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Read This Because the Dollar Is Doomed

Brian Richards and I wrote back in March that we thought the dollar might be doomed. That was because:

1. The United States has a massive and growing deficit.
2. The United States continues to generate significant trade deficits.
3. The United States has become oh-so-willing to print money out of thin air to meet its increasing obligations, and to prop up the likes of AIG (NYSE: AIG  ) and Bank of America (NYSE: BAC  ) .

The more things change …
Fast forward five months, and that willingness to print and spend has only increased. None other than Warren Buffett of the famously successful Berkshire Hathaway (NYSE: BRK-A  ) put the nail in the dollar's coffin in a New York Times editorial last week.

He wrote, "Fiscally, we are in uncharted territory" and concluded that "Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar's destiny lies with Congress."

Lies with Congress? If you know anything about Congress -- I used to work in the political game -- then you know for sure now that the dollar is doomed.

Deep breaths
This should be worrisome news if you earn a dollar-based salary, keep a dollar-based bank account, or invest in dollar-denominated U.S. stocks and bonds. Why? Because as the dollar declines in value, so too will all of your earnings, savings, and investments. And that's scary stuff.

The good news for you is that the dollar's decline in value over time won't happen in a vacuum. In order for the dollar to decline, other world currencies must rise in value against it. That means you can protect yourself -- and even profit -- from the dollar's decline simply by buying stocks that do business in other currencies, such as Coca-Cola (NYSE: KO  ) or Wal-Mart (NYSE: WMT  ) , and specifically in currencies that you suspect will rise against the dollar over time.

Some currency candidates
Our Motley Fool Global Gains international stock research team believes that the currencies that stand to benefit most are those that are tender in countries that 1) are big and stable enough to offer a credible alternative to the U.S. for countries that are looking to stash their trade surpluses, 2) have significant natural resource assets that will become more and more in-demand over time, or 3) both.

Thus, candidates include the euro (simply because of its scope, despite the fact that Europe has its own structural economic problems), the Brazilian real, the Indonesian rupiah, the Chinese yuan (should it become freely convertible), the Chilean peso, and the Peruvian new sol.

What we don't know, however, is how this all will all play out. So rather than bet on just one of these currencies, we recommend you buy a basket of stocks that will get you exposure to all of them. Thus, even if political instability triggers a decline in the rupiah or the new sol, you have sanctuary in diversification.

With that last point in mind, I'm going to give you the name of my No. 1 dollar protection stock -- one that I consider a "Best Buy Now" in our Global Gains service. But before I do that, know that this stock is not the silver bullet. Indeed, to properly protect yourself and position yourself to profit, you need a globally-oriented portfolio of stocks that will give you exposure to a variety of currencies and markets.

But this stock is a great place to get started …

My No. 1 dollar protection stock
Philip Morris International
(NYSE: PM  ) was spun off from Altria (NYSE: MO  ) in early 2008 to hold all of Altria's foreign cigarette businesses. This includes those in Canada, Latin America, Europe, and even a joint venture with China National Tobacco.

Today, the company makes about 48% of its sales in the EU; 23% in eastern Europe, the Middle East, and Africa; 19% in Asia; and 10% in Latin America and Canada, though I'll note that the company's European exposure is coming down over time, since growth has been more rapid in the company's emerging markets.

And while the company's earnings have recently been dinged by a strong dollar, earnings going forward should benefit from a significant currency tailwind as the dollar declines against many of the other currencies Philip Morris does business in. Add on a near-5% dividend, and this stock will not only protect your savings from the dollar's decline, but should also beat the market going forward.

Looking for more ideas
This is just one of the ways we're helping our Global Gains members protect themselves against a falling U.S. dollar and gain exposure to emerging international markets, which we expect will grow much faster than the United States over the next decade.

To see the rest of our ideas, including plays on Indonesia, Peru, Brazil, and rural China, click here to grab a free guest membership to Global Gains free for the month. There is no obligation to subscribe.

Already subscribe to Global Gains? Log in at the top of this page.

Tim Hanson is co-advisor of Motley Fool Global Gains. He owns shares of Philip Morris International, which is a Motley Fool Global Gains recommendation, and Berkshire Hathaway, which is a Stock Advisor and an Inside Value recommendation. Coke and Wal-Mart are also Inside Value picks. Coca-Cola is also an Income Investor selection. The Motley Fool owns shares of Berkshire Hathaway. If the Fool's disclosure policy were written by Congress, it would be 50% less effective and about 1,000 pages in length.

Read/Post Comments (89) | Recommend This Article (212)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 28, 2009, at 1:46 PM, madmilker wrote:

    yes....tat Dollar Is Doomed....but only when it is in foreign hands....keep George Washington at home floating around like he did in the past and you will see in a very short time....George Washington is alive and well.

    Foreign stuff didn't make America great....US jobs did... and you can't have a strong country, jobs and a strong currency until you get George out of foreign hands.

  • Report this Comment On August 28, 2009, at 2:48 PM, clayman14 wrote:

    Didn't know that about MO I'm going to have to look into PM now. Thanks.

  • Report this Comment On August 28, 2009, at 4:55 PM, Newf100 wrote:

    Look north young man not south.

    Your criteria for a future strong dollar sounds exactly like Canada. Hmmmm strong banks and soon to have an even stronger dollar.

  • Report this Comment On August 28, 2009, at 5:47 PM, TMFMmbop wrote:

    @Newf100 Absolutely right. Canada is another one that fits the criteria and that should be included in the basket. My oversight to leave it out.


  • Report this Comment On August 28, 2009, at 6:15 PM, RogueAccountant wrote:

    madmilker - Foreign stuff didn't make America great, but it didn't hurt either. All the cheap Chinese imports have, over the past two decades, made products cheaper for consumers. The problem has nothing to do with US currency being in foreign hands and everything to do with a monetary policy gone rampant.

  • Report this Comment On August 28, 2009, at 6:15 PM, hedrone wrote:

    I'd actually put at least one point against the Canadian dollar: The US is by far Canada's largest trading partner, and as such, steep increases in the value of the loonie relative to the USD cause problems for export-driven Canadian industry.

    There are rumblings already from the Bank of Canada about possibly intervening in the FX market to keep the loonie below 90 cents. A large devaluation of the US dollar would make a lot of Canadian businesses much less competitive in their primary market, and a compensating devaluation of the Canadian currency to stave off the resulting unemployment would not be unexpected.

