How could the US currency collapse overnight, either realistically or unrealistically?
97544
The dollar is not directly linked to the stock market. It is a strong currency in that many developing countries, including China, stockpile dollars to give them some "hard currency" strength. The danger is really the longer-term decline of the dollar versus other "hard currencies" such as the euro and yen. The dollar is also strengthened by its ties to various commodities, such as oil, which is denominated in dollars. If Russia and the Middle East countries begin selling oil to Europe or China for euros or gold dinars in a big way, then the dollar would lose more of that stability. Inflation and investors' currency speculation are additional variables. But it is unlikely that the dollar would crash overnight, because those that you might think would benefit from this (such as China) would actually lose billions and billions overnight if all their dollar holdings lost huge value. Longterm erosion in the dollar value is much more likely.
147343
Yes Mike, it's all very well about trust, but what happened in 1929?   Something similar may happen soon.   9/11 set the process in motion; Bush is carrying it further.  Thank goodness I'm a poor man, with little to lose.  You rich people had better buy gold or Chinese currency soonest.\nQuestioner bulabate is very near the mark when he talks about printing money - whose head is in the sand - his or Mike Gilbert's?  I reckon your's Mike, rather than bula's, not that I know much about the subject : in fact I don't think anyone does; not even Alan Greenspan.
1056033
The Project for a New American Century is about to fall apart.  The world is headed back to a multi-polar world, not very stable and it will be compounded by the loss of the dollar as the reserve currency of the world and the peaking of oil.  We're in for a bumpy ride. :(
694901
As one of my finance professors so clearly stated it... "In God We Trust".  It is on every piece of paper and coin in the US.  There is no backing or "gold standard" of the almighty dollar anymore.  It is really just a highly accepted form of trade for a common tool for bartering.
575532
Well yes and no. Long story short it's possible because the US government is selling bonds to other nations, (more like extorting them to buy it, otherwise they will charge a very high tariff on all imports from that country)  and this allows a steady flow of cash into the economy.\n\nThis boom goes on until someone wisens up and demands the loaned money.  At which point, everyone who's borrowed money ends up actually having none, and this cause major and I mean MAJOR chaos.  Think this way, no one has cash. Everyone wants cash. But there is no cash.  Everyone is going to fall down like a domino.\n\nAnyway people call this "depression".  It's a result of living in decadence and buying everything on credit and assuming that tomorrow, your paycheck will be bigger.  Specualtion and greed supplies all the other necessity for a disaster.\n\nI really crammed about 10 books worth of info into a few paragraphs. I hope I got through to you.
301814
one answer: currency risk
244261
It's really a matter of the confidence of the people in our system.  Since our currency is fiat money, that means there's no gold or anything backing our money, it's only worth what people believe it to be worth.  As long as people have confidence in the system it will continue to work.  If people give up and lose faith in the system, it could theoretically collapse.  Personally I don't think it will.  That said, the advice you mentioned is good.  Those investments tend to be less affected by market forces.
796060
You ask a good question.  Now I believe you know there is not enough if any gold in fort Knox to back up our money.\n\nWhy does one think money means anything.  One may play games with it all day.\n\nYou are correct in many things you have said; but I wonder why most people think that the United States of America is not in prophecy (prediction) of what is to happen about us?  I have read Revelations many times and the more one reads it the more one realizes > WHAT?   Watch and Pray.  1+1+1=1
234899
Simple economics. USD is becoming weaker because of inflation, the US government printing a lot of money, huge government debt, and about a million other reasons.
