Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Only Thing Systematic Is The Destruction Of America - 29th Sep 20
Fractional-Reserve Banking Is The Elephant In The Room - 29th Sep 20
Gold And Silver Follow Up & Future Predictions For 2020 & 2021 – Part I - 29th Sep 20
Stock Market Short-term Reversal - 29th Sep 20
How Trump co-opted the religious right and stacked the courts with conservatives - 29th Sep 20
Which RTX 3080 GPU to BUY and AVOID! Nvidia, Asus, MSI , Palit, Gigabyte, Zotac, MLCC vs POSCAPS - 29th Sep 20
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

U.S. Dollar Crashes Against Yen! Time to Act!

Currencies / US Dollar Sep 28, 2009 - 11:07 AM GMT

By: Martin_D_Weiss


Best Financial Markets Analysis ArticleMartin here with an urgent update on the dramatic events that took place late last week and what they could ultimately mean for you …

Just when the worldwide onslaught against the U.S. dollar seemed to be temporarily subsiding, a new round of attacks hit Friday — this time from Japan.

On August 30, in a landslide election victory that shook the world, the left-of-center Democratic Party of Japan derailed the ruling party and swept a new leader to power, Yukio Hatoyama. It was the most significant tipping point in that country’s politics since 1955.

Now, 30 days later, we are starting to see the repercussions for the U.S. dollar: For the first time in decades, the new Japanese regime is effectively giving up supporting the greenback in the currency markets!

The consequences are immediate: Just this past Thursday, the U.S. dollar could buy 91.27 Japanese yen. By the end of the day Friday, it could only buy 89.63 yen.

In just 24 hours, the dollar fell by 1.81 percent, more that it would typically fall in 24 DAYS!

But if you think the dollar decline is far removed from your daily life, think again.

The Dollar Decline Could Deliver A Major Blow to Your Wealth

Right now, American households own $67.2 trillion in assets, including stocks, bonds, and real estate.

Here’s the key: If measured in terms of Japanese yen, just between the close of business Thursday and close of business Friday …

Over one trillion dollars in American wealth was wiped off the map! All in just 24 hours!

Unfortunately, most people have no idea this is happening, and even if they did, no sense of how it could impact them. Their typical reaction:

“I don’t care how much the dollar is falling in Japan, Europe, or any other country. All that concerns me is what happens with my money right here in the United States.”

But there are four fatal flaws to this rationale:

Fatal Flaw #1. Your money isn’t just falling in far-away markets. It’s falling everywhere.

When the value of your money crashes globally, it also falls domestically.

Already, the cost of more than 90 percent of the products sold at Wal-Mart (all produced overseas) is being impacted.

Already, the vast majority of products sold in electronics stores, furniture stores, and appliance stores are being affected.

Ditto for the lion’s share of the oil, gasoline, and heating oil you buy.

So when the dollar falls, you ultimately pay.

Fatal Flaw #2. Your money isn’t really yours. A lot of it is actually theirs.

It’s been loaned to America by the very same foreign countries where the dollar is falling the fastest — Japan, China, the eurozone, and other countries. And it’s being loaned to America …

To finance the massive $1.58 trillion federal budget …

To fund our addiction to debt …

And to once again fuel the borrow-and-spend binging that helped create the financial crisis in the first place.

Fatal Flaw #3. When they want their money back, they GET it back.

When foreign central banks and investors want to pull their money out, they don’t have to grovel to the U.S. Treasury Department or wait on line at the Fed. They merely issue sell orders to liquidate their U.S. investments, convert them into cash, and exchange them for other currencies.

So far, this process has typically been orderly, with no panic. But if the action in the Japanese yen on Friday is any indication, it may not stay that way for long.

Fatal Flaw #4. They can sink YOUR investments.

The more the dollar falls, the more they want to sell. And the more they sell, the further the dollar falls.

But dollars aren’t sold in a vacuum. Whenever foreign investors and governments sell U.S. our dollars, they’re also selling U.S. stocks, bonds, and real estate.

