Archive for the 'Politics' category

Is Gold the answer?

August 22, 2007 6:22 am

I cant help but reading: The US Dollar: On the Edge of the Abyss
I wish I had a lot of money right now. Investing in gold seems like the right thing to do.

Here is another article talking about Iran: 70% of Iranian oil exports in non-US income.
Very interesting. Who is next?

Look at gold prices keep going up: 10 year gold price history in US Dollars per ounce.

Get rid of your USD.

August 18, 2007 8:52 pm

– and so it begins… USD trading at 34 Bath. Wtf is happening? My adsense checks are starting to look more and more like regular paper.

I think it will only get worse. Are they even planning a recovery? Something tells me they are not. By the look of things, somebody is taking the dollar straight to hell in a basket. Now, Im no expert on American economy (or economics in general for that matter), but I understand simple concepts of how things work.

Right now the US national dept is at $8.6 trillion (what USA owes its own bankers, federal reserve). An amazing number, and as the American consumers finally hit a brick wall and maxed out their credit cards, its time for a reality check. Consumer spending is 70% of Americas GDP. What happens if it breaks down? Now that its time to pay all those credit card bills, where will the money come from? Do they even have a plan? It seems like pure madness.

US foreign debt is up 10% to $4 trillion. USA accounts for almost 60% of all global lending combined last year alone. USA keeps feeding the Japanese and Chinese dollar checks like there was no tomorrow. How you even accept checks from someone with $4 trillion in loans, is to me a mystery, but I guess its good to have some USD to pay for increasing oil prices. But what if you dont have to buy oil in USD anymore? What will USA do with all that “outstanding money”? Take a look at the petrodollar system. USA used to have a monopoly on oil trade. You needed USD to pay for oil. Trough some weird dealings, USA somehow got the world to think “this is how it works”. They could increase their deficit, because other countries needed USD to pay for oil. Great stuff! Oil was cheap and plentiful, but maybe there is a backside to it. America never had to educate themself to respect oil like the rest of us did. When it comes to pollution, they account for 25% of all global nastyness alone. Oil have been too cheap in USA. They have little competence in public transportation and efficiency of their cars. In USA its “big and loud”, thats how we like it. Spend Spend Spend! Why not buy 2 cars instead of just 1? Compare USA with countries like Germany for example. Germany knows the value of oil. They dont have any cheap or national oil resources, so they have to. They try to conserve gas in whatever means they can. USA haven’t even heard about this concept until just recently. Europe have worked on oil efficiency and public transport for decades. If USA no longer can have their USD monopoly on oil trade and get their cheap oil, what are they going to do? I cant possible imagine they can afford to buy oil in Euro or “real money” like the rest of us? What are they going to do with all those big cars? Take out the engines and re-fit them with horses? Not to forget all those international loans they have to pay back because countries no longer need all those USD to buy oil?

What about the real estate loans? Have they even started to think about this? What the fuck is going on?

Russia have already changed their oil sales to Euro and Rubles. Iran and Venezuela is probably next. You don’t need to be a prophet to forecast where this is going. If USA looses its grasp on oil trade monopoly and at the same time, national consumer spending drops and people cant pay their loans…. Huston, we have a problem.

One can debate if a weaker USD will increase US export and benefit the “longrun”, but its too late for that. Everyone is buying stuff in Asia nowadays anyway.

Get as far away from the dollar as you can. It has cancer and its about to explode. The big question now is, how large will the crater be, and what to convert to?