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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: daveinmarinca who wrote (18)	5/9/2007 4:15:49 AM
From: Real Man	Respond to of 71407

Yes, I agree. That's the main reason why the CBs have been accumulating dollars. At the same time, US Fed has been raising rates to support the dollar, while monetarizing (printing dollars) at the same time. In modern times all markets are moving because of much larger derivative markets, and interest rates derivatives could care less about printing; it is an irrelevant variable. Gold still cares, or so it seems. There is nothing the Fed can do to support the dollar if there is a currency crisis. The only reserves we have is gold in Fort Knox. Some speculate that all that gold is gone already (has been lent out to banks at 1% interest rates to suppress gold price). They can't do this forever. As they raise, their interest goes up as well, making the current account deficit worse, not better. Kind of like spending on a credit card making minimum payments in a rising interest rates environment. The only difference is you can print your minimum payment.