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Thread: Dollar devaluation - what do you do?

  1. #1
    Para aquí para acá Jonh's Avatar
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    Default Dollar devaluation - what do you do?

    I'm no financial guru and have no special investments or assets, and I barely understand all this, only seeing it through a glass darkly. But it appears that the US Dollar will soon cease to be the world's reserve currency and that will cause major inflation and chaos in the US. Some say economic collapse.

    To avoid "the troubles" (to borrow an Irish phrase), one option is to boogie to Nicaragua, but trying to imagine how a dollar-based life would change for a gringo living in Nicaragua makes my head hurt. When Nicaragua drops the dollar, your greenbacks will be useless. No more Action Certificates unless they're in Cordobas. Banks may not accept dollars. If you get a Social Security check, is your US bank secure? If you pull it out of a Nica ATM, is that a viable and sustainable method of making ends meet? Best idea is to live in Nicaragua, produce something that sells locally and pays in Cordobas, and ignore "the troubles."

    For those that stay in the US, I've heard the best protection is investing in foreign currencies, land, and commodities (gold, silver).

    Thoughts?

  2. #2

    Default Re: Dollar devaluation - what do you do?

    No Sure Bets or Free Lunches anymore --as the Russians recently found out with the Cypriot bank fiasco.

    The losses here, and much of it is going to be people who stashed their life savings there, have yet to be determined. What is clear is, everyone except the really small depositor is going to take a haircut.

    Crewcuts may come back in fashion in Cyprus and Russia.

    The Fed's QE efforts have poured escess liquidity into the US economy, but job growth is still weak. If there is an increase in interest rates, the cost to service the out of control US debt will soar, crowding out the better uses of our tax dollars. Some scenarios are scarier than others. The one really bright spot is the trend towards increasing energy independence in the US.

    I hate to sound like a survivalist, but yes, a sustainable life somewhere might be a better alternative. I chose Nicaragua; I can only hope it was the right choice.

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    Viejo del Foro Daddy-YO's Avatar
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    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by Jonh View Post
    ... it appears that the US Dollar will soon cease to be the world's reserve currency and that will cause major inflation and chaos in the US. Some say economic collapse.
    I wouldn't bet on it. All those nukes, stealth bombers & drones are worth more than one might imagine in global accounting circles. Meanwhile money in the bank earns near zero interest, the opposite of inflationary times. That will continue as long nations' priority is paying down the deficit and not building bridges to the future.

    If fearful, diversify. Gold's value tends to float independent of currency. It's $1550/oz now; that's less than $55/g which is cheaper by half than the US street value of pure cocaine.
    I never met a Semite I didn't like.

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    Default Re: Dollar devaluation - what do you do?

    The logic, if I can distill it accurately, is we're printing money to cover our government debts, but not nearly enough. As long as the world trades in dollars, it's not detrimental because every international trade stimulates demand for dollars to convert to first. Germany buys oil by purchasing dollars, then giving the dollars to Saudi Arabia. But as soon as the dollar is dropped by enough countries and Germany can buy oil with Euros or Marks or whatever, demand for dollars drops and thus the value. So with all the monopoly money they're printing, plus reduced world demand, the dollar loses value (is devalued like Chavez did to Venezuela). Try to buy cheap Chinese crap and it isn't so cheap any more.

    Meanwhile, the government tries to pay its trillion dollar bills with more worthless money and something's gotta give. Government services get cut, welfare checks bounce, and the 47% become an angry mob.

  5. #5

    Default Re: Dollar devaluation - what do you do?

    This economy is more like a feat of modern engineering. It will be interesting to see if we make it across, or if the bridge is going to break before we get to the other side. The question is, if the bridge does break how far will we fall? Will it be devaluation / inflation, gold /silver, or bullets and food. I don't think there is another currency that is more stable than the dollar. If there is, switching over to that currency will probably cause it to destabilize since we are all intertwined now. But yes, the more we print, the more likely that could happen. I think most of the leeches see that this deficit will be a deciding factor for the next few elections and they won't want to risk the high-life.

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    TRN Science officer bill_bly_ca's Avatar
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    Default Re: Dollar devaluation - what do you do?

    But the EU is in worse shape (if you back out Germany and the Benelux) The UK is even worse, Japan is worse still (by a factor of 2X) and the Chi-Coms Rus-Caps have the rule of law (the lack of it... ) working against them...

    While the world wide rule of the US buck is not as high as it once was I think that your Co-hort is too dodgy to flee to them just yet..

    Another 20 yrs who knows..

    It is for my children I worry, not me...
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    Default Re: Dollar devaluation - what do you do?

