The demise of the US dollar

[AfterTimes]

I'd like the US to raise interest rates.

Our SGD interest rates will also rise since it is dependent on USD rates as well.

Then our own housing bubble will also collapse. This will then make homes more affordable for young sporeans. Also, our return on savings will also go up. Same for CPF interest rates.

Err...

I thought the main reason why housing is unafforadable to the young is because the demand for hdb flats far overwhelmes the supply.

A raise of interest rate will not soften the rate of purchase because everyone needs a roof over their head, as can be seen that buyers are willing to fork up more in COV.

In fact this may be a double whammy for the youngs who aspire to buy their own flats now, with high COV and high interest rates.

Recent buyers who purchased their property under variabe interest rate scheme may suffer, but a panic sell off will not result as long as they can afford to hold on to it, esp if they can lease it off.

Tycoons who can afford to buy high end condos have the wealth to ignore the interest rates, hdb upgraders who want to upgrade to mass market private property may think twice now if the interest rate is increased, thus making the supply of resale hdb even less.

Housing cost will remain high as long as Singapore's PR population grows and a deliberate attempt from govt to keep the supply low. Interest rate is a less concern.

My two cents worth.

 

[cowbehcowbu]

Read Tommy Koh statement today that so profoundly, overly positive about the fure strength of USA...naturally so as he has a good part of his life spent in the states..
BUT..could a countries that borrow uncontrolledly astromical amount of monies from the rest of the world ,,just to sustain the credit-based life-style of the Americans??? and go to war at the slightest excuse.....
THE REAL PROBLEM with the USA is they still think they were the superpower that control the world after secong world war....in a miniscal scale ..they become arrogant , and gradually ignorant of what other nations can achieve..just like the ching dynasty....
1] IT IS A COMPLETE FALLACY THAT only USA has the best brains...Russia is wiles ahead of the state in space technology...china is already catching up cloisely behind ...
2] In terms of military research...Russian has very advance nuclear submarines..and fighters jets....the Mig 31.n above canbeat the F16 flats...China is already test flying their stealth bombers n fighters jet....the gap..will be close within 10 years...
3]In terms of Rn D ..Russia n china has equal n more research personnels.....they will soon outbeat USA
4]maybe the unpredictable time frame of democratisation of china n russia is THE ONLY marginal advantages...BUT a centrally controlled nation IS MANY TIMES MORE EFFECTIVE IN all MAJOR EVENTS...including R nD ...just look at the ridiculously clumsy way the US in tackling the Caterina disaster when compare to China in tackling the SZIchuan earthquake...
5] US banks are technically bankcrupt TILL NOW[ as also stated by Jorge Soros..]..
the state is also bankcrupt...with 10% umemployment ..and tens of trillions new U$ printed...with hundreds of trillion of toxic assets just put under the carpet....ONLY FOOL will think the US can recover soon without any PRICE TO BE PAID FOR THEIR UNCONTROLLED,,EXCESSIVE CAPITALISM WITHOUT REGULATIONS!!!!!!!!!!
...the damage in the USA is historical .epical in calling it a day for the supremacy of the USA...period...
US$ will likely to devaluate another 30% or so....thats why gold is shooting to the sky...
the poor US citizenz has to go through 5 t0 10 years of hardship....by that time ,,Russia, china ..n India..Brazil will advance much closer or exceed US in one field or others....

 

[hockbeng]

