I always seize this opportunity to rejoinder: "If I knew, I'd be on a yacht off the Isle of Man snorting blow off a stripper's ass." The irony being, of course, that when I respond thusly I usually am snorting blow off a stripper' ass, frequently on a yacht (or some reasonable facsimile thereof, such as a well-appointed catamaran with fine leather and granite finishes). Ergo: I do in fact know when the shithouse will go up in flames. And, feeling charitable towards humanity on account of the solicitous ministrations I am presently receiving (even as I write) from a stripper (the backside of whom I have just availed myself of to snort blow), I will herein reveal it to the general public.
First, consider that the final collapse of the dollar is equivalent to the price of commodities approaching infinity. And when the price of commodities approaches infinity, any ratio with commodity prices in the denominator will, of course, approach zero.
What if we could find a ratio that loses a constant value every year, such that its zero on the time-axis can be easily extrapolated?
My data goes back 23 years, so I am looking for a ratio (1) whose linear regression fits the data well over that period, and (2) has the same linear regression line no matter where you start or end over that 23-year span (e.g. 1990-2013, 1994-2012, 1990-1995, 1990-1999, 2002-2007, 2002-2013 etc.). If such a ratio with commodity prices could be found, extrapolation would be justifiable.
It would also be nice if this ratio had some fundamental significance. For example, if the dollar collapses, it will almost certainly collapse because government debt has become unmanageable and needs to be monetized. The easiest way to maximize the life of the shithouse, then, is to lower interest payments on the debt in real terms as gradually as possible, until you can't do so anymore.
Well, look no further, we have our ratio.
The $TNX:$CCI ratio tells you how much real crap (in units of "CCI baskets") the government has to pay you every year for borrowing your $1000. That ratio has been going down constantly at 0.016 baskets per year for 23 years. But remarkably, it has also been going down ~0.016 baskets per year over just about every decent-sized "sliding window" you can pick over that 23 year span. For clarity, I've drawn only three regression lines on the chart below. First the 23 year regression line (dark blue), then the 1990-1999 regression line (black) and then the post-2002 regression line (pink, center).
Now we just need to extend the light-blue regression line to see that this ratio hits zero in mid-2014. The parallel lines around it (something like 1 and 2 standard deviations shorter/longer) tell us it could happen as soon as 2013 or as late as 2016.
Or perhaps interest rates really will go negative, and this process can continue . . . forever. Soon we will be paying the government all our income for the privilege of lending it to them. Kind of like North Korea.