- Joined
- Aug 6, 2006
- Messages
- 766
- Reaction score
- 16
Stay away from the US dollar, at least as a "safe haven" from other currencies, as it is extremely flawed. The fundementals of the US economy are essentially toxic, and all the money printing that is going on help prop up what is left of the economy is going to have an inflationary impact eventually.
Inflation is the increase in the money supply, so eventually the Fed is going to hit that point of no return with the US government, where the prices of real assets will raise against the paper dollar. This is the danger with fiat currencies. Once this starts to happen, no amount of dollar infusion is going to be able to paper over their issues.
All of the big banks in the US have asset sheets completely filled with toxic assets, MBS, millions of loans on homes that are now worth anywhere from 10-70% less then than the loan itself, and it goes on from there. Also now consider that the US government, in an attempt to stop a complete housing collpase, is now co-signing all mortgages, hoping this will entice more lending from the banks and will remove tension from the buyer as well.
The part most people don't realize is when the government is guaranteeing these loans, they are essentially forcing the US tax payer, all of them, to co-sign for someone elses mortgage. This is not what you want the government doing, since they are just "guaranteeing" these loans with money they have the Fed print out of thin air, and swap for securities (IOU's) with a nominal yield.
Basically, they are in such debt that it is unlikely they will ever get out of it. At this point I believe they will eventually have to default. By 2015, upwards of 39% of all tax income will have to go towards the interest on outstanding loans with foriegn creditors. That is simply unsustainable. Oh ya, and their debt/GDP ratio is over 100% now. I could go on and on with factual information that points out just how flawed the economy is there, but i'll let you come to your own conclusions.
I would not hold any USD paper money. America is the biggest debtor nation in the world, has a very combustable situaiton with the biggest creditor nation in the world (China), in which they are doomed to be the losers when all is said and done, and they have a horrific trade deficit which simply adds to the daily expenses of running what is essentially a service based economy.
Stay Away.
Inflation is the increase in the money supply, so eventually the Fed is going to hit that point of no return with the US government, where the prices of real assets will raise against the paper dollar. This is the danger with fiat currencies. Once this starts to happen, no amount of dollar infusion is going to be able to paper over their issues.
All of the big banks in the US have asset sheets completely filled with toxic assets, MBS, millions of loans on homes that are now worth anywhere from 10-70% less then than the loan itself, and it goes on from there. Also now consider that the US government, in an attempt to stop a complete housing collpase, is now co-signing all mortgages, hoping this will entice more lending from the banks and will remove tension from the buyer as well.
The part most people don't realize is when the government is guaranteeing these loans, they are essentially forcing the US tax payer, all of them, to co-sign for someone elses mortgage. This is not what you want the government doing, since they are just "guaranteeing" these loans with money they have the Fed print out of thin air, and swap for securities (IOU's) with a nominal yield.
Basically, they are in such debt that it is unlikely they will ever get out of it. At this point I believe they will eventually have to default. By 2015, upwards of 39% of all tax income will have to go towards the interest on outstanding loans with foriegn creditors. That is simply unsustainable. Oh ya, and their debt/GDP ratio is over 100% now. I could go on and on with factual information that points out just how flawed the economy is there, but i'll let you come to your own conclusions.
I would not hold any USD paper money. America is the biggest debtor nation in the world, has a very combustable situaiton with the biggest creditor nation in the world (China), in which they are doomed to be the losers when all is said and done, and they have a horrific trade deficit which simply adds to the daily expenses of running what is essentially a service based economy.
Stay Away.