Read Tommy Koh statement today that so profoundly, overly positive about the fure strength of USA...naturally so as he has a good part of his life spent in the states..
BUT..could a countries that borrow uncontrolledly astromical amount of monies from the rest of the world ,,just to sustain the credit-based life-style of the Americans??? and go to war at the slightest excuse.....
THE REAL PROBLEM with the USA is they still think they were the superpower that control the world after secong world war....in a miniscal scale ..they become arrogant , and gradually ignorant of what other nations can achieve..just like the ching dynasty....
1] IT IS A COMPLETE FALLACY THAT only USA has the best brains...Russia is wiles ahead of the state in space technology...china is already catching up cloisely behind ...
2] In terms of military research...Russian has very advance nuclear submarines..and fighters jets....the Mig 31.n above canbeat the F16 flats...China is already test flying their stealth bombers n fighters jet....the gap..will be close within 10 years...
3]In terms of Rn D ..Russia n china has equal n more research personnels.....they will soon outbeat USA
4]maybe the unpredictable time frame of democratisation of china n russia is THE ONLY marginal advantages...BUT a centrally controlled nation IS MANY TIMES MORE EFFECTIVE IN all MAJOR EVENTS...including R nD ...just look at the ridiculously clumsy way the US in tackling the Caterina disaster when compare to China in tackling the SZIchuan earthquake...
5] US banks are technically bankcrupt TILL NOW[ as also stated by Jorge Soros..]..
the state is also bankcrupt...with 10% umemployment ..and tens of trillions new U$ printed...with hundreds of trillion of toxic assets just put under the carpet....ONLY FOOL will think the US can recover soon without any PRICE TO BE PAID FOR THEIR UNCONTROLLED,,EXCESSIVE CAPITALISM WITHOUT REGULATIONS!!!!!!!!!!
...the damage in the USA is historical .epical in calling it a day for the supremacy of the USA...period...
US$ will likely to devaluate another 30% or so....thats why gold is shooting to the sky...
the poor US citizenz has to go through 5 t0 10 years of hardship....by that time ,,Russia, china ..n India..Brazil will advance much closer or exceed US in one field or others....

Totally agree with you.

The main reason why the US is technologically superior and ahead in terms of R&D was because:
- most of the best brains in the world migrated there to seek a better life.
- their way of life and culture and tolerance of failure & differing opinions
- they had to money to invest in R&D cos they USED TO, I repeat USED TO manufacture and export goods to the rest of the world

 

[Sperminator]

A raise of interest rate will not soften the rate of purchase because everyone needs a roof over their head, as can be seen that buyers are willing to fork up more in COV.

In fact this may be a double whammy for the youngs who aspire to buy their own flats now, with high COV and high interest rates.

Recent buyers who purchased their property under variabe interest rate scheme may suffer, but a panic sell off will not result as long as they can afford to hold on to it, esp if they can lease it off.

Tycoons who can afford to buy high end condos have the wealth to ignore the interest rates, hdb upgraders who want to upgrade to mass market private property may think twice now if the interest rate is increased, thus making the supply of resale hdb even less.

Housing cost will remain high as long as Singapore's PR population grows and a deliberate attempt from govt to keep the supply low. Interest rate is a less concern.

My two cents worth.

Dear AfterTimes Sir,

Could you share with us, what is the meaning of COV?

And also what are the current interest rates for HDB loan, and Private loan?

thanks

 

[Sperminator]

Read Tommy Koh statement today that so profoundly, overly positive about the fure strength of USA...naturally so as he has a good part of his life spent in the states..
BUT..could a countries that borrow uncontrolledly astromical amount of monies from the rest of the world ,,just to sustain the credit-based life-style of the Americans??? and go to war at the slightest excuse.....
THE REAL PROBLEM with the USA is they still think they were the superpower that control the world after secong world war....in a miniscal scale ..they become arrogant , and gradually ignorant of what other nations can achieve..just like the ching dynasty....
1] IT IS A COMPLETE FALLACY THAT only USA has the best brains...Russia is wiles ahead of the state in space technology...china is already catching up cloisely behind ...
2] In terms of military research...Russian has very advance nuclear submarines..and fighters jets....the Mig 31.n above canbeat the F16 flats...China is already test flying their stealth bombers n fighters jet....the gap..will be close within 10 years...
3]In terms of Rn D ..Russia n china has equal n more research personnels.....they will soon outbeat USA
4]maybe the unpredictable time frame of democratisation of china n russia is THE ONLY marginal advantages...BUT a centrally controlled nation IS MANY TIMES MORE EFFECTIVE IN all MAJOR EVENTS...including R nD ...just look at the ridiculously clumsy way the US in tackling the Caterina disaster when compare to China in tackling the SZIchuan earthquake...
5] US banks are technically bankcrupt TILL NOW[ as also stated by Jorge Soros..]..
the state is also bankcrupt...with 10% umemployment ..and tens of trillions new U$ printed...with hundreds of trillion of toxic assets just put under the carpet....ONLY FOOL will think the US can recover soon without any PRICE TO BE PAID FOR THEIR UNCONTROLLED,,EXCESSIVE CAPITALISM WITHOUT REGULATIONS!!!!!!!!!!
...the damage in the USA is historical .epical in calling it a day for the supremacy of the USA...period...
US$ will likely to devaluate another 30% or so....thats why gold is shooting to the sky...
the poor US citizenz has to go through 5 t0 10 years of hardship....by that time ,,Russia, china ..n India..Brazil will advance much closer or exceed US in one field or others....

