June 1, 2009

You do realize that you're all speculating on the US dollar, don't you?

If your savings are in dollars...

If your pay is in dollars...

If you have a dollar in your pocket...

You're speculating on the US dollar.

Any questions?


Anonymous said...

If you live in the U.S. you need dollars.

The dollar will be devalued against other currencies first. (Not housing as you need wage inflation for that)

Then the other countries will devalue their currencies.

And on and on.

Guess who won't devalue "their" currency?


keith said...

People think the price of oil is rising, as it goes from $35 to $67 in a matter of days.

I would suggest that oil isn't rising. It's simply priced in dollars, and the dollar is tanking.

Duarte said...

How can you say the recession is over? Because "the debt will be monetized"? Like that will turn the tide of consumer confidence in the same way government spending seems to raise your own optimism? Recession measured in dollars? In gold? Keep your eyes on Spain, if you truly wish to see the future.

Anonymous said...

The dollar is toilet paper, get out of it while you can...

keith said...

During the first part of any great inflation people feel wealthier. Stock soar, asset values soar, too much money sloshing around. There will be a new wealth effect again for a bit.

Then it starts chasing commodities, like we saw in 2007. Remember RicePANIC and OilPANIC and MilkPANIC?

Only this time around, the prices won't come down.

What's about to happen will be really confusing, especially for Americans.

Get popcorn. But come out of your caves and play. If you don't, and just sit on your depreciating dollars, you're gonna get killed.

Start making your moves now, before everyone catches on.

Saul said...

If I was living in America, I think I'd be somewhat concerned.

As I live in Australia, I don't have USD to worry about, thank goodness. My wealth, what little there is, is about 1/3 cash, 1/3 gold (physical and paper), 1/3 junior gold miner. And just to make it all not quite add up, I have a tiny bit in an Biofuel company, which is a play on oil.

So far, the Gold and Gold Miner (ASX:HEG) has done me proud. Cash is stable, and the Biofuels is down. If oil spikes again that could take off, and I'm in no hurry. It could also get wiped out, as they are struggling a bit.

As a point of interest, as of today and thanks to eBay I am now a trillionaire! Sadly, this is only really true in Zimbabwe, but the notes look really nice. I think I'm going to get my $100,000,000,000,000 note framed, partly as a reminder of what inflation can do to your wealth. Not that I'm predicting that right now, you understand. One day, maybe, though.

vanilla ice said...

I heard GM filed for bankruptcy. Is this true?

"It's simply priced in dollars, and the dollar is tanking."

Very good way of putting the dollar destruction in perspective.

Anonymous said...

ohhhh FUCK; being somewhat cynical, I am not at all comforted by this:

"...this is the region of the world, more than any other, that helped shape Geithner's world view. His father, Peter, was a senior executive running Asia programs for the Ford Foundation...In college he studied both Mandarin and Japanese..."...I wanted to work for my government, and help to shape its policy toward this part of the world."...

...he understands the concerns of policymakers on this side of the Pacific...
...a question Geithner heard from a bright young Peking University student...how safe are Chinese investments in U.S. Treasury debt?

"Very safe," Geithner quickly reassured the Peking University questioner, as the audience laughed..."

The joke is on ALL OF US except the puppet masters pulling the strings.

This scam only works because we use their fiat.


Bukko_in_Australia said...

(Nelson's voice from "The Simpsons" here:)
"Ha Ha!"

Not me, mate. I got money in American dollars, and Aussie ones, plus Swiss francs and euros. If we immigrate to Vancouver, that will make five currencies in the doom-bunker stash. It's nice to be able to be able to choose your currency. Having just one kind of money is like eating nothing but potatoes all your life.

Anybody got an opinion on Singapore dollars? It's small, it's fascist, but I reckon Singapore is going to be the Switzerland of the 21st Century. I work with a few nurses from there. Pushy, but fucking brilliant. My impression is that the velvet-gloved dictators there are the least likely to let their currency be turned to shit by hyper-printing. But I haven't done the due diligence. Anybody got an educated opinion? Mike Hunt?

casey said...

what recession are people talking about.I swear people are still spending like this is no tomorrow around california.There have been no sacrifices.Hate to see what a depression looks like.

