Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19
Central Banks’ Gold Buying and Repatriation Spree - 28th Nov 19
Another Precious Metals’ Reversal Coming Right Up! - 28th Nov 19
Stock Market 100% Measured Moves May Signal A Top - 28th Nov 19
Don’t Look for Investing Advice in the Media - 28th Nov 19
Why You Should Buy Trailer Park Stocks - 28th Nov 19
Will YouGov General Election Forecast 2019 be as Wrong as their REAL Forecast was for 2017? - 28th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

How Can Localities Cope if the U.S. Dollar Crashes?

Currencies / US Dollar Jan 20, 2010 - 06:34 AM GMT

By: Richard_C_Cook

Currencies

A “run on the dollar,” or any currency, for that matter, takes place when the currency is losing its value. This happens when a country’s debt becomes so great that there is danger of a major default–that is, large scale or even national bankruptcy. At that point, people whose wealth is in that currency, or in relatively liquid assets denominated in the currency, try to get rid of them as fast as they can. Today, that includes foreign countries like China or Russia that are holding large quantities of U.S. government bonds.


The U.S. currently is at risk. We see it in personal and business bankruptcies and foreclosures. One result can be a high rate of inflation in certain products like food or gasoline, even while asset prices, as with homes and stocks, are going down. The question is now whether the “recovery” that is underway can be sustained or will there be another crash like there was in late 2008 to early 2009.

Forecasters are projecting this recovery to last until June 2010 but are foreseeing slippage at that point. Investors at this time are still putting money into the stock market and getting out of dollars. By June, the U.S. government had better come up with a strategy for real economic growth–which means jobs–or we will likely see the “double-dip” recession many have predicted. Personally I see no way growth can be sustained unless the national debt burden shrinks. This can only be done through an orderly process of debt forgiveness, a resurgence of economic production, or a default that could be catastrophic.

Is there any way people and localities can protect themselves? The best way, in my opinion, is to put our resources, including our time and labor, into producing something of value in the real physical economy. Since most people’s largest asset is their homes, home maintenance and repair might work. It won’t make you rich, but it could put food on the table.

Speaking of food, growing it is another option. In many locations, there is a greater demand for locally-produced food than there are producers to meet that demand. In a couple of months it will be time to start planting this year’s garden. People could get together as a community and make plans for gardens big enough to sell the surplus at local outdoor markets. Buying and selling products at the local level can also become an economic engine to fuel the creation of a local currency.

A strategy of local food production can also address the problem that the era of cheap food in the U.S. is coming to an end. This is happening partly because a large portion of food prices consists of the cost of the fossil fuels used in growing, harvesting, and transporting the food to market. Gasoline prices are on the rise again. This will take food prices upward as well.

Local farming, by contrast, places food production close to the end consumer. Personal health also benefits from higher quality food and from getting outdoors and becoming more physically active.

As the national economy gets worse, it’s time for people to roll up their sleeves and get to work doing for themselves what big finance, big oil, and big government can no longer do.

By Richard C. Cook
http:// www.richardccook.com

Copyright 2010 by Richard C. Cook

Richard C. Cook is a former U.S Treasury analyst who also worked in the Carter White House and for NASA and writes on public policy issues. His new book is We Hold These Truths: The Hope of Monetary Reform (Tendril Press 2009). His website is http://www.richardccook.com He is a member of the U.S. Basic Income Guarantee Network and has been an adviser to Congressman Dennis Kucinich and the American Monetary Institute http://www.monetary.org

Richard C. Cook Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules