Wednesday, April 1, 2009
Monday, February 16, 2009
Dollar Update
The US dollar index rallied back after the sharp decline in early December. That was a very good thing to see, because had the dollar continued to fall lower, it could have triggered a run on the US dollar. And even though the US dollar index is back up near its recent highs, gold has managed to move up nicely anyways... so anyone who sold US dollars for gold is actually still better off, even though the dollar is currently quite strong.
Lindsey Williams appeared on the Alex Jones show again recently and made the prediction that the US dollar would collapse sometime in 2009. Before the dollar collapses, we still have to see the collapse in the Middle Eastern countries first. We are already seeing the signs of collapse in Dubai and I expect economic problems in this region to spread and intensify.
But even though the dollar has rallied back to a relatively high level on the dollar index... I am still certain that the US dollar will collapse at some point. If it does not happen this year, it will probably happen the next year, or the year after. But looking at what has been happening, i think there is a strong chance that there will be massive currency devaluation in 2009. The long term bond yields on US T-bills had a pretty big move up in January which is a sign that the bond bubble is now bursting. Even though many people will be betting on rising interest rates, the Federal Reserve has already stated that they are prepared to buy up the bonds to keep the rates lower. People like Marc Faber have been saying that shorting the long term T-Bills will be a good trade for 2009... i would have to disagree. It has been a great trade in January... but i believe that the Federal Reserve will prevent rates from rising to the level that the free market would otherwise push them. The Federal Reserve has already said that they are prepared to monetize the debt, which is means that inflation cannot be too far off. It is amazing how well the dollar is preforming in the face of trillion dollar deficits, stimulus spending plans and bailouts as far as the eye can see. Despite all this news, people have not yet lost confidence in the dollar for whatever reason. Obviously, the Obama administration will not be able to spend money endlessly without suffering consequences.
Even though I expect a collapse in the US dollar to occur this year, i truly hope that i am wrong. I do not think it will be fun to live though this event and its aftermath. But it will certainly be an interesting time to be alive to witness maybe the greatest economic collapse the world has ever seen. We should take every day from here on in as a blessing and use the time to prepare for what i believe is inevitable. Gold and silver are still very affordable and available... and there is still time to make whatever preparations are necessary to survive (and hopefully prosper) after the real collapse occurs.
Many people think that the crash already happened... as if the DOW falling to 8000 is some sort of big tragedy. Everything that has happened is just a lead up to the real crisis. In fact, this lead up provided a great buying opportunity to buy assets to crash proof a portfolio. Of course silver at under $10 was a great buy... but i still think that silver under $15 is still very cheap, considering it is still hard to get, premiums are still high, and the 2008 high in silver was over $20. Gold has preformed very well of course, and anyone holding a lot of gold should not have much to complain about.
Even though my views on the economy would be considered by most to be extreme and unlikely, Rep. Paul Kanjorski of Pennsylvania recently explained that in September 2008, there was an electronic run on money markets that almost caused the collapse of the entire US economy that day, and would have collapsed the entire world economy within 24 hours. Had the Federal Reserve and Treasury not acted quickly, we could have seen a total breakdown of civil society as we know it.
http://www.youtube.com/watch?v=_NMu1mFao3w
So if this is true... if we really were that close to the edge... it does not bring me much comfort to know that the morons who work the US Government and Federal Reserve are responsible for holding the entire world economy together. It sounds like they were able to stop the collapse this time... but i certainly do not have much faith that these idiots will be able to keep the system together forever. If the entire world economy almost collapsed within 24 hours back in September 2008... could the same thing not happen again? And what if next time, the market overpowers the government? What if the people in charge cannot stop it next time? I feel like things are really holding on by a thread here. But like John Williams (from shadow stats) had said about a year ago... these guys will do everything they can to keep the banking system functioning and prevent it from collapsing... if they are successful at this, it will prevent a global meltdown, but the result will probably be hyperinflation. And if we get hyperinflation and a collapse in the US dollar... a global meltdown might occur anyways.
