Hypothetical situation regarding dollar vs peso

bigbadwolf said:
If hope is enough for you, well and good. And the current president is all about hope. But those of us who lack the audacity of hope have moved out of dollars.
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What have you moved into BBW?
I'm in Euros; I think (hope) Germany will make sure the currency isn't debased too drastically - they still have memories of the Weimar republic. But the Eurozone has major problems, too.
I think the best idea at the moment is to stay flexible and be prepared to move fast.
 
harpo said:
What have you moved into BBW?
I'm in Euros; I think (hope) Germany will make sure the currency isn't debased too drastically - they still have memories of the Weimar republic. But the Eurozone has major problems, too.
I think the best idea at the moment is to stay flexible and be prepared to move fast.
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I started moving into euros in '99 and now have just about everything in euros. Euroland is not problem-free either and the future of the EU project is not clear. It's conceivable that Southern and Eastern Europe break away or be pushed out (in some extreme scenarios), and a new "Mittel Europa" federation emerge -- France, Germany, Austria, Benelux, Scandinavia. The EU has become too big and unwieldy.

Another problem with Euroland -- besides its unwieldy size -- is its ageing population. The future does not lie with Europe. But having uttered these caveats, I have more faith in the euro than in the dollar. The US house of cards is a very flimsy construction indeed.
 
harpo said:
Gold is the traditional haven in uncertain times and I've heard that the very wealthy are going for the shiny stuff - not just paper saying you own some, the actual physical metal.

Problem with gold is where to keep it. The marauding motor-cycle gangs will kill for a pound of carrots - if they think you've got gold...! Also, you get no interest, unlike cash, so you rely on the price going up - and they do just keep on digging more and more out of the ground. Still, I wouldn't call it horribly speculative; it will always be valuable, whereas a dollar is intrinsically worth... the value of a piece of paper with George Washington's head of it.
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Can't fault the logic in what you say. But bank interest does not generally keep pace even with true inflation (not the bogus government figures). In other words you are usually losing purchasing power with a bank account. Gold can be volatile -- compared against a dollar yardstick. I think it reached a speculative peak in 1979 of about $850(?) but then retreated to about $300(?), and remained quiescent for over 20 years. In periods of rapid economic growth it probably makes more sense to have one's money in company stock, in active investments. But in stagnant periods like this ...? Gold doesn't look like bad thing to hold on to at the moment. But one must not check the dollar prices -- that is silly. Just think that one has so many ounces of gold and that one will keep it.

Many of those buying gold are also betting that the usual law-and-order structure of civil society will be, er, ... severely tested. So they are also stocking up on rifles, ammunition, tinned food, water purifiers and so on.
 
im still waiting for a name of some analyst that gave his opinion about the state of the USD.Im not getting any indications that the dollar will weaken anytime soon. As for the ARS, I dont see that doing anything but get weaker against most other important global currencies. I believe they need to focus on the debt they walked away from during there solo crisis.
The dollar I believe will get stronger and stronger, and the only difference is our children will need to pay for it!!!
 
The problem for the US is that the dollar is supported by countries like China who hold it as a reserve, if they lose faith in it and sell, it will collapse - no 'ifs' or 'buts'.

Of course, it isn't in China's interests to collapse the dollar when it holds so many. But they are searching around for alternatives and are likely to edge away from the greenback little by little.

Printing trillions of new dollars doesn't help either. If there are more, then each one must have less value, which is another way of saying inflation. Why should foreigners want to hold onto a depreciating asset? Once the dollar really starts to slide, everyone will pile out and it becomes a vicious circle.

Seems totally logical and predictable - but then again, when has the future ever been predictable?
 
harpo said:
The problem for the US is that the dollar is supported by countries like China who hold it as a reserve, if they lose faith in it and sell, it will collapse - no 'ifs' or 'buts'.

Of course, it isn't in China's interests to collapse the dollar when it holds so many. But they are searching around for alternatives and are likely to edge away from the greenback little by little.
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They already are. They are buying up real assets with their dollars all over the world (Michael Hudson recently called it "trash for resources").
 
China is also by passing the dollars with Southeast Asia and South American countries, so they don't have to use the dollar in trade. When China stops buying our debit, which is slowly occurring...the US will be screwed. Amero? Amo? Food? What will be the currency of the future?
 
Exactly my point Cris, what would/should ARG befriend as their new currency?
 
The Brazilian Real is a safer currency to invest in and will show excellent appreciation against the dollar in the coming years. I believe that Argentinas Peso will not devalue much more than its current state and there are more signs that it will increase in value sooner than decrease.

Regarding Chinese swapping dollars for real assets this is already happening big time in Argentina and some very important land acquisitions are on the cards now.
 
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