I like reading about financial stuff. A while ago there was an article about the PRC using their investment in the US dollar to stop the revaluation of the yuan by reserving the right to use their financial nuclear option.

Now the outgoing head of the International Monetary Fund says the dollar will collapse on its own or with the help of outside forces.

How likely are these situations? I'm sure the Chinese situation is unlikely because if you owe a bank $100 and can't shell out then you're in deep trouble but if you owe a bank $1,000,000,000 and can't fork it over then the bank is in deep trouble. To me, the latter article is just a warning rather than a declaration of imminent collapse.

So why ask the people on an internet astronomy board? They might know a bit more than Ben Bernanke. Hopefully Jim won't deem this too political and lock it down before the first response considering his recent modding.

I don't think it was the OP that made Jim do that, I think it was some of the responses in particular. So keep your suggestions politically neutral, folks!

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"If this were play'd upon a stage now, I could condemn it as an improbable fiction."
Shakespeare, Twelfth Night
Illuminati's Razor-The most complicatedly evil answer is usually the most correct answer. - Fazor
"Every book is a children's book if the kid can read." - Mitch Hedberg
"Distance doesn’t matter much in space, where if you just start a thing off with the right kind of shove, sooner or later it will get where you want it to go." -Frederik Pohl, Mining the Oort

Perhaps, but I think the OP of that thread was fishing for a political response. As for the U.S., I wouldn't be surprised if we had a recession before too long, but that's about all I'd expect. Recessions happen now and then. *shrug*

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I say there is an invisible elf in my backyard. How do you prove that I am wrong?

Disclaimer: Avatar is not an official NASA image and does not imply any specific interplanetary or interstellar capability.

The Leif Ericson Cruiser

Yes but the fiscal prognosticators have been making it seem quite dire and final as if they were, and I'm hope I'm using the term right, woo-woos crying twenty twelve. Hence my curiousity.

If something happens it will be over by 2012.

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If it's just us, it seems like an awful waste of space.
Contact Carl Sagan

There are always some doomsayers. Meanwhile, I think back to Black Monday, which looked pretty scary for a little while. But how often do you think about it today? Depending on age, how many even remember it?

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I say there is an invisible elf in my backyard. How do you prove that I am wrong?

Disclaimer: Avatar is not an official NASA image and does not imply any specific interplanetary or interstellar capability.

The Leif Ericson Cruiser

It shouldn't be a major problem if you invest wisely. Put your money into canned goods, shotguns and underground real estate...

__________________
"If this were play'd upon a stage now, I could condemn it as an improbable fiction."
Shakespeare, Twelfth Night
Illuminati's Razor-The most complicatedly evil answer is usually the most correct answer. - Fazor
"Every book is a children's book if the kid can read." - Mitch Hedberg
"Distance doesn’t matter much in space, where if you just start a thing off with the right kind of shove, sooner or later it will get where you want it to go." -Frederik Pohl, Mining the Oort

Then I won't feel so bad about taking a Gap Year.

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"If you think the LHC will create black holes, you might as well believe Hobbits are at the bottom of your garden."- Dr. Mike Inglis
Rovers forever! - ToSeek
"Carl Sagan sent a message to ET,
Neil Armstrong walked in the Sea of Tranquility
Steve Squyers built Spirit and Opportunity
Dan Haylen upchucked in zero gravity." -Brent Simon, The Space Camp Song

It's possible that some posters know more on this topic than Ben Bernanke. However he has been working as an economist since 1979, has written 4 textbooks and has published many papers, so it seems unlikely, but you never know.

Firstly there is no doubt the dollar will collapse slash fall, the only question is it going to be a collapse or a fall and how you define collapse. There is a perhaps a 75% chance the dollar will have a "soft" landing where it falls, but not too rapidly and doesn't generate a big panic. And perhaps a 25% chance of a "hard" landing resulting from a financial crisis. You want to avoid a hard landing if possible.

