This page has been archived and commenting is disabled.
The Dollar Will Collapse Within 3-4 Months
The US
Dollar's inflationary death spiral continues. We've now taken out the 2010 low
leaving only two more lines of support before we're in completely uncharted
territory.
At its current rate of collapse, the US Dollar will do this within the next 3-4
months. This means the greenback will break into a new all-time lows by 2H11,
which will precipitate the coming inflationary collapse.
Small wonder then that both Gold and Silver recently hit new highs for their current
bull markets. With the greenback dropping like a rock, and rumors of QE 3
swirling around the financial community, what sane investor would bet against inflation?
On that note, now is the time to be shifting capital into inflation hedges. Those
who buy Gold and Silver will likely do very well in the coming months (my
personal view is Gold will clear $1,500 and Silver $40 this year).
We’re also
going to be seeing an increased wave of buyouts in the natural resources sector
as larger firms look to increase their resources via mergers and acquisitions
rather than spending the money to find and develop new mines.
The natural
resources sector will also benefit as large institutions (pensions, mutual
funds, etc) finally begin piling into inflation hedges across the board. Given
how little exposure the Big Boys have to inflation hedges even a small
percentage of assets under management, shifted into these sectors, could result
in sharp price spikes.
In other
words, buckle up, cause things are about to get REALLY interesting.
Good Investing!
Graham
Summers
PS. If
you’re getting worried about the future of the stock market and have yet to
take steps to prepare for the Second Round of the Financial Crisis… I highly
suggest you download my FREE Special Report specifying exactly how to prepare
for what’s to come.
I call it The Financial Crisis “Round Two” Survival
Kit. And its 17 pages contain a wealth of information about portfolio
protection, which investments to own and how to take out Catastrophe Insurance
on the stock market (this “insurance” paid out triple digit gains in the Autumn
of 2008).
Again, this
is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com
and click on FREE REPORTS.
PPS. We ALSO
publish a FREE Special Report on Inflation detailing three investments that
have all already SOARED as a result of the Fed’s monetary policy.
You can
access this Report at the link above.
- advertisements -
tee hee hee JP mucus -- like that one
If there is QE-3 in the air, it will encourage USD decline. Benocide is now hitting the inflation button hard. So $ decline is in the cards. The only question is when....
Dollar certainly has problems which could arise very soon, then again, if Europe tanks...
If the Euro tanks, does that extend the life of the dollar (flight to safety), or does it accelerate its collapse (OMG! if it can happen there, it can happen here!)? I wonder which way it would go...
Well, if the USD dies in 3-4 months time, that means the euro will die in 1-2 months time.
Or 5-6 months. The central bankers haven't finished writing the script yet.
The dollar will not collapse within three or four months; this is ridiculous nonsense; written by a person who has no experience, and no knowledge of major equity markets.
Nonsense?! You think Weimar Germany 1919 to 1923 can't happen here? We have printed more dollars in the last 2 years than all the dollars printed in the preceding 234 year history of our country. About a year ago 53% of interest payments went to foreign holders of our debt, today the FED has borrowed more than Japan and China combined. Interest is due on every bond and every loan, there is always more debt than there is currency to pay the debt. Every dollar printed is a promise to tax us until the day we die, because every dollar is borrowed into existence and it’s all promised back to us with interest. In other words the entire currency supply is owed back, plus interest.
Equities rely on affordable commodities, and many of those have shot through the roof. Bernanke blows smoke at us with low core inflation which of course excludes food and fuel. I don't see sales going up anytime soon, the moment they pull the plug on QE this lead ballon is going to drop like and anvil. There is a damn good chance the bond market will tank first. We are so far out in uncharted waters now, in 45 years I have never seen an environment like we have to where so many different factors could cause the global economy to fall off a cliff. P/E ratios are still over inflated and dividends are at all time lows.
People compare this to the depression but consider the following:
During the great depression the US:
There is good chance of deflation, there is also a good chance it will be followed by run away inflation because Bernanke is committed to printing currency while calling it something else.
Fed is under enormous pressure to NOT have QE3! Instead they will hint at a long term "strong dollar" policy...good luck to all the silver speculators - which is getting ridiculous. Who will buy all the T-Bills?...all the enormous money in emerging markets, the yen, the euro, the market, PM - you name it - the whip saw will be unreal...short high yield bonds and risky "too the moon" assets and go long dollar...re-name this site "one-side hedge"
Precious metals won't collapse until every Tom Dick and Harry own a few grams.
