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A dollar devaluation coming? What will happen to the price of PM?

Bob Chapman, on Alex Jones’s show, said he thinks the rug will probably be pulled within the next year and a half and the dollar will probably be dumped by an official dollar devaluation, giving the dollar a 2/3 haircut - one new one for three old ones. The new one being a world currency. It will come about through a coordinated debt default, a revaluation of all currencies against one another whereby they will probably chop off 2/3 of the the debt. Alex thinks they will only forgive the debt of the big institutions and globalist groups while increasing our taxes, putting us in a worse position than before the bailouts and stimulus. I think they may sweeten the pot to entice people to acceptance.

QUESTION: What do you think this new currency scheme will do to the price of gold and silver?

For those of you who think the new currency will be backed by gold and silver, remember the euro started off at 15% backing and is already down to about half that - come into my parlor said the spider to the fly. Besides, the IMF is selling off 1/8 of their gold. I think our best hope of prevention is an audit that gets at the Fed's dealings with the IMF.



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Planned Devaluation 1980s

The Plaza Accord or Plaza Agreement was an agreement between the governments of France, West Germany, Japan, the United States and the United Kingdom, agreeing to depreciate the US dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets. The five governments signed the accord on September 22, 1985 at the Plaza Hotel in New York City.

The exchange rate value of the dollar versus the yen declined by 51% from 1985 to 1987. Most of this devaluation was due to the $10 billion spent by the participating central banks.[citation needed] Currency speculation caused the dollar to continue its fall after the end of coordinated interventions.

...The reason for the dollar's devaluation was twofold: to reduce the US current account deficit, which had reached 3.5% of the GDP, and to help the US economy to emerge from a serious recession that began in the early 1980s. The U.S. Federal Reserve System under Paul Volcker had overvalued the dollar enough to make industry in the US (particularly the automobile industry) less competitive in the global market. Devaluing the dollar made US exports cheaper to its trading partners, which in turn meant that other countries bought more American-made goods and services. The Plaza Accord was successful in reducing the US trade deficit with Western European nations but largely failed to fulfill its primary objective of alleviating the trade deficit with Japan because this deficit was due to structural rather than monetary conditions. US manufactured goods became more competitive in the exports market but were still largely unable to succeed in the Japanese domestic market due to Japan's structural restrictions on imports.[clarification needed] The recessionary effects of the strengthened yen in Japan's export-dependent economy created an incentive for the expansionary monetary policies that led to the Japanese asset price bubble of the late 1980s. The Louvre Accord was signed in 1987 to halt the continuing decline of the US Dollar.

http://en.wikipedia.org/wiki/Plaza_accord

Devaluation vs. depreciation

That was depreciation, not devaluation. They used currency swaps and market intervention to bring the dollar down vs. other currencies. We got a nice bubble and bust out of the deal. The bust took the Dow from 2700 to 1600.

Today the G20 is clamoring for the US to STOP the dollar from falling more, so they are not going to participate in market intervention to bring it down vs. other currencies.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

I grabbed the wrong word.

I grabbed the wrong word. Conditions were different then but shared a trade deficit. That was one of the meetings Chapman used in his example of how they reevaluate.

He's still full of it. The

He's still full of it. The idea that central banks would intervene to weaken the dollar when they are yelling for the US to keep it from falling more is just ludicrous.

The central banks might collude to STRENGTHEN the dollar vs other currencies, but market interventions never work in the long run.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

You're right.

You're right. His prediction would need a lot of adjustments.

Still waiting. Explain how to "devalue"

In 1971, Nixon "temporarily" closed the gold window. It's since been shuttered and bricked over. You can now get precisely zero ounces of gold for a dollar. How do you devalue a currency below zero?

Seriously, what does "devaluation" mean? I hear people talk about it, but I have no idea what they mean by it, and seriously doubt that they do either. The dollar is not pegged to anything, so there is nothing to devalue it against.

Am I wrong? Then explain the procedure. Assume the US Treasury and Fed want to devalue the dollar by 1/3 as of Monday. What precisely do they do? Garden-variety inflation does not count.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

Me thinks...

The US Dollar Index is an index or measure of the value of the dollar relative to a basket of foreign currencies. It is a weighted geometric mean of the dollar's value compared to the euro, yen, Pound sterling, Canadian dollar, Swedish krona and Swiss franc.

If the dollar index is around 77 now it will be devalued to 1/3 of that.

How to do it? I think the Forex can be manipulated as easily as any other market. Collusion is all that is needed.

