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Originally Posted by macmanmike6100
The dollar's not going away any time soon. Yes, the dollar is most certainly in for a major correction, but it's not going to be a collapse. And again, if you really are worried about the dollar's utter collapse (remember, this is a global currency), then you should be hunkering down in your basement, not trying to play the market.
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A "correction" sounds like such an innocuous thing, but it could be huge. Like when the British pound "corrected" from $5 to $2 or so back in the late '60s. A devaluation of even 30 percent would have major effects, such as an increase in our cost for oil (if the sheiks decide to demand more of our less valuable dollars for their oil, which they probably will).
Even if the dollar doesn't fritter sizzle away to nothing, a "correction" of even 30 to 50 percent would have serious connotations for people's lives in the US, not least their retirement plans. Imagine the cost of energy _also_ going up 30 -40 percent more in dollars because the sheiks or the Venezuelans demand more of our less-valuable dollars for a barrel of oil. And then think about th cost of that energy rise rippling through even things that we make ourselves, like food, heating oil, even paper.
Some people say that a devaluation will bring more manufacturing and outsourced service work back to the US, because the relative cost advantage of Asian manufacturers would be decreased. But that's not a given. And even if it were, our purchasing power would be far, far down.
We used to be important in the world because we were an economic powerhouse that produced to the world. Now we buy more than we sell; we 're still important in the world, only as a consumer only, and as the owner of a military that we pay for with borrowed money. But when the money runs out...