Just like they did with real estate.
Just like with the dot.com bubble.
Just like they did in the last precious metal's market.
Rinse and repeat. It's always the same, and people are like "it's just too easy for it to be the same, if it always repeated, everybody would do it!"
Not when there is 24 hours a day 7 days a week propaganda telling you to do the wrong thing.
Empty Rhetoric = IQ145 - 55
Agree with JohnQPublic.... You can give no facts to this support position?
Anyone who has to flash his (supposed) IQ is certainly lacking in other areas -- if ya know what I mean (wink, wink).
The first time I saw his handle, my "douchebag meter" pegged out and he went on virtual ignore. Now if he would have called himself IQ 63 and then made intelligent posts? That would have been clever.
You'd think a fella with a 165 IQ would know that.
the avatar does beg for it doesn't it
there you are....where have you been hiding....for iq145, you are not too bright. they aren't talking about dollar to 0....just collapsing below previous trends (and then on to 0).....
oh yeah, fukushima is all clear. i think you should visit and report back to us, oh all knowing master....
I think its a bold call and I have to wonder why. However, I do think when the dollar collapses or high/hyperinflation begins it will happen rapidly...at some point. I think a lot of countries and big players would like to exit the dollar under the right conditions.
IQ145 didn't read carefully. The author did not say, "The dollar will lose all value within three to four months"; he said "the greenback will break into new all-time lows by 2H11".
Whether you consider breaking to new DX levels a "collapse" is a different question. Terms like "collapse" and "hyperinflation" get thrown around with no consensus on what they mean. Marc Faber has said that if the USD should lose 50% of its value in a year, that would constitute hyperinflation in his view.
Whatever you call it, for the dollar to lose half its purchasing power in a year would be a calamity. The currency manipulators would say, "The dollar is stronger against the EuroCharmin". So what? You can't eat iPads, or Euros either.
certainly, a new low is possible... but eventually with the nature of the fed the dollar would have to rally back as assets suddenly collapse.
It's like the story of the lady that nursed a snake back to health and the snake bit her. In her final hour, she asked "i nursed you and healed your wounds: why did you bite me?"
The snake replied; "look bitch, you KNEW i was a snake."
During periods of very high inflation, not every asset inflates at the same rate. Non-liguid assets such as real estate and natural resource properties commonly do not keep up with inflation and often even go down in nominal value. That's the time to trade highly liquid assets such as gold or even currency that still has some respect for these assets. Farm land usually becomes a grossly undervalued asset then as do factories.
Thats right.
Most people who agree with the inflation scenario dont understand that real estate falls in NOMINAL value during incipient hyperinflation.
Yes, but it still beats sleeping under a bridge.
And youre under the delusion that the FED's plan is to RESCUE us...not the obvious plan to anyone with a brain its DESIGNED to collapse?? You actually believe all this TARP, then QE shit was designed to HELP us? My God man youre delusional.
+1
ultimately their goal is to acquire assets cheap. they create a psychological market force of anxiety over the currency; then people leverage into assets; then a 'sudden' and violent collapse triggers the margin calls.
who the HELL would trust this market where it is today. you might have some upside for a few months, but ultimately i think the overall goal of the fed is to create an environment where those dollars buy MORE assets in the future, not less. Simply based on the group think notion among the alt media that the fed is trying to print money to create inflation, so they can ultimately raise rates and pay more money to passive savers (retirees, retired folks.. of which is a much higher percentage now than historically). We saw what happened in 2007; rates didnt get too high, did they? then they crashed.
i dont think bankers are in business to do charity work for governments; i think they are in business to loot, pillage, and steal the assets of said governments.
Wow, our Government Fucking the People. They starve the poor and middle class with high Food and Gas prices, while making them work for lower wages to buy those needs. All the while, forcing them to give up their land and houses on the cheap so the elite bankers can buy them on the cheap. Where will all the street people sleep and live? Will the steet people need to steal from the rich to live? Looks to me like America is Fucked by the CBs and the FED. America is becoming a fourth world nation.
YOUR RIGHT, I GIVE IT 2 MONTHS
.
reasons why?
