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Strategies & Market Trends : The coming US dollar crisis
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To: Nevada9999 who wrote (15962)1/2/2009 4:05:53 PM
From: Elroy Jetson  Read Replies (1) of 71463
 
To the extent you believe the U.S. Dollar has zero intrinsic value, you need to keep in mind that it trades against other currencies which also meet your criteria for having zero intrinsic value.

We have recently let a period characterized by the massive creation of nearly every currency by banks through fractional banking.

This led to a devaluation of these currencies as the price of commodities, real estate, stocks and other assets rose dramatically against all currencies. Many people called this credit bubble a "bull market", rather than a "currency debasement". This reflects the common public misconception that government debt creation is inflationary while private debt is inflation-free deliciousness.

Now that an increasing amount of this debt is vanishing, the flight into hard goods has reversed, and currencies are becoming increasingly valuable. Yes, various government programs are increasing the amount of various currencies, but this only partly offsets the currency that has been destroyed through bad loans which will never be repaid.

Since more of the loans were made in Yen and U.S. Dollars, these currencies are experiencing some of the greatest appreciation relative to things.
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