[quote=dumbrenter]
None of the rules that applied to other economies, currencies throughout our history apply here anymore, so we have no history to look back to.
In my view, we are all actually sitting very pretty and need to thank our good fortune that folks outside our shores have an insatiable appetite for our paper. The only risk is when major commodities / goods will be priced in currencies other than USD. Unlikely to happen for grain and agriculture related ones since US still dominates that trade as an exporter. So that only leaves out oil or in general any energy source. As long as they are priced in USD, all is good.[/quote]
In my eyes history has shown that a fiat currency crisis happens suddenly and violently. The USD will be unquestioned until it finally is and by then it will be to late. Usually in a currency crisis the hard currency does perform better than leveraged assets but not much better. I.e. Iceland saw a 95% reduction in the stock market but only a 50% reduction in the currency value, relative to other currency values.
Of course I’ve been thinking about the economy without currency because currency is just a medium of exchange. What’s really important is the total goods and services available and the competition between people to consume those goods and services.
Americans have had an extremely large competitive advantage compared to the rest of the world, but we aren’t doing things to maintain that competitive advantage. That’s why the average is falling behind the previous standard of living. They are losing to outside competitive forces. In all honesty what competitive advantage does your average baby boomer retiree have in this world economy. Those that have no skills or no desirable assets are going to have a tough time competing.
