Have we defrauded the world by trashing the dollar?

The reserve status of the U. S. Dollar is threatened as never before. The world knows that it is unbacked and is rapidly losing purchasing power. As I discuss, below, we have defrauded the world according to the Law of God. We will reap the "rewards" of our action as the books are balanced. That day may be approaching rapidly.



Both gold and silver are taking the hit. Gold is 921.90 on a down tick and silver is 13.39 on a down tick. The DOW is off 100 to about 7676. Our trading stocks are, as follows: DROOY 8.89; HMY 11.48; HL 1.90, and VGZ 1.88. All are, in my opinion, reasonable buying ranges. If you chose to buy, buy in smaller increments that you might normally. The stocks seem to be headed lower for a time. You must make your own decisions based upon your risk tolerance and your present portfolio. The future delivery for gold this week should be a rather large one, so the vested interests will likely intervene to swing the prices lower as the have in the past. Thus, we are likely to see lower prices this week. Of course, I do not know the future. Only our Sovereign God knows that for sure, because He moves every thing and every body according to His will.


From MineWeb:

Mining stocks hit best levels in six months

A ranking of the world's biggest diggers shows how names in gold, silver and copper easily top miners of diamonds, coal and potash.

Author: Barry Sergeant
Posted: Monday , 23 Mar 2009

JOHANNESBURG -

Mining stocks were more heavily sold down than most equity subsectors, but have in the past few days moved decisively to the best levels seen in six months. Where the dollar-based MSCI Barra Index for all global equities has bounced by 15% from its lows in the past few months, the world's top 100 mining stocks have moved up by 88%, measured on an average value-weighted basis.

These mining stocks have, as such, gained $400bn in market value since rising from trough levels, but, even so, still show a net loss of $1.5trn from high points seen during 2008, typically during May. The world's top 100 miners currently carry an aggregate value of $939bn. Read it HERE.

We have most certainly been privileged to see this in our mining stocks here. It is interesting in spite of the fact that the precious metals have not sprinted forward as much as would be expected given the financial turmoil and the military adventures around the world.
The questions that most of us should be asking are (1) "Will the U.S. Dollar lose its exclusive world reserve status?", and (2) "When will the dollar lose its exclusive world reserve status?" If this occurs, the dollar will lose purchasing power and we will have hyperinflation in spades. Then we will reap all the "rewards" for having debased the world currency when the privilege was granted to us after WWII. We have squandered this blessing and gone into debt at a level never before seen in the history of the world. From Proverbs, "The wicked borroweth and payeth not again." The United States will never pay its debt with anything of value. The best we could do is pay by printing dollars and computer blips. Think about this way of repayment. We borrowed for decades using dollars of higher purchasing power than the dollars with which we would repay the debt. I would declare that this is a form of fraud. It is a violation of God's Law against the use of unequal weights in financial transactions. Thus, we are defrauding the world which loaned to us in the first place and from whom we bought many things. We used our world currency reserve status to exchange depreciating dollars for all that we bought. Now we are going to renege on our debt or pay it off with dollars of less value than the ones we borrowed. The immediately following articles reflect the sentiments of many recently published which show that the world around us is worried about the value of the dollar. This is particularly true in view of the significant bail outs of the past and the current extreme bail out on the way. These actions will trash the dollar and even give more concern to the world around us.

From The Daily Pfennig: "China's central bank Governor Zhou Xiaochuan was in the news again yesterday. He suggested the IMF should look to create a 'super sovereign reserve currency' that is not connected to any individual nation. Sounds like China is continuing to look for alternatives for their $1.95 trillion of reserves. They will present their proposals to reform the IMF at next month's Gorup of 20 meeting. While a super sovereign reserve currency is probably a ways away, it is obvious that China is wanting to find alternatives to their huge investments in the US$. Not a good sign for the green/peachback."

From Reuters:

Falling greenback fuels BRIC dollar reserve rethink

Mon Mar 23, 2009

By Sebastian Tong and Peter Apps - Analysis

LONDON (Reuters) - A push by the world's leading emerging economies to dislodge the dollar as the dominant global reserve currency appears to be gaining momentum even as a weakening greenback adds further urgency to the discussion.

China on Monday added its voice to a growing international chorus seeking the replacement of the dollar as the main reserve currency, urging for an overhaul of the global monetary system to allow for wider use of Special Drawing Rights (SDRs) allocated by the International Monetary Fund (IMF). Read it HERE.

From Market Watch:

Bugs triumphant about gold, terrified about U.S.

By Peter Brimelow, MarketWatch

Last update: 3:03 a.m. EDT March 23, 2009

NEW YORK (MarketWatch) -- Last Wednesday's Federal Reserve debt monetization announcement was the event gold bugs have been anticipating all their professional lives, or at least since the last gold bull market blow-off 30 years ago. They are triumphant -- and terrified.

Australia's The Privateer said on Sunday: "On March 18 ... U.S. Fed announced plans to begin to buy U.S. government debt paper with Federal Reserve Notes (a.k.a. U.S. Dollars) created out of thin air. ... On our Web site, we announced that decision as the 'END GAME.' That is precisely what it is." The website is HERE. You can read the entire article from Market Watch HERE.

From Time On Line:
Why the Norwegian Krone is the World's Safest Currency By Adam Smith / London The main reason: Norway's budget and current-account surpluses are the biggest among nations with the 10 most traded currencies. Factor in the country's $350 billion sovereign wealth fund pumped full of the country's oil revenues, and the cost of insuring against government default in Norway — a key measure of a currency's safety — is the lowest of those countries. Read it HERE.

I am out of foreign currencies for the time being; however the Krone looks very interesting at present. As Richard Russell says "Gold and Dollars."

Best to each, Doug