[maverickdoc]

It is time to start preparing for the future especially if you live the United States. In the US the living standards are declining and they are going to start decline even faster, a lot of it has to do with the raising oil prices and a lot has to do with the falling dollars. Oil is rising because increase demand by other countries (ie. China and India) and lack of stable supplies (ie. Iraq Venezuela and Russia). America is making the situation worse by going to war in Iraq and spending $300 billion and counting, which adds to our 7.6 trillion, see: link federal deficit. In the last year alone we added 1 trillion, fastest in history and this has caused a fall in the dollar value- currency. How does this deficit affect the average American?

If you were worth $100,000 in 2000 you could get 125000 euros. Today you will get 77000 a net loss of $48000! And things don't look too much better against other currencies and other commodities like gold or OIL. So what you say, I will not be leaving the US. Don't worry the problems will come to you. The price of oil was gone up from $26 to nearly $50 today. For Europeans the price has gone up not as much ($38) this is due to the exchange rate. The dollar will continue to fall was the cost of war in Iraq and Afghanistan continue to rise, along with other domestic costs. That is assuming we don't attack other countries (ie. Iran). The reason the value of dollar falls relative to everything else is topic for another day, but just remember as the debt goes up the value of dollar goes down as goes your living standard and your net worth.

So what can I do? I plan on keeping the amount of dollars I own to a minimum just to run day to day needs. I plan on converting my saving to euro of Swiss franc (is based on gold).
The US dollar will continue to fall, yes it can make a short term rally, but in the long term it will fall. The fall will constant unless China starts selling its dollar reserve, or if we attack Iran, or if the IRAN oil Bourse comes online. In any one of these scenarios there will be a sudden crash.

[maverickdoc]

[/B]Warren Buffet the Second richest man in the world is betting against the Dollar
"The dollar has fallen savagely against the euro for the past three years, and the trade deficit is running $55 billion a month. Is the currency rout over? Can the trade deficit be fixed with a rise in interest rates or an upward revaluation of the Chinese currency? Warren Buffett, the world's most visible dollar bear, says the answer to both these questions is no." article
For those of us who are not billionairs the time to switch is now

[john156]

This is exactly what I was looking for. You seem like you have a business back ground. Thanks Mav. Can you explain how dollar is valued? Also when is the best time to get euros? What are your thoughts on Gold?

[john156]

what did you mean by $3Cool this is due to the exchange rate.?

[threadbear]

I moved to Canada about a year and a half ago, but had to leave my IRA's in the US. .

When I moved here I directed the brokerage to sell my stock and convert it to gold, energy and foreign bonds of my choosing, immediately. They dragged their feet and then told me they "didn't deal" with those companies--told me they didn't have agreements with them. What this essentially meant is the stocks I wanted to purchase weren't front loaded, meaning (I think) that the broker collects commission when they sell, not upon purchase. This was incredibly annoying. Another thing they won't do is have "agreements" with any dealers who are purchasers of gold bullion. They only deal with companies that have gold miners mutual funds. This isn't quite the same thing as buying gold. Again--very annoying. I figure one of the reasons for this is, being agents for companies directly speculating in the gold markets, undermines their ridiculous theories about the perpetual nature of bullmarkets. Gold is rewarded when the sh** hits the fan, generally, and that runs counter to their philosophy. Oh, and did I mention, ALL brokerages in the US are ethically crooked, if not legally so. Their "agreements" with mutual fund managers are essentially kick back schemes.

It has been a really irritating exercise and as soon as I'm able to physically get back to the US I'll open a purely self directed account where I can do whatever I want. This involved a small sum of money, or I would have done a full Josemite Sam impression.

Whatever investments anyone makes, make sure you're dealing with agents who have a realistic philosophy and understand that we're entering tough times. Make sure they give you full authority over your account. You should also never approach them , as if they're the authority. As far as I'm concerned, if you know anything about peak oil, at all, you're more of an authority on the economy than they are. Most of them are complete dumbasses, politically, and read only the in house literature. This is what they base their analysis on.

Word of advice. There are some really good online bear sites, Capitalstool is one. Click on B4 the Bell. Best impartial advice from growling bears, some of whom short the market for a living. They're also highly amusing. I don't short sell, and wouldn't advise anyone to attempt this, at this time, but these guys understand political/economy better than anyone I've ever come across and most are very interested in Peak Oil.
Pardon my rambling. I hope so much this has helped some of you.

