Is our USD going to get revalued?

mhammerman

I've seen this in a couple of places, folk are talking 1 for 3. Any wizards here with insight on this? I guess that would lend some credibility to the collapse the dollar to save the gov. or collapse the gov. because of lack of confidence in the currency argument. Seems kind of tin foily to me but...always good to pay attention.

RedTiger

For the most part the dollar trades freely every day, and gets revalued every minute of every trading day. So, what is the question? Is the plan to knock some zeroes off? Revalue vs. China? A new dollar? A split currency (one for domestic, one for foreign)? All of that sounds absolutely kooky, when most of the same monetary goals can be accomplished incrementally without scaring the wits off everyone and creating massive disruptions in every market (all markets trade in dollars).

mhammerman

Actually, and the tin foily part, is the question..Are there proposals anyone knows about for a new USD currency that will replace the FRN's?

fc

tell those folks you heard it from to stop taking double their normal medication.

let me guess. you read this on the internet on some bulletin board.

sigh.

Wolf359

<< <i>I've seen this in a couple of places, folk are talking 1 for 3. Any wizards here with insight on this? I guess that would lend some credibility to the collapse the dollar to save the gov. or collapse the gov. because of lack of confidence in the currency argument. Seems kind of tin foily to me but...always good to pay attention. >>



The sun will die first. Any other questions?

mhammerman

Actually, it was on a couple of Kitco boards and it seemed kind of goofy...thanks for the kind replies. Man, you think we're doom and gloom, tinfoily here...you should look at some of their posters.

roadrunner

tell those folks you heard it from to stop taking double their normal medication. let me guess. you read this on the internet on some bulletin board.

Give me 100-1 odds where I can put up $100 and I'll be happy to be on the "impossible" devaluation side.

Why would this be done? How about if there is no choice as the banking/financial system has to go through a part 2 or part 3 of the current crisis? (ie a bigger crisis than part 1). I've seen estimates by people in the govt who feel that 1000 bank failures will be the minimum we'll see before this is all over. What if a hundred or more of those are coming in one week or one day? Would it make sense to just declare a banking holiday, stabilize a very unstable system, and then move forward with a devalued dollar? Who says the financial powers to be can unwind the current system at a methodical pace to slowly devalue the dollar over several years via normal market mechanisms? Considering we are in unchartered waters I wouldn't rule out anything. Certainly the FED and Treasury by their actions to date have not ruled out any possibilites.

FDR devalued the dollar 40% overnight in the early 1930's by changing the US$ value of gold. While we are no longer on a gold standard there are similarities. In fact the US govt doubled the money supply (and eventually prices) despite a gold standard a few times prior to the 1930's. The gold standard didn't stop them. One can also devalue the dollar via excessive credit and derivatives (ie totally divorced from actual currency or money aggregates).

roadrunner

gecko109

"Is our USD going to get revalued?"


It does every single year, at the rate of about -2.6% or about -6%....depending on which source you decide to believe.

derryb

revaluation is not a single event. it is continuous government policy/action to allow (or force) the US$ up or down. current washington actions are revaluing the US$ in a downward spiral. when they are ready to push it up (if it's not too late) they will tighten credit and raise interest rates.

gecko109

<< <i>revaluation is not a single event. it is continuous government policy/action to allow (or force) the US$ up or down. current washington actions are revaluing the US$ in a downward spiral. when they are ready to push it up (if it's not too late) they will tighten credit and raise interest rates. >>




Might be far too late by then. Foreign vaults hold over 80% (some estimates as high as 90%) of all the paper money the U.S. has printed. Once that avalanche of dumping begins, there will be NOTHING our government can do but to "reset" with a new currency. Its a scary, but very real possibility!

RedTiger

I agree with Roadrunner, that is it possible. Likely? Not likely for the moment. What I see as the most likely scenario would be some kind of dual currency, one for domestic, one for foreign, so as to repudiate the debt owed to foreign interests. That could happen if there was a war, either trade war or shooting war with some of the other powers.

