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The Fed’s Killing the US Dollar Behind the Scenes
Things have gotten very ugly for the US Dollar.
Up until last week, the US Dollar looked as though it might be staging some kind of a rally with a series of higher lows. However, we never quite made it above resistance but have taken out the multi-month trendline instead.
Worse still, we’ve seen a new lower low formed, which indicates the upward momentum (however small) has been broken. We now have only two lines of support standing between the US Dollar and all time lows:
This is quite a development as stocks have been showing pronounced weakness over the last month or so. And typically when the markets switch to a “risk off” mode money pours into the US Dollar.
But then again, we have the Fed still juicing the system behind the scenes:
As you can see, aside from a brief dip at the beginning of July, the US monetary base continues its near vertical trajectory, which tells us that the Fed continues to print money despite QE 2 ending.
It’s not much of a surprise, the Fed knows how to do one thing only: print money. However, the fact the Dollar is showing so poorly while Europe is taking a hit is a major warning that all is not well with the greenback.
I’ve long said that we were heading into some kind of inflationary collapse. We might get another round of deflation first (courtesy of Europe imploding), but the end result will be the same: the US Dollar falling when the US defaults on its debts.
On that note, our FREE Special Report titled The Inflationary Disaster explains not only why inflation is definitely coming to the US financial system, why the Fed will be powerless to stop it, and three investments that absolutely EXPLODE as a result of this.
All in all its 14 pages contain a literal treasure trove of information on how to take steps to prepare AND profit from what’s to come. And it’s all 100% FREE.
To pick up your copy today, go to http://www.gainspainscapital.com and click on FREE REPORTS.
Good Investing!
Graham Summers
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In this interview, Sir Goldsmith discusses the ramifications of free-trade agreements that were about to take place in 1994 (GATT), as you can retrospectively see, he correctly predicted many of the things that happened after that.
http://www.youtube.com/watch?v=YW6KkF6aa_A&feature=related
Quem deus vult perdere, dementat prius
The Bernank must be wandering if he will need more than 15 minutes to reverse dollar collapse.
That was starting to look Like an ascending triangle techncially, now she is looking very very sick yes.
I have to say that obamas lies are catching up with him. Just like that guy from http://www.forecastfortomorrow.com said. Obama been preaching for months that we are getting better, what a moron. I know that people say us americans are dumb but I beg to differ, the internet is an amazing place and many people are waking up in droves. Yes the system is collapsing, but people are waking up. It was bound to happen!!!
yeah people are waking up to watch the show... dumb? understatement...
Welcome to AOL Time Warner Taco Bell US Government.
Laura Tyson See Start of a `Lost Decade' for Many Americans
She was a spokesperson in favour of GATT, arguing with Sir James Goldsmith on Charlie Rose that American jobs will be increased by the trade agreement. Now that traitor is saying that displaced workers face lost decade.
LAURA TYSON; Candidates for Obama's Inner Circle
BEING CONSIDERED FOR A top economic post, possibly in a return tour as director of the National Economic Council.
WATCH AND EMAIL TO ALL
A prophetic interview with Sir James Goldsmith in 1994 Pt2
http://www.youtube.com/watch?v=SZTzPmn-87w&NR=1
73.6 on the Dollar Index looked like a significant point of support last night, but they took that out about 12 hours ago.
Trying to hold somewhere between 73.45 and 73.5 at the moment.
73.466 right now.
Its always been very simple to understand:
Think of a country like the U.S.A. like a super big company. If your company cannot sell enough products to pay their bills you have to lower the price of your product right? Obviously, the USA can't lower the price of its products but pices fall naturally through currency change. The Fed is accelerating this process, but with their help or not it was going to happen. As long as our trade deficit and current accounts deficit are negative it will continue.
Too many BMW's, Sony's, and Donzi boats being bought and not enough John Deere's, 747's, and F-16's being sold.
This is all so absurd. Buying more gold and miners. But, I do think they raise the debt ceiling, for six months. And then, we take the same ride again.
No. I think there are enough players who want the population decimated (including members thereof) to actually send it over the side this time. Without emergency rules changes (which would require a 2/3 vote!), I no longer believe they can actually get a deal done before the "soft default". The question then becomes: When does prioritization begin, with what, and where?
