As Sound as a Dollar: They’ll Write This on the American Tombstone.

 

 

The US Government, and the Federal Reserve Bank, has flooded the world with dollars and its continuing, willy-nilly, to flood the world with dollars and the consequences of this suicidal plan is looking like the total destruction of the American Currency!  It’s one thing to have a run on a bank, or even on most of the banks: a depression is no fun, but it’s an order of magnitude worse to have a depression and add the abject destruction of the American currency. 

Many people have become accustomed to horrific economic news such as US Bonds essentially paying no interest and frightened investors, around the globe, buying our debt for no interest just to ensure the security of their capital.  That’s horrific news folks.  The Nationalization of Banking, elements of insurance, and now the Automakers is stunning horrific news and spells the death of our traditional economy and government.  We are now very much a socialist state no matter how we may try to deny it and now we work for the government who probably now owns our mortgage note instead of employing a government to work for us.  Government has become Mommy, Daddy, Priest and Pastor in addition to Uncle Sam and is now the lender, employer, and morality enforcer of last resort as well.  In a stupid attempt to hide from us the consequences of its mismanagement its thrown dollars at every problem and as Obama’s ex-pastor might say: Americas chickens are coming home to roost.  This is horrific news.  Massive stock market spikes and crashes of nearly a thousand points have become unremarkable.  Horrific news has become the norm; we’ve come to expect it and accept it and thus we can be sold anything by the “experts” managing the crisis and we’ll go along with it.  That’s the most horrific news of all.

When the Dollar means nothing, and the world figures it out, there’s going to be lots of anger against Americans as the world dumps its worthless dollars thanks to the irresponsible conduct of the Federal Reserve and both Bush and Obama administrations.  Capitalism will be blamed and our standard of living will be adjusted down sever orders of magnitude. 

Its like signing trade deals with the world where other countries can produce for MUCH LESS than we can and expecting that the rest of the worlds wages will rise to parody with American wages.  Baloney.  Our wages will be achieving parody with the rest of the world and we’re fools if we don’t see it.  Socialism finds the lowest common denominator and our way of life is going to steadily fall until we cant remember what we threw away anymore. We can’t compete with other nations who can produce goods and services for a fraction of what’s needed to produce them here:  Its only common sense.  If we want to compete with the world our standard of living is unsustainable.   

We’re going to see a time when, like Germany after World War I, you need a wheelbarrow of thousand dollar bills to buy a loaf of bread.  I think the situation in Germany was mismanagement but the situation, when our dollar breaks, will be officially assigned to mismanagement but I think it’s deliberate at the very highest levels of the economic cabal that runs the economy of America.  The Congress and various administrations have served as useful idiots as our government, swollen to ten times its proper size, usurping power reserved to the people, staggers about throwing gasoline on the economic fire that will ensure the death of capitalism and democracy. 

I repeat:  the thing to watch is the US Dollar.

When the dollar falls so will our pretence of being a market economy and the new socialist government will be a wholly owned subsidiary of the Federal Reserve and we’ll go from being citizens to employees of the United States in the blink of an eye.  We’ll do anything the government says to maintain our unsustainable standards of living and our government will use that to utterly usurp, at our expense, and future generations, absolute power on earth. No one will dare say a word. When some of us figure it out: it’ll be well past the speaking out stage. No one morns the loss of freedom of speech who refuses to hear the people crying a warning now, about the world to come because it’s too uncomfortable.  We Americans have degenerated to the point where we don’t ask our politicians the hard questions because everyone is afraid of the hard answers.  We don’t want to know what we’ll have to sacrifice to get through this economic mess and talking about it is discouraged as defeatist and fear mongering. No one morns the loss of freedom of speech if their own little world is kept at least marginally serviceable and in the end this marginal middleclass living is the price we’ll have paid for selling America’s very soul.  God help us.

Consider this article I found on Bloomberg: 

Read the whole article at this URL: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3f._bJvEaZU

 

Dec. 15 (Bloomberg) — The biggest foreign-exchange strategists and investors say the best may be over for the dollar after a four-month, 24 percent rally.

The currency weakened 5.9 percent measured by the trade- weighted Dollar Index after strengthening between July and November as investors bought the greenback to flee riskier assets and repay dollar-denominated loans from lenders reining in credit. Ever since peaking on Nov. 21, the dollar fell against all 16 of the most-widely traded currencies, according to data compiled by Bloomberg.

U.S. policy makers are flooding the world with an extra $8.5 trillion through 23 different plans designed to bail out the financial system and pump up the economy. The decline shows that the increased supply of money may be overwhelming investors just as the government steps up debt sales, the trade and budget deficits grow and de-leveraging by investors slows.

“The dollar will go to new lows as the U.S. attacks its currency,” said John Taylor, chairman of New York-based FX Concepts Inc., which manages about $14.5 billion of currencies.

“We’re at a turning point in terms of dollar dynamics,” said Jens Nordvig, a New York-based strategist at Goldman Sachs, the biggest U.S. securities firm to convert to a bank. “The dollar shortage has been addressed and we’ll see people start to focus on other things and those are all dollar negative.”

After rising from $250 billion in September and October, dollar cash positions at U.S.-based banks have stayed at about $800 billion since Nov. 1, according to Nordvig.

Robert Sinche, the head of global currency strategy at Bank of America in New York, the third-largest U.S. bank, says the dollar is bound to weaken because investors are starting to focus on traditional measures of value such as relative interest rates, budget deficits and trade balances.

As more loans are repaid, there is less need for dollars, forcing investors to value the currency on metrics such as relative interest rates, budget deficits and trade balances. By those measures, the greenback should weaken, according to Sinche.

“A lot of the reasons why the dollar went up are not sustainable and have started to disappear,” said Sinche, who predicts the currency will weaken to $1.44 per euro as early as March 31. “Bad news about the U.S. economy is beginning to be bad news for the dollar.”

The U.S. economy may contract 3.9 percent this quarter and 2 percent in the first three months of 2009, according to the median estimate in a Bloomberg poll.

“Rapid deterioration in the U.S. economy, coupled with the adverse effects of monetary and fiscal stimuli, do not bode well for the dollar,” Citigroup strategists Todd Elmer, Michael Hart, James McCormick and Aerin Williams wrote in a report from New York on Dec. 12. The New York-based bank “foresees short- term dollar weakness, against both Group of 10 and emerging- market currencies,” they wrote.

We’re seeing that correlation between equities and the dollar break down,” said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG, the world’s biggest currency trader, according to a 2008 Euromoney Institutional Investor Plc survey. “The fact that the dollar is weakening in this environment probably tells you a bit more focus is coming back on the fundamentals of the U.S. economy.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s