# The US Dollar



## Big Smoothy (Jan 24, 2011)

First 30 seconds is a bit....off, IMO....but the a good description of the _Petro Dollar_ concept, and what will be a sign (according to the presenter) of when the US Greenback will decline.  The US economy will follow.

Please watch and comment.  It's short.





YouTube Video


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## Stewart14 (Jan 24, 2011)

Ok, in simple terms, what can we do to prepare for this?  Should we spend all of our money?  Save it?  Buy gold?  Buy guns?  Rack up credit card debt and not pay it?


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## Big Pimpin (Jan 24, 2011)

Barter, it's smarter.


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## LAM (Jan 24, 2011)

what you mean the 1st and 2nd Gulf War's weren't about "Democracy"?

the dollar would be so much stronger if we hadn't let manufacturing levels drop below 50% and kept a trade surplus going. greed, sociopathic CEO's and making the big buck now at the expense of the countries future is what killed the country.


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## Work IN Progress (Jan 24, 2011)

I'm a big fan of US dollars. I have a little. I keep them in a jar on my refrigerator. I wanna put more in that jar. That's where you come in.


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## Work IN Progress (Jan 24, 2011)

LAM said:


> what you mean the 1st and 2nd Gulf War's weren't about "Democracy"?
> 
> the dollar would be so much stronger if we hadn't let manufacturing levels drop below 50% and kept a trade surplus going. greed, sociopathic CEO's and making the big buck now at the expense of the countries future is what killed the country.



Unilateralism and special interest groups.


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## Hench (Jan 24, 2011)

LAM said:


> what you mean the 1st and 2nd Gulf War's weren't about "Democracy"?
> 
> the dollar would be so much stronger if we hadn't let manufacturing levels drop below 50% and kept a trade surplus going. greed, sociopathic CEO's and making the big buck now at the expense of the countries future is what killed the country.



They were about 'democracy' in terms of creating a government that would allow the implementation of western capitalism/US free market as their economic structure. Not saying thats an entirely negative thing, but that's what they wanted to achieve. 

Completely agree with the second point. Although, it has been proven that vertical investment by US manufacturing firms actually increases US employment levels in that industry.


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## Big Smoothy (Jan 24, 2011)

LAM said:


> what you mean the 1st and 2nd Gulf War's weren't about "Democracy"?
> 
> the dollar would be so much stronger if we hadn't let manufacturing levels drop below 50% and kept a trade surplus going. greed, sociopathic CEO's and making the big buck now at the expense of the countries* future is what killed the **country.*



Note the part in bold. 

I feel the same way.  I have begun using the past tense.  

Meaning, it's over, and there's no turning back at this point.


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## Captdick (Jan 24, 2011)

Guns,God and ammo?


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## bandaidwoman (Jan 24, 2011)

Our biggest export is trash... what does that say about us as a producing nation?
America

I didn't favor bailing out GM no more than the Repub's Tarp plan but at least GM is now selling more of their crappy cars to Chinamen than Americans....


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## DOMS (Jan 24, 2011)

bandaidwoman said:


> Our biggest export is trash... what does that say about us as a producing nation?
> America



It says that most of the rest of the world is the US' trash can.


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## LAM (Jan 24, 2011)

Big Smoothy said:


> I feel the same way.  I have begun using the past tense.
> 
> Meaning, it's over, and there's no turning back at this point.



history has already shown us that when people (corporations are technically people) are in places of high power and accumulate great wealth it is never relinquished freely.  unregulated capitalism, free markets, etc. all sound and look good on paper, but once you factor in the human condition and greed it all goes to shit always has and always will...human beings in general are a rather unsavory bunch when compared to just about every other life-form on the planet.


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## ROID (Jan 24, 2011)

DOOM DOOM DOOM.

I get tired of hearing all these dooms day scenarios. Not worth the headache to worry.


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## lnvanry (Jan 24, 2011)

It could collapse (although I highly doubt it)...but its *highly unlikely* as long as the world still uses the USD as its currency reserve.

OPEC fully supports petrodollars for many many reason...its a mutually beneficial relationship and I don't see OPEC nations (with the exception of Iran and Venezuela) turning their back on the US policy...after all, we are those countries FIRST and LAST line of defense.