    It is a really good currency, but the dependence of the country on the US as an export market ties it to the fate of the US dollar more than the others on the list.

  • Report this Comment On August 28, 2009, at 8:03 PM, TWOTIMETUNA wrote:

    what's the deal with buying and selling Gold?

    I have been told that the broker makes 15% when you buy it and 15% when you sell it. After you do have some in your safe deposit box or home safe, how do you get cash for it easily? BOA doesn't deal in it where I bank.

  • Report this Comment On August 28, 2009, at 8:14 PM, AvianFlu wrote:


    Gold related fees vary.

    Where I am at you are looking at spot price plus 10% to purchase. Then selling back is typically done at spot price. So that would be a lot less expensive than what you outlined.

    The least expensive way to own gold is through an ETF that holds actual bullion. The one most often mentioned is GLD. I believe the annual fee is 4/10 of one percent. But then you don't get to hold the actual gold...just a piece of paper. Not good to barter with.

  • Report this Comment On August 28, 2009, at 8:23 PM, memoandstitch wrote:

    Yeah, gold is the best currency. Nobody can print it except some mining companies. It's backed by its intrinsic value rather than the full faith of Ben Bernanke and U.S. politicians. The only problem is I don't know how to trade it.

  • Report this Comment On August 28, 2009, at 8:43 PM, bigbadude wrote:

    If you think for a miniute this stimulus plan is gonna do anything but banrupt us. Perhaps you should apply for school. To start business rolling do not invest in failing industrys. Have an agency pick out a industry that can compete in a world wide economy.

    Choose the right people allow the industry to pay back the government. no goverment intervention no union. no out sourcing ever!

    Its is obvious our goal is just to spend money.

    Is the theory the Govenment suports the people the theory or do the people support the Government?

    We could have given every man woman and child 500,000.00 instead so you decide???

  • Report this Comment On August 29, 2009, at 9:08 AM, NFLNostradamus wrote:

    Got to shop around for selling actual gold in hand. Lots of local jewelry/coin dealers are in the fray, plus some refinery direct buyer/sellers are more reputable and also higher paying than others. If you got the cash, a bullion IRA might be the way to go if you don't think gold's price is way overblown. If you piece buy to hold physical assets, don't get sucked into premium on bullion. All that graded condition applies to less liquid pre-1933 but nowhere near as much as recent bullion coin issue.

  • Report this Comment On August 29, 2009, at 10:46 AM, Gardnermiles wrote:

    after reading all those comments I still agree with madmilker. If we had been buying American products for the last 30 years we would have employment at least. However controlling corrupt business personnel and CEO's would have also been necessary. Where human input exists there will always be some form of greedy financial mess for the middleclass to absorb.

  • Report this Comment On August 29, 2009, at 12:23 PM, Velocity1986 wrote:

    To answer BigBaDude and expand on the topic:

    If one accepts Bobbitt's analysis (looking at the inter-relationship between war-driven technology advances, the nature of the State, and International structuring, the US started out as a "State Nation" in which the nation (the People) supported the State and tthe State could then more coherently engage a dangerous array of World Powers. The State Nation was an innovation of the Americans and was soon copied in many European States.

    With Lincoln, the Nation State came into being, in which the State existed to support and protect the nation (the People). This was again a very exportable structure in the same way that the Territorial State or the Princely State also worked well at those periods of European history.

    Bobbitt posits that the next phase is the "Market State" in which the State envisions its role as extending opportunity to as many as possible, with this being done largely through socially responsible businesses and less through government action.

    If one looks at the purpose of economic and other human activities as a means to further the Society Proper and its aims ("Socialism"), the obvious question becomes, "Who gets in to Society, and by what criteria?" Obviously Obamacare is designed to have government funds and forces cover the asses of those in Society and to a lesser extent the broader Public, which we could call "Society Ordinary." I don't want to go into a screed on differences between the Human Race and Mankind as anyone investing is already familiar with those topics concerning Cultural Racism-- which though a fact, is not particularly lamentable.

    But, as most investors know, the selection for Society Proper is quite exclusionary: resumes, family, status, nature of schooling, and most of all how one was raised. All talk of expanding this "walled city" meets with resistance using the term "inflation." Even the modest quantitative easing raises that objection.

    What is we think of substantially increasing the slots available in Society, both Proper and Ordinary by building a "new wall" that would hold six-fold as many new People and expanding over a ten year or so period-- expansion, not inflation, although obviously the amount of money in circulation would grow sixfold as well-- if the techniques of creating money out of thin air reached an awesome level.

    In brief, new blood, new talent, new worldviews, new skillsets would certainly benefit not just Society, but the "Village" as well. The objection would be raised that this newly-minted public would require a redistribution of wealth, but I again urge re-conceptualisation. It is the Cultural difference that keeps Mankind separated-- they are brought up to know the straight poop about the meaning of culture products. Culture products themselves (books, music, art, business constructs, IP, etc.) are incredibly inexpensive thanks to mass production and capitalism. It is the straight poop necessary to understand the culture products that is tightly guarded inside the walled City. Knowledge can be distributed to your new members without much expense and the assimilation can proceed at a quick pace.

    The objection will be raised that the Government cannot cover the asses of that many people under the Socialist model. True. So don't adopt this version of Public Option Health Care. Try "expanded socialism." The American Cultural identity ("Americanism") becomes greatly strengthened, and the new Market State can offer Opportunity to many more of us pesky (and smelly) Humans on an inclusionary basis without redistribution of wealth. And I'm sorry, but anybody who earns an Honourable Discharge should be guaranteed a place in Society Ordinary at the very least.

  • Report this Comment On August 29, 2009, at 12:36 PM, Velocity1986 wrote:

    I should add that it would be the Markets which provide most of the inclusive Opportunity, not the Government. Likewise it is the Markets that cover the asses of those who accept the opportunities, not the Government.

  • Report this Comment On August 29, 2009, at 12:58 PM, Racovius wrote:

    gosh darn tootin madmilkin! that darn dem foreigners damn buying dem george washingtons. god namit! American Jobs's, god and country music is what hot dang darn made this country the best in the world. and always will be!

  • Report this Comment On August 29, 2009, at 2:37 PM, CntrlAltDel wrote:

    Canada is very actively beginning to develop new markets. At least, it looks that way. In any case, just invest in their banks and forget their businesses. I've always been amazed how lazy Canadian industry has been over my lifetime, blindly depending on US markets for their survival and loudly crying the blues every time the greenback takes a crap. This time around, I hope the greenback isn't suffering from long term dysentry as that is not good for anyone.

