User 86945

U.S. Dollar Paradigm Shift Underway

Since 2000, the S+P 500 is down significantly when you price the index in oil, gold, food, industrial metals. Most rates along the yield curve are negative even when you use the phony CPI from the government. Conservative investors and US dollar savers are getting crushed The standard of living - the amount of goods people are able to purchase with their income has been falling. There will be a reduction in the spread between the real incomes of the developed world and the emerging market world. Probably not in a straight line, but it will occur over time. Many developing countries used to be controlled by the same mentality of welfare for bankers, big industry, seniors, military- fill in the blank that currently grips the U.S. The staggering US debt- public and private will have to repaid in depreciating money. More so if the systemic banking bailouts continue. Paul is right about the lunacy of borrowing from world in order to protect it from it self. The taxpayer gets stuck paying the the tab plus the interest that comes with it. The politicians, their cliques and the two major parties make a fortune from handing out the contracts. You tell the truth on the big stage in the US and you are marginalized. Any benefit in the additional increase in the supply of money gets washed out because the amount of real goods one is able to buy shrinks. Money is only useful when it is exchanged for real goods. Trade the dollar on the long side in the short term, but in the long term, the dollar should go down and it will be bad for dollar earners and holders make no mistake about it.

U.S. Dollar Paradigm Shift Underway

Here is what Mr. Krause wrote on his blog said back on Friday, October 26, 2007

"Is the market misreading the FOMC?

I am in total disbelief that the talking heads, hedge funds, and powers that be are betting so much on the fed cutting here (even 25bp) despite their past move being 50bp. The FOMC executed their last cut after a dismal jobs report, and during commercial paper crisis which resulted in a flight to 90 day bills not seen since the crash of 87!

What's different now? We aren't in credit crisis anymore. The commercial paper market, despite not being what it once was, stabilized somewhat. The unknowns of subprime asset writedowns are much more known than before (despite being worth 18 cents on the dollar versus 38-42 cents at mid august)."

Yeah, back in Oct 07, the USA was no longer in a credit crisis! Wow. Does this guy have any credibility left after that memorable statement?