)

strider3700 said:


> They haven't started dumping treasuries on the market yet. They have slowed their purchasing however.
> 
> The dollar has declined lately but nothing serious. If china decides to dump it's trillion or so dollars on the market the US dollar will be worthless paper overnight. It's nowhere near that point yet.



Do we really know that immediately? Isn't that figure to be released in November as to how much selling China has been doing?


----------



## Ernie (Jul 22, 2007)

uyk7 said:


> "I dunno ... I can't think that the falling dollar means anything but good for Americans."
> 
> Seems to me that with a weaker dollar, oil prices will skyrocket, fuel prices will go up, and the price of everything we buy will go up. Doesn't seem too good to me.


There's the rub, isn't it? Seems like a lot of what you're buying is made overseas and you're paying the transport costs. If you buy local you don't have that buried expense.

Plus I don't buy much in the grand scheme of things, so it hardly hurts me much.


----------



## strider3700 (Feb 2, 2007)

Aintlifegrand said:


> Do we really know that immediately? Isn't that figure to be released in November as to how much selling China has been doing?


technically I don't know if we could know that immediately or if we have to wait until November. What I do know is the currency markets are the most powerful markets on the planet. They can wipe out countries if they decide to swing that way. Look what happened to britain in the early 90's. Those players haven't seen any reason to run from the dollar at a stampede pace yet and if anyone in the world knows when that should happen it's them.


----------



## uyk7 (Dec 1, 2002)

"They haven't started dumping treasuries on the market yet."

I read last week that China has reduced their holding of US treasury bonds by 15% in August.


----------



## Hip_Shot_Hanna (Apr 2, 2005)

Here is a good site showing the slow but steady fall of the US dollar weighted against 10 other currencies . 
the fall of the dollar will only allow better exports IF the pay of US workers falls to parity with the Chinese workers ., the US imports most of the raw materials needed , so as the dollar falls comodity prices rise , AND as the world prices materials in dollars , as the dollar falls, America pays more for them while the other major currencies / countries they get their comodities CHEAPER because their currencies buy more dollars / comodities priced in dollars .

http://quotes.ino.com/chart/?s=NYBOT_DX&t=f


----------



## strider3700 (Feb 2, 2007)

hmm it seems we where 1 day ahead of the media
 Japan and China lead flight from the dollar 
Thats a scary amount of selling

Oh and today the US dollar Index touched a new all time low. This will take awhile to show up in the average persons day to day life but when it does it's going to hurt.


----------



## pmondo (Oct 6, 2007)

we are in deep trouble just a matter of time crops failing world wide dollar going down the tube in 2-4 years TSHTF


----------



## AngieM2 (May 10, 2002)

Welcome pmondo - 
Good to see more people jumping in.

Angie


----------



## naturewoman (Nov 12, 2002)

It sure isn't helping that we just PO'd China over the issue with the Dalai Lama. They are not happy with us right now and are more than happy to show it. The first thing they did was pull out of the Iran talks...but they also know they hold our financial security in their hands.


----------



## KindredSpirit (Feb 16, 2006)

So I wonder if now we are going to enter into a war with Iran to distract John Q. Public from our currency collapse and inflation.


----------



## MELOC (Sep 26, 2005)

it's not working in iraq, so why try again?


----------



## Pack Rat (Nov 9, 2006)

MELOC said:


> it's not working in iraq, so why try again?


The public attention span has been exceeded with Iraq, and something "new and exciting" needs to be proffered.

Watch for it.


----------



## highplains (Oct 5, 2006)

I think that we are in for some turbulent times ahead, I don't know if it is PHTF but it's bad enough that my grandmother who survived WWII and escaped from the Iron Curtain is getting very nervous, she has been for the last couple years now.
I tend to think that anyone with a good number of years of history behind them, survived being in just a civilian in WWII is getting nervous about things, I am getting debt paid off as fast as I can, and making sure that we are ready for assorted PHTF scenarios.
I think that if any of you out there have grandparents or great grand parents to check with, it would be interesting to see what they have to say as well.

On a side note for interesting things as well, I am hearing to be prepared for 3-6 months rather than the 3 days, then a week, then 2 weeks stuff that has been broadcast. Bird flu, dirty bombs whatever, better to be prepared. They have done another drill similar to the Jericho drill... interesting times we live in.


