Devalue of the U.S. dollar...

[HARK!]

Our home has a budget. We have to stick with it.

How do you pay for bread and circuses?

 

[Arcangl86]

Do you know what happens when businesses and even households have deficits? We go bankrupt. Our home has a budget. We have to stick with it.

Um, no. Most homes and businesses run on deficits. That's what credit is.

 

[SavedByGrace3]

Um, no. Most homes and businesses run on deficits. That's what credit is.

And what happens when they default? When they do not pay for a matter of years, do the credit companies just continue to string them along with more and more extensions? Eventually it fails and if they are lucky they declare bankruptcy.

 

[HARK!]

And what happens when they default? When they do not pay for a matter of years, do the credit companies just continue to string them along with more and more extensions? Eventually it fails and if they are lucky they declare bankruptcy.

Someone else moves in.

 

[Arcangl86]

And what happens when they default? When they do not pay for a matter of years, do the credit companies just continue to string them along with more and more extensions? Eventually it fails and if they are lucky they declare bankruptcy.

As long as you make payments on time you can go on indefinitely, though of course the balance does go up due to interest. The debt does need to be brought under control I agree, but it's not the existential threat that the GOP is making it out to be. We are in no danger of not being able to meet our obligation from a fiscal sense. It's only politics that is making a default seem likely.

 

[Eschatologist]

The new BRICS alliance is going to kick the West to the curb.

It looks strong currently, but India has an uneasy relationship with China. Russia and India get along well, but India and China have a long history of territorial disputes.

 

[Eschatologist]

The dollar is strong because the U.S. economy is strong in relation to other nations. You can't just arbitrarily decide to use another currency unless that currency is back by a strong economy. As far at the stock market, a strong dollar hurts stocks of US companies that operate internationally though it may help stocks of companies that export products to the US.

I think we're witnessing the development of a multipolar world. For most of human history, there were no superpowers and no global reserve currency. Try as the globalists might, it looks like the world will move toward regional currencies that might span multiple continents but not quite serve as global reserve currencies. The dollar looks like it will be reduced to dominating North America and most of South America, while the Euro might become the dominant currency of Europe and much of the Middle East and North Africa. What BRICS moves to could end up being the Yuan, Rupee, or Ruble.

 

[Eschatologist]

Also possible: The USD will devalue. US manufacturing will become more competitive and exports will improve. Imports will become more expensive and so buying local more attractive. Australia is very familiar with this cycle. What business values most is stability. Russia? Economic basket case. China? In trouble economically. Africa? Don't make me laugh.

A weak dollar will certainly attract manufacturing here, although, in the short run, our standard of living will fall.

America is currently more stable than a lot of its contemporaries, but it seems that the Left is doing everything it can to destabilize us, both economically and morally. If I had to pick a nation that will likely rise to the top after the US falls, I'd actually choose India. They have plenty of problems, but they are trending in a much better direction than most of the West and the rest of BRICS.

 

[Lost Witness]

This is true but people have been getting used to this with credit cards for 3/4 of a century, let alone debit for almost two decades

Personally it's hard for me to find rentals or to do anything due to the credit system.
Been homeless due to it on at least one occasion.

 

[Eschatologist]

I'm not aware of any righteous nations other than Israel; and I'm not speaking of the geographic Israel.

I read an article over a decade ago, about a city (I believe it was in Europe) that escaped the woes of The Great Depression by cohering to the principles of Austrian school of economics. I wish that I had saved this tidbit of historical trivia.

It appears that this is exactly what BRICS is setting out to do.

The BRICS countries do have better debt to GDP ratios than most of the West, for sure. I wouldn't say that any of them are following the Austrian model, however. All engage in high amounts of market intervention by the state. They do seem more open to commodity-backed currency, however.

 

[Eschatologist]

As long as you make payments on time you can go on indefinitely, though of course the balance does go up due to interest. The debt does need to be brought under control I agree, but it's not the existential threat that the GOP is making it out to be. We are in no danger of not being able to meet our obligation from a fiscal sense. It's only politics that is making a default seem likely.

The GOP overall doesn't consistently make it out to be a threat -- they only tend to do it when Democrats are in control. But that's the problem.

Only a few voices of reason (like Ron Paul, Rand Paul, Thomas Massie, etc.) consistently speak out against raising the debt ceiling. There was a time when America could spend carelessly and leverage it with maintaining the dollar's status as the global reserve currency, but that time is coming to a close. When that status truly ends, we could end up like Argentina in terms of a currency crisis. In short, we no longer have the luxury of spending far more than we receive in tax revenue.

 

[friend of]

If I had to pick a nation that will likely rise to the top after the US falls, I'd actually choose India.

India is an excellent choice because of their birth replacement rate. The country is filled with youth. They also have a space program. I love India!

 

[HARK!]

The BRICS countries do have better debt to GDP ratios than most of the West, for sure. I wouldn't say that any of them are following the Austrian model, however. All engage in high amounts of market intervention by the state. They do seem more open to commodity-backed currency, however.

How does a gold backed currency differ from Austrian economics?

 

[HARK!]

Zimbabwe plans gold-backed digital currency

I got a report form another source that the IMF tried to talk them out of this move

 

[Eschatologist]

How does a gold backed currency differ from Austrian economics?

While Hayek certainly preferred the gold standard over fiat currencies, Austrian economics is mostly about minimizing, if not eliminating, government intervention in the market. Adherence to a gold standard or other commodity-backed currency does not specifically make an economic system Austrian. For example, for most of the time in the 1900s that the US had the gold standard, our economic system was largely Keynesian.

None of the BRICS countries could be considered Austrian in their approach to markets. Most of these countries are more interventionist in markets than we are. You could describe Brazil and India to be reminiscent of our Keynesian phase. China is extremely interventionist -- they have a true state capitalism that is, in many practical respects, centrally planned. Every major company in China has a board within it mandated by the government that has the power to make important decisions in the company's operations. Russia is somewhat free in its markets compared to China, but it has a high level of corruption between oligarchs and the government. South Africa is even more corrupt than Russia.

 

[SavedByGrace3]

Zimbabwe plans gold-backed digital currency

I got a report form another source that the IMF tried to talk them out of this move

I think they learned their lesson. Others should have learned by observation.

Hyperinflation in Zimbabwe - Wikipedia

en.wikipedia.org

 

[Soul_Tsunami]

From a biblical perspective, only a few counties dominate the Book of Revelations: China, Russia, and Israel. There are other countries mentioned but they are mere players and not Super Powers.

 

[HARK!]

I think they learned their lesson. Others should have learned by observation.

Hyperinflation in Zimbabwe - Wikipedia

en.wikipedia.org

So we agree that this is their answer to hyperinflation, not what caused the hyperinflation?

When their hyperinflation ramped up; they started using the American dollar; but it seems that they have grown weary of the U.S. weaponizing their currency.

 

[friend of]

I wonder what's going to happen to the petrodollar. It's about to take a she-lacking.

 

[HARK!]

While Hayek certainly preferred the gold standard over fiat currencies, Austrian economics is mostly about minimizing, if not eliminating, government intervention in the market. Adherence to a gold standard or other commodity-backed currency does not specifically make an economic system Austrian. For example, for most of the time in the 1900s that the US had the gold standard, our economic system was largely Keynesian.

A false gold standard manufactured through government intervention, is not a true gold standard.

Here is a history lesson from the Austrian School: