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How Quickly Will the Dollar Collapse?

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Posted by Alasdair Macleod

on Friday, 05 January 2018 07:01

The-Dollars-Days-are-Numbered-622x415This might seem a frivolous question, while the dollar still retains its might, and is universally accepted in preference to other, less stable fiat currencies. However, it is becoming clear, at least to independent monetary observers, that in 2018 the dollar’s primacy will be challenged by the yuan as the pricing medium for energy and other key industrial commodities. After all, the dollar’s role as the legacy trade medium is no longer appropriate, given that China’s trade is now driving the global economy, not America’s.

At the very least, if the dollar’s future role diminishes, then there will be surplus dollars, which unless they are withdrawn from circulation entirely, will result in a lower dollar on the foreign exchanges. While it is possible for the Fed to contract the quantity of base money (indeed this is the implication of its desire to reduce its balance sheet anyway), it would also have to discourage and even reverse the expansion of bank credit, which would be judged by central bankers to be economic suicide. For that to occur, the US Government itself would also have to move firmly and rapidly towards eliminating its budget deficit. But that is being deliberately increased by the Trump administration instead.

Explaining the consequences of these monetary dynamics was the purpose of an essay written by Ludwig von Mises almost a century ago.[i] At that time, the German hyperinflation was entering its final phase ahead of the mark’s eventual collapse in November 1923. Von Mises had already helped to stabilise the Austrian crown, whose own collapse was stabilised at about the time he wrote his essay, so he wrote with both practical knowledge and authority.

The dollar, of course, is nowhere near the circumstances faced by the German mark at that time. However, the conditions that led to the mark’s collapse are beginning to resonate with a familiarity that should serve as an early warning. The situation, was of course, different. Germany had lost the First World War and financed herself by printing money. In fact, she started down that route before the war, seizing upon the new Chartalist doctrine that money should rightfully be issued by the state, in preference to the established knowledge that money’s validity was determined by markets. Without abandoning gold for her own state-issued currency, Germany would never have managed to build and finance her war machine, which she did by printing currency. The ultimate collapse of the mark was not mainly due to the Allies’ reparations set at the treaty of Versailles, as commonly thought today, because the inflation had started long before.

The dollar has enjoyed a considerably longer life as an unbacked state-issued currency than the mark did, but do not think the monetary factors have been much different. The Bretton Woods agreement, designed to make the dollar appear “as good as gold”, was cover for the US Government to fund Korea, Vietnam and other foreign ventures by monetary inflation, which it did without restraint. That deceit ended in 1971, and today the ratio of an ounce of gold to the dollar has moved to about 1:1310 from the post-war rate of 1:35, giving a loss of the dollar’s purchasing power, measured in the money of the market, of 97.3%.



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Currency

Read this before doubling down on Ripple

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Posted by Simon Black - Sovereign Man

on Thursday, 04 January 2018 11:31

 

Screen Shot 2018-01-04 at 11.37.53 AMYou’ve probably heard that Ripple (abbreviated as XRP) has soared, more than tripling since Christmas.

The overall market cap for XRP (i.e. the combined value of every single token) now exceeds $140 billion.

In the incredibly faddish and volatile cryptocurrency sector, this makes Ripple the flavor of the month.

Now... this week we’ve been talking about avoiding MAJOR mistakes.

Remember-- it won’t matter how much success you achieve if you lose it all from making bad financial decisions.

You don’t have to get a whole lot right in life as long as you don’t get a whole lot wrong.

This is one of the simplest financial maxims to live by.

Most of the time, catastrophic financial decisions are completely avoidable if we exercise common sense.

As we discussed yesterday, there’s not a whole lot of common sense these days in the cryptocurrency space.

Crazed speculators continue to bid up cryptocurrencies to greater heights without the slightest understanding of what they’re buying.

How many people who are bragging about how much they made in Bitcoin have even bothered to read the original 9-page white paper, or have the foggiest idea what a Merkle Tree is?

Now we’re seeing another mad rush into Ripple (XRP). And if you’ll indulge me for a moment, I’d like to provide a bit of perspective.



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Currency

Bitcoin's Crazy Dance a Step Ahead of Bloomberg, as Usual

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Posted by Rick Ackerman

on Tuesday, 02 January 2018 06:50

Rabid-little-weasel-has-begun-2018

Bitcoin’s crazy shenanigans are making the news media’s attempts to keep up with them seem pathetic. Bloomberg’s latest update, from four hours ago, has trumpeted the headline Bitcoin Starts a New Year by Tumbling, First Time Since 2015.  In actual fact, after trading moderately lower on the opening bar of 2018, one popular bitcoin vehicle, $BRTI, is currently up $263, at 13,849. Ordinarily Rick’s Picks would suggest using a ‘mechanical’ entry to short the little sonofabitch if the rally hits $14,277, using a stop-loss at 16,477. We’ll pass this time, however, and resume actionable guidance after traders have had a few days to shake off mind-dulling excesses of holiday food, libations and festivity. Stay tuned if you care — and please note that all real-time trading recommendations will be published here first, then at FXStreet.com as soon as they can get to them. 



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Currency

Dollar Collapse

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Posted by Gary Savage - Smartmoneytracker.com

on Friday, 29 December 2017 06:13

The US Dollar continues to confirm that is not only in a bear market, but likely to collapse in 2018. This will have significant implications for all kinds of investments.

 

https://blog.smartmoneytrackerpremium.com/

falling-kiwi-dollar



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Bitcoin: Additional Suspicious Developments

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Posted by Seeking Alpha

on Wednesday, 27 December 2017 06:40

Screen Shot 2017-12-27 at 6.42.05 AM

Summary

- Tethers are being issued at a pace of 13 billion per year.

- No one knows where the money is, but no one seems to care.

- Bitfinex halted new accounts registrations.

- Bitfinex employee's profile suggests that he or the company is being investigated.

- Tether Limited runs the Bitfinex playbook by imposing redemption minimums, effectively freezing customer funds.

- This idea was discussed in more depth with members of my private investing community, Core Value Portfolio.

In my previous articles, I talked about the surprising correlation between the supply of Tether and the price of Bitcoin. I encourage you to read both of them for some background. In essence, there are good reasons to believe that Tether Limited is issuing Tethers that are not backed by USD as promised in order to purchase Bitcoin through Bitfinex. After examining the flow of Tethers, which originate from Tether Limited and are then subsequently distributed to various other exchange all through Bitfinex, I believe that Tether's correlation to Bitcoin is no simple coincidence.

....continue reading HERE



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