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Some Additional Opinions On The Consequences Of The Dollar's Imminent Demise
If you missed David Malpass' great op-ed in the WSJ earlier, we suggest you read it. For those pressed for time, David summarized his thoughts on what the ongoing dollar deterioration will do to the economy in the following CNBC clip.
Additionally, some very key thoughts on why dollar may very well be already finished, and what this means for the US, here is a must watch clip highlighting the views of Gerald Celente of Trends Research Institute (h/t Shanky)
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The Dollar is dead! Long live the Dollar!
Basically Bernanke is telling the American sheeple to spend their greenbacks now while they are still worth something (which is why retail sales, stock prices and home sales are picking up) before the dollar keeps tanking to new lows and eventually to the abyss. Little do the herd know that their house price and stock prices are also valued in USD.
I am not an imbecile!
I am Chumbawamba.
I agree, you're brilliant.
Have you had chance to answer this nice mans comment?
http://www.zerohedge.com/article/max-keiser-death-us-dollar-middle-class...
I am not an imbecile!
I am not Chumbawamba.
Celente: "Iceland, Argentina, the USA"
sadness
anger
I know the saying goes "the market can stay irrational longer than you can stay solvent" but what if the whole market is actually rational like it is when it comes to the dollar? How long can 99% of the investing community stay rational? It makes sense from a fundamental perspective to be short the dollar like everyone is trumpeting, but how much downside is left when 99% of the people out there are already bearish, including the joe shmoes out there buying gold plated coin replicas off of tv?
One way trades always end up in tears, but may stretch until there is an Ocean size of tears to drain.
It does not take that much to reverse the 99% bets, a geostrategic event, interventions to support he USD, etc....
History has been full of these.
Wikipedia = Custer
I think you are quite right about that. I think the only reason the dollar can stay this low is Bernanke is doing the trick. it will not solve the US problem by lowering the dollar.
You would think that logic and reasoning will prevail in the market. many times, you will be surprised.
Good point.
Everyone likes to think it's cool to be a "contrarian", that is, until it comes to walking across a busy intersection. Then they are happy to go along with the crowd when the sign says "walk".
Sometimes doing what the crowd is doing keeps you from getting run over by a bus. The herding instinct developed for a reason.
I have a saying:
"A lone monkey is a dead monkey."
cougar
The herding instinct is of no use when you are in a herd of lemmings about to be chased off of a cliff!
yep, but that is why someone came up with the bumper sticker "NO FEAR". Three words would have been to many for most folks to read and understand too.
As far as speculative positions go 99% of the people are not short USD, %50 are short %50 are long. Also, the reason why speculative crowding isn't as big a deal in currencies is because currencies have a natural long position build in: however many dollars are floating around. Dollar-Credit is the corresponding short position to that. But credit can be defaulted on or the ratio of money-credit can be increased by the CB, or it can be monetized, etc. etc..
The reason why a currency can be a crowded trade and still work is the fact that the majority of the longs are natural longs who hold USD reserves and cash balances, and if inflation expectations get un-anchored money-demand can fall in a self-reinforcing cycle and people will start exiting those natural long positions for other assets/currencies.
The attack on sterling, the rubble, the peso etc. back in the day were all crowded speculative trades and look what happened anyway.
That is a great point actually, the contrarian strategy does not really apply to currencies as it does to equities as the supply side is much greater than just the investing public.
With all the new foreign ownership of the US of A, would it be easier just to paint red stars over the white ones on the our military's equipment and uniforms . . . I'm not sayin', I'm just sayin' . . .
Gerald Celente rocking the scarf!
I am Chumbawamba.
Watch out for well dressed guys.
http://www.youtube.com/watch?v=mCE5VbgpP3I
Too funny.
Celente looks and sounds like he has gone "off the deep end".
What gives with the Buddhist monk costume under the sport jacket? Wierd...
I'm pretty sure Celente was heavily into Acid in his younger years.
What a surprise, another goldbug on ZH.
He's a contact marshall artist, may have somthing to do with his garments
..... But the question is Does the sartorial critique invalidate the financial prediction ?
Methinks not.......
........
Maybe it is a sling for an injured arm.
It is far too late to save the USD. Trust, once broken, takes a long time to restore. And there is nothing backing the USD but trust.
Don't forget the 82nd Airborne.
What are we going to bomb them with, dollars?
Trust is relative.
Who do you trust more when the choices are all absolutely untrustworthy? Who do you trust in the dark? Who do you trust during a gunfight?
