When The Usd Collapses...

What ever happens will be world wide, everything is too inter connected now.

The dollar is doomed. It isn't backed by anything except a promise and it only survives because others are still willing to take for now. More and more nations are settling debts in gold and other currencies. That is a sign that the dollar is moving to shaky ground. People must look at the whole picture, not what they see in their area. What happened to Greece is spreading and fast. Those that are not aware now will suffer later.

I hope you are right fenton, but things seem to be speeding up on the debt front.

alright, so heres my take,
I don't think that the dollar will collapse as much as become the new peso. The fed HAS printed in excess of three Trillion dollars, BUT it is currently sitting in accounts at Wells fargo, BOA, etc... Currently the government is releasing it in small amounts in hope as to not overwhelm the market. That said, its still 3 TRILLION dollars. I think 10-20% inflation, (like what we had in the 70's) is more likely than a complete collapse. But, if the government hadn't printed all of that money, it is my understanding that we could have had negative inflation, (deflation) of 5-10% which would have sunk our economy. Anyhow, I don't like fiat money, but I'm not sure a gold standerd is much better. In my opinion we should have private currency. In other words, bank 1's "dollars" would compete with bank 2's "dollars" and so on. The reason I think this is the best alternative is different banks would either have to back their currency with something tangible, or they would have to keep their inflation rates low enough so that a customer would trust their currency. Government doesn't have any incentive to keep inflation low, sometimes they even try to increase inflation to stimulate the economy. Meanwhile, a gold standard is putting all of your eggs in one basket. If the price of gold swings wildly, (which did happen in the past when we were on a gold standard), then our "dollar" would be even less stable. On the other hand, if the price of gold is too high, our "dollar" could become to strong and would have a hard time competing around the world. That is why I think private currencies a be the best, private banks have an incentive to make sure that their currency is the best, otherwise people wouldn't use it, and they wouldn't make money.Government has no incentive to make sure that they have the best "dollar" either with a gold standard or a fiat system. (sorry about my rant, coin collecting is my hobby, economics is my passion)

There's not even enough PM's in all the world's reserves to monetize the US debt. We can't go back on a PM standard atm. The US only has maybe 400-500 billion in Gold reserves. Our Budget deficit last year was 1.3 trillion.

The only good point of going back on a PM standard is that it would limit capital spending to the amount of PM's we added to reserves. It's a spending/debt control thing. On the flip side it limits capital. If you want to invest in new technology, NASA, green energy, etc, you have to have the capital reserves first, or borrow them from someone else. That's pretty much why we went of the standard in the first place. We wouldn't have the tech we have today and it would evolve much slower had we never gone to a fiat currency. The problem we have now is that we've over-extended the fiat currency. Our economy isn't producing enough to cover the expansion of the currency and it is setting up for failure.

Heres another good link if one can get past their normalcy bias...sustainable?

http://www.usdebtclock.org/

@1976Canadianpenny love the thoughts. We live in a credit/debt based economy based on consumption/spending. Raising interest rates (deflation) would strengthen the dollar and lower the price of goods and comodities. Like you said it would certainly harm the economy as spending would decrese greatly and production would slow (not just in the US either). I dont know about "sunk" but the exact same is said about the current route we are on by those of another mindset. Thats why I agree with your initial statment...it appears we are comitted to inflation which by definition weakens the dollar. Savers are not rewarded in inflationary scenarios and spenders are not rewarded in deflationary scenarios. PM buyers/backed currency proponents fear and wish to hedge against inflation as they believe it is the major threat currently. Should PMs be monetized it is my belief that fluctuations in their prices would decrease greatly....the markets would be exponentially larger than they currently are.

@GRR two things
1)Not enough PMs to monetize US Debt...at current ratios true. But if the dollar goes lower, metals go higher, or a combo of the two it is not so outlandish at all. Why does it take 30 fiat USofA marked paper dollars for a 1oz silver eagle also stamped one dollar by the same USofA. Fiat vs. Intrinsic value is the issue at hand. The ammount is arbitrary...Trade 20 cents (2 silver dimes at $1.95 each) for a gallon of gas or $3.90 fiat dollars. The .20 cannot account for the full 3.90 but still gets you the same item.
2) The "etc" on your limited capital problem list could list a whole sheet of foreign and domestic programs/actions that have spurned great divides in society as well the relativly positive ones mentioned. The problem is that it is still a type of invisible tax...thats why foreign countries arent happy when more money is "created". Inflation passes the cost of lowered purchasing power to any saver/nation that is holding dollars. The cost is moved, the can is kicked, credit/debt is produced...and then we have the link listed above.

i think the issue is the fact that before the gold standard, PM/s weren't looked at as PM/s at all.... so your going to go BACK 40= years and have to make/take GOLD and SILVER off the commodities trade....but, hence the dollar falling completely off the scales... it might be easier to do

I think the most likely outcome is that within a hundred years, money will be used (in the US) only by the Donald Trumps of the world, and the rest of us will get by mostly with barter--money will be an afterthought. This was actually a rather commonplace scenario where I went to college. For three years, no matter where I worked, I was paid in goods. I still remember negotiating with a potential employer to be paid in vegetables, rather than the offered money, because the food was more valuable than the ten dollars a day. If Earle was in the area in the early 2000s, he could probably offer you even more anecdotes about this.