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Dollar printing press at full capacity by Note Printing debt dilution

start again the number of loose Fed policy, inflation, currency depreciation and manufacturing has been pulled off. This is a dollar and then loose one-sided, but recovery in the global economy against the backdrop of the dollar will once again be a serious surplus problem, increasing the pressure on the next dollar. Through currency devaluation, inflation is likely to create re-balance the United States an important tool. After all, “the debt with inflation out of the temptation is irresistible.” Creditors are careful!

diluted by Note Printing debt

□ Roubini

sovereign wealth funds around the world are showing more and more obvious tendency of diversification, began reducing the proportion of U.S. dollar assets. These investment funds have shown on the foreign exchange reserves by central banks has always been an important part of the U.S. Treasury’s disgust, Er Shi Qiang eyes move to have those high-yield investment products: from the hedge fund Dao mineral rights have access to their investment horizons .

this trend is still likely to continue in the coming years. If all goes well, the dollar’s decline will be a gradual process, rather than sudden, disorderly collapse. Perhaps, the U.S. is likely to follow the British path of hegemony and money in the coming decades gone slowly. Historically, around 1872, the United States overtook Britain as the world’s most powerful economies, however, until 40 years later, Sterling was the world still has been the dominant currency. Only in the First World War, Britain became a net creditor nation a net debtor position of ￡ truly began to decline. Nevertheless, until 1928, the composition of international reserves, the share pounds is still twice the U.S. dollar.

Until Britain abandoned the gold standard in 1931, the position of sterling dollar eventually replaced. Although the Bretton Woods agreement to consolidate the status of the dollar, but until 1956, with the Suez crisis and the further decline of sterling, the dollar finally became the unrivaled international reserve currency.

whole experienced a decline of ￡ 3/4 of a century, we have reason to look forward to the decline of U.S. dollar will take such a gentle rhythm. Dollar appears to have few good days. However, this sudden and disorderly dollar decline in the end will be what kind of drama is still confusing. Historically, more or less currency to gold and silver is the basis of the relationship of 70 years in the 20th century was completely separated. Current international monetary system depends’s not gold, but one kind of legal tender, it does not have any intrinsic value, not only precious metal to support Ye Bu Neng to any form of fixed its value. This is an unprecedented challenge, to some extent, today the dollar’s role and the role of gold as previously. Several centuries ago, as the king and the bankers to open their vaults and found piles of coins that have been turned into dust. The collapse of the dollar today may be just a modern version of the old story.

If the U.S. can not control the rising deficit, then the story will one day become a reality. Some small countries are taking the brink. This is most likely to trigger more countries to join the army stopped purchasing U.S. bonds.

The United States is at a crossroads. If the United States can not improve the fiscal deficit and increase private savings, it will increase the probability of a crisis. It is easy to imagine a crisis scenario staged, especially when the political impasse in the next few years when the United States, the outlook will be more difficult to predict. Republicans vote against tax increases, Democrats rejected tax cuts, while the debt by printing money to make the shrinking is likely to become acceptable to both sides in the middle of the road, the resulting inflation will dilute the U.S. public and private debt. Needless to say, this “inflation tax” is likely to sell dollars to investors around the world, and buy the sovereignty of the financial credibility of the better money.

if this is really happening, then the United States will pay the price. So far, the United States still be able to issue debt in their own currency, which will decline in value of the dollar losses transferred to creditors. If those countries the dollar “super”, then the pressure will be the United States themselves, the cost of borrowing will be straight up, consumption and investment will decline and eventually economic growth into a trough.

Author:  Nouriel Roubini, New York University. In 2006 he accurately predicted the U.S. sub-prime crisis and to fame, since the first half of 2008, he predicted the miraculous collapse of investment banks. With a “Doomsday prophet Roubini’s financial predictions.”