Why is dollar strong vs. over 18 trillion of USA's debt?

[Figaro]

The dollar shows a steady growth with regard to other until recently stable world currencies. But is the dollar that strong? After all, the U.S. has a state debt of 18 trillion dollars and can declare a technical default at any moment. Recent rise of the Swiss franc showed that the dollar is far from being a safe haven for investors.

Global capital flows are extremely unstable. Today the U.S. dollar is preferred, but it is not a vote of confidence to the American currency. It is just voting against all others, at it were.

Who will demonopolize the U.S. dollar?
A currency of some small state cannot demonopolize the dollar on the currency market, currencies of states that have a large scale foreign program are more interesting in these terms. It seems that the only thing to do is to break up the peg with the dollar, in this context the yuan is far more independent.

 

[eagle1462010]

Most currencies across the globe are being manipulated as well...........doing the same dang thing we are doing............

Which props the dollar up as others are manipulating as well.

 

[EatMorChikin]

The only value the dollar has, is your ability to use it to pay taxes to the corrupt federal government. That is if you consider yourself a resident alien or a resident of The District of Columbia. I am neither of those, so I am exempt.

 

[Mac1958]

Most currencies across the globe are being manipulated as well...........doing the same dang thing we are doing............

Which props the dollar up as others are manipulating as well.

Yep, it's a race to the bottom.

It's all relative.

.

 

[DriftingSand]

Smoke and mirrors!

 

[pinqy]

The only value the dollar has, is your ability to use it to pay taxes to the corrupt federal government. That is if you consider yourself a resident alien or a resident of The District of Columbia. I am neither of those, so I am exempt.

And how many times has that argument ever worked in court? Oh, that's right: never.

 

[elektra]

Yes, let's embrace communism? The Chinese dollar is a better choice.

 

[EatMorChikin]

The only value the dollar has, is your ability to use it to pay taxes to the corrupt federal government. That is if you consider yourself a resident alien or a resident of The District of Columbia. I am neither of those, so I am exempt.

And how many times has that argument ever worked in court? Oh, that's right: never.

What argument? The IRS gets successfully sued all the time, so it works in court a lot. Federal income taxes are voluntary for the majority of Americans.

 

[pinqy]

The only value the dollar has, is your ability to use it to pay taxes to the corrupt federal government. That is if you consider yourself a resident alien or a resident of The District of Columbia. I am neither of those, so I am exempt.

And how many times has that argument ever worked in court? Oh, that's right: never.

What argument? The IRS gets successfully sued all the time, so it works in court a lot. Federal income taxes are voluntary for the majority of Americans.

The taxes are voluntary, sovreign citizen, I'm exempt argument. It's never worked. Of course the IRS is often successfully sued, but never on those grounds.

 

[EdwardBaiamonte]

Global capital flows are extremely unstable.

100% mistaken of course. the dollar/Euro trading range has stayed between $1.12 and $1.55 over that last ten years and moves very slowly even in that narrow range. There is nothing unstable about it. Care to try again?

 

[SteadyMercury]

But is the dollar that strong? After all, the U.S. has a state debt of 18 trillion dollars and can declare a technical default at any moment.

Part of the reason it is that strong is because people believe (correctly) that the U.S. will not declare a technical default.

 

[SteadyMercury]

What argument? The IRS gets successfully sued all the time, so it works in court a lot. Federal income taxes are voluntary for the majority of Americans.

Can you site an instance where the IRS was successfully sued to prove federal income taxes are voluntary?

 

[EdwardBaiamonte]

figaro started a thread but quickly found out he could not defend it so apparently has disappeared.

 

[AdvancingTime]

Figaro, thank you for your point of view!

Political considerations and insider deals between both nations and Central Banks play a big roll in this game. Having the dollar as the world reserve currency is both a blessing and a curse. I think it is important to consider that the other three major world currencies are all in worse shape than the dollar. I contend they will fail first and bolster the dollar while they fail. In the end a new system will most likely emerge and be forced upon us.

The world is currently engaged in a massive game of speculation and chance that contains a lot of risk. A chart I saw recently touted how the percentage of funds held by foreign governments in dollars has fallen in recent years. Even after many countries have reduced their holdings in dollar reserves the dollar still carries a major wallop and place in the world economy and will effect everyone going forward. More on how the dollars role as the reserve currency effects all of us in the article below.

Advancing Time Reserve Currency Status Both A Blessing And A Curse

 

[SteadyMercury]

Sheesh dude you're still spamming that stupid blog?

 

[Staidhup]

When one compares the US currency and stability of the economy with others it becomes apparent the Dollar will remain the worlds preferred trading currency. When at such time gold, a gold backed depository trading platform, or gold backed currency takes hold then the dollar will collapse.

 

[EdwardBaiamonte]

. In the end a new system will most likely emerge and be forced upon us.

and can the illiterate tell us what that system will be, who would impose it, and why it would be better than current system?

 

[quorthon]

The debt ceiling will be raised again...

 

[gipper]

If a powerful nation (not the USA) were to back their currency with gold or silver, it likely would become the world's reserve currency, replacing the US dollar...as investors flock to own it leaving the dollar hanging.

Problem is any nation doing this will likely be destroyed by the US and it's allies.

 

[EdwardBaiamonte]

If a powerful nation (not the USA) were to back their currency with gold or silver, it likely would become the world's reserve currency, replacing the US dollar...as investors flock to own it leaving the dollar hanging.

Problem is any nation doing this will likely be destroyed by the US and it's allies.

our currency was backed by gold till the Depression but when things got tough no one could agree what backed by gold really meant so the system fell apart.

Imagine if we had a gold system now and all our gold was going to China Japan and India. People would be scared to death and that would be the end of the system.

It does not matter what kind of system we have, it only matters what the rules of the system are and whether they are enforced always or not.