Here’s my response to the Streettalk.com article (Doug Casey column) below on what’s happening to the dollar internationally and the economic outlook for the U.S.:

http://moneynews.newsmax.com/streettalk/doug_casey/2009/07/29/241521.html

Doug Casey has some very pessimistic things to say about where America is headed, and the following quote sums up a good part of it:

“Naturally, foreign countries don’t want to see the value of their dollar holdings tank, but they don’t want to hold dollars either, which is why the Chinese and others aren’t selling dollars on the foreign exchanges but using them to buy hard assets instead.”

Thomas Quinlin’s response:

I agree with Casey.  We have become our own worst enemy.  The economic bottom is still months…if not years away.  Bill Bonner and others at Agora have referred to this current economic meltdown as the greater depression.  In fact it’s only a part, albeit a large part, of the Great US Government swindle on its citizens.  We have nobody to blame but ourselves.

What is amazing to me is the level of ignorance being exhibited in the beltway.  Asinine behavior being passed off as journalism is continuing to feed that ignorance as most major newspapers continue to get most of their sources from government.

You can bet your life that other governments will eventually get their assets out of the US dollar.  Until then you will continue to see behavior like the Chinese claiming to feign interest in an immediate solution to their dollar holdings like publicly complaining about seeking out another reserve, only to use the resulting drop in the dollar to repurchase and add to their holdings.

Eventually, all the BRIC countries will engage in commerce using their own currency swaps (China and Brazil are already doing this), thereby side stepping any use for the US dollar altogether.

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