Even free reports are cutting back. This time we only get 14 free pages instead of 17. On the serious side,
The Fed is doing their job devaluing the dollar. They may avoid a technical default by currency depreciation, but in the eyes of creditors,
it a default all the same will be treated as such by those who hold our debt. I believe China's dealings with Iran is just the beginning of
retributions against the U.S. for their obvious attempts to devalue the dollar. Other costs of the Fed's policy are inflation and increased
interest costs on the debt. The only other option to killing the dollar at this stage would be default and even a partial U.S. default would
wreak havoc on the world. A rock and a hard place.
here some links to related discussions.
Finance as the Humpty Dumpty of Academia
by Steve Keen on July 21st, 2011 at 10:00 am
http://www.debtdeflation.com/blogs/2011/07/21/finance-as-the-humpty-dump...
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[KR167] Keiser Report – Mass Psychosis
Posted on July 26, 2011 by stacyherbert
http://maxkeiser.com/2011/07/26/kr167-keiser-report-mass-psychosis/
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many thanks to the many struggling and shedding light
on the dark path. saints i say !!
When the debt ceiling is finally raised in any form, there will be a massive run into the new US Bonds, be it for short term (1/2 to 1 year) foremost. Not defaulting and at the same time cutting spending, or at least so in the perception of the markets, reinforces the US gov. So all the doomprophets will have something(s) to explain then.
There has to be, even if there's a naked print into them. Remember: They have to "repay" $300,000,000,000 into the Federal retirement funds liquidated to keep the dog-and-pony show going.
Doom prophets!? And in the last 3 years why didn't anyone on Capitol Hill make a serious effort to reinstate the Glass Steagall Act? Rob Kirby earlier this month rightly pointed out the banks have racked up a fresh $244 TRILLION in derivatives in his story Derivatives: A Capital Markets Gong Show For Whom The Bell Tolls with direct links to the OCC Quarterly Derivatives Report Q1/11. That's 20x greater than all the money in the entire world! If even a fraction of that collapses were f***ed. The FED has helped us climb higher on the proverbial cliff from which to jump. The next crash is game over.
The know that the new bonds (and at 1 to 2 year) will force the US to pay for them no matter what. Also housing is continuing down and it's not getting better.
We can't depend on any of those in power here, to do what's needed. But other countries could help to push for needed changes Globally, by returning to a de-facto Gold Standard. Actually this is the easiest part:
A "How To" on reverting to a Gold Standard:
Countries receiving US Paper in Payments simply immediately Exchange that Paper into Gold and Silver.
Hugo Salias Price wrote a great article on this
16/June/2010
The gold standard: generator and protector of jobs
What with the value of the FRN plunging, wages being stagnate, real estate crashing, food and petrol prices skyrocketing, I cannot afford any more FREE REPORTS.
Naw, they are pretty much doing it out in the open.
Why do we even worry about the debt ceiling, default, or downgrades to U.S. Debt? The FED has the ability to print, print, and print; effectively devaluing the debt and the underlying currency. What doesn't one of the rating agencies declare the U.S. Treasuries in default? According to their own rating criteria if one is forced to receive a haircut involutariliy, then the debt is in default. The FED has basically defaulted on our debt long ago. Why do we need to raise the debt ceiling, when an outside monopoly (AKA FED) can create money out of thin air without any approval by the voters, congress, or any branch of government. This will end very badly.
http://dont-tread-on.me/feds-16-trillion-dollar-secret-slush-fund-props-...
Craemer says Dominoes is a "Global pizza power." He also promoted Wallmart and McDonald's.
How can this man promote the vendors to the poor and claim the economy is recovering? Easy. He's a tool of the MSM and Wall Street.
Because vendors to the poor will do well. Every day there are more poor and fewer middle class. Domines, Mickey D's, & WM sound like pretty secure investments...with maybe a little Family Dollar and KFC thrown into the mix.
I thought Taco Bell was going to be the ultimate winner in the fast food category
"Now all restaurants are Taco Bell..."
As I've stated before in regard to the debt ceiling debates, I think there are factions in government/finance in Europe and the USA who want to collapse the USA and European economy to preserve Euro-American hegemony (and neutralize the Chinese) by killing the US Dollar and possibly the Euro as well.
The scenario, I think, will go like this:
1) No debt ceiling agreement is reached.
2) Congress dithers for weeks or months as the government meets fewer and fewer of its financial obligations.