Different answers to all of those. The "trust" of the US government will be won or lost on the battlefield of relative measures.
cougar
When will all those AUD/USD carry trades come home to roost?
Breifing.com reported that no fewer than 5 identified asian central banks were buying $$ to temper the fall and stop their currencys' rally.
And so it beings. The start of this was the Aussie ER that was stronger than expected. Right or wrong on that, who knows still the perception is down, and AU is hitting peakes- backwardation or not.
As with every government asset purchase in history, if asian CBs are buying $$ then it emboldens those wishing to sell since they're guaranteed a buyer.
Edit: oops..i thought i knew how to insert a picture here. :((
Gerald and David, why do you hate america by speaking the unvarnished truth. Haven't you realized our way to prosperity is lying, illusions, chicanery and obfuscation? There will be a nice cell for you in Guantanamo for you and all the dissidents, traitors and terrorists.
Get with the program Mr. Celente and Malpass.
America FUCK YEAH! Printing and devaluing our way to prosperity.
Cheers,
Pigpen
And so it beijings
From the oped: when pursuing a devaluation strategy, "capital outflows overwhelm the trade flows"
I guess the concept is just too rooted in common sense for anyone in the government to take notice. I'm sick and friggin tired of smarter-than-thou economists who spend all their time telling folk not to believe what their eyes see.
Currency going down means money leaves that country. For all that we pick on Japan for their lost decade lets take away two positives that we could only dream of: no one questions whether they can sell all their debt, and their cost of living has been stable or declining thanks to the Yen. Boo-ya
Remember five things in this order of importance; Water, Food, Shelter, Security, and Transportation. Good luck.
I would add happiness.
Thanks, I needed that. Debbie Downer here. Sometimes, watching this slow motion train wreck is too much to bare.
That's actually 6 things Marley... personally I'd place 'good luck' first.
Can anyone give me an example of a country whose interest rates have FALLEN while its currency is being destroyed?
Is this the black swan that quant models can't understand.
Japan has had strengthening currency with its declining bond yields.
Cheers,
Pigpen
Happy to oblige:
"Zimbabwe continues to have negative real interest rates. These rates discourage investment and production but aid undesirable levels of speculation and in turn aid and abet inflation."
DM, not what I wanted to hear. Any non banana republic ruled by a dictator countries?
Cheers,
Pigpen
Sorry about that, I thought you were looking for countries like the US, which is now a banana republic ruled by a government no longer representing the people (i.e. like a dictatorship). If you're looking for countries that are not like it, then unfortunately I can't come up with any examples that have led to such failures.
If it walks and talks like a lame duck, it is a lame duck.
Yes Pigpen, the United States circa 1930 - 1932, at which point the dollar was revalued and gold was declared illegal for a private citizen to own.
Yes, it's going to be fun too see some of the posts when that day comes again.
"Obama declares gold ownership illegal"
All gold sales are halted.
A new gold price is set by the US treasury ($190/oz).
Gold is forfeited by individual and commercial owners and they are compensated at $190/oz for their booty.
Doh! Buy gold!
in other news...
Zerohedge reports the black market for gold is now $17,000/oz.
History destined to repeat itself.
http://masters-of-photography.com/images/full/bourke-white/b-w_living.jpg
Oh, it already has, watch this video.
http://www.youtube.com/watch?v=cV2ngvYI_ZU
...One of the ways a country gets out from under its debt burden is to devalue."
you see, Americans, the US administration, and Bubblenanke particularly, think about YOU, about YOUR debt.
as for the foreign creditors, well, who gives a f about those basket cases.
American debt users, don't be so ungrateful to YOUR SAVIOURS aka the US administration, and Bubblenanke particularly who keep devaluing YOUR debt burden via printing money.
I think you have it backwards, dude. In real terms, lower interest rates mean your debt burden just went up, as the aforementioned debt obligation was likely undertaken during some previous timeframe when deflationary forces were not at work.
More people got wealthy by accident during the 70's during inflationary periods because they were paying the bank back with inflated dollars.
The devaluing currency is actually crippling middle America. Dollars will flow abroad because they are cheap, meanwhile the principle balance in real dollar terms of all those HELOC's are going up as deflation reigns.
"More people got wealthy by accident during the 70's during inflationary periods because they were paying the bank back with inflated dollars."
don't you think that the US administration, and Bubblenanke particularly, are trying to cause that accident again, dude?
printing money ain't really a rocket science
It's a devaluation not a death.
