Korean Job Discussion Forums

[ontheway]

Iran has stopped accepting dollars for oil:

Will this accelerate the meltdown of the dollar or accelerate the Bush plans for war with Iran, or both:



http://www.youtube.com/watch?v=jRR9QnAmH08

[igotthisguitar]

RON PAUL ... CENSORED AGAIN
http://www.youtube.com/watch?v=-Jqz3QbAaTQ&NR=1

CNBC Censors Oct 9th Landslide (75%) Victory
http://www.youtube.com/watch?v=45mmY7giY4s&feature=related

[ontheway]

The dollar is falling, the recession is already here, but the government is hiding it ...


http://www.youtube.com/watch?v=0My84UIj88A

[Kuros]

[ontheway]

[ontheway]

The financial world is waking up.


http://www.youtube.com/watch?v=8teEHdCrFqE

[mindmetoo]

[ontheway]

In the days of the petro dollars, the central banks were not dumping their dollars for other currencies. It was rich oil investors and governments acting as investors who had a greater quantity of money than before. At first they increased their investments, later they increased their rates of consumption. The dollar was a medium of exchange from oil to other investment and consumption goods and services.

This time it's the central banks who are selling dollars. They will be dumping their dollars in the currency markets. They will not be investing. They will not be consuming. They will be seeking alternative currencies to hold in reserve. This is not investment money. It is the world's substitute for gold. It's why when the dollar falls, most of the world's currencies will fall. But, they will scramble around trying to save themselves.

The dollar would be a good reserve currency if it were backed by gold. It would, indeed, be as good as gold. But, unfortuantely for the unwitting who bought the nonsense of the world's paper money promoters, fiat money alway has a real value of zero. It's just that as long as fools believe, those who know can get richer and richer robbing the fools.

But the dollars that are in the central bank reserves were issued with no backing. They are just worthless bits of paper. Dollars were spent overseas for goods and services, but they were held in reserves and not spent in trade. The US was able to consume without producing by printing money, borrowing against the future. But there is nothing for those massive trillions of dollars to buy. It will drive up prices in double digit and triple digit price inflation.

So, those dollars will come crashing back. No one will want to buy them. If the dollar seems to fall far enough, some people many take a chance on exchanging for dollars, if they can spend them fast enough to get some deals ahead of the soaring price inflation that will result. This, however, will drive prices higher, faster, and with accelerating price inflation, more people will dump their dollars. Even Americans will refuse to accept dollars or if they accept them, they will hold dollars in a temporary frenzy to try to make some money by "day trading" ahead of the fall.

In a run on the dollar, the final crash will come relatively quickly. It will be unstoppable. It'll be like watching the stock crash of a high flying company when some devestating news exposes its previously unrecognized, looming bankruptcy.

Ususally there are insiders and wise observers who know ahead of the general public. They will get out early. Actually, by balancing dollar debts to exceed dollar assets, they can always remain safely unexposed and actually profit during the fall.

Also, there are usually stubborn doubters who refuse to see the truth until, for them at least, it is too late. These people will ride the crash into the dirt. Proudly carrying their dollars and holding on to discredited socialistic dogma to the bitter end.


Remember the US dollar never rose in the 90s. The dollar has been falling since the Fed began in 1913. It has fallen faster in some periods and slower in others. When you think the dollar is rising, it just means other currencies are falling more rapidly. No currency is rising. Think of it as a "Theory of Relativity" for money. What you think you see is not what is really happening.

[huffdaddy]

Where's the bubble? Which of these three pics show a bubble that will crash?

[ontheway]

The dollar is not in a bubble. The dollar is just plain falling.

Of course, because people typically see charts showing the gold price in terms of dollars, it looks like gold is very volatile. This is because they are doing the chart backwards. They should be showing the gold as a constant of one ounce which will reveal that it is the volatility of the dollar and not gold that the chart shows.

In other words, instead of showing the price of an ounce of gold in dollars, which creates the presumed bias that it is the dollar that is stable, you should show the price of say $1000 in terms of gold ounces. Then you'll see it's the dollar that is unstable and generally falling.

Since Nixon decoupled the dollar and ended its gold backing there have been several panics that caused investors to run to gold and silver. This looks like a run up in gold, but really it was a premature expectation of a run on the dollar. It is the dollar that is unstable. The charts are making use of the wrong dependent and independent variables.

The world has never seen this kind of situation before. It has fooled some gold proponents into expecting the dollar to hit zero more quickly than the institutional factors and lack of a general panic by the public would call for.

Again, it's like jumping out of an airplane with no parachute. At first you know you're dead. But, if you start very high up, you will soon feel a kind of euphoria and you might not believe that you're falling after all. Maybe you even start to think you are flying. You are, of course, falling all the while, but if the fall was long enough you could forget about that and fly joyfully all the way into the ground. This in fact happens to some skydivers who forget to pull the ripcord.

So, while some have panicked too quickly making the dollar fall and then seemingly rise back up against an ounce of gold. This erratic behavior is really due to the short term volatility of a fiat currency.

Many people are enjoying the freefall of the dollar. They have, like the skydiver, lost touch with reality. The dollar will come smashing down into the earth. It's just that due to the lack of a hard money alternative, it takes a considerable amount of time. The government has told confusingly detailed lies that have fooled the public, and the lack of mathematical and scientific sophistication on the part of some bozos who pretend to be economists, means that many professionals were fooled by the same lies.


But, nice try anyway, Huffdaddy.


Sorry I don't have time to go into more detail about the late 70s dollar panic. It caused many people to run away from the dollar and caused that spike, which shows just how volitile the fiat dollar is during its fall to zero.

The spike was exacerbated by the attempt of two brothers named Hunt, from Texas, to get ahead of the market by buying up massive amounts of silver. They lost billions and contributed to this premature downward spike in the dollar.

It you look at the silver price of the same era you will find that silver soared. People knew the dollar was doomed, but they were early. The Hunts bet against the laws of gravity and the natural terminal velocity in the falling speed of the dollar. They lost.

If you look at the price of First Chicago Bank stock, you will find that that too was temporarily depressed as the Hunts had to liquidate everything they owned to pay off the losses they incurred betting against the market.

The market is part of mother nature. Never bet against nature or the market.

[huffdaddy]

[ontheway]

I generally do not believe in technical analysis in the market. You have to analyze fundamentals.

If you watch any of the market shows, you will find a divide between the techincal and fundamental camps.


In this case I would agree with Warren Buffett and rely on fundamentals, and you have provided no information at all. I would never invest based on the technicals. You only show three unlabled charts that are nearly the same and that resemble the historical dollar/gold charts from 1970 to 1980. You have provided no facts upon which to base a decision.


Unlabled charts could be anything. They could be body temperature or the decible level of the fat lady singing.

[mindmetoo]

[huffdaddy]

[igotthisguitar]