Dollar collapse

[jose]

I think the dollar will collapse 20% (against the dollar) in the next couple of months. There goes my parking/adsense reveneu.

Check this chart:


http://finance.yahoo.com/q/bc?s=EURU...m&q=l&c=%5EDJI

[rofsjan]

Here is a graph of the Federal Reserve Bank Credit. FED loaned that money out. Prices in dollars can rise to adjust to all that extra amount of money.
I don't know when, but it should happen. Now (short term) we see that housing prices in USA and many other countries are declining.
But in a longer period of time you can expect an inflation, some people expect hyperinflation.

[touchring]

Over the medium term, house prices really got nothing to do with inflation but more to do with credit and leverage. You can have high inflation and very cheap housing like in the 1970s.

[Rubber Duck]

Consumer Inflation and asset prices are both closely linked to the supply of money. The main reason there has not been inflation to date is that American has been rely on the slave wages in emerging economies that it condemns to prevent prices rising on consumer goods.

Money supply should be linked closely to the value of economic activity, GDP for want of better term, as GDP doesn't really measure real economic activity. If the link is there then you can expect price stability. If it is not there then it is impossible.

At the moment, we are facing depression, but I am not so convinced that is worse than Stagflation, indeed we may need to create a whole new word for what is about to ensue. I guess it has happened elsewhere but probably nowhere in the Western World apart from perhaps Germany.

If Obama fails or even gets distracted then we will see rapidly increasing prices at a time of rapidly contracting economic activity and employment. It won't just be Arabs throwing shoes at Bush and calling him a dog. Frankly, even if Obama succeeds all you can look forward to is a weak and drawn out recovery.

However, there really is no choice. Debtors cannot afford to buy their way out on their own. If the debtors all default then the entire economy will collapse. The savers have to pay, as they are the only ones with the where withal to do it. The trick is going to be to stimulate the economy sufficiently to avoid deflation by deleveraging through inflation but then to bring it into a stall before hyperinflation kicks in. If that is achieved the patient will survive the operation, but will be faced with a prolonged stay in intensive care. Those that think it back to the good old days in a few months are are pilling into every bear rally will lose their shirts.

[sbe18]

hyperinflation is not likely for the US or for the EU for that matter if they go with a huge stimulus...1 trillion or 2 trillion ...whatever...

The US is not Argentina....

and the Chinese are not fearing hyper inflation with their huge stimulus either...


All of these stimuli (sp ?) are likely to be 50% effective...
graft, corruption, and fraud are likely to be prevalent in the US, EU and China for all 3 stimulus plans.. no news there....
just new names of criminality 2 to 3 years from now....when Madoff, Enron, and Haliburton names fade off....



The key in my mind is that another 200 million Chinese , 100 million Indians, and 100 Arab speakers become lower middle class citizens and contributors to the global economy.....

$ 3 Trillion is not a lot of money to print ..if 300 million + , achieve incomes of $2000 to $4000 per year....over the next 10 years or so...
their consumption, income, productivity, and savings would make the $3 trillion a wise investment........and not simply printed money etc........


Food, meat, clothing, TV's, mobile phones, financial services at a basic level will never go away...

it is just that there are 300 to 400 million people that are very close to achieving this style of living in the Middle East, India, and China.....and they have been shut out by stupid, corrupt elites for 80 years..
To be clear, the collapse of the Ottoman, Belgian, Spanish,British and French empires in the middle of the last century screwed these people, because
autocratic elites kept their state resources for themselves and their cronies..


The hyperinflations of Germany in the 20's was to pay off the French with worthless money to be gone with them..It impoverished the Germans, and created chaos ( street fighting of Nazis and Communists...while Weimar struggled to keep the US/French/British paid off)

The hyperinflation of Zimbabwe is not relevant...no one buys anything
from Mugabe's thugs anyways...
but if I could...I would buy a $1 Billion Zimbabwe note for 1 dollar for a bookmark gift....(grin)

The US dominated financial system of Federal Reserve fiat is finished...

The US-China system ....with EU/Japan/Arabs/ Russia/Brazil/ very important but 2nd tier is need of creation....

I think Obama is smart enough to try to build or give birth to this..


