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In reply to: albion on Friday 19/12/08 08:17am

Albion: you would surely have to be Einstein to have any hope of understanding anything, let alone make any rational decisions. What do you make of this? (My Bolds).

IMHO since the Lunatics are now in charge of the US asylum, everbody is shite scared of the inevitable consequences, boy are times about to get electric!

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Dollar gains on euro after ECB cuts deposit rate

 

By Lisa Twaronite

Last update: 11:50 a.m. EST Dec. 18, 2008Comments: 1

SAN FRANCISCO (MarketWatch) -- The dollar jumped against the euro Thursday after the European Central Bank cut its offical deposit rate by 50 basis points to 1% below the key rate and raised its marginal lending rate by 50 basis points to 1% above the key rate. Its benchmark repo rate remains unchanged at 2.5%. The euro was buying $1.4294, down from $1.4404 in late North American trading Wednesday and down from an earlier Thursday high of $1.4716. "The ECB is obviously fighting the surge of cash out of U.S. dollar deposits into euro deposits since the Fed's surprise rate cut earlier this week," said Michael Woolfolk, senior currency strategist at the Bank of New York.

 

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Hi Flower.There's a whole lot more to consider than unemployment stats.There is plenty of smart money that says USD could go a lot higher.The wildly touted idea that printing lots of USD's is inflationary and therefore will devalue the USD is, in my view incorrect.At present we have deflation and until this works out of the system printing money will not be inflationary.Those who have long forecast the destruction of the USD have been wrong so far and there is little technical evidence to indicate they will not continue to lose money by pursuing this belief. The POG looks toppy from an Elliot Wave viewpoint--this (maybe!) lends support to the strong USD idea.

There's lots of USDs heading home,and they are being exchanged for other currencies.

When everyone knows something(eg:USD is stuffed) it often isn't worth knowing.l Sold my Gold shares yesterday---time will tell!

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In reply to: flower on Tuesday 06/01/09 07:18pm

There is a limit to how much nonsense foreign nations will take, once the T Bond market starts collapsing the dollar will go with it, then not only will they be monetizing mortgage based derivatives (as they are doing now), they will be required to monetize Govt debt - at that point the $ is completely screwed and the fundamentals for multiple reserve currencies will be in place (The U.S. will not have too much of a say in it). The only saving grace they have is to get the $ back on a non redeemable gold standard, that will not happen at today's prices. By the time that's ready to happen faith in the faith based monetary system will be on the ropes so we will end up with multiple reserve currencies with each one tied to gold, this in turn will allow businesses to start making long term plans as interest rates will remain stable, a possible outcome of this stability being that the manufacturing base of Western Nations will be hopefully restored.

 

The other option to the multiple currencies is one world currency, but that one's 50 - 100 years away, I won't be around but I'll bet my bottom dollar that it will be a privately owned bank behind it.

 

That's my two bobs worth.

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In reply to: TheFerret on Tuesday 06/01/09 08:07pm

An inconvenient truth is the behavior of Bond Markets.In previous deflations,30 yr Bonds have stayed high(=v.low interest rates) for many years.There is no certainty of a bond collapse.When this crisis began,the confident chorus was for an immediate Bond crisis.What actually happened?Bond prices have risen since that time.

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QUOTE (wren @ Tuesday 06/01/09 07:58pm)

Those who have long forecast the destruction of the USD have been wrong so far and there is little technical evidence to indicate they will not continue to lose money by pursuing this belief.

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Sorry to be brutal Wren, that really is completely WRONG.

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In reply to: wren on Tuesday 06/01/09 08:21pm

As $ were repatriated via the de-leveraging process, the bucks were not going into the banks, from memory FDIC insures participating bank deposits up to 100K, so it only makes sense that they will park them in T bonds. I did the same thing in Nov 2007 when the crises was in its infancy, I knew at that point in time that there was no guarantee with deposits at Oz banks so I purchased T Bonds with the Reserve Bank and also for SMSF as well as purchasing certs at the Perth Mint.

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In reply to: TheFerret on Wednesday 07/01/09 04:14am

For the lazy ones who dont want to click on the link,lol.

 

nice day to all.

 

http://www.sharescene.com/html/emoticons/wink.gif

 

 

Willem Buiter warns of massive dollar collapse

Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.

 

By Edmund Conway, Economics Editor

Last Updated: 3:05PM GMT 06 Jan 2009

 

MPC founder member Willem Buiter. Photo: CHRISTOPHER COX The long-held assumption that US assets - particularly government bonds - are a safe haven will soon be overturned as investors lose their patience with the world's biggest economy, according to Willem Buiter.

 

Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.

 

The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency's prospects, as well as sparking fears about the sustainability of President-Elect Barack Obama's mooted plans for a Keynesian-style increase in public spending to pull the US out of recession.

 

Writing on his blog , Prof Buiter said: "There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place."

 

He said that the dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" - an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.

 

"The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally," he said. "Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed."

 

He said investors would, rightly, suspect that the US would have to generate major inflation to whittle away its debt and this dollar collapse means that the US has less leeway for major spending plans than politicians realise.

 

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In reply to: flower on Tuesday 06/01/09 08:55pm

After the usd went down a few weeks back we/some thought it was the beginning of the end for the dollar.

 

Bounce back to current levels and maybe just under 85 before it gets dumped again???

 

Who knows WHEN......but IT WILL HAPPEN.

 

http://www.sharescene.com/html/emoticons/weirdsmiley.gifhttp://www.sharescene.com/html/emoticons/lmaosmiley.gif

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