The Dollar Plunges Further

[Borodog]

Another prediction I made a couple months back:

[ QUOTE ]
I am not a financial type guy, so feel free to rip me to shreads. Both posts are from me in EDGD:

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
please explain how a dollar "collapse" is different that the dollar just continuing to slide down as it has for the last several years?

[/ QUOTE ]

Currently there are trillions of USD being held outside of the US. As the USD slips, those holdings lose value. So all those holding them have a depreciating asset. At some point, the rats are going to desert that ship. This will precipitate the sell-off of USD, and their international value will literally plummet (imho of course).

Once the international value tanks, people are going to be stuck with all these devalued dollars. They will try to recoup their losses. How will they do that? They will buy up anything and everything they can get their hands on that they can buy with USD. But the only place that will be will be the United States. Exports will skyrocket. Foreign investors will buy up American real estate and companies, you name it. The trade deficit will become a trade surplus (which is not a good thing, no matter what Lou [censored] Dobbs thinks). All of those dollars flowing back into our economy will creat massive double digit inflation.

Meanwhile, our inflation-bubbled economy is certainly going to pop at the same time, meaning we will get a massive recession. We'll have massive inflation and a recession, just like the 1970s.

The value of gold will skyrocket as people look to get out of USD that are losing value daily. This happened at the end of the 70s as well. Gold hit $800 per ounce in late '79. In today's inflated dollars that's like $2400. Currently it's at like $735 and climbing _fast_.

Central banks prevented gold form spontaneously remonetizing in 1980 by instituting massive gold dumping to crash the market value of gold and convince people that their inflation hedge bet had failed. It worked. Central banks have been gold dumping off and on for 30 years to control the price of gold.

But my gut feeling is that there is not enough gold left in the central banks of the entire world to prevent it again. So the dollar will crash, we will get a massive recession + massive inflation and a flight to gold. The price of gold will double or triple or quadruple. Central banks will dump gold, but it will fail. If they do try this, and the price of gold crashes, you should buy as much as you can, because when they do this they will be putting real money back into circulation and you want to have as much of it as you can get. Gold will spontaneously remonetize, and the world fiat currency order will collapse.

That's my theory.

[/ QUOTE ]

I realized there is a mistake in my reasoning. That being, everyone else can also follow this chain of reasoning. Why would foreign dollars holders wait until AFTER the dollar tanks to start trying to recoup their losses on their dollar holdings? Why would they sell off dollars for Euros or Yen when that would crash the value of the dollar, and hence their remaining holdings? They wouldn't.

Instead I realized that they will start getting out of dollars now, not by buying other currencies, but rather by buying up US assets, like companies and real estate.

. . .



[/ QUOTE ]

[/ QUOTE ]

I am starting to see this EVERYWHERE. One analyst I just saw on CNBC said that his clients are coming to him asking for anything at all in hard assets that they can buy for dollars and hold long term. He said that "America is on sale" right now and international investors are buying up US assets left and right.

[The once and future king]

I will be contributing to this thread in the medium of jpeg.

[Borodog]

It has a lot further it can go:



Gold = DOW = 8000 anyone?

[Luxoris]

[ QUOTE ]
Another prediction I made a couple months back:

[ QUOTE ]
I am not a financial type guy, so feel free to rip me to shreads. Both posts are from me in EDGD:

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
please explain how a dollar "collapse" is different that the dollar just continuing to slide down as it has for the last several years?

[/ QUOTE ]

Currently there are trillions of USD being held outside of the US. As the USD slips, those holdings lose value. So all those holding them have a depreciating asset. At some point, the rats are going to desert that ship. This will precipitate the sell-off of USD, and their international value will literally plummet (imho of course).

Once the international value tanks, people are going to be stuck with all these devalued dollars. They will try to recoup their losses. How will they do that? They will buy up anything and everything they can get their hands on that they can buy with USD. But the only place that will be will be the United States. Exports will skyrocket. Foreign investors will buy up American real estate and companies, you name it. The trade deficit will become a trade surplus (which is not a good thing, no matter what Lou [censored] Dobbs thinks). All of those dollars flowing back into our economy will creat massive double digit inflation.

Meanwhile, our inflation-bubbled economy is certainly going to pop at the same time, meaning we will get a massive recession. We'll have massive inflation and a recession, just like the 1970s.

The value of gold will skyrocket as people look to get out of USD that are losing value daily. This happened at the end of the 70s as well. Gold hit $800 per ounce in late '79. In today's inflated dollars that's like $2400. Currently it's at like $735 and climbing _fast_.