I don't think these USD doomsdayers understand how much US treasuries and USDs are in demand.  There is NO good alternative except for commodities that are becoming a bubble in themselves.  The USD does not have to play by conventional rules regarding monetary expansion...other countries may not like it, but they have to play by it.

I LOLed at the NK, Iran, Venezuela, and Syria examples....Those are the ONLY examples and its b/c we have an embargo against them, lol.  His facts are right, but this author is drawing poor conclusion


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## lnvanry (Jan 24, 2011)

The Chinese Yuan is barely on the map...the Ruble isn't on the map at all.  The only other currency that is close to challenging the USD is the Euro...and we all know its current situation.


Page 26
http://aric.adb.org/grs/papers/Lee.pdf


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## PreMier (Jan 24, 2011)

Captdick said:


> Guns,God and ammo?



First 100 Items to Disappear after Collapse


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## DOMS (Jan 24, 2011)

lnvanry said:


> The Chinese Yuan is barely on the map...the Ruble isn't on the map at all.  The only other currency that is close to challenging the USD is the Euro...and we all know its current situation.
> 
> 
> Page 26
> http://aric.adb.org/grs/papers/Lee.pdf



Nothing you've posted so far makes the US sounds like Nazi Germany or portents the fall of the USA. Therefore, quite simply, it cannot be correct.


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## Big Smoothy (Jan 25, 2011)

lnvanry said:


> It could collapse (although I highly doubt it)...but its *highly unlikely* as long as the world still uses the USD as its currency reserve.
> 
> OPEC fully supports petrodollars for many many reason...its a mutually beneficial relationship and I don't see OPEC nations (with the exception of Iran and Venezuela) turning their back on the US policy...after all, we are those countries FIRST and LAST line of defense.



There has been a dimishing _faith,_ IMO.  These countries, very slowly, and minutely, has reduced USD reserves.  No one has faith in the USD medium or long term. 

I don't think these USD doomsdayers understand how much US treasuries and USDs are in demand.[/quote]

short-term haven.


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## Big Smoothy (Jan 25, 2011)

LAM said:


> history has already shown us that when people (corporations are technically people)



In the 1860s, a US Supreme Court cases established corporations (legally) as individuals. 

Bad.


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## bandaidwoman (Jan 25, 2011)

DOMS said:


> It says that most of the rest of the world is the US' trash can.



True, but also how innovative they are in recycling and then transforming it into further exports and making tons of money with very little supply overhead http://hamptonroads.com/2010/03/our-trash-becomes-chinas-cash for  a short spell I worked in recycling chemistry and we really are overlooking a cheap commodity source to produce products.  No need to mine, cut down trees, dig for the  metal etc. 


I think this country only recycles 1% of its trash for the above.


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## DOMS (Jan 25, 2011)

bandaidwoman said:


> True, but also how innovative they are in recycling and then transforming it into further exports and making tons of money with very little supply overhead Our trash becomes China's cash | HamptonRoads.com | PilotOnline.com for  a short spell I worked in recycling chemistry and we really are overlooking a cheap commodity source to produce products.  No need to mine, cut down trees, dig for the  metal etc.
> 
> 
> I think this country only recycles 1% of its trash for the above.



Yeah, or they end up like Ghana and Nigeria.


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## LAM (Jan 25, 2011)

lnvanry said:


> I don't think these USD doomsdayers understand how much US treasuries and USDs are in demand.  There is NO good alternative except for commodities that are becoming a bubble in themselves.  The USD does not have to play by conventional rules regarding monetary expansion...other countries may not like it, but they have to play by it.



the US has been living off of credit for the past 60 years eventually it will run out, we are already starting to pay for a "lifestyle" that most never could have afforded with out government subsidy in one form or another (budget deficit) .  with manufacturing down to what 13% of the jobs as a country we offer just about nothing to the world market.  don't forget that dollar is backed by absolutely nothing except faith since we no longer produce anything nor is there anything in the near future of any value to be produced in the US.  currently the only thing the US produces in quantity is debt, garbage and babies from unwed mothers.