Dear Sir CowBehCowBu,

Thank you for your solid summary, you make a great market researcher anytime!

I truly enjoyed your articles, if I could up you some points, I'll do it, but now I am a newbie...

From my point of view, GOLD may eventually reach USD 2000 per ounce, although it's still hovering USD 1000 per ounce.

That's of course due to the USD losing value.

What can we do?

My thinking is that perhaps we should consider holding real assets.

Example ; PAID UP PROPERTIES that generate INCOME / or positive cashflow properties.

GOLD BARS, that you can afford to hold at HOME... ( banks are known to collapse... remember the ICELAND BANKS, it caused 200,000 British to lose all their money overnight! )

If you are in USA, better get yourself COMBAT trained, and learn how to carry a side arm.

Have a plot of land and consider planting your own food (which some US people are doing right now)

Learn how to BARTER TRADE, which is happening in UK, London, where they plant specific foods, and being exchanged for other food. (tomato, exchange for cabbage)

I am not a financial expert, but I think RMB as backed by 1.3 billion labor power, would not slide, although having 2 trillion USD T-bills... so, I'm betting with RMB, and keeping my money with RMB as well.

As for Singapore, I think SGD is still powerful enough to be a regional currency... perhaps need some financial experts to advise on what currency to hold.

I heard that there is a new currency called AMEROS a combined currency with CANADA + USA + MEXICO... as opposed to the EUROS...

It's time to brush up your CHINESE, HINDI, RUSSIAN, POURTUGUESE, SPANISH... because these are the languages of trade in the future....

 

[hoho99]

Er forgive someone who don't really understand economics but won't it be more beneficial to the US if their currency goes down as it will be cheaper for countries to import US products? And it will make enable them to compete wif China in the export market so much easier?

 

[Maverick01]

Sir CowBehCowBu?? kana knighted.

Dear Sir CowBehCowBu,

Thank you for your solid summary, you make a great market researcher anytime!

I truly enjoyed your articles, if I could up you some points, I'll do it, but now I am a newbie...

From my point of view, GOLD may eventually reach USD 2000 per ounce, although it's still hovering USD 1000 per ounce.

That's of course due to the USD losing value.

What can we do?

My thinking is that perhaps we should consider holding real assets.

Example ; PAID UP PROPERTIES that generate INCOME / or positive cashflow properties.

GOLD BARS, that you can afford to hold at HOME... ( banks are known to collapse... remember the ICELAND BANKS, it caused 200,000 British to lose all their money overnight! )

If you are in USA, better get yourself COMBAT trained, and learn how to carry a side arm.

Have a plot of land and consider planting your own food (which some US people are doing right now)

Learn how to BARTER TRADE, which is happening in UK, London, where they plant specific foods, and being exchanged for other food. (tomato, exchange for cabbage)

I am not a financial expert, but I think RMB as backed by 1.3 billion labor power, would not slide, although having 2 trillion USD T-bills... so, I'm betting with RMB, and keeping my money with RMB as well.

As for Singapore, I think SGD is still powerful enough to be a regional currency... perhaps need some financial experts to advise on what currency to hold.

I heard that there is a new currency called AMEROS a combined currency with CANADA + USA + MEXICO... as opposed to the EUROS...

It's time to brush up your CHINESE, HINDI, RUSSIAN, POURTUGUESE, SPANISH... because these are the languages of trade in the future....

 

[eatshitndie]

Totally agree with you.

The main reason why the US is technologically superior and ahead in terms of R&D was because:
- most of the best brains in the world migrated there to seek a better life.
- their way of life and culture and tolerance of failure & differing opinions
- they had to money to invest in R&D cos they USED TO, I repeat USED TO manufacture and export goods to the rest of the world

the tally for nobel awards so far this year:

medicine - 3 americans
physics - 3 americans
chemistry - 2 americans, 1 israeli

 

[Seee3]

The stock market has rebounded because of inflation; and pple moving out of cash into other assets. (Due to super low interest rates set by central banks, and printing massive amounts of paper money).

A rising stock market is not equal to a recovery. A rising stock market, and rising gold and commodity prices and rising home prices = Inflation!

To a layman like me, rising stock market, gold, commodity and house is not an indication of inflation but just a clear indication of speculation.

It is just hot money trying to make a quick buck from anything - capitalising on sentiment and greed. (I always remembered how much tulip bulbs once worth)

The same goes with the US dollar or any other currencies. To the punters, it is just an 'item' that others one to play with. Push it down then pull it up, and they make big money.

The factor that determines the value of a currency no longer depends on whether is the country's economy doing fine. The key factor is whether how big is the market that plays with that currency. As long as US$ is a main "item" in the currency market, it will not die. However, if international trade stops using US$, then it is a different story. When that happens I believe it will be the next world war. US will never allow that to happen.

 

[zuoom]

makes sense.

 

[Meltdown]

I would really appreciate to understand the following projections.

CASE 1 Scenario : What would happen when there is a GLOBAL MELT DOWN of the USD becoming absolutely worthless?

Unless there's a new International Reserve Currency already put in place before the USD becomes worthless, world trade will come to almost a complete halt. Why? Bec most countries are using the USD to settle their trades with each other.

CASE 2 Scenario : What will happen to the massive trillions of USD debts owned by nations like CHINA, RUSSIA, BRAZIL, INDIA, etc???

They'll become worthless!

That's why these countries have been KPKB lately about the unsustainable trillions of USD that the Federal Reserve has been printing nonstop.

CASE 3 Scenario : Would War Arise, when USA declares bankruptcy, Chap 11 as a nation, and no body to bail them out, use what to pay back? as debts could not be payable?

Hard to predict at this moment. How can the USA go to war when the USD is absolutely worthless? How can they pay the bill to fight a war?

The most possible outcome is that the USA will start a war before the USD become absolutely worthless. They can start a war in the Middle East to try to control the vast amounts of oil there. If they succeed, they can use the oil reserves to back the USD which will then be backed by a tangible asset, thereby, restoring global confidence on the USD.

CASE 4 Scenario : Would the rest of the world's economy be affected due to the defuncted USD? if yes, how bad...

Absolutely!

As mentioned above, world trade will come to a complete halt unless an alternative International Reserve Currency has already been put in place.

When the USD becomes absolutely worthless & global trade has come to a halt, I expect the imported rice & other imported foodstuffs on the store shelves to be emptied by panicked shoppers within a matter of days, if not within a matter of hours!!

I expect gov'ts in most countries to implement rationing on basic necessities when the USD become absolutely worthless, but only if the gov'ts themselves can survive the crash! If the gov'ts also collapse, I expect anarchy & a total breakdown of law & order.

CASE 5 Scenario : What happens to SINGAPORE? would there be a DOOMSDAY scenario that all of us should look out?

Absolutely!! The SGD will also collapse when the USD become absolutely worthless.

All countries' fiat currencies, with the exception of the EURO, are backed by the USD and other fiat currencies as their reserve backing.

Even the EURO is not immune bec it was backed by gold of only 15% as it's reserve when it was first introduced. Many analysts suspect that it's gold backing is now less than 10%. So, with a backing of more than 90% comprised of fiat USD & other fiat currencies, the value of the EURO will also collapse when the USD becomes absolutely worthless.