    With respect to George being in foreign hands, it is Americans and American greed that has put him there. You can't be a buyer without a seller. Sadly, at the end of the day, America hasn't been great for quite a while, just arrogant and incredibly ignorant.

  • Report this Comment On August 29, 2009, at 4:03 PM, plange01 wrote:

    the dollar has been doomed for years! the US has been running a madoff style ponzi scheme to keep operating up until this with the country 9 months into a depression and printing money by the truck load it appears the game is up.....

  • Report this Comment On August 29, 2009, at 5:50 PM, raquelmax wrote:

    The Surgeon Grneral might agree with your diagnosis, but not with your prescribing poison.

  • Report this Comment On August 29, 2009, at 9:14 PM, ET69 wrote:

    Who needs Jay Leno when you have these kind of commentaries going on ! As for Velocity 1986........say what?!!!!!!!!!!!!!!!!!!!!!

  • Report this Comment On August 29, 2009, at 9:26 PM, DEALWITHTHEDAY wrote:

    I have noticed that allot of comments try to make gold look like currency. Gold is a commondity. Since we came off the gold standard (which I do not agree with but it is) gold is a commondity. So is it not just an trading illusion that it supports your position on a weak dollar. I believe this is the Bears bubble.

  • Report this Comment On August 30, 2009, at 12:12 AM, mlaursen wrote:

    re: "Foreign stuff didn't make America great....US jobs did... and you can't have a strong country, jobs and a strong currency until you get George out of foreign hands."

    If you don't want to avail yourself of all the world's wealth, brains, goods and services, go ahead. Please leave me out of your plans.

  • Report this Comment On August 30, 2009, at 3:37 AM, ryanalexanderson wrote:


    Since we came off the gold standard (which I do not agree with but it is) gold is a commodity. So is it not just an trading illusion that it supports your position on a weak dollar.

    You're is currently perceived as a commodity. Which is exactly why now is the right time to buy it. When the perception shifts back to gold being a currency - and it will, as people lose faith in fiat currencies - the premium it will attain will occur very quickly.

    Gold has been perceived as a currency for thousands of years. Fiat money has been an experiment for a couple experiment that hasn't been going so well. Even if we get to an inflation-adjusted value of gold around 1980, that's one hell of a run-up.

    Good article, by the way.

  • Report this Comment On August 30, 2009, at 5:03 AM, doctordave77 wrote:

    Approx 50% of my investments are in Chinese companies. They're there because that's where the most profits are to be made, nothing more or less. But when you start to consider the decline of the US, and it is declining as a world power, remember it isn't going to happen overnight, I was born in England, and I saw the tail end of the British Empire's fall also, caused by what? Cheap imports from abroad that we couldn't afford to compete with price wise. Consequently manufacturing jobs disappeared overseas over a twenty year period or so. The previously healthy and profitable British car manufacturing sector collapsed, so did our textile sector, as did steel, etc etc,...notice any similarities yet? America will soon become another Britain, larger workforce and with far greater commodity resources, but Britain just the same. IF YOU WANT TO PROFIT FROM THE US DECLINE, study hwat was done successfully in Britain, and buy into the same sectors here. You'll make money!

  • Report this Comment On August 30, 2009, at 8:45 AM, thisislabor wrote:

    velocity, are you an academic? i mean, it just sounds like you are.


    the main indication of intelligence is the ability to convey an idea in a manner that is understandable to the person you are informing.


    though I think I understand what are you saying, it does come with a lot of preconceived notions about the way society "proper" (and thus there is an "improper"???) and "ordinary".


    also that crap about the money having to increase by six-fold because the population base expands by six-fold is a bunch of crap too. - the kind of thinking the fed believes in. on a gold system there is no need to print 6x as much money.... the money simply becomes worth 6x as much, or the assets sold become worth 6x less. its sorta relative to your view point. also, if you stuck with fiat currency and just stopped printing the stuff, you would have no need to expand the currency supply either. same concept as the gold standard, the dollar just becomes worth 6x as much.

  • Report this Comment On August 30, 2009, at 8:47 AM, thisislabor wrote:

    the amount of money in circulation does not need to increase, it just cycles faster or at 1/6 the amounts.

  • Report this Comment On August 30, 2009, at 10:17 AM, DEALWITHTHEDAY wrote:


    I do not disagree that Gold could come back as a standard. China is pushing for a new currency. The Euro really has not changed how we look at each European country etc.

    The hard part is trying to understand when? I would not being to state that I can figure this out so I am trying to understand.

    It takes a depression base upon the past that I can read to make extreme changes in currency. The last one took us off the gold standard.

    Printing Money to "stimulate the economy" makes it easier to try to get out of tough times. I get this. It makes what you have in your pocket worth less just as putting out additional stock makes you stock work less.

    My problem is as I have said before going agains the "Kid with the big stick". The government does not want to go back to this standard. It has set up a system that is design to beat this.

    How and when will the "Kid with the big stick" be able to be beaten.

    In the mean time I need to make money so I play what I see.

  • Report this Comment On August 30, 2009, at 2:20 PM, LessGovernment wrote:

    All government leads to inflation from too much spending and too much debt caused by the desire to spend to support the false promises of elected government (vote for me and I will give you) and the corresponding lack of responsibility to fund the spending, hence the debt.

    All socialism leads to inflation from heavy taxes confiscated from workers to support the socialist programs. This leads to the destruction of discretionary incomes of workers which leads to diminished economic activity and opportunity for all.

    Hence socialist government most likely leads to hyper inflation, very low discretionary incomes, and low employment.

    The irony in all this is these very socialist programs are at best attempting to provide what employment, discretionary incomes, and personal responsibility once provided. However, once the socialist programs are enacted, but not funded, the resulting debt destroys the very discretionary incomes, employment, and personal responsibility we all used to rely on, and upon which the socialist programs rely on to survive.

    In other words, in plain speak, socialist government leads to economic ruin.

    Even in the United Socialist States of America.

    Be afraid. Be very afraid.

    Fire them all.

    Never vote for an incumbent.

  • Report this Comment On August 30, 2009, at 2:40 PM, AvianFlu wrote:

    I have noticed that posters who used to seem like conspiracy theory wackos now seem like they make a lot of sense. In fact, it is getting very difficult to punch holes in many of their arguments. Has anyone else noticed this?

