Saturday, April 9, 2011

End of America

Collapse of Dollar 
If you thought the economy was starting to improve, think again. Things are actually going to take a turn for the worse -- much worse.

Collapse of USA

Forecasting the end of America’s global economic dominance, ultimately resulting in rioting and protests across the country.
Porter Stansberry’s “End of America” Video


So how long do Americans have before the world dumps the dollar?
Well, according to Stansberry, we’re already in the thick of it. “If you go anywhere around the world, most wealthy people have already abandoned the dollar,” he says. “If you look at the commodity complex you can see very clearly that many people around the world have [already] abandoned the dollar as the reserve currency."
If something is not done to remedy this country’s tremendous debt load and stop the flood of dollars into the market, the rest of the world will eventually drop the dollar completely for hard assets - such food, he says.
Stansberry points out that millions of Americans are already living off of food stamps. Should the price of food rise so dramatically, millions more will go hungry.
Without affordable food, jobs or retirement funds, he predicts Americans will take to the streets in protest, similar to what's occurred in Egypt, Greece and other nations.
Stansberry is predicting the end of America’s global economic dominance, ultimately resulting in rioting and protests across the country.

         Reading more...below

Traders are warning of a dramatic change in dollar selling. They fear central banks from the Middle East may force their Asian rivals to more aggressively drive the dollar down. 
Too Many Dollars
  In 10 months, the Dollar Index has lost 14% because the world keeps accumulating dollars it doesn’t want and sells them. 

Asian central banks are key. 
 Many Asian central banks have been forced into waging wars to keep their currencies from appreciating because of the influx of investors to emerging markets. They sell waves of their own currencies into the market in an attempt to keep exports competitive.
In return they often receive dollars. But with the Federal Reserve printing dollars and the greenback’s value continually falling, the Asians sell those dollars in order to preserve the value of their reserves.
“Asia Pacific banks are renowned for their strict diversification” says Neil Mellor at BNY Mellon. “They hold a level with China in order to be competitive. Beyond that it’s very strict ratios. They need to swap-out of dollars.” 

Euro Benefits
When they sell dollars they often buy euros.
China and Taiwan have tried looking further afield in their diversification, to the Australian and South Korean bond markets” says Mellyor. “But there are only two places that are deep enough to absorb reserves of this magnitude: the Euro Zone and the US. When ever you see emerging markets perform well you will see the euro perform well.” Three months ago central banks in Latin American joined the Asians as “currency wars” became more widespread. 

 Middle East
US crude prices have risen 30 percent since Libya’s “Day of Rage” Feb. 14 above $100 a barrel. The International Energy Agency says OPEC nations will net one trillion dollars a year. The political tension also demands petrodollars are sold and the proceeds increasingly repatriated, as Saudi King Abdullah’s $93bn-worth of handouts demonstrate. 
“The Middle Eastern players seem to be willing to chasing the market higher,” says Borthwick. “When the EUR/USD rallies 30 pips on air you can be assured this is a Middle Eastern reserve manager diversifying out of Dollars they have received from the higher price of oil.”  

source: cnbc

Former Top US Economic Adviser: A Weaker Dollar is Good for America

More controversially, Romer lauds QE for helping to weaken the dollar. A weaker dollar makes U.S. goods more competitive overseas, boosting exports and GDP growth, and ultimately hiring.


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