Dollar coming to an end

[scarsbergholden]

dollar is the one only good for investment

It has been a good investment sometimes but it is one of the worst investment among the big choices an investor has right now

USD Interest rate has been maintained too low for a long time and it looks like there is a pressure within to hike the rates or else overall it is will be bad in long term.

USD interest rate is low right now because Asian and European investors don't want to invest in those markets. Japan's economy is tanking fast and Greece is starting to spread contagion fears throughout Europe. Money is flooding into US bonds. As bonds get purchased, their prices rise. When their prices rise, yields decrease, due to the fixed coupon payments. As a result, US interest rates are flat, just because of the rush of foreign capital.

The FED is keeping the interest rate at zero

You do realize there's a bond market, right?

The bond market is being manipulated by the fed via QE as well as the fed's promise to keep short term interest rates low for a long time. There are people speculating that the fed will continue to keep short terms rates low which pushes the market rate for longer term bonds low as well

[Barabbas0]

dollar is the one only good for investment

It has been a good investment sometimes but it is one of the worst investment among the big choices an investor has right now

USD Interest rate has been maintained too low for a long time and it looks like there is a pressure within to hike the rates or else overall it is will be bad in long term.

USD interest rate is low right now because Asian and European investors don't want to invest in those markets. Japan's economy is tanking fast and Greece is starting to spread contagion fears throughout Europe. Money is flooding into US bonds. As bonds get purchased, their prices rise. When their prices rise, yields decrease, due to the fixed coupon payments. As a result, US interest rates are flat, just because of the rush of foreign capital.

The FED is keeping the interest rate at zero

You do realize there's a bond market, right?

The bond market is being manipulated by the fed via QE as well as the fed's promise to keep short term interest rates low for a long time. There are people speculating that the fed will continue to keep short terms rates low which pushes the market rate for longer term bonds low as well

QE already ended. Please, your right wing fears are entirely unfounded. Go back to hoarding gold and whining about monetary inflation.

[picolo]

dollar is the one only good for investment

It has been a good investment sometimes but it is one of the worst investment among the big choices an investor has right now

USD Interest rate has been maintained too low for a long time and it looks like there is a pressure within to hike the rates or else overall it is will be bad in long term.

USD interest rate is low right now because Asian and European investors don't want to invest in those markets. Japan's economy is tanking fast and Greece is starting to spread contagion fears throughout Europe. Money is flooding into US bonds. As bonds get purchased, their prices rise. When their prices rise, yields decrease, due to the fixed coupon payments. As a result, US interest rates are flat, just because of the rush of foreign capital.

The FED is keeping the interest rate at zero

You do realize there's a bond market, right?

The bond market is being manipulated by the fed via QE as well as the fed's promise to keep short term interest rates low for a long time. There are people speculating that the fed will continue to keep short terms rates low which pushes the market rate for longer term bonds low as well

QE already ended. Please, your right wing fears are entirely unfounded. Go back to hoarding gold and whining about monetary inflation.

The FED didn't unwind its balance sheet and didn't raise rate so we are still in a very lose monetary policy environment with a weak economy. The public debt is still growing fast and the Dollar will likely start crashing in 2015 or 2016

[Barabbas0]

dollar is the one only good for investment

It has been a good investment sometimes but it is one of the worst investment among the big choices an investor has right now

USD Interest rate has been maintained too low for a long time and it looks like there is a pressure within to hike the rates or else overall it is will be bad in long term.

USD interest rate is low right now because Asian and European investors don't want to invest in those markets. Japan's economy is tanking fast and Greece is starting to spread contagion fears throughout Europe. Money is flooding into US bonds. As bonds get purchased, their prices rise. When their prices rise, yields decrease, due to the fixed coupon payments. As a result, US interest rates are flat, just because of the rush of foreign capital.

The FED is keeping the interest rate at zero

You do realize there's a bond market, right?

The bond market is being manipulated by the fed via QE as well as the fed's promise to keep short term interest rates low for a long time. There are people speculating that the fed will continue to keep short terms rates low which pushes the market rate for longer term bonds low as well

QE already ended. Please, your right wing fears are entirely unfounded. Go back to hoarding gold and whining about monetary inflation.

The FED didn't unwind its balance sheet and didn't raise rate so we are still in a very lose monetary policy environment with a weak economy. The public debt is still growing fast and the Dollar will likely start crashing in 2015 or 2016

lol, okay. As soon as you start pulling dates out of thin air with no evidence I know you're full of shit. You can spew anti-US FUD, doesn't make it true.