"At its current rate of collapse"
Why would one expect this? It will speed up, slow down or reverse but not stay the same for three or four months. I don't disagree with the end result just with the precise nature of the schedule. It degrades the crdibility of the analysis to frame it that way.
Agreed. Putting a timeframe on it is silly, and quite a bit irresponsible.
Besides -- the Fed has many more tricks up it's sleeve. If the dollar began to collapse in an uncontrolled fashion, (which is certainly possible) the Fed would just tank equity markets and chase everyone into dollars.
So far Pheonix and Madhedgefund trader are a couple of sources Zero Hedge refers to that seem to always make my spidey sence tingle warning me of danger when reading their work.
i wiill wager the dollar is HIGHER in 3-4 months.
low rates are a means to an end, not designed to create inflation (where the banks have to pay high interest rates to passive savers), but to ultimately create DEFLATION (bubble economics). That's why nothing bernake does makes sense... their interests are the OPPOSITIE of the US gov't, and the US taxpayer. US administrators go along and announce to the people that these moves are correct because they are entirely bought off and corrupted.
The fed benefits from deflation, not inflation. they are the lender; they are a private institution w/ private interests. todays economic environment is a farce; with the illusion of inflation, but not all assets are appreciating; meaning the core is speculation, just like the housing bubble.
once we see a threat of a new administration, THEN we'll see armaggedon in the stock market. The obama admin is the bubble gum holding together the apparatus. early 2012.
.
66SEXY, you say the dollar will be higher as valued in... what? Other FIAT currencies? Will the dollar be higher in oil, gold, silver, corn, rice, etc? The problem in a blanket statement about the dollar being higher is that you need a qualifier as to what the dollar will be higher in.
pure speculation, but i'd say mainly stocks and real estate; probably end up up against most other currencies. imo what we are seeing now is a metamorphosis; growing pains amid fx manipulation, which could inevitably be a huge dollar rally... if for no other reason than history. stocks are a bubble, THE bubble now. They defy gravity, the fundamentals of the economy and the market do not support the performance; which means the performance is internventionalism. interventionalism will lead to a collapse as it always does; most likely with a "regime change". I predict the market will 'lead' the event, and we'll start seeing the selloff after the short term dollar bottom.
ultimately, who knows? but history says dollar up and stocks down eventually because thats how they roll. usually, extremist views like "dollar collapse" don't happen; and the end result is the opposite.
to be honest there is too much group think regarding the 'dollar collapse' a big dollar rally would take everyone by surprise. i am wary; and play both sides by holding dollars and physical metal.
well said
Federal Reserve notes are notes made by the fed.
The more they make, the more they can use this capital to control markets.
The Fed has nothing to loan really - what assets do they really have to back up their loans?
Sorry, I don't understand. How does the fed benefit from deflation? Please explain.
Answer to newbie - Inflation benefits debtors (makes debt easier to pay). Deflation benefits creditors (the money that is repaid has more purchasing power.)
How anyone can think US dollars will increase in purchasing power LT is beyond me.
"once we see a threat of a new administration,..."
I think I heard that in 2008
Not even 2008 changed the long term trend of the dollar.
Nobody really thinks the dollar will collapse in 3 or 4 months which means its a contrarian play. I even seen some people here say they are betting on a higher dollar in the next 3 or 4 months.
I have to agree with you. Even though it should collapse doesn't mean it will. I expect it to yo-yo back and forth as "Euro-Disasters" will be played expertly against "US Inflation". We will continue to chase each other's currency back and forth, devaluing a little at each turn.
How long the game of global musical chairs will last is anybodies guess. 3-4 months? No way it shits out that quickly.
This is key.. I agree, we are a few headlines from Europe away from a USD rally. If the next QE is ostensibly shelved we could see a few months of deflationary pressure and Equity/Commodities should see a pull back.
This will only be temporary as many other fiscal disasters will come into view and gather attention. Early 2012 is when I see all fiats tanking to a degree that will change the landscape of things..
Hm, even less people expect the Euro, the Yen or Gold to collapse against the $ - so what's the REAL contrarian play here? Me thinks, a violent rally of the $ because there are ZERO fundamental reasons for such a move and almost everyone will be caught by surprise. next big move: a total collapse of the yen starting by end of 2012
+1