Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Investing in Crypto Currencies With Both Eyes WIDE OPEN! - 25th Oct 21
Is Bitcoin a Better Inflation Hedge Than Gold? - 25th Oct 21
S&P 500 Stirs the Gold Pot - 25th Oct 21
Stock Market Against Bond Market Odds - 25th Oct 21
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Dollar Warning - This is going to dramatically affect you ...

Currencies / US Dollar Jul 26, 2007 - 10:33 AM GMT

By: Money_and_Markets


Larry Edelson writes: By every measure under the sun, the dollar is getting creamed, just like I told you it would.

It recently hit a 25-year low against the British pound … a record low against the euro … a 12-year low against the Thai baht … and a seven-year low against a third-world currency, the Philippine peso.

In terms of overall international purchasing power, the dollar is now at its weakest level in decades.

Warning: This is going to dramatically affect you!

It means your money now buys less food and energy than it has in decades.

It means inflation — which is already running near 10% based on most people's experiences — is going to rise even higher.

And it will impact every investment under the sun.

Some, like hard assets, will continue to shine. Some that have been getting creamed will turn around and ride the inflationary wave higher. Some that are rising now will suddenly collapse, catching unsuspecting investors off guard.

My Research Tells Me the Dollar Can Plunge at Least Another 20% in Value

This won't happen overnight. In fact, there are bound to be rallies in the dollar. For example, we saw the greenback bounce a bit yesterday after it plunged on Tuesday. But over the next two or three years, I expect the dollar to lose at least another 20% in value … perhaps as much as 40%.

For investors who fail to prepare, it will be a disaster. For those who do, it will be a bonanza. Here are some things you absolutely need to understand …

A. The U.S. Federal Government is broke. It's at least $9 trillion in debt. And once you count all the contingent liabilities of the U.S. government — such as Social Security, Medicare, government pensions, etc. — the debt soars to more than $55 trillion .

There is no way Washington can ever pay those debts, or even a fraction of them, without substantially weakening the medium of exchange underlying those debts — the greenback.

Every politician in Washington knows this. So when you hear them saying the Chinese yuan is undervalued (or any other currency for that matter), what they're really saying is that the U.S. dollar is overvalued!

B. The U.S. private sector is also broke. Corporate debt is at record high levels. Consumer debt is too. Homeowners are wallowing in debt, with subprime and adjustable rate mortgages eating them alive.

These debts wouldn't be so bad if U.S. citizens had adequate personal savings. Unfortunately, the U.S. has one of the lowest personal savings rates on the planet.

C. The already weak dollar will give rise to nasty trade wars, worsening the problems, and making the dollar even weaker. The trade wars have already begun, as Congress starts sinking its teeth into China, trying to make it the scapegoat for the U.S. economy's problems.

Just look at it like this: There is no way the U.S. economy can compete with the newly industrialized economies of Asia or Latin America. Take the auto industry, for example. How is a U.S. auto company going to compete with an Asian auto company when a U.S auto worker gets paid 10 times as much?

Trade tariffs and political jousting can't close that gap. Something will have to give. Either wages in Asia will have to rise many times over, or wages and benefits here in the U.S. will have to plunge to a fraction of what they are now. I think you'll probably see a bit of both happen.

D. At some point in the future, an extraordinarily weak U.S. dollar will become a BOON to the U.S. Once the dollar gets weak enough, assets in the U.S. will be at fire sale prices for international investors.

Imagine that you're a citizen of the European Union. And over the next couple of years your euros appreciate another 20% against the dollar, on top of the near-30% gain you've already seen. With the ability to buy 50% more in the U.S. than you could a few years ago, you'll probably want to swoop in and buy up some juicy U.S. assets.

The same can be said for Asian investors. As their currencies appreciate against the greenback, dollar-denominated assets will become very enticing indeed.

No one can say when foreign investors will flood back into the U.S. to buy businesses, stocks, or real estate. But it will happen at some point. In the meantime, you can expect more of what I've been telling you about all along …

Natural Resources Will Soar Higher And U.S. Markets Will Underperform

Just as the dollar recently plunged to record lows, the price of oil zoomed to near-record highs and gold soared more than $18 to $690 an ounce. Many other natural resources also saw their prices jump sharply.

Save a minor pullback here and there, this uptrend in natural resources will continue. Because these assets are priced in dollars, the weakening greenback virtually guarantees that their prices must go up to adjust.

Plus, there's still all that underlying demand emanating from Asia, where nearly half the world's population is suddenly leapfrogging into modernized economies.

That international growth is also why I've been telling you for over a year that foreign stock markets have much more profit potential than those in the U.S.

As you know, I've been ratcheting up my warnings on U.S. stocks, telling you that the downside for most of them vastly outweighs the upside.

Last Friday, the Dow Jones Industrials fell more than 140 points even as Asian markets soared higher. Then, two days ago, the Dow plunged another 226 points. In my view, this is just a glimpse of what lies ahead.

That's why, with the exception of the natural resource stocks I recommend in Real Wealth Report , I strongly suggest you clear out of U.S. shares.

Stay safe,

By Larry Edelson

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.


06 Aug 07, 23:22
US Dollar

Dear Sir,

YOur article excellent and thought provoking. Keep it up.

Regards and best wishes,


Post Comment

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