I don't see BRIC replace US-dollar. Why? In what country would you rather open a bank account? United States, Brazil, China, Russia, India Ask this question to anybody who does not live in one of these countries. Everybody will say United States. The other countries just aren't as reliable at the moment. Do you trust the Chinese government with your money???
This is the kind of intelligent, respectful discussion I rarely find on ET, so I thank you for it. If it were to persist and predominate ET, I might come back and participate again.
Even if I had all of the answers (which I don't), I do not have an entire day to devote to this task. In moderation, higher taxes and printing can help to solve the debt problem. The scenario you have layed out is what would happen in a case of raising taxes to the extreme, and printing to the extreme. The USA is in for higher tax rates in the future, face the facts. It doesn't mean they'll automatically be whipped into deflationary armageddon. In fact, just the opposite will occur. Printing will deter deflation and will debase the USD at the same time, making it easier to pay off their enormous debts. The Fed has to print, because if deflation were present, then it really would be Depression 2. But it's not, so it won't be. Argentina and Iceland aren't even close to major economies. I shit more GDP than these countries. You are talking about the G7. Europe and America will not implode. And even if they do (which they won't), it won't be for many years, so there is no use in talking about it right now.
I agree that the US is painted into a corner, but my point is that the world doesn't want to see them in that corner. All those things that you mention will occur if there's a loss in confidence in the US. Although there is a bunch of real reasons why we should not have confidence in the US anymore, especially because of its debt load, I don't believe that the world will lose its confidence in the US, and they are willing to continue to extend its confidence to it. It's kind of like a lover that abuses you time and time again... you could dump them and move on, but there is no one else better around, and they do pay for the bills, so you might as well stay with them. I'm half-joking and half-serious with that example, it pretty much explains the mentality. Until there is a more viable country that people can pour their money into, I think people will have the most amount of confidence in leaving their money in the US. If Europe weren't in such a bad situation, I think they could very well have been the candidate, but given how fragile they are at this point. Until China becomes more transparent and until there is more internal consumption such that they are self-sustainable, they are not viable either. You can buy the yuan, however, since they are pretty much pegged to the US, it's basically a proxy for the US dollar. In order for the yuan to take off they would need to break free from their peg, which is unlikely at this point. They will continue this until the US no longer becomes their primary source of consumption.
He has <b>not</b> been wrong for 2 decades, he has been <b>right</b> for 2 decades. If a scientist were to say another massive earthquake was going to occur along the San Andreas fault but it didn't happen for another 2 decades would you say this guy was wrong for 2 decades? No one can predict earthquakes or currency defaults with the kind of accuracy you are expecting. They are naturally occuring phenomenon. Dude, get a little education in science before you begin proclaiming people are wrong about their analysis and predictions.
If I say S&P goes to 1200 and it gets there in the year 2030, am I right? Like it or not, timing is just as important as direction in this game.
Have you considered the possibility that we have arrived at this situation by design? If what we have is by design, then there is no intention to solve the "debt problem" by saving the Dollar or any other sovereign currency that will be earmarked for assimilation. The central bank"s" couldn't give a shit what the name of the currency is that they issue, aslong as they can issue it without the interference of a democratic government. Personally, I don't find the concept/ideal of a one world currency all that bad as I'm not shackled by the emotional attachments associated with patriotism, however, I would probably go insane if I didn't have a data feed to study 5 days per week, heck, it is difficult enough having to cope with 2 days of boredom per week as it is, nevermind having no data feed ever again. But "trivialities" aside, a one world currency appears to be completely unworkable due to the diversity of cultures along with regional economic novelties. The problem that the banks are creating for themselves is that they are pushing this agenda far to quickly and as a result it is very unstable, not only from an economic perspective, but from the perspective of the average working class individual who doesn't wish to survive upon a diet of genetically modified square banana's. The point is, if where we are at is by design, there won't be any Dollar or Pound in the not so distant future. All we need now is the ultimate trigger... and we can only speculate upon what that might be... perhaps a "terrorist attack" on a scale that will dwarf 911, or perhaps a biological attack that wipes out 90% of the human population, maybe both, why not? If we are here for the party, lets do it in style.