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

To: Real Man who wrote (9107)	6/18/2008 2:48:54 PM
From: Secret_Agent_Man	Read Replies (2) \| Respond to of 71406

$1.14 Quadrillion In Derivatives— What Goes Up… Kevin DeMeritt President, Lear Financial Quadrillion? That’s a number only astronomers use, right? You know…as in the North Star is “just” a couple of quadrillion miles away. But, ominously enough, Earth’s economists are actually starting to use it, too. No, not to discuss the amount of dollars out there (though it might feel like the Fed just pumped a quadrillion greenbacks into the economy). The Bank of International Settlements recently reported that the amount of outstanding derivatives has now reached the $1.14 quadrillion mark ($548 Trillion in listed credit derivatives plus $596 trillion in notional [or face value] OTC derivatives). Ladies and gentlemen, these derivatives referenced above are virtually ALL PROXIES for fiat U.S. dollars. Using one ounce of common sense, anyone should be able to see that when ANY GOOD is produced in quantities such as this – their relative value CANNOT AND WILLNOT GO UP – long term. What is outlined above is a RECIPE for HYPERINFLATION. Typically, at the leading edge of a hyperinflation, shortages of staple goods begin to appear – like this: Forget oil, the new global crisis is food, BMO strategist Donald Coxe warns credit crunch and soaring oil prices will pale in comparison to looming catastrophe Alia McMullen, Financial Post Published: Monday, January 07, 2008 I would submit that the price of crude oil is in fact BEING FORCED HIGHER for the expressed purpose of DESTROYING DEMAND because “it must be” – due to shortage. As oil maverick T Boone Pickens says, “Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87 million," he said. "It's just that simple. It doesn't have anything to do with the value of the dollar." I would suggest that Pickens is “off the mark” when he says it does not have anything to do with the dollar. On the contrary, IT HAS EVERYTHING TO DO WITH THE DOLLAR! Incremental inelastic global oil demand is coming from China [China subsidizes the price of oil which explains its price inelasticity]: Subsidized oil product prices led to diesel shortages last fall because small independent Chinese refiners (called "teapots") were unable to pass on higher oil feedstock costs. State-owned refineries, which operate at a loss, were also pinched by higher crude prices. Although the Chinese are now expanding their refining capacity, they have taken a "measured approach" to meeting subsidized internal demand. China set for 400,000-bpd oil refinery output rise (Reuters, January 9, 2008) tells the story — Lest we forget, China’s robust ECONOMIC MIRACLE was indeed “seeded” by WESTERN FIAT MONEY – so it really “IS” all about the dollar: Western markets have been at least subconsciously aware of this for a decade. More than half of the $1.1 trillion in foreign direct investment that has flowed into China since 1995 has not been foreign at all, but money recirculated through tax havens by various local businessmen and governing officials looking to avoid taxation. Of the remainder, Western investment into China has remained startlingly constant at about $7 billion annually. Only Asian investors whose systems are often plagued (like Japan's) by similar problems of profitability or (like Indonesia's) outright collapse have been increasing their exposure in China. Ladies and gentlemen, it always “HAS BEEN” about the dollar – and how many of them that are being created! Of course we should not be surprised when Central Bank shills have the audacity to tell us that fiat money is “going up in value” – in light of what they’ve done to OUR MONEY - it’s a Central Banker’s wet dream.