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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: Raymond Duray who wrote (61240)3/22/2005 9:50:21 PM
From: energyplay  Read Replies (1) of 74559
 
USD as a loser..I estimate we might see gold at 3000 - but not at 10,000.

That's about a 4: or 7:1 drop.

Roughly 260 miilion ounces of gold.

Total US Currency in Circulation is about 800 Billion -

So roughly 3,000 would back every bill with gold.

Total US Debt is about 5 Trillion - which would lead a need for a much higher requirement, maybe >30,000 an ounce.

Except the total amount of money that the FED has created from nothing is only about 750 Billion. Note how close this number is to the currency number.

So all the rest of the USD in the world was created by loans...

^^^^^^^^^^^^^

Now let's flash back to the middle 1990s - The Clinton administration has a top Wall Street currency trader, Robert Rubin, runnig the Treasury...
Enter the "Strong Dollar" Policy

Gold gets down to $280 - gold mines shut down
UK Treasury sells gold
Argentina, being tied to the USD, enters a recession
US banks buy Argintine banks at discount prices
Hong Kong experiences a slow down (Jay can add comments)

^^^^^^^^^^^^^^^

This will take another decade to play out. My guess would be the dollar drops about 50-60% from here, but with lots of reversals. All those home loans become easier to pay off.
US export industry returns - look at steel companies.

The new head of the Federal Reserve thanks investors and countries around the world for financing the US at such favorable rates....
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