Reply #49: The 2 charts in this article are true eye openers. Especially seeing [View All]

[54anickel]

the money supply expansion in so many nations.

As long as foreigners continue to accept our paper dollars they have very few choices on what to do with those dollars. They can either convert those dollars into their own currency or invest those dollars in U.S. If they convert those dollars into their own currency their currency would appreciate sharply as a result of the size of those dollar surpluses. This would put and end to their trade surplus which could in turn drive their economies into recession. The other alternative is to invest those dollar surpluses into U.S. dollar assets fueling asset bubbles here in the U.S. in stocks, bonds, mortgages, and real estate, which is what they are now doing. The result of these trade imbalances is that dollar reserves or dollar liquidity keeps expanding at an exponential rate....

Since the breakdown of the Bretton Woods, International Monetary System total international reserves have increased by more than 2000%. They are now growing parabolically at a rate of $1 million a minute and now approximate roughly 2% of global GDP.