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Monday, March 21, 2011

This Week in Charts - US Dollar to test new lows

If you have been reading my blog, you know that my concern of the US Dollar is high right now.
The USD has broken all sorts of support levels, and now its time to take the express train to the all time low. Once we break through that level, its really time for a US crisis.

Best thing to have is plenty of food, resources at hand, and to be invested in Gold, Silver, or related investments. This week in charts I highlight USD chart looking grim, at same time 30 year bond rates are resuming a climb, and gold is resuming it's climb.

This is not good folks, the worst thing for this country is loss of faith in USD. We are a country that lives off of everyone else through debt. I really don't think its time for the USD to fail, that is years off. But each new low will bring new panic, and new reactions, to staff off the decline.

Over this time period, being pure cash will be a loser. This can change on a dime, the solution is simple, stop spending 1.6 trillion in debt per year. how about....only 600 billion in debt? That would make the USD soar. (ya think 600 billion in debt would be bad, but its all relative).

Think of what has transpired this year, countries failing, Japan badly injured, China having inflation rates at about 5% PER MONTH (and China underestimates!).
With all the chaos, you would think the USD will rise....imagine if everything in the world was fine! How fast would the dollar fall then?

I think what we will see is a break, possibly USD down from 74 to 64, or 60. Then with some sort of knee jerk reaction, something will be done to stop the slide....and in a few months we'll revisit the lows, and make new lows. This will repeat until its all over or we get serious as Americans to cut the funny business out.

NOTE: I am not advocating buying gold bars, or go 100% into precious metals. For most people, 25% to 50%, depending on your risk tolerance, into Gold, Silver, Energy (oil), Food, and other commodities. Rest *SHOULD* be cash. Why? Because most people's debts is in cash terms (such as a mortgage). So even if cash goes down in value in commodity/international terms, it can still be used at face value to pay of existing Debt. PLUS Government entities will be watching USD valuation and intervene at some point to reverse (probably suddenly) the slide by taking action.
So cash, even if it is losing value, is low-risk in these terms.

To the charts! USD - breaking down, 30 year treasury rates, breaking up, and gold, resuming it's 10 th year of a continuous, non-stop bull run.

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