Lots of bad things come out of economic hardship, particularly war and dictatorships. But the economic collapse will also present opportunity for social change. The hope is that the social change will be for the better, with a move towards greater freedom and less government, rather than a move towards totalitarianism control and war.
Lindsey Williams appeared on the Alex Jones show again recently and made the prediction that the US dollar would collapse sometime in 2009. Before the dollar collapses, we still have to see the collapse in the Middle Eastern countries first. We are already seeing the signs of collapse in Dubai and I expect economic problems in this region to spread and intensify.
But even though the dollar has rallied back to a relatively high level on the dollar index... I am still certain that the US dollar will collapse at some point. If it does not happen this year, it will probably happen the next year, or the year after. But looking at what has been happening, i think there is a strong chance that there will be massive currency devaluation in 2009. The long term bond yields on US T-bills had a pretty big move up in January which is a sign that the bond bubble is now bursting. Even though many people will be betting on rising interest rates, the Federal Reserve has already stated that they are prepared to buy up the bonds to keep the rates lower. People like Marc Faber have been saying that shorting the long term T-Bills will be a good trade for 2009... i would have to disagree. It has been a great trade in January... but i believe that the Federal Reserve will prevent rates from rising to the level that the free market would otherwise push them. The Federal Reserve has already said that they are prepared to monetize the debt, which is means that inflation cannot be too far off. It is amazing how well the dollar is preforming in the face of trillion dollar deficits, stimulus spending plans and bailouts as far as the eye can see. Despite all this news, people have not yet lost confidence in the dollar for whatever reason. Obviously, the Obama administration will not be able to spend money endlessly without suffering consequences.
Even though I expect a collapse in the US dollar to occur this year, i truly hope that i am wrong. I do not think it will be fun to live though this event and its aftermath. But it will certainly be an interesting time to be alive to witness maybe the greatest economic collapse the world has ever seen. We should take every day from here on in as a blessing and use the time to prepare for what i believe is inevitable. Gold and silver are still very affordable and available... and there is still time to make whatever preparations are necessary to survive (and hopefully prosper) after the real collapse occurs.
Many people think that the crash already happened... as if the DOW falling to 8000 is some sort of big tragedy. Everything that has happened is just a lead up to the real crisis. In fact, this lead up provided a great buying opportunity to buy assets to crash proof a portfolio. Of course silver at under $10 was a great buy... but i still think that silver under $15 is still very cheap, considering it is still hard to get, premiums are still high, and the 2008 high in silver was over $20. Gold has preformed very well of course, and anyone holding a lot of gold should not have much to complain about.
Even though my views on the economy would be considered by most to be extreme and unlikely, Rep. Paul Kanjorski of Pennsylvania recently explained that in September 2008, there was an electronic run on money markets that almost caused the collapse of the entire US economy that day, and would have collapsed the entire world economy within 24 hours. Had the Federal Reserve and Treasury not acted quickly, we could have seen a total breakdown of civil society as we know it.
http://www.youtube.com/watch?v=_NMu1mFao3w
So if this is true... if we really were that close to the edge... it does not bring me much comfort to know that the morons who work the US Government and Federal Reserve are responsible for holding the entire world economy together. It sounds like they were able to stop the collapse this time... but i certainly do not have much faith that these idiots will be able to keep the system together forever. If the entire world economy almost collapsed within 24 hours back in September 2008... could the same thing not happen again? And what if next time, the market overpowers the government? What if the people in charge cannot stop it next time? I feel like things are really holding on by a thread here. But like John Williams (from shadow stats) had said about a year ago... these guys will do everything they can to keep the banking system functioning and prevent it from collapsing... if they are successful at this, it will prevent a global meltdown, but the result will probably be hyperinflation. And if we get hyperinflation and a collapse in the US dollar... a global meltdown might occur anyways.
Lots of bad things come out of economic hardship, particularly war and dictatorships. But the economic collapse will also present opportunity for social change. The hope is that the social change will be for the better, with a move towards greater freedom and less government, rather than a move towards totalitarianism control and war.
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