alteroru486 said:
So far as at least 80% of all world population are satisfied with their lives, they do not see at all why there should be any changes.
Hi alteroru486, are You sure about this 80%? :) Where You get this number from?
Bear said:
Hi Mikel,
Personally I don't see now or the future as a time to try to beat the system or use the system's possible weaknesses in terms of exchange rates and the such. Things could get out of control fast with unpredictable results and I'd want to have a position that is secure before any of it starts. That's just me and I'm conservative when it comes to taking risk with financial matters. I'd be looking for ways to be outside the system as much as possible.
Hi Bear, well I wish I was free from debt but I am not. I am not that far from paying it off but there is still a lot to be paid. I have counted that if everything goes according to MY assumptions means no changes to my work situation I should be ready to pay my bank loan within 2 years or so. Original loan was for 30years and I have 22 still to go.
What was I thinking that when collapse of the financial system comes it need not to be a simultaneous event. Maybe it will be quick but it needs to start with something.
Possible triggers for monetary crisis what I can think of are:
1. China and/or Russia claims their due debt from USA
2. Other countries not in US block follow China and/or Russia.
3. Countries try to change their own currency reserves I guess still kept in USD for other currencies (maybe CHF as officially marketed as the most stable which it is obviously not)
5. Division of financial system due to break in thrust.
6. US-block countries ??? Do not know what will they do? I guess that governments if not completely driven by US will be trying to do something to save at least the elite. For sure foreign trade may be stopped for awhile so for countries which have most of their budget generated by export and contracted in USD this maybe bigger problem than in countries with mostly internal revenues. Also countries heavily dependant on import of energy may suffer if those contracts are paid in USD.
In a fact I cannot imagine immediate collapse scenario. This must have meant that USD is the foundation block for whole world monetary/banking system. But is it?
Anyway FOREX will not be closed I guess during one day.
For example money stock will get info that for example Russia/China are selling their reserves or China claiming it's dept from USA. I guess USD goes down. People are selling it and try to buy something different. There will come a moment that will be panic - like in 1929 maybe. Then people, institutions, countries will realize that what actually they own in USD is peanuts is nothing.
As it comes to national or country treasury I think that usually it must be diversified - I am not sure but I think that there is some international guidance on that. So reserves should be kept in gold, silver, gems, currency and maybe some other countries bonds and something like this.
If country looses all USD reserves I think it will depend on how much those it had. According to (the one and only :)) Wikipedia _http://en.wikipedia.org/wiki/Reserve_currency looks like the share is 3/4 in USD and 1/4 in EUR is normal for currency reserves. Others are marginal. I do not think that EUR may be stable when USD falls and in addition finance bubble is present everywhere in our modern banking system if I take as true info from Zeitgeist the movie that 10 times more money are allowed to be borrowed by any bank than this bank's deposits/ real money stocked.
You see I am not even close to this matters and I am afraid that I may mess some terms and concepts here but this is what I think right or wrong.
So, USD collapses and people will try to get rid of it as soon as possible. But in some time no one will be willing to buy USD anymore because everyone will try to sell it basically. So it is sure then that we will have global losers and a lot of USD on market no one wants.
Now what I think is that some banks borrow internationally some are local players. International players are easily affected by such crisis that they are not able to exchange their major operating currency. But local ones...??? I do not know how exactly shall small local bank be affected. I mean this will not be immediate effect.
I can see that now I mean in the moment people from central banks/ governments realize that part of their treasury is out they may start to impose draconian rules to steal peoples money from commercial banks.
But before that there is also a problem of countries debts like for example now Ukraine towards IMF. If the loan is taken in USD by Ukraine or any other country and USD is falling it means that those countries are winners. USD looses on value and their own currency if not fixed to USD by central bank shall be doing better.
But still there are a lot of players in this market and it is hard for me to imagine now how it may go down in one day.
My 2 cents.