Originally posted by galdur

Most of this doomsaying, comets, asteroids and other extinction level events propaganda originates with Wall Street. It´s designed to propagate the myth of shortages in a world that races ahead on a rising wave of technological advances, efficiency increases and general oversupply of everything that money can buy.

Now this is a conspiracy in itself! This speculation deserves a thread of it's own. If these doomsday agendas are a ploy of distraction coming from wall street we really should be investigating that aspect!

Originally posted by galdur
If Uncle Sam fails, the financial system of the entire world will go down the crapper. Which means that U.S. will not fail..

Huh? Can you explain how it would not be a failure for the US corporation if the world's entire financial system goes down? Is there an ace in the hole?

I mean, come on folks, after all the years years of Dr. Doom and co. predicting the demise of the dollar and the always imminent collapse of the financial system - here we are in the year of the Lord 2011 with the price of money (debt) at a 150-year high. It´s a matter of historical record. It has to tell you something.

Now, let´s have a brief recap on the forces and agendas that have mainly influenced the trade in the U.S. dollar - the big dog that the world virtually revolves around.

A lower dollar benefits DOW multinationals. This results in more dollars to book home in the US, thus inflating revenue and profits, resulting in rising stock prices. This very archaic and obsolete 30-company index then leads the rest of the stock market, indeed world stock markets.

A lower dollar also benefits commodities whose price is denominated in dollar. Since most of these commodities are produced and extracted outside of the US, a falling dollar leads to increasing production costs in local currencies, thus resulting in demand for more dollars to meet those costs.

So, you see the obvious and gigantic agendas for keeping the dollar down. All the while this play has been increasing economic input costs into the US economy, which is very heavily dependent upon imports and consumer spending. At some point this mess got too one-sided and was forced to reverse which is what I´ve been trying to communicate on this thread. Markets will always correct themselves eventually and they have no incentive at all for self-destruction. They will always be right in the end because they will after all always be there no matter how many of us individuals pass on.

So, the market will most likely try to establish some sort of equilibrium between economies to hold water. In my view US and Germany are the most important immediate players and so it´s likely that the market will continue deferring inflation to a falling Euro in the interests of the German export machine while bidding up the dollar to bolster the US import and consumer spending dependent market. As for China and the rest of Asia, these are still minor players among the giants. They should focus on developing their internal markets first an foremost for the moment and not disturb the market corrections in the old west.

Interesting move in the dollar. In my opinion the market is trying to establish equilibrium between the two big dogs - US and Germany -. It makes sense to take down the cost of the import dependent US economy by bidding up the dollar, while helping Germany´s export machine by taking down the euro. China and Asia are junior partners in this game of old dogs, they need to focus on building up their own internal economies and consumption.Regards, galdur.

Don´t recall if I remembered mentioned it, but Dollar rallies off cyclical lows have tended to be quite violent.

Well, it´s official - the price of US govt. debt is at a 200-year high. Yield of the 10-year note is at 1.91%.

Those morons in DC seem totally clueless. In their shoes I´d simply send the 50 million lowest income families 500 billion to a 1 trillion over the next 24-36 months. It´s clearly totally risk-free for the federal govt and of great benefit to the populace and businesses.. The debt would be bought all the way down to zero %. I´d be reelected by 80% for sure.