US Dollar-This conspiracy theory is a real threat

[Toro]

This is silly. This is not a conspiracy. It is the effect of monetary and fiscal policy.

The US dollar has been in terminal decline since 2000. This is because the US government and Federal Reserve have reacted to the collapses of the Tech Bubble, which led to the Housing Bubble, by running deficits and flooding the financial system with liquidity.

The reason why the dollar keeps going down is simple. When rates are as low as they are in America, traders borrow at low rates and then buy bonds of countries which have higher interest rates.

It works like this. A trader can borrow at a short-term rate of about 0.5% in the US. He can then use those funds he borrowed in US dollars to buy the same instrument in Australian dollars at 3.5%. Borrow at 0.5%, lend at 3.5%, make 3%. This is the oldest trade in the book. It is called "the carry trade." Google it if you want to find out more.

Borrowing in a currency is effectively selling the currency in which you are borrowing. Lending in a currency is effectively buying the currency in which you are lending. When you borrow US dollars, you are selling US dollars. When you are lending in Australian dollars, you are buying Australian dollars. The US dollar goes down, the Australian dollar goes up.

Gold is going up because the US is effectively devaluing its currency to monetize its debts. Thus the dollar goes down. Because the dollar is the reserve currency, it drags all other currencies down with it. Thus, real assets like gold rise.

End of story.

 

[Mr.Fitnah]

Would you rather have double-digit interest rates? What was the alternative? I'm not being a smartass, I really don't know what WILL save the economy. Do you?

Stop spending money, stop borrowing money .They work every time.

Consumers are doing this; when will uncle?

Im going with: when we burn them out of town

 

[MaggieMae]

Stop spending money, stop borrowing money .They work every time.

A large part of the problem is that consumers are NOT spending; therefore businesses (those that have survived the first blows) are losing money; therefore they need to borrow; but they aren't getting loans because consumers are NOT spending and their balance sheets suck. And round and round it goes. Kinda blows holes in your simplistic logic.

That is how business cycles work , The government trying to forstall the inevitable pain does not divirte it .
It prolongs it.

So how many million more would be unemployed while we "wait"? Have you figured that out yet?

 

[MaggieMae]

maybe if we cont talk about the collapse of the dollar and the dawning of the new world order.. it wont happen..shhhhh

Let's just put it this way: It WILL happen, and a lot faster, if assholes like Matt Drudge keep headlining the story as it it already has (when it hasn't).

 

[Screaming Eagle]

Is this the same report that ranked the Mexican Peso above the dollar for stability? If so, burn the damned report, it isn't worth the paper it's printed on.

 

[Mr.Fitnah]

A large part of the problem is that consumers are NOT spending; therefore businesses (those that have survived the first blows) are losing money; therefore they need to borrow; but they aren't getting loans because consumers are NOT spending and their balance sheets suck. And round and round it goes. Kinda blows holes in your simplistic logic.

That is how business cycles work , The government trying to forstall the inevitable pain does not divirte it .
It prolongs it.

So how many million more would be unemployed while we "wait"? Have you figured that out yet?

It would almost be over now if the government had not created them mess and is now fixing it.
It hasn't even begun to get as bad as it is going to get.
Please, no more stupid questions just watch .
If things are better in six months Ill admit Im wrong.

 

[Sweet Willy]

Finally, an explanation. We can generally gauge large advances in gold by particular business/political events/announcements. This weeks surge seemed to be without cause. We have bought an unprecedented amount of gold in my store this week but we could not put our finger on any major event that precipitated the surge. Now it comes out. Complete bullshit.

But I made nice money.