Shorting the US Dollar



Posted: Monday, November 23, 2009

by Aurelia Masterson
Panama Legal

Executive Summary – Right now the whole world is shorting the US dollar on the currency exchange and futures markets. When you see something like this the masses are rarely ever correct. People shorting the USD get the dollars and invest mostly in China products. This means if the USD goes up, China investments will drop. If the dollar goes up the stock markets may decline and then you can have the perfect storm. Many large countries are holing USD and want to move them out slowly so as to not get caught short holding worthless currency they can buy nothing with. They will take steps to shore up the dollar on the currency markets as they liquidate the USD which may take another year or longer.

Did you just see India buy up 100 metric tonnes of Gold from the IMF? The EU with their high EURO is not sitting pretty. Their exports are priced too high and their tourism is hurt for the same reason – too expensive. The USA with their cheap dollar is getting a lot of tourism from people who do not seem to mind going to a police state and being treated as a criminal. Their tourism is not where it should be with a cheap dollar due to their police state tactics. The USA can still export the few things it makes competitively due to the cheap dollar.

What We Expect – The USD can readily go to 1.25 against the Euro. It is now roughly 1.5 against the Euro. At this level we would look hard at getting out of the USD and into EUROS and some other currencies as well. The USD may even go to a level-approaching par with the EURO, which would be a fantastic buying opportunity to get out of the USD. The USD has no long-term future, none. It can surge from artificial market manipulations but will ultimately drop like a worthless rock.

Gold – Be careful here. There are some pretty leftist radical high tax governments out there in the EU and USA. It is conceivable that they may make private ownership of gold illegal. This the USA did in 1935. This will drop the price of gold, which is something they want. For one thing they could buy up gold reserves cheaply using their fiat money.

Seems like governments are beefing up their gold reserves. They do not like to see their currencies competing with gold for security. Instead of increasing the security of their currency which would be the right thing to do, they will destroy gold in favor of their fiat money. You can rely on the high tax police state governments to do the absolute worth thing for the people in general. Did you get your swine flu shot yet?

Back to Gold. Try to hold your gold outside of the USA. It still seems to be headed up and a lot too but do protect yourself against government confiscation or making it illegal. Find a nice safe free jurisdiction to store your gold in. Do not keep it inside of a high tax police state.

http://www.panamalaw.org


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