The Coming Dollar Panic

“Is The US Setting Up For A ‘Final Dollar Panic’?”, Peter Morici describes all the factors driving the US dollar (and the US economy) toward collapse. Morici is a business professor at the University of Maryland, and former chief economist at the U.S. International Trade Commission – hardly a radical.

He focuses on all the same factors that as a layperson seem obvious to me. We can’t keep federal spending exorbitantly beyond revenues, massively borrowing, importing vastly more than we export, focusing on social and other feel good political agendas, engaging in “bank bailouts, reckless stimulus and other fiscal foolishness”, all while ignoring fundamental economic reality.

While all the brilliant experts in Washington and Wall Street can fool themselves with their complex analysis, more and more Americans realize the fundamental math that Morici clarifies is completely unsustainable.

One has to wonder what the crash, the backlash and the aftermath is going to be like.

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1 Comment

Filed under Economic Policy

One response to “The Coming Dollar Panic

  1. Michael Barrow

    My guess is that this will all come to pass, but not right away. I think we’ll have some more creeping upward in stock prices in this “Cash for Clunkers” stock rally, followed by one more breathtaking surge downward in the stock market, deflation, and the price of gold dropping, while the flight to “safe haven” will drive the relative value of the worthless dollar back up again for a period. Then, the powers-that-be will roll up their sleeves and redouble their efforts to return to that wonderful old 2006 status quo. Then, it will start to really play out with most, if not all, of the world’s currencies becoming worthless in a massive hyperinflationary spiral. We’re all too tied in to each other these days for there to be much in the way of diversification. That final spasm will be the end of this chapter in global finance. Could happen in a year or it could take 10, but it will happen. Fundamentals always win in the end.

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