[picolo]

dollar is the one only good for investment

It has been a good investment sometimes but it is one of the worst investment among the big choices an investor has right now

USD Interest rate has been maintained too low for a long time and it looks like there is a pressure within to hike the rates or else overall it is will be bad in long term.

USD interest rate is low right now because Asian and European investors don't want to invest in those markets. Japan's economy is tanking fast and Greece is starting to spread contagion fears throughout Europe. Money is flooding into US bonds. As bonds get purchased, their prices rise. When their prices rise, yields decrease, due to the fixed coupon payments. As a result, US interest rates are flat, just because of the rush of foreign capital.

The FED is keeping the interest rate at zero

You do realize there's a bond market, right?

The bond market is being manipulated by the fed via QE as well as the fed's promise to keep short term interest rates low for a long time. There are people speculating that the fed will continue to keep short terms rates low which pushes the market rate for longer term bonds low as well

QE already ended. Please, your right wing fears are entirely unfounded. Go back to hoarding gold and whining about monetary inflation.

The FED didn't unwind its balance sheet and didn't raise rate so we are still in a very lose monetary policy environment with a weak economy. The public debt is still growing fast and the Dollar will likely start crashing in 2015 or 2016

lol, okay. As soon as you start pulling dates out of thin air with no evidence I know you're full of shit. You can spew anti-US FUD, doesn't make it true.

The FED didn't unwind its balance sheet and didn't raise rate so we are still in a very lose monetary policy environment with a weak economy. The public debt is still growing fast  : those are facts we agree on

[Barabbas0]

dollar is the one only good for investment

It has been a good investment sometimes but it is one of the worst investment among the big choices an investor has right now

USD Interest rate has been maintained too low for a long time and it looks like there is a pressure within to hike the rates or else overall it is will be bad in long term.

USD interest rate is low right now because Asian and European investors don't want to invest in those markets. Japan's economy is tanking fast and Greece is starting to spread contagion fears throughout Europe. Money is flooding into US bonds. As bonds get purchased, their prices rise. When their prices rise, yields decrease, due to the fixed coupon payments. As a result, US interest rates are flat, just because of the rush of foreign capital.

The FED is keeping the interest rate at zero

You do realize there's a bond market, right?

The bond market is being manipulated by the fed via QE as well as the fed's promise to keep short term interest rates low for a long time. There are people speculating that the fed will continue to keep short terms rates low which pushes the market rate for longer term bonds low as well

QE already ended. Please, your right wing fears are entirely unfounded. Go back to hoarding gold and whining about monetary inflation.

The FED didn't unwind its balance sheet and didn't raise rate so we are still in a very lose monetary policy environment with a weak economy. The public debt is still growing fast and the Dollar will likely start crashing in 2015 or 2016

lol, okay. As soon as you start pulling dates out of thin air with no evidence I know you're full of shit. You can spew anti-US FUD, doesn't make it true.

The FED didn't unwind its balance sheet and didn't raise rate so we are still in a very lose monetary policy environment with a weak economy. The public debt is still growing fast  : those are facts we agree on

Yeah, so what? USD is still the world's safest asset.

By the way, I don't think you understand how QE works. The Federal Reserve issued low interest short term bonds to buy back high interest long term bonds. Also, the US is anything but a weak economy. It's been 6 years since recession, get over it.

[scarsbergholden]

dollar is the one only good for investment

It has been a good investment sometimes but it is one of the worst investment among the big choices an investor has right now

USD Interest rate has been maintained too low for a long time and it looks like there is a pressure within to hike the rates or else overall it is will be bad in long term.

USD interest rate is low right now because Asian and European investors don't want to invest in those markets. Japan's economy is tanking fast and Greece is starting to spread contagion fears throughout Europe. Money is flooding into US bonds. As bonds get purchased, their prices rise. When their prices rise, yields decrease, due to the fixed coupon payments. As a result, US interest rates are flat, just because of the rush of foreign capital.

The FED is keeping the interest rate at zero

You do realize there's a bond market, right?

The bond market is being manipulated by the fed via QE as well as the fed's promise to keep short term interest rates low for a long time. There are people speculating that the fed will continue to keep short terms rates low which pushes the market rate for longer term bonds low as well

QE already ended. Please, your right wing fears are entirely unfounded. Go back to hoarding gold and whining about monetary inflation.

The fed is not purchasing additional bonds however they are still holding bonds they previously purchased (and have a larger then usual balance sheet - much larger). They are also manipulating the bond market via their promise to keep short term interest rates low for a very long time (it has been ~5 years so far)

[picolo]

dollar is the one only good for investment

It has been a good investment sometimes but it is one of the worst investment among the big choices an investor has right now

USD Interest rate has been maintained too low for a long time and it looks like there is a pressure within to hike the rates or else overall it is will be bad in long term.

