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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 379.91+0.4%Nov 11 4:00 PM EST

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To: Hawkmoon who wrote (75384)6/18/2011 1:49:59 AM
From: elmatador1 Recommendation  Read Replies (1) of 217693
 
I disagree with TJ. Here is why:

"There is a dollar shortage.
More dollar must be tee-ed out of thin air.
There must be more circulating medium.

Dollar about to seriously rise."

USD won't rise if more USD is created.

USD is a good like any other. The bigger the supply of any good the lower the value of said good.

Look at the demand side. The world cannot take more USD.

Like an eletrical current the negative charges must return to ground though the circuit. USD, in the past, always returned to the US.

Some times naturally. At times forced artificially via fleecing the USD takers since the US controlled the mechanisms of fleecing creation.

The world is awash in USD but there is very little one can do with USD. Thus purchases of treasuries.

In April, Brazil invested $ 13.4 billion in Treasuries, almost double the U.S. $ 7.6 billion invested by China

According to Boston Consulting Group:

"Total offshore investments (sent out of country) around the world rose from U.S. $ 7.5 trillion in 2009 to $ 7.8 trillion last year, which means a growth of 4% in the period."

At the same time in which Brazil takes its position, the BRIC countries (Brazil, Russia, China and India) reduce exposure to Treasuries. With reductions for six consecutive months, the volume of debt securities held by the U.S. government of China has $ 1.18 trillion in October 2010 to $ 1.15 trillion in April this year. Russia has already reduced the amount of U.S. $ 176 billion to U.S. $ 125 billion in the same period.

Who is going to buy the new USD created out of thin air?
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