May 28, 2009

Is it over for the US Dollar, and for US Treasury Bonds?

Sure looks like it.

Total freefall underway.

You know what that means.

And remember, all this stuff hath been foretold.

Schiff's current investment advice is the same as it has been for years: Get your money out of the U.S. dollar and into more fundamentally sound currencies like the Swiss franc or the Singapore dollar; buy some precious metals; and buy foreign, dividend-paying stocks, with an emphasis on natural-resources companies.


Anonymous said...

The dollar is helped when interest rates rise. Look for the USD to rally until Bernanke gets the courage and a nod from Obama to put the printing press in overdrive.

China no-likee, but voters no-likee 9% 30 year mortgages. Get ready for shitstorm 2009. Were's a good war when you need one?

Anonymous said...

* CRASH ALERT! * The effects of Bush and Cheney for the past 8-years is about to hit the fan

Big Time!!!!!!!

Anonymous said...

Kooks. Everything is going to be great. This is America!

yoski said...

All hell will break lose the day a treasury auction fails. Until then it'll be business as usual with deflationary tendencies.
Once a treasury auction fails there are few equally unpleasant options. Let it fail and come up short on spending cash. So that means cutting spending (like on social security for example or heaven forbid, bailouts) or printing up the difference. The latter is unlikely since it would cause every treasury auction thereafter to fail putting us on the same course as Zimbabwe...and no, I am not exaggerating.
The other unpleasant option is to raise interest rates. Not good for housing, consumers or a highly leveraged (= indebted) economy as ours.
The bottom line is; on the long run you can't spend more money than you take in and all Ponzi schemes will collapse at some point in time.
Our politicains acts like neither of those 2 facts applies to the US. Maybe they've been smoking too many green shoots or maybe they realize we're probably already past the point of no return.

keith said...

I'm not sure if a Treasury auction CAN fail, what with Bernanke doing the buying.


I mean, the only way it would fail is if he let it fail.

Printing money and then buying it up is a fun game.

Until it's not.

Anonymous said...

Boom Boom

OUT goes the lights.

America is Dead
FUCK America

Every man/woman/child for themselves.

Hungry Yet? You will be.


casey said...

Buy a house for once.Take some risk and quit bitching you missed the big one as usual.Caveat emptor!!!!!!!!!!

How is working for wall street.

Anonymous said...

didn't you post (during the disinflationary period, confused as deflation by you)that you thought schiff may have missed the mark?

Alan said...

Can anyone suggest some ETF's that are reasonable at implementing Schiff's ideas?

I own TBT already, but haven't found other good funds for shorting the dollar.


Anonymous said...

Can someone explain to me why the enire Bush mis-administration and any agency charged with protecting the American people against FRAUD and CORRUPTION is not in JAIL right now???


Where is the JUSTICE???

Batman said...

What is funny is watching accepted logic not work here because of the denial of how bad it is. Nasty shit.

keith said...

Always agreed with Schiff's long-term view on the dollar and also foreign dividend payers

When he was getting flamed this winter for being wrong, I was saying short term he was (it was hard to forsee the sucker rush to the dollar during the panic), but that he'd be proven right in time

He's being proven right, right about now.

Some ETFs for Schiff's ideas would be TBT, EWX, RSH, FXI, GLD, GDX AND IFN

yoski said...

Keith:"I mean, the only way it would fail is if he (Bernanke) let it fail."

Well, that's pretty much equivalent with the auction failing and printing up the difference. It really doesn't matter if you "print" the money right before the auction and bid with the new money or after the auction to buy up the leftovers. The effect is the same.
As long as there're enough suckers legitimately buying treasuries it'll be more or less business as usual. Once the last sucker catches on it's game over.
Then the possible outcomes are: default, inflation or rising interest rates or any combination thereof. How exactly it'll play out is difficult to gauge, too many variables. It won't be anything "we" can control. It'll be forced upon us and it will create total chaos as is to be expected when a Ponzi scheme collapses.

BananaRepublicrat said...

Don't forget folks: when treasuries tank, mortgage rates go up. --Rut roh!!

Lady Di said...

Bernanke has 2 choices:

1. raise interest rates
2. lower the value of the dollar

I'm putting my money on option 2.

Supercharged, Triple X, Quantitative Easing, here we come...

Alan said...


RSH Did you really mean Radio Shack?!

Miss Goldbug said...

ETF gold stocks are considered collectables, and taxed at the maximum rate.

swannster river said...

