| sep 28 2007 | | Death of the Dollar. | Has anyone even noticed that the dollar has decline below 78? This is a major correction with disastrous consequences.
The dollar is dying and the markets go up. If the dollar were a horse you would take it around the back of the barn and shoot it. Instead the Fed is pleased to let it endure the death of a thousand cuts.
It is the USGovt. intention to let the dollar decline. Depending on your definition of decline, I’m saying it will sink into oblivion.
What does this mean? As I said in previous posts the declining dollar is inflationary as imports will cost more. And you thought the Fed was there to manage inflation. These are the people who are creating inflation by running the printing presses. Now you see why they stopped publishing M3. So everything imported into the country like raw materials as well as finished goods cost more and increases inflation for the average Joe and Jane. If you want to believe the government figures out today claiming inflation fell in August by 0.1% you can. I prefer the real world. The flip side is that exports are cheaper abroad and therefore they can sell more. If only that were true. After years of shutting down their manufacturing capacity and shipping it overseas they no longer make anything. Same goes for services like call-centre, design, I.T. all shipped overseas.
So what happens to investments? Well there are two scenarios. Either there will be a 1930’s depression that will grind inflation out of the system, or the stock market will take off to the stratosphere, as is happening today in Zimbabwe as hype-inflation takes hold. Either way a lot of pain is about to descend on most families.
If you know me at all then you will know what comes next. With gold up another $10 an ounce today it is the only way to protect you from the coming storm.
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