"They" got to devalue .....NOW!

[GRG55]

Re: "They" got to devalue .....NOW!

"Perhaps everyone here other than I fully comprehend what mechanism(s) could/would be used if those in power decided to "sanction a US dollar devaluation as a means to stimulate the domestic economy," but I don't have the foggiest idea as to how it would actually take place."

I always thought this was simple. Just keep running progressively larger federal deficits, and have the Fed print up X trillion dollars to buy bonds to monetize the deficit. Keep doing this until the market marks down the value of the currency to the desired level.
Then release a statement saying that you think the current level of the dollar is about right, and commit to stabilising the currency by gradually reducing the deficit.

There are a lot of things that can go wrong with the stabilisation phase, but getting people to sell off the dollar doesn't strike me as the hard part. Just borrow and print til the markets get the picture.

Since the "running up deficits" part is already in the bag, it is really just a matter of the Fed making regular anouncements about upcoming QE activities. How many times does the Fed need to anounce that it is going to print a trillion and buy bonds AGAIN? I think that if this becomes a monthly occurance,you'll see a pretty significant move in the dollar.

Against what?

The USA doesn't have an exclusive on running deficits, bailing out banks and failed corporations, rising future entitlement liabilities, quantitative easing and "printing money". In fact the population demographics for the USA look positively promising compared to some other developed nations.

[GeraldRiggs]

Re: "They" got to devalue .....NOW!

Here is what I think based on your list:

• A default on Treasuries, in the sense of a failed auction or auctions. NOT GOING TO HAPPEN HERE BECAUSE THEY PRIMARY DEALERS AND INDIRECT BIDDERS (ONE IN SAME) WILL MOP UP ANYTHING NOT BOUGHT.
• A problem in China or Japan or other large Treasury holder, causing them to need to redeem large amounts of Treasuries. NOT GOING TO HAPPEN THERE. THEY'LL JUST PRINT MORE YEN AND MOVE ON.
• A 9/11 like event, not necessarily in the US. COULD BE BUT DOUBTFUL.
• A sudden loss in confidence in the dollar or banks by US citizens, resulting in bank runs and similar. WITH THE MSM BLOWING "HAPPY DAYS ARE HERE AGAIN" UP EVERYONE'S ASS, NO WAY.
• A currency attack by speculators, ala Soros and the Bank of England (not likely on the dollar but possible as an effect of an attack on another major currency). SOROS AND THE BOE WON'T CROSS THE FED AND OTHER CB'S.
• The biggest issue in my opinion is that no significant world currency is coming even vaguely close to gaining value... and in plain English, what I'm saying is that it could easily be a worldwide devaluation with the dollar being devalued more than average while other currencies gain their place in the SDR or an SDR like currency that has gold as part of it "backing". THIS IS PROBABLY THE MOST LIKELY EVENT TO HAPPEN BECAUSE IT HAS THE LEAST POLITICAL EXPOSURE/RISK ATTACHED TO IT. "EVERYONE'S DOING IT FOR THE GOOD OF THE PLANET"......WE'LL JUST DO IT MORE TO GAIN SOME UPSIDE AGAINST OUR DEBT BURDEN.....

I have little doubt that there are plans and "suggestions" already in place for many different scenarios, ready for submission or action at the right time.[/QUOTE]

JMHO

[bart]

Re: "They" got to devalue .....NOW!

Here is what I think based on your list:

1. A default on Treasuries, in the sense of a failed auction or auctions. NOT GOING TO HAPPEN HERE BECAUSE THEY PRIMARY DEALERS AND INDIRECT BIDDERS (ONE IN SAME) WILL MOP UP ANYTHING NOT BOUGHT.
2. A problem in China or Japan or other large Treasury holder, causing them to need to redeem large amounts of Treasuries. NOT GOING TO HAPPEN THERE. THEY'LL JUST PRINT MORE YEN AND MOVE ON.
3. A 9/11 like event, not necessarily in the US. COULD BE BUT DOUBTFUL.
4. A sudden loss in confidence in the dollar or banks by US citizens, resulting in bank runs and similar. WITH THE MSM BLOWING "HAPPY DAYS ARE HERE AGAIN" UP EVERYONE'S ASS, NO WAY.
5. A currency attack by speculators, ala Soros and the Bank of England (not likely on the dollar but possible as an effect of an attack on another major currency). SOROS AND THE BOE WON'T CROSS THE FED AND OTHER CB'S.
6. The biggest issue in my opinion is that no significant world currency is coming even vaguely close to gaining value... and in plain English, what I'm saying is that it could easily be a worldwide devaluation with the dollar being devalued more than average while other currencies gain their place in the SDR or an SDR like currency that has gold as part of it "backing". THIS IS PROBABLY THE MOST LIKELY EVENT TO HAPPEN BECAUSE IT HAS THE LEAST POLITICAL EXPOSURE/RISK ATTACHED TO IT. "EVERYONE'S DOING IT FOR THE GOOD OF THE PLANET"......WE'LL JUST DO IT MORE TO GAIN SOME UPSIDE AGAINST OUR DEBT BURDEN.....

I have little doubt that there are plans and "suggestions" already in place for many different scenarios, ready for submission or action at the right time.

JMHO[/quote]


Fair enough. It was just mostly off the top of my head and there are no guarantees.

1. If the money comes from the Fed or Treasury to allow the Primary Dealers to buy, its self defeating, and can blow up big.

2. Any redemption will seriously rattle the market, and could blow. Political causes do exist.

3. Its all about possibilities.

4. The MSM has been blowing happy days for years, and the dollar has lost well over 50% since 2002. The dollar's value and sentiment about it outside the US is pretty negative.

5. Soros and the BoE incident was just an analogy. A dollar attack could come indirectly via US enemies.

6. Yes... most likely of the ones that I listed.