Is Marc Faber Right About the U.S. Dollar?

As every trend-following commodity trader knows…they do not know the future. I saw an interesting video Monday morning with Marc Faber discussing that in his view, the worst is ahead of us. Can he be right about the US dollar? Marc Faber believes that the US dollar will continue to lose purchasing power and the value of dollar will continue to fall.

Comments

[huskerbob:]

The answer is easy. The Fed has destroyed 96% of the dollar's value. Why would they change their policy now? Their stated goal is to destroy 2% of the dollar's remaining value every year.
Unfortunately, dollar destruction will accelerate to the point where it becomes a regular topic of conversation among the hoi polloi.
Will the world continue to send us their savings?
Will the ruling class do what needs to be done to strengthen the dollar?
No and no, emphatically. The dollar will continue to slide in the coming years, with an occasional gain here and there.

Oct 06 07:23 AM

[sod:]

Really! does it take a rocket science to see that the value of the dollar must continue to diminish?

Oct 06 11:11 AM

[Daniel Eskin:]

It actually scares me how things like this can be discussed in such a casual tone. From my point of view the Fed is really screwing around with the dollar's value, and with that the whole country's reputation. When (and if) people start actually responding to this, the ramifications could be huge and the entire US financial system could be in danger. Maybe even something as bad as hyperinflation.... let's hope for better...

Regardless, Peter Schiff has been saying the same thing for a while now and I agree with his and Faber's Pov - the US racked up some SERIOUS debt and I just don't understand how one nation could be the debtor nation for longer than it's due... eventually the debt must shift to another nation in the world and that makes the US' role in the world quite diminished.

Check out my blog at youngandinvested.com

Oct 06 04:46 PM

[Steve in Gr...:]

Borrow USD, invest AUD (or maybe just Au). Have a nice day.

Oct 06 06:57 PM

[The Geoffster:]

70% of world debt is dollar denominated. It cannot be retired in constant dollars because the economy has tanked. We, as a nation are insolvent. The government is insolvent, the financial system is insolvent and the consumer is insolvent. Fiscal policy isn't working. It's just adding to the debt. Monetary policy is keeping the financial system and stock market afloat but unless the economy recovers, this too shall pass. The policy makers have opted to devalue the dollar in the hope that they can stimulate the economy, monetize the debt and raise taxes to keep the ponzi scheme alive. The price of gold is telling us the piper is on his way.

Oct 06 07:48 PM

[untrusting ...:]

What makes you think anybody in the US except the big banks can borrow any dollars? Certainly the average American citizen can't except at 20-30% and up and with great credit scores and certainly virtually no small business can borrow at all at any price.

About the only one who can borrow at cheap rates is the US government. Maybe they should borrow every nickel they can and buy Australia and Canada.


On Oct 06 06:57 PM Steve in Greensboro wrote:

> Borrow USD, invest AUD (or maybe just Au). Have a nice day.

Oct 06 08:31 PM

[Albertarocks:]

On Oct 06 06:57 PM Steve in Greensboro wrote:

> Borrow USD, invest AUD (or maybe just Au). Have a nice day.

Unfortunately, you're right. With Bozo Bernanke declaring that they won't be raising interest rates for the next year or more, the USD has become the vehicle of choice for the carry trade. But if Bernanke speaks the truth (what are the odds of that?) inflation will run out of control. The only way to fight inflation is to raise interest rates. I'm relatively certain though, that he speaks the truth this time, because it's his own cronies who will be using the dollar for their own greedy purposes for as long as possible... at the expense of the dollar and at the expense of the good American people.

He and his predecessors and the entire board (and all THEIR predecessors) all belong behind bars for treason and crimes against humanity. Or according to this article... worse. Check out this quote... it's pretty hard core and doesn't mince words:

"SECTION 19. And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of fine gold or fine silver therein contained, or shall be of less weight or value than the same ought to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, * * * every such officer or person who shall be guilty of any * * * of the said offenses, shall be deemed guilty of felony, and shall suffer death."

Here's a link to said article. As an added bonus, you'll probably also enjoy this entire great website:

www.runtogold.com/2009.../

Oct 06 08:31 PM

[Albertarocks:]

On Oct 06 08:31 PM untrusting investor wrote:

> Maybe they should borrow every nickel they can and buy Australia
> and Canada.<

You forgot the end of your sentence. " ........ and return every single penny of the profits to the American people."

If they bought Australia, Canada and gold, and gave every penny of profit back to where it belongs, the American people, America could survive this incredible disaster.

Oct 06 09:59 PM

[Steve in Gr...:]

I get credit card offers, mortgage refi, etc. offers 3x per week. I'm not a big bank. I'm not even a small bank. Sorry.

On Oct 06 08:31 PM untrusting investor wrote:

> What makes you think anybody in the US except the big banks can borrow any dollars?

Oct 06 10:13 PM

[a fat panda:]

Jim Williams, of "Midnight In The Garden Of Good And Evil"-fame said it best. "It's only the trappings of aristocracy that I find worthwhile - the fine furniture, the paintings, the sliver--the very things they have to sell when the money runs out. And it always does. Then all they're left with is their lovely manners." The only difference is that he was talking about individuals where as Faber is talking about an entire country.

Oct 06 10:53 PM

[elwind45:]

We can have a falling dollar and still survive. As long as China creates Yuan to offset trade imbalances. Dollar carry is going to be used to fund off balance sheet dollar creation. The Yen can be controlled by BOJ and the ECB has room to lower rates to defend stronger Euro. We would have inflation in the future anyhow. When your entire export policy is de-valuing your currency , who cares how low it goes? Your rich ha ha.

Oct 07 02:11 AM