Written by Jeff Nielson Monday, 17 November 2014 14:10
The fact that the U.S. dollar is a dying currency is a foregone conclusion. The (negative) fundamentals of the dollar are overwhelming, for two reasons: their magnitude and their irreversibility. These harbingers of the dollarâs doom center on three areas:
1) An ultra-extreme over-supply of dollars, due to several years of money-printing at a hyperinflationary rate.
2) A simultaneous collapse in demand for the dollar, as it loses its status as global reserve currency (replaced by Chinaâs renminbi).
Those are the three, principal fundamentals of any currency: supply, demand, and the (supposed) âbackingâ for the currency itself, which (in the case of our paper âfiat currenciesâ) is nothing more than the economic output of the underlying economy. With respect to supply; any reader who considers it hyperbolic to depict the supply of dollars as âultra-extremeâ simply hasnât seen the chart showing its exponential explosion. Indeed, describing the picture below as anything short of âultra-extremeâ would be understatement.
While the collapse in demand for the dollar hasnât been as (frighteningly) spectacular as the explosion in supply, it is just as irreversible as the exponential curve above. The reason why this second, terminal fundamental is irreversible (as the dollar is replaced by the renminbi) is a direct function of the first and third fundamentals.
Because the value of the dollar has been grossly debauched through over-printing (despite its fraudulent exchange rate); the Rest of the World is rejecting it as a benchmark for global trade. Because the U.S. economy itself is in irreversible decline; the dollar could not be sustained much longer as a reserve currency, as a simple function of mathematics/economics.
Written by Jeff Nielson Monday, 10 November 2014 13:49
For the past two years (more or less) readers have read warnings that a horrific economic collapse is brewing across the Western world. It will be the final collapse for these regimes, as none of these economies will be able to survive this coming cataclysm in their present form.
There is no prognostication involved here as the âwarning signsâ that a collapse is coming couldnât be more obvious if they were laid-out on a road map. Worse, we know (for a multitude of reasons) that the Next Crash will be much more severe than the economic collapse which preceded it (the Crash of â08), because nothing has been fixed since that previous crisis.
Indeed, our governments have done nothing since that time except more of all of the economic policies (i.e. mistakes) which caused the last crash. Obviously these governments cannot "put out a fire" by pouring much, much more gasoline on it:
a) The debt-bubbles are now much larger. The U.S. and UK national debts have more than doubled since 2007. Canadaâs debt-to-GDP ratio is higher now than in the 1980âs, when it was openly acknowledged as being in âa debt crisisâ.
b) The asset-bubbles are now much larger. The Dow Jones Bubble-Index has nearly tripled since its bottom in 2009, and it was not allowed to fully deflate during the last, manufactured crash. After six years of near-zero interest rates; Western real estate markets are all ridiculously unstable bubbles, described previously as âhistoryâs greatest wealth trapâ.
c) Unemployment continues to soar. Permanent (âstructuralâ) unemployment across the Western world now amounts to roughly 100 million people.
Then there is the money-printing. Even our catastrophic debt levels, and permanent, ultra-extreme interest rates pale in comparison to this monetary insanity.
While other Western regimes havenât entirely duplicated the extreme, exponential curve represented by U.S. money-printing, the trend is identical. It has to be, because all of our (traitor) governments have publicly declared they are pursuing a policy of âcompetitive devaluationâ â racing to see which one can drive their currency to worthlessness first via over-printing.
The chart above is the mathematical representation of the phrase âout of controlâ. It does not represent a currency in danger of hyperinflation. It represents a currency which has already been hyperinflated. So why has the value of these (worthless) Western fiat currencies not already collapsed?