There is precedent: in 1941, before the Japanese attacked Pearl Harbor, the U. S. government froze all Japanese national owned assets in the U. S., in July when Japan occupied the Phillipines and Malaysia. The Hawaii stamped currency notes and North Africa notes are some examples of dual currency from that era.

Bear

The brown seal Haiwiioverstamp was printed for use

only in Haiwii. This was in case Japan invaded the islands.

We could then make all the overprint money null and void.

Norseman88

<< <i>"Is our USD going to get revalued?"


It does every single year, at the rate of about -2.6% or about -6%....depending on which source you decide to believe. >>



Correct, if it wasn't revalued down by inflation most years then why is the dollar worth only 4-5 cents compared to it's value when the Fed was established in 1913 as a result of the panic of 1907.

ttown

An just think prior to the FED you could buy 50 ounces of gold for $1000 now it's right at 1. I'd call that devalued.

renman95

Revaluation is happening everday. An overt 1 for 3 on a world reserve currency doesn't make sense.

I'm flying down in Brazil right now, first time in 6 years. I remember getting nearly 4 Reais to the dollar, today it's 1.69! Once you step off Conus Americans take a big hit comparesd to a few years ago.

R95

cladking

Eventually the Chinese will let their currency increase and this will
effectively devalue all the others and have the most impact on the
dollar.

mrearlygold

Sure it's going to revalue. It's going to revalue DOWN. But they may print a few more Trillion just to make sure the masses are corraled real good.

jmski52

If you talk about revaluation, the question remains:

Revalued compared to what? To other currencies? To a basket of commodities? To gold? To land?

At the very least, I'd call it a "fluid situation".

Like any other medium of exchange, the dollar works as long as there is a degree of confidence in getting the value out of it when you spend it.

If it does get to a point where people have to play "hot potato" with their dollars before the value evaporates, then a revaluation (whether it is continuous or all at one time) is ineffective.

The hyperinflation scenario is possible only because of the governmental policies which have generated massive public debt. Unlike Weimar Germany, we've managed to produce our own massive public debt by constant overspending. Like Weimar Germany, it appears that the only politically palatable way out of massive debt is to hyperinflate.

In case you hadn't heard, $7 Trillion just became $9 Trillion, and that's only now. Hey, they are just getting warmed up with "the agenda." It's a bad scene, and getting worse.

Norseman88

<< <i>If you talk about revaluation, the question remains:

Revalued compared to what? To other currencies? To a basket of commodities? To gold? To land?

At the very least, I'd call it a "fluid situation".

Like any other medium of exchange, the dollar works as long as there is a degree of confidence in getting the value out of it when you spend it.

If it does get to a point where people have to play "hot potato" with their dollars before the value evaporates, then a revaluation (whether it is continuous or all at one time) is ineffective.

The hyperinflation scenario is possible only because of the governmental policies which have generated massive public debt. Unlike Weimar Germany, we've managed to produce our own massive public debt by constant overspending. Like Weimar Germany, it appears that the only politically palatable way out of massive debt is to hyperinflate.

In case you hadn't heard, $7 Trillion just became $9 Trillion, and that's only now. Hey, they are just getting warmed up with "the agenda." It's a bad scene, and getting worse. >>



Be careful, any mention of hyperinflation brings with it the risk of being labeled a tin foil hat wearing nut job by some of the so called experts here. In reality it is possible that hyperinflation could happen at any time but I doubt we'll see it for some time, at some point logic would dictate that it is inevitable unless the national debt mysteriously disappears or at the very least quits growing at such an astonishing rate.
Of course many will say that increasing the money supply doesn't matter when it comes to inflationary forces, I would say that these are the real tin foil hat wearing kooks.

Bear

Devaluation has taken place since we stopped backing dollars with gold.

The concern now is not that devaluation continues, but rather the velocity,

at which devaluation occurs.