Central banks prevented gold form spontaneously remonetizing in 1980 by instituting massive gold dumping to crash the market value of gold and convince people that their inflation hedge bet had failed. It worked. Central banks have been gold dumping off and on for 30 years to control the price of gold.

But my gut feeling is that there is not enough gold left in the central banks of the entire world to prevent it again. So the dollar will crash, we will get a massive recession + massive inflation and a flight to gold. The price of gold will double or triple or quadruple. Central banks will dump gold, but it will fail. If they do try this, and the price of gold crashes, you should buy as much as you can, because when they do this they will be putting real money back into circulation and you want to have as much of it as you can get. Gold will spontaneously remonetize, and the world fiat currency order will collapse.

That's my theory.

[/ QUOTE ]

I realized there is a mistake in my reasoning. That being, everyone else can also follow this chain of reasoning. Why would foreign dollars holders wait until AFTER the dollar tanks to start trying to recoup their losses on their dollar holdings? Why would they sell off dollars for Euros or Yen when that would crash the value of the dollar, and hence their remaining holdings? They wouldn't.

Instead I realized that they will start getting out of dollars now, not by buying other currencies, but rather by buying up US assets, like companies and real estate.

. . .



[/ QUOTE ]

[/ QUOTE ]

I am starting to see this EVERYWHERE. One analyst I just saw on CNBC said that his clients are coming to him asking for anything at all in hard assets that they can buy for dollars and hold long term. He said that "America is on sale" right now and international investors are buying up US assets left and right.

[/ QUOTE ]

And the same drivel was the rallying cry when Japan was buying up US assets in the late 80s. The winners were the primarily American owners of properties who benefited from the speculative runup in prices that the cash rich Japanese paid to outdo each other and "dump the dollar".

And of course the following 20 years proved to be an economic disaster for the US.

Oh....wait.

[Thois]

american [censored], quit stealing my money!!!!! Soon I cant even buy cookies with my $4500 online bankroll

[Cumulonimbus]

Borodog,

I remember when you warned to buy gold, and I took heed and cashed out around 10k from my account for investing. I know virtually nothing about investing though. [img]/images/graemlins/frown.gif[/img] Is 10k a large enough sum to just throw towards gold? What's the main advantages of doing so? Is it just an investment?? Should I buy up as much of it as I can?? I'd really appreciate your (or anybody else's) input. Economics makes my head explode!!

[Luxoris]

[ QUOTE ]
Borodog,

I remember when you warned to buy gold, and I took heed and cashed out around 10k from my account for investing. I know virtually nothing about investing though. [img]/images/graemlins/frown.gif[/img] Is 10k a large enough sum to just throw towards gold? What's the main advantages of doing so? Is it just an investment?? Should I buy up as much of it as I can?? I'd really appreciate your (or anybody else's) input. Economics makes my head explode!!

[/ QUOTE ]

diversify diversify diversify

If you built a roll playing poker you didnt do it by placing blind bets, and thats what youre doing if you follow advice on an internet bulletin board.

[PLOlover]

[ QUOTE ]
What's the main advantages of doing so? Is it just an investment?? Should I buy up as much of it as I can?? I'd really appreciate your (or anybody else's) input. Economics makes my head explode!!

[/ QUOTE ]

main advantage is you can take physical possession and so you won't be stuck with some form of IOU that becomes worthless.

you can do the same thing by stocking up on real goods you will need, to some extent.

[Borodog]

[ QUOTE ]
Borodog,

I remember when you warned to buy gold, and I took heed and cashed out around 10k from my account for investing. I know virtually nothing about investing though. [img]/images/graemlins/frown.gif[/img] Is 10k a large enough sum to just throw towards gold? What's the main advantages of doing so? Is it just an investment?? Should I buy up as much of it as I can?? I'd really appreciate your (or anybody else's) input. Economics makes my head explode!!

[/ QUOTE ]

I am not an expert. But I am buying gold and silver both. I believe gold will hit a few thousand dollars an ounce sometime within the next few years. Possibly as little as one, maybe as long as ten.

You could think of it as an investment, or better yet an inflation hedge, but mostly, because I believe it's going to be money again at some point.

[Borodog]

Yet more proof the dollar is tanking:

http://youtube.com/watch?v=wiuNd5SoU8E

53 second mark.

Probably not a rickroll.