Analysis of all current logic of the dollar

 All current dollar analysis logic
economist Robert. Triffin (Robert Triffin) 60 years in the last century that the global monetary system based on the dollar's inherent flaws: Global want more mobility, The flow is only through the United States current account deficit means to provide, but the accumulation of debt will sooner or later the currency undermine confidence in the currency of this key. In fact proved that this is called Triffin dilemma) with great foresight: the Bretton Woods system collapsed in 1971.
subsequent floating exchange rate system became popular around the world. In theory, a floating exchange rate mechanism, the accumulation of reserves should be redundant. but in fact, 90 emerging countries for the last century's lingering fear of the financial crisis, they think they need to export-driven growth and protect themselves from the crisis. which led directly to three-quarters of global reserve currency within the last decade accumulated. more floating exchange rate, the greater the demand for reserves has become a paradox.
It is this paradox of supporting the U.S., even though the old and Georgia over the past decade the rapid expansion of monetary policy, but ultimately not U.S. significant collapse of the trend. so that led to this once in a century because of global economic recession is the U.S. housing market bubble, rather than many economists worried about the subprime mortgage crisis, as before, because the United States long-term current account deficit caused by the breeding of the dollar crisis.
Chinese saying goes, to avoid them in retaliation, not to avoid them fifth.
question now is, in the global economy to balance the movement, speaking from the supply the United States return to the real economy, credit size is shrinking, M3 is shrinking, current account deficit fell sharply by nearly half (of 2008 compared to 8,000 billion U.S. dollars), the U.S. household savings rate continues to rise to nearly double-digit levels.
a coin has two sides, with the corresponding, China, Japan and the oil states of the trade surplus will shrink substantially, that is overseas for the U.S. decline in the ability to provide debt financing.
while at the same time, the U.S. government in this round recession in a series of rescue measures introduced to stimulate the economy, making the fiscal deficit rose to a record high, ending a chapter in the private leverage over, and yet opens the excessive leverage of public sector chapter. the just-concluded fiscal year 2009 deficit of up to a record 1.47 trillion, while Obama announced over the next 10 years will increase the fiscal deficit and an extension of 2 trillion U.S. dollars to 9.05 trillion total amount of days.
U.S. fiscal deficit deteriorated sharply, making a self-fulfilling currency crisis which may be followed to.
people began to maintain the independence of the Federal Reserve and ensure long-term financial solvency had a growing suspicion, when Geithner to borrow, the less independent or will the Fed be forced to buy public debt. This will enable investors to accelerate the flight from the dollar. The dollar may be tanking, long-term interest rates may soar, a hard landing for the economy will fall into the abyss again.
This is the current dollar depreciation of all logic. To some extent, the sustainability of U.S. fiscal policy is to change the return of the weak dollar.
the long run, Americans reform of its costly and inefficient current health care system, almost Obama reduce the deficit ratio has the only hope for the sustainability of the financial burden, because the recession in the economy can not allow the Government to substantially increase the tax rate. If you do not reform, the obligations of the U.S. fiscal spending (Social Security and Medicare) would be discretionary spending faster than the United States government's major expenditures, and expected that the proportion will rise to 80% of 2019 levels. With the increasing aging population means that social security, health insurance costs will be less and less labor bear population, the U.S. health care and social security system will be a sharp deterioration in the financial position, which is expected to be 2017 health insurance fund food and drink. will stimulate the market for the U.S. financial deterioration of despair, loss of control caused the depreciation of U.S. dollars.
course, the controllable current weak U.S. dollar is probably the most Geithner and Bernanke would like to see the results because it is clear weak currency can reduce the risk of deflation in the United States, and to promote the adjustment of global imbalances, the U.S. now too need to export-driven growth. But the premise that the decline of high inventory can effectively neutralize Meijin driven by the depreciation of the global commodity up momentum.
rational expectations from the market risk of the apparitions. so, the weak U.S. dollar will beat the high inventory, increased money will be fully reflected in the price directly. dollars, selling U.S. debt to the tide or the world for the credit If the collective collapse of confidence in the currency will lead to commodity exchange and precious metals ETF's paradise to be the last hedge. runaway inflation may force the Fed to start raising interest rates in the period ahead.
Once a reversal of capital flows, then pushed to asset bubbles in emerging markets, or will face a sack.