CORRECTION, did NOT HIT 2008 lows, hit 2009 lows. See this link
No country in history has flourished with a free floating currency devaluing as a driver.
The question is, how much lower? As the currencies go lower, precious metals explode higher, as other natural resources can go higher.
Could this be the start of the end of the USD? Making not marginal lows but drastic lows from her? Could the USD enter into a death spiral here and now resulting in USD failure?
All of this is possible, anyone who says it isn't possible has a faith based bias on alternate viewpoints. The facts clearly say it is POSSIBLE, but I must agree, not PROBABLE.
Why not probable? Same as it has been since 2008, if the USD implodes, so goes the world. The world hasn't taken enough steps to decouple from USD as the reserve currency. It has made huge progress, and I predict will be ready for USD collapse 2014+, but not yet.
Back to the FACTS about this situation
1) S&P announced DOWNGRADING US credit worthiness, first (baby) step in currency collapse
2) USD hits new LOW, breaking 2008 low. Note the last time this happened, the Fed collapse the market to force people into the USD, contributing to the 2008 market crash.
3) Rumors that China is to increase YUAN valuation by 10%, a significant shift for world's second largest economy. (not fact per say, but we'll know soon)
4) The US government has proposed NO REAL debt reform, forcing dollar lower.
5) Gold, Silver, and precious metals are breaking to the up side.
Given above and all other information, its very confusing what to do. Gary of the Smart Money tracker gave a tepid partial buy here and now. I bought in SLIGHTLY yesterday back into AVL and AGQ.
So what am I doing? Keeping my core positions through whatever happens, tinie-tiny buy above, and rest cash with a couple of shorts.
SEE UPDATE link
Monday I'll re-evaluate, for if the USD is headed into the abyss, I doubt it collapses over night, there will be time to jump onto precious metals and out of cash. I fear the weekend, for that is when politics announces major changes, shifting the market. The USD is so stretched low, it could jump overnight and crush metals. This is more possible than USD overnight crash.
For this reason, for me its a holding pattern. Good luck. See USD charts below.