US Dollar Situation Very Disturbing Development...

[zarni]

All of the economic indicators are not good and every piece of news that comes out continues the trend. We are headed for at the very least a serious recession and at the very worst a dollar meltdown on par with 1929. The fact the Feds stopped publishing the money supply statistics in 2006, the trade deficit, the war spending, the price of oil, federal deficit spending, non-farm payroll worsening and many other factors points to a serious economic crisis. The only person that has it right on the political landscape, Ron Paul, is ignored by the main stream media and doesn't yet have the votes to take the lead. His interrogation of the Federal Reserve Chairman during a recent congressional hearing showed the Chairman admitting that the current course isn't good and that the course needs to totally change. Ron Paul very nicely shredded Berneke (sp?). Then, the bail out, which is nothing more than turning on a computer, and typing in a bunch of zeros that have no value, so, all of our money is being devalued, lower spending power, etc....The Fed, The Treasury, The Executive Branch and The Legislative Branch have all lost their way and we're headed into bad economic times.

I have to say Bernanke is not the real culprit here. He happened to take over the helm when the stage had already been set for all this. The real culprit is Greenspan who presided over an era that will live in the economic history books as probably the most grossly mismanaged monetary policy of any central bank. It is so bad that I have serious suspicion that it was intentionally engineered as was the great depression of 29. These things are just a means of the ones in control to covertly transfer wealth.

In essence the Fed cannot do much at this point but try to save themselves by at least providing some additional liquidity in the hope that the collapse will not be sudden. This is what we see in the media Behind the scenes the bottom line is the government cannot afford to pay social security and is bankrupt for all intents and purposes. The only way out is a devaluation of the dollar. That means the middle class will be destroyed. Pensioners will end up having to get back to work...
The increase in liquidity masks the problem and does not solve it as the current problem is a problem in confidence, lack of transparency and lax regulations. However it serves their purposes.

I, as anybody in their right mind with a basic grasp of economics, do disagree with their course, however Bernanke is a slave to wall street. Effectively, he does not answer to Congress (the few Congressional hearings have shown Congress is not even capable of understanding him let alone lead a discourse of any value) as we are not the ones who elect him. So how can you expect him to protect the value of your dollar? He would be better off helping out his buddies on wallstreet who are losing their fat paychecks. Bear in mind the Fed is owned privately. It is a boy's club...

I for one have given up on changing the system. Save yourself as the government will not save you. If you can't beat them join them.

 

[bethetop]

can this be

How can/will this affect forex in future,? I want to know is it advisable to open forex acct with usd now ?:unhappy:

Hi there

This is Felix writing. In the middle of November of 2007, I had a gathering on a big yacht with 200 of our members. We discussed many things, but one of the things I suggested to people is to open bank accounts in Switzerland.

I suggested to people opening accounts with UBS, which at that time required a minimum deposit of only $100,000 US Dollars.

Today I received an email from my attorney who specializes in US Tax Law.

Here is exactly what the email said:

"I thought you would find this interesting: UBS is no longer accepting US clients…current accounts will remain, but no new accounts. This is an amazing development. There are other options, but most require large deposits ($3m+) from US clients."

This email sent a shiver of disturbance up my spine for the following reasons.

1. I am not sure if you knew this or not, but after the stock market bust in the late 1920s, the US Government passed a law, which made "gold holdings" illegal. They instantly confiscated everyone's gold, and gave them pennies of what it was actually worth, and whoever tried to buy gold again, became a criminal and was either heavily fined or went to prison. This was a desperate act of the government to inspire people to keep spending their money and stop them from hoarding it in other instruments.

2. I am not sure if you knew this or not, but just a short while back, in 2006, the US government stopped reporting the size of its money supply. That basically means that since 2006, it has been creating money, and nobody in the world officially knows how much money has been put into circulation. This means that the US dollars might be so overinflated in value than most people even realize.

3. In the beginning of 2008, Chinese officials have mentioned for the second time within a few months that they are holding too many dollars, and they would like to diversify their portfolio. Please note that Japan and China have been the two biggest parties buying up dollars, and their demand for dollars is what has kept it afloat.

4. Several times in 2007, and perhaps before that, there were serious suggestions made by some European country officials to set Euro as currency to buy and sell oil with. The fact that demand for oil has been high, and that in order to buy oil, one must buy it in US dollars, has also kept demand for dollars high.

So, to make the long story short, we have the US Fed printing as much money as they want, with nobody knowing how much exactly they have been printing, and I have a feeling that the supply of US dollars is increasing a lot more rapidly than demand for them. In addition to that, there are threats from many different parts of the world to hinder demand for US dollars even further.

Now, I hope you understand more clearly why that email from my attorney disturbed me. If a major Swiss Bank is stopping to accept US accounts, perhaps it's one of many preparation steps from US government to make sure its citizens do not get their money out of the country, in case there is another major financial crisis similar to the Great Depression.

This is just another suggestion that if you have a lot of savings in US dollars or other US instruments, I strongly recommend to take it out of the country.

According to the words of my attorney, it seems like Switzerland has shut its doors, but perhaps doors into some other European countries are still open...

Interested to hear your thoughts and suggestions.

 

[DaveO]

Bethetop,

The global financial credit crisis is tottering on the brink of the precipice. The whole pack of cards could go down at the next breath of wind. The situation and linking is Global. If the US of A crashes then the whole world is sucked into the ensuing pain. Indeed, much of the world is as guilty as the US for the current financial crisis. Therefor you have very little, if any, protection.

I personally try to deal mainly through brokers in the UK, simply because they are local to me and I could always go visit them if necessary with my shotgun under my belt. And I do not use them as savings accounts. i.e I leave only the required margin in the account to enable the dealing I anticipate. If my account grows I withdraw any excess to margin requirements.

It is blatantly obvious to you from this very intelligent forum discussion that you do not want to have your money tied up in USD and preferably not in the US of A. Try to avoid that in so far as you can and be aware that if we start to see a run on banks etc in the US the same thing will happen in many other countries.


Felix,

Did you realise your post would take on a life of its own LOL.


Zarni,

I now see where I confused you. My reference to the last industrial revolution exponential growth factor was purely to emphasise what is now happening in the world of Genetic Engineering. Yes it may be too late ! But hey comon lets try to find something that could save us at the eleventh hour. There is a massive "political, moral, ethical" roadblock which urgently needs removing.

Go study Dr J Craig Venter of the J Craig Venter Institute. Unfortunately his recent Dimbleby Lecture was edited but I witnessed the original live version and it impressed me. The radical content was chopped.

I completely agree with your comment re Greenspan versus Bernanke. I actually feel quite sorry for Bernanke The Greenspan era was disastrous.

Dave.

 

[goodtyneguy]

Gold & Silver the best low risk gamble this century.

The global financial credit crisis is tottering on the brink of the precipice. The whole pack of cards could go down at the next breath of wind. The situation and linking is Global. If the US of A crashes then the whole world is sucked into the ensuing pain.

Spot on IMHO.

I leave only the required margin in the account to enable the dealing I anticipate. If my account grows I withdraw any excess to margin requirements.

Applicable all times not just times of uncertainty. If you're broker goes down or their are any shenanigins going on your risk is limited plus the opportunity cost of keeping the unecessary monies with your broker has to be considered.

If the central banks' attempts fails to stop the rot such is the interwoven nature of the "financial weapons of mass destruction" as described by Warren Buffet, a global meltdown well occur. One more Bear Stearns could be the trigger either side of the pond.

The price of gold and silver will rocket as investors seek a safe heaven for their money. Varying degrees of fortunes will be made by those with these precious metals in their portfolios and if the meltdown does not occur there are still strong fundamental reasons to hold these metals. Inelasticity of supply and demand are not least of these reasons and it should also be remembered that silver has numerous industrial uses.

An excellent risk to reward ratio IMHO, a genuinly rare opportunity in life to become wealthy overnight if the worst occurs.

 

[zarni]

Spot on IMHO.



Applicable all times not just times of uncertainty. If you're broker goes down or their are any shenanigins going on your risk is limited plus the opportunity cost of keeping the unecessary monies with your broker has to be considered.

If the central banks' attempts fails to stop the rot such is the interwoven nature of the "financial weapons of mass destruction" as described by Warren Buffet, a global meltdown well occur. One more Bear Stearns could be the trigger either side of the pond.

The price of gold and silver will rocket as investors seek a safe heaven for their money. Varying degrees of fortunes will be made by those with these precious metals in their portfolios and if the meltdown does not occur there are still strong fundamental reasons to hold these metals. Inelasticity of supply and demand are not least of these reasons and it should also be remembered that silver has numerous industrial uses.

An excellent risk to reward ratio IMHO, a genuinly rare opportunity in life to become wealthy overnight if the worst occurs.

You should be aware that you will not create any wealth holding gold and silver with no leverage. You will really only protect the value of your wealth. Gold only rises vs the dollar. It actually is just a hedge to the dollar and moves up with weakness in the dollar. I guess one could say that is just semantics at this point. You could of course play the metals with leverage and do much better than just retain the value of your holdings.
I for one think the mining stocks are really undervalued at this juncture and should be poised to provide significantly better returns vs the metal. Another better way to get into the gold play is to buy coins which retain their value better during downturns in the general precious metals market.

 

[DaveO]

"Zarni --------You should be aware that you will not create any wealth holding gold and silver with no leverage. You will really only protect the value of your wealth. Gold only rises vs the dollar. It actually is just a hedge to the dollar and moves up with weakness in the dollar. I guess one could say that is just semantics at this point. You could of course play the metals with leverage and do much better than just retain the value of your holdings.
I for one think the mining stocks are really undervalued at this juncture and should be poised to provide significantly better returns vs the metal. Another better way to get into the gold play is to buy coins which retain their value better during downturns in the general precious metals market."
End quote.


