ok-let's say the dollar has fallen

This is something that I've been asked a few times by others that I know personally, but have never had a clear answer to give them.
Let us, just for the sake of interest, say that the Dollar has fallen, and we are thrust into a catastrophic depression.
What will become of our credit card dept, and will it matter?
Silly, I know, but something to think about.
Will men in black storm our houses to collect?
That would be fun.
I know, it's silly, but I get asked this all the time, and need to know what I can start telling people when they ask me.

the mighty dollar shall never fall iam sure our goverment will do something about it if it does actually does

Originally posted by dabomb
the mighty dollar shall never fall iam sure our goverment will do something about it if it does actually does

Lol..

At the end of the day, the Government will have very little control over the market value of the dollar unless they took drastic measures, which in themselves would harm the economy.

It could only take a couple of events and the dollar would plummet overnight, say the Oil producers switching to the Euro, or China/Japan dumping some of their reserves (if OPEC et al switched, the latter would happen as a consequence)

posted by hessiantrooper

“ . . for the sake of interest, say the Dollar has fallen and we are thrust into a catastrophic depression. What will become of our credit card debt . . Will men in black storm our houses to collect? [Edited by Don W]

Repossessing mortgaged property is usually done in anticipation of selling the distressed property at the auction block to recover some of the otherwise uncollectible debt. If the economy is at the bottom, there will be no buyers and hence, not much urgency on the part of debt holders to attempt to collect the hard way. Credit card debt will continue to earn outrageous interest until Jesus comes. Or we kill the !%*@# debt-holders.

I know, it's silly, but I get asked this all the time, and I need to know what I can start telling people when they ask me.

Tell them to quit voting for politicians who push the nation deeper into debt when the times are good. It’s one thing when times are bad, that’s Keynesian economics a/k/a/ pump priming but when the times are good, it is inexcusable IMO.

posted by stumason

At the end of the day, the Government will have very little control over the market value of the dollar unless they took drastic measures, which in themselves would harm the economy.

For a (very) short term response, the Government could declare the dollar has XYZ value and punish anyone who does not obey that edict. That might work for a week or two at the most. The more likely scenario is the Weimar Republic response, to print more money. It is said a wheelbarrow full of money was needed to buy a loaf of bread. And then came Hitler.

It could only take a couple of events and the dollar would plummet overnight, say the Oil producers switching to the Euro, or China and Japan dumping some of their reserves . . [Edited by Don W]

Well, the Persian Gulf oil producers are in the same boat we are in. They own scads of property in NYC, W-DC, Miami, Las Vegas, Aspen and in all the more exclusive enclaves in the Catskills and other high rent districts. It is not in their interest to see their own trillions of dollars of investments go south! So, relax. It ain’t gonna happen.



[edit on 6/11/2006 by donwhite]

Originally posted by stumason

Originally posted by dabomb
the mighty dollar shall never fall iam sure our goverment will do something about it if it does actually does

Lol..

At the end of the day, the Government will have very little control over the market value of the dollar unless they took drastic measures, which in themselves would harm the economy.

It could only take a couple of events and the dollar would plummet overnight, say the Oil producers switching to the Euro, or China/Japan dumping some of their reserves (if OPEC et al switched, the latter would happen as a consequence)

ppffftt whatever as soon as we take over the middle east that wont happen

Originally posted by dabomb
ppffftt whatever as soon as we take over the middle east that wont happen

Thanks for that insightful and intelligent post there. Your contribution is much appreciated.

It all depends on how low the dollar goes. Why do people forget that what goes up most come down and vise versa? What do you think the effect of a low dollar will have on your Export and Manufacturing Sectors? How about Tourism? I am going to Buffalo to buy a computer in July. Cheaper that way. Saves me a couple hundred bucks that way. What effect will that have on your economy if more and more people start to come to your country as a sort of consumer tourist?

posted by sardion2000

It all depends on how low the dollar goes . . don’t forget that what goes up most come down and vise versa? What do you think the effect of a low dollar will have on your Export and Manufacturing Sectors? How about Tourism? [Edited by Don W]

Traditionally, cheap currency at home means exports rise and imports decline. Tourism goes up, locals stay home. When exports rise, manufacturing also rises. Which makes it sound as if the preferred monetary policy is cheap money. Say hello China! This argument has always been around. America's presidential candidate William Jennings Bryan - late 19th century early 20th - became famous on that issue. The 'Cross of Gold' speech. He arguing for cheap money. The R&Fs who owned the money, arguing for costly money. The argument was expressed then in the ratio of gold to silver specie - coins. The official rate was 8 silver to 1 gold, Bryan wanted 12 to 1. He lost. It is very hard to beat the money mongers at their own game.

I am going to Buffalo to buy a computer in July. Cheaper that way. Saves me a couple hundred bucks that way. What effect will that have on your economy if more and more people start to come to your country as a sort of consumer tourist?

If the exchange rate between the Canadian and American dollars is about 100 of yours to buy 80 of ours, it is not immediately obvious to me why you’d save money buying in NY as opposed to buying in Ontario. And, would you be breaking a Canadian law by importing an untaxed item? Assuming avoidance of such a tax is the underlying purpose of your plan. Canadians, unlike Americans, are more self regulating as in obeying laws. Since all PC computers are made in SE Asia, what is the difference? Help me understand this.


[edit on 6/12/2006 by donwhite]

Originally posted by stumason

Originally posted by dabomb
ppffftt whatever as soon as we take over the middle east that wont happen

Thanks for that insightful and intelligent post there. Your contribution is much appreciated.

your welcome