silver-bullet

How Bad Is the Dollar's Fall?

Yes, oil and may I add gold.

To put this in perspective, beyond paying for the war, trade deficit, pork barrel projects, global military build up.... do not under estimate what I consider the grandfather of all bear scenario:

The US ENTITLEMENT PROGRAMS (social security, medicare, medicaid, etc) was estimated to be at about 2/3 of the federal budget. This figure is in the trillions of dollars.

MSNBC: www.msnbc.msn.com/id/1.../
The Heritage Foundation: www.heritage.org/resea...
Wiki: wiki.answers.com/Q/Wha...

This will play itself out in the next 20 to 30 years, when 60 million boomers begin to retire. They will be collecting more and using more, and contributing less. Yes, it's payback time for them.

Make not mistake, the US government is bankrupt and has already dipped into the social security cookie jar for sometime. If history repeats itself in fiat currencies, there is a 99% chance that the US government is going to print more and more money. Why else do they stop publishing M3 money supply a few years back.

A second factor that will aggravate the dollar decline is oil, or the lack there of. There are no new and bigger oil fields discovered, there is vehement opposition on oil exploration within the borders of US. Oil can rise to $200, $300, $400.... and the cost of gasoline to string beans will sky rocket.

The public probably thinks that gasoline comes from gas station - NOT. It originates from oil fields. Oil can be at $1,000 a barrel and it is still not a bubble because by definition a bubble is when price increase when there is an excess supply of the item of interest. Again, where are the new and larger oil fields?

The future is bleak for all who holds US$, especially those who are retiring as they are at the end of their productive years and have most of their wealth in the 'safety' of cash.