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Question: Do you believe him?
yes 100% - 26 (32.9%)
yes, but i think he's pushing it to far.. - 26 (32.9%)
not really - 22 (27.8%)
What he says is complete BS - 5 (6.3%)
Total Voters: 79

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Author Topic: [poll] - The U.S. Dollar Collapse Is Accelerating  (Read 6164 times)
cypherdoc
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February 04, 2013, 11:55:28 PM
 #41


You just defined exactly how an exponential process works.

>>> a = 1
>>> for i in range(1, 50):
...     print a
...     a = a * 1.2




Yes, clearly. My point is more that people are implicitly thinking that this is going to go the way of a typical debt/bond crises, but there's no mechanism for that in a modern fiat nation that's simply willing to print to buy it's own bonds. You don't get investors suddenly demanding higher rates (because guess who the "investor" is?), which is why the 3rd-world style sudden collapses happen.

Obviously even 0.00001% inflation could not go on forever. But <10% could go on for quite some time (yeah, I know I used 20% in my extreme thought experiment - sorry). Too many people look at the debt situation and predict collapse in the next couple years (or by 2020, or what have you). My point is that this is because they're failing to realize how insidious the dynamics of QE really are. Don't get me wrong - a major restructuring must happen - but it'll probably be another couple generations.

then why did all these subprime lenders along with their debt get vaporized?  

http://online.wsj.com/public/resources/documents/info-subprimeloans0706-sort.html

along with Lehman, Merrill, Bear, Wachovia, Downey, IndyMac?
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February 05, 2013, 01:23:55 AM
 #42


You just defined exactly how an exponential process works.

>>> a = 1
>>> for i in range(1, 50):
...     print a
...     a = a * 1.2



Yes, clearly. My point is more that people are implicitly thinking that this is going to go the way of a typical debt/bond crises, but there's no mechanism for that in a modern fiat nation that's simply willing to print to buy it's own bonds. You don't get investors suddenly demanding higher rates (because guess who the "investor" is?), which is why the 3rd-world style sudden collapses happen.

Obviously even 0.00001% inflation could not go on forever. But <10% could go on for quite some time (yeah, I know I used 20% in my extreme thought experiment - sorry). Too many people look at the debt situation and predict collapse in the next couple years (or by 2020, or what have you). My point is that this is because they're failing to realize how insidious the dynamics of QE really are. Don't get me wrong - a major restructuring must happen - but it'll probably be another couple generations.

Nobody can tell the investors to demand low rates or high rates. What they do, depends on the total situation as seen from the insvestors, including the words from the inflators.

Investors are you and me. Institutions are only collectives, ultimately controlled by you and me. If you and me don't save in a pension fund, it will have to disappear. If you and me regard company bonds as risky, their rate will go up.

There is nothing in the current global situation where we can draw upon experience from earlier times. We are in experimental territory. Mainstream economists say this, including the central bankers themselves. Experiment and forceful action.

According to the Austrians (yes, sue me), the manipulation of interest rate leads to malinvestments and reduced economic output. The longer it goes on, the worse.

Nobody knows when problems occur, or even what the bubbles are. But as soon as investors starts to distrust the bonds, the rates will go up. If people stops depositing in banks, there will be a sharp decrease in money supply, which will be met with more printing. When users of money starts to distrust the fiat, they will try to convert it to real goods as soon as possible, and price increases will start.

When it starts, there is nothing anybody can do.
Melbustus
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February 05, 2013, 06:12:15 AM
 #43


Yes, clearly. My point is more that people are implicitly thinking that this is going to go the way of a typical debt/bond crises, but there's no mechanism for that in a modern fiat nation that's simply willing to print to buy it's own bonds. You don't get investors suddenly demanding higher rates (because guess who the "investor" is?), which is why the 3rd-world style sudden collapses happen.

Obviously even 0.00001% inflation could not go on forever. But <10% could go on for quite some time (yeah, I know I used 20% in my extreme thought experiment - sorry). Too many people look at the debt situation and predict collapse in the next couple years (or by 2020, or what have you). My point is that this is because they're failing to realize how insidious the dynamics of QE really are. Don't get me wrong - a major restructuring must happen - but it'll probably be another couple generations.

then why did all these subprime lenders along with their debt get vaporized?  

http://online.wsj.com/public/resources/documents/info-subprimeloans0706-sort.html

along with Lehman, Merrill, Bear, Wachovia, Downey, IndyMac?



Because, unfortunately, TPTB (to use your acronym) can continue to keep this thing going for quite some time. I'm essentially arguing that the nasty stagflation situation can last for decades (largely because 100% QE eliminates a rational bond market, totally abusing interest rates, and therefore removing the mechanism that would force better behavior sooner). By contrast, the imminent hyper-inflation->collapse folks think we have 5-10yrs, max. I don't see how we get there in 5-10yrs with such a manipulated bond market. It'll ultimately be worse for humanity the longer this lasts, of course, but that's not the point.

I know your position is medium-term abrupt deflation. That could certainly be the case, but I still don't think it'll unseat the dollar in one dramatic moment. It'll be a slow, long-term process, involving decades of lost prosperity (and we may very well still prosper, just far less than could've been; a tragedy of waste, as it were).


Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
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molecular
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February 05, 2013, 10:12:26 PM
 #44

No time is now! Fuck the high maintenance, always about to fall apart, fiat system. we have an alternative! its called BITCOIN,  know it, use it, love it!
 Cheesy

FUCK YEAH!

PGP key molecular F9B70769 fingerprint 9CDD C0D3 20F8 279F 6BE0  3F39 FC49 2362 F9B7 0769
str4wm4n
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February 07, 2013, 07:16:14 AM
 #45

If the dollar collapses, will the internet stay on?
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Digital money you say?


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February 07, 2013, 07:21:29 AM
 #46

If the dollar collapses, will the internet stay on?

Only if you pay your ISP in btc  Grin

FAP Turbo 2.0, the FOREX trading robot which also trades bitcoin!

I had to link it because I love the name. Seriously, that is the real name.
lebing
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Enabling the maximal migration


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February 07, 2013, 05:52:48 PM
 #47

Collapse relative to what?

To bitcoin? Obviously
To physical gold/ silver? Eventually, maybe 5-20 years from now
To other fiat currencies? Nope. It is a full on currency war right now with nations racing to the bottom (to avoid their debt responsibilities). So I don't think we will see any "collapse" of a single fiat currency relative to what our imaginations conjure when considering the word collapse.

Bro, do you even blockchain?
-E Voorhees
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February 07, 2013, 05:55:54 PM
 #48

This "imminent collapse that hasn't quite happened yet" reminds me of those philosophical examples with the "ominous boulder jutting out over the edge of a cliff". The fact that it has been there for millions of years doesn't make it bound to fall "any minute now".




Though to be fair, you're not wrong, there's plenty of scare-mongering to go around. Things do seem to be accelerating though and unlike many things that appear to be getting crazy but are limited by negative feedback, there's ample evidence that those in control are actually in a positive feedback loop.

I guess that actually makes this somewhat fitting and appropriate:


1RichyTrEwPYjZSeAYxeiFBNnKC9UjC5k
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