  • Report this Comment On August 30, 2009, at 5:27 PM, Starfirenv wrote:

    DUH Avian, you line up enough boxcars and it starts looking like a freight train.Just find the engine and you'll know what's driving it.

  • Report this Comment On August 31, 2009, at 8:39 AM, RaceCoach wrote:

    There are plenty of high quality gold miners (and other companies) that are listed on the TSX that may also be listed on US exchanges. An easy hedge is to purchase these stocks on the TSX now in CDN currency, then wait for the US dollar to devalue. You gain tremendously through the currency exchange difference. At that point, if you think the US dollar will recover, sell the TSX stock and purchase it right back on the US exchange, and wait for the US dollar to recover.

    It would be fantastic is TMF would increase the exposure of the TSX in their research and online tools.

  • Report this Comment On August 31, 2009, at 9:35 PM, murthg1 wrote:

    so...invest in tobacco products to sell to the Chinese? Umm, go lung cancer! I guess...

  • Report this Comment On September 01, 2009, at 12:08 PM, sofpan wrote:

    Dudes, dollar is doomed...

    that's why I buy chinese...

  • Report this Comment On September 01, 2009, at 12:16 PM, RaulChapin wrote:

    RaceCoach, definately a good idea, the TSX might not feel too foreing for those who might be uneasy about investing in "unknown" areas. Also the Fool might benefit from more clients, as many Canadians could benefit from advice geared to "Domestic" companies :)

    About the general article

    I find it a tad ironic that Latin America is now a good hedge against Dollar Depreciation... ask any Latino about hedging... we all used to do it with US Dollars :-)

  • Report this Comment On September 02, 2009, at 10:40 PM, grendeth wrote:

    How can the US dollar be doomed when foreign countries like China are trapped in it?. They are sitting on about $1 trillion of US bonds that for all purposes are worthless. The only hope for countries that have a large amount of US bonds is for the US to continue to be strong so they can somehow off load those worthless paper currency.

    Heck, the US will never pay them back, they cannot. Obama keeps printing more money & Hilary ran to China to beg the Chinese to buy more bonds.

    Until those export orientated countries like China and Japan decide they want Euros, Yen or RMB instead of Dollars, nothing will change. They are still dependant on exporting their junk to America.

    I see China being 10 years away from being a nation of users instead of a nation for export. Till then we are still save. When 1.5 billion people have enough purchasing power & don't rely on exporting to the world, then we have some serious issues.

  • Report this Comment On September 03, 2009, at 8:01 PM, Steve1965 wrote:

    buy canadian natural resources - I cant think of a better way to hedge US inflation

  • Report this Comment On September 04, 2009, at 3:48 PM, drbat wrote:

    I've been looking into currency ETF's and the 4 best that I have found are:

    CurrencyShares Euro Trust (FXE)

    CurrencyShares Canadian Dollar Trust (FXC)

    PowerShares DB US Dollar Index Bearish (UDN)

    Powershares DB G10 Currency Harvest Fund (DBV)

    Just my 2 cents.

  • Report this Comment On September 04, 2009, at 4:45 PM, Tink12 wrote:

    If that friend of the socilists now in power, George Soros, and his cohorts decide to short the dollar as he did the Pound Sterling in the seventies then the dollar is toast. Suggest oiur new Options operation finda away to benefir.


  • Report this Comment On September 04, 2009, at 4:50 PM, AriasPalm wrote:

    Lessgovernment is right. When sanity comes back to America after Obama has been voted out, the next president will have to undo all the damage. Meanwhile, vote out all the incumbents. None of them has ever run a business, made a profit or spent wisely. They went to ivy league schools, became lawyers and then went into government. The ones with some real life experience try to speak up but their voices are too faint to do much good. We had our little experiment with remaking America and it has, in the words of former Obama supporter Warren Buffet, put us on the path of becoming a banana republic, with trickle up poverty. Vote em OUT!

  • Report this Comment On September 04, 2009, at 4:53 PM, baggins2000 wrote:

    grendeth wrote:

    How can the US dollar be doomed when foreign countries like China are trapped in it?. They are sitting on about $1 trillion of US bonds that for all purposes are worthless. The only hope for countries that have a large amount of US bonds is for the US to continue to be strong so they can somehow off load those worthless paper currency.

    The issue here is that if the standard currency is not US dollars. Then lets say China demands that this is paid back in Euro's or just the interest is paid back in Euro's or some form of Asian currency. Then we are totally screwed, 2 levels below doomed. That is why a lot of foreign governments are pushing for another standard currency.

    One of the big pluses holding the dollar as exchange currency has been that it is used for purchasing oil. But Iraq wanted to sell oil in Euro's and Saudia Arabia is talking about selling oil in Euro's. When oil is traded in another currency, then the last wheel will have come off the wagon.

  • Report this Comment On September 04, 2009, at 4:54 PM, SDLurker wrote:

    Also checkout ETF "SPDR DB Intl Govt Infl-Protected Bond (WIP)". Yield is 3.7% and it has returned about 10% for me over the last 4 months or so.

  • Report this Comment On September 04, 2009, at 5:12 PM, tenimotsu wrote:

    Your increasingly shrill tone is neither warranted nor appreciated. I, for one, would like to see a period of wild, uncontrolled inflation as I've already hedged my assets and would like to see my liabilities shrivel like a Brazilian bank account.

  • Report this Comment On September 04, 2009, at 5:20 PM, Retirefunds wrote:

    I couldn't agree more. (You must have been reading my articles this spring) King Dollar may become a Prince, a Pauper (a fool) or somewhere in between, but King no more! If working stiffs in America are angry now, just wait until this plays out.

  • Report this Comment On September 04, 2009, at 5:33 PM, mencik21054 wrote:

    I love it! The Fool does it again! An article that suggest buying Wal-Mart as a defense against the dollar, followed immediately by an ad for another article about why Wal-Mart is doomed.

    Okay Fool, which is it? Is Wal-Mart a buy, or is it a sell? Or will you tout whichever is correct later while conveniently forgetting the one that was wrong?

  • Report this Comment On September 04, 2009, at 5:38 PM, atp2007 wrote:

    Well some of us hope that the dollar falls soon because we have inherited money in Pounds sitting in the UK and will need to move it over to buy a new house. The dollar has gone down a bit from it's high but isn't near as low as it was two years ago.

  • Report this Comment On September 04, 2009, at 5:43 PM, driller101 wrote:

    When are you going to join Glen Beck over at Fox?