And that’s how it comes back to bite ordinary Americans on the rear end, causing potentially big losses in the $67.2 trillion of household wealth.

The Unfathomable Risk Our Leaders Are Taking

The U.S. dollar is not going to die. But our leaders are taking an unfathomable risk with our money and our destiny as a nation.

Every time we run budget deficits, we must go, hat in hand, asking for money from central banks and investors in Asia, Europe, and even Latin America.

Every time we run a trade deficit, spending more on imports than we earn on exports, we run back for still more money from Asians, Europeans, and Latin Americans.

And now, after thousands of such trips and billions of such transactions, the U.S. now has a total of $7.9 trillion in liabilities to foreigners.

Why It’s Now Far More Difficult to Postpone the Day of Reckoning

Until recently, we were able to continually postpone our day of reckoning as a nation.

The U.S. dollar was king, the only reserve currency. And the U.S. financial market was the only game in town big enough to satisfy the needs of overseas investors. So they had to keep most of their money in dollars, whether they liked it or not.

They had no choice.

Whenever they lost faith in other countries — Argentina, South Africa, Thailand, or even a country like Great Britain — they could pull out along with hoards of others, sending those financial markets into a tailspin. But when the United States made similar mistakes, it got away with it.

And so it was that we merrily ran huge deficits, borrowed to the hilt, and continued to party as if nothing were wrong. And that’s why, despite it all, overseas investors continued to pour more and more money into America.

In the 1980s, it was primarily cash-rich Japanese who led the way, investing billions in U.S. stocks and bonds, helping to lift the Dow and Treasuries out of their worst slumps of the postwar era.

In the 1990s, it was mostly Germans who played that role, helping to drive the big tech boom.

And in the 21st century, China has become the big provider of new funds to the U.S.

But now all of this is changing and we’re nearing the end of the line:

  • Foreign central banks have sought — and begun to find — viable alternatives to the U.S. dollar as a reserve currency.
  • China and others have pushed progressively harder to replace the dollar with a basket of currencies.
  • The United Nations has proposed a similar scheme, creating a new monetary system.
  • And this past week, as I mentioned at the outset, even Japan, America’s staunchest and richest financial ally, is beginning to abandon its long support for the U.S. dollar.

But U.S. authorities remain conspicuously complacent. Despite rhetoric supporting the greenback, both the U.S. Treasury and the Federal Reserve have actively pursued policies that merely sink the U.S. dollar further — a national debt that will grow by $9 trillion by 2019 … and massive money printing to finance it.

Clearly, our government can think of no better response to the new pressures than to flood the world with still cheaper dollars.

Time for Action


Many years ago, my father tried to protect the U.S. dollar, and prevent it from declining.

He founded the Sound Dollar Committee.

He enlisted the support of men like Bernard Baruch who was the former adviser to many presidents … Herbert Hoover, the former president who presided over the worst of times … and Bill Martin, who was Chairman of the Federal Reserve.

He organized a massive grassroots campaign to balance the budget, fight inflation, and protect the American dollar.

He helped President Eisenhower achieve one of the few solid, balanced budgets of the 20th century. And he won several landmark battles for the dollar. But he lost the war.

Baruch, Hoover, Martin

Today, I am the Chairman of the Sound Dollar Committee and I wish I could accomplish as much as Dad did to stop the dollar’s decline. But the forces driving it down are too powerful; our leaders, too complacent.

Thus, today, my primary course of action is different and I will tell you more about what I’m doing next month.

Right now, however, your first urgent step must be to defend yourself from this madness with the investments we’ve been recommending that go up when the dollar falls.

Your second step: To go on the offensive, aiming for the unusual wealth-building profits that only crises like these can generate.

Stand by for further instructions.

Good luck and God bless


This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit .
Money and Markets Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


29 Sep 09, 01:01

Today's news out of Japan demonstrates the opportunistic nature of this article. Readers want unbiased information, not thinly disguised marketing!

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules