There are so many websites and videos out there telling us that the United States Dollar is going to collapse. What is the truth? Well, for starters, we are on a fiat currency system right now, which means if the government says it’s worth something, then it is. Think about Zimbabwe for a second though, they printed a 100 trillion dollar Zimbabwe dollar note in 2008, but now it’s only worth 40 cents.
Think about the Weimar republic hyperinflation of the 1920s, which ultimately led to Hitler’s rise to power.
Watch the video below if you want to what could happen if the dollar does in fact, collapse:
Federal Reserve Interest Rates
The Federal Reserve has said that they are not ready to increase interest rates yet.
Federal Reserve Interest Rates
Time will tell, the Federal Reserve could very well increase interest rates a bit, or they could launch QE4 (Quantitative Easing Round Four) but we have to be prepared for anything.
So, what can we expect in the coming months? Probably not much, the holiday season is approaching. Perhaps when the new year comes we might hear more word from the Fed regarding raising interest rates, at this point, I don’t see anything happening.
Next week we’ll figure out if the longest-ever will-they-or-won’t-they dramatization including a basically insignificant quarter-point rates of interest change will amount to anything. But in either case, United States monetary plan is currently a great deal tighter than it was a year ago.
The Fed’s balance sheet, as an example, is a measure of just how much brand-new money it is pumping into the banking heating and cooling unit. And it’s up just $79 billion, or 1.8 %, in the past year. In genuine terms, that’s level to a little poor.
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Considerably bigger in the system of points is the dollar, which is up by about 20 % versus most other significant moneys (as well as a whole lot much more versus arising market moneys like the Brazilian genuine). A stronger money makes financing’s tougher to pay back (equally as would a greater rate of interest), exports harder to offer (due to the fact that they’re valued in a much more costly money) and imports likewise less expensive.
Bearing this out is the latest reading for United States import prices, which was down a surprising 11 % year-over-year in August. Part of this was the dropping cost of oil, yet not all of it. A great deal is stuff being available in from weak-currency investing partners.
Goldman Sachs calculates that the above, together with the current volatility in stock prices, exercises to three 25 basis factor raises in the Fed Finances rate.
Which makes those equity market gyrations look a whole lot like the taper temper tantrums that went along with the end of the first few QE programs– and brought about many more easing in short order. So the question comes to be, can the Fed– or any other significant central bank– ever before once again overtly tighten financial plan, since merely the tip of it seems to send out the now over-leveraged speculating community right into an epileptic seizure? The response could be no, in which situation 2016 will see some genuinely legendary volatility as this concept percolates via the worldwide financial psyche.
Stay tuned for more updates.