Friday, November 16, 2007

US Dollar Impression

Wile E. Coyote doing his impression of the US Dollar:

"Permit me to issue and control the money of a nation and I care not who makes its laws." -- Mayer Amschel Rothschild

`If you have dollars, I urge you to get out,'' Jim Rogers said in an interview in Singapore, ``That's not a currency to own.'', from a Bloomberg piece dated Nov. 15. Jim Rogers started the famous Quantum fund with George Soros and has been into natural resources since the beginning of their bull market, which started at the same time as the bull markets in gold and silver. This makes sense as they are made of atoms like gold and silver. Smart "money" started going into real stuff, tangible, at the beginning of this decade.

Not that people do not need some government fiat paper and digital bits to function in the world as it exists today. Even US dollar ones. Actually, the paper fiat might be more valuable than the digital fiat. If your bank goes bankrupt, you still have control over your paper fiat because it is in your hand. It's just that one should try not to store too much value this way. Just about all fiat paper and fiat digital bits are being devalued by around, at least, 10%. The US dollar by increasingly larger percentage amounts.

Over the coming years, Wile E. Coyote's impression of the US Dollar might not be too far off. We'll have to wait to see.

So far this year, the US dollar is down almost 10% versus other major fiat; and down far more than that versus gold and silver (actual money).


“Nations are not ruined by one act of violence, but quite often, gradually, and almost imperceptibly, by the depreciation of their currency, through excessive quantity”.
-- Nicolas Copernicus, 1525

"One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It is simply too painful to acknowledge - even to ourselves - that we've been so credulous."
-- Carl Sagan

“Once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities will not cease to rise, everybody becomes eager to buy as much as possible and restrict his cash holdings to minimum size… If the credit expansion is not stopped in time, the boom turns to crack-up boom: the flight into real values begins, and the whole monetary system founders.”
-- Ludwig von Mises (1949)

“The truth is that liquidity, the only significant weapon remaining in the central bank’s arsenal as decision making moves to the markets, will not necessarily go where you want it to go when you need it to go there.”
-- Martin Meyer, from his book “The Fed”

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