Getting Ready For A Dollar Collapse?

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This was first predicted (with info from insiders) by Bob Chapman in November of 2009. Such devaluation is to occur prior to 12/31/10.....look for it to occur after the election....the RUMOR is that it will be a 1 for 3 devaluation....i.e. 2/3 of your wealth and purchasing power will go up in smoke in a split second, and hyperinflation will occur to the extent of 300%....IF that rumored devaluation rate is realized.

August 23, 2010
Could the Federal Reserve’s decision to restart its quantitative easing program trigger a dollar collapse?

That’s what John Hussman, a fund manager, argues in his latest weekly note to investors. And the case he makes is strong… as long as one ignores the fact that other central banks don’t want and are unlikely to accept a big dollar devaluation.

Hussman notes that while, longer term, currencies tend to move to equalize purchasing power between different countries, most short-term foreign exchange fluctuations hinge on interest-rate differentials. Here, differences in inflation rates and yields on offer between countries will determine the flow of capital, which, in turn, will affect relative changes in currencies. So countries with relatively high interest rates can see their currencies trade well above where they should do according to purchasing power parity arguments.

So much for the theoretical background.

Hussman then notes that two thirds of the Fed’s balance sheet is made up of securities issued by government-sponsored enterprises, namely Fannie Mae and Freddie Mac, that are being bailed out by the Treasury, which is to say these are holdings the Fed won’t be able to reverse easily. In other words, this represents the more or less permanent printing of new money.

When set against the fact that the government has lost control of its finances, the long-run inflationary threat posed by fiscal and monetary policy is huge. But the dollar’s position is made even more precarious by the zero interest rates being pursued by the Fed in response to economic weakness….”

See:
http://blogs.wsj.com/source/2010/08/23/getting-ready-for-a-dollar-collapse/


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