USD Reserve status
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Started by wglassfo - Oct. 5, 2020, 7:32 p.m.

I am sure if you are an American you will find this impossible to believe

However, I am now convinced, after some extensive reading that inflation will rear it's ugly head

I am also convinced that the USD will lose it's reserve world currency status

I will name a few possibilities that come to mind that could replace the USD

Renminbi, gold, crypto currencies or a very slim chance the Euro increases in value re: the USD

Currently the USD is still used for more than 50 % of all trade settlements. However, with the current gov't spending by congress re: fiscal stimulus and other gov't spending, the deficit is sure to increase faster and faster, so that one can only speculate what the deficit will be in 1-2-3 or however many yrs.

Normally when spending increases at a furious pace,   Higher int. serves to sort of put the brakes on gov't spending. But Powell has taken higher int. rates off the table for some yrs in the future. Powell has said the Fed will do what ever is necessary [translated that means money printing]

Now the USA has reached the point where the GDP will be less than spending, with no sign congress will spend less. If you assume congress will spend more than GDP, then foreign investors may ask what is the security backing the USD

Investors may ask the same question about a lot of currencies, the CAD, the Aussi, yen, any SA country you care to mention, ME such as the lira etc.

So what happens

1st: is inflation

2nd: one of the above will become more valuable than the USD. We don't know which one but gold and other PM] may be a valuable asset and/or the renminbi may surprise Remember: At one time the gilder was the world currency, then the pound sterling then the USD

So what happens to the USD. Something will change, we don't know when or what

By metmike - Oct. 5, 2020, 11:56 p.m.
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I agree with this Wayne.

We are living in a time when our politicians are basing every decision on what helps them to get elected or gain more power TODAY!

Forget accountability and consequences in the future.

Make impossible promises, mislead, scare people  and give things away to them to get votes.

Never balance the budget because cutting spending would be too unpopular and cost votes to politicians that take away goodies.

Make up all sorts of shirst about the magic Green New Deal that will save the planet.

That somehow, solar and wind energy will be able to generate 25 times more energy than they do today, at cheaper prices while creating 10's of millions of new jobs............even in northern locations that can't generate substantial solar energy in the Winter months. Not today, not ever because of the laws of physics/energy and meteorology.

..........even in places that don't have enough wind for wind turbines to be practical today or ever. If there isn't much wind today, there won't be much wind in 15 years.

There is a 0% chance of the Green New Deal being possible but so what. That really doesn't matter.  One party is running on this fairy tale, completely making up and lying about the realities, including the fact that we are having a climate optimum, not a climate crisis.

All of it is made up. 

Similar dishonesty with the busted badly budget and off the charts spending.  

We are supposed to think that the Fed can keep printing trillions and trillions of dollars indefinitely and racking up astronomical deficits with no consequences...............never, no matter how huge and unbalanced it gets.

We are supposed to get bent out of shape over a non problem(the fake climate crisis, which is greening up the planet and causing life to flourish) and not worry a bit about the massive REAL problem, a rapidly escalating debt load that will soon crush our economy.


You are using common sense with your views and seeing inevitable realities, while our politicians and most people are in denial. Thank you. 

By wglassfo - Oct. 6, 2020, 3:10 a.m.
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I am told the environment was not supposed to be a topic for the last debate

I am surprised Trump didn't shred Biden's false claims. Trump missed an easy one and he blew the opportunity

I am also surprised Wallace framed the question to Trump as if the climate  science was settled, which was very unfair but Trump could have used Ca. as an example of why green energy would not work, with out coming right out and saying the science is false, which would have cost him a lot of votes.. Sadly, too many people would not believe him, even if he is correct and the MSM would have had a field day if he denied the false science many people  believe. But Ca. would have made people think and he would not have to deny some thing many people believe, even if they are wrong.

