[quote]John S. wrote:
The dollar will go down some, then up some, but will never regain its past status. That’s it! The soundclip had the same music as “9/11 truther” videos do. That’s embarrassing. And yes, I listened to the message, he’s got to be wrong. It starts now (insert scary music)
The dollar lost ground mainly against the Japanese yen today. You have to realize that the yen is also losing, when compared to other asian currencies.
Both will rebound when GDP goes up, and GDP will go up.
[quote]archiewhittaker wrote:
The dollar lost ground mainly against the Japanese yen today. You have to realize that the yen is also losing, when compared to other asian currencies.
Both will rebound when GDP goes up, and GDP will go up.[/quote]
This assertion is meaningless as it stands. Without time or scale measures, you eventually get the “broken watch” scenario.
Yes, GDP will go up. The question is when? How soon? By how much? Next year? Next decade? I had a wager with John S a month ago about a reversal in both Gold and the dollar. The time frame was approximately 60 days. I conceded within 30, as once certain benchmarks were passed, these markets were likely to remain on course for a period of time.
I too believe that the dollar is due to begin a rise very soon. There are so many people in this risk trade that at some point it has to be unwound. And when that happens, the move is likely to be violent as shorts cover and the smart money climbs back in on the other side. It needs to happen soon though, or the damage done will be horrendous. Also, I belive that the scenario I am describing will not involve rising GDP.
And then again, I could be wrong…
The dollar won’t recover till it has something backing it. The problem is, is that if we do back the dollar with something we won’t be able to print money to fund our welfare and warfare state.
China and India are dumping the dollar. If it continues to get lower expect other nations to follow.
would guns and ammo be a bad investment at this point?
[quote]StevenF wrote:
would guns and ammo be a bad investment at this point?[/quote]
only if they become illegal to own or taxed
[quote]dhickey wrote:
StevenF wrote:
would guns and ammo be a bad investment at this point?
only if they become illegal to own or taxed[/quote]
Why?
That would be a sign that you need them soon
Schiff is hitting the panic button for no reason. It is highly unlikely that the dollar will collapse. That is because no one who has the power to make that happen, China, Japan and other foreign dollar holders wants it to happen. It is not in their best interest. Why bankrupt your best customer? Instead, the dollar will probably decline gradually, as these countries gradually find other customers.
[quote]ZEB wrote:
Schiff is hitting the panic button for no reason. It is highly unlikely that the dollar will collapse. That is because no one who has the power to make that happen, China, Japan and other foreign dollar holders wants it to happen. It is not in their best interest. Why bankrupt your best customer? Instead, the dollar will probably decline gradually, as these countries gradually find other customers.[/quote]
In order for the dollar to stay alive they will have to keep loaning us money. We can’t pay back what we owe now. Why would they continue to throw there money after ours?
China has been saving, they are perfectly capable to start consuming.
[quote]orion wrote:
dhickey wrote:
StevenF wrote:
would guns and ammo be a bad investment at this point?
only if they become illegal to own or taxed
Why?
That would be a sign that you need them soon
[/quote]
That would make them a bad investment. They would still have utility. You wouldn’t need a collection, just a couple. Easier to hide a couple.
Edit - I have many more guns than I need right now. If they became illegal or were taxed excessively, I would thin my collection to the ones I really needed.
[quote]ZEB wrote:
Schiff is hitting the panic button for no reason. It is highly unlikely that the dollar will collapse. That is because no one who has the power to make that happen, China, Japan and other foreign dollar holders wants it to happen. It is not in their best interest. Why bankrupt your best customer? Instead, the dollar will probably decline gradually, as these countries gradually find other customers.[/quote]
If we keep printing money, the dollars they are keeping off the market and the debt they hold will continue to lose value. How long to you think they will let that go on? Forever?
[quote]dhickey wrote:
ZEB wrote:
Schiff is hitting the panic button for no reason. It is highly unlikely that the dollar will collapse. That is because no one who has the power to make that happen, China, Japan and other foreign dollar holders wants it to happen. It is not in their best interest. Why bankrupt your best customer? Instead, the dollar will probably decline gradually, as these countries gradually find other customers.
If we keep printing money, the dollars they are keeping off the market and the debt they hold will continue to lose value. How long to you think they will let that go on? Forever?[/quote]
Forever, or until the Chinese revalue their currency and/or start selling their dollar holdings. Whatever comes first.
[quote]John S, aka Henny-Penny, wrote:
The Dollar is Falling!!! The Dollar is Falling!!! OMG!!! The Dollar is Falling!!![/quote]
Good.
[quote]tme wrote:
dhickey wrote:
ZEB wrote:
Schiff is hitting the panic button for no reason. It is highly unlikely that the dollar will collapse. That is because no one who has the power to make that happen, China, Japan and other foreign dollar holders wants it to happen. It is not in their best interest. Why bankrupt your best customer? Instead, the dollar will probably decline gradually, as these countries gradually find other customers.
If we keep printing money, the dollars they are keeping off the market and the debt they hold will continue to lose value. How long to you think they will let that go on? Forever?
Forever, or until the Chinese revalue their currency and/or start selling their dollar holdings. Whatever comes first.
John S, aka Henny-Penny, wrote:
The Dollar is Falling!!! The Dollar is Falling!!! OMG!!! The Dollar is Falling!!!