Note that if the U.S. dollar "collapses" this means it falls suddenly in value in relation to other currencies. It does not mean that U.S. dollars ain't no good no more. What it does mean is that imports will become more expensive and U.S. exports will become more competitive. Millions of people will need to move into export substituting industries. If this happens gradually it may not be too painfull. If it happens suddenly there could be massive unemployment. Imagine the economy as a snake. If it swallows an enormous drop in the dollar it's not going to move until it that huge structual adjustment has worked its way through its system.

Looking at the latest U.S. housing figures there is a 100% chance there will a be a rates cut in the immediate future and a 40% chance that there will be a recession or that the U.S. is in a recession now.

I understand China is moving to the lead standard.

Also remember that economists are attempting to predict the future. Generally, they are better at predicting the past. After the recession comes, they will be able to explain why it happened. Because they will be able to look back along the branch of history actually travelled.

So, diversify your portfolio, pick up bag of Doritos and a copy of Dr. Strangelove, kick back and enjoy.

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The Devil offered me power. I told him I preferred aperture.

How accurate have his predictions been? His track record's more important than how many books or years, IMO.

__________________
"If this were play'd upon a stage now, I could condemn it as an improbable fiction."
Shakespeare, Twelfth Night
Illuminati's Razor-The most complicatedly evil answer is usually the most correct answer. - Fazor
"Every book is a children's book if the kid can read." - Mitch Hedberg
"Distance doesn’t matter much in space, where if you just start a thing off with the right kind of shove, sooner or later it will get where you want it to go." -Frederik Pohl, Mining the Oort

Actually it's not. You can have a hundred cranks making predictions about the economy and out of that hundred a few of them will appear to be accurate entirely through chance. A good track record in this case consists of not trying to make predictions from sets of data that are often basically random walks. Think of him as a doctor who advises a patient that to be healthy they have to avoid smoking and junk food and get regular exercise, rather than a witch doctor who can predict the day you'll have a heart attack. Basically, the question is does he act like a scientist or like a woo-woo? And to my knowledge, in his professional life, he has always acted like a scientist.

That's the problem, most economists act like scientists working from completely different theories, and I don't know enough about them or their subject to say which one's right, if any.

__________________
"If this were play'd upon a stage now, I could condemn it as an improbable fiction."
Shakespeare, Twelfth Night
Illuminati's Razor-The most complicatedly evil answer is usually the most correct answer. - Fazor
"Every book is a children's book if the kid can read." - Mitch Hedberg
"Distance doesn’t matter much in space, where if you just start a thing off with the right kind of shove, sooner or later it will get where you want it to go." -Frederik Pohl, Mining the Oort

I imagine this is how many people feel about the lunar hoax issue. I would suggest two things. Look at their credentials and see if they are a working economist or simply a lobbyist, shill or woo-woo. And also check if they are giving their professional or personal opinion. And if they represent an institution you should consider the reputation of that institution. For example do they represent Harvard or the United States government?

Nicely done!

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The Devil offered me power. I told him I preferred aperture.

Thank you, but please note my two examples are only examples. It's up to the reader to decide how trustworthy those individual institutions may be. I don't want people to conclude I'm passing any sort of judgement here, reguardless of what I may personally think.

Which was exactly my understanding: The Lady or the Tiger?

Or the Aardvark, maybe.

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The Devil offered me power. I told him I preferred aperture.

It's not the chimp.

I'm an economist. A lot of economic theories aren't too many steps up from reading the tea-leaves. Though it depends what you mean by theories. The theories are rather high level (if the price goes up, all else being equal, demand goes down - that's about the level of a theory in economics - it doesn't produce a prediction to 6 decimal places like a theory in physics, indeed the best it usually does is predict the sign of a number). At a lower level I think we have methods rather than theories. And the main shortcoming of the methods is lack of information. (What is the sensitivity of demand for X to price, not just now at the current price, but at all times at all prices? Be nice to know that but you never do.)

At the largest scale, eg, the whole-economy models which central banks and national finance ministries use for setting their macro policy, the models typically used are known to have shortcomings, for the following reasons.

Pe