Following the brief article
Dethroning the US Dollar,
the present article continues to track what's happening in the world of US dollars and money printing.
A lot of the details of what is to be said here can be obtained from online media, just Google it. Basically, the market has risen dramatically in the last two years. Compare this with the rise in 1932 after the 1929 crash and the subsequent crash of 1937 which took longer to recover.
The situation now is on a much larger scale. Many major banks around the world was bailed out. A big Depression was averted for now. The solution was that the government saved the banks.
- Where does the money come from? They print them. The QE2 is nothing more than printing money to pay debts.
- How can the US do that? Because the US is the reserve currency and the real physical commodities are sold in US dollars.
These news are well known in the media to anyone who wants to read.
However, what many people are in denial about is that the risk of hyperinflation, in which the currency can become so worthless that it can cost billions of dollars for a loaf of bread. Is this ridiculous? Look at the history of Germany in 1920's, Yugoslavia in 1990's and Zimbabwe recently. Here is a potential way events can unfold.
US prints more money - Cannot pay off debt - inflation becomes hyper - people's life savings are worthless.
Why would a goverment do that? Why print money and make your currency worthless? Simply, there is no other way out. The solution is to declare bankcruptcy of your country or make your currency so worthless that everyone knows you cannot pay anyway. Rest assured, the people pulling the strings and controlling the monetary policy would have bought other assets before they devalue the nation's currency. THEY would not hold their savings in their own currency.
So is this devaluing real? Here are some evidences:
Geithner says "
US will not Devalue Dollar" (they always say the opposite) -
China's holding of US Treasuries tumbles -
China cuts US Treasury holdings by the most ever -
The wold community knows the US dollar is losing its value fast. There are plans already to introduce a One World currency. Here is a document by the International Monetary Fund (IMF) entitled: Reserve Accumulation and International Monetary Stability.
http://www.imf.org/external/np/pp/eng/2010/041310.pdf
The world currency already has a name: Bancor
Some other articles:
Yes, China can choose to just say no to one export from America - inflation
World finances go topsy-turvey -
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