I know a  lot of people believe the planet has a problem so Trump wouldn't likely score many points by denying the science

It looked kind of suspicious that Bidden had a believable answer and Trump was caught with an unexpected question

Shades of Dona Brazil

Trump should have been all over that question but he didn't do very good on the environment [IMHO]

I suppose 20/20  is easy but golly all Trump had to do is use Ca. aa an example and then ask Biden what his plan would be for Ca. as he kept referring to his plan which nobody heard him explain at the debate, other than wild claims of jobs, paid for by taxes

Taxes is an important issue many people are worried about the Biden plan and Trump should have known what people fear about Biden and his plan, which was just that.  [higher taxes]

A Biden plan nobody understood, except it involves higher taxes which people don't want

By metmike - Oct. 6, 2020, 10:39 a.m.
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You are exactly right Wayne.

Wallace made Trump out to be somebody that is denying science and Biden was able to tell us about his absurd, not possible "Biden Plan" which is really not the Green New Deal according to him (as he told us bogus reasons for why the Green New Deal will work)

Trump should have immediately responded "Of course there has been climate change and global warming Chris. Temperatures have risen over 1 deg. C during the last century" Much of that may have been caused by humans but life on this planet has benefited from the warming and REALLY REALLY benefited from the beneficial gas, carbon dioxide.

The planet has greened up 15% in the last 40 years. How can we be killing the planet if its greening up? 

We've had the best weather and climate for life and crop growing in 1,000 years, the last time it was this warm. How is it that food production continues to go thru the roof from CO2 fertilization?  How did it get this warm 1,000 years ago, during the Medieval Warm Period? Also known as the Medieval Climate Optimum.

Or the Roman Warm Period/Climate Optimum, 2,000 years ago and Minoan Warm Period/Climate Optimum, 3,500 years ago? Or the Holocene Climate Optimum 9,000 to 5,000 years ago that was 2 deg. C WARMER than this in the higher latitudes and when there was even less Arctic ice?

Why were these periods called Climate OPTIMUMS but now, the same climate and weather is being called a crisis and emergency.

Why have all the predictions of catastrophe from the left side completely failed? Polar bears were supposed to be threatened the last 20 years but instead, their numbers have increased 30%.

Joe and Bernie have been warning us about the US going under water. Bernie said most major coastal cities will be under water in 7 or 8 years but the seas continue to rise at just over 1 inch per decade. How can the oceans going up 1 inch cause the US and major cities around the world to go under water Joe?

Joe, renewables, mostly solar and wind only supply a small fraction of our energy today because they can't compete with fossil fuels. How is your plan going to use them to replace all of the wonderful, abundant, reliable around the clock and around the year, power concentrated and cheap fossil fuels in places where the wind does not blow much and long periods of the year when there is not much sunshine?

Why would we even want to replace fossil fuels since their CO2 emissions are greening up the planet and producing the best weather and climate in the last 1,000 years?

Joe, aren't you aware that the life blood of every developed country's economy on the  planet is its access to cheap, reliable, abundant fossil fuels?

This is what makes life so great for Americans.

This is why we can heat and cool our homes and travel anywhere we want affordably. This is what powers all of our wonderful technology. Why do you want to take all that away from us Joe?

You know darn well that your Green New Deal or Biden Plan, whatever you want to call it has a 0% chance of working and will be 100% detrimental to the American people.

And this plan is based on a completely made up climate crisis.

Yes, of course I believe in climate change but climate change is not a climate crisis..........its a climate optimum based on authentic science. 

Using  extreme weather events that we've always had and blaming them on a climate crisis is not a climate crisis. 

Cold still kills 15 times more humans that heat does, even with the global warming.

Cold kills 200 times more life on this planet than heat does.

How is warming the coldest places the most and greening up the planet a climate crisis?