What you describe was operation twist. The FED was buying 85 Billions MBS and US bonds a month and they didn't sell any

USD interest rate is low right now because Asian and European investors don't want to invest in those markets. Japan's economy is tanking fast and Greece is starting to spread contagion fears throughout Europe. Money is flooding into US bonds. As bonds get purchased, their prices rise. When their prices rise, yields decrease, due to the fixed coupon payments. As a result, US interest rates are flat, just because of the rush of foreign capital.

The FED is keeping the interest rate at zero

You do realize there's a bond market, right?

The bond market is being manipulated by the fed via QE as well as the fed's promise to keep short term interest rates low for a long time. There are people speculating that the fed will continue to keep short terms rates low which pushes the market rate for longer term bonds low as well

QE already ended. Please, your right wing fears are entirely unfounded. Go back to hoarding gold and whining about monetary inflation.

The FED didn't unwind its balance sheet and didn't raise rate so we are still in a very lose monetary policy environment with a weak economy. The public debt is still growing fast and the Dollar will likely start crashing in 2015 or 2016

lol, okay. As soon as you start pulling dates out of thin air with no evidence I know you're full of shit. You can spew anti-US FUD, doesn't make it true.

The FED didn't unwind its balance sheet and didn't raise rate so we are still in a very lose monetary policy environment with a weak economy. The public debt is still growing fast  : those are facts we agree on

Yeah, so what? USD is still the world's safest asset.

By the way, I don't think you understand how QE works. The Federal Reserve issued low interest short term bonds to buy back high interest long term bonds. Also, the US is anything but a weak economy. It's been 6 years since recession, get over it.

[aminorex]

The fed is not purchasing additional bonds however they are still holding bonds they previously purchased (and have a larger then usual balance sheet - much larger). They are also manipulating the bond market via their promise to keep short term interest rates low for a very long time (it has been ~5 years so far)

In comments at private appearances, Ben Bernanke has stated that he does not expect interest rates to normalize in his lifetime.  If the rate on the Japanese 10 year went to 2%, all the tax revenue of the Japanese government would not suffice to service the coupon payments.  That is where the U.S. is heading, and it is no secret, merely an unmentionable elephant.  Given that it is unlawful to default on the debt of the U.S. Treasury, the only possible outcome is hyperinflation:  No austerity, no financial repression, no feasible growth will suffice to overcome the magnitude of the debt mountain.  The debatable aspect is the timing of that hyperinflation.  Everyone wants time to roll out of USD before it breaks loose.

 

[Barabbas0]

The fed is not purchasing additional bonds however they are still holding bonds they previously purchased (and have a larger then usual balance sheet - much larger). They are also manipulating the bond market via their promise to keep short term interest rates low for a very long time (it has been ~5 years so far)

In comments at private appearances, Ben Bernanke has stated that he does not expect interest rates to normalize in his lifetime.  If the rate on the Japanese 10 year went to 2%, all the tax revenue of the Japanese government would not suffice to service the coupon payments.  That is where the U.S. is heading, and it is no secret, merely an unmentionable elephant.  Given that it is unlawful to default on the debt of the U.S. Treasury, the only possible outcome is hyperinflation:  No austerity, no financial repression, no feasible growth will suffice to overcome the magnitude of the debt mountain.  The debatable aspect is the timing of that hyperinflation.  Everyone wants time to roll out of USD before it breaks loose.

 

Please, investors are running from Japan to US. They are incomparable. Do you know what a yield curve is? If you did, you would know that all that doom and gloom you're spreading is not evident at all.

We're fighting deflation, not hyperinflation. No one's "rolling out" of USD, they're flocking to it. Also, Treasury "debt" does not work like corporate or individual debt. It works more like company shares than anything else. That is, when a country's doing good (exporting) it's currency rises in price. That's what's happening to USD. It's getting bought up and the price is skyrocketing.

I'm out of this thread. There's no logic or intelligence here. Just an anti-USD, pseudo-economist, pro gold and BTC, circlejerk.

[picolo]

The fed is not purchasing additional bonds however they are still holding bonds they previously purchased (and have a larger then usual balance sheet - much larger). They are also manipulating the bond market via their promise to keep short term interest rates low for a very long time (it has been ~5 years so far)

In comments at private appearances, Ben Bernanke has stated that he does not expect interest rates to normalize in his lifetime.  If the rate on the Japanese 10 year went to 2%, all the tax revenue of the Japanese government would not suffice to service the coupon payments.  That is where the U.S. is heading, and it is no secret, merely an unmentionable elephant.  Given that it is unlawful to default on the debt of the U.S. Treasury, the only possible outcome is hyperinflation:  No austerity, no financial repression, no feasible growth will suffice to overcome the magnitude of the debt mountain.  The debatable aspect is the timing of that hyperinflation.  Everyone wants time to roll out of USD before it breaks loose.

 

Please, investors are running from Japan to US. They are incomparable. Do you know what a yield curve is? If you did, you would know that all that doom and gloom you're spreading is not evident at all.

We're fighting deflation, not hyperinflation. No one's "rolling out" of USD, they're flocking to it. Also, Treasury "debt" does not work like corporate or individual debt. It works more like company shares than anything else. That is, when a country's doing good (exporting) it's currency rises in price. That's what's happening to USD. It's getting bought up and the price is skyrocketing.

I'm out of this thread. There's no logic or intelligence here. Just an anti-USD, pseudo-economist, pro gold and BTC, circlejerk.

The US has a 500 Billions negative trade balance and the Dollar will be less use while there are plenty of Dollar around.

[aminorex]

Please, investors are running from Japan to US. They are incomparable.

Investors are buying the Nikkei, and selling Yen.  It's hardly running from Japan to US.  Anyhow, you seem to take my prediction that the dollar will end in hyperinflation as implying that the dollar should be losing value relative to other currencies.  That is non sequitur.

Do you know what a yield curve is?

I spent a few months implementing various models of the yield curve (or surface), so I have a pretty good idea.  Predictively modelling the yield curve would be extremely leveragable, so I invested quite a bit of time into it, until I ran into a brick wall trying to solve a boundary value problem in Hilbert space.  I might return to it later if I have more time for basic research.

If you did, you would know that all that doom and gloom you're spreading is not evident at all.

I don't perceive anything gloomy about it.  Doom just means final fate.  Yes, I perceive the doom of the USD as coming 1 day closer with each passing day.  If you do not, then your perception of time is, shall we say, idiosyncratic, or your vision simply does not extend as far into the future.  I suppose that any outcome or event seems gloomy to those who are unprepared for it.  To those who see their plans bear fruit, the outcome is tasty and sweet -- or at least is not an unbuffered shock.

We're fighting deflation, not hyperinflation. No one's "rolling out" of USD, they're flocking to it.

The first is true, the second is absolutely false.  Some very large holders of USD debt are gradually liquidating already and have been doing so for quite some time.  QE was a god-send for them as it was a huge opportunity to exit without slippage.

Also, Treasury "debt" does not work like corporate or individual debt. It works more like company shares than anything else. That is, when a country's doing good (exporting) it's currency rises in price. That's what's happening to USD. It's getting bought up and the price is skyrocketing.

The monthly balance of trade has declined from -35bn USD one year ago, to -43bn USD at last report.  Meanwhile, DXY went from 80 to 90.  Methinks your explanation is lacking in evidence.  Methinks the facts are actually supportive of my view, that Japan has left the domain of perceived sovereign risklessness, for the same reasons that the U.S. will one day step outside that pale.

I'm out of this thread. There's no logic or intelligence here. Just an anti-USD, pseudo-economist, pro gold and BTC, circlejerk.

I am bearish gold on a short time frame, bearish on a medium time frame, and bullish on a long time frame.  I doubt you understand what I think.  I am long USDJPY, for example.  That does not mean that it is any less obvious to me that USD will not eventually face the same terminal decline as JPY.  It just means not yet.

Kicking the can down the road works until you run out of road.  A long-term prediction can be perfectly right in the long-term, while being completely wrong in every intervening time period.  I am pretty sure we have at least another 6-9 months of blind faith in central planning being the dominating force in financial markets globally.

Your challenging remarks are appreciated.  Your juvenile remarks are not.  I'm torn as to whether it is good or bad that you should run away.

[deluxeCITY]

In comments at private appearances, Ben Bernanke has stated that he does not expect interest rates to normalize in his lifetime.  If the rate on the Japanese 10 year went to 2%, all the tax revenue of the Japanese government would not suffice to service the coupon payments.  That is where the U.S. is heading, and it is no secret, merely an unmentionable elephant.  Given that it is unlawful to default on the debt of the U.S. Treasury, the only possible outcome is hyperinflation:  No austerity, no financial repression, no feasible growth will suffice to overcome the magnitude of the debt mountain.  The debatable aspect is the timing of that hyperinflation.  Everyone wants time to roll out of USD before it breaks loose.
 

It may be against the law to default on US (federal) government debt however if the US is not able to raise enough money to pay it's bondholders then it will have no choice but to default. There may become a point where potential investors will not be willing to lend to the US federal government at any price (interest rate)

[aminorex]

In comments at private appearances, Ben Bernanke has stated that he does not expect interest rates to normalize in his lifetime.  If the rate on the Japanese 10 year went to 2%, all the tax revenue of the Japanese government would not suffice to service the coupon payments.  That is where the U.S. is heading, and it is no secret, merely an unmentionable elephant.  Given that it is unlawful to default on the debt of the U.S. Treasury, the only possible outcome is hyperinflation:  No austerity, no financial repression, no feasible growth will suffice to overcome the magnitude of the debt mountain.  The debatable aspect is the timing of that hyperinflation.  Everyone wants time to roll out of USD before it breaks loose.
 

It may be against the law to default on US (federal) government debt however if the US is not able to raise enough money to pay it's bondholders then it will have no choice but to default. There may become a point where potential investors will not be willing to lend to the US federal government at any price (interest rate)

The Fed will always be there to buy bonds.  So it's not a problem.  Move along.

[polarhei]

Interesting article with a very surprising end (related to Bitcoin see last 2 paragraphs)

http://www.telegraph.co.uk/finance/comment/liamhalligan/10978178/The-dollars-70-year-dominance-is-coming-to-an-end.html

Dollar comes an End? Well, just adjusting the way since there are many people believing BTC.

[Haslett5236]

Interesting article with a very surprising end (related to Bitcoin see last 2 paragraphs)

http://www.telegraph.co.uk/finance/comment/liamhalligan/10978178/The-dollars-70-year-dominance-is-coming-to-an-end.html

Dollar comes an End? Well, just adjusting the way since there are many people believing BTC.

dollar will not be end..

[picolo]

In comments at private appearances, Ben Bernanke has stated that he does not expect interest rates to normalize in his lifetime.  If the rate on the Japanese 10 year went to 2%, all the tax revenue of the Japanese government would not suffice to service the coupon payments.  That is where the U.S. is heading, and it is no secret, merely an unmentionable elephant.  Given that it is unlawful to default on the debt of the U.S. Treasury, the only possible outcome is hyperinflation:  No austerity, no financial repression, no feasible growth will suffice to overcome the magnitude of the debt mountain.  The debatable aspect is the timing of that hyperinflation.  Everyone wants time to roll out of USD before it breaks loose.
 

It may be against the law to default on US (federal) government debt however if the US is not able to raise enough money to pay it's bondholders then it will have no choice but to default. There may become a point where potential investors will not be willing to lend to the US federal government at any price (interest rate)

The Fed will always be there to buy bonds.  So it's not a problem.  Move along.

If the FED becomes the only buyer the Dollar will tank and loose most its value. We will risk hyperinflation.

[Pruden]

The fed is not purchasing additional bonds however they are still holding bonds they previously purchased (and have a larger then usual balance sheet - much larger). They are also manipulating the bond market via their promise to keep short term interest rates low for a very long time (it has been ~5 years so far)

In comments at private appearances, Ben Bernanke has stated that he does not expect interest rates to normalize in his lifetime.  If the rate on the Japanese 10 year went to 2%, all the tax revenue of the Japanese government would not suffice to service the coupon payments.  That is where the U.S. is heading, and it is no secret, merely an unmentionable elephant.  Given that it is unlawful to default on the debt of the U.S. Treasury, the only possible outcome is hyperinflation:  No austerity, no financial repression, no feasible growth will suffice to overcome the magnitude of the debt mountain.  The debatable aspect is the timing of that hyperinflation.  Everyone wants time to roll out of USD before it breaks loose.

 

Why does it have to be an extreme event? Why couldn't it be just quite higher inflation? 5-8% would be enough, and anything higher, with two digits, would cause panic. The only reason I see for hyperinflation is that the mood can't be managed, but after it didn't happen in the 70's I see no reason to expect it now.

[thresher]

Am I the only person who doesn't get my news off youtube?

The dollar is continuing to strengthen from every piece of news I've seen....but then this fact is true

https://www.youtube.com/watch?v=AvYN0oUzVzo

[aminorex]

thresher, you're like the guy who gives no credence to global warming because the winter is cold.

i keep saying the dollar is going to be strong for while yet.  when the squeeze on dollar shorts is over (which will take a while, since there are so many USD denominated loans offshore), then we'll see what the next phase looks like.  It may be a hyper- phase, or it may not yet.  An eventual hyper- phase is inevitable, however.  It's just math.