Dollar aint worth squat.

RobertM said...

As a currency trader, I haven't seen anything that would suggest what you are saying. All the other countries are in the same shape or worse- I don't any winners coming out of this other than gold(maybe).
BTW- I didn't see the Aptera listed as one of the options in "Your next car will likely be..." poll.

hp fan said...

US Dollar will behave much like the Japanese Yen has since their bubbles burst.

There will be lots of volatility but US Dollar won't be turning to toilet paper any time soon. It needed to fall some for exports to pick up but most of the fall is done now.

As for oil... you do realize inventories are massive and storing it on boats floating all over the place can't last forever?
Back in December I paid $1.38 per gallon which I know won't come back but neither will $4 for many many years.

Batman said...

Any bets on how long before the dx hits 70?

Mike Hunt said...

Hi Bukko,

I had a big position of British pounds that I moved to Singapore dollars in early 2008 back when one pound would buy 1.90 USD... smart move but based on dumb luck truthfully.

The Singapore dollar took a big drubbing when the USD got strong- not as bad as the AUD but worse than some of the other SE currencies like THB and Malaysian Ringgit.

There was a point where 1 SGD would buy 1.10 AUD and I was thinking about switching again. Foolish for staying pat.

My justification for supporting SGD is that it is under pretty tight monetary controls. Banking in SE asia is where Singapore holds a dominant position... there and Hong Kong I suppose.

Singapore also does well when China does well, given the fact that it is a trading hub between China, SE Asia, Australia and the rest of the world. So as China keeps accelerating Singapore will also stay strong.

Overall it's a good currency to add to the portfolio. Don't expect any interest though they are following a ZIRP like the US.


Anonymous said...

Dollars are nothing more than shares of stocks.

Faber predicts that we will have inflation close to Zimbabwe.

Andrew from Russia said...

And in Soviet Russia, the dollars speculate on you!
Well, seriously, name me one thing that is "different this time" with this replay of the (hyper)inflation scare. If there's anything different, it's the pace of the events - it tooks 4 months for dollar buying to subside and hyperinflationists to reappear.

Devestment said...

Inflation and deflation are factors that do not occur uniformly across all asset classes.

Dollars are a necessary liquid instrument that is subject to value fluctuation against varying asset classes. These costs change due to market fluctuations, cost of procurement, interest, consumer perceptions, employment, etc.

During the Internet boom, dollars were very weak against stocks but very strong against $250 oz gold.

During the housing credit boom, dollars were weak against many asset classes, especially labor. This is when I bought many dollars BY TRADING OVERVALUED ASSETS FOR THEM.

Now, the dollar has gained much strength against real estate while it is weak against gold. I bought more dollars with gold while my dollars gain strength against real estate and other tangible luxury assets that I am interested in.

Soon necessity items such as energy and food will weaken my dollar and increase my cost of living while driving the assets of people with no savings to market. In this period I expect to see high interest rates and government subsidy in incomes through hiring and a new higher minimum wage.

There is much more pain from the bubbles to come. The bill for the foolishness is still coming over the hill.

When I see assets that look undervalued to me I buy them. However, I always keep a prudent reserve of dollars on hand as they are a indespensible tool.

Anonymous said...


What if my money is invested in Real Estate?

Anonymous said...

>Like that will turn the tide of consumer confidence...

Policy makers can't seem to accept that the debt driven consumer economy is simply gone with the wind.

Anonymous said...

Bernanke would 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.


Anonymous said...

9mm FMJ 115 grain.

Be There.

I'll charge $10K cash or gold per round when the time comes shortly.

Like when the Detroit 2009 Riots begin soon. It won't be blacks setting fires this time Bubba.

Try hungry GM workers...

America IS DEAD.

Say Hello to my Little Friend...

Anonymous said...

