After some research and reading, it seems as though our Dollar may be experiencing very tough times ahead. What we have is a mix of factors that will
not only discourage but most likely push foreign countries away from The Dollar. The climax of the events to come will occur this coming week of March
20-26, 2006. It will be one of great importance.
First we shall start with the fact the M3 report will be discontinued on March 23 2006.
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease
publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to
publish institutional money market mutual funds as a memorandum item in this release.
For those that don't know the M3 report is a way to determine the amount of dollars in circulation. The main different between the M3 and M2 & M1 is
the fact that the M3 contains eurodollar deposits. Now discontinuing the M3 report wouldn't be that big a deal, IF it were an isolated incident that
had nothing to do with other events taking place that same week. What events may we ask?
Well it just so happens that Monday Mrach 20, 2006 Iran will be opening its Oil Bourse. They plan to have their oil trade in Petro-Euros.
The upcoming bourse will introduce petrodollar versus petroeuro currency hedging, and fundamentally new dynamics to the biggest market in the world -
global oil and gas trades. In essence, the U.S. will no longer be able to effortlessly expand its debt-financing via issuance of U.S. Treasury bills,
and the dollar’s international demand/liquidity value will fall.
The most recent news reports indicate the oil bourse will start trading on March 20, 2006, coinciding with the Iranian New Year. The
implementation of the proposed Iranian oil Bourse – if successful in utilizing the euro as its oil transaction currency standard – essentially
negates the previous two criteria as described by Mr. Yarjani regarding the solidification of a petroeuro system for international oil trades. It
should also be noted that throughout 2003-2004 both Russia and China significantly increased their central bank holdings of the euro, which appears to
be a coordinated move to facilitate the anticipated ascendance of the euro as a second World Reserve Currency.
What this means is that the Petro-euro and the Petro-dollar will be in competition for the control of the oil trade monopoly that the US has held on
to for many years. For those who don't know, many countries have our money invested because oil is traded in dollars, so they need dollars. Should
our monopoly on the oil industry fall because of trade in euros, the value of the dollar will fall at a decent pace. This is because the need of the
dollar for oil trade will diminish within time. Such a situation, though damaging to the US Oil market, wouldn't normally be a panic situation. The
only reason for a panic in the white house is the amount of national debt we have created within the past couple of years. Though it would be
damaging, had we been in a surplus our system would not have taken the extreme amount of damage it will now. What effects will this have on you
That's a good question. To answer that you will have to ask yourselves a couple more questions. A question to start with is how much material assets
do you own such as gold and silver? as a pose to paper currency?
"Just as the U.S. role as world superpower won't last forever, neither will the dollar's role as the world reserve currency," said John Nugee,
director of the official institutions group at State Street Global Advisors. SSgA, an arm of State Street Corp. (STT), is the world's largest
institutional money manager with US$1.4 trillion in assets under management.
"A lot of this region is sleepwalking a bit about the long-term future of the dollar," Nugee said. "I hope that the dollar doesn't become an asset
that people have too much of and nobody really wants," he said.
As seen, the dollar is losing its hold on the international trades and could be looking at a world of trouble....literally. This is because if the
dollar should take a sudden collapse from the Iran situation, most other economies will suffer a great deal. This is the reason why most countries do
not want to oppose against actions against Iran, because they will be equally effected by the blow iran is attempting to deal the US economy. That is
not all though. Like we asked ourselves before, how will this effect you?
The fact is that for a while it was only the dollar that was losing value. However, as other central banks inflated to mitigate the dollar’s
decline, the world’s savers began to take notice, and reacted by fleeing all fiat currencies in favor of gold. The old saying that “paper
currencies do not float, but merely sink at different rates” is becoming increasingly evident with each up-tick in the price of gold.
The reality though is that it is not gold which is gaining value, but currencies that are losing it. This loss of purchasing power is increasingly
evidenced by rising nominal prices of both assets and real goods. Do not be fooled by the pretense of higher nominal asset prices that merely reflect
depreciating paper currencies. Even though stock prices may appear to be rising, they continue losing value relative to gold.
In short, your money is losing value, and things will continue to become more expensive. That is at the current rate we are going at though. This does
not tell you what will happen should the Iranian oil situation occur March 20, 2006. What will most likely occur will be this process in which the
dollar devalues at a very increased rate. The reason the dollar will lose value faster is the foreign nations sudden lack of need for dollars.
In conclusion we need to ask ourselves relatively simple questions. Are we too late? Did we put the pieces of the puzzle together a bit too late to
realize the dollars downfall? Will we see the kind of depression we could only dream of in fear? A better question to ask yourselves would be, "Am I
prepared for this?" Is your life savings in electronic stocks and little pieces of paper?
NOTICE: if this is in the wrong section Mods please move it to the appropriate section. i figured since this would all be occuring this week it could
be considered current events.
[edit on 19-3-2006 by grimreaper797]