How The U.S. Dollar Reserve Currency Dies… Slowly At First, Then All At Once

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(By Chris Hamilton)

By any objective measure Reserve Currencies — particularly the US dollar — are dying. The question most analysts get when discussing the reality of the US and world economic/financial situations is, if things are so dire, why doesn’t it feel like it? (***see dire links below ) If all the facts stated about $6 trillion annual (GAAP basis) US budget deficits or US government total debt and obligations in excess of $90 trillion are true, why does the system still “function”??? Social Security recipients receive checks, the military is still paid, the garbage gets picked up, and stores still have stocked shelves. Life seems hectic but generally “normal”. So, is there a problem at all and if so, when and how will it go from theoretical to reality?

US is Bankrupt: $89.5 Trillion in US Liabilities vs. $82 Trillion in Household Net Worth & The Gap is Growing. We Now Await the Nature of the Cramdown. – See more at: http://charlesbiderman.com/2014/08/04/us-is-bankrupt-89-5-trillion-in-us-liabilities-vs-82-trillion-in-household-net-worth-the-gap-is-growing-we-now-await-the-nature-of-the-cramdown/#sthash.RkY8CKFZ.dpufUS is Bankrupt: $89.5 Trillion in US Liabilities vs. $82 Trillion in Household Net Worth & The Gap is Growing. We Now Await the Nature of the Cramdown. – See more at: http://charlesbiderman.com/2014/08/04/us-is-bankrupt-89-5-trillion-in-us-liabilities-vs-82-trillion-in-household-net-worth-the-gap-is-growing-we-now-await-the-nature-of-the-cramdown/#sthash.RkY8CKFZ.dpuf
***US is Bankrupt: $89.5 Trillion in US Liabilities vs. $82 Trillion in Household Net Worth & The Gap is Growing. We Now Await the Nature of the Cramdown

or
***America Has Adopted The Sclerotic European / Japanese Model
or
***The Story of America’s Economic Illiteracy – Truth hidden in Plain Sight…Yet We Choose to be Blind?

Commit to about 5 to 10 minutes of reading and maybe we can have a very plausible answer.

A LITTLE BACKGROUND

Following WWII, a new monetary system for international commerce and finance was implemented. This agreement known as Bretton Woods (the location in New Jersey where the conference was held) gave the expected Allied victors the spoils and represented the World as of 1945.

CHIEF FEATURES OF THE BRETTON WOODS SYSTEM:

• An obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar

• The ability of the IMF (created by the Bretton Woods agreement along with many other current day acronyms) to bridge temporary imbalances of payments (IMF would loan money to nations in trouble with strings attached to ideally resolve these imbalances and keep the system functioning).

• Address the lack of cooperation among other countries and to prevent competitive devaluation of the currencies as well (avoid countries printing money to cheapen their exports and gain advantage in trading)

• To ensure the US did not abuse it’s privilege as the world’s de-facto currency, the US dollar would be freely convertible into gold (if the US printed an excess quantity of $’s, nations accumulating too many dollars from US trade/budget deficits could convert and retire these dollar’s into gold (gold representing a relatively fixed quantity and storage of value).

The Rest Of The Story Here

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Peter Janisch specializes in short sales in Short Sale Realtor. I am your Short Sale Realtor Short Sale Specialist Realtor and Short Sale Realtor loan modification and distressed property expert. This article and content is for general informational purposes and may not be accurate. This should not be taken as legal advice, technical or tax advice under any circumstance. Seek legal advise and representation in all legal matters.



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