The way I have played this has been to trade futures PM's as a part of my swing trading portfolio and transfer any profits from the PM's into the hard stuff. That way I have something very tangible and my attitude is purely that of "insurance". I recently closed a gold trade entered in late Jan 07 but I agree with you that the mining stocks have a lot of catching up to do with spot price and silver has potentially some ground to make up also.
Good advice you give imo.

Everything we care to discuss with trading relates to the individual personality and his/her psychy. We are all the same yet very different. This question is largely dependant upon whether there exists the will to save and to pay some premium for insurance purposes. Some folk posess a very high risk tolerance and others a very low risk tolerance, with anything inbetween. Me, I have lived through 3 uncomfortable recessions during my offline biz carreer and I can clearly remember how extraordinarily quickly things have changed on each of those events. Often there is not time to prepare ourselves for what is to come.

Dave

 

[goodtyneguy]

You should be aware that you will not create any wealth holding gold and silver with no leverage. You will really only protect the value of your wealth. Gold only rises vs the dollar

Hi Zarni, (with all due respect to you and your opinions) you will if there's a global meltdown, which is the main theme of my post. Look what happenned to the price when Bear Stearns announced it was insolvent! If the Fed and J P Moirgan had n't colluded to keep it afloat and in the process perhaps prevented a global catastrophe one can only speculate where the price would be now.

It actually is just a hedge to the dollar and moves up with weakness in the dollar.

What about the other fundamentals affecting the price common to every other tradable commodity and service, supply and demand? I think I'm correct saying that the price of gold has risen approximately 4 times since the start of it's current bull run, if your statement is correct then surely this would imply that the USD has lost approximatley 75% of it's value since then??

Me, I have lived through 3 uncomfortable recessions during my offline biz carreer and I can clearly remember how extraordinarily quickly things have changed on each of those events. Often there is not time to prepare ourselves for what is to come.

Dave, are you referring to the decline into or the climb out of recession or both?

 

[zarni]

Hi Zarni, (with all due respect to you and your opinions) you will if there's a global meltdown, which is the main theme of my post. Look what happenned to the price when Bear Stearns announced it was insolvent! If the Fed and J P Moirgan had n't colluded to keep it afloat and in the process perhaps prevented a global catastrophe one can only speculate where the price would be now.



What about the other fundamentals affecting the price common to every other tradable commodity and service, supply and demand? I think I'm correct saying that the price of gold has risen approximately 4 times since the start of it's current bull run, if your statement is correct then surely this would imply that the USD has lost approximatley 75% of it's value since then??



Dave, are you referring to the decline into or the climb out of recession or both?

#1
I am not sure what your question is here..

#2
Although not a perfect barometer as there are many factors involved including IMF and CB artificial suppression and speculative pressure - Yes that is roughly what it implies. Actual inflation is partially fudged by goods like electronics bundled into the CPI. These tend to become cheaper (or rather stay roughly the same but you get more bang for your buck) due to r&d cost covering, obsolescence and advances in the area. The effects of Moore's law is really currently being used to cook the books on CPI.
I would suggest look at the price of corn and wheat and you will get a better idea of the real inflation. Gold is also a good gauge.

 

[DaveO]

Quote "Dave, are you referring to the decline into or the climb out of recession or both?"


Sorry for not being clear. I was referring to the climb into recessions and the speed of change can be alarming and catch us on the wrong foot. For example I once built a new high tech factory with very high gearing on borrowings which was just completed in time for a deep recession in the UK. My traditional markets turned down so quickly and interest rates rose so quickly I hardly had time to reconstruct the business plan.

Of course, the climb out of recession tends to be very much more gradual and difficult to identify the beginning of the turn. That is my experience on the ground so to speak.

Timing is everything. During my mainstream carreer I had some pretty lucky judgements and some very poor ones also. I sold real estate in 2002 thinking the top was in for the UK. Prices had continued up after the start of the bear run in 2000. Now, for goodness sakes I would have twice my wealth if I had hung in there until 2007 Hindsight a wonderful thing !

My message really was that at times like this we need to take some precautions and be prepared to pay a premium for some insurance if appropriate.

Dave.

 

[goodtyneguy]

Quote "Dave, are you referring to the decline into or the climb out of recession or both?"


Sorry for not being clear. I was referring to the climb into recessions and the speed of change can be alarming and catch us on the wrong foot. For example I once built a new high tech factory with very high gearing on borrowings which was just completed in time for a deep recession in the UK. My traditional markets turned down so quickly and interest rates rose so quickly I hardly had time to reconstruct the business plan.

Of course, the climb out of recession tends to be very much more gradual and difficult to identify the beginning of the turn. That is my experience on the ground so to speak.

Timing is everything. During my mainstream carreer I had some pretty lucky judgements and some very poor ones also. I sold real estate in 2002 thinking the top was in for the UK. Prices had continued up after the start of the bear run in 2000. Now, for goodness sakes I would have twice my wealth if I had hung in there until 2007 Hindsight a wonderful thing !

My message really was that at times like this we need to take some precautions and be prepared to pay a premium for some insurance if appropriate.

Dave.

Thanks for the clarification Dave.