yourdeadmeat69

Beware the U.S. Dollar's Head-Fake Rally

The head fake prognosis, is correct. Oil is shrinking on lowered PROJECTED US demand, as if this winter the NE US is burning something else (analyst reports perhaps?), China and India carbuyers will jump TEN FOLD to 600 MILLION in the next 36-60 months, and those cars will be running on gas.

The housing bust is bankrupting Freddie and Fannie, the FED promise to buy bonds and preferred will wipe out common stockholders, and send the dollar reeling. Right now housing deflation says, less dollars will be printed amongst consumers. True, but 3 TRILLION need to be printed to bail out mortgage and banking institutions which otherwise, would go belly up. Another reason for the temp dollar pop--foreign investment in those bonds got an assurance from the FED that those investments were literally good enough for the US govt.

It's all smoke and mirrors. Gold is worth $1050 an ounce, whatever the spot, on simple inflation since Nixon let it float 1971. It ended that year about $105. If you bought a 240Z Nissan then, you paid $3500, about $44000 for a house. Same car now is 35,ooo, same house is $440,000 (not $595,000 last year), so just add a zero to the POG.

Should be $1050. We're back to $850, with the same $200 to run to end of year.

That means the dollar has about 15% more to decline from current levels.

And THAT's the nasty secret the blogger is writing about.