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Sandbagging the Dollar

Written by Robert Murphy on July 25, 2014

The problem with the USD being the world’s reserve currency is that it’s a situation where things could unravel very suddenly. So long as most investors think that the dollar will be OK next week, then it will be a self-fulfilling prophecy. But if people start to worry, then there could be a sudden crash as people head for the exits. Thus the USD system is like a giant commercial bank subject to a run, whenever the public loses confidence.

In that context, it’s interesting to relate three recent news items:

==> ZeroHedge reported on this exchange (in an interview in a French magazine) with Christian Noyer, governor of the French National Bank and member of the ECB’s governing board:

Noyer

==> The German government recently decided to keep its gold stored in the US after all, but Gary North explains the irony of that decision.

(For the rest of the article, click the link.)

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2 thoughts on “Sandbagging the Dollar

  1. Lorraine E says:

    The nameless and faceless people who control all governments will decide when the dollar will no longer be the world's reserve currency. The crash of the 30's happened over night and another crash will someday be created by the people who really control the world.

  2. "So long as most investors think that the dollar will be OK next week, then it will be a self-fulfilling prophecy. But if people start to worry, then there could be a sudden crash as people head for the exits."

    Exactly. Hyperinflation is a different animal altogether from inflation. Inflation is more and more currency units in circulation but people still retaining confidence in the currency, and demanding more and more of them as prices are bid up. Hyperinflation is when people "head for the exits"–into anything of value INSTEAD OF the currency. Inflation is a monetary phenomenon. Hyperinflation is a psychological phenomenon.