Learning Center
Plans & pricing Sign in
Sign Out

It about the Euro


									It's all about the US Dollar.

Iran's threat isn't nukes; Iran's threat is the EURO.

Interesting that Israel’s (the UK's, USA's etc) deadline for Iraq coincides exactly with
Iran's opening of it's own Oil Bourse (trading exchange) that's completely denominated in
Euros. The exchange will complete head-on with the NYMEX and the EURONEXT
exchanges. Not good for the US $.

To find the enemies of the US, look to those who have completely abandon US Dollars
for oil and only accept Euros for payment for oil. (North Korea, Iraq - just before our
invasion, Iran.)

To find where tensions are strained between the US and other countries, look to those
who recently began accepting some level of Euros for oil payments. (Russia, China.
Venezuela always threatening)

The dollar is built on one thing and one thing only, a belief. With no belief there are no
investors. With no investors there’s no one to cover our deficit. With no investors to
cover that deficit…poof…the economy comes tumbling down.

King Fahd is dead and that leaves only one ally within the royal family, Prince Abdullah.
He ain’t gonna live-forever. He’s also sewn to the Bush family’s hip. When Bush leaves
in 2008, expect subtle, yet consistent, changes. Sure it’s great that Reagan made the
Saudi’s keep 1 trillion in the US, but when push comes to shove they’ll bolt in a
heartbeat. When the Saudi’s sneeze, the US catches a cold. When they get really ill, look
out below for the US Dollar.

I find it interesting that in the history of mankind there isn’t a single government that
hasn’t abandon a currency when it reached 1% of its original value. The scenario usually
goes like this: once the currency gets to 10% of its original value the government borrows
everything it can against it. Once it gets to 1% it abandons it and leaves those holding the
bonds etc up-a-creak.

In 1984, the US dollar hit 10% of its original value. In 1984, our borrowing against the
dollar began escalating and hasn’t let up. In 2005 the US dollar is valued at 4.3 % of its
original value. It’s on schedule to hit the magic 1% in 2009. mmmmmm.

The US will defend its currency to the last drop. Don’t get me wrong, you won’t wake up
the day after the dollar hits 1% of its original value and see the government announce that
fact, then abandon it. No no no. It will happen very slowly and very painfully and will
last over the course of about 4/5 years. My take is that they’ll do several devaluations
first, each time sending the holders of our debt screaming and threatening etc. Then after
years of this, say about 2014, they’ll abandon it. That’ll be the bottom. Exactly the time
everyone panics. They always panic at the bottom.
The world we see today will look much different then. These times, albeit chaotic, will
seem mellow compared to what lies ahead. So, keep your eye on the Euro for dollar story
and you’ll be able to follow the plight of the US economy. Who’s asking for Euros for
their oil? Who’s asking for dollars?

Take care,
Jim Goulding

To top