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## lnvanry (Jan 25, 2011)

LAM said:


> the US has been living off of credit for the past 60 years eventually it will run out, we are already starting to pay for a "lifestyle" that most never could have afforded with out government subsidy in one form or another (budget deficit) .  with manufacturing down to what 13% of the jobs as a country we offer just about nothing to the world market.  don't forget that dollar is backed by absolutely nothing except faith since we no longer produce anything nor is there anything in the near future of any value to be produced in the US.  currently the only thing the US produces in quantity is debt, garbage and babies from unwed mothers.



Faith...this is the same faith smoothy is talking about as well:

Here is the amount of faith the world has in the USD expressed quantitatively:
Federal Reserve pays U.S. Treasury record $78.4 billion last year | cleveland.com

This is a statement depicting world demand for US treasuries.  They may complain and gripe about how the world needs to move towards a basket of currencies in regards to hard currency reserves (currently the USD, EURO, Sterling Pound, and YEN)...but they choose to continue buying 1 currency above all....the USD.  As long as the world continues to do this, the USD will be fine.  "Actions speak louder than words"

Here is a side story worth reading:
Currency Wars: How Ben Bernanke Outsmarted China - DailyFinance

China has become aware of its image as a MASS USD consumer...hence why its covering its tracks:
Is The Chinese Government Secretly Buying U.S. Treasuries Through The UK?


I'm not saying that we have done a good job managing our manufacturing base and diversifying our economy (away from financial engineering)...I agree with all your other points.  I'm just saying the "faith" is still there and its there by a large margin.  Why?


The world has NO OTHER OPTION in the near-to medium term.  Unless there is a global catastrophic disaster...the USD will remain the hegemon for the foreseeable future.


A final article from the PRC's equivalent of Hillary Clinton's Deputy.
U.S. power unbeatable for decades: China policy planner | Reuters


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## DOMS (Jan 25, 2011)

lnvanry said:


> The world has NO OTHER OPTION in the near-to medium term.



It's a simple statement, but so few, especially the chicken littles, will understand it.

It's kind of like those that hope the US "falls." Who's next? China? I bet they'll be _so much better_ as the top dog.


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## LAM (Jan 25, 2011)

DOMS said:


> It's a simple statement, but so few, especially the chicken littles, will understand it.
> 
> It's kind of like those that hope the US "falls." Who's next? China? I bet they'll be _so much better_ as the top dog.



it's called history...the british pound was also once the world's #1 reserve currency in the 18th & 19th century and they also once ruled the world, look at them now.  eventually the same will happen to the US


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## Big Smoothy (Jan 25, 2011)

> Here is the amount of faith the world has in the USD expressed quantitatively:
> Federal Reserve pays U.S. Treasury record $78.4 billion last year | cleveland.com



Ivanry,

The number #1 holder of US treasuries is......The Federal Reserve.

More than China and Japan.

Faith?  I don't think it's mostly faith, but necessity by China, and Japan....and....erm....the Fed.


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## DOMS (Jan 26, 2011)

LAM said:


> it's called history...the british pound was also once the world's #1 reserve currency in the 18th & 19th century and they also once ruled the world, look at them now.  eventually the same will happen to the US



It took two _world wars_, the loss of most of it's territories, the rise of one it's former colonies, the realities of being just an island, _and _an industrial revolution to make that a reality.

But yeah, I can see all of that happening (to the USA) again very soon. 

Also, keep in mind that neither I or Ivanry has said that it will _never _happen. We're saying that it's just not going to happen any time soon.


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## Dale Mabry (Jan 26, 2011)

DOMS said:


> It took two _world wars_, the loss of most of it's territories, the rise of one it's former colonies, the realities of being just an island, _and _an industrial revolution to make that a reality.
> 
> But yeah, I can see all of that happening (to the USA) again very soon.
> 
> Also, keep in mind that neither I or Ivanry has said that it will _never _happen. We're saying that it's just not going to happen any time soon.



IMO, it will be a long while, but with one caveat: When the next form of energy is identified and produced, whichever country develops that will be rich as shit, and if it's not us, we're fucked.  Look what having oil has done for the shithole that is the middle east.  Outside of oppressing women and suicide bombing, oil is the only industry they have, yet look how rich they are.


