Here is an interesting post from Daneric...I hope he is wrong about the pound !


http://danericselliottwaves.blogspot.com/2011/06/elliott-wave-update-8-june-2011.html

 1. The Euro will break up before any dollar crackup. Its simple really: You cannot have monetary union without social, fiscal, or, and no one ever mentions this one: military union. United Europe is a big illusion and a sham foisted on the people by unelected autocrats who will get whats coming to them (thrown out of their jobs when the Euro fails). How this Euro breakup effects everything is unclear. Obviously countries will go back to their own currencies and some will win big and some will lose big.

2. The YEN will experience hyper-inflation before any danger of the dollar doing so. The average reader thinks this is crazy because you have been ingrained with Japanese deflation for 2 decades now.  The Yen is not the world's reserve currency although its a very important one.   But it will lose first against King Dollar. Japan leads. Their deflationary cycle may not be over but it is closer to being over than many think.  In any fiscal panic over the next few years, the Yen is in danger of collapse.  The Japanese have been so used to (in effect) printing and getting away with it, they will ultimately pay the price first.

3. The Chinese Yuan. If you trust the Chinese for anything you are a fool, particularly their banking system. Selling defective, fraudulent products, ripping off intellectual property, cyber attacks, no basic freedoms, polluting their environment for the enrichment of a select few.... The rot and corruption is great. I admire Chinese hard-working people but the government and its corrupt institutions should be abolished with extreme prejudice.

4.  British Pound. For hyper-inflation to occur, you must first be able to isolate a currency vis-a-vis all the rest. Zimbabwe and Weimer Germany had hyperinflation because they were isolated as currencies. It was possible for other choices.  I argue mostly the dollar simply cannot be isolated at this stage.  That is why I think the Yen would be more vulnerable first.  But even more so vulnerable is the Pound.   It probably can be isolated. Therefore the Pound is probably a major candidate for hyperinflation in any financial collapse.  The Brits will have a harder time than Americans giving up the nanny state!

I know I left other major currencies out such as the Indian Rupie, Australian dollar (I think will do well) and others but I don't have a strong enough opinion at the moment.

CONCLUSION:  So you see, its not that I am in love with the fiat Dollar, its just that all the rest have their own extreme problems that are likely worse than we have going on with the dollar.

A currency can never be looked at in isolation unless it can be isolated!. This is the mistake that people make with the dollar. And they never have a better solution as opposed to the dollar.  And yes gold and silver (physical) are always nice, but they have and can confiscate it, devalue it at will, or outright ban bartering with it in the name of "social order".   So to say its the ultimate solution in a thoroughly fiat world at this stage is vastly premature.  But then again, it has survived the test of time.