How Long Does The Dollar Have?

For the person who asked 'why gold' its because its a store of value, gold is sufficiently rare, and does not tarnish, rust or diminish in any way. All value is based on scarcity, all money is a store of value - it enables us to trade with those for something when they do not have anything we want directly.

We can't use rocks to trade because they are no sufficiently uniform or rare. We can't use other metal or wood because it rusts and rots and will not retain is condition for long periods of time. Thus we're left with gold and other precious metals.

In the modern world the gold standard was finally done away with in 1972 and we've had run away inflation ever since, the numbers published by the government do not tell the whole story as they keep changing the way inflation is calculated to keep the numbers artificially low. (seriously, you have to be a special kind of stupid to think we should ignore changes to food and energy).

Politicians are heavily invested in making sure the inflation rate stays high, since it allows them to keep spending money with no consequence since its easy to push the burden onto the next generation via the national debt. China, who owns much of it, is in a quandary because if we pay them back it will never be worth what they gave us initially. The dollar is done once foreigner's figure out we can't pay them back - but that's a problem for people who have a large amount of credit in US dollars - if they admit the dollar sucks they lose their credit so I think they just keep loaning us more money and hope their problems go away. Its like drinking more to forget about your drinking problem.

That is a truly obsolete view. We don't HAVE to print actual dollars anymore, just inconvenience electrons.

In the mid 20th century, when that view was far more accurate, a dollar spent would be back in circulation in a day or three. Today a single dollar, or at least the inconvenienced electrons that represent that dollar, can be spent 100s of times in an hour.

This has the effect of actually multiplying the dollars in circulation. Thank all the powers that be that China in sitting on billions of our dollars (actual bills? Inconvenienced electrons?) keeping them out of circulation.


Once we were the biggest creditor on the planet. Everyone owed us money.

Then came Regan. In 8 years we went from the biggest creditor on the planet to the biggest debtor on the planet. But it isn't a bad thing really. We pay in dollars. Everyone holds our dollars. At that point its what Zicdeh said. And no one, not even China, wants to crash the dollar.

North Korea makes a substantial profit counterfeiting 100 dollar bills. They do not counterfeit Chinese yuan.

And about that CPI....

Almost every president's administration finds some way to rig the CPI to show inflation as lower than it actually is. Today they do not count food or rental housing in the CPI.

In the last eight years the cost of many simple food items, yogurt being my favorite example, has doubled. But the monthly cost of buying a house has dropped, and that's counted in the CPI unlike yogurt.

The new official currency will be your grandmother's doilies! Get to crocheting, folks!

EDIT: I've always wondered why all the politics and religion threads always make their appearance at the same time. Hmmm...

Working in finance I can give you the lay mans answer.

US dollar is dependant on the US doing well and staying high, many EU countries as well as China and Russia don't really like dealing in US dollars.

If the US takes a huge dive (as most of the world expects/hopes it will) gold still holds its value in the majority market world wide.

That's as basic as you can get on that subject.

On trading in euro's etc, it's prety much just about what the majority of world wide investment firms talk to each other and again, the US isnt and hasnt been looking good for a while. China was VERY strong to take over but for various reasons (re: speculation of American interference and destabilization) China isnt such a safe bet.

With the eurozone looking shakey thanks to Greece, Ireland and Spain the US dollar is still king...but just barely.

yeh the dollars doing great don't worry.

just forget the odd 900 trillion bucks missing from the reserve - like they want you to. Don't be concerned you don't have the highest GDP - definitely don't be upset that the British Pound can buy you half as much on top again for every dollar - when we come visit.

And lets both forget the fact that in the next 10 or so years we're all going to be *** as the global buying power is going to shift to the east anyway.

^^

Which is why the cuts should be uniform, unless politicians actually want to admit that there's a large problem of waste in the government. But that'll just make them look worse. :p

Found a counter point to the Iranian Oil Bourse vs US hegemony argument.

http://www.engdahl.oilgeopolitics.net/Geopolitics___Eurasia/Iran_Oil_Bourse/iran_oil_bourse.html

It pretty much says that our money isn't backed by oil but backed by F-16s, Raptors and Abrams tanks. But still. Anyone who wanted to trade oil for non-us currency is considered an enemy.

Turns out we're even forcing countries like Japan and India to buy less or completely stop buying Iranian oil. It's been cool trying to figure out how multidimensional our foreign policy is and not just listening to the government/news media propaganda.

Well about the only news i read these days is from the one guy most large networks have now banned from live shows as he refuses to follow their agenda and "news reporting policy" they are told to follow - and they are all scared ***less what he will say on live TV unless they can edit him out later on ^^

http://www.infowars.com/

Because it's finite. Also miners determine its growth so it's difficult to manipulate.

Neither of those "problems" affect paper/electronic money. Paper money wouldn't be so bad if it wasn't being manipulated by a handful of economists instead some hard math equation. Even basing it off of Census information would make more sense than arbitrarily lowering interest rates to encourage more borrowing in an already inflating monetary environment.

Printing more money = less worth per dollar. On the other hand, if there's a huge population boom, but no additional money in the system then money becomes too rare and then a penny could be worth multiple gallons of gas - which also doesn't work.

