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FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

U.S. Dollar Develepments, The Most Critical Financial Developments of Your Lifetime…

Currencies / US Dollar Oct 14, 2009 - 01:53 AM GMT

By: Larry_Edelson

Currencies

Best Financial Markets Analysis ArticleMake no mistake about it. The developments over the last three weeks affecting the U.S. dollar — which continues to sink in value — are the most critical financial developments of your lifetime.

The U.S. dollar has now entered the final days of its reign as the world’s reserve currency.


I’ve been warning you about it. And the events are unfolding precisely as I predicted …

1. Behind closed doors, the G-20 countries have now taken control of the world’s economic caretaking. It is no longer the G-3 nations that are in charge … or even the G-7 nations. The G-20 is in charge.

Put another way, the U.S. is now being forced to placate our largest creditors in an international forum, where it is now just one of 20 countries in charge of the world’s economic affairs. And it is the largest debtor of the group, by far.

2. Behind closed doors, the Arab Gulf States have also been meeting with Russia, Japan and China to replace the dollar for pricing oil. Make no mistake about this: The world as you know it is changing.

3. And yet, in the open, in public, Washington isn’t making one single comment about these developments. Not one peep. Not even trying to jawbone the dollar higher.

Why? Because, whether our leaders admit to it or not, their top priority is clearly to let the U.S. dollar fall in value, even if it ultimately means that it will be replaced by a new world reserve currency.

Even if it ultimately means your cost of living is going to skyrocket, and everything you ever knew about the world is turned upside down.

Their hidden rationale: To inflate away the mountains of debts in this country, by artificially raising asset prices via devaluing the currency in which most of the world’s major assets are denominated.

Whether our leaders admit it or not, their top priority is to let the value of the U.S. dollar fall.
Whether our leaders admit it or not, their top priority is to let the value of the U.S. dollar fall.

Don’t get me wrong. It is a sad state of affairs the U.S. finds itself in: The massive financial crisis, Washington’s gargantuan $125 trillion in debt, the real estate crisis, and ultimately, the end of the dollar as the world’s reserve currency.

But there’s nothing you or I can do about it, except protect our wealth and seek out the profits we can reap as well.

That’s why, back in April of this year in a Money and Markets column I wrote, I said unequivocally that real money — gold — was the only win-win investment I knew of.

Now, is it any surprise then that gold has busted through to new record highs?

Is it any surprise that gold mining shares are taking off to the upside, soaring as much as 8 percent in a single day last week?

Is it any surprise that other tangible asset markets are also starting to rally sharply again — oil, copper, platinum, palladium, and silver?

Or that even agricultural commodities look like they are bottoming and appear poised for significant rallies?

I don’t think so. It’s hardly surprising at all. For when paper currencies are devalued, savvy investors turn to natural resources and tangible assets to protect their money.

Natural resources, including gold, are  starting to rally sharply again.
Natural resources, including gold, are starting to rally sharply again.

My view: If you’re not seeking out shelter from the falling dollar by investing in gold and other natural resources, your wealth is going to be confiscated from you on the sly by Washington.

That means it’s mandatory that now, more than ever before, you take the following steps …

First, with the next phase down in the dollar starting, continue to steer clear of all U.S. Treasury notes and bonds. Not only is the yield still meager, but with the dollar set to lose much more purchasing power in the months and years ahead, Treasury notes and bonds are a losing proposition. Period.

Also continue to steer clear of foreign sovereign notes and bonds. They too, while maybe more attractive in yield, will likely suffer as the world goes through a massive change in the currency markets, the result of the dollar’s eventual replacement as the world’s reserve currency.

Second, and very importantly: GOLD. Depending upon how long you’ve been with me and how aggressive you’ve been with my recommendations, you have up to 25 percent of your investment portfolio in a series of my gold recommendations ranging from physical gold and gold ETFs to mutual funds and gold mining shares.

Hold that gold. And stay tuned to my columns and my Real Wealth Report for updates.

Third, with any speculative funds you have available, consider getting more aggressive with natural resources. Not just gold or oil, but also copper, platinum, palladium, silver, agricultural commodities like soybeans, wheat and corn … and even staple commodities like coffee, cocoa, and sugar.

Nearly all natural resources are now entering renewed bull markets to reprice themselves higher in anticipation of a much weaker dollar that will eventually be replaced, and all the uncertainty surrounding the future of a new world monetary system.

Best wishes,

Larry

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.

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Comments

Ben
16 Oct 09, 05:41
Your Article...

... is correct-a-mundo !!!


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