Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: SouthFloridaGuy who wrote (7016)	5/6/2008 11:54:01 PM
From: John Vosilla	Read Replies (1) \| Respond to of 71456

'That is a very possible scenario, but it's not the playbook right now' The playbook is all about debasing our federal governments near $100T of obligations... It is foolish to think deflation comes out of this if even airline fares are rising these days and national average property rents hit new highs according to the WSJ report on Friday..

To: SouthFloridaGuy who wrote (7016)	5/7/2008 2:08:25 AM
From: Real Man	Respond to of 71456

Well, the other side is deflationary derivative collapse, a meltdown the Fed will prevent at any cost, but that side is not bullish for the dollar either. At least that side has a dollar bottom, while propping them with liquidity (what the Fed IS DOING) might not. I agree with you, it's a mess - you've got debt deflation on one side - and, in my view, dollar devaluation on the same side, because the debt is owned by foreigners. On the other side are booming commodities. All 3 things together. The difference with Mish and Minyanville. Guess what? Stocks go up, and so does the dollar, but the advance of the latter is limited, because a 3 billion drip happens every day regardless -g- Did you notice Gold and stocks have become anticorrelated lately? Question: Why not deleverage? Answer: Because the game went way too far. They can't, without a Great Depression. Fed was right, collapse of Bear as a counterparty would have caused a meltdown. Dollar devaluation itself should start a process of bringing back manufacturing at some point. That would be bullish, and would indicate the decline is ending, the fundamentals are improving. We have a bit of that, since the structure of the current account deficit is changing, but a long way to go still. At least the current account deficit is "stabilizing" - at a high value.