Here is what I believe will happen before the US Dollar (US$) takes a big plunge in value:
I believe that the dollar (US$) is ripe for a really big devaluation, just like Mexico did right after NAFTA was signed.
I can see 1 New BUCK (NU$) equal to say 100 “old” dollars (US$), that way we would reduce our foreign debt by 100 times OVERNIGHT… This could only be done when the Dollar (US$) is very high because then the rest of the World would have to accept it because they are holding all our paper money. US COLA adjustments to Social Security and or Medicare would be “fuzzy” as all adjustments are. The FED would be seen by most as helping the US economy as many things would have to be adjusted but it would all be done in the name of US domestic financial security!
Another way this could happen is if the FED simply dumped a hundred times as many “newly created” dollars (US$) into the marketplace over a weekend. I like the first scenario since an added benefit to the US would be that all the Billions in bogus or the illegally gotten money would have to be declared to be exchanged to New Bucks (NU$). Additionally these New Bucks (NU$) would be traceable with new state of the art anti-forgery technology, which would save the US Billions of dollars (US$) annually due to forgery. The other thing that this would do, is that it would prevent the value of Gold and or Silver from skyrocketing because face it, cash is much easier to use than very valuable coins. If nothing else, this new monetary “coinage” (NU$) would allow all the other Countries to then readjust their own “coinage” and thereby delay everyones conversion to a new “globalized” commodity (Gold or ???) standardized currency OVERNIGHT…
For me, the signs are coming into place:
The Japanese Are Dumping Their Gold
With China starting to accept the Japanese Yen without any relationship to the dollar later this Summer
China and Iran are now trading in Oil without converting to the dollar (US$)
So the time is ripe now, before the US does not have this BIG option any longer, because we are the Worlds greatest consumers and everyone is holding our paper, this gives the USA an option that no other country now has at least until the dollar (US$) starts to tank…
BTW: What is your favorite “safe” currency, not counting the Dollar (US$)?