Will Gold's Astonishing Rally Continue?

Dines Letter (11/20/2009)

"We've been warning about "The Coming Currency Crisis" for years, but there was almost no interest by the press and much of the public, so we are thunderstruck at the enormous news coverage devoted to gold and currencies these days. The American government's deficits have been no secret, but the public has been too often detached from how they were handled, and only remotely cognizant of the causes of inflation and deflation.

. . .outraged are those nations that have been suckered into holding American dollars as backing for their own currencies, delusionarily believing that the greenback was still "as good as gold," even though the link was severed long ago—over TDL's bitter objections because we foresaw the current situation.

. . .America's leaders secretly and hypocritically like a weak dollar because it stimulates exports, although at the expense of our non dollar-linked trading partners; the Irony as punishment will be that foreigners will use those same dollars foisted on them to buy our country out from under our feet, and then where will we live?

Foreigners are not going to take America's heroin-like addiction to printing paper backed by nothing forever, and already Brazil and China are working toward using their own currencies in trade transactions rather than the U.S. dollar—although Brazil's central bank hurried to emphasize that the talks were "at an early stage." China has also been negotiating bilateral currency swaps with countries, such as Argentina and Malaysia. Mr. Zhou, of the People's Bank of China, proposed replacing the U.S. dollar with a new international reserve currency, possibly special drawing rights (SDRs), yet another layer of paper, backing paper, on top of paper, a house of cards vulnerable to being blown away in a thunderstorm. Meanwhile, wages and taxes can't meet higher prices if they're going in the same direction at the same velocity!"

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