Dollar Submerged
Thursday, February 28, 2008 | 02:00 PM | Permalink
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Like I said before, I you don't want those little pieces of dirty green paper in your wallets, just send them to me. I will even pay for postage. No need for thanks. It is my duty as a public spirited soul to save you from such embarrassment.
Posted by: cinefoz | Feb 28, 2008 2:10:08 PM
The administration's strong dollar policy is a lot like Paulson's pro-claimed "no bailout" policy...
...except the just opened the spigots on Fannie and Freddie...
Gov't to Lift Fannie, Freddie Limits
http://ap.google.com/article/ALeqM5hZMu_zy8j8jS-ZGoLa7TRsySUaHwD8V2P3PG2
...and the uber-backstop FHLB
How The Government Kept Countrywide Afloat
http://www.dealbreaker.com/2008/01/how_the_government_kept_countr.php
Posted by: VennData | Feb 28, 2008 2:16:08 PM
To cinefoz,
Ask and you shall recieve.....
http://clubnosebleed.com/?p=59
Posted by: MarkTX | Feb 28, 2008 2:25:37 PM
I don't think you need any more proof of a recession than this headline:
"Bush: U.S. is not headed for recession"
http://www.msnbc.msn.com/id/23389508
Posted by: MooPoint | Feb 28, 2008 2:30:58 PM
stores in ny are now taking Euros.
http://www.amny.com/business/am-euro0228,0,2872977.story
Posted by: costa | Feb 28, 2008 2:40:25 PM
Are you telling me that the greenback sleeps with the fishes?
Posted by: Scott Frew | Feb 28, 2008 2:42:12 PM
Q: why is gold approaching $1000/oz?
A: because Fed/Treasury is debasing the currency (into worthless IOUs... they represent claims against what you say?)
Posted by: glory | Feb 28, 2008 2:54:26 PM
did barry just nailed the bottom in dollar.
hope it is mainstream enuff ..
Posted by: sam | Feb 28, 2008 3:05:33 PM
The US Dollar... it's the world's newest source of funds for the carry trade.
For fun and profits, borrow cheaply in ever declining dollars and invest in growing markets worldwide!
Posted by: Vermont Trader.. | Feb 28, 2008 3:20:21 PM
Posted by: cinefoz | Feb 28, 2008 2:10:08 PM
_______
Will you still pay for postage when a stamp costs more than a dollar?
Posted by: Marcus Aurelius | Feb 28, 2008 3:42:58 PM
Hey, is it just me, or does today's NASDAQ chart resemble the CISCO logo?
Posted by: cliffynator | Feb 28, 2008 3:59:39 PM
But don't worry because Bernanke says there's no inflation and Fearless Leader says everything's gonna be awright.
Posted by: Bob A | Feb 28, 2008 4:05:58 PM
Barry - I'll acknowledge all the abstruse and insidious tricks that the Fed is employing to prop this Enron of an financial system up! Your friend (?) James Grant in the February 22nd Edition of his Interest Rate Observer, quotes one stategist (Christoper Wood at CLSA) who asserted that the Fed is taking "the garbage collateral nobody else wants to take".
My question is - and remains - as bad as we are, aren't the other kleptocracies - Russia, China, the Saudis - even worse. Hell, take the Germans out of the EU and what you have is a weak confederation, as Jim Grant calls it: " confederate money"!
Gotta admit though, Enron is looking like more of a portent every day!
Posted by: John Badalian | Feb 28, 2008 4:09:17 PM
real interest rates are negative = Adios greenback.
Posted by: Stuart | Feb 28, 2008 4:16:54 PM
Ok, so question. I'm not a high net worth investor or anything, just another person off of the street. But see, I'm not leveraged to the hilt, I actually have some cash savings. (Yeh, I must be unAmerican) How do I protect my savings (say 20 to 50k) from the continuously sinking (and probably much further) dollar?
Posted by: tm | Feb 28, 2008 4:34:36 PM
Talk about a sinking dollar, in 2001 I went to the Czech Republic and pulled a 500 Czech bill out of the ATM. At the time, a dollar was worth 38 Czech Koruny, so that 500 was worth about 13.15 US. Now the exchange rate is 1 US dollar equals 16.5 Czech Koruny just 7 years later. That same bill is now worth 30.29 US dollars. That equates to about a 18.5 percent annual decline in the dollar vs the czech currency. Thankfully I decided to keep the bill .:) It makes me wonder what the next 7 years will bring.
Posted by: Brian in Seattle | Feb 28, 2008 4:38:45 PM
Talk about a sinking dollar, in 2001 I went to the Czech Republic and pulled a 500 Czech bill out of the ATM. At the time, a dollar was worth 38 Czech Koruny, so that 500 was worth about 13.15 US. Now the exchange rate is 1 US dollar equals 16.5 Czech Koruny just 7 years later. That same bill is now worth 30.29 US dollars. That equates to about a 18.5 percent annual decline in the dollar vs the czech currency. Thankfully I decided to keep the bill .:) It makes me wonder what the next 7 years will bring.
Posted by: Brian in Seattle | Feb 28, 2008 4:40:36 PM
tm..10% oil, 15% euro,10% gold,15% EEM,30% short term bond,20% cash.
This way you will beat BArry's returns
Posted by: sam | Feb 28, 2008 4:40:59 PM
tm,
I am working on the same problem. Here is my quick summary from my two years of work on the problem (reading many blogs and doing what research seems needed). I have very few long positions, was short WM (and several less successful shorts), and am currently short BAC and COF. I opened an account with Everbank and bought a couple pounds of gold, got my 401K out of equities, and am waiting for long positions to look reasonable again. You really don't want to be short the U.S. over the long term, but over this particular term it seems prudent. I have stayed away from foreign diversification because there are a lot of "tensions" built up that can snap and unravel at any moment, IMHO. Getting into Euros last year would have been a good idea, but that ship has sailed. As for Asia, they need a strong U.S. and they won't have one for a little while. Agricultural commodities seem to be a new bubble since there is no reason to suspect there is actually a massive shortage of these products (even with the ethanol subsidies eating up production). I am currently trying to decide whether to go short any or all of C, LEH, or GS. Each is a bit different. C is obviously weak, but have taken a beating already and because of how shorts (not options) work the lower the price per share the more risk. GS has mostly avoided the beating and probably have one coming but their high stock price means you might be able to short them if you only have ~20-50k to play with. Sorry to write a disseration, but I hope I can help someone else in a similar situation.
Posted by: philip | Feb 28, 2008 4:52:00 PM
Lest anyone overlook it, one of the driver4s of the sub prime/credit debacle was the need to obtain more yield. Well, here we go again. Yields are declining due to the rate cuts, the dollar is sinking, home values are sinking, there are fewer and fewer defined benefit pensions out there, and our fearless leader says things are good. How do you stabilize an economy that needs increased savings for both down payments and retirement, when yields are below inflation? I do not think you can.
Posted by: larry | Feb 28, 2008 5:56:19 PM
You know, Bush is right. We aren't headed for a recession. We've been in one for some time. Wait until the BLS restates the employment figures for last year come March 11.
Don't buy airline stocks if you think we are headed for a depression. The railroads did lousy during the 30s.
Posted by: AGG | Feb 28, 2008 6:37:53 PM
People bought up gold for the same reasons in the depression. FDR then confiscated everyones gold, and those who did not turn it in went to jail. The treasury paid them 20 dollars an oz. Once he had all the gold, he devalued the dollar and gold was worth 35 dollars and oz. The big boys in Wall Street had shipped tons of gold to London since they were tipped off about the devaluation, and nobody was going to jail them. They made a nice profit. The gold the Fed banks turned in was not paid in Federal Reserve Notes since they knew these were worthless after going off the gold standard, and instead they got gold certificates (everyone else got dollars)
As for the printed dollars in circulation today, there is only 220 billion in the US, and 500 billion is overseas. If they gave each man women and child an equal share of dollars in circulation, that would be about 700 dollars. The cost for each dollar is 6 cents, so it cost 42 dollars to make your dollars. The value of the paper is even less. Of course, dollar depreciate (inflation, devaluation).
Posted by: PFT | Feb 28, 2008 6:40:23 PM
tm:
The short answer is precious metals until inflation is no longer an issue. To me, it is a matter of preserving capital while making a profit by hedging on the obvious; inflation. As PFT writes; another reason why of the two monetary metals I prefer silver.
Posted by: Pat G. | Feb 28, 2008 7:28:49 PM
The deflation is a fig leaf to fool the unwary of what is going on. Oh my god! The monetary base isn't really growing. The deflation I have been predicting for 50 years is right around the corner.
You Wish! Like the returns on money will ever go positive. Don't delude yourself the dollar is a paper currency and you know what paper currencies are worth nobody wants them.
Your best protection right now is to buy real estate with a fixed rate mortgage. Go for it. You have my blessing.
Posted by: Mises | Feb 28, 2008 7:40:53 PM
Ok, so question. I'm not a high net worth investor or anything, just another person off of the street. But see, I'm not leveraged to the hilt, I actually have some cash savings. (Yeh, I must be unAmerican) How do I protect my savings (say 20 to 50k) from the continuously sinking (and probably much further) dollar?
Posted by: tm | Feb 28, 2008 4:34:36 PM
///////////////////////////////////
Bud, buy gold and oil stocks
Posted by: rickrude | Feb 28, 2008 8:29:23 PM