3) Eventually, the bond market panics. The USA’s debt is now unfinanced by China, et. al. exacerbating the government’s crisis. The panic spreads to Europe where the Euro dies a noisy death.
4) The shrinkage of government money tanks the economy of the USA. Deflation follows rapidly. The Euro becomes yet another failed fiat currency.
5) Through QE3, QE4, QE-forever or some other method, the government starts printing money in dollar denominations and injecting it into the economy in any way it can until inflation reaches Zimbabwe levels.
Result?
1) In the traditional fashion, the USA has hyper-inflated its way out of dollar denominated debt.
2) New currency is issued, but wages and prices in the USA are now realigned with BRIC and Chinese standards, making the American economy competitive on price.
3) The Chinese must either keep their currency pegged to the dollar, making it worthless and causing major political upheaval at home, or let it rise, making their export market much less competitive, which suppresses their economy.
In short, China is de-fanged while America and Europe are given breathing room while they still have military power, and oil is plentiful. The alternative, waiting 10 years for the inevitable default, would simply give China and the BRIC countries overwhelming military and economic advantage.
If pain it inevitable, better to take it sooner rather than later, if it takes your enemies with it.
Put yourself in the position of the "old money" elite in the USA and Europe vs. the upstart and uncooperative Chinese elites. If you were old money, what would you do?
excellent comment
Buzzkill man, pure buzzkill. With all my assets in dollars, I so hope you are wrongo - but I've got my wheelbarrow lubed, just in case.
Bad news, Ian. TPTB don't give a flying F about the long term future of USA Inc. Globalization - an ancient Jewish project - means the end of "the Time of Nations" (Levinas) and replacement with universal kosher gulag.
"If pain it inevitable, better to take it sooner rather than later, if it takes your enemies with it."
Settling back into the easing/money printing regime has the following benefits:
1. China must actively manage pernicious inflation, eventually leading to the de-peg and hopefully internal conflagration. The whole middle east control structure including their backward religion, pukes chunks and has a renaissance.
2. The see saw game with the G7 FX can continue for years.
3. Pain, like death is inevitable. It's best to postpone both to the extent possible.
USDX took out 74 support recently...73 is next...after that, the abyss
Graham
You are the best person I know at stating the obvious. Your indepth analysis is on par of an intern at CNBC.
Yes but he has to write for the general audience and his words are music to my ears.
stating the obvious helps solidify the view of reality, otherwise you may be baffled with bullshit.
Manipulation of the dollah is something that will keep you awake nights, so if someone will tell me where I can find some of this to insure a good nights sleep... as advertised on ZH.
http://c2462832.r32.cf0.rackcdn.com/653_405_meg145x110.jpeg
Those currencies are inflated
They have figured out the next global currency already. By use of IMF's SDR, they think they can have their cake and eat it too at everyone else's expense. Welcome to the new global hidden tax scheme.
Actually, ZH already debunked this...
http://www.zerohedge.com/article/no-there-nothing-strange-about-surge-adjusted-monetary-base-past-two-weeks
IMHO both of you are a half right, monetary base is exanding and will continue due to fractional reserve banking,,,,where 1 dollar turns in ten,, ELECTRONICALLY. So they are not printing money.
Things will get much uglier. Remember, Barry's lead economist, Larry Summers, stated two years ago "the only way out of this recession is to drive exports via a weaker dollar."
So far, we have seen Timmy and The Bernank agree with him 100%.
And now we see more people then ever before stashing what's left of their retirement savings into gold as shown by this MSN Money article:
http://money.msn.com/mutual-fund/gold-bullion-for-your-ira-smartmoney.aspx
Even the prestigious U. of Texas Employee Retirement Fund bought Billions of physical gold!
I am not a goldbug but am giving all this careful attention. If teh Fed decides tocontinue with Larry's plan, the dollar may go much lower.
GL!
You might want to make a decision. The time for decision based on "careful attention" passed a long time ago. The dollar cannot be saved no matter how much spending cuts they enact. That tells you the clock is ticking.
I disagree with this title. The dollar is being killed by The Fed right before our eyes.
Dead right there. There's no subtlety to it at all.
WOOP there it went, da dollar!
Woop there it goes, gold!
That's all you need to know. Weee!
http://2.bp.blogspot.com/-temNqVmsOQE/TiypHoHRJPI/AAAAAAAAAII/KVIdO9-ZQx...