It's the end of the world as we know it... Nov 07, 2007 - 16:47 PM
Wow, I seem almost prescient:
Giselle Bundchen wants to remain the worlds richest model, Bloomberg News reports, and is insisting that she be paid in almost any currency but the U.S. dollar&When Bundchen, 27, signed a contract in August to represent Pantene hair products for Cincinnati-based Proctor & Gamble Co., she demanded payment in euros.
Bill Gross: Weve told all of our clients that if you only had one idea, one investment, it would be to buy an investment in a non-dollar currency, said Gross, the manager of the worlds biggest bond fund. That should be on top of the list.
Warren Buffett: We still are negative on the dollar relative to most major currencies, so we bought stocks in companies that earn their money in other currencies.
Jimmy Rogers, Super Investor: The dollar is collapsing.
Let's see here: War in Iraq (the Forever War) High gas prices Interest rate cut sends dollar over cliff Pakistan, our ally next to Iraq is falling apart Chinese Congressman floats the idea of selling dollars for euros Yuan may be revalued, which should also keep pressure on a downward spiral of the dollar...last May Highest gold prices since 1980 Inflation is a worldwide problem US Housing and mortgage industries going down down down Financial powerhouses Citigroup, et al doing multibillion dollar writeoffs Inflation - real inflation, is estimated at at least double the official estimates and even upwards of 16% Record trade deficit Record debt, both personal and governmental Negative savings rate So obvious that even Giselle Bundchen is demanding payment in Euros.
Fuck.
So what's it going to be? The Fed is weighing 2 evils: Deflation and inflation. Deflation leads to recessions and depressions. If that happens that would be the mother of all depressions. On the other side is inflation. Meaning your dollar is worth less, but your house (in inflated dollar terms) is worth more.
Let's see, last time Alan Greenspan dropped the interest rate to 1%, mortgage loans were dropped to 5% and everyone took out loans on McMansions for 0% ARMS that readjusted to 8% 3 years later. Bad loans to bad people because the banks would just sell the paper to someone else. A Ponzi scheme, but the Citibanks of the world couldn't find a greater fool and got stuck.
Fuck.
So, here we go again. Reinflate the dollar, throw cheap money to the wolves. Dollar collapses, $6 gasoline and now your $400,000 house is now worth $600,000. China decides not to "invest" in our currency anymore and the death spiral of America begins.
But like they say, if the US sneezes, the whole world gets a cold.
So, what are you going to do? Are you going to just stand there and bleed?
This, depending on your viewpoint, is a tipping point into the worst financial times of our lives - or a huge opportunity come knocking.
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