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Dollar Is Tanking Versus The Dollar?

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Well, there's this new hurricane, for one thing: if it trashes more refineries, America will be really screwed.

Dollar Declines on Concern Damage From Rita Will Slow Economy

Sept. 21 (Bloomberg) -- The dollar fell the most in three weeks against the euro and dropped versus the yen on concern Hurricane Rita will add to damage caused by Katrina, damping consumer spending and slowing U.S. economic growth.

The dollar extended losses after Rita was upgraded to the same strength as Hurricane Katrina when the storm slammed the U.S. on Aug. 29. Oil prices climbed and yields on Treasury notes fell as Rita approached Texas and Louisiana. The dollar weakened even after the Federal Reserve raised interest rates yesterday and said the impact of the first storm will be short-lived.

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Dollar Declines on Concern Damage From Rita Will Slow Economy

Sept. 21 (Bloomberg) -- The dollar fell the most in three weeks against the euro and dropped versus the yen on concern Hurricane Rita will add to damage caused by Katrina, damping consumer spending and slowing U.S. economic growth.

The dollar extended losses after Rita was upgraded to the same strength as Hurricane Katrina when the storm slammed the U.S. on Aug. 29. Oil prices climbed and yields on Treasury notes fell as Rita approached Texas and Louisiana. The dollar weakened even after the Federal Reserve raised interest rates yesterday and said the impact of the first storm will be short-lived.

We're in big financial trouble in this country. And our president doesn't seem to get it. On top of our huge deficits, a hugely expensive (and endless) war, the rebuilding of the Gulf Coast, and now the possibility of more destruction from Rita, he and his conservative cronies continue to push for permanent tax cuts for the very wealthy and a permanent repeal of the estate tax (which affects only a tiny percentage of multi-millionaires).

:ph34r:

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US increases its interest rate and the next day it tanks?  Anyone got any idea why? I would have thought sterling would have tanked instead.

The USD is no longer a sound currency. Too much debt, too many dollars have been created out of thin air. Excerpt from http://www.museletter.com/archive/149.html

To understand why the dollar is America's Achilles heel, a metaphor is useful. Imagine being able to write checks and then convince the people you give them to not to cash them. Perhaps they find the checks themselves comforting to hold onto; or maybe you have a friend who agrees to sell groceries or gasoline for your checks only, and then happily stockpiles and re-circulates them. In either case, you may be tempted to write checks for much more than you have in your bank account. As long as the checks themselves are regarded as valuable and not cashed, you get a free ride. But if people stop finding your checks comforting to hold onto, or if your friend starts selling groceries for other people's checks or for gold or silver, then the game is up. It will be revealed that your account is overdrawn and you will be in trouble.

The metaphor is not perfect. In fact, every nation in the world is attempting to write checks beyond its means. But the US has managed to do by far a better job of it than any other nation. The checks we are not talking about are not just hoarded paper dollars (though there are billions of these stuffed in mattresses around the world) but dollar-denominated investments and securities, including T-bills, stocks, and mortgages. Currently the US is running a $700 billion per year trade deficit, this on top of trillions in government debt and trillions more in consumer debt. No other nation in the world comes remotely close to this level of bad-check writing, on either a total or a per-capita basis.

If a run on the US dollar were to occur, then the only financial solution would be to create even more dollars (presumably through government borrowing), which of course wouldn't actually solve the problem and would in the long run make matters worse. The currency would become almost worthless, and in the process real wealth (land, factories, and natural resources) would be confiscated and turned over to creditors.

What could cause this to happen? A decision by OPEC to openly sell oil for euros could be a trigger. Some oil is already quietly being sold for euros, and several countries including Iran and Saudi Arabia have floated the possibility of valuing oil against a basket of currencies (meaning, effectively, dollars and euros). The Arab OPEC states have also toyed with an idea that must be equally worrisome to Brussels and Washington: to sell oil for gold (the gold dinar). If and when this happens, the full wrath of America will descend upon the Arab Middle East - and that's why it hasn't happened yet.

The other likely trigger would be a collapse of the US economy from within resulting from a bursting of the mortgage bubble. The recent US economic "recovery" arose almost entirely from low mortgage rates (set ultimately by the Fed), which allowed families to refinance their homes, cash out some of their equity, and use the money for immediate consumption. With oil prices soaring, the Fed will eventually have to raise interest rates steeply in order to contain inflation. But this may cause millions of homeowners to default on their currently low-interest adjustable-rate mortgages. In that event, property values would plummet, and with them would go the stock market and the economy as a whole.

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What could cause this to happen? A decision by OPEC to openly sell oil for euros could be a trigger. Some oil is already quietly being sold for euros, and several countries including Iran and Saudi Arabia have floated the possibility of valuing oil against a basket of currencies (meaning, effectively, dollars and euros).

Keep your eye on that Iranian Oil Bourse plan. Come March next year, if it opens and genuinely trades in euros, the dollar is fvcked.

Edited by Time to raise petrol prices

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It's all about Rita right now, if she hit's where she's heading right now it could cause the biggest oil shock in history by taking out even more refineries...

http://quote.bloomberg.com/apps/news?pid=1...yKpQ&refer=home

``The Houston area is ground zero of the refining industry,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands. ``If it suffers the scope of damage caused to refineries in Louisiana by Katrina we could see rationing and queues at the gas pump. This is something OPEC can't do anything to remedy.''

Of course I guess Hurricanes rarely hit where they are predicted to be 3 days time.

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Right that's settled I'm opening a goldmoney account. Almost did it last night.

It's not to be taken lightly, we're at a 17 year high and central banks still have enough reserves to dump (discredit) the market, how do you think they give credence to paper money? Even if you're a gold bug timing is everything :ph34r:

Edited by BuyingBear

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It's not to be taken lightly, we're at a 17 year high and central banks still have enough reserves to dump (discredit) the market, how do you think they give credence to paper money? Even if you're a gold bug timing is everything  :ph34r:

I am strongly hoping that they dump, so I can get more gold for my "monopoly" GBP.

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goldmoney account

Gold can be very volatile – like shares they can be very painful

Only spend what you can afford to loose + they look expensive to me – have a look around and buy something that’s cheap and people don’t want

I have an old endowment policy you could have!

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Gold can be very volatile – like shares they can be very painful

Only spend what you can afford to loose + they look expensive to me – have a look around and buy something that’s cheap and people don’t want

I have an old endowment policy you could have!

I'm thinking aout waiting for sell off and slight dip before I buy. Long trm I believe it will go higher. I will only spend what I can afford to lose. My STR deposit is never touched :)

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We're in big financial trouble in this country. And our president doesn't seem to get it. On top of our huge deficits, a hugely expensive (and endless) war, the rebuilding of the Gulf Coast, and now the possibility of more destruction from Rita, he and his conservative cronies continue to push for permanent tax cuts for the very wealthy and a permanent repeal of the estate tax (which affects only a tiny percentage of multi-millionaires).

:ph34r:

Yep, we are in trouble. huge trouble.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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