The demise of the USD will affect all countries & collapse all other fiat currencies! The wealth that most gov'ts & SWFs are holding today are paper wealth like stocks, US Treasuries, Gov't Bonds, corporate & municipal bonds, warrants, private equities, hedge funds, ETFs, derivatives, and the USD & other fiat currencies. These type of wealth is a mirage bec they are all IOUs denominated in USD or in other fiat currencies. When the USD & all other fiat currencies collapse, the wealth of most gov'ts & SWFs will be wiped out!!

 

[hockbeng]

Er forgive someone who don't really understand economics but won't it be more beneficial to the US if their currency goes down as it will be cheaper for countries to import US products? And it will make enable them to compete wif China in the export market so much easier?

The US makes NO products that the world wants.

Look at our shopping centres and roads. How many items are made in the US.

The only products that they did make and export were financial products like lehman bro minbonds. That's why they also fight so hard to make everything non-tangible that is produced in the US copyrighted.

 

[Sperminator]

Unless there's a new International Reserve Currency already put in place before the USD becomes worthless, world trade will come to almost a complete halt. Why? Bec most countries are using the USD to settle their trades with each other.


They'll become worthless!

That's why these countries have been KPKB lately about the unsustainable trillions of USD that the Federal Reserve has been printing nonstop.


Hard to predict at this moment. How can the USA go to war when the USD is absolutely worthless? How can they pay the bill to fight a war?

The most possible outcome is that the USA will start a war before the USD become absolutely worthless. They can start a war in the Middle East to try to control the vast amounts of oil there. If they succeed, they can use the oil reserves to back the USD which will then be backed by a tangible asset, thereby, restoring global confidence on the USD.


Absolutely!

As mentioned above, world trade will come to a complete halt unless an alternative International Reserve Currency has already been put in place.

When the USD becomes absolutely worthless & global trade has come to a halt, I expect the imported rice & other imported foodstuffs on the store shelves to be emptied by panicked shoppers within a matter of days, if not within a matter of hours!!

I expect gov'ts in most countries to implement rationing on basic necessities when the USD become absolutely worthless, but only if the gov'ts themselves can survive the crash! If the gov'ts also collapse, I expect anarchy & a total breakdown of law & order.



Absolutely!! The SGD will also collapse when the USD become absolutely worthless.

All countries' fiat currencies, with the exception of the EURO, are backed by the USD and other fiat currencies as their reserve backing.

Even the EURO is not immune bec it was backed by gold of only 15% as it's reserve when it was first introduced. Many analysts suspect that it's gold backing is now less than 10%. So, with a backing of more than 90% comprised of fiat USD & other fiat currencies, the value of the EURO will also collapse when the USD becomes absolutely worthless.

The demise of the USD will affect all countries & collapse all other fiat currencies! The wealth that most gov'ts & SWFs are holding today are paper wealth like stocks, US Treasuries, Gov't Bonds, corporate & municipal bonds, warrants, private equities, hedge funds, ETFs, derivatives, and the USD & other fiat currencies. These type of wealth is a mirage bec they are all IOUs denominated in USD or in other fiat currencies. When the USD & all other fiat currencies collapse, the wealth of most gov'ts & SWFs will be wiped out!!

Dear Meltdown Sir,

Thank you for your great information...

It seems like the USD can indeed ruin the world when it comes to ground 0.

I hope that the worst case scenario does not happen.

We'll all just have to consider ways of planting food, and collecting water if this kind of things happen... FOOD, WATER, ELECTRICITY would be the primary basic things that would be in huge demands...

Anyways... let's wait and see.

 

[AfterTimes]

The most possible outcome is that the USA will start a war before the USD become absolutely worthless. They can start a war in the Middle East to try to control the vast amounts of oil there. If they succeed, they can use the oil reserves to back the USD which will then be backed by a tangible asset, thereby, restoring global confidence on the USD.

Haven't they try that already? The attack of Iraq is all about trying to control the oil fields there, but they have failed. Not ony another attempt will be futile, but will run the risk of the whole world turning against the US. Plus I don't think the Obama administration will do it.

Cut their military spending deeply and allow high end weapons or technology to be sold to China. This is one way to reduce their debt, but I reckon they will never do it. Much the pity.