What you use as money is arbitrary. But too often, if it's paper, then governments/banks will weasel their way into printing more of it to have more value: The instant money is printed, it has the same value as the current money in the system. It isn't until that printed money circulates into the system is a new value applied to all money of that type. The new value is inevitably lower than that of the old value so the people who first get their hands on that money can transfer said money into something that will retain its value.

it is but a game and we are the sacrificial pawns, if not part of the game board.

Why exactly do we care about our "debt" to other countries?

Debt just like value are not real things. They are imaginary terms that we use to keep things running in an orderly fashion.

The bottom line is that the US has positioned itself as the center of the world's economic structure by being the single greatest consumer of goods. All other nations have a vested interest in our continued success. That's a good place for the US to be.

Also, it's not like any other country has the ability to "collect" on the US if for whatever reason we just decided to not pay up. There isn't another country with the military might to reposes anything from us.

I think the US has been smart in allowing other countries to build up their own economies by owning US debt. Normally we think of those who own the debt as being in control of those who owe, but in this case I think the US actually uses it's debt to control the countries that own it.

most of our debt is to ourselves, and as far as the overall debt/debt to other countries it has to do with our credit rating, and really our economy in general.

There's several countries that could give us a run for our money, the only real great advantage we have is Navy, if it came down to it we could line our coasts and fend off attacks, but then we'd have to worry about land invasion from Mexico or Canada, not to mention any holes in that barricade.

having a requirement of a balanced budget would be a very bad idea, but our debt has gotten out of hand.

thing if the world wants us to pull out of it all they have to do is strengthen the value of the dollar and buy a crapload of US goods. the dollar goes up, oil goes down, the economy boosts, etc.

ATM there is no country that could actually attempt an invasion of the US and hope to be successful.

Our long range capability, means that no matter where our forces are located we are always able to take the fight to the other country.

We all like to think of these problems in a civil way, but none of us should be naive to think that its the non civil responses that keep the US in its position of power.

I've rewritten this a couple times now...

HERRRDERRRR I'M SAI, LET'S JUST NOT PAY, NO ONE CAN TOUCH US, WE R AMERICA LOL

***, get over it, America's time is over.

Canada, and Mexico could invade, actually take over: doubt it.

But no single country is the point, China, with N. Korea, and a handful of others combined could whip our ***, or if we pissed off Europe. Our forces are really spread to the point to be able to easily take the offensive in another nation "peace keeping" not to be able to withstand a full scale assault on our own turf.

Granted actually declaring war is an international crime, so it's not that big of a worry. If China tried something Europe would end them.

meh, it's fixable but not for long.

Get off that sinking ship before it's too late.

if I can con my gf into it I'm going to attempt to move to Norway in a few years, but we'll see.

Norway's pretty.
Expensive as ... I don't even have a word to compare.

The equivalent of a combo meal at a fast food restaurant is like $20 (USD).

I probably wouldn't eat fast food there, but what's the minimum wage again?

Im not one who thinks the US is invincible or anything, because I do think we have serious issues, as we discussed in the other thread.

But military threat is not one of them.

No combination of other countries could really threaten the US, without causing their own destruction. The US sits on a nuclear arsenal big enough to vaporize every other country in the world 10 times over.

No matter how spread out our forces, countries like China, N Korea etc, know that if they actually landed forces on our lands and the situation looked bad enough, we could destroy their entire country with the flip of a switch.

Our leaders def are of the mindset of "If we are going down, ALL the rest of you are going down with us"

I doubt Obama shares that mindset, and he's the only one with the authority.

the mutualdestruction scenario was always dumb.

but that's really the only failsafe...

Without anything to back it, money is basically just worth what people believe its worth which is in large part based on how much of it is out there (scarcity).

However, America won't be going back to a gold standard for its currency primarily for two reasons: 1) Even if we have all the gold we claim to have at fort knox the price of gold would need to be set at around 7000 dollars an ounce based on how many dollars are in circulation. 2) Where are all the gold mines? That's right, Russia, South Africa, etc. Our leaders will NOT allow increased mining in foreign countries to destroy the value of our currency (they prefer to do that themselves!)

Being the world's reserve currency brings some marginal benefit but nothing too great. If it changes to the yuan or whatever the exchange rate won't change too much because of it. Also, other countries have a huge vested interest in keeping the value of the dollar because they are holding them.


Having said all that, the one thing that WILL happen because of the debt is a devaluation of the dollar which will make imported items cost more but will add more jobs as we will be exporting more due to sales in other countries counting for more actual wealth being generated due to the differing valuations in currency. The extra jobs sound good until you realize they will be very very low wage jobs. The end result of the debt will be a HUGE gap between the rich and the poor in this country.

Norway doesn't have a set minimum wage.

Spence, it's pronounced 'Murica! 'Murica!

ah, they're heavily Unioned.

their average pay is still much higher than our own, but not enough if the prices can really be judged by a 3x markup on fast food.

I should look at the average costs of living, but I'm feeling lazy.

Oh man, lol'd so hard at Sai's comments. Ok so say the states refuse to pay up...do you really honestly think all other countries would continue to trade with them? Without even looking the statistics up, I highly doubt america has the raw materials within its own borders to sustain the "American way of life".

The states would have to produce damn near everything at home...and have the resources to do so. God I hope you are a troll because the ignorance in that post is way too much.

we wouldn't have some oil and a few toys, the rest of the world would be out of food.

We got what? a month~? then we can plunder everything we want.