December 16, 2008

US Dollar Hits 13 Year Low

By IdeaMan21

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The US Dollar hit its 13 year low versus the Yen Friday and rebounded shortly after that. However, if you look at the currency markets overall a trend is starting to show, that the US Dollar is weakening. This is a point that is being argued about alot but a select few economists and professors of economics seem to agree that the US Dollar is going to tank.

The reason for this isn’t really that complicated. We are the largest debtor nation in the world. In 28 shorts years we’ve gone from being the largest exporter and lender to the world to the opposite. Reagonomics and the Laffer Curve be damned. The two combined have wiped out almost our entire manufacturing base and we have to borrow money every single day just to function as a government. With the Investment Bank collapse in September and October and now the stock market collapse the rest of the world is figuring out that we won’t be able to pay back our loans. This alone will kill the value of the US Dollar.

Check out this video from Novermer on Fast Money on CNBC. Peter Schiff has hit this on the head going back over 2 years and unfortunately he has been right. But what he is predicting now is dire.

Our Government and the Fed specifically has been playing witchcraft games with our economy for so long that it looks like no matter what, the market is going to correct itself and we all are going to feel the pain of this correction. Buy and Hold Investing is dead because the market is so volatile and there is no rhyme or reason for these 20 percent moves on some stocks that you must find something to hold onto in the interim.

Gold is that something. Again, going back to Peter Schiff he makes a great case for buying the precious metals and Gold in particular. It is really best to buy actual Gold buy investing in Gold futures will be better than nothing. When the US Dollar collapses Gold will be standing extremely tall. Think about it, if you use the US Dollar to buy Gold and than the US Dollar is worth less, Gold goes up by default.

Check out this video of Peter Schiff talking about Gold.

He has already predicted that Gold would hit $1000/ounce this year and it did. He is now predicting it hitting $2000/ounce next year and I wouldn’t bet against him anymore. He seems to have hit this right on the head and he started talking about it back in 2006.

After watching that it is scary how accurate Peter Schiff has been, even in the face of laughing pundits and “so called experts” on these practically worthless Financial Talk Shows. It seems like the talk shows are more about entertainment than about facts. Do they look at us like children that can’t take the truth or are they themselves unable to face the hard facts of life.

Either way I think it is time that you looked into the falling US Dollar or buying Gold, both if you can afford it. As far as Forex Trading is concerned there are hundreds of ways to invest in this market and it is easier and faster than investing in Gold. But I would be looking to start doing it soon since the writing appears to be on the wall for a US Dollar fall.

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