Re: Seeking Profits from a Falling U.S. Dollar]

["Gary Santos" <evs@xxxxxxxxxxx>]

> This is how the market supports the dollar.  Those who fall for this
simplistic scam will lose their shirts by the very effect of their
collective herd instinct.  When all the greedy sells dollars speculatively,
the dollar will go down, but no one can exit because to exit means to buy
back the dollars, which means the dollar will go up.<
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I think there is an alternative for the exit. The exit is not into another
currency or back to the dollar. The exit is into tangible assets. Real asset
markets may be high in the US and the UK but where currency devaluations and
depressed demand have worked their havoc into the real economy, an exit from
the dollar to these depressed markets is an alternative. Leaving the stories
of the gold enthusiasts aside, it is no wonder why there is a strong rally
in gold and why the Fed has pronounced a willness, unprecedentedly, to buy
private sector assets. A dollar collateralized by US real estate?

I stumbled upon two quotes today:

"There is no institutional mechanism by which we could ever duplicate the
kind of financial system we have, under a system that relied almost entirely
upon gold. Of course, you could always have a system that used a lot of
paper that was in some sense convertible into gold. You could always find a
price of gold that you could convert that paper theoretically into gold. But
I don't think anyone has thought in terms of the enormous price of gold that
would be required in order to achieve that." -- Robert Mundell

". . .Because of our economic strength, the paper money disease here may
take many years to run its course. But we can be approaching the critical
stage. When that day arrives, our political rulers will probably find that
foreign war and ruthless regimentation is the cunning alternative to
domestic strife. That was the way out for the paper-money economy of Hitler
and others."  -- Cong. Mr. Howard Buffett, years before 1971 when Nixon went
off gold convertibility.

Since then it seems hegemonic capital made a few more attempts in prolonging
the party: by reining in the dollar during Volkner, by monetary aggregate
targetting and, lately, by inflation rate targetting. But, these failed with
the bubbles now burst and bursting. No wonder we are on the verge of war, I
wonder. It's more than just oil, I wonder.

Heterodox economics better hurry up. In U.S.-U.K. time, we are in the middle
of 1929 and technology has speeded up the ticking of time.