----------



## strider3700 (Feb 2, 2007)

That chart is net foreign treasury purchases. That plumet at the end is the rest of the world deciding the US isn't worth investing in. It's not the same as a mass sell off but that may well be happening as well


----------



## Ernie (Jul 22, 2007)

Pack Rat said:


> The public attention span has been exceeded with Iraq, and something "new and exciting" needs to be proffered.
> 
> Watch for it.


Agreed, but it took the destruction of two massive buildings and a lot of deaths to get us into Iraq. That leads me to two questions:

1. What will it take to get us into Iran?
2. Do you think the current administration is above manufacturing that reason if it doesn't present itself?


----------



## Hip_Shot_Hanna (Apr 2, 2005)

Pack Rat said:


> The public attention span has been exceeded with Iraq, and something "new and exciting" needs to be proffered.
> 
> Watch for it.



New and Exciting , IMHO soon that wil be paying $5 pluss for gas , standing in line trying to buy something to eat , trying to find a job , and for most Americans trying to find the money to eat , pay the credit cards, mortguage and car payment ( IF you can afford to put anything in the tank .

there can be little more exciting than wondering where the next meal is coming from .


----------



## joe1968m (Mar 14, 2005)

without a doubt i think, on average, americans will coalesce just like we did in ww2 and right after 9/11 and do what is needed to overcome any hardship...

it's in our history and our genes

of course there will be exceptions but on the whole we will weather any storm...like we always had


----------



## Chuck-prime (Jul 24, 2007)

Hip_Shot_Hanna said:


> New and Exciting , IMHO soon that wil be paying $5 pluss for gas , standing in line trying to buy something to eat , trying to find a job , and for most Americans trying to find the money to eat , pay the credit cards, mortguage and car payment ( IF you can afford to put anything in the tank .
> 
> there can be little more exciting than wondering where the next meal is coming from .



Eventually, a day's wages will buy a morsel of bread.


----------



## Chuck-prime (Jul 24, 2007)

joe1968m said:


> without a doubt i think, on average, americans will coalesce just like we did in ww2 and right after 9/11 and do what is needed to overcome any hardship...
> 
> it's in our history and our genes
> 
> of course there will be exceptions but on the whole we will weather any storm...like we always had



This generation is a bit different than the Great Depression generation, or at least it seems that way to me.


----------



## Gunga (Dec 17, 2005)

Strider,
That chart is scary. Is that bloomberg chart available to the public? I'd like to check it periodically.

Thanks


----------



## texican (Oct 4, 2003)

Our Chinese friends may be communists, but they're not fools. They hold a lot of dollars and other dollar based instruments... If they dump their trillion dollars on the market, it will make their dollars worth a lot less.

Also, if the Chinese destroy our currency, who's going to buy their goods? Don't think they haven't weighed that conundrum.

And, finally, I wonder, if America is felt to not be a safe place to park some capital, exactly where is safe? Hmmmm... think I'll invest some capital in Venezuela, maybe Argentina, Iran, or heck, even China... its a communist country, but heck, we all know, repressive regimes would never confiscate foreign assets.

Personally, I'd trust Canada... but only because I 'could' get in the truck, and go knock on some doors, if I had to.

____________________________________________

Should we start requesting wages to be paid in euro's?


----------



## strider3700 (Feb 2, 2007)

I'm not sure but I don't think so. I just linked to it from a different forum. Next time I come across it I'll post it again


----------



## KindredSpirit (Feb 16, 2006)

texican said:


> Our Chinese friends may be communists, but they're not fools. They hold a lot of dollars and other dollar based instruments... If they dump their trillion dollars on the market, it will make their dollars worth a lot less.
> 
> *They may be looking at it like someone does when they own stock that is not doing well. Get out before you lose it all.*
> 
> ...


----------



## NoClue (Jan 22, 2007)

The value of Chinese currency is fixed by (their) law to the value of the dollar - 1 Yuan is required to be approximately equal to 1/10 of a US dollar. 

To destroy our currency, they'd have to destroy their own.


----------



## uyk7 (Dec 1, 2002)

I guess I need to make my point once again. China wants Taiwan but the US is supposed to protect Taiwan. If China dumps the dollar and loses 99% then the chances of the US protecting Taiwan drops to near zero. China would be free to invade/take over Taiwan. Taiwan is worth a lot more than the $1 trillion China owns in US currency. China would make up the loss in no time at all.