Same tinyurl as above:

The economy is in the grip of deflation. Commercial banks are stockpiling excess reserves (more than $850 billion in less than a year) to prepare for future downgrades, write-offs, defaults and foreclosures. That's deflation. Consumers are cutting back on discretionary spending; driving, eating out, shopping, vacations, hotels, air travel. More deflation. Businesses are laying off employees, slashing inventory, abandoning plans for expansion or reinvestment. More deflation. Banks are trimming credit lines, calling in loans and raising standards for mortgages, credit cards and commercial real estate. Still more deflation. Bernanke has opened the liquidity valves to full-blast, but consumers are backing off; they're too mired in debt to borrow, so the money sits idle in bank vaults while the economy continues to slump.

gutless and lazy said...

I just posted in another thread the solution to this. GET THE HELL OUT OF USD.

I mean every single dollar you got.
Homes. Retirement accounts. EVERYTHING.

This rally is the last exit point to get OUT. Not to get in USD.
And you all know it.

The strange thing is, very few will. Intellectually, you know.

But emotionally, you just won't do it. I leave you with one last word:


JAWS said...

Okay, so I'm stuck in cash.
Now what?
All I really know is investment property, and banks are playing Hide-and-Seek with foreclosures, plus I don't want to pay 2004 prices.

I'm going to steady myself, climb out of my bunker and sniff around.

I like sniffing around when the seedlings are just beginning to sprout.

Hope this works but I still don't know what to do with cash among seedlings.

Anonymous said...

Currency changers in Montreal frowned at the Mrs. and I everytime we traded USD for Canadian.....they seemed happy to see Mexican pesos, however. Thought that was kind of odd.

Anonymous said...

I expect more bankruptcies and defaults. You should get some of those fiat dollars out of the bank. Put them in a PVC pipe, and bury them in your yard.

Paul E. Math said...

I'm not speculating on the dollar; I'm speculating against the dollar.

DAG, GDX, PBW, HL, CCJ - all of these will at least preserve what little 'wealth' I have.

Those of you still in dollars, I really recommend opening an etrade account.

If you're safety conscious and you're only going to buy one thing, I would recommend DBA - it is the same as DAG, which I own, but it doesn't use leverage.

Anonymous said...

What ever happened to BUTCH

Anonymous said...

I've been shorting the dollar for the last month. I can tell you that.....

hp fan said...

money sits idle in bank vaults ...

TARP money isn't sitting in banks, it's being gambled on stock futures.

Double or nothing baby. Only insiders know when it's gonna burst.

patrat said...

I definitely don't know where to put my money.
Nothing seems good.

Is there any way to not lose your morals in today's market and society?

What I mean is, can you be an honest man and survive today?

Is the honest man a fool today?

If so, then I don't know what to do. It's definitely beyond Dems and Reps.

Anonymous said...

I have always needed them.

Anonymous said...

If you want your dollar bills to be worth something someday, you should probably do this to them, since it's probably the only value they will have left:


Anonymous said...

Dollar is not "toast" though I do expect some significant inflation. That is why I'm short the dollar and long an inflating asset...which is.....you guessed it...rental real estate.

I have over $10 million dollars borrowed right now at FIXED rates for roughly 28 years on average. Even in today's market I am cash flowing on every single property because I bought smart over the last 5 years. Once inflation hits, rents rise, values rise and my 28 years of mortgage payments stay the exact same I'm gonna be made.

Why do you inflationists want to buy gold? Worthless, you can't eat gold, drink it or live in it. Real estate on the other hand is an asset that has intrinsic value. Value that will only go up once inflation hits.

Now I'm not saying that ALL real estate is a good investment. But smart buys in stable cash flow communities (college towns I'm talking to you) will make ya rich.

Peahippo said...

Keith, let us know when you can dictate terms to employers about which currency they can pay you in.

Until then, your employer pays you in USD, and by no mean coincidence these dollars are good at EVERY RETAIL OUTLET in the nation, and can be used to pay off EVERY PUBLIC AND PERSONAL DEBT.

Those who predict the failure of the USD are in completely denial about the inherent strength of a 300M-person economy. We could cut off China tomorrow, and people will STILL be able to get much of their lives functioning with their dollars.

We're not Zimbabwe, folks. Zim is a deep-African shithole with largely ag exports to support any idea of a national currency. THAT is part of why Zim got so weak. But the USA not some bullet-riddled "Agrica" shithole. Literally, the USD cannot hyperinflate.