Announcement

Collapse
No announcement yet.

World reserve currency status does not last forever

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • World reserve currency status does not last forever

    The last six world reserve currencies lasted about one human lifespan each.

    Let's see... the current one has lasted about 70 years...

    http://www.zerohedge.com/sites/defau...PM_reserve.png

  • #2
    Re: World reserve currency status does not last forever

    Originally posted by mooncliff View Post
    The last six world reserve currencies lasted about one human lifespan each.

    Let's see... the current one has lasted about 70 years...

    http://www.zerohedge.com/sites/defau...PM_reserve.png
    you can read the latest drug induced, crowd pleasing, zerocred false alarm de jour... or if you prefer your analysis sober go back & read this interview of galbraith by ej nov 2006...

    EJ: Let's look at the potential downside of that equation. In "Conquest of Inflation, the World's Second Oldest Profession", I make the point that the trade deficits have shifted inflation risk from the Fed to export countries that are buying U.S. debt to support U.S. consumption. The Fed doesn't control U.S. interest rates and inflation as much as U.S. creditors do. In a story entitled “Rubin, Volcker Say Investors May Avoid Buying Dollars, Bloomberg recently reported this: "Robert E. Rubin, Treasury secretary under President Bill Clinton, and former Federal Reserve Chairman Paul Volcker said foreign investors probably won't keep increasing dollar holdings, raising the risk of a slump in the currency." Do you not share their concern about the trade deficit and the dollar?

    JG: The world will not go on forever using dollars exclusively as reserves. The cost of production of reserve assets is zero versus the cost of producing things; the advantage is not permanently sustainable. Global monetary systems tend to last 30 years or so, and the current dollar-based arrangement that arose in the early 1980s out of the inflation crisis is getting a bit long in the tooth.

    EJ: Let's leave the realm of informed speculation to advance into idle speculation. What events do you think are likely to precipitate the end of the dollar's reign as the world's reserve currency? What might a post-dollar world look like?

    JG: You might like to design the new system first and then figure out how to get to the new system from here with the least possible transition cost. We won't be so lucky. Throughout history, these kinds of transitions have been precipitated by crisis, precisely because the transition cost is too high for most of the players in the system.

    EJ: In the current instance, the United States.

    JG: Right. That said, it's hard to imagine how any of the players will do anything intentionally to create the crisis that will lead to a transition. Think of a crowded theater where someone yells “Fire!” In the case of the global monetary system, the theater isn't very crowded. There are three seats in the front row occupied by sleepy, porcine men, representing Europe, Japan and China. If someone in the back yelled “Fire!” the porcine men might wake from their slumber, sniff the air and—noting a lack of smoke—go back to sleep.


    http://www.itulip.com/forums/showthr...erview-Janszen
    speaking of interviews, is ej going to start doing interviews of folks again again?

    Comment


    • #3
      Re: World reserve currency status does not last forever

      Hi "T"
      Get the resench grant?

      Metalman
      Ok, lets see if you are half as smart as you like the rest of us to think you are............should i buy Gold today?

      Mike

      Comment


      • #4
        Re: World reserve currency status does not last forever

        Metalman:
        Trillions of Dollars have been added to the US Govt debt pile since 2006. It is now over 100%! That must change things. In addition, more economic blocs are no longer doing all their trading in Dollars or are planning on creating tading blocks which use a new currency ie the Middle East.

        Comment


        • #5
          Re: World reserve currency status does not last forever

          Originally posted by Mega View Post
          Hi "T"
          Get the resench grant?

          Metalman
          Ok, lets see if you are half as smart as you like the rest of us to think you are............should i buy Gold today?

          Mike
          if you trade...

          down 2% last 3 days
          up 1% last 30 days
          down 4% last 60 days
          down 5% last 3 mo
          down 6.6% last 6 mo
          up 4.6% last yr
          up 2% ytd
          up 139% last 5 yrs
          up 482% since 2000

          ej says > 10% gold rise in 2012

          if gold 4.6% so far, another 5%+ to go?

          if you hold gold for insurance...

          zzzzzzzzzzz

          Comment


          • #6
            Re: World reserve currency status does not last forever

            Originally posted by DRumsfeld2000 View Post
            Metalman:
            Trillions of Dollars have been added to the US Govt debt pile since 2006. It is now over 100%! That must change things. In addition, more economic blocs are no longer doing all their trading in Dollars or are planning on creating tading blocks which use a new currency ie the Middle East.
            yep... as forecast on the tulip in 2006 & detailed in part ii.