    Brazil and Australia are dumping the dollar in their China trade.

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    Default Re: Dollar devaluation - what do you do?

    When the USA was more on top, say 20 years ago, we had South American countries borrowing and continuing to default against loans. What did we do? We kept them alive so that they could continue. I guess the idea is if they croak we have to bail them out, but as long as you keep them going there is a chance you can get some or all of your investment back. Kind of like a loan shark killing someone for not paying his debt... then he never gets his money back.
    Survivor

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    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by Jonh View Post
    Brazil and Australia are dumping the dollar in their China trade.

    Yes..

    But I read this.. and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation,

    As away to save transaction costs and not disgust with the genreal house kept by the US..

    Whatever the US sees in decline in 20 yrs , China will see in 40 and twice as bad, because of the one child policy..

    http://en.wikipedia.org/wiki/Demogra...ion_projection
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  10. #10

    Default Re: Dollar devaluation - what do you do?

    I'd say there are definitely structural cracks in the bridge. One of the biggest was having a downgraded bond rating. Guess its about being able to read the signs correctly in time. Reckon we will see if the bridge breaks or not. Sometimes things have to break before they can be fixed.

  11. #11

    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by Jonh View Post
    I'm no financial guru and have no special investments or assets, and I barely understand all this, only seeing it through a glass darkly. But it appears that the US Dollar will soon cease to be the world's reserve currency and that will cause major inflation and chaos in the US. Some say economic collapse.

    To avoid "the troubles" (to borrow an Irish phrase), one option is to boogie to Nicaragua, but trying to imagine how a dollar-based life would change for a gringo living in Nicaragua makes my head hurt. When Nicaragua drops the dollar, your greenbacks will be useless. No more Action Certificates unless they're in Cordobas. Banks may not accept dollars. If you get a Social Security check, is your US bank secure? If you pull it out of a Nica ATM, is that a viable and sustainable method of making ends meet? Best idea is to live in Nicaragua, produce something that sells locally and pays in Cordobas, and ignore "the troubles."

    For those that stay in the US, I've heard the best protection is investing in foreign currencies, land, and commodities (gold, silver).

    Thoughts?
    Currency is like a doughnut; sweet to some but all have a hole in'em.

  12. #12
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    Default Re: Dollar devaluation - what do you do?

    If it keeps on rainin', levee's goin' to break,
    When The Levee Breaks I'll have no place to stay.

    Mean old levee taught me to weep and moan,
    Got what it takes to make a mountain man leave his home,
    Oh, well, oh, well, oh, well.

    Don't it make you feel bad
    When you're tryin' to find your way home,
    You don't know which way to go?
    If you're goin' down South
    They got no work to do,
    If you don't know about Chicago.

    Cryin' won't help you, prayin' won't do you no good,
    Now, cryin' won't help you, prayin' won't do you no good,
    When the levee breaks, mama, you got to move.

    All last night sat on the levee and moaned,
    Thinkin' about my baby and my happy home.
    Going, going to Chicago... Going to Chicago... Sorry but I can't take you...
    Going down... going down now... going down....
    To be called a "Has Been" I must surmise, is much Greater than to be called a "Nevah Been"... JW...



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    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by Daddy-YO View Post
    ...All those nukes, stealth bombers & drones are worth more than one might imagine in global accounting circles...
    Yep you are a guy who has it right!- Just like individuals stocking up on AKs and ammunition for the survival of the fittest.

    Some Canadian friends were riding me because they had natural resources to keep their economy going & they don't spend much on the military yet the US was spending itself into oblivion. I told him we just let you think you own our natural resources but when we want them we will take them. At the time I meant that as a joke but it may well be the way things work in the future.

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    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by JohnS View Post
    Yep you are a guy who has it right!- Just like individuals stocking up on AKs and ammunition for the survival of the fittest.

    Some Canadian friends were riding me because they had natural resources to keep their economy going & they don't spend much on the military yet the US was spending itself into oblivion. I told him we just let you think you own our natural resources but when we want them we will take them. At the time I meant that as a joke but it may well be the way things work in the future.

    Thank you Ms Coulter
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    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by bill_bly_ca View Post
    Thank you Ms Coulter
    Ouch - That really hurts - Bad as it can get - Must have been delirious after that nightmare I had last night where I was watching FOX news.

    I don't see any safe havens when(strike that) if the US economy collapses because that would probably ripple throughout the world (if the last recession is any indicator). You can't eat gold. Some people predict complete anarchy and then all bets are off. You are gonna own only what you can protect whether you are a person or a country. I phoned my buddy Obama last night and he said I had 1st dibs on your property.