[smiley]

When you want to invest in foreign currencies I think you have to consider the following:
Currencies like the Euro, the franc, the Canadian dollar etc. have been rising because of weakness of the US dollar. That is not going away anytime soon. However that does not mean that these currencies will keep on rising as the dollar deteriorates. I think there are two developments which deserve particular attention. Japan seems to have given up on currency intervention and China seems to be opting for a flexible Yuan.

This will create two new alternatives for the dollar. Judging by the general interest in Asian investments I think these currencies will be very hot when they are unleashed from their current restraints.

If these currencies are opened to the market I expect money to flow out of the other currencies (especially the Euro) into the Asian currencies. While the dollar will keep on falling against a measured basket of currencies, the valuation of the individual currencies within that basket might shift considerably. So beware for a change of the playing field.

[Tyler_JC]

If America crashes, Canada gets sucked down just as quickly. Most of Canada's economy exists to sell stuff or buy stuff from the USA. I would not be investing in Canadian Dollars right now.

[maverickdoc]

Thanks for the kind words john. I do have an MBA but most of the currency and commodity stuff I learned on my own.

1.As all astute readers of Peak Oil knows the US dollar is a float currency the only value it has is based on perception. The US also happens to the biggest debtor in the world. The almighty Dollar is the “reserve currency of the worldâ€

[threadbear]

China may stall out or may have created a strong enough domestic economy and strong enough trading relations with the rest of the world that they just might depeg from the dollar. Then you'll see some inflated prices in the US.

I figured that what Bushco was thinking about for the future was restoring the American manufacturing base, beginning in Christian debtor prison/work camps, where the over leveraged and unemployed get to work off their debts sewing uniforms, building bombs for the war effort.

W could reduce the trade deficit while Christianizing the heathens, and further enriching his buddies at Whakenhut and Brown and Root. Like grandad, like grandson Perfect.

Gold is good in uncertain times. If the US tanks there will be some contagion but it may not have the extreme impact beyond it's borders, we think it will. I think Canada will survive it. A lot depends on China's ability to be the new mega consumer, while letting other countries in on the production end, when they float their currency. It should spark a speculative buying frenzy.

[Schneider]

$this->bbcode_second_pass_quote('Tyler_JC', 'I')f America crashes, Canada gets sucked down just as quickly. Most of Canada's economy exists to sell stuff or buy stuff from the USA. I would not be investing in Canadian Dollars right now.

[Tyler_JC]

China needs the United States more than we need them.
We need them for one reasone. Cheap imports. Without cheap imports Wal-Mart will have to look elsewhere for products to put on the shelves. Replacing that junk is possible without a major increase in price inflation (10% or less). Remember, this would be a one time charge. We'd buy a little less stuff from foreign powers, but we would survive. The trade deficit would shrink and we would have less debt overall.

The nice thing about imports is when you stop buying them, very few people in America lose their jobs. Those that do can go back to the factory if it reopens do to a competive advantage.

But what about all of the easy credit we get from China? We wouldn't need it. If the US bought less stuff from other countries, we wouldn't need to borrow money to pay for it. The issue is if they cut their lending too quickly, that could spike interest rates and make millions of variable rate mortgage people homeless.

What is the effect on China?: Mass urban unemployment, starvation, and civil unrest. Maybe a civil war. The symbol for food in China looks alot like the symbol for government. Without one, you can't have the other. The newly Middle Class like having stuff. If they lose a little in their standard of living...it's not pretty. When the China Bubble bursts, it could mean the end of the Chinese government. I try not to think about what would happen to all of those nukes...

[threadbear]

Tyler, Schnieder, I'm not under any illusions about the pain a depegged dollar would cause for China, but bear in mind that they are importing price inflation from the US by continuing to underwrite the Yankee buck. This has a serious effect on factory workers who's wages aren't keeping up with inflation right now.

The US wo't quit purchasing from China. They may cut their imports by 50%, though. Same for Canada. Our manufactured and agricultural exports to the US may take a 50% hit, if our currency continues it's climb against the US dollar. I think we can take it. The natural resource sector in Canada will take up some of the slack. Unemployment will be higher, but social programs will likely be reinvigorated.

As well, you'll have to check the veracity of this claim as I'm not a banker or an economist, but I think Canada has much stronger code of conduct for it's lending institutions regarding financial derivatives, and separation of services, ie..banking and insurance. This is also a positive.

