Living4Dividends

Paul Tudor Jones: Gold's Undervalued and Bonds Are a Curve Flattener Play

Gold isnt worth $1200 nor $2400 per ounce.

One ounce of Gold is worth what it has always been worth: it is worth one ounce of Gold.

It is better to say that one dollar is worth 1/1000, 1/1200 or 1/2400 of an ounce of Gold.

Thursday FX View: Chinese GDP Offers Dollar Reprieve

Due to rampant printing, money supply has exploded in the Dollar and Euro and Pound at roughly the same amounts (within 10%). That having been said, due to rampant growth in Federal Debt, I think that the Dollar is fundamentally weak.

nearly every country is printing currency like its going out of style, NO fiat currency is a safe form of holding wealth. Fiat currencies have always been risky. They have become even more risky since the global flood in liquidity. The dollar is vulnerable to devaluation, but so is the Pound and Euro. Putting 100% of one's wealth in Dollars is very risky. Who knows who will be the first currency to win the race to the bottom?

Who is the biggest printer of them all ? Surprisingly, it is the Chinese. They have had the largest recent increase in monetary base of all the important currencies. By far, China has printed more currency and has expanded its monetary base much more than the Western Economies.

Surprisingly, despite the huge increase in the monetary base the Yuan still remains undervalued and China is experiencing 6-7 % deflation. If the Brits, Europeans and/or Americans printed money like the Chinese, we would almost certainly experience high inflation.

Wednesday FX View: U.S. Dollar Strengthens as Data Refutes Recovery

1.41 dollars per euro does not a bull market make

Why You Shouldn't Speculate on the Dollar

thanks Marli - I appreciate your validation of my theory.

As for monetization of commodities, that's beyond the capacity of this author. interesting concept.

As long as it doesnt hyperinflate (and I doubt it will) the dollar can still be used in trade. Of course sensible countries would rapidly exchange their dollars earned in trade for other currencies after the trade was over. The dollar can still be used in trade, but not as a store of wealth.

On Jul 06 10:54 AM Marli wrote:

> Superb.
>
> Many dollar bears conveniently forget the currency prices are relative
> to each other, so that if, for example, the fed is monetizing the
> debt while the Bank of England experiences gilt auction failures,
> the net effect could be zero between these two respective currencies
> in a purely hypothetical two-nation model.
>
> However, many dollar bulls simply end the debate there instead of
> taking a logical step further - that if there is no such thing as
> a safe haven currency due to worldwide deficit expanison and monetary
> debasement, that an overall fiat currency crisis could emerge. In
> such a scenario, the securitization of precious metals and commodities
> markets could make the quantum leap from being purely instruments
> of speculation to instruments of trade between private parties who
> may pay taxes and make payroll in their respective national currency,
> (as they would be legally required to do) but accept settlement in
> privately issed notes. The term 'petrodollar' could have a whole
> new meaning.

Why You Shouldn't Speculate on the Dollar

I appreciate your compliments on my article
Thank you


On Jul 02 02:13 PM Samsung wrote:

> Great article. thanks

Thursday FX View: Dollar Quandary

Back in 1967, Alan Greenspan said:

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process… It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard."