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Please don't encourage him. It is not the end of the world at all. A one time correction will not be cataclysmic for the US economy. The trade inflows would likely offset any increase in cost, and it would buyo the currency from falling further. A new, lower equilibrium would be hit, and the rest of the world could still use it as a reserve currency.
You guys are acting as if the world is stupid. Companies and countries may not like a falling dollar, but It doesn't mean their gonna go set their house on fire to switch currencies.
no it would be fine if what you are saying was true...if it did hit a new equilibrium. The problem is $ volatility...i.e. its constant shifts...the dollar is just way too unstable right now.I don't think its a cataclysmic event at all...the pound was the standard before and gold before that so if it changes it changes nothing truly spectacular will happen.
p.s. not trying to encourage anyone just trying to have a healthy debate.
TheIdiotsAREWinning.
"Whenever you find yourself on the side of the majority, it's time to pause and reflect."
Mark Twain
Dollar is done for, don't believe the talking heads, china is already shifting it's dollars to commodities like oil wells and mines and such.
China has been buying into oil with size and at a premium. This has analysts puzzled:
"Sinopec’s offer is equivalent to $34 a barrel of proved reserves and $14 a barrel of proved and probable reserves. The African transaction average in 2007, when the average crude price is similar to current prices, was $14.40 a barrel for proved reserves and $9.90 for proved and probable reserves, respectively. On a proved basis, the 2007 average suggests $3.1 billion total value for the deal. Therefore, $7.2 billion implies a 135% premium."
But when it becomes obvious to investors the world over that a US dollar devaluation is the only possible way to manage the kind of debt burden the US has accumulated, those premiums will vanish instantly. Oil quoted in US dollars could easily make new highs beyond $147 in such a scenario. China will not only have safe guarded the wealth of its citizens by owning oil fields, but will also have increased the global political power of the country thru the acquisition these strategic assets.
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