Is the USD doomed to fail...?

Brown_Bear

In 1971 President Nixon devalued the USD in order to pay for the Space Race and the Vietnam War.

In 2003 the USA invaded Iraq because Saddam Hussain refused to sell oil in USD.
After years of war in Iraq and Afghanistan, the USA started money printing (QE) in 2008 (following the banking crisis).

So the USD has been devalued to pay for war - but then war was required to support the USD - which needed further devaluation to pay for the wars.

So does this indicate some kind of negative feedback loop for the USD and is the USD doomed to fail - if rejected as the world's reserve currency..?

Thrugelmir

Brown_Bear wrote: »

if rejected as the world's reserve currency..?

Name an alternative?

The strengthening $ is in part down to repatriation of funds from US companies following Trump's generous tax breaks. Which is initself putting pressure on the countries of origin.

Brown_Bear

Thrugelmir wrote: »

Name an alternative?

The strengthening $ is in part down to repatriation of funds from US companies following Trump's generous tax breaks. Which is initself putting pressure on the countries of origin.

Described by Brent Johnson of Santiago Capital as 'The Dollar Milkshake Theory'...

Thrugelmir

80% of the world's Central Banks are now in balance sheet contraction mode. The news has moved on.

Liquidity as a whole may be the next major challenge.

Brown_Bear

Thrugelmir wrote: »

80% of the world's Central Banks are now in balance sheet contraction mode. The news has moved on.
.

I'm not so sure.
I reckon the Fed bottled it when the markets fell a bit in December.
They're now talking about ways to further fudge the inflation targets.

John_G_Jones

Brown_Bear wrote: »

In 2003 the USA invaded Iraq because Saddam Hussain refused to sell oil in USD.

That’s a conspiracy theory I’d not heard before. May I ask, do you believe in any others?

Chemtrails, for example, moon landings being hoaxed, vaxines causing autism?

phillw

John_G_Jones wrote: »

That’s a conspiracy theory I’d not heard before. May I ask, do you believe in any others?

It was prevalent at the time, so I'm not sure why you didn't hear it.

http://edition.cnn.com/2000/WORLD/meast/10/30/iraq.un.euro.reut/
https://usiraq.procon.org/view.answers.php?questionID=000911

I don't believe it was the sole reason, but it may have influenced their opinion & they still sell in USD. So who knows.

Brown_Bear

It is the most logical explanation for the Iraq invasion. The USA must have had a good reason to risk strengthening AQ and Iran - which it obviously did.

Same thing happened with Ghadafi in Libya.

This is what has led to the whole Iran / Russia/ China / Turkey plan to sell oil for gold - avoid the SWIFT system and US sanctions etc, etc.

AnotherJoe

LOL "the Space Race in 1971"

phillw

Brown_Bear wrote: »

It is the most logical explanation for the Iraq invasion.

It's the simplest explanation & it's based on some evidence, I'll give you that.

But I don't think it was necessarily that simple.

Brown_Bear wrote: »

The USA must have had a good reason to risk strengthening AQ and Iran - which it obviously did.

I think the US is just arrogant.

Brown_Bear

AnotherJoe wrote: »

LOL "the Space Race in 1971"

1971 was when the USD was devalued.

Throughout the 1950s-60s the USA spent heavily on the Cold War, Space Race, nuclear weapons, Vietnam etc.

Devaluation tends to occur after a govt has built up the debt. That's why the UK devalued its silver coinage in 1919 and 1946.