    The US$ is hurt by the huge debt but is backed by a pretty decent GDP - The Cordoba is backed by nothing but debt so I doubt if that is the currency to hoard.

    I hope the whole subject is a bad joke.

  16. #16
    TRN Science officer bill_bly_ca's Avatar
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    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by JohnS View Post
    Ouch - That really hurts - Bad as it can get - Must have been delirious after that nightmare I had last night where I was watching FOX news.

    I don't see any safe havens when(strike that) if the US economy collapses because that would probably ripple throughout the world (if the last recession is any indicator). You can't eat gold. Some people predict complete anarchy and then all bets are off. You are gonna own only what you can protect whether you are a person or a country. I phoned my buddy Obama last night and he said I had 1st dibs on your property.

    The US$ is hurt by the huge debt but is backed by a pretty decent GDP - The Cordoba is backed by nothing but debt so I doubt if that is the currency to hoard.

    I hope the whole subject is a bad joke.
    It was a tangent off of Ms Adams Apple "allowing" Canada to exist upon the continent.. And i would not be Canadian if I did not apologize.. Which I do..

    http://www.youtube.com/watch?v=T1ZSHulmerE
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    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by bill_bly_ca View Post
    Heh...heh... - That cold weather must make people awfully cantankerous.

    Actually Canada is one of the few countries USAers universally hold in high regards and I have never heard an anyone badmouth Canadians - Nicaragua has a big collection of characters from both countries.

    BTW if you ever run into my old buddy Pierre Trudeau give him my regards - Also, Maggie, Ted Kennedy, the folks at Studio 54, and all the members of the rolling Stone band.

    .

  18. #18
    Viejo del Foro Just Plain John Wayne's Avatar
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    Default Re: Dollar devaluation - what do you do?

    Hell I thought Canidians was North Americans.... I must say, I ain't nevah met a real bad one yet....

    Oh and I remember Dudley Doright.... I liked it Hated Snidely Whiplash....
    To be called a "Has Been" I must surmise, is much Greater than to be called a "Nevah Been"... JW...



  19. #19
    TRN Science officer bill_bly_ca's Avatar
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    Default Re: Dollar devaluation - what do you do?

    Quote Originally Posted by JohnS View Post
    BTW if you ever run into my old buddy Pierre Trudeau give him my regards - Also, Maggie, Ted Kennedy, the folks at Studio 54, and all the members of the rolling Stone band.

    .
    PET is dead (2000) but his son is making a run...

    We are a pretty bland bunch all tolled...

    When my Dad immigrated in 1964 I could have been a Tanned boy in FLA or Born in Hamilton Ontario.. I guess the lights and raz-mi-taz of the US was more than he could care for..

    http://www.youtube.com/watch?v=Lab6gyWsMXo
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    Default Re: Dollar devaluation - what do you do?

    Good choice for opportunities!
    Canada has a lot fewer people and more land and resources than the US and Canadians I know claim a better economy.
    A couple expats I know from Canada have about $5K/month pension from a blue collar job which beats the US by far.

    Back to the original topic - Maybe Canada is so isolated and self sufficient that it is the place to invest for the collapse. But it seems like the whole world is so financially intertwined that if the US goes down there is no safe haven. And the news I see pretty much says much of Europe is in the same tank as the US.

    A guy can always be lucky and die before that happens.

  21. #21

    Default Re: Dollar devaluation - what do you do?

    Canada is going to benefit big time from the warming trend. Just think of all those enormous lands that might be opened up to agriculture with a modest rise in earth temperature. MAYBE even a NorthWest Passage.

    Egypt used to be the bread basket of the Roman Empire, and then there were the Hanging Gardens of Bablyon in Iraq. That wasn't very long ago.

    My theory is: The rising sea levels (modest as they might be) coupled with a bit more heat will increase the evaporation from the oceans, and thereby increase the rainfall onto land.

    Big winners, the Ukraine, Canada, northern tier of US states. Ii don't question that the planet is getting a bit warmer, but I do question our contribution to it. Our contribution HAS bought Al Gore a 9000 square ft house in California with a huge carbon footprint.

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    Default Re: Dollar devaluation - what do you do?

    Ii don't question that the planet is getting a bit warmer, but I do question our contribution to it. Our contribution HAS bought Al Gore a 9000 square ft house in California with a huge carbon footprint.

    ..... Saludos to Al Gore...... He can put his lips to my cornhole....
    To be called a "Has Been" I must surmise, is much Greater than to be called a "Nevah Been"... JW...



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