 

[Goh Meng Seng]

Er forgive someone who don't really understand economics but won't it be more beneficial to the US if their currency goes down as it will be cheaper for countries to import US products? And it will make enable them to compete wif China in the export market so much easier?

You are technically right, but that depends on whether US has produced enough goods and services for the world to consume. Besides, many of the US enterprises have been bought by other countries' governments and companies. Thus, whatever advantages that such depreciation of US dollars will not benefit Americans 100%. Profits will be taken off by other countries.

Goh Meng Seng

 

[longbow]

US$ will never become worthless. Should US $ lose its reserve currency status what will happen is foreigners will try and get out of the US$ causing it to drop or will come to the US and use the US$ that they have and buy up US assets - property, stocks etc. There will be rampant inflation.


It will not be overnight but gradual. There will be more preferance for another currency of trade within certain regions. In Asia, the Yuan might be used more often. Australia would not mind accepting Yuan for the resources that they sell to the Chinese because they can in exchange use the same Yuan to buy Chinese manufactured goods or use Yuan to pay for a Korean made bulk tanker (to transport their iron ore).

Koreans would accept Yuan as they can use it to buy Chinese manufactured goods. So there maybe a regional use for Yuan. But all this is 20 to 30 years down the road. People need to gain confidence with Chinese financial system and economy.

Unless there's a new International Reserve Currency already put in place before the USD becomes worthless, world trade will come to almost a complete halt. Why? Bec most countries are using the USD to settle their trades with each other.


They'll become worthless!

That's why these countries have been KPKB lately about the unsustainable trillions of USD that the Federal Reserve has been printing nonstop.


Hard to predict at this moment. How can the USA go to war when the USD is absolutely worthless? How can they pay the bill to fight a war?

The most possible outcome is that the USA will start a war before the USD become absolutely worthless. They can start a war in the Middle East to try to control the vast amounts of oil there. If they succeed, they can use the oil reserves to back the USD which will then be backed by a tangible asset, thereby, restoring global confidence on the USD.


Absolutely!

As mentioned above, world trade will come to a complete halt unless an alternative International Reserve Currency has already been put in place.

When the USD becomes absolutely worthless & global trade has come to a halt, I expect the imported rice & other imported foodstuffs on the store shelves to be emptied by panicked shoppers within a matter of days, if not within a matter of hours!!

I expect gov'ts in most countries to implement rationing on basic necessities when the USD become absolutely worthless, but only if the gov'ts themselves can survive the crash! If the gov'ts also collapse, I expect anarchy & a total breakdown of law & order.



Absolutely!! The SGD will also collapse when the USD become absolutely worthless.

All countries' fiat currencies, with the exception of the EURO, are backed by the USD and other fiat currencies as their reserve backing.

Even the EURO is not immune bec it was backed by gold of only 15% as it's reserve when it was first introduced. Many analysts suspect that it's gold backing is now less than 10%. So, with a backing of more than 90% comprised of fiat USD & other fiat currencies, the value of the EURO will also collapse when the USD becomes absolutely worthless.

The demise of the USD will affect all countries & collapse all other fiat currencies! The wealth that most gov'ts & SWFs are holding today are paper wealth like stocks, US Treasuries, Gov't Bonds, corporate & municipal bonds, warrants, private equities, hedge funds, ETFs, derivatives, and the USD & other fiat currencies. These type of wealth is a mirage bec they are all IOUs denominated in USD or in other fiat currencies. When the USD & all other fiat currencies collapse, the wealth of most gov'ts & SWFs will be wiped out!!

 

[longbow]

Even if the Chinese currency were to appreciate by 20%, the US still would not be able to compete with industries that Chinese are dominant in. And even with a 20% rise in Yuan, few countries out there can compete with Chinese manufacturing. They have supply chain, huge domestic markets, excellent quality (where do you think all your ipods are from) for the price good infrastructure. It is like a perfect storm, only in a good way, for the Chinese

Er forgive someone who don't really understand economics but won't it be more beneficial to the US if their currency goes down as it will be cheaper for countries to import US products? And it will make enable them to compete wif China in the export market so much easier?