The Dollar?

After I went off on the fed and the inevitable disaster we are in store for, lets just take a look at what these chuckle-heads did just 2 days after my last post....In light of Tuesday's announcement that reduced rates early and in a bigger than expected chunk...

NEED I SAY MORE?

Why is the Greenback doomed?

$9,190,163,041,479.34

Let’s start with the over 9 trillion reasons above. Click the link above to get some interesting yet startling facts related to the U.S. National Debt. Recent months have shown us what happens when consumers borrow too much and behave like teenagers; so what should stop me from thinking that the United States will be boarding up the windows soon and moving in with the in laws?

OK in all seriousness I am not a doomsday kind of guy, but let’s face the facts people. The Green back won't last under this kind of strain. Paper money is just that. It works well up to a point but a damn will break if water levels exceed the parameters for which the structure was engineered. Sure you may be able to cheat and exceed those parameters for a while, but as time passes redundancies fail and complacencies multiply... you get the Idea. Well fellow traders the US monetary system could easily be at a breaking point; and just like in the cartoons, it may only take the weight of one little bird as it lands on the top of the damn, and BAM! It’s all gone.

5 years ago people balked at the notion that the US Dollar may soon be at parity with the Canadian Dollar. Well here we are, and the scoffers are paying attention. Now imagine the Mexican Peso 5 years from now... My biggest fear is that the US will one day loose its ability to service debt, and unfortunately we may already be there. Congress passes new laws regularly to raise the limit on the legal total deficit that we as a country can incur. That is more or less the equivalent of your bank giving you permission to increase your credit limit to take cash advances every month, all the while you are making the minimum payment. At some point they would put the breaks on you. So far I don't see any slowing in the rate at which money is printed....

What does all of this have to do with trading? Not a whole lot for me, however I can't just let my cash get pummeled by inflation either. Here’s my basic game plan for the next few months:

1- trade small
2- hedge with gold
3- hedge with holdings in other currencies
4- divest into real estate
5- don't borrow money
(stealing is ok but don’t get caught. Terms of restitution are a lot steeper than credit card rates)