Free Republic

The euro as presently configured is doomed due to structural imbalances between mercantilist and consumer nations. A "euro1 and euro2" system would allow a face-saving demise to euroland's single currency. I've got a bad feeling about the Euro: the structural imbalances I presented yesterday irrevocably doom the single currency. Just to recap the cycle and its consequences, here is a chart: The Mercantilist Nation - Consumer-Debt Nation Cycle Since the euroland leaders have invested their prestige and credibility in the single currency euro, it's demise will likely be cloaked in some "face-saving" measure. My best guess is euro-denominated bonds, both...

Chinese officials and private investors around the world have been worrying aloud about whether their dollar investments are safe. Since the Chinese government holds a large part of its $2 trillion of foreign exchange in dollars, they have good reason to focus on the future value of the greenback. And investors with smaller dollar holdings, who can shift to other currencies much more easily than the Chinese, are right to ask themselves whether they should be diversifying into non-dollar assets – or even shunning the dollar completely. The fear about the dollar’s future is driven by several different but related...

Gold’s Chart is Ugly in Multiple Currencies Most commentators living in the states have made a big ado about Gold breaking to a new all-time nominal high back in the fall of 2009. I didn’t buy into the mania and wrote an article titled Three Reasons Gold Might be Making a Head Fake that was published on November 10, 2009. The primary point of the article was that Gold was struggling to hit new highs against most major world currencies. Sure, the precious metal had rallied impressively when denominated in Dollars. But you have to remember that the Dollar lost...

Gold prices were rising Tuesday despite a stronger U.S. dollar as bargain hunters bought gold as an alternative asset. Gold for February delivery was adding $1.90 to $1,097.60 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,103.20 and as low as $1,085.20. The U.S. dollar index was rising 0.43% to $78.53....

The Coming Cyclical Collapse Of The U.S. Dollar Currencies / US Dollar Dec 08, 2009 - 10:30 AM By: Bob_Clark Ask not for whom the bell tolls We are having our first winter blizzard, the windows were rattling all night. There are knee deep snow drifts in places. When I went out to feed the horse this morning, I found a coyote asleep in the hay. I guess he is a little bit deaf because he didn't jump up until I was on top of him. I don't know who was more scared. It was a most pitiful thing to...

The gold price dove lower, dropping $23.30 to close at $1,131.25, as investors liquidated all investments tied to the price of gold against the backdrop of a strengthening U.S. dollar. Gold mining stocks were sold aggressively, evidenced by the 4% decline in the Market Vectors Gold Mining ETF (GDX) and the 2.7% decline in Canada’s S&P/TSX Global Gold Index. Both indices declined for the fourth straight day as the U.S. Dollar reached its highest level in over a month as measured by the Dollar Index (DXY). The largest gold producer in the world, Barrick Gold (ABX), declined 4.5% today and...

FRANKFURT (MarketWatch) -- Gold futures fell sharply on Friday, breaking below the $1,200-level, as the U.S. dollar surged against its rivals buoyed by data showing that unexpectedly few jobs were lost in November. Gold for December delivery fell to an intraday low of $1,186 an ounce in electronic trading on Globex. The contract was last down $31.20, or 2.6%, to $1,186.20 an ounce. Gold and the dollar have a very strong inverse correlation -- when the dollar gains, gold prices tend to fall. "The pullback is related to the dollar reaction to the jobs data," said James Steel, gold analyst...

FRANKFURT (MarketWatch) -- Gold futures fell on Friday but traded off their lows, as Dubai World's debt woes fueled a sell-off in commodities and stocks, while the U.S. dollar gained against its rivals. Gold for December delivery tumbled from a high of $1,195 an ounce to an intraday low of $1,130.10 an ounce in electronic trading on Globex. That is a decline of nearly $65, or more than 5%. In recent trading, gold fell $26.80, or 2.3%, to $1,160.20 an ounce.

FRANKFURT (MarketWatch) -- Gold futures fell on Thursday after climbing to a record just below $1,200 an ounce, as the dollar rebounded against its rivals, pressuring the precious metal. Gold for December delivery dropped $3.30 to $1,183.70 an ounce in electronic trading on Globex.

The Australian dollar will reach parity with the US dollar in the next six to 12 months and peak at about $US1.02-03, a currency strategist says. State Street Global Advisers head of currency management Collin Crownover says the unit is already overvalued by about 20 per cent and that the figure would stretch out to 30 per cent if it reached the $US1.03 mark. "I think we'll see about a 10 per cent appreciation from where we are now," the London-based Dr Crownover said in Sydney on Friday. "At that point, certain dynamics come into play and that becomes an...

