The dollar is not bottoming out, at least not at the moment. With the troubles in the EU, and their inability to reign in their debt problems, the core ECB (euro central bank) members have been infected. Capital flight is in full swing, and with rumors of a potential Chinese housing/economy collapse in full swing, and all the problems facing Japan after this last april, the USD has gained strength. Some political figures are trying to equate that to vidication of obama's policies, but they are sadely mistaken.
What is happening is the USD is being chosen as the lesser of three evils. As such the index recently topped over 80, (80.03 as of this writing) Up from recent lows around 73 and 74.
This is going to put a hurt on the precious metals market but not for the obvious reasons. It is because there are multiple countries and financial institutes liquidating precious metal holdings in an attempt to stay afloat. Gold will likely get down to 900-1000 again, and silver down around 20-23. Many PM traders will have thrown in the towl by then.
However; those numbers will be in the neighborhood of a trigger point for the collapse of the US economy. That is why I mention them at all to begin with. Inflation wise those numbers are far below their historical index. A simular scenario played out just before the great depression in the U.S., and other collapses around the world throughout history.
There will be no recovery from this. Its game over when people wake up and realize there is no way for the United states to service an 18 trillion dollar debt, with ~140 plus trillion dollar unfunded mandates to go with it.
At this point in time, the U.S. has only one option, and thats bankruptcy. Printing more money won't fix it as the only thing propping up the dollar as the worlds reserve currency is faith in the green back. That is already in trouble. Russia and China have agreed to trade among themselves in their own currency outside of the USD.
In 2010 China submitted to the UN that a new world reserve currency should be developed based on a basket of goods and currencies from around the world effectively ditching the USD.
We are on the cusp of that as the ECB is considering that as a way out. Germany has already held talks with Russia regarding joining in that should the Euro die (and it will) and they revert to the mark.
Shortly after the Euro dies, all hell is going to break loose. PM's will reverse course and go through the roof as people try to invest their money in a safe haven. 4-5 grand gold is entirely possible, but even at that, what good will 5 grand be at that time when the dollar totally craps the bed.
Where does that leave us?
One day in the near future, the EBT food stamp card won't be able to buy a loaf of bread. What do you think the welfare crowd is going to do when they wake up at the end of the month and realize no free cheese is forthcoming? For that matter, what are you going to do when the wheelbarrow you carry a pile of dollar bills in is worth more than the dollars?
My opinion for what its worth.
Ezekiel 7:19 “‘Into the streets they will throw their very silver, and an abhorrent thing their own gold will become. Neither their silver nor their gold will be able to deliver them in the day of God’s fury. Their souls they will not satisfy, and their intestines they will not fill, for it has become a stumbling block causing their error.
Revelation 6:5 And when he opened the third seal, I heard the third living creature say: “Come!” And I saw, and, look! a black horse; and the one seated upon it had a pair of scales in his hand. 6 And I heard a voice as if in the midst of the four living creatures say: “A quart of wheat for a de‧nar′i‧us, and three quarts of barley for a de‧nar′i‧us; and do not harm the olive oil and the wine.”
I am sure that when the Roman Empire fell, many thought that the world was ending. It did not, it jus really sucked for a really long time in the affected area.
With the global economy, there are few who will not be affected.
I will tell you what I am going to do.....I am going to sit at my house in rural Wyoming and watch the chickens peck the ground, and my wind mill spin around......with an ak 47 in my lap.
Everyone says "buy gold, buy gold...", my thinking on gold is, you cant eat it; lead will become a precious metal.