We will see if China wants to fund Obama's $1 Trillion....
I think they will...
The Japanese refuse to sell the Chinese , government or corp. bonds.
The EU doesn't create enough paper for them to buy...

And Shang Hai doesn't need 5000 more high rise condo buildings....


Until China decides at the top, to make 75 modern cities in the interior,
they will finance large inefficient enterprises...for labor peace and
the 90 % employed US consumer class........the 10% unemployed is a separate issue...and not a trillion dollar support issue etc...

When China's elite decide to support and finance massive consumer spending for all of China ...not just coastal China............that will be the signal of
inflation for the US........because then........interest rates will have to rise to attract capital from replacement sources other than the easy credit from the Chinese...

but that is not hyper inflation.....just higher rates for bond holders to put money in the US, and not to float credit cards and business loans in China or where ever...

The economic situation in the US is bad, no doubt.
My retirement funds are down like everyone else...by 30 to 40 %.
My house's value is down like everyone else...by 30 %....

But both are values on paper ...and not transactions....and I am not forced to sell.......just theories.....


Bull markets have tops....and bear markets have bottoms..

There will not be a V shaped recovery for the US or world economy IMHO.

But a $40 Trillion World GDP is not going to vanish to $20 T ....
not with the Internet, mobile phones, and 300 million more mobile phone customers in the pipeline for 2009.

Every recession in the last 80 years gave birth to radical changes in economic and social activity...

the 50's....big cars ......to smaller cars in the US.... MG's Triumphs in the UK...VW's....in Germany.....Japanese smaller cars just beginning...etc..

60's ....transisters for radios and TV's......to color TV and integrated chips..mainstream small cars....Jet travel goes mainstream..707 737
70's... mini computers, tape decks, electronics...watches/ calculators....global travel 747
80's PC's , Mac's..walk mans DVD..
90' .....laptops cellphones, web, pagers
2000' so far...........SMS as a $70 Billion industry, Google ads, social networks..

2009........MMS, Mobile phone TV ?, IDN's ....?

Now that www.gov.cn is now an IDN dot CN for all official announcements....
IDN's are not a joke...and they are going to happen in China regardless of ICANN's and the US Dept of Commerce bullshit..

when I started IDN buying...I thought the PRC gov sites would be IDN's 4 to 5 months before the Olympics.....

I was wrong.

It was 4 to 5 months after the Olympics.

Since I am, and will remain a speculative buyer and not a speculative seller...
it cost me nothing....

but IDNer's in China.....and ASCII dot CN buyers in China.....they wanted to
buy and flip in a year......

they are going to be net/net/net losers, and will be lucky to hold 33% of their names as holdings if they have good IDN's for development.

I like my odds for 2009 for my $7.50 per year names..
I treat each as an asset.

So I am in at $22 all in - per name on average, and many of the same quality are selling even in this market at $2000 +


So for RD and all the old timers......who are in at 2003 or 2004 etc....

They are in at $49 to $70 est per name of reg and re-reg X 5 or 6 ???
And some names are carrying their Reg's via PPC rev. of course....

With names that should fetch $100,000 + if they were ASCII, but at distressed....would be .....what $20,000... at worse ....$10,000

but the old timers...and some of us relative new timers...1 to 3 year types...
don't have to sell.......

that affects supply here on IDNF...

But it has absolute zero effect on demand.
Either end users will find and buy...
Or we will find them, and they will buy.

Selling to ASCII domainers because the light bulb goes off is a joke.


the domainer wild west .........it has simply moved further west that it is East now.....(grin)

Happy holidays to everyone.......

2009 should be a wild ride...

Steve

[Drewbert]

Stimulus doesn't prevent hyperinflation, it just delays it and ensure that when it finally arrives, it'll be even worse.

Dubya's "here, have some money to go shopping so you're distracted while we spy on you" turkey has come home to roost. Dropping it from a helicopter won't make it fly away.

"As God as my witness..."

How to run a country like a radio station.

[Rubber Duck]

Stimulus will be the cause rather than the cure, but it is nevertheless necessary. We are, however, in a scenario where a good outcome is less likely than with Apollo 13.

I think this is graph everyone should take a look at:

[bwhhisc]

Bram has fixed the problem from Admin panel; sorry for any inconvenience.

[jose]

Let's try it...

[Rubber Duck]

You'll end up doing the washing up!