Devaluation below zero would

Devaluation below zero would mean there would be a nagative return for the usersof that currency ..It would no longer be accepted as currency because other currrency forms exist ..The FED would become extinct...Circulation of currency is the real wealth ..When a currency no longer circulates it's worthless ..All growth in an economy stems from the circulation of that economy ..When the circulation ends so does the economy..This is why the crisis..th9is is why the FED is in trouble ..They have run the scam too long..The booms were not wealth producing only cash flow producing ..NO profit sharing for the public..Now the NAFTA policy & outsourcing have taken their toll on our economy eliminating the ability to CIRCULATE funds ..So ,the gov't who already iss over extended is trying to save the FED with forced stimulation from the only avenue of circulation left.. The peoples personal savings ..They also want healthcare to generate funds to keep some circulation going.They already were paid for this medicare & SSI but they still owe the people for the program ..They must make us pay it again while trimming the benefits to make money ..
Good people do Good deeds
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This is what devaluation means to me.

Last week we took our car to the local Walmart for an oil change and oil filter.
The price of the oil change plus filter had risen from $24 dollars last time { about 3 months } to $30 this time.

A large snow/mud tire in front was priced at $280 for one, not including any other charges that would be added in later if you bought and mounted the tire. This seemed to me like over a 100% markup in dollars since last year.

I remarked to my wife that Hyperinflation is already here, with these prices, and it must be the law of supply and demand in money that's forcing prices up. { TARP, etc. }
The more money put into circulation the higher prices go because each existing dollar gets diluted in value.

As far as dollar devaluation on an international level done by what I consider as corrupt banking officials, that's for the currency traders to decide, which are very likely mostly central bankers, and guys like George Soros.

Apparently, the Fed has all kinds of little tricks to hide what they are doing. They are suspected of selling dollar denominated treasury bills and buying them back themselves from off shore Cayman island banks, to prop up the value of the dollar when other central banks won't buy at auctions.

Pass H.R. 1207 to get a complete idea of how and what the Fed and cronies are doing.

beesting

That's inflation.

That's inflation. Devaluation means something different and specific.

I'm with you on HR1207. I've campaigned for it a lot ever since it was first proposed.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

We Americans might not see the affects of real devaluation.

From personal experience.
I was in Japan on Aug. 15th 1971 when Nixon took us off the Gold standard.
Right away in Japan the dollar went from 360 Yen to 240 Yen to the U.S. dollar. "Overnight "!

However when I returned to the states a few weeks later little had changed in the way of prices. It took till about 1980 { 9 years } for all prices to about double and it was blamed on OPEC.
I think the prices climbed because of the devaluation of the dollar at the international level, but took years to show up domestically.

Opinion: International trade would be affected first, and since we import much more than we export prices will rise.

We'll see, thanks for the posts.

beesting

Devalued against the NWO IMF

Devalued against the NWO IMF basket of currencies.

How? What actions do the

How? What actions do the de-valuers take? Write out the instructions.

The dollar is not pegged to a basket of currencies, so it cannot be de-valued against a basket of currencies.

The IMF basket is called an SDR. SDR's do not have a fixed conversion rate. SDR's float on the market, just like dollars. Here are the conversion rates for the last few days.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

Jive_Dadson, do you remember when the U.S. was putting,,,

,,,Pressure on China to re-evaluate their currency higher?

At the time I looked up the regulations for valuing currencies at the Bank for International Settlements website. { BIS }
The research confirmed that Central banks around the world { The Fed is our central bank } are allowed to regulate the value of their own currency, since they print and issue it.

This link doesn't show much, but does show that the BIS keeps track of currency valuations:

http://www.bis.org/publ/work287.htm

Of course in a worse case scenario no other country will accept a defaulting countries money. So when Mexico came close to defaulting on an IMF loan a few years ago the IMF came galloping to the rescue by re-arranging Mexico's loans, and at the same time creating the "New Peso", which was more valuable than the old Peso by a factor of 10, if I remember right.

Example: old Peso = 100.
New Peso = 10

This could happen to the U.S. by issuing a "New" dollar.

Who changed the value? The Central bank of Mexico.

beesting

The dollar is tied

to a basket of 7 or 8 currencies. The dollar index depicts it's strength among them. The Forex can be manipulated just like any other market. I am sure that supply and demand could devalue it. Every try to sell their dollars. Or short it.

A default on debt could be

A default on debt could be coordinated in a meeting like the Plaza Accord in the '80s. The devaluation will be in the form of the 2/3 haircut where basket currencies are revalued and devalued against one another, and 2/3 of the debt will be forgiven, in exchange for which the new dollar will be thrown into the basket.

But it will be harder to pay back the remaining 1/3 debt with a devalued dollar, so it sounds more like a card trick.

I know they can have a

I know they can have a meeting. But what do they DO? How do they devalue or "revalue" something that has no set value? I ask how one devalues the dollar, and I get the answer, well, they devalue the dollar.

