The Dollar Will Collapse Within 3-4 Months

[MNeagle]

Submitted by Phoenix Capital Research on 03/24/2011 18:25 -0400

Monetary Policy


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The US Dollar's inflationary death spiral continues. We've now taken out the 2010 low leaving only two more lines of support before we're in completely uncharted territory.


At its current rate of collapse, the US Dollar will do this within the next 3-4 months. This means the greenback will break into a new all-time lows by 2H11, which will precipitate the coming inflationary collapse.


http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/dollar%20falling.gif

Small wonder then that both Gold and Silver recently hit new highs for their current bull markets. With the greenback dropping like a rock, and rumors of QE 3 swirling around the financial community, what sane investor would bet against inflation?

On that note, now is the time to be shifting capital into inflation hedges. Those who buy Gold and Silver will likely do very well in the coming months (my personal view is Gold will clear $1,500 and Silver $40 this year).

We’re also going to be seeing an increased wave of buyouts in the natural resources sector as larger firms look to increase their resources via mergers and acquisitions rather than spending the money to find and develop new mines.

The natural resources sector will also benefit as large institutions (pensions, mutual funds, etc) finally begin piling into inflation hedges across the board. Given how little exposure the Big Boys have to inflation hedges even a small percentage of assets under management, shifted into these sectors, could result in sharp price spikes.

In other words, buckle up, cause things are about to get REALLY interesting.

Good Investing!

Graham Summers

zero hedge (http://www.zerohedge.com/article/dollar-will-collapse-within-3-4-months?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedg e+-+on+a+long+enough+timeline%2C+the+survival+rate+fo r+everyone+drops+to+zero%29)

[Horn]

In other words, buckle up, cause things are about to get REALLY interesting.


Here in Costa Rica they have a "banded" currency, not completely pegged just tied too by a "percentage".Their central bank purchases dollars at different intervals to balance the difference.

Just this past quarter the "band" has been stretched to a point of question.

I can only imagine if it goes further, it will snap (or will the people) as they are becoming awarer as to why they are suffering. Any economic energy they gain is eventually dispelled into the large $ purchases.

[ximmy]

It's dropping pretty severely

74.105 (04-21-11)

[SLV^GLD]

Those who buy Gold and Silver will likely do very well in the coming months (my personal view is Gold will clear $1,500 and Silver $40 this year within a month).
Touched up the OP article just a tad.

[ximmy]

This is the lowest I've seen the dollar... dip into 73's... We are in trouble... :(

http://quotes.ino.com/chart/?s=NYBOT_DX

[Heimdhal]

I remember reading this ever 3-4 months on GIM way on back when I first joined in 07.


The dollar will crash when and if they want it to and no sonner, if ever.

[ximmy]

I remember reading this ever 3-4 months on GIM way on back when I first joined in 07.


The dollar will crash when and if they want it to and no sonner, if ever.




I don't know about any of that... I was just looking at the news this morning...

Reuters.
US dollar index hits three year low
Published 5:42 PM, 21 Apr 2011 Last update 7:07 PM, 21 Apr 2011
TOKYO/SINGAPORE - The US dollar tumbled to a three-year low against a basket of currencies as strong corporate earnings buoyed risk appetite in illiquid pre-Easter trade, threatening to drive it to historic lows...

The chart outlook for the greenback looked dire after it tumbled through a 74.17 trough hit in November 2009, a move that may spark a run towards the 70.698 all-time low hit in 2008.

A series of records have been broken, with gold vaulting to all-time highs above $US1,500 an ounce and the Aussie powering to 29-year peaks above $US1.07, while the Singapore dollar, Swiss franc hit all-time highs...

The dollar index fell 0.7 per cent from late New York trade to 73.799, the lowest since August 2008 – just before it surged during the Lehman Brothers collapse as investors scrambled for safe-havens.

http://www.businessspectator.com.au/bs.nsf/Article/FOREX-Dollar-index-hits-3-yr-low-may-slide-towards-G59BF?opendocument&src=rss&utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+TopStoriesRssBusinessNewsFeed BusinessSpectator+(Business+Spectator+Top+Stories)

[Heimdhal]

Ive no doubts eventualy it will collapse. It is inevitable and one day they will "let" it for one reason or another, but they CAN and WILL keep this game going for another 3-4 months easy.

Its a number games and they control he numbers, the rules and the game board.

[Horn]

Here's a translated page from the Costa Rican La Nacion on what they are trying to do to keep up, Not like it will amount to much. The only reasonable approach would be to stop accepting them within the country, but we all know how that would end up...


The Central Bank sharpening tools at hand to pick up sending settlers to the economy when it buys dollars to prevent the currency price falls below ¢ 500.Among the measures will expand the range of instruments to attract settlers, said Rodrigo Bolanos, president of the Central.For example, in the coming days will be introduced collection periods of 7 and 14 days in the integrated market liquidity, which is where they make cash loans financial institutions and Central.In addition, the board authorized a new series of monetary stabilization bonds to capture longer terms.

Also, increasing the frequency analysis of securities for sale in the auction and recruitment over the counter.What is the problem? The entity is currently in a shoe complicated.The reason is that every time the Central Bank purchased U.S. dollars to keep the lower rate of pay to ¢ 500 colones which has the power to make and put into circulation.

These settlers came to the economy and increase the purchasing power of people, and the supply of products does not increase at the same rate, there is pressure for prices to rise. Hence the efforts to collect colones.So far, the Central had included the purchase of dollars, in order to avoid the drop in price as part of the acquisition of $ 600 million to increase its cash reserves.

Therefore, this issue was covered in the economic program that aims to achieve this year an inflation rate of 5%.However, due to heavy purchases of foreign currencies in recent days, the program, which would end in December 2011, was completed last Monday.

From now on, foreign currency purchases made by an entity threaten its inflation target, hence, his concern for collecting settled because the sale of securities (bonds and other mechanisms).

However, other problems, as described by Jiménez Ronulfo economist.

"The monetary excesses could be counteracted by the placement of monetary stabilization bonds, as suggested by Mr. Bolaños, which could increase local interest rates and boost capital movements that would increase the appreciation of the colon," said the economist.

The reason is that to sell the securities by the Central Bank should offer attractive interest rates for the public to purchase.

This comes at a time in which the Government also requires more resources to finance its deficit, and companies and individuals have begun to apply for more credit, therefore, could generate further pressure on interest rates.If rates go up, could only come from outside investment dollars, which would force the central bank to buy more foreign currency, colones to issue more and more titles, which creates a vicious circle.
Another problem is that Jimenez said placing more stabilization bonds also increase the losses of the Central Bank, thereby increasing future inflation.

http://www.nacion.com/2011-04-21/Economia/NotasSecundarias/Economia2755154.aspx