  • Report this Comment On September 04, 2009, at 6:48 PM, EvanRowe wrote:

    The dollar is falling off a cliff! Along with the lemmings it is. The dollar is going to be much stronger in probably 2 months. I am ideologically on the other side of the spectrum from Robert Prechter, but I think his thoughts are best on this matter.

    In our uncharted fiat currency world, money is a brand of psychological value, and people are borrowing out of various currencies. In my estimation, people are borrowing OUT of key currencies (the dollar and the yen) and have been plowing them into assets, creating what we can describe as "asset inflation". As these assets go up in value, they are in essence nothing more than re inflated equity and commodity bubbles. Unemployment is too high, and those of us in the working class majority make too little money to spend enough. Once the equity bubbles pop again, credit will get harder again (even more so than last year when there was more hope) Once you have chain reaction of liquidation, the capital that was invested will be liquidated into the ROOT fiat money it started in. That is why in my opinion, the dollar will rise, and it explains also the eurodollar charts that show eurodollar roughly following the S&P 500 in the 50% rise since march.

    I am currently long dollars, shorting euros, with a short term hedge in a long Aussie.


  • Report this Comment On September 04, 2009, at 7:14 PM, Voxland wrote:

    We definitely do NOT want to go back to the day when the dollar was linked to gold. I won't go into all of the reasons why other than to say that had we been linked to the dollar this past year when the greedy monsters got us into this fiscal jam, we couldn't have spent our way out. Go do your homework. Be ever so careful what you wish for. Our system is not designed the way it used to be.

    Second point: The Chinese are beginning to purchase currencies other than the dollar in greater quantities. However, that doesn't mean they're dumping ours. They still do want us to survive, recover and return to purchasing goods from their factories, so they STILL do have a vested interest in our seeing our GDP rise.

    Natural resources is the hot commodity the Chinese are snapping up faster than Christmas candy via mines and anything else that gives them control. That's the big play, scary as it is.

  • Report this Comment On September 04, 2009, at 7:40 PM, godsfriend wrote:

    The dollar is doomed and has been ever since Obama started stealing like crazy. Buying many foreign stocks is only jumping from the skillet into the fire. Remember how Communist China has always done business. When it looks like your investment with them might make something for you they have always nationalized your industry. You saw that dragon rear its ugly head this last week when the Bank of China O.K.ed some of their national companies reniging on oil contracts. If they aren't winning or you are making tooo much they simply change the rules. You know, like what New York did to the Hunt brothers in the last silver run. That is why you don't trust futures contracts. That is why you don't trust the ETF's. If you use them be careful. Never trust the Communist country stocks. They will cheat when it is important. That is why we talk about safe countrys and unsafe countrys that are fairly safe refuges. China is not one of the safe ones. Australia and Canada are about as good as they get. Their gold stocks are taking off. The US is no longer a safe country to invest in because of Obama and his plans for us. I believe we have a war in our future (on our own soil for a change). After that we will shine again. God will bless us but our financial blessings maybe after a hard time. It does take jobs done well and not Monopoly money to make America prosper. In God we trust. If that isn't true we are finished.

  • Report this Comment On September 04, 2009, at 8:17 PM, LJohnstone wrote:


    I do not disagree that Gold could come back as a standard...


    Gold has always been the gage for the value of the paper it takes to buy it.

    No matter what is used for money it will never set the value of the gold cause the gold sets the value of the paper it takes to buy it.

    An ounce of gold will buy more goods today than it did in 1913, but the fiat paper we use today is not worth but 5 percent of what it was in 1913.

  • Report this Comment On September 04, 2009, at 8:35 PM, loopholes wrote:

    Foreign purchasers of US sovreign debt who are also exporters of cheap goods have an inherent conflict of interest in seeing the dollar devalued. If you think of the treasuries we issue as seller financing (which makes all the "cheap" stuff they sell us a lot more expensive, by the way), then a drop in the value of the dollar relative to their currency is like discounting their receivables; and not buying our treasuries and watching us plummet into economic collapse means choking off their own revenue source. I don't know what the answer is, but I just don't see how it makes sense for our trading partners to allow the dollar to go into freefall. So I doubt that's what will happen. happen.

  • Report this Comment On September 04, 2009, at 9:13 PM, beret98 wrote:

    For those who think that gold is but a barbaric relic, please consider why the banks own it, why they attempt to control its value, and why gold has been the synonym of wealth in every advanced culture on earth. The dollar may not be directly linked to it, but gold has become the de facto global monetary base. The ongoing gold "bubble" and the scramble to own it by investors and banks is proof of its superior value.

    A smart investor will hedge his investments with the solid stuff, either PM miners, bullion in hand, or via unleveraged gold trusts that deal with only hard assets (sound Canadian trusts like CEF and GTU, etc.) and not derivative-based trusts like many of the more popular ones making the news (think GLD and SLV here).

  • Report this Comment On September 04, 2009, at 9:15 PM, bebop111 wrote:

    Not even one word about the morality of supporting this company!

  • Report this Comment On September 04, 2009, at 9:21 PM, oceantraveller wrote:

    Dollar doomed?

    Not before the other currencies collapsed.

    I have been around the world since I was 18.

    Until now passing the canals,oceans,seas and talking to port stevedores.

    We have the west coast for China,we have the East coast for Europe,we have the gulf coast for central and south Americas.

    The most well placed country in the world.We have Nebraska the size of Germany of only 1.4 million population.We have coal for the next 200 years or more.

    We have the best technologies.

    The most diversified population therefore the most diversified thinkings.

    Can not ask for more.

    Invest in BAC and C - they have investment overseas - you do not look far away - you go to Italy you have C you go to Asia - you have the best regional bank for years- C.Who owns tollways in Spain - C

    Go to China and see for yourself - not in our lifetime.

    Now with deficit getting lower- with coming of biofuel.

    Go USA.

  • Report this Comment On September 04, 2009, at 10:09 PM, georgesmithok wrote:

    Being a wise investor is great, Jesus commended those that turned his investment in them into a gain

    Read Matthew 25: 14-46

    Matt 6:19-21

    Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal:

    20 But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal:

    21 For where your treasure is, there will your heart be also.

    If you really want to avoid losing all your treasures invest yourself in the Kingdom of God. No U-Hauls to carry your treasures to your grave.

  • Report this Comment On September 04, 2009, at 10:48 PM, Lantzvillain wrote:

    Canada may have a loony parliamentary system that's become nearly incapable of electing a majority government, but we also have just a few major banks, all extremely sound, that hold on to the mortgages they write, and inexpensive - if slow - medical coverage on every citizen.

