Wednesday, December 23, 2009

The US Dollar Generally Acts Inversely To Gold

The US dollar generally acts inversely To gold and silver, and it sure as heck is not going up other than the occasional bear market rally like right now. There is a lot more to go on the down side.

This generally holds true for any other governments that are devaluing their fiat tokens; thus the price of gold and silver is going up on most other government fiat tokens also, since the ten year old bull markets in gold and silver started.

Jim Rogers and Marc Faber See Disaster Looming, Blame The Fed

Legendary investors Jim Rogers and Marc Faber have similar outlooks on the financial crisis and the efforts of the Federal Reserve to revive the U.S. economy. What do they think of the Fed's quantitative easing policy? In a word, it is a recipe for disaster.

According to Rogers, governments have not addressed the underlying problems which triggered the crisis, but instead have "flooded the world with money." He argues that trying to solve the problem of too much consumption and too much debt with more consumption "defies belief," and will result in epic failure.

Faber's outlook echoes the sentiments of Mr. Rogers. He says, "If we agree that excessive credit and excessive leverage led to the crisis, then what the Federal Reserve is doing is giving a wrong medicine to the patient—they are giving the drug addicts more drug instead of sending them to rehabilitation, which is not good for the economy. So I think that the whole policy will eventually end in another disaster but we don’t know when and many things can happen in between."

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John Williams' Shadow Government Statistics
"Analysis Behind and Beyond Government Economic Reporting"
has released to non-subscribers the "Depression Special Report - August, 1st, 2009"


Number 52

August 1, 2009


Current Economic Downturn Is Worst Since Great Depression

Recession Started a Year Earlier Than Official Reckoning

Business Contraction Triggered Systemic Solvency Crisis
Not the Other Way Around

Still Heavily Gimmicked, Post-Revision GDP Shows More Realistic Numbers

Economic Crisis Is Far from Over



U.S. Economy Is in a Multiple-Dip Depression. The grand benchmark revision of the national income accounts on July 31, 2009 confirmed that the U.S. economy is in its worst economic contraction since the first downleg of the Great Depression, which was a double-dip depression. The current economic downturn increasingly will be referred to as a depression, and it is far from over. There will be intermittent blips of new activity, such as the current cash-for-clunkers automobile giveaway program that appears to be generating a one-time spike in auto sales. Yet, this downturn will continue to deteriorate, proving to be extremely protracted, extremely deep and particularly nonresponsive to traditional stimuli. ...

The rest is at this link.

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International finance is sooooooo complicated. Nope. It's not. A five year old can understand it:

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Over at Mover Mike:

Rickards remarked: “When you own gold you’re fighting every central bank in the world.”

That’s because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that’s why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.

As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central bank system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government.

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This current rally in the US dollar and correction in gold and silver is just temporary. Nothing to worry about. There are no bubbles in gold or silver. Governments still have a lot more damage ("quantitative easing"/"stimulation"= further damage) to do to their fiat tokens.

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