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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 389.75

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To: energyplay who wrote (20465)	7/26/2007 10:16:34 AM
From: Tommaso	Read Replies (2) of 218125

I think the lynchpin to everything is the U. S. dollar, and it looks to me as if the only thing holding it up is a perception of the U. S. as a country of great military and economic power. Recent reports about the kinds of recruits the U. S. army is now accepting suggest that there is diminishing enthusiasm in the U. S. for military service. The Bush administration has been abusing both the regular services and the national guard units by prolonging their periods of service and sending them back to Iraq repeatedly. Meantime, fewer and fewer Americans are convinced that a military solution is possible--or any solution at all. The United States is depending on loans from other countries to meet the government expenses. When the perception grows that the U. S. military establishment has been damaged, and that we have become a nation of debtors, the dollar may drop very fast, even against currencies which are themselves losing value to inflation. At some point holders of U. S. treasury securities may wish to change them into something else. The effort to sell these will have something of the effect that the effort of investors in those Bear Stearns funds to get out of those funds had. Prices of bonds and notes will drop, interest rates on them will rise. The United States can always make interest payments by creating dollars. But that will be highly inflationary and will further damage the value of the dollar. The situation is now much worse than what Paul Volcker rescued the U. S. from in the 1980s. The one bright spot is that, relative to everyone else, American producers of agricultural staples should do extremely well. I expect food prices to double in the next few years. Very bad news for the poor and hungry, whether here or anywhere else.

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