----------



## strider3700 (Feb 2, 2007)

NoClue said:


> The value of Chinese currency is fixed by (their) law to the value of the dollar - 1 Yuan is required to be approximately equal to 1/10 of a US dollar.
> 
> To destroy our currency, they'd have to destroy their own.


True but the US govenment is pushing hard to have the chinese change the fixed rate of the currency. Many asian and middle eastern countries that used to have fixed conversion rates are being crushed under rampant inflation so they are slowly adjusting the conversions. 

It's not a huge deal to destroy a currency anyways. Remember it's just a piece of paper and some promises. Yes it hurts for a few years but in the end the country in many cases comes out way ahead. The russian default is an excellent example. Sure the masses suffered horribly but since when does that matter to our rulers. 

Looking at what the Fed and us government have been doing I personally believe they are attempting to destroy the US dollar so they can default and start over. The current debt is far too large to ever tackle short of devaluing the dollar or just writing the debt off in default.


----------



## FUNKY PIONEER (Sep 20, 2005)

The the Yuan exchanging at 1 for every .17 the Chinese are making $6 for every $1USD we give them, they are making a killing.

Speaking of Merrill Lynch, Stan O'Neal, the beleaguered chief executive of Merrill Lynch & Co., was reportedly close to resigning Sunday amid broad criticism for leading the world's largest brokerage to its biggest quarterly loss since it was founded 93 years ago.

An interesting development no?


----------



## Chuck-prime (Jul 24, 2007)

texican said:


> Also, if the Chinese destroy our currency, who's going to buy their goods? Don't think they haven't weighed that conundrum.


Actually, Europe is booming. Question arises, is their GDP (for the whole EU) larger than ours? (just asking, not sure).

If the EU market for Chinese goods increase, and if the need for American consumers wane...

...things are getting pretty interesting, aren't they?


----------



## adamtheha (Mar 14, 2007)

Ernie said:


> There's the rub, isn't it? Seems like a lot of what you're buying is made overseas and you're paying the transport costs. If you buy local you don't have that buried expense.
> 
> Plus I don't buy much in the grand scheme of things, so it hardly hurts me much.


Here's the problem...America doesn't make enough of anything to supply itself!! We don't make shoes, we hardly grow anything but wheat, soybeans, canola, corn and beef, and whatever we grow required vast amounts of oil, which is purchased from Canadians, Arabians and Venezuelans (to name a few) with soon-to-be worthless American dollars. Just ask Argentina what a worthless dollar gets you! 60% Unemployment (think, everyone working for gov't losing their job, or getting paid 25% of normal pay) hyperinflation (Pensions worthless) Housing foreclosures, and massive starvation. Like I said, just ask Argentina, who suffered through all of the above!


----------



## Guest (Oct 30, 2007)

FUNKY PIONEER said:


> The the Yuan exchanging at 1 for every .17 the Chinese are making $6 for every $1USD we give them, they are making a killing.
> 
> Speaking of Merrill Lynch, Stan O'Neal, the beleaguered chief executive of Merrill Lynch & Co., was reportedly close to resigning Sunday amid broad criticism for leading the world's largest brokerage to its biggest quarterly loss since it was founded 93 years ago.
> 
> An interesting development no?



Seen that on the world news this evening. They said that even if he gets canned for such a big loss, he will still walk away with 200 million dollars in his pockets as a payout for his tenure.


----------



## strider3700 (Feb 2, 2007)

Chuck-prime said:


> Actually, Europe is booming. Question arises, is their GDP (for the whole EU) larger than ours? (just asking, not sure).
> 
> If the EU market for Chinese goods increase, and if the need for American consumers wane...
> 
> ...things are getting pretty interesting, aren't they?


According to the CIA the EU had a GDP of 13.08 trillion last year. That beats the US GDP of 13.06 trillion
https://www.cia.gov/library/publications/the-world-factbook/geos/ee.html#Econ
https://www.cia.gov/library/publications/the-world-factbook/geos/us.html#Econ

Their GDP was also growing faster. 

Now when it comes to imports/exports from china the CIA page doesn't give us a clear answer
the EU imports 13.4% from china and 13.8% from the US 
The US imports 15.9% from china and here's the issue it lists germany as 4.8% breaking the EU up for import purposes. 

Same goes when you check china. 

China exports 21% to the US 4.8% to germany. 

according to this page the EU is the number one importer of chinese goods
http://ec.europa.eu/trade/issues/bilateral/countries/china/index_en.htm

either way it doesn't matter if the US and china stop talking trade in both countries is hurt but it shouldn't be a death blow for either economy. 

treasury purchases are a major part of what we're talking about when we discuss china nuking the dollar. Here's what they did for the last year up to august
http://www.ustreas.gov/tic/mfh.txt
as you can can see china didn't do much, japan the #1 holder however has been selling. The big surprise is the UK has quadrupled it's holdings in the last year. That data came out october 16th so we won't see the next quarter until early in the new year sometime.


----------



## strider3700 (Feb 2, 2007)

Well it looks like Opec is talking about partially moving away from the US dollar for oil pricing.
http://in.news.yahoo.com/071027/137/6mhrn.html

a big chunk of these record highs in oil come from the fact that it's priced in the declining dollar. Same goes for gold. It keeps going up and everytime I convert to canadian and check it's pretty much the same.


----------



## comfortablynumb (Nov 18, 2003)

you know whats really fun?
pick up aluminum cans, cash them in for paper money then go trade the paper for silver rounds.

I always get a chuckle out of that....
I pick up trash.
I trade trash for US dollars
then trade the dollars for real money.

I wish the recycler would just trade my cans for silver, it would cut out a lot of driving and trouble.


----------



## NoClue (Jan 22, 2007)

I don't disagree that the dollar is ****ed. My point is that every other currency bandied about is just as ****ed independently of the dollar. Add to that the fact that the role of the dollar, which is really just a symbol of the American economy, plays in the bigger picture of the world economy, and they're even more screwed.

Any country that thinks the demise of the dollar and the US is somehow good for them is remarkably short-sighted. It's like the steerage passengers on the sinking Titanic moving into First class after the rich passengers have abandoned ship.


----------



## Aintlifegrand (Jun 3, 2005)

strider3700 said:


> Well it looks like Opec is talking about partially moving away from the US dollar for oil pricing.
> http://in.news.yahoo.com/071027/137/6mhrn.html
> 
> a big chunk of these record highs in oil come from the fact that it's priced in the declining dollar. Same goes for gold. It keeps going up and everytime I convert to canadian and check it's pretty much the same.



That will be another blow to the dollar...not to mention if the fed lowers the interest rate the .25 that is predicted.


----------



## strider3700 (Feb 2, 2007)

The fed lowered the .25 hard to say what it will do to the dollar. Lots where expecting .5


----------



## Labrat407 (Aug 24, 2007)

Just thought I would Bump one of the old Dollar is falling threads to revisit now the table is turning.

What are your thoughts on this? Just Cyclical or something else?
At the start of this thread it was rising oil and faling dollar, now it is the opposite.


----------



## wyld thang (Nov 16, 2005)

Chuck-prime said:


> This generation is a bit different than the Great Depression generation, or at least it seems that way to me.


You know, I used to think so too, but since moving to a small town(well actually 15 miles outside of town back in the mountains, I changed my opinion. Out in those small towns and backwoods there are a LOT of folks who are made of the same stuff as the Depression generation. They are smarter and more realistic and full of common sense and love for life. So there are plenty of people around, including a lot that are lying low in the burbs, who would much rather be prowling the woods hunting their supper, who were forced near the cities to make a living. Where does our military come from? It's this group of people, and you can look at the general caliber of military and see that there are quite a lot of great Americans left--they just don't get a lot of tv face time.


----------



## uyk7 (Dec 1, 2002)

> What are your thoughts on this? Just Cyclical or something else?
> At the start of this thread it was rising oil and faling dollar, now it is the opposite.


I still think the dollar is losing its status as a reserve currency. The value may be higher now than it was a month (or two) ago but it is still basically worthless. Where is the money for the bailout going to come from? They will just print it up, just like Zimbabwe did.


.


----------



## booklover (Jan 22, 2007)

Interesting.


----------



## Txsteader (Aug 22, 2005)

According to an analyst on TV a few minutes ago, because of the worldwide crisis, the dollar is considered the _safest_ currency in comparison to all the others, which is why investors are selling gold to invest in dollars. Not that it will prevent a market meltdown, mind you, but only that it's the safer investment at this point in time.


----------

