Forex Trading Tips

Notwithstanding the ever-present worry that the Chinese and the Russians, even the oil giants of the Gulf region may begin to run away from the dollar in panic at any moment, the dollar seems to be doing reasonably well against its peers, given how severe the deterioration of the U.S. finances are.

Let€™s put the picture into perspective: the American government is now counting in trillions, not in billions as it used to do in the past, when discussing the financing of its grand schemes. The nation is busy with pursuits in Afghanistan, a nation-building effort in Iraq, and a war against an elusive, shadowy entity called €œterror€. Unemployment is at ten percent and rising. Once the envy of the world, the American finance complex is totally disgraced at home and abroad, as the once unflinching defenders of unbridled capitalism more and more embrace the various discredited mechanisms of socialism in fear of complete economic collapse.

Meanwhile, the government is attempting to expand various social benefit programs which are already cases of future bankruptcy unless greater taxes are imposed on the electorate, and that, of course, is an impossible task in this economic environment. Finally, as Americans keep considering imposing much tighter regulation on all aspects of financial speculation, the speculators themselves are looking at places beyond Europe and the U.S., to locations like Singapore, Shanghai, and Hong Kong, where the various factors of economic freedom, and a business-friendly atmosphere (not to mention a corrupt bureaucracy that can be made to bend for the correct amount) ensure that there are a lot of opportunities to be exploited.

So how does the dollar still hold at where it is, and the sky doesn€™t come crashing down on the American econo-shambolics, taking the whole edifice of the global economy with itself down, plunging us into a decade-long chaos? It doesn€™t happen because nobody wants it to happen. Americans essentially created the world order as it stands, and as people realized that it was impossible to defeat them, they decided to cooperate rather than fight, which means that at the moment there is no corner of the world free from the catastrophic implications of the collapse of American capitalism, should it indeed occur. A monopoly is usually a bad thing. The absence of competition means that when the single version of the product used by everybody proves to be deficient, there€™s no entity in possession of a good one that will keep functioning. Such is the case with American financial hegemony. When all that we had was the American system, and everybody looked to New York to hear the unerring pontiff of free markets speak, errors would be regarded as manifestations of genius, and so they were.

As such, those who anticipate a sudden and general dollar collapse are usually unaware that the end of the dollar is the end of the global financial system as it stands today. Could anyone really expect free trade, and the culture of free competition to survive, in the short term, if its main building block, the dollar, were to be discredited completely? Obviously that cannot happen. We don€™t imply a dollar collapse to be impossible at this stage, but only suggest that its collapse would be a true global economic catastrophe from which just about everyone would be harmed to a great degree. The Lehman Event gave a pre-taste of what could happen if the system did indeed crash. Authorities and most economic actors are aware of this, that€™s why, for now, the dollar, and the system are being maintained by them. In short, we don€™t believe that the dollar will collapse anytime soon, and argue that when it does, we may simply find out that there was too little of it after all in comparison to the amount of euphoria, debt, and good will financed by it all over the word.