Tuesday, January 06, 2009

More US Dollars On Their Way

The world may be stopping the loaning of USD to the US in exchange for US debt. A great case for gold and silver.

Hugo Salinas Price:
The strange case of falling international reserves

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Now, if the Reserves are no longer growing but diminishing, this might indicate that the exporting countries are no longer buying and accumulating more US, British and European debt. If they are not accumulating more foreign currency bonds and debt, then the fiscal deficits of the US, the Brits and the European Union countries are no longer being funded – especially important to the US, which is running an immense fiscal deficit, what with the US Treasury going into debt like a drunken sailor on account of the need to bail-out all and sundry debtors.

Now if the US deficit is not being funded, then that means that the fiscal deficit is simply being monetized by the Fed. Or what else can it mean?
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Silver may outperform gold, Jim Rogers says

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Silver, down 33% this year, will outperform gold as investors turn to the metal as a hedge against inflation, investor Jim Rogers said.

"Silver will do better than gold," Rogers, chairman of Singapore-based Rogers Holdings, said today in an interview in New York. "It's been beaten down horribly. If you put a gun to my head and said you have to buy one, I would buy silver rather than gold."
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If you are wondering just what is going on with the US dollar, you might want to read a free book:
The Causes of the Economic Crisis
... a collection of five essays on economic fluctuations by Ludwig von Mises (1923, 1928, 1931, 1933, 1946) ...

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