But what if you are in a position to pick up the pieces in a much less damaged state than your opposition. The eventual outcome is already pretty much well assured anyway, as in it will all crash not if but when right? You are all hanging off a cliff on a rope line, do you cut away those hanging beneath you and start the climb back to the cliff top or all go down together ?
The insanity of negative interest rates and higher taxes is what will destroy the economies. This is what will be another factor which will see the demise of the Euro and as for the Rouble and the Yen, both will suffer long before the U.S. dollar. The U.S. dollar will be the last to fall and it will be some time before this occurs. Follow the money trails whenever there is any kind of upheaval and it is as plain as the nose on your face exactly where the money goes. This will not change anytime soon.
China would not allow it, they hold heaps of USD and do not want it to become worthless overnight, which is very unlikely to happen because other suckers also hold these worthless, but not useless pieces of paper. Also China can acquire more USD from the US because it's China's number 1 customer.
The market value would go to 10c in the dollar in an hour! or, more likely Aunty Janet would fire up the presses to Warp Speed 10, and buy the lot! IMNHO, we WILL see world wide printing in the order of Quadrillions at a moments notice. OC
Why would the stock market crash? And, aside from that unexplained possibility, the only reasoning you have is: the USD will rise because similar theories to this one haven't yet produced results. Somehow, I can't be as confident as you are...
The USD will rise because very few things on this planet will be able to absorb the amount of capital that will leave the worst risk investments. The Euro, Euro bonds etc. It is not theory, it is the only possibility that is likely.
What are you referring to when saying "worst risk investments" and how do you foresee capital exodus from there?
It will be a long, long time before the dollar is replaced as the reserve currency. Trading currencies are completely different to a reserve currency. When obscene amounts of money need to be parked in relative safety, there is only one currency in which one can be confident. All others, Euro, euro bonds, european banks ( see a pattern).....Yen, Yuan etc, etc are all risky and will be dumped when the pressure is on. Talk of bail-ins is just another nail in the coffin of Europe. Those responsible for the management of the large sums of money are well aware of this, they also know about U.S. debt etc.....but when the time comes, they know they have no other option that can absorb the capital that will move quickly. This actually has a feedback effect in the sense that the demand for U.S. dollars will cause it to surge dramatically further supporting its safehaven status. Forget about gold in the short term. It is a tiny market that will eventually turn up and skyrocket in time....but so will other metals.
Recent move in spot price following news: http://www.theguardian.com/world/2014/aug/06/russia-bans-imports-eu-us-sanctions
The EU has slammed Russia with a mix of sanctions. I think it's foolish, they can hit back much harsher. The EU is unable to sell much of their agricultural goods - Russia is a huge market lost now... Russia is banning EU airlines from flying above their heads. God knows what else they will ban. Euros, dollars? Russia is a petrol-oil king and it is exiting the petrodollar system, probably they'll exit euros and dollars as well. Just that getting rid of those currencies is a bit more complicated and a gradual process. I don't like to see what's unfolding. Trade wars, currency wars...
So far, I didn't see much unfolding. Lotsa blabla, some decisions, not much materialized and consequences so far are 'we'll see'. I learnt to not believe so called government conflicts as easy as before. Because, I've seen too much hindsight the other way than was pointed to. Let's see what will have remained over a year of this story. Back end 2010 begin 2011, I also acted upon a story, and hurried after lotsa hesitating. Hindsight? I could have waited 3 years, and still pay a $10 lower price than now. A crisis is not what it seems. The world didn't go under in 1930. Also not in 1980. It didn't in 2000 and still didn't in 2008. Some people lost alot money, and others spent it in their place. And this also happened among people that acted to avoid it. Take the stock market in 2008. Lotsa sold shares thinking of Doom. Well, we're 6 years later and stock markets sit back on even higher levels. Those that didn't sell at the peak, and didn't sell at the bottom, have now again a chance to get out at a top. So far the hurry in 2008. What DO I care then? That I'm independent. That I control things myself, not relying on third parties. The rest I'll see, and won't make much of a difference, regarding what I could have done. Doing nothing is sometimes better than doing something. But always doing nothing is a guaranteed loser. Why? Because doing nothing is what is easiest, and competition routes that out equally easily..
You didn't see? Russia exiting the petrodollar, selling Iranian oil through a new commodity market, banning EU planes from flying above Russia to Asian destinations, Russia being excluded by VISA and Mastercard, ... Well, the World didn't go under back then, but it's undoubtedly worse now than in 2005 - let's say. Definitely a worse geopolitical situation than back in 1998. One can't deny the facts. It doesn't have to "go down" - I like to look at the crisis as an opportunity.
