Excellent Commentary All ...................................................... The real issue here is that there are no safe haven alternatives for dollar holders....The Euro is no pillar of strength and has its own issues... The overlooked issue is that each country has its own issues that must be reflected in its own currencies...There is no other blanket approach to this....
The only realistic solution to fiat currency risk is to devote more and more of your personal time to 'riding the waves' and being the first kid on the block to leap from overvalued fiat currency to undervalued currency with the rest of the sheeple following you. Rinse and Repeat until desired level of bouncy shine is achieved. A little gold, commodities, and real estate doesn't hurt. However, what will we do when exchange controls are put into place?
You never 'bailed' europe of France out or anything. All you did was make sure that your main markets were protected for future generations and business. And what a great business move it was. Trillions have been made out of Europe, not possible if it was 'governed' by red russia.
I don't get it. The article says Iran, starting in late March, will price their oil in Euros. OK. Say Japan or China wants to buy oil from Iran. Then they will sell $ and buy Euros. What will Iran do with Euros? Buy French airbuses or German Beer or some other European products! They already are doing that now, and Iran must convert $ to euros anyway. What difference does it make if Japan or Iraq is the one doing the conversion. I do not follow or trade foreign currencies, but I just do not see how there will be any change in international trade just because a different party is making the conversion that would have happened anyway. Maybe the big difference is that there will be a greater demand for Euro backed debt, so, Foreign Central banks will buy less of our paper. Again, I do not see how it changes anything. Central banks will go where they have to to invest -- they do now. Will somebody explain this?
You don't get it because you do your own thinking and do not buy into stupid cliche doom-say scenarios. USD dominance has been waning for at least 20 years. It just becomes more and more visible. Compare futures exchanges and Forex volumes from 20 years to now. There is not going to be a dominant currency in the future. We might not have a gold standard but we have what Walter Wriston called international monetary standard which, in his own words, is much more draconian than gold ever was.To all the people crying about USD fundamentals, is it a problem to open a Forex account and get rid of USD? Not to speculate just to hedge. The thread started with the link to the French article which exposes French as a nation which want to stick it to Americans so bad that they cannot think straight. They are truly pathetic. Otherwise there is nothing new going on.
Read Ron Paul's speech http://www.house.gov/paul/congrec/congrec2006/cr021506.htm At the end of the day it comes back to demand/supply. If demand for US dollars wanes because nations are increasingly buying oil with Euros then the free ride that the US has experienced over the decades at having the reserve currency will come to an end and the US will have to go back to producing real goods and saving money. The risk that the Fed runs by not publishing M3 IMO is that by keeping the world in the dark as to its actions a minor problem may well turn into a major disaster as nations assume the worst and dump their dollars in unison. If the dollars that are outside the US come back home (or if the Fed is forced to print money to buy back bonds being dumped by foreigners or to recapitalize the banking system) then it's Germany 1923 again. With an inflationist US government and Fed it will eventually end in tears IMO, it's just a matter of time.