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XMFSinchiruna (26.54)

Death Knell for the Dollar



September 23, 2010 – Comments (6) | RELATED TICKERS: GG , NEM

The U.S. dollar is dead. There, I've said it.

My fellow Fools, it is with great sadness that I must inform you of the passing of our nation's currency.

In memoriam, I have penned this piece from the bottom of my heart to help investors through the grief they will undoubtedly feel.

I humbly ask that you share this article with your friends, your family, and anyone else whom you know to have been a friend of the dearly departed dollar. I have attempted to address a series of crucial topics that all American citizens must understand ... and I hope this epitaph finds its way across this great land of ours.

Please do your part, and help me circulate this article. Post it wherever you post things online. E-mail it to whomever you think might be interested in knowing that their currency is a dead man walking. I appreciate your help.


When asked in a town hall meeting this week whether the American dream was dead, President Obama replied: "Absolutely not. There is not a country in the world that would not want to change places with us." Although the statement typifies the upbeat and patriotic sentiments we've grown to expect from political leaders, I find it insultingly disingenuous under the circumstances. Try telling that to Caterpillar (NYSE: CAT) CEO Jim Owens, who jabbed last year that he "would rather be President Hu than President Obama."

I believe many investors mistakenly believe that inflation can only occur in the context of economic recovery. I have stressed repeatedly that inflation is a currency event rather than an economic event, and I view a comprehensive understanding of currency induced, cost-push inflation as one of the more important topics of inquiry for Foolish investors struggling to ascertain what the future may hold. Stated another way, the currency event that is likely to trigger abrupt inflation is precisely that crisis of confidence now set to unfold for the U.S. dollar.

The common strategy of counteracting economic crisis with untenable debt places the trio in a twisted race to debase. On the other end of the spectrum, Japan's currency intervention last week to stem the troublesome strengthening of the yen reveals that fiat currencies weak and strong are ultimately embroiled in this race to debase as a consequence of the global financial crisis and the official responses to it.

In a truly astonishing admission from a former Fed chairman, Alan Greenspan offered this morsel last week: "Fiat money has no place to go but gold ... Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central bankers should pay attention to it."


I hope you enjoy the content, I thank you as always for recommending the article at the source if you do, and I welcome your comments, questions, and thoughts.




6 Comments – Post Your Own

#1) On September 23, 2010 at 8:46 PM, mighelinger (< 20) wrote:

My wife will deeply grieve it's passing.

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#2) On September 23, 2010 at 9:43 PM, rd80 (96.82) wrote:

I believe many investors mistakenly believe that inflation can only occur in the context of economic recovery.

Those investors clearly don't remember or weren't around for the late 70's.

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#3) On September 24, 2010 at 7:38 AM, outoffocus (24.06) wrote:

The dollar wasn't long for this world after the death his cousin, common sense.   In previous years they were known collectively as "Dollars and Sense"; traveling the world while helping build a growing ecomony at home. Then common sense was killed off slowly by corrupt politicians and an apathetic entitled public.

The dollar leaves behind a bunch of brightly colored paper (that looks more and more like monopoly money) and billions of increasingly irrelevant silver and copper colored coins. 

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#4) On September 24, 2010 at 11:41 AM, cbwang888 (25.71) wrote:

USD index may never see 80 again ...

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#5) On September 24, 2010 at 12:12 PM, watchmesoar (74.91) wrote:

Very passionate artical, i am glad to see many are seeing the light. Buy gold buy silver as insurance, and prepare yourselves!

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#6) On September 24, 2010 at 5:34 PM, mrindependent (42.12) wrote:

As a US manufacturing executive, I don't bemoan the dollar's death, I cheer it.  For twenty years of so, we have been exporting our inflation to China where it goes unnoticed.  Instead of printing dollars we have issued equally worthless debt.  Meanwhile, the Chinese printing press has been working overtime to print Renmibi at a pace that far exceeds their economic growth.  This process has artificially benefitted chinese producers at the expense of US producers and has artificially benefitted US consumers at the expense of Chinese consumers.  Time for adjustment.  Inflation will be just one consequence.

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