The strong dollar is making it harder for Bernanke to engineer a recovery. He'd like nothing more than to see the dollar tumble and reset at a lower rate. That would reduce the debt-load for homeowners and businesses and send consumers racing back to the shopping malls and auto showrooms. Perception management is a big part of stimulating the economy. That's why the financial media has been air-brushing articles that focus on deflation and shifting the attention to inflation. It's an effort to kick-start consumer spending by convincing people that their money will be worth less in the future. But deflation is still enemy number one. Rising unemployment, crashing home prices, vanishing equity and tighter credit; these are all signs of entrenched deflation.

the dude said...

you hoenstly think the euro will fare better?

Lady Di said...

"Well, that's pretty much equivalent with the auction failing and printing up the difference."


The auctions will not fail. The US must finance its ginormous deficit spending through the bonds. How do you do it? Lower the value of the dollar, making the bonds more attractive to the foreign buyers.

Schiff is right. The way to hedge the weak dollar is to invest in precious metals, foreign currencies, foreign stocks, and markets [if the country/company can grow through this current period].

Just my two (debased) cents.

Anonymous said...

" are going bad faster than their provisioning is increasing...""...back out that "unearned" and illicit gain from the passthrough and they would have lost $92.4 billion..."

"...Don't forget folks: when treasuries tank, mortgage rates go up. --Rut roh!!"

"...the 30/fixed is now being quoted at 6.5%, up nearly 30% in one day..."


keith said...

The Euro and especially the Pound are confusing the hell out of me.

The British economy is a basket case, they're printing money and buying bonds too. So for the GBP to be skyrocketing doesn't make sense. But it is. I guess that's because the USD is falling even faster in terms of credibility, and also people are fleeing the dollar to buy hard assets and stocks.

The Euro, well, they're not printing money, and their interest rates aren't 0%. Their economies are a shambles and will be in near-depression as there's not much stimulus either. Yet the Euro is soaring too.

All paper currencies are suspect, so comparing one to another is kind of a fools game. The real protection will be assets. Schiff is right. The only problem with some though is that natural demand is plummeting (think gold or diamonds), while investment purchases are skyrocketing.

So what assets are there that have strengthening natural demand, AND attract investment as a store of value?

I'm thinking oil.

Anonymous said...

I think we'll see another run of 10% with the dollar index topping at 90 before it crashes in the Fall. Think about it, with all the uncertainty in currencies, falling equities, international tensions, what is the one tried and true constant? Granted it may be uglier than in the past, but the answer is still the USD, and that is where cash will be parked.

Equities down, commodities down, USD up.

Anonymous said...

Re: EWX,

Forward Currency Exchange Contracts. The Funds may enter into forward currency exchange contracts for hedging purposes to help reduce the risks and volatility caused by changes in foreign currency exchange rates. Foreign currency exchange contracts will be used at the discretion of the Adviser, and a Fund is not required to hedge its foreign currency positions.

I'd prefer an ETF that doesn't have statements like that in the prospectus.

MsNJ said...


What is the best way to get "into" foreign currencies? Anyone, suggestions??

Should I just go to the local airport and trade US$ in?

Anonymous said...

recession may be ending(!!!)Best laugh: "...the deepest recession since the 1930s may be drawing to a close..."

Nice choice of words there; because the Great Depression was really only a recession, what is going on now is as well.

So subtle I almost missed it...NOT.

Anonymous said...

Kieth, have you heard about the tightening of consumer credit card accounts?

Just this week I got one cancelation letter for a card I've had for 10 years but don't use and Bof@ckingA just jumped my card balance rate from 1.99% to nearly 19%!! And doubled the minimum payment.

So BofA gets our tax dollars at 0% and to return the favor they charge those with perfect credit and payment histories 19%? WTF?

I called to compalin and was told that BofAssholes has a rate freeze at no LOWER than 19%, no exceptions, suffer, bend over.

Anyway this and the issue you bring up with bonds is not looking like a recovery. Higher interest rates, payments doubling, one last nail in the consumer coffin, watch out below!

GT Charlie

Anonymous said...

For some reason I see treasuries as a buying opportunity for the SMART investor. You guys are a shitload of idiots and never get it. Also, get ready for a nice 1 year slide on the stock market.

Keep waiting for the dollar to collapse and keep waiting for treasuries to collapse. At least not now suckers.

Great opportunity to make some cash. Short the market and long treasuries. A sure win.


Anonymous said...

Going long on Phillipine Pesos...

patrat said...

I see average people pulling money out of 401k's to live. There goes the playground.

Anonymous said...


Try Ever Bank if you want to buy foreign currency.

gutless and lazy said...

CA is shutting down, piece by piece.

Must really suck to live in CA now.

patrat said...

This country has to start producing something. I don't know what it will be, but the debtor thing just isn't going to cut it.
We do have a wealth of natural resources. Maybe we can find some logical way to use them. God, could it happen? (sarcastic)