The dollar's recent strength

Yeah people really have short term memories. Dollar is about where it was 2 years ago.

So as the dollar strengthens, is that a sign that people are cautious about the recovery we've had over the past year? Is the next dip coming this spring?

Dollar index is a relative valuation against a basket of currencies.

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U.S. Dollar Index - A measure of the value of the U.S. dollar relative to majority of its most significant trading partners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies.

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USDX Currently, this index is calculated by factoring in the exchange rates of six major world currencies: the euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc.

from: Investopedia

USDX is up compared to the 6 currencies that make up the basket. That doesn't mean it's not going down, only that it's going down more slowly than the others in the 'basket'.

Take a look at PM prices for relative dollar strength. Also energy prices reflect the relative strength of the USD, particularly CL, or crude oil, as the large majority of transactions for CL are done in USD.

Take a look HERE: Minneapolis FED Inflation Calculator

To see what the so-called strong dollar policy has done since the creation of the privately owned federal reserve.

You pick a year, then enter a dollar amount... then pick another year and it will calculate the corresponding amount:
$1 in 2000 = $1.24 in 2009.

$1 in 1985 = $1.98

$1. in 1970 = $5.49

$1 in 1913 = $21.54


That is based on the current definition of CPI, which, as most Republicans know, was changed during the Clinton administration in a lame effort to conceal the reality. Shadowstats.com has a nice tracking of the CPI using the Clinton modified CPI we have now, and using the Pre-Clinton methodology.

Inflation is a hidden tax. Bankers, particularly the Central variety love it. The media tells us 'prices are going up', but the truth of the matter is that the value of the currency is going down. Bush ran up huge deficits. Change we can believe in is doing more of the same. A whole lot more.



Doesn't even include the $1.XX Trillion dollar deficits being run up in the name of change we can believe in.

I believe paper burns, and I know that fiat currencies always return to their intrinsic value... 0. All this massive government deficit spending is doing irreparable damage to our money.

I don't place faith in this US government, nor small pieces of paper with funny symbols and incantations written on them, as secure investments in the long term.

If the status quo continues for another 30 years, $1 today will only be worth ~35-50¢ That means, in order to eat a hamburger when you retire, you'll need to put away two today (inflation tax). With the interest environment being what it is, and the stock markets suffering from tremendous risk and volatility, it makes planning for retirement very challenging.

I would much rather see a currency based on something that cannot be printed (ergo devalued arbitrarily). Imagine, if you will, that the dollar you save today will buy the same thing in 20 years as it does today. This was the fiscal reality in this country throughout most of its history. Not so any more. We can thank the Federal Reserve and free spending politicians with no accountability for that.

how many fiat dollars did it take to buy an HDTV in the 90s?

That brings me back to the US Dollar – where is the fundamental argument in favor of a long term bull market in the greenback? Keep things simple – look at the almost unquantifiable sum of dollars being created and ask yourself where is the demand going to come from that can hope to absorb all of it. We have saddled not only the next generation and our own children with a crushing burden but their children as well. At some point it becomes mathematically impossible to realistically pay back such debt. All that is left becomes either a default or a currency devaluation.

the above from Sinclair and why i have chosen to take out "insurance" in the form of precious metals. the people i choose for information have all made it clear that it has been more of the same, enough has not been done to fix the problems we face. i think the dollar is toast!!

What's the best way to go about investing in precious metals?

I went to Europe summer of 2008. I took a real beating.

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A decline in dollar is a catch-22 isn't it? Supposedly great for export sector, but a hit towards our standard of living. Or am I off-base?

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Pretty accurate.

A weak dollar makes our products a lot cheaper for other countries and other countries' products a lot more expensive for us.

kfizz, you're be facetious?

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the above from Sinclair and why i have chosen to take out "insurance" in the form of precious metals

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That sound I just heard must have been Rivers sh*tting a brick.

Seriously though, value can be assigned to precious metals and gems only because a market exists for them.

If you want to look at gold, silver, etc. as wealth storage devices then fine, but remember their value is predicated on people's trust just like our dollar.

I guess it depends on how much backstop you're looking for. With modern society in its current form as a starting point, let's suppose things devolved into a situation where the dollar was worth zero. I'm thinking nothing short of a Mad Max situation would result and if so, I propose gold wouldn't do you much good. You can't eat it, it can't keep you warm or dry, it can't heal you if you're sick or injured ... and so on.

I'm not saying that you shouldn't own gold or silver or diamonds or astatine (the rarest naturally-occurring element, with less than 30g estimated to be contained in the entire Earth's crust) or any other valuable commodities. My point is that all the pimping of gold lately ignores the fact that its value is based on trust just like FIAT currencies.