massive dollar collapse?

[ace00]

The yuan and the rupee.

Maybe in 20 years, but not in the (strangely vague) 2 to 5 years.
They would need to change currency controls and market transparency 1st.

[Svalbaard]

But if the pound, dollar, yen and euro collapse, then ....what do they collapse against?

I don't see a "currency collapse", I just see a commodities boom

They collapse against all of the gold that we once owned but have pawned to the Arabs in return for oil; and the very oil that we buy from them via the global markets.

[d000hg]

I would hardly call Buiter "some dork". I wonder how your achievements in your career would stack up against his?

Everyone who is quoted is some industry big-wig, but they still disagree and are often proved wrong.

Anyway, 2-5 years is too far off to be considering The rocketing of the pound Vs the euro is more interesting right now!

[swamp]

But if the pound, dollar, yen and euro collapse, then ....what do they collapse against?

The yuan and the rupee.

[BlasterBates]

But if the pound, dollar, yen and euro collapse, then ....what do they collapse against?

I don't see a "currency collapse", I just see a commodities boom

[PM-Junkie]

Deja vue or what. There seems to be a standard dollar health warning issued by some dork every year since 1960. Dollar collapse due to massive federal deficit or balance of trade deficit, or trade imbalances, or Reluctance of creditor nations to finance yankee SUV spending, finance larger Big Macs development budget for troops in Iraq, .....ZZZzzzzzzzzz

I would hardly call Buiter "some dork". I wonder how your achievements in your career would stack up against his? OK so he called for interest rate rises in May 2008, but he was one of the first to shout for cross-border financial controls and warn about credit collapse, so I think he knows a little about what he is talking about.

And what has changed over the period since the 1960's is the US has sizeable budget deficit now - and Obama is about to borrow another $800 billion. Doesn't exactly instil confidence in investors. Added to that, Bush has spent the last 8 years doing his best to piss off his country's customers.

I've said in other posts that I expect the dollar to collapse, and expect the Euro to suffer too - the only question is whether the snot-goblin manages to carry on screwing up our economy badly enough so the pound collapses quicker!

[Solidec]

Question is what will sterling be doing if and when the dollar collapses? will we follow suit or will we be going on shopping holidays to New York again?

[Turion]

Deja vue or what. There seems to be a standard dollar health warning issued by some dork every year since 1960. Dollar collapse due to massive federal deficit or balance of trade deficit, or trade imbalances, or Reluctance of creditor nations to finance yankee SUV spending, finance larger Big Macs development budget for troops in Iraq, .....ZZZzzzzzzzzz

[BrilloPad]

http://www.telegraph.co.uk/finance/4...-collapse.html

Willem Buiter warns of massive dollar collapse
Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.

The long-held assumption that US assets - particularly government bonds - are a safe haven will soon be overturned as investors lose their patience with the world's biggest economy, according to Willem Buiter.

Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.

The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency's prospects, as well as sparking fears about the sustainability of President-Elect Barack Obama's mooted plans for a Keynesian-style increase in public spending to pull the US out of recession.

Writing on his blog, Prof Buiter said: "There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place."

He said that the dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" - an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.

"The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally," he said. "Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed."

He said investors would, rightly, suspect that the US would have to generate major inflation to whittle away its debt and this dollar collapse means that the US has less leeway for major spending plans than politicians realise.

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Looks like I should hold off buying that holiday home in Florida then.....