American dollar predictions

perry

Registered
I have been reading a lot of late about the imminent collapse of the American Dollar and this week the China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.
In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.

What do members think about this and are you taking precautions to protect your savings?
 

Conorworld

Registered
The way the dollar has been moving recently it is very hard to predict. This time last year EUR/USD was close to 1.60, then by October it was down to close to 1.23 and then back up to 1.45 in December, down to 1.24 in February and now 1.35. Last week it shot up over 4c after the announcement of quantitative easing. It is very hard to predict things at the moment.

Even looking at the USD/AR$. There has been talk of a measured devaluation and that the speculation was of 4 pesos to the dollar by the end of the year but that could be higher now considering we are already at or around 3.7.

The creation of an international reserve currency is a good idea in theory. It could help to settle such speculation and the dominance of the Dollar. It will be a hard thing to do considering how leveraged many nations are to the dollar and the US is so reliant on the dollar being a reserve currency it would be hard to decouple the world economy from it.

I don't think we would see a major collapse in the dollar. Well, spectacular collapse as the word collapse is used a lot in currency terminology. There will continue to be a lot of fluctuations.

This world reserve currency is one of many ideas been thrown around running up to the G20 summit in London next week. I will wait to see what comes out of that and what hints there will be on proposals for this. Each nation is preparing its bargaining position so I will wait until next week to pass further judgement on this.

I am from Ireland and living in Dublin for the moment. My money is in euros so I would be more inclined to worry about the euro as opposed to the dollar but at this point in time you are probably better off having dollars. The main reason why the dollar surged last year was due to its supposed safe haven status. That would be a good indication of the durability of dollar denominated savings.
 

Grazie

Registered
Oh I hope not, could you imagine the immediate havoc it can cause the real estate sales and transaction in Buenos Aires will be without the US dollar? If say this "collapse" happens tomorrow?! I shudder to think, no?
 

Conorworld

Registered
Grazie said:
Oh I hope not, could you imagine the immediate havoc it can cause the real estate sales and transaction in Buenos Aires will be without the US dollar? If say this "collapse" happens tomorrow?! I shudder to think, no?
It is quite disturbing how still today, even after the 1:1 currency peg failed that the dollar still has such a hold on the Argentine economy. I always thought that the government would try and move away from that to a more heterogenous currency situation or a peso peg to a basket of currencies.
 

criswkh

Registered
The way the US government is going with the printing machines, I bet the dollar will be lower in a year or two (being optimistic). A lot of other governments now want to make basket currencies. I think the best plan is to diversify if you can, gold, other bank notes, lands, guns, etc. There was talk about this changing the FIAT two years ago, but it never got any media play. Now, Bloomberg is talking about it among others. What will happen to the peso if the US dollar is no longer the FIAT currency? Given Argentina's peg to the dollars, what will happen to investors?

http://www.iht.com/articles/2009/03/22/business/markets23.php
http://finance.yahoo.com/news/China-calls-for-new-global-apf-14726105.html
 

daswamy

Registered
Diversifying across assets classes should help. Consider -
gold stored offshore - www.bullionvault.com
currencies (e.g. Sing Dollar, Norwegian krone based on economic fundamentals) - www.everbank.com
foreign stocks - cash-rich Asian companies, commodity players (soft and hard commodities)

Due your own due diligence!

As the US Federal Reserve revs up the money printing into high gear, it is key to take steps to avoid destruction of your $ savings/retirement portfolio.
Must watch documentary here (long) -
The Money Masters -

Alos, reading this article is a good reality check - http://solari.com/blog/?p=2060
Some key excerpts:
Having all your money in one currency or one country is pretty risky – a risk many in the US tend to take.

Diversification of life risks is an integral part of all matters related to financial capital. Living things are the source of all wealth. That includes you and me.

Diversification means that we invest in our physical and mental well-being. Diversification means that we invest not just in our own human capital but also in the human capital of other members of our family and those around us. In this way, we are not betting on financial assets alone to see us through. We are investing in each other because it is family, friends and communities that help see us through.
Diversification also applies to the work we do. For most people, our labor is our most important source of financial assets. Skill diversity can mean, for example, that you have a number of skills.
Good luck!
 

Lucas

Registered
gouchobob said:
I would say the collapse of the dollar anytime in the near future is highly unlikely as there simply isn't a suitable alternative.
Yes there's an alternative...a NEW DOLLAR!!! or whatever it's name will be.

This article was written by Adrian Salbuchi in June 2005...so It's not new but those assertions are relevant today as in the near future....maybe he posses a Cristal ball to read the future.

1 Adrian Salbuchi is an Argentine writer, researcher and journalist. Member of CREAR, Consejo Regional Estratégico Argentino, the Project for a Second Argentine Republic and the Centro de Estudios Económicos Mariano Fragueiro, Buenos Aires. Author of various books on geopolitics and economics, amongst them, “El Cerebro del Mundo: la cara oculta de la globalización” (Ediciones del Copista, Córdoba, Argentina, 4th Edition, 2003, 470 pages).
Part of...

"In the rest of the world – i.e., Asia-Pacific, Central and South America, Africa, Russia, the Muslim World – changing “old” Dollars for New ones will depend on the local “exchange markets” which will fix the “proper” rate of exchange between the extremely plentiful “old” Dollars and the extremely scarce New Dollars. And what will that rate of exchange be? One-to-one? I doubt it, because supply and demand will set in almost as fast as panic. Two “old” Dollars for One New Dollar, then? Or, maybe, 3-to-1? Or 5-to-1? Or 10-to-1? Who knows? “Let the laws of the free-market economy – supply and demand – do their bidding”. And whatever happens elsewhere will certainly not be the concern of the US.

We will then see millions upon millions of desperate and panicky people, companies, banks, operators, players of all sorts throughout the planet running amok all at the same time trying to unload their “old” Dollars and exchange them for New Dollars. Again, in Argentina we have a huge amount of experience on this…"


Full article here---> Death and Resurrection of the US Dollar

“Who needs Dollars?”Juan Perón
 

gouchobob

Registered
Lucas said:
Yes there's an alternative...a NEW DOLLAR!!! or whatever it's name will be.

This article was written by Adrian Salbuchi in June 2005...so It's not new but those assertions are relevant today as in the near future....maybe he posses a Cristal ball to read the future.

Part of...

"In the rest of the world – i.e., Asia-Pacific, Central and South America, Africa, Russia, the Muslim World – changing “old” Dollars for New ones will depend on the local “exchange markets” which will fix the “proper” rate of exchange between the extremely plentiful “old” Dollars and the extremely scarce New Dollars. And what will that rate of exchange be? One-to-one? I doubt it, because supply and demand will set in almost as fast as panic. Two “old” Dollars for One New Dollar, then? Or, maybe, 3-to-1? Or 5-to-1? Or 10-to-1? Who knows? “Let the laws of the free-market economy – supply and demand – do their bidding”. And whatever happens elsewhere will certainly not be the concern of the US.

We will then see millions upon millions of desperate and panicky people, companies, banks, operators, players of all sorts throughout the planet running amok all at the same time trying to unload their “old” Dollars and exchange them for New Dollars. Again, in Argentina we have a huge amount of experience on this…"


Full article here---> Death and Resurrection of the US Dollar

“Who needs Dollars?”Juan Perón
The article you reference in support of your arguments comes from a site called Global Research out of Canada. I do not find the content on this site to be very credible. The following article on the site also out of Canada makes my point.

http://www.adelaideinstitute.org/Dissenters1/Zundel1/chossudovsky.htm
 
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