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## DOMS (Jan 26, 2011)

Dale Mabry said:


> IMO, it will be a long while, but with one caveat: When the next form of energy is identified and produced, whichever country develops that will be rich as shit, and if it's not us, we're fucked.  Look what having oil has done for the shithole that is the middle east.  Outside of oppressing women and suicide bombing, oil is the only industry they have, yet look how rich they are.



This still will not effect us too much short-term, or even mid-term. We can continue to use oil and produce our own.

That scenario would fuck the Middle East up as the price of oil plummets due to a drop in demand. Which I would be very happy with.


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## ebn2002 (Jan 26, 2011)

When it comes to making investment and life decisions based on the topics in this thread, remember that the end of the world only happens once, recoveries will happen many times. Bet accordingly.


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## Dale Mabry (Jan 26, 2011)

DOMS said:


> This still will not effect us too much short-term, or even mid-term. We can continue to use oil and produce our own.
> 
> That scenario would fuck the Middle East up as the price of oil plummets due to a drop in demand. Which I would be very happy with.



It won't hurt us?  It will hurt us, and quickly, because whoever does that will have control over which currency the energy is based off of, which will be the currency of that country if they are smart.  Few people realize that if OPEC decided to allow oil to be based on a currency other than the USD, demand for the USD would drop sharply and quickly, a change of energy would have the same effect.

As for the Middle East, once they raze that dump and put up a parking lot the world will be a better place.


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## lnvanry (Jan 26, 2011)

LAM said:


> it's called history...the british pound was also once the world's #1 reserve currency in the 18th & 19th century and they also once ruled the world, look at them now.  eventually the same will happen to the US



all fine and dandy...but that doesn't mean the USD will hit that wall in the next 12-16months


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## Big Smoothy (Jan 27, 2011)

Responding to post #31, DOMS and Dale Mabry.

The oil output from the (allegedly) largest Saudi oil field _Gawhar_ has been declining for years.

The Saudi Oil Ministry still keeps the amount of oil reserves it has secret. We can only speculate (and the oil experts of course).

But the demand for oil has increased worldwide, primarily in China and India.

Increased demand with _worldwide declines in oil output_ + a weaker dollar,

and the _price of crude will go up._

I posted a thread about a month ago calling for the price of crude to hit $150-200 per barrel.  

It's possible.  

Regardless, I see $4+ gas by September.


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## Glycomann (Jan 27, 2011)

LAM said:


> the US has been living off of credit for the past 60 years eventually it will run out, we are already starting to pay for a "lifestyle" that most never could have afforded with out government subsidy in one form or another (budget deficit) .  with manufacturing down to what 13% of the jobs as a country we offer just about nothing to the world market.  don't forget that dollar is backed by absolutely nothing except faith since we no longer produce anything nor is there anything in the near future of any value to be produced in the US.  currently the only thing the US produces in quantity is debt, garbage and babies from unwed mothers.



One thing that adds a little bit of a positive in all this: When the Fed lends to foreign banks the interest goes into the US Treasury so we actually profit from Federal Reserve activities in many cases. Now if we could only audit the Fed...
Another positive is we are one of the biggest exporters of goods still to date.  Our products include mostly tech products such as aerospace, computer, medical devices and pharmaceuticals etc.  Problem is most of this stuff does not lend itself to unskilled labor and or educational system sucks. Plus, let's face it, not everyone is capable of earning a living in high tech. Since we are not making shirts and tea cups and junk toys and such there just isn't as many blue collar jobs as there were 40 years ago. 

*I say invent a beer that the Chinese will love and export the shit out of it.  That way they will be drunk and happy and work less plus demand higher wages for Monday's labor.*


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## lnvanry (Jan 27, 2011)

Big Smoothy said:


> Responding to post #31, DOMS and Dale Mabry.
> 
> The oil output from the (allegedly) largest Saudi oil field _Gawhar_ has been declining for years.
> 
> ...



Another reason why the demand for the USD will go up...The KSA gov't is the most loyal US ally in the region (more so than Israel IMHO)


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