The US has managed to convince the entire planet that it is indispensable, in all ways--militarily, economically. I cry BUllsh**. They can just twist in the wind. The world will go on without them and much more happily, in the long run

[smiley]

$this->bbcode_second_pass_quote('', 'B')ut what about all of the easy credit we get from China? We wouldn't need it. If the US bought less stuff from other countries, we wouldn't need to borrow money to pay for it.

[threadbear]

Smiley, The US is totally dependant on debt forgiveness. The latest issue of Forbes magazine, has an article about future disaster scenarios for the US.One of the articles absolutely insists that their debt MUST be forgiven. Wild hey? Wouldn't you just love to be holding American dollars right now? The thing is, no matter what kind of interest rate they offer, this kind of situation is going to see the dollar lose all it's value. They'll need a Dawe's plan to get them out of hyperinflation and back to a gold pegged dollar, as Germany did in the late twenties.
There can't be any IMF bailout. They are the IMF

For me, this is a bigger potential disaster than peak oil. And how apt that the US currency collapse will be synchronized with the rise of alternative technologies and the collapse of oil based technology.

In some ways I'm looking forward to it. The situation can be compared to pre war Germany, somewhat. The difference is through the Dawe's plan Germany forged strong links with industrialists in the US and elswhere. They helped build the German war machine. The US will have no paternalistic relationship with a greater power who can help them out. This will put a complete end to Bushco's retarded military adventurism, which threatens the world much more than their inability to greedily consume a disproportionate number of consumer goods.

BTW, apologies to Americans, many of whom are great people. It's your leadership that sucks.

[Tyler_JC]

What if the government raised taxes to pay off its debt and cut spending on things like paying farms not to grow food. We could also cut back on SS payments. Let them eat dog food, we have to service our debt! This won't get you elected , but it would make a GREAT debate. I laugh jsut thinking about it .

[threadbear]

Tyler, You have a great idea there. Noone in the US would have the sheer audacity to suggest taxes be substantially raised for the superwealthy. And it was just this class of republican bozos loudly proclaiming prior to invasion of Iraq, that what the economy really needed to get it back on it's feet was a good old fashioned war. WW11 worked. Hell--let's do it again.

Not being astute students of history, what they overlooked was the tax rate on millionaires during WW11 was 80%. Hmmmm. I think they'd rather deficit spend and inflate the debt away. Leave the middle class holding the bag. They'll have all their currency converted to metals and other hard assets before the SHTF. Socializing costs and privatizing benefits. That's what the USA does best.

And they're talking debt forgiveness. I would tidily divorce the wealthiest 2 % from 80% of their holdings before that would be considered

[smiley]

$this->bbcode_second_pass_quote('', 'S')miley, The US is totally dependant on debt forgiveness. The latest issue of Forbes magazine, has an article about future disaster scenarios for the US.One of the articles absolutely insists that their debt MUST be forgiven. Wild hey? Wouldn't you just love to be holding American dollars right now?

[maverickdoc]

The Big difference between the Plaza accord of 1985 and now is that:
1. Their is an alternative currency (EURO)
2. The rise and continued growth of China and India
3. General dislike of the US foreign policy if not the US itself


Besides looking to the past to predict the future is shaky at best.

Since my first posting the on this thread the euro was appreciated considerably


http://yahoo.reuters.com/financeQuoteCo ... 353_newsml

[maverickdoc]

"The biggest chatter in the markets today is about the article in the Financial Times that talks about the shifting of central bank reserve positions from dollars to euros. This is something that we have warned about for some time now in previous editions of Daily Fundamentals as well as in our 2005 currency outlook. Russia has already announced their intentions to shift their mix of reserve allocations"

http://biz.yahoo.com/fxcm/050124/110660 ... 944_1.html


My prediction by the end of the 2005 the 1 euro will get you 1.4 US dollars

Some people asked about currency trading besides going to the bank adn doing it physically to can traded currency from you pc with various companies such as FXCM

http://www.fxcm.com/?engine=yahoo&keywo ... +01070+FNP


DISCLAMER I DON'T HAVE ANY FINANCIAL STAKE IN FXCM

[maverickdoc]

Update

"Bill Gates, the world's richest person with a net worth of $46.6 billion, is betting against the U.S. dollar."

http://quote.bloomberg.com/apps/news?pi ... news_index