If the dollar really did die then we are all in world of sh*t. A world that would be completely unrecognisable to one in which we currently live.
Who says that's out of the question??
Seriously, the way people have their undies in a bunch over the delicining dollar now may be the time to go double long.
I bought some UUP the other day, just to hedge the PM holdings.......
Isn't it nice how when he brought a rational intelligent argument the interview was immediately terminated?
It really isn't, but I completely understand your sarcasm.
Yeh, did you hear the emergency red phone start ringing. TPTB called and told them to kill the interview. Too much truth getting out.
That's why, rather than wasting my time listening to the bullshit on CNBC, I simply scrolled down to the comments. Celente, on the other hand, is always entertaining and worth a few minutes.
Another opinion on the decline of the dollar from Jesse's Cafe Americain:
http://www.youtube.com/watch?v=X5GEU5F_WdA&feature=player_embedded
Some insightful commentary from Dan Norcini over at Jim Sinclair's website:
http://jsmineset.com/2009/10/08/hourly-action-in-gold-from-trader-dan-172/
It's a race to the bottom... The FED prints money, the dollar depreciates... foreign countries see their export industry threatened (they are all irrationally wedded to promoting exports)... soon other central banks will also begin printing their own currencies. That won't be a tough decision to make, because which government doesn't want to print money with abandon? The appreciating dollar is a PERFECT excuse.
Eventually, what will happen is that ALL fiat currencies will be called into question by citizens around the world. Watch for precious metals to skyrocket. I see no bottom to the crisis until a new, stable currency regime is put in place.
If it's a race, it's a slow sort of one. We've been on this trajectory since Nixon dumped the gold standard in 1971.
One could I suppose argue that it takes 40 years for something like that to rev up, and that now we're just starting to feel it, and the worst is sure to come and quickly. But I'm not so sure we've seen the end of the game just yet, or what it might look like. I have the sense this could play itself out for another 40 years, though I'd probably not recognize the world at that point (assuming I'm still extant.)
cougar
As always, I agree with cougar.
"ALL fiat currencies will be called into question". Maybe but they won't be replaced by gold.
If USD is replaced it will be replaced by a plastic card like a credit card. That is what this government wants because the plastic card will make all transactions visible and ultimately taxable.
What the US government wants, the US government gets.
Can't use plastic. Oil too expensive to make it soon. Would you settle for ochre?
Hydrated iron oxide, haha yea I get your point but do you get mine?
Goldbugs get squashed once again, dollar survives, dominates, and mutates so .gov has finite control.
Malpass dissapoints me. He was laying out a good argument, but could not close it. I mean, really, all Obama has to do is change the wording from "a strong dollar is in our national interest" to "I want a stronger dollar" and that saves the dollar? Huh? Please, dude.
Want a stronger dollar? Ben has to start raising interest rates. Oblunder has to stop spending like a drunken Bush on steroids. Etc...
The Malpass article is fantastic, thanks for bringing it to my attention.
Is Malpass retarded?
jim willie is on a rampage today...he spells out the handwriting on the wall in today's excerpt....
http://www.kitco.com/ind/willie/oct082009.html
mene mene tekel upharsim
if folks don't own gold they fucked....
Jim Willie suks Gecko ball sachs.
So Einstein, if you own silver you're fucked, if you own land that you bought correctly you're fucked, if you have other tangible assets that have value you're fucked???
You goldtards are out in the stratosphere. Please stay out there and play among yourselves.
Malpass gets it so right.
I use technical analysis.
My monthly indicator for the USD is still giving bullish warnings.
Will the USD rally when DOW bear market rally ends ?
VIX index also continues to give bullish warnings (bearish for stocks)
I warned of an impending stockmarket crash back in early *2007*
www.zerohedge.com/forum/market-outlook-0
How does Celente keep getting on TV? He just repeats the same talking points over and over and even those are far too general to be interesting, let alone useful.
Excuse Celente....I think he just came off the set of the new movie/remake that's in the works---Kung Fu II. It looks like he's playing Master Poo, but without the contact lenses.
I remember in the late 1990's when the carry trade got unwound in a single day. The yen went from 140 to 118 in a matter of hours (or maybe days, but it sure seemed like hours).
Given how crowded the dollar short trade is at this moment, I would not be all that surprised if......
Of course Bernanke "stands with us" to make sure such a thing could never happen again and the inexorable long term collapse of the dollar, which is apparently in all of our best interests, is a no-money-back guarantee.
Interesting stuff. But be careful with Russia Today - it's pure propaganda
even compared to CNBC