Dollar Value Predictions 2021/2022

[on the brink]

I agree with some posters here that the USD as transaction currency / medium at least in the short and mid term (if not long term) is and will be the most common way of doing deals and exchanging goods.

However, in terms of value storage I would prefer other currencies (JPY, CHF, SGD). Looking over the last 10-20 years the USD has lost (if I am not completely mistaken) against most major currencies. I don't assume a demise of the USD and expect it to be remain the world's most dominant currency, but I expect it to keep losing against most major currencies (especially because of the deficit spending).

To put something in a bank safe with a horizon of at least 5-10 years I would probably prefer gold. Regarding Bitcoin I am highly skeptical. Who can say that the Bitcoin is worth 50'000 USD, 1m USD or 200 USD? It might be that cryptocurrencies are indeed the future, but they remain highly speculative and therefore not really an ideal medium of wealth storage.

One last thought: the Bitcoin network has a higher energy consumption than the state of Norway (source):

View attachment 7699

Given that there is a clear worldwide need to get greener and cleaner, this is complete madness.

I agree that Bitcoin's energy usage is criminally high.

About saving in dollars, you don't have to keep them in a bank safe. Put them to work in the US stockmarket, and get about 8% yearly over inflation.

 

[Dougie]

I agree that Bitcoin's energy usage is criminally high.

"It is a little naive — or then disingenuous — to discuss Bitcoin’s energy consumption while leaving out the profound links between traditional finance and carbon emissions. Have those impetuous Bitcoin critics at the Financial Times heard of the petrodollar? As large volumes of oil revenue from energy-producing countries were invested directly in Treasuries and in other financial markets of the major industrial economies, a perpetual motion machine quickly developed: those financial markets could not work as planned without an ever greater supply of petrodollars and thus an ever greater extraction of fossil fuels. Should we inquire about the carbon footprint of the greenback or are those sins reserved for Bitcoin?"

Does Bitcoin hurt the climate?

Bitcoin consumes a lot of energy. In early March, Bill Gates told the New York Times, “Bitcoin uses more electricity per transaction than any other method known to mankind.” According to some estimates, it may account for 0.5% of total global electricity consumption

brunomacaes.substack.com

Also not mentioned in that article is all the brinks trucks, security guards, guns, police - the entire security apparatus that safeguards currency. The heating, lights, fuel, etc. This whole security establishment is what helps protect it, whereas with Bitcoin that protection is done with Bitcoin mining so it's a world where currency isn't guarded by more weapons but by math and so it's more quantifiable.

About saving in dollars, you don't have to keep them in a bank safe. Put them to work in the US stockmarket, and get about 8% yearly over inflation.

For the average Argentine I'm not sure if this is so easy? What have you been investing in? 8% over inflation is pretty good!

 

[jeff1234]

One interesting thing that is going on in the USA right now- Houses are selling at incredible speed, for incredible prices. Its almost as if US citizens are adopting the argentine attitude that the only safe place to hoard your wealth is in real estate.

This a pretty much national phenomenon, not restricted to the coasts, or the big cities. Even in extremely rural areas, prices are way up, and there is very little for sale.

And it's in the middle of a pandemic. Go figure.

 

[Dougie]

If only you knew what I look like.
Lets just say no one is going to mistake me for E.F. Hutton.

From your posts, I've gathered you are far from being a "suit"

Just my way of saying that I enjoy your posts and have learned a lot from them.

 

[Ries]

From your posts, I've gathered you are far from being a "suit"

Just my way of saying that I enjoy your posts and have learned a lot from them.

I do actually own quite a few suits, including one from Nudies Rodeo Tailors, but none would be appropriate for wearing to an investment firm. I used to collect 40s and 50s suits at thrift stores, when they were 5 or ten bucks each. Born Beatnik Atheist, I was a hippie, a punk, and now just an aging weirdo.

 

[Ries]

And it's in the middle of a pandemic. Go figure.

Actually the pandemic has accelerated this phenomonen. A lot of people will probably never go back to the office, and will work from home- and thus, are buying places in the country. But sales are up in NYC and LA and Seattle, too- there is no overall exodus from cities, as there is still a flow of younger people, or empty nesters, IN, while people in their middle years move out.
I have a friend who just sold his house in 5 days for 400k over asking. In a rural, but nice area, to someone who sold a house in California, undobtedly for much more than his house cost. But houses in California are selling in days, for 20% over asking price too.
The people with money all seem to think real estate is a good investment.

 

[camel]

If I'm not mistaken all of bitcoins value is based on the cost of the electricity and computing needed to create it. So it's a bet that no one will invent a more efficient computer or one that requires much less electricity.
Personally I'd never bet that a new technology won't happen.

It already happened, when they put the bitcoin mining algorithm in a chip called an ASIC, allowing those miners to mine way faster than the previous generation of miners. In fact, it had happened before that, when people started using GPUs to mine (as opposed to normal CPUs). Bitcoin has always accounted for this, with its "difficulty adjustment," which happens roughly every 2 weeks. Read about it here:

Difficulty - Bitcoin Wiki

en.bitcoin.it

 

[Alpinista]

The blue has been depressed and the wu ccl rose nearly 7 pesos this week. I wouldn't call the ccl flat.

There is an informative chart in infobae today:



The increase in the blue (libre) is much stronger than the CCL. Also that the CCL was higher than the blue over the last few months was an anomaly.

 

[jblaze5779]

The blue was just depressed for a certain amount of time. I don't know why but the price of the blue is just returning to where it should have been had whatever keeping it down not been there.

The CCL follows it's natural trend upwards as it has been over time yet the blue reverses its trend from 14-dec to ~06-april. After April the blue sky rockets back to where it would have been without whatever influence was acting on it during this duration.

Someone or something was putting pressure specifically on the blue to push it down. I'm not an expert enough in these matters to know what exactly was happening but the decreasing rate was not "natural".

It looks to me like that blue is trying to come unhinged at every moment it gets. It's a jump and then a slow draw down over time, then another huge jump then a slow draw down..... to me this signals it is wanting to follow it's natural upward trend over time.

Not saying your wrong these are just my observations. I would be interested if someone with more concrete ideas could explain.

 

[Alpinista]

Someone or something was putting pressure specifically on the blue to push it down. I'm not an expert enough in these matters to know what exactly was happening but the decreasing rate was not "natural".

I am also not the expert here on the blue and CCL. But it is pretty clear that the Central Bank was intervening massively since last September / October (via bond purchases with USD) and therefore pushing down the CCL. It is probably also safe to say that the blue (and also the CCL) would be above 200 without these interventions. But if all macroeconomic parameters clearly pushing against the domestic currency, there is only so long that you can keep the ball under water.

But the government will certainly have a strong interest to keep the CCL / libre somehow under control until the mid term elections, otherwise there would be an additional pressure on the inflation rate.