It’s a good day to go cross border shopping as our Canadian Loonie is buying more in the US. The Loonie is almost on par withe the US dollar. Fueled by high oil prices and a declining US dollar the high loonie hurts employment in Canada. “Canadian Prime Minister Stephen Harper said yesterday in remarks to reporters in Toronto that he shares Bank of Canada Governor Mark Carney’sconcern that gains in the country’s currency could slow recovery. Carney said in a speech on June 4 that a persistently strong Canadian dollar would “work against” positive factors such as improved trade.”...

Major institutions should be broken up if necessary, Greenlight manager says NEW YORK (MarketWatch) -- Greenlight Capital manager David Einhorn said Monday that his hedge-fund firm is betting on the possibility of a major currency collapse and a surge in interest rates, citing ballooning government deficits in some of the world's most developed countries.The hedge-fund manager, who warned about Lehman Brothers' frailty before it collapsed last year, also said financial institutions that are deemed as "too big to fail," such as Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 4.57, -0.02, -0.38%) , should be broken up. ReutersDavid Einhorn of Greenlight Capital. Greenlight has...

Since Nixon severed gold from the greenback in 1971, the dollar's comparative value has fallen 97%. Money printing today will only hasten the currency's destruction. I was recently thinking about what has transpired in this country in the past decade: first the equity bubble, then the real estate/credit bubble and the steady debasement of the dollar (where a trickle of trouble threatens to turn into a flood). I have been struck by how few people seem to understand how all these events are related -- in that, at the root, they each have the irresponsible printing of money as the...

Soros...ok, we've all talked about MoveOn.org, Soros shorting currencies, hating Israel, hating the US, backing Obama, ACORN, etc. But, I was just wondering is there any "official effort" to track his dealings, that is, trying to put together a paper trail of his shorting currencies, ruining the US with his financial "bets", etc.? Am I the only one who would love to see such a thread outlining what dealings he has done and what damage it inflicted?

The report yesterday in the UK's Independent newspaper by Robert Fisk triggered several slightly bizarre reactions which ranged from brandishing the respected reporter as a conspiracy nut to dismissing the allegations as not very useful since Mr. Fisk is not by training an economist. (Actually I would have thought that was to his credit). What was questionable about the Independent article was the emphasis that was placed on the notion that pricing oil in another currency than U.S. dollars was really the thin end of the wedge which will lead to a phasing out of the greenback's role as the...

The sun is setting on the US dollar as the ultra-loose monetary policy of the US Federal Reserve forces China and the vibrant economies of the emerging world to forge a new global currency order, according to a new report by HSBC. The dollar looks awfully like sterling after the First World War," said David Bloom, the bank's currency chief. Crucially, China and rising Asia have reached the point where they can no longer keep holding down their currencies to boost exports because this is causing mayhem to their own economies, stoking asset bubbles. Asia's "mercantilist mindset" of recent decades...

Unlike the "legitimate bull markets" of many foreign markets, Peter Schiff believes the U.S. is merely experiencing a "rally in a bear market," and is lagging the rest of the world "for a reason." The worst is not over, according to Euro Pacific Capital's Schiff, who predicts the Dow will fall another 90% from current levels when measured against gold. A longtime dollar bear and gold bull, he foresees gold hitting $5000 per ounce "in the next couple of years," and predicts the Dow and gold will trade on a one-to-one ratio vs. the current level of around 9.7-to-1. Schiff...

Bloomberg: Link Only

It just gets more and more odd after my original report, with the latest coming from a German newspaper (translation courtesy of Google): Hit for the Zöllner: The contraband securities valued at 134 billion U.S. dollars are apparently real. Die italienische Finanzpolizei hatte zwei Japaner ertappt, die im doppelten Boden eines Koffers milliardenschwere Anleihen in die Schweiz schaffen wollten. The Italian financial police had two Japanese caught in the false bottom suitcase billion-dollar bonds in Switzerland wanted to create. Von dem Fund profitiert das hochverschuldete Italien. Note that this has received very little coverage in the so-called "mainstream US media"...

BEIJING -- If you owe your bank $1,000 you have a problem, but if you've borrowed $1 million it's the bank that has the problem. Going by that old maxim, then China, which has lent the United States upwards of $1.3 trillion, has a very big problem. And it knows it. As a consequence, Beijing is diversifying its overseas investments and pressing U.S. officials for an "exit strategy" from the ultra-loose fiscal and monetary policies that China fears will eventually inflate away the value of its U.S. bond holdings and fell the dollar. But China's pragmatic policymakers also know there...