While the world is focused on the Middle East, the bankrupt countries of Europe continue to deteriorate. The extend and pretend games that are being played across the globe are nothing but a farce. The goal was to pray for a worldwide recovery that would miraculously spin trillions of bad debt into gold. Not happening. The world is descending into chaos, oil prices are skyrocketing, food prices are soaring, the poor are starving, and revolution is in the air. Faith in the world economic system is collapsing. What is happening in Europe and the Middle East is just a prelude to what will happen in the U.S.
Moody’s Investors Service cut Greece’s sovereign-debt rating Monday by three notches to B1 … The ratings agency, which also assigned a negative outlook to Greece’s ratings, highlighted the government’s difficulties with revenue collection and noted a risk that Athens might not meet the criteria for continued support from the International Monetary Fund and the European Union after 2013.
That could result in a voluntary restructuring of existing debt, the ratings agency said.
Administrator says:
Europe is a basket case, but the USD fell to 1.40 versus the Euro today. What does that tell you about the U.S.?
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7th March 2011 at 11:08 am
Administrator says:
From Jesse:
07 March 2011
US Dollar Very Long Term Chart: Emperor et Ses Amis du Vins
The weakness with this US Dollar DX index is that it is highly weighted to the developed economies of Europe and Japan. As such it may not reflect erosion of dollar purchasing power vis a vis the BRICs, and external measures such as gold, oil, and silver. It may be masked by the mutual weakness of central banks all inflating their currencies in unison.
This is what the Federal Reserve desires: to repair its economy and unpayable debts by expanding its monetary base while exporting much of the negative effects of such monetary inflation to the rest of the world, keeping things relatively stable to maintain confidence in their paper. And this is why the central banks attempt to control the price of less manageable currencies such as gold and silver. Silver is the most problematic because its supplies are difficult for the banks, as they have none of their own, and the world has largely depleted its discretionary strategic stockpiles of this metal. Long term price suppression breeds underinvestment and the inevitable shortages of real goods.
The support levels are as marked and fairly obvious. With the dollar index around 76.28 today it is threatening to break down out of the chart formation. Lateral support around 74 and 71 is fairly strong.
Rather than rallies through economic vitality and recovery, the dollar rallies have been marked by relative declines primarily in the euro on their sovereign debt problems. It is almost like two drunks leaning on each other for support.
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7th March 2011 at 11:14 am
Smokey says:
It is a mathematical impossibility that within the next twenty years Europe, Japan, and the USA do not default on their debt or enter hyperinflation. One or the other MUST happen.
Using today a twenty year holding period to buy oil, precious metals, and short US Treasuries will prove to be very wise. Practically no risk, enormous potential, mortal locks.
So what does Jim Chanos do ? SHORT CHINA!!!!
http://seekingalpha.com/article/256768-where-is-the-chinese-real-estate-bubble?source=dashboard_global-investing
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7th March 2011 at 11:56 am
Persnickety says:
“What does that tell you about the U.S.?”
That we’re in a sack race of midget cripples?
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7th March 2011 at 12:48 pm
Viet Vet-70 says:
In 2002 for every American dollar I was getting $1.47 Canadian, now 9 years later for every American dollar I am getting $0.97 Canadian, what does that tell you?
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7th March 2011 at 1:44 pm
Opinionated Bloviator says:
Apart from silver and gold, shorting the shit out of long term US debt is my next money maker.
Making money of the economic collapse of the world – priceless…
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7th March 2011 at 5:47 pm