Crash or Slow Burn?

[Joanne98]

One of the most important financial questions on my mind these days is “What is the end game for the ’strong dollar policy’?”

As members of the economics team who engineered this policy in the mid-1990’s return to Washington, the fundamentals behind maintaining the dollar as the world’s reserve currency have never looked more tenuous. The fate of the dollar in 2009 and the impact of widely liberal monetary policy in the US (and among key allies in the G-8 nations) could have profound implications for our lives and finances.

Are we going to continue to “slow burn” or is a radical devaluation of the dollar a possibility?

Have a look at these two news articles. They demonstrate the central banks’ willingness to print as much money as possible to prevent a deflationary spiral from taking hold:

Bank of England Mulls ‘Nuclear Option’ of Cash Injection
Deflation Virus is Moving the Policy Test Beyond the 1930s Extremes

An important component of this question is the financial deterioration of state and local government. One of the major risks before us is whether municipalities will be pressured to privitize assets which are critical to our health and well-being:

Muni-Bond Funds Face Record Losses

continued>>>
http://solari.com/blog/?p=1896#more-1896

She should have called this Shock Doctrine USA!

[Warpy]

1. The dollar has been involuntarily devalued already

and my guess is that it'll be a slow process as the next world currency emerges.

We won't see a strong dollar again unless we regain a manufacturing base. Without that, the dollar is backed by little but hot air and wishful thinking.