Dollar Continues on the Downward Path
Virtually all currencies (paper, that is) are increasing in value relative to the dollar. Remember they are all unbacked paper without any real value except for the acquiescence of people to use them and the power of governments to force their use for all debts public and private.
Paper currencies were invented to allow banks and governments to print or create them at will. Inflation is an increase in the supply of paper currency which lowers the purchasing power and robs the citizens of real value.
Inflation, also, results in citizens giving in to the inflation psychology. This reveals to most citizens that prices are increasing and urges them to buy now before prices increase further. Then they go on spending binges poorly or even well intentioned to save by buying today. When their available cash runs low, they increase borrowing to further the spending. The result is a spiral of debt beyond imagination. That is where we are as American citizens. Our governments at all levels are doing the same. Don't worry about the debt, just get out there and shop 'til you drop. Spend! Spend! Spend!
If you have been reading this blog, you already know these facts, but it is well to remind ourselves from time to time of the dangers of inflation.
The commodity currencies of Australia, Canada, and New Zealand are booming. Both the Pound Sterling and the EURO have reached multi-year highs. This, of course, is only relative value. However, the price of gold is growing in terms of most of the paper currencies.
The mining stocks are rising, as well. The general stock market remains high, but the buying seems to be slowing. Will it be followed by selling increase? Yes! Without a doubt selling will begin and accelerate. "When?", is the real question. I do not know, but am taking steps by using trailing stops on general stocks, doing very little new buying, and selling the under-performers in the portfolio.
Today is Friday and it could be a day of big changes in the market. We will have to wait and see. Gold is strong at $679 as of now. That is showing a positive upward move possibly making an assault upon $700. And note that it is early in the year for an upward surge.
Speaking of surges, it seems that the pressure for withdrawal of our troops from the Mid-East is growing. A withdrawal will be a tricky and dangerous maneuver as the land route back to Kuwait is under insurgent control much of the way. It will be a fighting withdrawal. The troops will have to fight their way and be on guard for hit and run attacks and mines along the way. Not a very nice situation at all.
Will Iran be attacked? The naval battle groups are in and near the Persian Gulf, and likely ready, but will the trigger be pulled? That is another unknown. Should it happen, watch the price of fuel for the autos skyrocket into space. And the dollar would drop like a rock taking with it the general stock market while the precious metals would jump upward overnight.
We always live in interesting times. Today is no exception. Hang in there. Trust in the Lord. And know, for certain, that He works all things for the good of His people. That is a fact upon which we can rest with great assurance even when things about us look dark.
Best to each, Doug
Paper currencies were invented to allow banks and governments to print or create them at will. Inflation is an increase in the supply of paper currency which lowers the purchasing power and robs the citizens of real value.
Inflation, also, results in citizens giving in to the inflation psychology. This reveals to most citizens that prices are increasing and urges them to buy now before prices increase further. Then they go on spending binges poorly or even well intentioned to save by buying today. When their available cash runs low, they increase borrowing to further the spending. The result is a spiral of debt beyond imagination. That is where we are as American citizens. Our governments at all levels are doing the same. Don't worry about the debt, just get out there and shop 'til you drop. Spend! Spend! Spend!
If you have been reading this blog, you already know these facts, but it is well to remind ourselves from time to time of the dangers of inflation.
The commodity currencies of Australia, Canada, and New Zealand are booming. Both the Pound Sterling and the EURO have reached multi-year highs. This, of course, is only relative value. However, the price of gold is growing in terms of most of the paper currencies.
The mining stocks are rising, as well. The general stock market remains high, but the buying seems to be slowing. Will it be followed by selling increase? Yes! Without a doubt selling will begin and accelerate. "When?", is the real question. I do not know, but am taking steps by using trailing stops on general stocks, doing very little new buying, and selling the under-performers in the portfolio.
Today is Friday and it could be a day of big changes in the market. We will have to wait and see. Gold is strong at $679 as of now. That is showing a positive upward move possibly making an assault upon $700. And note that it is early in the year for an upward surge.
Speaking of surges, it seems that the pressure for withdrawal of our troops from the Mid-East is growing. A withdrawal will be a tricky and dangerous maneuver as the land route back to Kuwait is under insurgent control much of the way. It will be a fighting withdrawal. The troops will have to fight their way and be on guard for hit and run attacks and mines along the way. Not a very nice situation at all.
Will Iran be attacked? The naval battle groups are in and near the Persian Gulf, and likely ready, but will the trigger be pulled? That is another unknown. Should it happen, watch the price of fuel for the autos skyrocket into space. And the dollar would drop like a rock taking with it the general stock market while the precious metals would jump upward overnight.
We always live in interesting times. Today is no exception. Hang in there. Trust in the Lord. And know, for certain, that He works all things for the good of His people. That is a fact upon which we can rest with great assurance even when things about us look dark.
Best to each, Doug
posted by Doug @ 8:14 AM
0 Comments:
Post a Comment
<< Home