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

To: stan_hughes who wrote (1027)	9/18/2007 9:08:26 AM
From: Real Man	Read Replies (2) \| Respond to of 71442

The point is, being long stocks is supported, while even a 5% decline is not tolerated - there are immediate cries for help from the Fed, and the Fed responds. Fundamentals for stocks have not been good for years. But something has to go down in this environment, and that something has been the dollar. So far the dollar has been falling gradually. The reason is foreign buying, which countered the huge trade gap outflows ($2 billion a day) The Fed has NOT been responsible at all, they have succumbed to political pressures - raising rates from 1% in baby steps, while printing at the same time, discontinuing M3, lowering margins on comex for market makers, fudging with inflation statistics, etc., you name it, they've done it. So NOW the dollar and the Fed credibility is a big question, and that's a result of great many years of bubble blowing. Once it's payback time (Fed's credibility is completely lost), the dollar will start dropping fast and will keep dropping. Nothing will stop that, and the LT rates will spike, so will gold. All imho. Wait, gold is already spiking. Asset inflation has replaced savings in the US. Asset inflation must continue, or else... Now it's not just assets that are inflating - food, oil, you name it. I PRAY we don't get the German scenario, cause in my view that's a definite possibility. So, while I hope that the Fed becomes responsible all of a sudden, I can see a scenario when they don't. Then it's not going to be 40 for USDX. It will fall into the bottomless pit.