Tuesday, February 12, 2008

Long Term US Dollar Chart

Below is a link to a long term US dollar chart. But first, read this about South Africa's Rand:

Rand Sinks to Worst Performer as South African Power Grid Fails:
...
Feb. 11 (Bloomberg) -- Gold is above $900 an ounce and platinum has never been higher, yet traders are selling the South African rand faster than any other major currency because President Thabo Mbeki can't keep the lights on
...

[That is what happens under Communism: government ownership of the means of production. Didn't people learn anything from the internal implosion of the USSR? What is happening in South Africa means a decrease in production of gold; a decrease in world supply. If demand is increasing and supply stays the same, gold prices will increase. If demand is increasing and supply decreases, gold prices will increase even more.]

...
The rand is down 12 percent this year against the dollar, six times more than the next-worst performer among the world's most widely traded currencies.
...

The decline signals the world is losing confidence in South Africa's ability to remedy a power shortage that has disrupted mining of some of the world's most valuable precious-metals deposits just when prices are climbing.
...

``The currency is the share price of a country,' said George Glynos, managing director of Johannesburg-based Econometrix Treasury Management, which advises investors on bond and foreign-exchange holdings. ``If anyone wants to know what foreigners are thinking about South Africa at the moment, they need look no further than the rand.'
...

Zurich-based UBS, the world's second-biggest currency trader last year with almost 15 percent of the market, according to Euromoney Institutional Investor Plc, forecasts continued ``rand weakness.'
...

Now, would you buy these shares of this company?
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA0N8cL7nsOxSOTI9JSkTrwwU4V4mN-520EgektX5sa3e75Xi_q6t6xsPv0BHmSaF_Q716zRiH9C7syKz5ahWqXGkS-jnyXMgeuocFPcys4mn4miaMrfOV4IxGAUT0GCG0Hv5m/s1600-h/LTDX.png
Chart from:
Jesse's Café Américain
Thoughts Concerning the Unfolding Economic Crisis
http://jessescrossroadscafe.blogspot.com/


These bull markets are about silver and gold prices moving inversely to the US dollar and other government fiat paper and digital bits because governments keep increasing the supply of paper and digital bits.

As the dollar was topping around 2001, gold prices, silver prices and other natural resource prices were bottoming. The dollar topped with classic head and shoulders and double top patterns, on top of each other. A screaming top; a no brainer time to switch from USD denominated financial instruments (digital bits) to gold, silver and other natural resources (stuff, atoms); when adding the technicals on top of the fundamentals.

9 year monthly bar chart of gold:

9 year monthly bar chart of silver

9 year monthly bar chart of the CRB Index
(commodities, stuff, atoms, the opposite of digital bits)

There is still a long ways to go for these trends that are in place. The 1971 Bretton Woods agreement is to politicians as giving whiskey and car keys is to teenagers. It disconnected fiat paper and digital tokens from the discipline of gold and silver.

That is one ugly looking long term US dollar chart.

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