    And - oops, almost forgot - lots of minerals and metals, oil, gas, and a literate educated population.

    So holding Canadian large cap company investments and dollars really ought to pay off over time. It sure has so far.

  • Report this Comment On September 04, 2009, at 11:20 PM, Renrah wrote:

    If we could get rid of the FED and not pay $ 500 billion a year on interest for money that we are allowed to print but pay them to do so, that might help. NObama is intentionally destroying the economy so fear runs rampant and people look to Big Brother government to fix what they broke. It's all about increasing their power more than ever before.

    And things do add up on the conspiracy side, just because you call someone a nutjob because he sees the truth when others don't does not change the truth -

    All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.

    -- Arthur Schopenhauer

  • Report this Comment On September 05, 2009, at 12:04 AM, timezmoney wrote:

    We sent advisors to Bolivia, to teach them how to collect taxes, instead of printing new money every ten years. It seems to me that Obama thinks he"s on a all expense paid holiday with the presidential 747. Obama said: there will be a trillion dollar deficit each year for the next ten years. You'll, have change, how about let them eat cake too.

  • Report this Comment On September 05, 2009, at 12:05 AM, gmcgfool wrote:

    Please read AriasPalm earlier comments. It is definitely time to stop trusting Congress members. In the late 1930s James Stewart starred in "Mr. Smith Goes To Washington" which portrayed how Congress worked then and in 70 years it has not changed. Please become politically aware and active. Question your Congress members and if their answers don't satisfy you, work to elect new members who know their voting records will be scrutinized. Our only hope is a watched Congress and the constant threat to each of the members for non-reelection. Most are far too entrenched in their own perks to serve their constituents instead of themselves. Thank you.

  • Report this Comment On September 05, 2009, at 1:46 AM, UtahMotled wrote:

    Let me get his straight! I can save my dollars by investing in tobacco stocks thereby contributing to the deaths of millions in the world community. Wow, it's no wonder that the nation is in trouble - its business community has fallen so low that the return to shareholders is now more valuable than human life. No wonder there is no health care for many Americans - we would really have to care about our fellow citizens more than our money and toys.

    Most evil is a function of human competition without regard for its effects on others.

  • Report this Comment On September 05, 2009, at 1:46 AM, Gratta wrote:

    Why not to look at the easy way to adjust the budget: increase taxes for the very rich, exactly the ones who have benefit the most from the past situation. This is not socialism, just equity

  • Report this Comment On September 05, 2009, at 3:16 AM, hbb8672 wrote:

    Waiting for all Central Bank issued currencies, to be pegged back to the Gold Standard. In light of the CFG and toxic debt secured against nothing of intrinsic value, this would seem a very real possibilty.

    Since only a finite amount of bills can be backed up by gold, guess who will miss out. Pay out your mortgage ASAP. I guess the Amero will be the likely currency very soon.

    Investing in China and Indonesia? China was lending you money to buy your HD flat from Walmart and they are expecting their money back. At least you will be providing it under a legitimate pretext.

    Invest in Indonesia, if you are not risk averse in marginalising your fellow man for a token profit. Corruption, accountability and transperency are real issues affecting your future returns.

  • Report this Comment On September 05, 2009, at 6:10 AM, WantonFly wrote:

    Mate your article about possible alternative investments to shield us from the projected demise of the US$ is the most serious case of navel gazing that I have seen. Navel gazing is endemic amongst our US brethren. This is so serious the author has totally missed looking at the ethics of his recomendation or even considering recommending his readers to look at investments in the current only western economy that is actually growing. What am I talking about? Read on oh Fools.

    This economy has serious links to the Asian economies including China, it is a flourishing democracy, can even lay claim to giving women the right to vote before any other country in the world.

    It is endowed with wealth that are the envy of the world from oils to gas to gold, lithium, diamons, and any other mineral you can think of, not mentioning of course that staple of all economies, iron, magnesium etc.

    Which country am I talking about, Australia of course the best country in the world.

    Our banks are strong, none have gone under. There's a ha! ha! in that isnt there talking about the land down under.

    We do not sell cigarettes to the children of the world, so if you invest in any of our companies you can sleep at night.

    That's all for now


  • Report this Comment On September 05, 2009, at 8:19 AM, NAU4U wrote:

    In 1776, the leading currency in North America was the Mexican peso. For a long time, the US dollar was actually pegged one-to-one with the Mexican peso (now trading at 13 to 1 against the dollar). It would certainly be ironic if the trend does continue northward, with the Canadian dollar becoming the basic store of value in North America....

  • Report this Comment On September 05, 2009, at 8:35 AM, painternc wrote:

    Hey, way to go Tim - invest in something that kills people - you not have any values - you're investing in cancer and making sure it is passed on to our children. Shame of you - I hope you lose all your precious bucks!

  • Report this Comment On September 05, 2009, at 8:55 AM, Agaba wrote:

    I do not believe gold will be returning as money or a standard any time soon.

    Talk is going around about the need to create a new global currency that is not limited in jurisdiction as an alternative to the dollar this is where the fall of the dollar will take us at least initially.

    Currency moves faster hence the rapid flows and ebbs in the current global economy, over time we will learn to control/predict them better, remember these are early days yet for the "new world order" real not the ideology...

    Finally all this woe about the fall of America is superfluous. America as a country/superpower/economy has some 20 to 40 years left in it before the rest of the world catches up. It may be slowing down but not necessarily falling. Rome, Egypt, Greece fell, I do not see this happening to America or any other country for centuries. The British empire morphed as its importance declined. America will integrate with its neighbors ala the EU/AU/Asiatic and the global village will become more of a reality. Those warred about this may as well just hide under mount Rushmore.

    It may never be the America we have been lead to believe it was/is but it will always be the land of opportunity, among many others, primus inter pares if you will.

    My two cents...

  • Report this Comment On September 05, 2009, at 9:14 AM, allied35 wrote:

    Invest in Wal-mart and PM huh? They are really going to grow a lot... not.

    Want to be safe from a inflating dollar? How about investing in companies that are NOT based in the US and ARE poised for growth? Like Brazil's Petrobras PBR, Germany's Q-cells or Holland's AMG Advanced Metallurgical group.

    Looks like the US is trying to inflate away its debts! What's a few trillion in debt when a loaf of bread costs a couple thousand bucks!

