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: ayn rand who wrote (25868)	12/23/2009 8:00:51 AM
From: DebtBomb	1 Recommendation Respond to of 71447

And the winner is? gold, commodities index, and oil. click on graphic. bloomberg.com

To: ayn rand who wrote (25868)	12/23/2009 8:04:14 AM
From: DebtBomb	1 Recommendation Respond to of 71447

Over the last few weeks, gold's short-term peak to trough decline amounted to more than 12 percent. With this correction, some are already celebrating the end of gold's nine-year bull market run. But gold's naysayers are ignoring important fundamentals: U.S. monetary and fiscal policies remain extremely expansionary and, ultimately, inflationary; There's strong continuing central bank demand for gold as more countries try to limit their exposure to a depreciating dollar and diversify their official reserve holdings; Investment demand is growing, with more individuals and institutions viewing gold as a valuable asset class, portfolio diversifier, and insurance policy, and; World gold mine production will continue to decline for at least another five years. The December decline in gold has been a mirror image of the U.S. dollar exchange rate - but it's wrong to conclude that the greenback is strengthening. Rather, the decline in the euro and some other key currencies has simply accelerated. With reflationary monetary policies, low interest rates, and expanding government debt in virtually all of the major industrial nations, paper money nearly everywhere - not just in the United States - faces an eventual loss of purchasing power. It seems dubious that the dollar's real and enduring worth is benefitting from rising fears of sovereign defaults. In our view, the dollar's real worth - that is its purchasing power for goods and services - is mostly a function of U.S. monetary policy and the rate at which the Federal Reserve is creating new dollars. Ironically, just when a growing number of foreign central banks (in China, India, Russia, and elsewhere) are worried about their U.S. dollar exposure, some private-sector investors and traders, worried about their exposure to shaky sovereign debt, are seeking a safe haven in the dollar. Nichols: Gold will resume its rise in 2010 resourceinvestor.com