There appears to be a chorus of people with very good resumes predicting that the dollar is about to fall. While the economic fundamentals for the U.S. dollar are dreadful, they have been so for quite some time. So, why are alarm bells going off now? Are we about to witness another pump-and-dump?

If so, you can bet that certain people behind the scenes will be on the right side of the trade. You can make money in any market if you know where it’s going.

Get Out Now!
Barron’s (05 Jan 2009)

Fed Has Abandoned Monetary Policy, Critic Says
Reuters (04 Jan 2009)

Former Bank of England Official Expects Dollar Collapse
GATA / The Telegraph (05 Jan 2009)

China Losing Taste for Debt From U.S.
NY Times (07 Jan 2009)

Gordon Brown’s Decision to Sell Half of the UK’s Gold Reserves ‘Cost UK £5Billion’
The Telegraph (07 Jan 2009)

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6 Comments

  1. So we have record foreclosures in America. Does anyone know when this foreclosures increase is going to stop? Have there been any signs of hyper inflation? Wouldn’t that increase foreclosures, and especially commercial real estate. Sorry about all the questions im confused and worried like the rest.

  2. My main concern about the supposed money crisis is the far too rapid consolidation of the banking industry giving people fewer options for which to shop for CD’d and rates for consumer loans. Granted, much of this crisis is because people have over extended their credit to asset ratio. Much of the wealth lost over the past year has been speculative on paper. The paper being traded wasn’t backed by tangible assets. Now we are printing money to cover for the loss of the paper wealth, which really wasn’t wealth at all, but speculative only in the eyes of the beholder.

    The money crisis is a concern to me because of how swiftly the government is moving to change the rules of finance. Paper wealth is not secure like tangible wealth. Unfortunately America needs to make more tangible consumer products and make less loans. We can’t continually borrow money and send it to China for their products and expect to have ample money supplies left for investments in new manufacturing capacity. I personally am investing in antiques because they are tangible and hold their value. Paper money has uncertain value because our government has an uncertain future.

  3. My old Econ prof. once said ‘Money is neither Created nor Destroyed. It’s just STOLEN!’ He’s 87 now and in Sept. told me quite emphatically to ‘put your 401k on the sidelines ASAP ’cause the men in black with the long knives are coming.’ (He called the minions of the Wealthy 1%-ERS ‘Wall Str. Ninja’. Their role was to create chaotic distraction in the market so a small number of investors could rob the market blind and get away clean.)

    China’s going to come out of this smelling like a Rose and the VAST majority of Americans will come out if stone cold BROKE. Capitalism has always been, is and will be under the Rule of the Jungle as opposed to the ‘Rule of Law’. How do we know this? The ‘Usual Suspects’ perpetrated the R/E, HiTech, SubPrime & Wall Street Bankers’ SCAMS who LOOTED & THEN ‘BAILED OUT’ the S & Ls. Follow the Money and look for folks with ‘Blood’ on their hands…like Paulson, Rubin & Fuld. Madoff is too obvious…Remember. Americans’ Missing Money is in the same old pockets as always.
    And OBAMA won’t do a darn thing about it, ’cause he doesn’t want to be up there with the DC Madam.

  4. I thought I hit the submit button, but my comment is still here in the text box so I’m going to try again. Sorry in advance if this is a double submission. Gary

    “So, why are alarm bells going off now? Are we about to witness another pump-and-dump?

    If so, you can bet that certain people behind the scenes will be on the right side of the trade. You can make money in any market if you know where it’s going.”

    Catherine,
    I understand the concept of pump and dump and have been burned by it consistently. In the context of the “dollar crisis”, I don’t understand what “they” might be pumping and what they might dump. In this case, they appear to be trying to scare everyone about the value of the dollar. What are they hoping I (the dumb public) might buy so they can sell it or vice versa?

    Thanks

  5. Brad:

    Excellent point. There is a lot more health and activity on Main Street than appears in the media, so I continue to get the sense that something is not right. That said, a lot of what is happening on Main Street depends on the US dollar-Treasury flow to continue. That flow is no longer economic — it is down to brute force.

    Catherine

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