  • Report this Comment On September 05, 2009, at 10:47 AM, hbb8672 wrote:

    No Gold Standard. Hmm....

    Curious that we are being incessantly spammed and info-mercialed, into selling all our gold. From grannies gold tooth capped dentures to the piglet shaped cuff-links handed to us by our ex's Father-in-Law.

    The stuff is being vaccumed-up by every two-bit pawn broker on the face of the earth.

  • Report this Comment On September 05, 2009, at 11:07 AM, Agaba wrote:


    I didn't say not to buy gold, just that it will not be coming back as money any time soon. That does not mean its a bad investment. If you know what you are doing buy it. Mr Buffet is buying silver... go figure.

    "The market like the Lord helps those who help themselves. Unlike the Lord, the market does not forgive those who know not what they do" -Warren Buffet

  • Report this Comment On September 05, 2009, at 11:48 AM, rgperrin wrote:

    In the first quotation, there are two choices: "... and concluded that, 'Unchecked greenback...'" or "... and concluded that "[u]nchecked greenback...'." What is not a option (in style) is what was printed, namely: "...and concluded that 'Unchecked greenback....'"

  • Report this Comment On September 05, 2009, at 11:49 AM, rgperrin wrote:

    Make that, " option...." Sorry

  • Report this Comment On September 05, 2009, at 12:08 PM, bullardrr wrote:

    I will dumpster dive before I buy Phillip Morris.

  • Report this Comment On September 05, 2009, at 2:24 PM, oimafool wrote:

    Our US is indeed a great country with plenty of wealth and resources. It has taken the lead in building a sound technology base and there is nothing seriously wrong in its economy. Its weakness lies in the parochial nature of its people. We simply don't get out and mix with the other peoples of the world! We should try to get out and travel around the world more often to see how the conditions are around us. Believe me, we are far better off compared to many in the world, and live better off compared to even our brethren in western europe. We have more free space to build, expand and wander, and with new discoveries and ventures we are bound to climb higher in the economic ladder.

    Let us not find fault with others, rather seek the deficiencies in us and correct them. As a nation and people we can move forward and our economy will move with us. Let us not doubt ourselves and weaken our hard earned dollar! Our fault is bickering among ourselves.

  • Report this Comment On September 05, 2009, at 4:24 PM, themaineones wrote:

    folks if push come to push we can close the money borders change screpts with in 1 for 1 and outside say 100 to 1 and use the present scritps for off shore goods and services only, and our inside scripts will not be accepted in exchange if it is out side the usa.

    this could be harsh but if we are going under it might work

  • Report this Comment On September 05, 2009, at 4:56 PM, dividendgrowth wrote:

    After reading all these comments, the contrarian in me says long USD.

  • Report this Comment On September 05, 2009, at 5:09 PM, Sailheaven wrote:

    The dollar's bottom line is not against gold, but instead the buying power of a good life here within our borders. So long as the world is seeking to break into our land of opportunity, the dollar will remain a powerhouse of currency everywhere. The Euro is presently inflated, and hyped beyond belief. Consider the cost of a McDonald's meal in France. We really don't need to buy into any thinking that our currency is in real trouble, even if the government continues to circulate additional currency over the short term. The economy needs sufficient stimulus to ride through the end of this recession, after which things will level out with new growth in emerging sectors. The deficit is also an illusory bogey man in the economy that we will likewise grow beyond. We all hate pork fat in the budget, but first we need as many heads and hands at work as possible to bring the economy around. Yes, there will be taxes as usual, but mostly on banking industry profits, and not on production. Isn't it the banking industry that put us into this mess? My final word is that you all ask yourself if you would rather life somewhere else. If the answer is no, hang onto your native currency, because you'll need it. Use it to invest inside the borders of the country you love, in any way that you can. Buy the national debt yourself, if you must. FDR was right, and a fear driven economy would be a real loss to a nation that leads the world in productivity, personal freedoms, ingenuity, and opportunity. But there is now an end to something that wasted a half generation of smart pants opportunists that called themselves investment bankers, and that is looking for an inside scoop for the easy ride on the tails of a Madoff, or some other looking good on paper scam with no substance. We're back to looking for the products, the innovations, the real value -- and that takes work.

  • Report this Comment On September 05, 2009, at 5:48 PM, snedunuri wrote:

    All this anti-Obama tirade on here, all repeating the same old garbage about how Obama is running this country into the ground. Let's get a couple of facts straight (not that some of these nuts are interested in the facts), but still.. 1, is that it was Bushwacker that doubled the national debt in his time. ie we are where we are *right now* (ok minus 9 months) b/c of Bush. OK, 2. Obama's spending unlike Bush's is an i-n-v-e-s-t-m-e-n-t. That is when you rebate a person for solar panels or finance a wind company's expansion you are investing in the future. What did Dumbo do instead with his doubling of the debt? Why he used it to invade a sovereign country, kill 3000 Americans and 100,000 Iraqis, and fill up the pockets of corporations. Bush threw away $, Obama is investing. Big difference

  • Report this Comment On September 05, 2009, at 7:10 PM, wrkdiver wrote:

    Yeah, Obama is investing - Ours and our Grandchildren's futures with trillions and trillions of natonal debt. Obama's debt is now larger than the debts of ALL previous Presidents Combined! Keep blaming Bush, koolaid drinkers, then look at those unemployment numbers -oops- Economic Stimulus Package? Soon we will no longer have a country run by Congress(The People's elected representatives), but by the EPA, FDA,other "letter" agencies, and the"Czars" - appointed by Obama with absolute power and answerable to NO ONE.

    Gold - I buy US Coins(not collector coins) foreign coins and the US Eagles - premiun over spot is a little higher, but they're tradable virtually anywhere.

    Also "junk" silver US coins and Silver Eagles. They're pretty, they're real , and you can keep them in a safe deposit box in the bank. - or buried under the ferocious dog's house in the back yard.

    Investments? Do you REALLY think you can trust the Chinese(Government - NO racial slur intended) or the Russians? "Those who refuse to learn History....." Since I have a Brasilian fiancee and they have so much oil now they're referring to "Sheikh Lula, I'm in PetroBras, Embraer, and I"m looking seriously at Vale.

    God Bless the USA

  • Report this Comment On September 05, 2009, at 8:16 PM, Arlechina wrote:

    Ayn Rand said it all 50 yrs ago in "Atlas Shrugged". The dollar and America with it, is going down - prey to powerlusting bureaucrats who won't stop trying to control our lives until there is no more carcas to parasitize.

