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Strategies & Market Trends : The coming US dollar crisis
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To: stsimon who wrote (17981)2/28/2009 10:49:48 AM
From: GST1 Recommendation  Read Replies (1) of 71456
 
The current account deficit will not go down because the US economy is strong. The current account deficit will not go down because the US economy is weak. The current account deficit will be dealt with by default -- by diluting the value of what we borrowed and promised but cannot pay or repay. It will be dealt with by the collapse of the trading value of the dollar allowing us to walk away from global investors, creditors and the American people. The promises we have made cannot and will not be honored. We will pay our debts with a worthless currency. The attraction of gold reflects the fact that we cannot resolve the current account deficit any other way. In the short run the US dollar will be defended as it is so hard to conceive of the world without it as a reserve currency -- and the longer the dollar is defended the harder it will fall. Devaluation of the dollar can come with a whimper or a bang. The odds of a bang are increasing daily.
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