Fleck listed interesting stages of the dollar bear.
1) dollar decline is a GOOD thing
2) It gets noticed. Fast dollar decline is not a good thing
anymore
3) Central banks talk it up. The decline continues
4) Central banks act on it. It bounces, but the decline
resumes, it takes the form of a BK
5) Full-blown dollar crisis.
He believes, we are in stage 4 now. I will believe it too -
once the dollar gets below LT support at around 80, we'll
be in a full-blown crisis. I think, 77.50 is the last
attempt of (4). Could be the BK below that. It's hard
to draw lines in the sand for a highly manipulated market.
The REALLY sad thing is that there is absolutely no way
to stop the dollar fall fundamentally. NONE. The imbalance
is HUGE. It will take 5 years of export only, and no
import, to pay the cummulative trade deficit, in current
dollars. And, we are not even paying it yet! We are taking
some more! Well, a lower dollar will probably make it
faster to pay, but at a huge cost. And, cummulative deficit
may become a cummulative surplus, for all I know. Euro is
not at all better - they copied the model of United States
of exporting inflation to Asia through the concept of "World
currency", since they have been runing high inflation,
especially since some Eastern Europe states became a part
of EU. Germany is in part former Eastern Germany, for
example. High growth rates there, but at a cost.
I think, gold is the only way to have protection against
the crisis that is coming. Euro will ultimately get hit
against gold as well. Gold has become money, again - and,
I believe, future dollars and Euros may have to be backed
by gold, in order to halt the crisis, and for folks around
the World to start accepting them again.
Full USD backing by US gold requires gold price of 160,000$.
Gold and silver. That's the investment idea of the
generation. Sit in it, don't sell (the metals are extremely
volatile - gold dropped $10 in 2 minutes this Friday, for
example, metal stocks even more volatile) - and you'll be
rich. Sounds simple? It ain't. This bull kicks you off it's
back all the time. That's why I don't even keep gold/shares
in the brokerage - to fight the temptation to sell -g- |
