Something to keep an eye in short term
More interesting comments below the article as well.
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I didnât expect my country get in list out of nowhere,
Is that India?
Its Indonesia, with corupt goverment ,im very doubting IMF prediction
I was not aware Indonesia was South East Asiaâs biggest economy. Next yearâs growth was projected above 8%, but down to around 6% now due to the pandemic.
I think that dollar already have depreciated. It is true that US is spending a lot of money and have issues since corona outbreak, but all other countries around the world are doing just the same. So, I think that we will see global depreciation.
Looks like this the most appropriate place for this article.
Talk about a good background history lesson on the USD. This, I believe, should be required reading for those traders who really want to know their industry.
Warning. This is long. But very insightful.
I hope you can get access to it. I bucked up for the access (subscription). Donât know if you all need to as well (please let me know).
https://seekingalpha.com/article/4393010-dollars-place-in-world-is-shifting-over-time
Mike
GSI Exchange, a seller of gold and silver bullion and numismatic coins, sent an email on Tuesday, containing the reprint of an article on the coming U.S. hyperinflation. The reprinted article is from the Mises Institute and was written by Jeff Deist, president of the Institute.
I have decided to post a link to the original Deist article, rather than a copy-and-paste of the GSI reprint.
I have included the GSI Editorâs Note, introducing the Deist article
From GSI Exchange
What Will Happen After Your Money Dies?
GSI EDITORâS NOTE:
To mainstream ears, warnings of dollar hyperinflation similar to that of the Weimar Republic in the early 20th century might sound outlandish. Yet, the concept of money â what it is, how itâs produced, and how it retains value â is anything but a mainstream topic. In other words, people know money as well as they understand people based on stereotypes: they can categorize it according to âplaceâ and âfunctionâ while not knowing anything substantial (or essential) about it. This article touches on ideas in Adam Fergusonâs book When Money Dies. Itâs a detailed discussion of the risks of dollar hyperinflation. Can it happen anytime soon; why are most people unable to identify the risks; and what can be done to avoid such a dreadful economic fate?
Here is the link to the Mises Institute article â
Excerpts from the article â
In our overwhelming material abundance, aided by the natural deflationary pressures of markets, we simply have lost our ability to imagine a hyperinflationary scenario.
Our make-believe economy, as Axios puts it, increasingly depends on enormous levels of ongoing fiscal and monetary intervention. Corporations borrow so cheaply we might call it âhouse money,â then buy back their own stock rather than hire or expand. Newly created money and credit benefits those closest to the spigot, juicing equity markets but doing little for ordinary people. Congress spends with abandon, knowing the Fed will keep its debt service low and provide a ready backstop market for US Treasurysâbut little of the stimulus reaches Main Street. Whole industries, including airlines, seek bailouts for covid shutdowns. Those shutdowns also strain tax revenue for state budgets; Mr. Biden promises a bailout there too. Meanwhile, small business and retail face an apocalypse which already leaves tens of millions unemployed. Once again, the presumed answer to all of this is the Fed.
Hyperinflation may not be around the corner or even years away; no one can predict such a thing.
But at some point the US economy must create real organic growth if we hope to maintain living standards and avoid an ugly inflationary reality.
History shows us how money dies. Yes, it can happen here. Only a fool thinks otherwise.
All this is so short-lived, USD is gonna come up strong and continue to be the reserve currency of the world without a doubt. For now I am looking at CHF pairing with EUR.
not after this stimmy check its going to continue to go down
Yeah, itâs really hard to stay in the top of this list I guess the curve of economic power for any country will have the shape of inverse âVâ, so basically China is now at the first stage and US topped out and switched to the second (declining part of inverse V)
Recently bought When money dies looking forward to reading it.
Here is my big fear for the US and I was laughed by a few on another thread for suggesting that the US could go the way of Venezuela or any other country thar experienced hyper inflation.
But America IMO is POSSIBLY in real danger of losing its status as world reserve currency.
First off - and I donât want to bang on about the election (but it canât be ignored) - if Biden is inaugurated come 20th Jan it will be the most corrupt government the US has likely had ever, or at least since the gilded age.
In all these countries that experienced hyperinflation there were corrupt governments.
Money printing is only part of the picture. It also involves folks losing faith in their government.
75 million Trump supporters believe the election was stolen.
They are not going to accept him as legitimate.
And Look what is happening already with large numbers of people moving out of democrat ran states and cities.
Due to crime, police defunding, taxes etc
Many of the municipalities are broke already.
Iâm not trying to score political points just suggesting such things will only get worse with a Biden presidency.
Then there is the fiscal irresponsibility that will only increase - itâs bad enough now.
Those who objected to my point in a previous thread said there would be checks and balances with one party controlling the house of representatives and the other the senate.
But with an election coming up in Georgia very soon there is a good chance the Republicans will lose the Senate.
If not through voter fraud, then through the simple fact that Republicans in that state wonât vote for Loeffler or Purdue as they are NOT supporting Trump in stopping the steal - despite the outcry in Georgia.
Trump aint great - he said heâs reduce the trade deficit but it got much bigger - but a Biden presidency will be utter carnage in multiple ways.
So getting back to my point why would foreign investors want to buy dollars when the US is literally taking the piss out of them?.
Why would they invest in US T bonds when the currency is being debased?
Ultimately why should the US have the privilege of having the worldâs reserve currency when basically they no longer deserve it?
China would love to have the Yuan as a reserve currency, and the US has many enemies.
I really do fear the US, which will have a big knock on effect for the UK too.
I am sincerely hoping for Biden not to be inaugurated - there is still a good chance.
Not so much for a love of Trump but for the fact if Biden succeeds then the US is really nothing more than a banana republic.
On the topic of reserve currencies â and which national currencies might succeed in replacing the U.S. dollar â you should read this article by Wolf Richter:
The editors at GSI Exchange point out some things that the Richter article does not take into account â
What the article doesnât focus on are the factors that remain beyond the standard currency mixâthe possibility of SDRs flooding the system, the influence of central bank digital currencies, or the potential return to a gold standard. These are among the many not-so-unexpected factors that appear like âblack swansâ (theyâre not, really) as their likelihood appears too marginal to consider probable. But as the pandemic has taught us, itâs important to look beyond common expectations to prepare for the unexpected.
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Fed maintains too loose monetary policy (the most aggressive easing among world Central Banks) which makes the case for meaningful USD appreciation very unlikely. The Fedâs policy is just too strong headwind to bet against.
Interesting article from AMEX about possible alternatives to a US Dollar Reserve currency. SDRs are mentioned, but specifically in transforming them into an international currency. This of course would mean the IMF would become the worldâs central bank, with other central banks holding reserve accounts in SDRs with the IMF. That would need international cooperation to happen, which would be an obstacle.
Thereâs also the idea of a multi-polar reserve system:
Although the dollar is globally dominant, countries also tend to hold the currencies of the dominant trading nation in their vicinity. Thus, European countries outside the Eurozone tend to hold the euro, and Asian countries hold the yen and, increasingly, the renminbi. Some economists argue that this tendency could develop into a full-fledged âmulti-polarâ system in which the dollar would be the principal reserve currency for the Americas, the euro would be the principal reserve currency for Europe and Africa, and the renminbi for Asia and Australasia.5
Should a multi-polar reserve currency system emerge, then global demand for both dollars and dollar-denominated safe assets might subside, while demand for euros and renminbi, and their associated safe assets, might increase. This could mean a lower dollar exchange rate, particularly in relation to the euro and the renminbi, and higher interest rates on dollar-denominated securities, notably U.S. government debt.