            Comment


            • #7
              Re: World reserve currency status does not last forever

              In 1995, many people said that the equilibrium level of the yen to the dollar was not the current 130 yen to the dollar, but 70 to the dollar. When I said that, people laughed at me, including Harvard MBAs... The BoJ was printing money like mad to keep the value of the yen down, and since they were the only zero interest rate bank at the time, it worked. Now that everyone is ZIRP, we see that in fact that was the equilibrium rate. Going from 120 yen to the dollar to 80 yen to the dollar only took a couple of years.
              In 1916, it was 2 yen to the dollar.
              There certainly can be huge changes in the value of a currency in just a few years.
              Since the pound was the last world reserve currency to lose its status, it is also useful to see graphs of that. You will see periods of stability of years or a decade, with extremely short sharp drops, say 15% overnight or in a month or so.

              Yes, Metalman, I know how kookie zero is, but it is useful to read it because it raises a lot of issues of which I am not aware. Then I ignore the conclusion, usually, or just add it to the stack of scenarios, which is always useful.

              Comment


              • #8
                Re: World reserve currency status does not last forever

                Originally posted by mooncliff View Post
                In 1995, many people said that the equilibrium level of the yen to the dollar was not the current 130 yen to the dollar, but 70 to the dollar. When I said that, people laughed at me, including Harvard MBAs... The BoJ was printing money like mad to keep the value of the yen down, and since they were the only zero interest rate bank at the time, it worked. Now that everyone is ZIRP, we see that in fact that was the equilibrium rate. Going from 120 yen to the dollar to 80 yen to the dollar only took a couple of years.
                In 1916, it was 2 yen to the dollar.
                There certainly can be huge changes in the value of a currency in just a few years.
                Since the pound was the last world reserve currency to lose its status, it is also useful to see graphs of that. You will see periods of stability of years or a decade, with extremely short sharp drops, say 15% overnight or in a month or so.

                Yes, Metalman, I know how kookie zero is, but it is useful to read it because it raises a lot of issues of which I am not aware. Then I ignore the conclusion, usually, or just add it to the stack of scenarios, which is always useful.
                disagree. confusing noise.

                jun 2011... euro is collapsing in 2 wks!!!
                jul 2011... euro is collapsing in 2 wks!!!
                aug 2011... euro is collapsing in 2 wks!!!
                sep 2011... eeuro is collapsing in 2 wks!!!
                oct 2011... euro is collapsing in 2 wks!!!
                nov 2011... euro is collapsing in 2 wks!!!
                dec 2011... euro is collapsing in 2 wks!!!
                jan 2012... euro is collapsing in 2 wks!!!
                feb 2012... euro is collapsing in 2 wks!!!
                mar 2012... euro is collapsing in 2 wks!!!
                apr 2012... euro is collapsing in 2 wks!!!

                & if the euro really is gonna collapse in 2 wks, how will you know?

                how can i identify the 'correct' alert?

                for me it's the zh signal/noise ratio that kills me... but yah, entertaining.

                Comment


                • #9
                  Re: World reserve currency status does not last forever

                  Well, yes, according to zero, we all should have died of radiation poisoning like a hundred times already.
                  And Godzilla should have awakened in Tokyo Bay.
                  They scream hysterically about something that is not, so far, all that important, but ignore things like 70% probability of massive quake in Tokyo within the next four years.
                  Euro went from 170 yen to nearly 100 yen to the euro in the last couple of years, so from yen point of view, fairly big collapse. The pound went from 220 to 110 over about the same time. That was amazing. I saved several friends quite a tidy sum by telling them not to change their yen yet.
                  And come on, sometimes they say euro is collapsing in two weeks, then they say tomorrow, then they say one week... Exactly how much coke are they doing?

                  Comment


                  • #10
                    Re: World reserve currency status does not last forever

                    Ha............but you have not factored in the value of £, might very well get KILLED after the games............Hmmm
                    Its only just over £1,000 now if it dips i will buy 5 oz baby!

                    Comment


                    • #11
                      Re: World reserve currency status does not last forever

                      Originally posted by mooncliff View Post
                      Well, yes, according to zero, we all should have died of radiation poisoning like a hundred times already.
                      And Godzilla should have awakened in Tokyo Bay.
                      They scream hysterically about something that is not, so far, all that important, but ignore things like 70% probability of massive quake in Tokyo within the next four years.
                      Euro went from 170 yen to nearly 100 yen to the euro in the last couple of years, so from yen point of view, fairly big collapse. The pound went from 220 to 110 over about the same time. That was amazing. I saved several friends quite a tidy sum by telling them not to change their yen yet.
                      nice call!

                      And come on, sometimes they say euro is collapsing in two weeks, then they say tomorrow, then they say one week... Exactly how much coke are they doing?
                      doomer porn artists & zh false reports addicts can never get enough...

                      Comment


                      • #12
                        Re: World reserve currency status does not last forever

                        Yes, it certainly might. The euro isn't doing too well, making the pound look good.
                        The Japanese government deficit is through the roof, on purpose, I think. What would the yen be if that deficit weren't there... I can only dream...

                        Comment

                        Working...
                        X