By bear - Oct. 11, 2020, 5:29 p.m.
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here is my take... on inflation and the 100 yr cycle.

when we compare the 1800's, and the 1900's, and this current century...

yes there is some (a bit) inflation in the first half of the century, and sometimes some shortages.  but the Big inflation does not happen until the second half of the century.  

for example,  on international markets gold and silver may have had a little blip with the war of 1812, and the depression of the 1830's, and the mexican american war.  but the big jump in metals and inflation happened in the 1860's with the civil war. (the second half of the 1800's).

again in the 1900's,  there may have been a little jump in commodities and inflation in WW1, and WW2,  and there may have been shortages,  but the Big inflation, and big jump in metals happened in the 1970's and 80's.  

and again in the 2000's there was a nice run up in gold and silver, and some inflation during the iraq war.  but silver did NOT go to new highs.  and i suspect it will not go to new highs in the 2020's or 2030's.  but silver will have its massive run up in the 2060's into the early 2070 target.  

in WW 1, and WW2 silver did not go past its high in the 1860's and 1870's.   and in 2011, silver did not go past its high of 1980.  

gold sets new highs in the first half of the century, but silver does not.  you get some inflation, but not the big inflation like we saw in the 1970's and 80's.  (or during the civil war).  

by the 2060's and 2070's,  i expect we will see inflation of 20 to 30 % year over year.  silver will top out in the range of 500 to 1000 bucks.   (but if you buy now,  you will have to wait awhile to see big gains).  and gold will top out close to 20,000 to 30,000.  (but thats almost a 50 year wait).  

in the late 2030's, going into 2040, we will see some inflation, but not a big 10 fold increase in gold. 

i see a trading range for gold of 2000 to 3000 over the next 10 years.  (4k tops).

over the next 10 years of so ,  i see gains of 0% to 1% in stocks (y-o-y),  1% to 2% in bonds (y-o-y),  and 3 to 5% in metals (y-o-y).   

the buck will not completely collapse right now.  every other country has the same problem.  and we still have big deflationary forces.  

(disclaimer,  i am long CEF and NEM).   

By bear - Oct. 11, 2020, 5:41 p.m.
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the euro zone is in worse shape than us. 

japan is in worse shape than us.  

what are the odds that other central banks will not take bizarre extreme measures.  what are the odds that only the u.s. fed will go to extreme measures to try to prop up its economy?  

all the arguments a person may give about the u.s. fed and currency could also be made about other nations, and other central banks.  

i prefer to look at where we are in the cycle.  

for now short term,  look to the left, euro, long term chart.  there is a falling resistance line.  we are bumping up against it right now.  either the euro is rejected again and goes down,  or we break thru to the upside.  that should happen right around election time.  

By wglassfo - Oct. 12, 2020, 12:05 a.m.
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Hi Bear

I see and understand your cycle theory which is a truth no one can deny


The market can offer us some surprises

I will just mention one possibility

If AOC and her tribe of 4 should some how become installed in key positions in a Biden gov't then a small number [4] could greatly swing the gov't hard left with increased spending on Green projects. This would not produce the millions of jobs promised, thus increased spending would be needed to keep the people convinced the gov't is working for them. Over a short span of time it would be possible to rack up some incredible debt. The hard left has no problem with printing money, and if congress should approve such spending, which they almost have to or else society will have even more riots and burning, as the promised social contract comes due such as pensions etc. which need increased spending. Does this mean the USA will print more than other countries or are we all in this together.    IDK

  One would think many other countries will have the same problem, or Trump could win or Biden suddenly grows a back bone, and AOC is dumped in the nearest ash pile,  which would mean your cycle would be true

Just an add on to the thread, which may mean nothing  IDK

A good friend of mine told me, some day, a large sack of potatoes would offer more security than a large bank account. He might be correct, just some 30-40  yrs early

He is Irish if that means any thing. Also to your cycle thing, he said the family farm in Ireland was sold recently for a large profit. The problem was it took 90 yrs for the profit to accumulate

I like your posts Bear and read them all

I also like your insight on various subjects

By bear - Oct. 20, 2020, 2:02 p.m.
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here is one of the explanations that armstrong gave as to why you won't get hyperinflation currently.  even tho govts are giving lots of bailouts/handouts,  the amount of money (supply) created has been less than the amount of wealth that has been destroyed (because of shutdowns etc).  

his calculations about money/wealth creation and destruction is very different than my simplistic look at long term cycles.  again,  i don't see any huge inflation problem until we get to the 2060's & 2070's. 

but remember, germany had hyperinflation in the 1920's.  we may see that in some developed country over the next decade or so.  but probably not in the u.s.a.