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written by reader US Dollar’s Stability

By Anonymous Questions, September 3, 2015

Have you addressed the continuing forecasting of the demise of the US Dollar, by; Dent, Stansberry, Casey, Rickards, Sen. Paul, and others with less apocalyptic views. The loudest voices, of course, have the most to sell.. These come via email and good old US Mail.

I am not a trained economist, so the amount of money injected into our economy does lead one to wonder when and how the USD’s value will rebalance.

BTW – I searched and found some specific articles unraveling silver bullet teasers, but not the general discussion.

Best Regards

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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Gary Stoltzenberg
6 years ago

I have the same concerns, they all claim that come Oct. 17 2015 the dollar will no longer be the worlds reserve currency, banks will close, there will be anarchy in the streets, etc, etc., yet they all manage to continue selling memberships.

Travis Johnson, Stock Gumshoe
Admin

I haven’t written about this a lot lately, the same basic arguments were used in 2010 and 2011, most notably in Porter Stansberry’s “End of America” screed, and similar ones in previous precarious times. My basic feeling is that the big picture worries about the dollar are logical and may end up coming to pass (though they’re certainly not preordained or easily predictable, particularly as it pertains to time — the major linchpin usually cited, U.S. Debt, has been unsustainable for 30 years…), but that the specific date stuff is hooey — they use dates because they fit with the basic logic of the argument and because deadlines and imminent threats sell newsletters, not because global currencies, economies and trends turn on a single point.

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Patricia
Patricia
6 years ago

Gary, they do not ALL give dates. I don’t know about the others, but I follow James Rickards and subscribe to his newsletter; he never gives dates. I think to do so is foolish and deceptive. Rickards is a thoughtful man and an astute, well-connected economist, writer, analyst, and observer. He’s quite clear, always has been, that what he is pointing out and warning us about is the complexity and fragility of our global financial system – no one can predict exactly when breakdowns will occur, but the weaknesses and most serious problems can be identified and give us some idea when certain limits are being reached, and loss of public confidence in markets and currencies are likely to begin.

There are basic structural problems in most of the world’s national economies, which governments are not addressing, and as Rickards has often said “you can’t fix structural problems with more liquidity.” I remember watching a Fed member on Bloomberg a couple of years ago making a similar point – he asked the show’s host why people were always expecting the Fed to fix the economy – how about focusing on needed fiscal policies, he asked? Those are, and should be, far more important.

As someone who wants the big picture first, I’ve been beyond satisfied with Rickard’s newsletter “Strategic Intelligence.” I’d never give up either my Stockgumshoe subscription or Rickards’s newsletter, which cost me exactly the same. (If I were a big time investor, I wouldn’t mind at all paying much more for higher levels of access to him. There’s nothing wrong with an expert selling his expertise.)

But anyone interested in his views, warnings, and recommendations can get the bulk of them free at dailyreckoning.com or look at his tweet stream or find his posted financial new channels interviews. I don’t agree with him on everything, for example I think Martin Armstrong is more correct about the driving cause of the world’s deteriorating state: a venal people in governments who want to steal wealth from people via ever increasing state power. I think perhaps Rickards, being a very amiable and rational man, tends to project (as we all tend to do) his own personality and good intentions on others so doesn’t recognize, for example, the power and appeal of collectivism to the masses in time of trouble. That’s why I think he’s wrong about the strength of the EU; he thinks it will hold, but I think far left politics will end up rupturing it.

But outside of the fact that I think he puts too much faith in “complexity theory” vs. just recognizing human irrationality and ignorance as the driving causes of our economic problems, as an economist I’ve come to like and trust him more than most. So please don’t lump him in with those “other guys.”

(BTW, when I first joined Gumshoe last year I made an error: it was never Rickards who expected QE4 in 2015; I was confusing him with Peter Schiff at the time. Rickards has only held that he’d be very surprised if the Fed raises rates this year, because it would be exactly counter to their stated goal of 2% inflation.)

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hendrixnuzzles
6 years ago
Reply to  Patricia

Welcome back, Patrica.

I share your regard for Rickards but second the motion that a correct long term macro viewpoint does not necessarily result in good short-term investments.

Long term, I just do not see how dramatic increase in fiat currency units will not result in the devaluation of those units. There will be lots of unexpected twists and turns, and the powers that be will try to maintain the value of the currency units; but in every age and time, these efforts have failed eventually when governments debase money and increase currency in circulation with no corresponding economic output to offset it.

The current situation is really troubling because all the major powers are playing the same game, so the denouement is likely to be especially dramatic.

Patricia
6 years ago
Reply to  hendrixnuzzles

Yes it is troubling, but not surprising to anyone who’s read his books. He seems quite correct in describing this currency war the world is now in as history’s third, so it’s instructive to look over how the previous ones ended. I don’t like the words “meltdown” or “collapse” because nothing really ends, we have crashes and resets. Historically the world’s dominant monetary system shifts or is restructured. We can only hope this next time is done in an orderly and beneficial way.

I think it would be so much safer for everyone if all currencies were asset-backed in some way. But governments don’t want that, they want to be able to reduce their debt at will via currency creation. I think you’re right about the long term, because as Rickards says, when they (instead of just aiming for price stability) deliberately try to create inflation then it often gets away from them and increases out of control.

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knambasai
knambasai
6 years ago

I got similar article relating to kenedy dollar movement and the reason behind president kennedy’s assasination.Can you share some light on this.

Thanks
Kevin

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Patricia
6 years ago
Reply to  knambasai

Kevin, I’m pretty sure Travis covered that pitch here in the past, try using the search function, it shouldn’t be too hard to find.

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archives2001
archives2001
6 years ago

Leave Harry Dent out of your query statement:
He continues to spout the dollar will escalate and gold plummet!
As of Nov 2015, it appears that he’s on target!

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