Author Topic: What Will Happen to You When the Dollar Collapses?  (Read 560 times)

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Tuck Fheman

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What Will Happen to You When the Dollar Collapses?
« on: April 26, 2015, 03:21:28 pm »
http://www.internationalman.com/articles/what-will-happen-to-you-when-the-dollar-collapses-1

When currencies crash, the state often tries to float a new currency. Sometimes, it’s accepted, sometimes not. Generally, the people of the country (and those trading within the country) move immediately to “the next best thing.” In 2009, when the Zimbabwe dollar crashed, several currencies were used, but the US dollar was the clear favourite, as it was the world’s reserve currency and therefore the most “spendable” currency.

Not surprisingly, the Zimbabwean government fought the use of the dollar, as they wanted to retain control of the economy and the people. People were therefore penalised for using the US dollar and other currencies.

And that’s what most governments do, but here’s where that idea usually falls down: First, the “black-market” currency is so desired by the now-jaded citizens that they do all they can to avoid the new official currency. Soon, most transactions, although illegal, are undertaken in the black-market currency. Second, since no one really wants the new currency, even the political leaders are soon using the black-market currency.

Offline donkeypong

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Re: What Will Happen to You When the Dollar Collapses?
« Reply #1 on: April 26, 2015, 03:44:20 pm »
If currencies are going to crash, then you have to ask 'relative to what?' since they essentially trade against each other. They would fall relative to commodities: real goods, like oil, gold, and food (minus the industrial materials, like steel, which can suffer a demand drop). As long as energy prices are as low as they are now, there are billions and billions of additional dollars in the economy that people can spend. The dollar is not going to crash as long as energy prices are low. When you see oil prices shooting up again, testing new highs, cutting down on peoples' ability to move themselves and transport goods, when airlines are going bankrupt again and gold is shooting up also, that's when things get interesting. With the cheap oil source in the U.S. right now, just watch how long that lasts. It could be three years, five years, or ten years. The dollar will be strong until then. In the end, it's all about energy.
« Last Edit: April 29, 2015, 07:38:48 am by donkeypong »

Offline Ben Mason

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Re: What Will Happen to You When the Dollar Collapses?
« Reply #2 on: April 29, 2015, 04:23:44 am »

And that’s what most governments do, but here’s where that idea usually falls down: First, the “black-market” currency is so desired by the now-jaded citizens that they do all they can to avoid the new official currency. Soon, most transactions, although illegal, are undertaken in the black-market currency. Second, since no one really wants the new currency, even the political leaders are soon using the black-market currency.

This is very interesting....hopefully Bitshares will be ready.