Lots of currencies are failing. Russia, Pakistan, Argentina, Mexico. And lots of countries in trouble. Iceland, Argentina, Russia, Ireland, England, Japan and and much of Europe and Panic in China. Even though China is expected to run a 7% GDP next year while we run a negative GDP. And states and cities all over the country are running into huge debt and revenue problems. And counries all over th world lower their interest rates weakening all currencies.
Although the dollar still remains the currency of last resort with all this bail out and stimulous, how long will that last? It was very curious last week when gold rose $70 (against all major currencies), silver was up over a dollar and the dollar was rising as well (usually over a 90% inverse correlation between gold and the dollar). And gold is in backwardation. It will be very interesting to see how many requests for delivery of physical comex gold and silver futures contracts this coming friday.
One person I know who sells 100 oz silver bars said they easily sold 100 of them recently at 3 to 4 dollars over spot.
AIG seems a bottomless pit, All major banks and many regional banks in trouble and the big three auto companies. And businesse's failing everywhere. People are talking about 8.5 trillion committed so far. I do not know how that breaks out.
Going forward, who is going to buy our huge projected deficit spending and will the dollar stand up to so much debt? They are going to have to print money I think as we are running out of countries to borrow from.
And so far the fed has not increased the velocity of money very much, so businesses continue to collapse and the recession keeps pushing more and more consumer's over the edge.
I keep wonderng how bad this is going to get? In my small town I can see the recession everywhere and commerce has slowed dramatically. Housing market is dead. Only one lot sold all year and it was a steal. And like so many cities, our budget is in trouble from lack of revenue.
In the 1930's we did not owe a lot of money, so when we finally had to deficit spend we could; but now we owe so much money everyone wonders if we can deficit spend enough to turn the deflationary depression around without creating hyperinflation?
I have no idea how this turns out, but it sure looks bad. |
