Will the dollar collapse?

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rrumbaugh's picture
rrumbaugh
Status: Member (Offline)
Joined: Feb 12 2009
Posts: 3
Will the dollar collapse?

Hello everyone!  I've been an avid reader for the past couple of months and finally got enough gumption to post.

Straight to the point.  What are your thoughts on an eventual dollar collapse?  Do you think this is possible?  Inevitable?

Based off everything I have been reading I would say it is inevitable.  What I am having trouble coming to grips with though is if I truely believe the dollar will collapse why should I not borrow everything I possibly can in order to protect my families future?  Rack up tons of dept buying gold, buying solar panels, etc.  I guess deep down I don't want to believe it can happen and in my heart of hearts don't think it would happen?  Financial collapse can't happen in this country right??  That's what I keep telling myself even though the writing is on the wall.

I am having a difficult time convincing my wife that we are in trouble as a country which once again makes me rethink everything.  Is she living in wonderland or am I?

 

 

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Will the dollar collapse?

 rrumbaugh,

We are all in wonderland!

The best approach for the uncertain future is to prepare for as many outcomes as possible. Do not "believe" (identify yourself with) in any one possibility, because you will certainly blind yourself to the other possibilities. Identify the possibilities and make initial preparations for each, then remain as flexible as possible in your ability to respond to the future. Your initial preparations should put you one step ahead of the "crowd", and provide you the opportunity to expand or unwind your respective preparations as the future unfolds.

Just my "deflation" adjusted 2 cents.

Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Re: Will the dollar collapse?

"What are your thoughts on an eventual dollar collapse?  Do you think this is possible?  Inevitable?"

Let's us the term "massive loss of value" as it is slightly less squishy than "collapse."  In my mind, the answer is "yes, it is virtually inevitable."  Only I don't know when, I don't know whether it will be a total or partial collapse, and I leave myself some wiggle room to adjust for the possibility that I might be totally wrong.

It's funny.  A month or two ago, CM posted that the chances of a massive loss of value in the dollar were quite high, but still far lower than 100%.  But to me, the macroeconomic state of the world virtually dictates a massive loss of value.  It's hard for me to picture a scenario where it doesn't happen.  Certainly CM has never offered a reason why it would not happen.  Nevertheless, I cannot be totally sure I am right.

"[I]f I truely believe the dollar will collapse why should I not borrow everything I possibly can in order to protect my families future?  Rack up tons of dept buying gold, buying solar panels, etc."

If you knew it was going to happen then this is what you would do.  You don't know for sure that it will happen, so you have to hedge your bets.

"Financial collapse can't happen in this country right?? "

You know damn well it can.  Your question is rhetorical.

"I am having a difficult time convincing my wife that we are in trouble as a country which once again makes me rethink everything.  Is she living in wonderland or am I?"

Neither one of you are living in wonderland so long as you are both thinking.  The only thing you can do is think about the factors in play, try to make some educated assessments and hedge your bets in certain directions. 

Making life choices based on macroeconomics is like poker.  There is almost never a "right" move because you never have complete information.  You get as much information you can get, you assess your risk and your probability of being right, you look at the upsides and the downsides, and you try to make judgments. 

 

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2606
Re: Will the dollar collapse?
Quote:

Straight to the point.  What are your thoughts on an eventual dollar collapse?  Do you think this is possible?  Inevitable?

Short answer - I hope so.  The "system" needs a significant shock if we the people want to have any chance of meaningful change.  You can't change the status quo from the inside and the only way the electorate is going to energize and start voting the boneheads in DC out onto the street is if the system gets stood on its head.

Quote:

Based off everything I have been reading I would say it is inevitable.  What I am having trouble coming to grips with though is if I truely believe the dollar will collapse why should I not borrow everything I possibly can in order to protect my families future?  Rack up tons of dept buying gold, buying solar panels, etc.  I guess deep down I don't want to believe it can happen and in my heart of hearts don't think it would happen?  Financial collapse can't happen in this country right??  That's what I keep telling myself even though the writing is on the wall.

I am having a difficult time convincing my wife that we are in trouble as a country which once again makes me rethink everything.  Is she living in wonderland or am I?

 

I wouldn't call it wonderland, but if you look over the Crash Course chapter on the Six Stages I would guess you guys are bouncing between denial and bargaining.  Keep getting information, verify that it is factual and not based on opinion masqueraded as fact you will both likely move to acceptance and into action pretty quickly.

Good luck - there are a bunch of people here on the site who have been where you are and can help.

BSV's picture
BSV
Status: Silver Member (Offline)
Joined: Jan 26 2009
Posts: 170
Re: Will the dollar collapse?

Perhaps. That may seem a trite answer, but there is a lot of thought behind it. Do keep in mind that the U.S.A. is - by far - the world's leading military power. After much thought about this subject over time, my best response to the question is that the dollar is more likely to encounter a controlled decline over the next decade or so. Based on everything I have read and learned, if I were a betting man I would bet that the dollar will be worth -- in terms of purchasing power -- roughly half what it is today in ten year's time.

That's bad enough for us ordinary folks. But it would not be a complete catastrophe like in the German Weimar Republic of the 1920s. Of course, I could be wrong. We can't know the future with any degree of confidence. So what we do is take the past and project it into the future. One of the most relevant and interesting points made in the Crash Course is the idea that the near future willl most likely not resemble the near past. For sure, it promises to be interesting. I recall the ancient Chinese proverb (curse?): May you live in interesting times... These times certainly qualify as "interesting". Agreed?

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