By the way, the G20 is howling about the dollar losing value as it is. Central banks, which hold scads of US dollars, have no interest in seeing the value of their dollars decline. Quite the opposite.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

One new for three old

One new for three old valueless pieces of junk.

I presume you mean three new

I presume you mean three new for one old. Either way, it cannot be done. Most dollars are computer entries. In fact, it is impossible even to agree on what constitutes a dollar. Some of those computer dollars are liabilities of the Fed, some are liabilities of banks, some covered by FDIC, some not, some are who knows what. See my comments below about greenbacks and bluebacks. There are computer dollars all over the world. There's no way to mark them "new" or "old" or "green" or "blue" even if one could write instructions for how to determine which color the entries should be - which obviously one cannot.

A short sentence is not going to do the trick.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

He said 1 new for 3 old.

He said 1 new for 3 old. Start at 8:30:

http://www.youtube.com/watch?v=bQ71L94e5d8&feature=channel_page

How will they do it? They're sham artists. That's how (2 sentences).

But I don't know if that's the trick they have in mind. Chapman knew Thursday would be the day the price of gold would fall (and should start to go way up soon), so I wondered what you all thought of his take on what will happen.

I don't doubt that he said

I don't doubt that he said it. I just think he's talking out the wrong end of the alimentary tract.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

This is complete nuts ...

And I now consider Bob Chapman nutty.

WAHOR!!
http://www.dailypaul.com/node/48994

SteveMT's picture

Chapman is a guest on Alex Jones every Friday.

Ron Paul is a frequent guest as well on Alex Jones.
I have heard Chapman speak several times, and he does not strike me as nuts. Why are you saying that?

Care to explain why.

or should we take your word for it.

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Real Patriots for 9/11 truth -- http://patriotsquestion911.com/

To think that a world currency can be introduced within ...

A year and a half and people will be forced to trade 3 dollars for every one new unit is pure fantasy.

The fact that this guy's best guess is exactly that, makes me think he is a little on the nutty side.

The Euro took decades.

My guess is that this guy is a PM broker and is using scare tactics to make some money, or he is seriously nutty.

And even if such a fantasy were to unfold ...

The value of the dollar would skyrocket.

You just can't do that in a short period of time.

It literally takes decades.

My guess is that a currency will be introduced and pegged at a rate to be considered weak.

Then they will slowly inflate so that supply and demand dictates that people will gradually gravitate toward the new currency.

That is the only way it works.

WAHOR!!
http://www.dailypaul.com/node/48994

Decades?

They HAVE been planning this for decades. Watch ENDGAME.
You can't have world government without a "world" tax and a "world" currency. Year-and-a-half? Why not? They're 97% done with the dollar.

“We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.”

Paul Warburg - February 17,1950

nice post.

people either don't know or have short memories.

The ultimate goal is

The ultimate goal is electronic money--I promise you that! So let's assume Americans are brought to their knees with joblessness and hunger, what will happen to Gold and Silver? It will drop like a rock!

The rich who have great big bank accounts will be protected and those who have next to nothing will be issued "point cards" which will be repaid after you find employment. The entire new scheme will be electronic and controlled by your assigned Government HR staff member. It's going to be a massive electronic social program that will enslave every single one of us. Every single thing you do will be monitored, controlled and managed by "them."

Not only will this be accepted but folks will rejoice about it!

If you think about it deeply enough you'll see that I'm right. Gold and Silver is a resource, this is not progressive it's recessive. This is why they a dumping it to the Chinese! Let the peasants snatch it up because it just makes their goal of wealth grabbing that much easier.

I own a nice amount of Gold but I regret it a little more each day. I fear when it all comes crashing down I'll be stuck with a box of old shiny souvenirs....

Goal, or out of control consequences of a faulty monetary system

I don't know what the specific goals of government are except for plunder and control.

I do think that gold will first go up to about $2,000 by October, 2010, and then it will fall to below $300 by October, 2014. I don't have an explanation, although I can imagine some events which would cause this. My basis for this is strictly application of statistical methods to the historic prices of gold and the identification of numerous cycles in that time series, and then the projection of these cycles (plus the long trend) into the future to produce a rough road map..

Just my take on this market.

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

The rich do not have great

The rich do not have great big bank accounts with bins full of notes..they keep their funds in Circulation at all times which is why they are rich on paper..Assets are their riches...Cash Flow is their diet. .. how do you think the FED keeps going & why do you think the Gov't is spending new notes ..A diet of cash flow milking has kept the FED going this long ..The US treasury only gives them the CIRCULATION method of transfer.When the private sector cannot spend , the gov't will ..That is the cycle we have experienced since 1913. Ever hear of WPA.. Now you are going to get healthcare gov't style & stimulous when they finaly spend the appropriations. Look out below.
Good people do Good deeds
Good people make it happen