Good.
[/quote]
Its like you guys all come back at once.
Currencies are driven by interest rates; specifically, they’re driven by interest rate differentials. Once US short-term rates start moving up vis-a-vis other currencies, you’ll start to see the dollar appreciate. You may also see the dollar advance due to European-regional issues (witness todays %1.4 move in the dollar due to concern over Dubai). Either way, there’s no official “reserve status” hat that the dollar wears - or has ever worn - it simply is the currency that most of the world chooses to hold. That being said, there is no better single currency. A very good case could be made for a central bank to hold currencies in equal weighting to their foreign trade, and that alone accounted for a large percentage of the weakness in the dollar/Euro during the early part of this decade.
[quote]John S., aka Henny-Penny wrote:
tme wrote:
dhickey wrote:
ZEB wrote:
Schiff is hitting the panic button for no reason. It is highly unlikely that the dollar will collapse. That is because no one who has the power to make that happen, China, Japan and other foreign dollar holders wants it to happen. It is not in their best interest. Why bankrupt your best customer? Instead, the dollar will probably decline gradually, as these countries gradually find other customers.
If we keep printing money, the dollars they are keeping off the market and the debt they hold will continue to lose value. How long to you think they will let that go on? Forever?
Forever, or until the Chinese revalue their currency and/or start selling their dollar holdings. Whatever comes first.
John S, aka Henny-Penny, wrote:
The Dollar is Falling!!! The Dollar is Falling!!! OMG!!! The Dollar is Falling!!!
Good.
Its like you guys all come back at once. [/quote]
And you just hate it when anyone calls you on your constant hysterical squawking, don’t you?
[quote]Dr. Pangloss wrote:
Currencies are driven by interest rates; specifically, they’re driven by interest rate differentials. Once US short-term rates start moving up vis-a-vis other currencies, you’ll start to see the dollar appreciate. You may also see the dollar advance due to European-regional issues (witness todays %1.4 move in the dollar due to concern over Dubai). Either way, there’s no official “reserve status” hat that the dollar wears - or has ever worn - it simply is the currency that most of the world chooses to hold. That being said, there is no better single currency. A very good case could be made for a central bank to hold currencies in equal weighting to their foreign trade, and that alone accounted for a large percentage of the weakness in the dollar/Euro during the early part of this decade.[/quote]
Points well made.
I have been watching the DXY closely for the last few months. I like the look of this little move off of 74.21. Most of the worlds attention has been on us (U.S.) for the last year. By this, I mean all of the negatives that have occurred. It was a chance for the rest of the world to pat themselves on the back and say, “Look at the high and mighty U.S. Look how they have fallen.” With their new found self esteem, they have neglected to take a look in the mirror. Yes, it is bad here. But it is no better elsewhere. I am concerned that maybe Dubai is just a prelude.
We are the economic engine of the world. When we catch the flu, it spreads. I have the bad feeling that China is not as sound as we been lead to believe. I am reminded of the cold war and the opinion that the rest of the world had about Russia and its position as a military power. In the end we discovered that they were conducting parades with what amounted to card board cut outs of missiles and weaponry. I am not saying that China is this bad. I do have my doubts though.
I also have my doubts about gold at these levels. Again, it reminds me of oil about a year and a half ago. It was going to $300-$400, no question. And then…
Today, everyone is talking about how gold is going to $2000-$5000 an ounce. People with no investing knowledge at all are asking me how do they buy gold. Even John S, who I admire for his thirst for knowledge and his enthusiasm, is talking about restructuring his student loans in order to by gold and silver. I consider John to be very intelligent, but this kind of behavior screams to me that the top is very near.
Let me give you a scenario that you can laugh at if you choose. Everyone talks of gold as being the only true money. I get it, but only to a point. If you are using it as an investment vehicle, or a hedge and are diversified, go for it. But if you are buying gold coin and such to use as real currency in the event of an economic meltdown then think it through very carefully. This is not the middle ages. Commerce is not set up to run on gold. If things got so bad that paper money was worthless, who is going to take your gold? The government would have already seized it by this point and made its possession illegal. And even assuming they did not, what would you do with it. If things were that bad, most trade would be reduced to the barter system on the local level. You can’t eat gold. My family is hungry and you offer me either a gold coin or a chicken, I’m taking the chicken.
I am not the smartest man in the world, this forum, and maybe even the room I am setting in now. I am just suggesting that folks think things through from multiple perspectives before they hitch their boxcar to any particular train.
When the gold bulls start approaching 90% or greater, watch out for a bear market.
I agree with Dr. Pangloss.
Right now, I think the value of the dollar is more or less bracketed. The British pound never went to zero when it stopped being held by most countries. Neither will the dollar.
Also, like you said JEATON, we suck, but other countries suck just as hard if not harder.
There is some good news for the dollar. It did what I did not expect it to do and it rose back to 75.50.
It could be from speculators or it could be something else, will be interesting to see what it does over the next month or two.
One thing we did learn from the dollar going below 75 is that the sticking point isn’t there.
Edit*
Gold took a massive hit too, -40.
Will be interested to find out tomorrow what happened, after 9 days of highs it had to have a low day sometime.
Wouldn’t be surprised if this is the start of another dollar rally.
Just hold off on those gold and silver purchases for a bit, friend. Feel it out a few days.