583815
Well it depends. If you are talking about free market economies, then the market is the one that sets the exchange rate... its pure supply and demand. Let me give you an example.\n\nTake for instance what happened today to the exchange rate between the mexican peso and US dollar. Investors around the world are thinking that the Fed is going to hike up the intrest rates, making american investment more intresting than before. So what happens to the peso? Well, investors that have their money in the mexican stock market or in mexican currency start to convert their pesos to dollars to bring them back to the US to invest. Since more people are demanding dollar in exchange of pesos, the supply is forced to adjust prices. Basic economics, more demand for a good makes price go up... so the exchange rate pesos for dolar is affected negatively... inversly, demand of pesos for dollar goes down! This happens with all exchange rates out there. \n\nAnother example. The middle east used to quote and sell barrels of oil in us dollars. When some nations decided to use the euro instead of the dollar, the dollar for euros exchange rate went up, since less dollars were being demanded, and more euros were being demanded to buy the oil.\n\nThat is the free market exchange rate... now, there is also a theoretical echange rate that uses intrest rate from both countries to calculate the exchange rate. The actual exchange rate in the market may be diffrent from the theoretical one, showing an over or under-valuation of a currency, depending on the difference.\n\nCurrencies that come from closed economies may have a fixed exchange rate, regulated by goverment. On this examples, the currency from the not opened economy might be overvalued by goverment fixing to protect certain intrests... sooner or later, the countries reserves mught not hold, and a hard depreciation of the currency is bounded to happen.\n\nHope i explained myself... kind of late and im almost ready for bed. Any more questions, feel free to email me!\n\nGood luck!
518134
Here you go.  You can do something with every currency that is reminiscent of 9/11 attacks.\nJust like what was said above -- you can see whateeeever you want to see.\nJust squint a little and tilt your head to the side.
64719
This is a really WIDE-ranging question, and it's practically impossible to give you a good answer that's practical for use. Fed Reserve prints money, essentially, "increasing the money supply" (counterfeiting) on demand. It is private, yet govt controlled. The govt simply placed it in "private hands" so they could get away with their political sleight of hand without having to worry about the Constitution. The IMF, of which the US is a member with about 17% of the clout, loans federal reserve funny money and usurious rates, then, eventually, puts anyone small (only large companies can afford usurious rates) out of business, out of house, home, food, and everything else. Ask Jamaica. The federal govt, in taking us off the gold standard, has sentenced the US to eventual economic death.\n\nGo to the web and search for Liberty Dollar. You can trade $10 in federal funny money for real silver, and $1 for silver certificates backed by real silver. If enough of us used this, we could make the US financially solvent again, over the years.
1065786
Economically it is impossible right now. We work with a world market right now, and right now all countries and cultures are different. India and China's economy is just blossming and their currencey is unstable. America is racking up a deficeit and our currency is shrinking. Japan is growing and so is their currency. Each countries currency goes up and down depending on the economical climate, so it would be impossible (and unfavorable) to use a single currency. Plus, with modern technolology exchange is so quick and simple their is no reason to adpot a universal currency.
1167617
The production of "more money" only lessens the value of the money.  Producing more "dollars" would make the dollar worth less than it is today.  Prices would go up and the value of the dollar would decrease in comparison to other world currencies.\n\nIn other words, it would destroy the US economy completely.
265734
I stopped investing in US dollar denominated assets some time ago. As someone in the oil business I have been expecting the oil trade to eventually begin using the Euro, and believe that in effect it already has. I think that oil has no chance of any significant price decrease until the dollar strengthens proportionally. With the twin deficits as large as they are there is little chance of this. \n\nI used to actively trade the Forex, but changed my strategy to hold foreign securities instead, and have somewhat concentrated on Canada, generally in the energy sector. Both the Canadian dollar and the Australian dollar are generally commodity driven and I have benefitted from that move. Real estate has been the only asset in the US I was willing to hold, and I think that price increase has been related to the falling US dollar as well. \n\nKeep in mind that the US is still the largest buyer of oil in the world, so even if the Euro-oil-trade were to become widespread, it would not change a large portion of the world oil market. Since the Forex is a trillion dollar a day market, it seems unlikely that changing the currency that half of the world’s oil is priced and traded in would have a large effect on the value of the US dollar. I do think it would have a further negative impact on the dollar, but am skeptical of claims that it would be catastrophic. \n\nThere has also been some interesting news recently about petro-dollars being converted to Euros. U.A.E. apparently as a quiet reaction to all the hoopla over the ports deal is switching at least 10% of its holdings away from the US dollar, and it looks like they might not be buying any more Boeing jets. \nhttp://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/03/14/cnuae14.xml&menuId=242&sSheet=/money/2006/03/14/ixcity.html
259207
no, this leads to hyperinflation and the currency becomes worthless. great examples can be found in former east germany, bolivia, etc.
1037800
It wouldn't work because it would require a mass undertaking that the government is not willing to do.  Making all current money obsolete and changing the "face" of currency is a huge ordeal.  Not only does it require the government to create the money, it would have implications all the way down the chain!