  • Report this Comment On September 06, 2009, at 10:15 AM, hbb8672 wrote:

    Yes keep investing your dollars in the happy, luck, joy land of China. That way they can keep manufacturing products that are adulterated with toxic industrial by-products, that they don't want to horde. So next time you find your pet dead on the lawn with renal failure, or your baby starts urinating blood be safe in the knowledge of your shrewd investment strategies.

    Don't worry about your tots putting those cheap-ass plastic toys in their mouths either, lead paint apparently stimulates the intellect.Not!

    Say yes to home grown products and rejuvinate the American economy.

  • Report this Comment On September 06, 2009, at 12:41 PM, pncampbell wrote:

    Fiscal stimulus is a means of increasing the share of a countries wealth that is under central or government controll i.e. it is a form of taxation, nothing more.

  • Report this Comment On September 06, 2009, at 11:01 PM, denvercfo wrote:

    Inflation is inflation - by classical definition, it is the increase in money supply due to issuance of debt by banks (or, in circumventing the market, the direct distribution of borrowed money to people). Rising prices are one effect of inflation.

    Whether the effect comes in the form of rising prices year over year, or in the form of an asset bubble that acts as a cache for inflationary effects, which when it bursts, erases half of your purchasing power all at once - or both at the same time - it is irrelevant.

    Your net purchasing power goes down regardless - whether it's slow and steady, or in fits and starts, inflation will deteriorate the value of your money and/or assets.

    Inflation stimulates malinvestment, It raises the level of risk required to generate a return over and above generally rising prices and obscures that risk in the form of apparent equity because of rising asset values within the malinvested sector(s) (basically, rising prices that are confined to a particular sector).

    Inflationary effects can reach your pocketbook through direct debasement and rising prices, or it can erase your savings directly.

    Again, inflation is not rising prices. Inflation is the increase in the money supply through the issuance of debt by banks - the money goes somewhere, and the inflationary effect is felt somewhere - whether it be asset bubbles in tech (1996-2001), oil (2006-2008), real estate (2002-2008), or generally rising prices.

    Imagine a world where there was zero risk in just holding cash: an inflation-free world.

    As it is, by holding cash (or any investment denominated in your local currency), you bear the brunt of the counterparty risk - and your counterparty has claimed that they WILL inflate... and inflate and inflate.

  • Report this Comment On September 07, 2009, at 4:09 AM, BaseballKat wrote:

    Ah geez, can some of you NOT quote bible verses, and stay on topic. Save the preaching for Sunday school.

  • Report this Comment On September 07, 2009, at 6:10 AM, ozzfan1317 wrote: Bullard I agree just cant bring myself to invest in big tobacco.

    To be honest I think the dollar isnt going anywhere It will lose some value of course but I think modern day reminds me very deeply of the early 80's and we all know what happened then.

  • Report this Comment On September 07, 2009, at 8:57 AM, hbb8672 wrote:

    When inflation runs away and is not secured against anything tangible, you can kiss your ass goodbye.

    The Baby Boomers are retiring en-mass, they are relying on social services, ie health care, from thence a diminished tax base. If you have a diminished tax base, in conjuction with two costly concurrent wars, China no longer accepting IOU's, what next?

    You print more money. God help you if the interest rates go north with all that debt.

    The Government must stop spending now. Stop bailing out corporations, they have Chapter 11 provisions to re-structure if they are viable entities.

    With this irresponsible fiscal policy, especially stimulus payments, guess where the money was borrowed from?, stick to ETF's, gold and silver, because if the worst happens that paper will be worthless just like the Zimbabwe experience.

  • Report this Comment On September 08, 2009, at 6:46 AM, thomdd1959 wrote:

    “I'm the president of the United States, and I'll carry out my responsibilities the way I think is appropriate.” --Barack Hussein Obama

    All Healthcare Legislation And Regulation By The Federal Government Is Unconstitutional!

    Government Healthcare Is Not An Option!

    “Don't interfere with anything in the Constitution. That must be maintained, for it is the only safeguard of our liberties.” --Abraham Lincoln

    We can not compromise on right and wrong! Truth is Truth! Americans need to “draw lines in the sand”. Why is Obama trying to sell us on his Healthcare Reform? He has had more opposition from “We the People” on this issue and lost more support than any other issue, yet he does not listen to us or let it go. Why? Do not be deceived, Healthcare reform is a smoke-screen.

    The real issue here is Power and Control!

    “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” --Thomas Jefferson

    “The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse.” --James Madison

    “Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.” --George Washington

  • Report this Comment On September 08, 2009, at 1:23 PM, OldCanadian wrote:

    You forget the USD is not valued in a vacuum. Most other countries are no better off than the US when it comes to debt, markets, unemployment and the general overall recession we are in. I have to agree with those thinking about a long dollar. (or at least a bit longer) The US is still the strongest nation on earth. I believe her currency will not falter much more when valued against the others that are of international importance.

  • Report this Comment On September 08, 2009, at 5:05 PM, dividendgrowth wrote:

    The dollar will crash only if these 2 things happen:

    1) Internal political instability, such as assassination of the President and ensuing chaos;

    2) Loses a major war.

    Reichsmark's crash exactly began when foreign minister Walter Rathenau was assassinated by right wing lunatics.

    Ruble's decline began when the USSR finally gave up in Afghanistan.

  • Report this Comment On September 17, 2009, at 12:55 PM, Investable1876 wrote:

    America to a large extent can’t avoid a period of adjustment as it seeks to deal with its triple deficits, trade deficits with the rest of the world, consumer debt, and US government debt. Whether the period of adjustment is gradual or painful will depend upon 2 things. Firstly how significant will be the fall in US house prices and consequent fall in consumer confidence. Secondly it will depend on the attitude of Asian bankers, in particular the Chinese. Since they hold so many $ assets they may try to manage a gradual devaluation, a continuation of the past 5 years. However if the dollar does lose its status as the reserve currency of the world, there could be a growing stampede as America’s creditors seek to cash in their cheques. This would exacerbate the fall of the dollar, causing real economic hardship for America and the rest of the world.


    Money is like muck, not good except it be spread.

  • Report this Comment On October 19, 2009, at 5:24 PM, whatsafool wrote:

    Question: If you inherited $100,000 Euros from a relative's account in Europe - is it better to retain the funds in Euros rather than convert to dollars, if the funds will be saved, not spent?


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