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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (17221)	2/3/2009 4:22:03 PM
From: axial	Read Replies (2) \| Respond to of 71456

tooearly, things that are happening now were predicted years ago. There's maximum fear and anger in the US - understandable. Things will get worse before they get better and in our lifetime, it's unlikely the US will ever regain the economic primacy it once had. But I hold a different view than most of the doomsayers here. That view is: IF there is a solution using fiat money and interventionist economics, the US has it more "right" and is doing it better than any other nation. That there was some confusion and early mistakes, but Bernanke acted quickly and emphatically, and left no doubt that he would take further measures. That if there is NOT a solution using fiat money and interventionist economics, then there will be a crash - but we were just days away from a global crash last October, anyway. That eventually deflation will stop. As massive injections of money take effect, inflation will return. When it does, liquidity will be carefully reduced, and interest rates will rise. In the meantime, the US will still be a haven for scared money, at the same time as foreign investors acquire more US assets, resulting in needed inflows. This will only happen if the US seems to be meeting prudent, sustainable targets. The US will be on economic parole. The amount of money actually used will be less than the huge sums allocated, and eventually, in 5 to 10 years, nationalized assets will be privatized again - at a profit to taxpayers, just as in Sweden. Things will never be the same, but the US economy will not crash: it will come out of this crisis sooner than any other. Eventually the US dollar will continue its decline, but there won't be a run. Gold won't hit the astronomical forecasts, though it may spike to ~$1500 if there are national defaults. That's what I think will happen. I respect other opinions. Today is 3 Feb/09. In a year, let's see how things look. Regards, Jim