The USD has seen its peak already long time ago. The decay was eased off when the government started building up huge debt to the bad of the american people which was lured into saving only after having bought.
The result is evident; the system has failed. It is proven by all; by politicians, managers as well as the priests and professors.
Don't forget, remember the USD nosedived just as a lame duck from a longtime maintained stable - was it really stable ? - level of some e.g. Swiss CHF 4.30 to agonizing CHF 1.43 within only seven years.
The US-Dollar's volatility then showed what the rest of the world was dealing with; a heavily indebted country living on the wealth of all others. Adventurous performing USD - 1977 CHF 1.43, 1980 2.93, then bumping up and down to 90ties' 1.10 to recover to some CHF 1.83 . . . . . . stable country? stable political system? never ! . . . It is rather the story of a dead man walking head over heal since quite some time.
For shedding a bit of light on it just read that tale. 1978 USD vs CHF 1.43 Swiss Central Bank has bought starting at much higher levels like hell, Swiss Franc liquidity to pour out of everybody's ears and nose.
Similar situtation throughout Europe, Germany, France and all the others. Then the almighty states decided to "assist" the drowning they issued Carter bonds in Swiss Franc at levels never seen [2.125% in CH for two to three and a half years] as well as in DeutschMark denominations.
The USA helped Europeans to neutralize their overshooting liquidity . . . . . It is true they helped ... by helping themselves as well. The Billions of Swissfrancs sold at levels of some 1.43 against US-Dollars were bound to be bought back at roughly 2.83 two to three and a half years later.
They never got aware facts being covered by loud voices. It is about to happen again: Swiss National Bank got credit of some USD 68 Billion selling them against NON-US-currencies at levels of CHF 1.-- to 1.20 for one USD.
Imagine when Switzerland has to pay this American loan back by buying USD at substantially higher levels - they will fix it - of .... let us just assume some CHF 2.-- per USD. What will this be?? A never ending nightmare: ONE USD will cost us twice as many Swissfrancs as at start. Twice as many ?
Thus sixtysomething billion (roughly CHF 65'000'000'000) If this compared to GDP or actual internal debt we get the creeps.
US political system considered the most stable around the globe ? NEVER !!
US citizens the most hardest working force in the world ?? NEVER !!
US President Obama is slapping the NON-US-world right in the face !!
What does he think? How arrogant; there still are all the others hey cannot survive without !!
The US without the world ? The world without the US ? Who is indebted ?, the rest or them ?
Who is living on the other countries' money ? The hardest working people in the world !
Who is consuming more than earning ? The hardest working people in the world !
Whose citizens have returned to live in tents at the cities' brims ? The hardest working people of the states !
Who is forcing countries all over the world ? The hardest working people's state !
Who is postponing all the sort of things by putting in a veto? The hardest working people's states.
Facts
Buy first then save is the root of all the mess. Save first then buy is remedy.
Why talk about some USD 140 Billion when Trillions are at stake. Why concentrate on collateral damage while the house is set on fire? It's just to mislead the people having kept ignorant.
Presidential outcry is but a show we know. It is just to hit the sack instead of hitting the donkey.
For to preserve real goods resources such as soil and manpower are needed. Capital for capital; never capital for paper. This has to be understood again.
Suggestion to renew the financial System
ALL currencies finally are useful only in their home-countries. For that reason it is not possible to manage currency reserves by diversification.
At the end of the day any currency will be converted back into the original currency thus working but at home.
This is the reason why concerted action has to be taken by all countries during the very same lapse of time.
2) In the case old bills are replaced by modern new ones it is NOT possible to exchange central bank money (giralgeld) for bills. Individuals do not need more bills than are afloat all of a sudden.
3) All credit cards are collected for extinction. Consumers are to first pay down their debts then save and only after saving to cosume or invest in durable goods. Thus economy becomes sustained while having long-term goals to achieve.
Financial intermediaries are not to use misleading expressions such as SAVING afterwards; saving is always BEFORE buying. Only debit cards are allowed; there are no credit lines allowed anymore.
4) Paper always buys durables or nutrition. Options are traided only on a fully covered basis; no delta hedges allowed. Futures always are paid against physical delivery. People in the need are buying from producers. Inflation thus is impossible, illusive structures whatsoever beyond control are not allowed.
As it can be seen illusions turn the people down. Americans sell their blood, their sperm, their hair. They are about to sell even more.
5) To protect firms from takeover - friendly or unfriendly - they simply unlist from the stock exchange. No reason needed to bar somebody from the shareholders' book. The law will alter.
6) Uneven tradebalances are settled by the exchange of real goods. The biggest debtors of all times is in austerity, they cure themselves. If they do not there will be even spuds' convertibility cessation
b) replace the USD by a new worldwide economy based currencyThe example of Europe shows the way - ECU first artificiel currency proves useless
1) First Europe invented the ECU which was a currency not backed by one sole economy. The ECU only was a basket of different european currencies exchangeable only at fixed rates the latter being altered from time to time because of misbehaveing governments in terms of policies influencing the money.
2) Europe invented then the EURO, one single money meant for the whole European Community. Before inventing all the countries were to streamline their economies. The convergence of the Interest rates took place. All the countries actually had same rates.
3) X-DAY The European dealt out new money exchanged the balance sheets' currencies as well as all the bills. ECB European central bank for once had full controll on central bank money knowing about the entire mass of bills roaming about the countries up and down. [Meanwhile the US-Dollars' - fake and real - amount of bills still was, is and will be unknown to federal reserve thus US-administration. See the vital difference?!]
4) As all the countries had same relative figures inside their domestic economies there were only slight differences in yield along the whole yealcurve up to fifty years. The slight differences never the less proved the expected behaviour of different politicians thus influencing their countries' interest rates.
Interest rates now are the price for money. The market exchanges discounted cashflows - e.g. Italy's 10 years present value against Germany's 10 years present value. First only slight spreads . . . . . have a look at them now ! Frenchs are Frenchs, Germans are Germans, Italians are Italians, others are others . . . they stay for ever what they are.
5) Only Problem all countries' individual central bankers become sheer statistical bureaucrats, no power anymore thus not on stage. They leave their vessels. The manipulative power by cheap or expensive money thus the control is surrendered to the most powerful - are they ? - economies.
The more they count the more power and influence they have. Driven by the people's foreseen riots threatened to lose their seats.
6) In case of a unified sole currency overall the countries only decent behaving of the parliaments each member thereof elected by the souvereign, individuals, taxpayers, will lead to stability and sustainable prosperity. Each country's interest rates [the yield curve] reflect the measures taken by the parliaments then executed by the administrations' presidents or multiple headed crews.
Do it ! Walk NOT talk !
copyright Thomas Ramseyer
http://www.xing.com/profile/Thomas_Ramseyer5