Is the Dollar going to crash?

[Rasta_Hibs]

I have been looking at this subject for a while now. Yes this has been predicted for many years but is it now come to a point where the dollar will crash?

The USA cant pay back the money it owes as the level of debt is too large.

The strength of the dollar comes from the strength of the US military and also the fact that it is the world reserve currency. But with the emergence of the BRICS nations and with China and Russia signing gas deals in a currency other than the dollar - Switzerland going to allow trading in yen. HAs the time come where the dollar will crash?

Is this why wee see so many wars right now is to preserve the US/Dollar domination or the world?

[RyeSloan]

I have been looking at this subject for a while now. Yes this has been predicted for many years but is it now come to a point where the dollar will crash? The USA cant pay back the money it owes as the level of debt is too large. The strength of the dollar comes from the strength of the US military and also the fact that it is the world reserve currency. But with the emergence of the BRICS nations and with China and Russia signing gas deals in a currency other than the dollar - Switzerland going to allow trading in yen. HAs the time come where the dollar will crash? Is this why wee see so many wars right now is to preserve the US/Dollar domination or the world?

As likely as any fiat currency is...not looking likely in the short medium term tho, a stronger dollar is the trend and one that doesn't look like reversing anytime soon...As for the BRICS well they are no more really. Just look at Ruble and the rather large debt bubble in China and you see these countries and currencies are no better.

The world is awash with debt, debt that really can't be repaid but until everyone wants it to be then we will carry on regardless...where it will end I have no idea but the dollar will probably be the last to fall..

[Jack]

No one can claim to know the future of currency exchange, any more than they can predict oil prices ;-)

[RyeSloan]

No one can claim to know the future of currency exchange, any more than they can predict oil prices ;-)

Too true...just look at the losses suffer on the Swiss franc!

Denmark under pressure from the swooning Euro now...I read recently that one Danish bank has offered its first ever negative rate domestic mortgage. If ever there was evidence that we live in extraordinary times that is it...imagine being paid by the bank to have a mortgage with them!!

[Lucius Apuleius]

Too true...just look at the losses suffer on the Swiss franc!

Denmark under pressure from the swooning Euro now...I read recently that one Danish bank has offered its first ever negative rate domestic mortgage. If ever there was evidence that we live in extraordinary times that is it...imagine being paid by the bank to have a mortgage with them!!


Something I was thinking about after reading on Sunday that we may be going into a deflation scenario. Things are bad enough for savers at the minute but would a negative interest rate mean we pay the bank to keep our money? :confused:

[lord bunberry]

Something I was thinking about after reading on Sunday that we may be going into a deflation scenario. Things are bad enough for savers at the minute but would a negative interest rate mean we pay the bank to keep our money? :confused:

Is it possible to have a negative interest rate? I would imagine it would lead to everyone withdrawing their money

[RyeSloan]

Something I was thinking about after reading on Sunday that we may be going into a deflation scenario. Things are bad enough for savers at the minute but would a negative interest rate mean we pay the bank to keep our money? :confused:

Effectively yes...negative rates in a commercial sense are not new. It has often cost companies money to have Yen on deposit for example.

In a domestic sense though it's unheard of. I'm no expert on the ramifications but to actively 'punish' savers and encourage more debt hardly seems like a long term solution to the 'we're drowning in debt' situation does it!

Fact is tho interest rates are already at an all time low...Central banks have used that card, they have used QE so where do they go now to keep their bubbles inflated?

[Killiehibbie]

Is it possible to have a negative interest rate? I would imagine it would lead to everyone withdrawing their money
Or everybody gets as big a mortgage as they can.

[Hibby Bairn]

The world can't be 'awash with debt'. There has to be a credit side for every debit side. What is critical is who the creditors are and can they withstand significant defaults.

[Jones28]

What I find bizarre are the figures. Trillions here and a few hundred billion there, it's all bull****! This whole notion of an economy and whether it goes up or down is just nonsensical. It's just notion invented by us to have something to drive spending.

If there really are negative rate mortgages, good. The banks owe taxpayers so much in bailout anyway. I've been in New Zealand for the past few weeks and every time I want to take money out or make a transaction I get charged 2.75% of whatever it is. I dipped into my overdraft by a fiver last month and was charged £6. For less than 24 hours, I was charged £6.

**** the banks, **** the dollar, if it wasn't for needing a bank account I would have the lot under my mattress.

[speedy_gonzales]

I've been in New Zealand for the past few weeks and every time I want to take money out or make a transaction I get charged 2.75% of whatever it is.

If your from the UK and over there on business or perhaps leisure, then you should be using a card like Halifax Clarity or my weapon of choice, the Santander Zero credit card, no foreign charges, no charges for cash advances!
Banks 'ain't that bad if you do your homework.

[RyeSloan]

The world can't be 'awash with debt'. There has to be a credit side for every debit side. What is critical is who the creditors are and can they withstand significant defaults.

Well it can and is...sure there is a credit side for every debit but that doesn't stop the debt from existing does it?

Just look at how much debt has been created by sovereign governments in the last few years, it's truly mental.

It's true debt is not a problem if it can be repaid or the lenders can suffer the defaults or even if the debt is being used to invest for future growth...there is not much sign of any of that though and no matter how many capital rules they dream up in Basel xx it's only the phoney rules of QE and fiat currency that are keeping the merry go round going. At some point (who knows when) the world will realise that borrowing to fund borrowing and debt upon debt just can't go on indefinitely!

Negative interest rates and people actually paying nations to borrow from them are just a few examples if how out of kilter the whole shebang has become. Even the good ol BoE is now talking about keeping the 'emergency' low base rate going for some time yet....they will no doubt still be stressing about deflation (brutal if you have big debt) when stagflation comes along and bites them on the bum!

Still that doesn't mean the world is going to end anytime soon and you may as well play the game along with the rest of them as the old adage of if you can't beat them you may as well join them rings pretty true here!

[Future17]

The world can't be 'awash with debt'. There has to be a credit side for every debit side. What is critical is who the creditors are and can they withstand significant defaults.

If everyone in the world owed money to the same person, would the world not be awash with debt?

[Hibby Bairn]

Well it can and is...sure there is a credit side for every debit but that doesn't stop the debt from existing does it?

Just look at how much debt has been created by sovereign governments in the last few years, it's truly mental.

It's true debt is not a problem if it can be repaid or the lenders can suffer the defaults or even if the debt is being used to invest for future growth...there is not much sign of any of that though and no matter how many capital rules they dream up in Basel xx it's only the phoney rules of QE and fiat currency that are keeping the merry go round going. At some point (who knows when) the world will realise that borrowing to fund borrowing and debt upon debt just can't go on indefinitely!

Negative interest rates and people actually paying nations to borrow from them are just a few examples if how out of kilter the whole shebang has become. Even the good ol BoE is now talking about keeping the 'emergency' low base rate going for some time yet....they will no doubt still be stressing about deflation (brutal if you have big debt) when stagflation comes along and bites them on the bum!

Still that doesn't mean the world is going to end anytime soon and you may as well play the game along with the rest of them as the old adage of if you can't beat them you may as well join them rings pretty true here!

Understood.

What I am saying is that you have to have a £ to lend a £. They key issue is whether those with the £s can withstand a large default of a single loan debtor.

For example if Greece defaulted.

I know that it is all very complicated but I guess that most of the £s that institutions have (who are lending to governments) are made up of deposits from banks or assets in pension funds. That basically means that the end provider of the £s being lent is the man on the street, small businesses and corporates. And governments with surplus cash.

One country defaulting probably wouldn't be much of an issue but a few and the system once again implodes.

In 50 years time (maybe sooner) I think we will see a return to local (smaller) economies as a pushback from globalisation. And this will be led by the circulation of capital and how people (you and me) use our hard earned pennies...and where we deposit them. It is essentially us that is funding the system.

[RyeSloan]

Understood. What I am saying is that you have to have a £ to lend a £. They key issue is whether those with the £s can withstand a large default of a single loan debtor. For example if Greece defaulted. I know that it is all very complicated but I guess that most of the £s that institutions have (who are lending to governments) are made up of deposits from banks or assets in pension funds. That basically means that the end provider of the £s being lent is the man on the street, small businesses and corporates. And governments with surplus cash. One country defaulting probably wouldn't be much of an issue but a few and the system once again implodes. In 50 years time (maybe sooner) I think we will see a return to local (smaller) economies as a pushback from globalisation. And this will be led by the circulation of capital and how people (you and me) use our hard earned pennies...and where we deposit them. It is essentially us that is funding the system.

As you say a very tangled web!

I don't think we will see globalisation pushed back but we may well see the end of fiat currencies and the current arrangement where banks and central banks simply create money on demand. A kind of futuristic gold standard if you want.

[Hibbyradge]

If your from the UK and over there on business or perhaps leisure, then you should be using a card like Halifax Clarity or my weapon of choice, the Santander Zero credit card, no foreign charges, no charges for cash advances!
Banks 'ain't that bad if you do your homework.

The Santander Zero card is no longer available to new customers.

However, the Clarity Card, which I use, is still on offer.

It's the best way to get foreign currency by far.

For a start, you get the best commercial rate which is significantly better than the tourist rates offered by the likes of M&S or exchange offices.

There are no fees for withdrawing cash at ATM's, no annual fee and no charges for using it for purchases.

Interest is charged against cash withdrawals from the date it comes out of your account, but if you pay your balance immediately, ie don't wait till your statement arrives, you'll avoid paying anything at all.

I tend to electronically transfer more than I withdraw on the same day and then top up regularly as I use it.

I actually still have a small credit balance.

http://www.halifax.co.uk/creditcards/clarity-card/