Feb 1:
Banana Republic: How the falling dollar has a long way to fall.
Banana Republic
By Bill Bonner
The dollar is falling against almost everything…even against Iraq’s dinar. [Ed -- buy gold now or regret it later...]Both Bernanke’s rate cuts and Bush’s ‘tax rebate’ plan have a fruity odour to
them. The tax ‘rebates,’ for example, will not return any money to its rightful owners. The US government can’t afford it. Instead, they’ll
send out cheques to 117 million people – including many who never paid any tax in the first place, encouraging people who have already spent
too much to spend even more.
Where will the money come from?
The Bernanke/Bush team isn’t saying. They’re so eager to avoid a serious correction that they are throwing caution to the wind. And the dollar
too. Let it fly wheresoever it will – as long as it goes down. Besides, who cares? Most of the world’s dollar reserves are held by foreigners.
And foreigners don’t vote in US primary elections. “It may be our dollar,” Treasury Secretary John Connelly once shrewdly observed, “but it’s
your problem.”
But overseas dollar holders are beginning to notice the tropical flavour of US finances. The dollar has lost 30% of its purchasing power
during the last seven years. Against gold, oil and other key commodities – and other major currencies – it is down much more. In many sunny
places with shady finances, this must seem all-too familiar. The ‘banana republics’ did business this way themselves - running up huge debts to
overseas lenders…selling off their capital assets to foreign savers…printing money by the boatload…and generally making themselves look
ridiculous. Now, the kvetchers are labelling the US as “the world’s largest banana republic.” One calls the dollar a “Bernanke peso.”
Another says the US is following “ Zimbabwe economics.”
...More from Bill Bonner ...Buy gold bullion and hold
on to your savings.
Jan 31: Fed rate cut doesn't boost stock market any more; gold shows "no give".
Gold Prices moved sideways early Thursday, holding between $920 and $927 per ounce as global stock
markets fell despite yesterday's fresh injection of cheap money from the US Federal Reserve.
"The character of the bull market in gold seems to be changing," says Richard Russell, veteran analyst and author of the widely-respected Dow
Theory Letter since 1958. "The change is that I don't sense any 'give' in the metal.
"It's like some strange, invisible power is forcing the metal higher.
"Can this steady, almost eerie rise continue? How could gold, how could any item, rise from $250 to over $930 without attracting intense interest
from the public? Damned if I know, but I can tell you this – somewhere ahead, rising gold will attract the interest of the [wider]
public."
read
more...
buy gold....
Jan 29: Doug Casey predicts stagflation coming soon, gold a good buy.
Rising prices make a stagflationary environment positive for Gold Investment, if for no other reason than that investors reallocate
depreciating paper-backed investments into tangibles with a demonstrated ability to float as the intangibles sink. ...Read more...
Jan 27: Long-term outlook for gold points up --gold investments 'offer long-term opportunities'
Investors considering looking to gold bullion should consider both the short and long-term view on the yellow metal.
This is according to Norman Stacey of Diversified Investment Strategy, who recently told the New Zealand Herald that while gold as a
short-term investment has seen much positive activity recently as a result of "perceived threats" to the global economy, gold bullion
could also prove fruitful in the longer-term.
These threats may include the weakening dollar, geopolitical tensions and high oil prices - all factors that have been identified by
experts as key drivers of gold prices in the last few weeks.
Mr Stacey noted that while latecomers to the gold investment sector may be "disappointed" with the yellow metal in the short-term, a
longer view may bring even higher gold prices.
"Medium and longer-term, we believe current official measures will be inflationary with gold destined to go higher as a consequence,"
he remarked.
"Simply put, more money than gold is being produced."
The comments appear to tally with recent forecasts from major banks. Most recently, the Financial Times reported that Barclays
Capital has predicted gold prices could hit the $1,000 an ounce mark by this summer.
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