Vote with your feet

[Jemmons]

Suggestion: No later than half a year before the next election you switch any savings that you have from whatever form of investment you have chosen to gold!

Its sure to drive the price of gold up and the price of dollars down. If enough people do that it is going to start a currency crisis or rather it is going to trigger the currency crisis that is now pending because of the economic policies of the Bush administration.

The situation now is that the dollar has been falling for 5 years and it might end up being only 60 percent of what it is right now. Gold on the other hand is rising and is probably going to do so as long as the US is threatening Iran and as long as Iraq is still chaotic.

If the dollar comes under enough pressure governments will start shifting their currency holdings from dollars to euros. The Chinese and Japanese government is already considering this and their huge dollar holdings would make the dollar collapse if they sold out.

“The Fed and the administration of President George W Bush know that the euro's ultimate aim is to slowly attract foreign investors and central banks to the euro and away from the dollar. But they also know that an explosively upward rocketing euro will wreck the Europeans' major economies in a heartbeat. As a result, the US game is to allow the dollar to drop lower - and faster than the Europeans' fragile economies can tolerate...

The saying that those who live in glass houses should not throw stones comes to mind. The lower the US lets its currency fall, the more temptation the Asians feel to dump their US debt holdings, as they see their US "assets" depreciate with every tick lower by the dollar on its journey into forex "Hades". At some point, this temptation will become overwhelming. The US is currently betting that the Asians' point of no return comes after that of the Europeans. I don't think that's a safe bet to make.”

The dollar faction knows that it has nothing to resist the world's slow but steady, molasses-like run to the dollar-exit doors. It will happen. Nothing can prevent it. The dollar faction's best chances at regaining control, they believe, lie in speeding up that very process - way past the ECB's tolerance level - in an attempt to utterly destabilize the euro system, hoping for an eventual complete breakdown.” http://www.atimes.com/atimes/Global_Economy/FK30Dj01.html>

The variable here is the timing: Do you want your currency crisis to happen just after or just before the next presidential election?

[FloridaPat]

1. Why would a dropping dollar mess up Europe? Their gas would

get cheaper by the day. We don't manufacture anything, so there isn't much they buy from us. Yes, we buy a lot from everyone, but with other countries's economies rising, the world could just by-pass us economically and just deal with each other.

And lastly, most of what we buy in this country is either junk or baubles. Things no one needs to live. Cute little decorations or entertainment. What kind of stupid economy is that? We have to produce and buy "stuff" so the world can be happy?

[Jemmons]

2. Its all about stability of markets

In a thriving world economy there has to be a bying as well as selling. Right now the US is doing a lot of buying which makes for more selling from elsewhere. If the dollar is steeply devalued there will be nobody ready to pick up the buying that the US can no longer afford. Europe wants to se a gradual shift from dollars towards euros so slow and continuous that other markets will devellop replacing the US. That way a recession can be avoided and more stability can be found.


"Because U.S. economic growth has been rapid in recent years, American consumers are snapping up foreign goods of all kinds -- autos, electronics and clothing being some of the biggest categories"


"...Chrysler automobiles, which were assembled at a Dailmer-Chrysler plant in Germany and imported for U.S. distribution, await shipment at the Port of Long Beach in Long Beach..."


http://www.washingtonpost.com/wp-dyn/content/article/2006/02/10/AR2006021000531.html