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Thread: Forecast: U.S. dollar could plunge 90 pct

  1. #1



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  3. #2
    If the Dollar plunges by 90%... Gold will go ALOT HIGHER than the $2,000.00 per ounce as predicted in that article.

  4. #3
    Quote Originally Posted by ron_paul_silver_dollars View Post
    If the Dollar plunges by 90%... Gold will go ALOT HIGHER than the $2,000.00 per ounce as predicted in that article.
    Correct, if the dollar loses 9/10 of its value, gold will be worth 10x as much...8000 or so.

  5. #4
    Gold won't necessarily go all the way to $8000/oz if the dollar is devalued by 90%.

    Central banks will sell/lease some more of their gold supplies to suppress the price.

    The good news is that central banks are running out of gold and they won't be able to suppress the price much longer.
    I have my own blog at http://fskrealityguide.blogspot.com/.

    Let me know if you like it.

    Help control the government population. Have your government spayed or neutered.

    Sometimes discussions on this forum get out of hand. If you have any questions about the Federal Reserve, the income tax, or the gold standard, you can PM me or leave a comment on my blog.

  6. #5
    Article today suggesting dollar rebound, particularly interesting is that Goldman is advising investors to sell gold:

    http://www.bloomberg.com/apps/news?p...WMFSQ&refer=us

    Dollar Rises Against Euro, Pound as Goldman Says Fall Is Ending

    By Gavin Finch and Stanley White

    Nov. 29 (Bloomberg) -- The dollar rose against the euro and pound after Goldman Sachs Group Inc. said the U.S. currency's decline is coming to an end.

    The dollar also gained after China Investment Corp., the $200 billion sovereign wealth fund, signaled it may invest in finance companies hurt by loan defaults. A report today showed U.S. economic growth surged in the third quarter.

    ``There is too much pessimism priced into the U.S.,'' said Jeremy Stretch, a senior market strategist at Rabobank Groep in London. ``We're not seeing anything that points to the U.S. heading for a recession. Equities are doing well and that's spurred some renewed appetite for the dollar.''

    The U.S. currency, which has fallen 11 percent on a trade- weighted basis this year, climbed to $1.4741 per euro at 9:03 a.m. in New York, from $1.4841 yesterday. It also gained to $2.0608 versus the pound, from $2.0823. Against the yen, the dollar traded at 109.85 from 110.03.

    Goldman advised investors to sell dollar-denominated gold because of expectations the risk premium on bank credit will ease and the dollar will stabilize.

    ``We would now use a short exposure in gold, expressed in U.S. dollars, to capitalize on a gradual relaxation of credit concerns in the financial sector over the coming months,'' Goldman analysts led by Jim O'Neill in London wrote in a report yesterday. Selling gold will also provide ``an avenue to benefit from the prospect of a stabilization in the dollar.''

    Yen Rally

    The yen gained against 15 of the 16 most-active currencies after a report showed Japan's industrial production rose in October. Output climbed 1.6 percent from a month earlier, when it fell 1.4 percent, the Trade Ministry said in Tokyo today. The median forecast of 42 economists surveyed by Bloomberg News was for a 1.5 percent gain.

    The yen advanced 1.2 percent against the pound to 226.39, from 229.13. The euro fell 0.8 percent to 161.96 yen from 163.32.

    The dollar has dropped against 15 of the major currencies this year as the worst housing market slump since 1991, and a credit squeeze that sent three-month interbank borrowing costs to the highest since 2001, forced policy makers to cut the benchmark rate twice to keep the economy out of recession. The currency has depreciated in five of the past six years.

    Dollar Rebound

    ``We wouldn't be surprised if the dollar does stage a recovery by year-end,'' said Ashley Davies, a currency strategist in Singapore at UBS AG, the world's second-largest foreign-exchange trader.

    The U.S. Dollar Index traded on the ICE Futures in New York rose 0.7 percent to 75.594 today, after reaching 74.484 on Nov. 23, the lowest since the gauge started trading in 1973. The index tracks the value of the dollar against six major currencies, including euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc.

    Federal Reserve Vice Chairman Donald Kohn yesterday signaled policy makers will support economic growth and curb financial market ``turbulence'' by cutting interest rates. The Fed has lowered its target rate for overnight loans between banks by 75 basis points since Sept. 18.

    Barclays Capital, the investment-banking unit of Britain's third-largest bank, today reduced its rate forecasts, saying the Fed will cut in December and January to 4 percent.

    Fed Chairman Ben S. Bernanke will speak in Charlotte, North Carolina, today on the national and regional economies at 6:30 p.m. local time. The dollar rose to a one-week high versus the yen yesterday after Kohn said policy makers have to look at ``stress'' in credit markets at their next meeting on Dec. 11.

    Stock Rally

    U.S. equities staged the biggest two-day rally in five years yesterday. ShopperTrak RCT Corp. said yesterday that holiday spending at U.S. retailers rose 6.5 percent on the Thanksgiving weekend. Today's revised data showed the economy grew an annual 4.9 percent last quarter, matching economists' forecasts, and compared with 3.8 percent in the second quarter.

    Futures on the Chicago Board of Trade show traders see a 78 percent chance the Fed will lower its target for overnight loans between banks by a quarter-percentage point to 4.25 percent on Dec. 11. The likelihood of a reduction to 4 percent in January is 65 percent.

    The dollar was also supported this week after Abu Dhabi Investment Authority agreed to buy a $7.5 billion stake in Citigroup Inc., allowing the biggest U.S. bank to replenish its capital after credit market losses. China Investment will be a ``stabilizing force'' similar to wealth funds that have invested in finance companies recently, the fund's Chairman Lou Jiwei said today at a conference in Beijing, without elaborating.

    `Improve Investor Sentiment'

    ``This news may improve investor sentiment toward the U.S.,'' said Nobuaki Tani, a client manager in Tokyo at Resona Bank Ltd., a unit of Japan's fourth-largest publicly traded lender. ``The dollar may be bought'' to $1.48 per euro and 110.60 yen today, he said.

    Yen losses may stall at about 110 against the dollar in Asia because Japanese exporters have placed orders to sell the U.S. currency near that level, said Kosuke Hanao, head of foreign exchange in Tokyo at HSBC Bank, a unit of Europe's biggest lender.

    Japanese exporters may also sell the euro, the Australian dollar and the pound for yen to pay their bills at month-end, said Kengo Suzuki, currency strategist in Tokyo at Shinko Securities Co., which will merge in May with Mizuho Securities to create Japan's third-largest brokerage.

    ``The yen's depreciation yesterday caught some exporters by surprise,'' he said. ``Japanese companies have to close their books at the end of the month and they can't pass up opportunities to buy the yen on the cheap.''

    Japan's currency may rise to 162 against the euro today, Suzuki said.

    To contact the reporters on this story: Gavin Finch in London at gfinch@bloomberg.net ; Stanley White in Tokyo at swhite28@bloomberg.net

    Last Updated: November 29, 2007 09:05 EST

  7. #6
    Yeah Gold has lost a lot of value lately.

    Time to buy or will it level out at this new low?



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