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
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
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
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)
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6 comments:
Hey Damon,
Good to hear from you again. I couldn't agree with you more. At some point, fiscal irresponsibility has to catch up with you. I hadn't really considered other currencies only because I don't have any experience in trading those yet. As for gold, that's something I've definitely been looking at. What's the best way to get into gold? Something like GLD?
I'm completely in cash in my account as of this morning after closing out some nice bearish positions. Being in cash is good for today's wild ride. But with the decline in the dollar, it's not a good place to stay.
While you're you're correct that the Fed is in bailout mode and have been printing money like madmen for years, how does that separate us from any other country in the world?
You have countries in the Middle East, China and down the line that are either pegged to the dollar or manipulate their currencies to trade in-line with it. They have been printing as much money as we have. Now if you want to talk savings rate, that's another story.
While the downside risks to the dollar are great and trade and fiscal deficits add to fuel to the fire--historically there has been a lot of support for the dollar when the fears of global recession mount. If you look at the activity over the weekend, one would have to conclude that the markets are pricing in some downside risks to the global economy.
In that scenario it doesn't pay to bet against the dollar and go for gold. If you watched the gold and U.S. equity markets after the Fed announcement today gold was down before it recovered. Interesting when there has been so much turmoil and a lower Fed funds rate is generally dollar bearish.
Before jumping on the gold train with both feet, make sure that the train is headed for inflation and not the deflationary trends that have prevailed over the past week.
Hedge with gold, or hedge with "yeeros" Damon. The greenback is in a vice, no way out. Unfortunately, bad for everyone but worse for the persons like myself that are trying to retire on the other side of the pawn.
tradeshares.com
GLD is my preference for gold
junk gold, that is my game. bury little pieces in little places only I will find...
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