If a currency fluctuates within a one or two percent trading range, that's OK.
If a currency drops 30 or 40 percent, that's bad!
If that currency is the dollar, its a catastrophe!
The GREENSPAN DOLLAR has done just that. And, now the consequences are starting to be felt; and very likely most of 2005 will be all about the consequences of the falling dollar.
I've noted here that foreigners NEED NOT dump or sell dollars to cause serious trouble, all they need to do is SLOW THE PACE BUYING them.
But now there is another ominous factor in play, AMERICAN FLIGHT FROM THE DOLLAR!
As the world's most clever speculators in "things paper," American speculators and investors are now "diversifying out of the dollar." That's news.
No less an investing icon than Warren Buffet has done so, and he advised others to follow.
Now it's finally happening. Americans are seeking ways to get into other currencies. Perhaps by going into gold or gold stocks which trade contrary to the dollar. Perhaps Euroland Funds or Asian stocks.
The point is that to have made 30% on your money in the last couple of years all you would have had to do is go to one of those airport rip-off currency exchanges and convert your entire bank account into EUROS!
Forget the hot stocks, just buying Euros would have been a boon to your finances. Even non-Euro currencies as in Canada, Australia and the UK would have paid off.
IFTHE DOLLAR FRIGHT AND DOLLAR FLIIGHT CONTINUES INTO 2005?
GREENSPAN'S "MEASURED PACE" RATE HIKES MAY BE THE FIRST CASUALTY OF THE COMING YEAR!
I LOOK FOR A SIX OR SEVEN PERCENT TEN YEAR BOND NEXT YEAR!
IT'S TIME FOR THE FED TO GET REAL AND TRY SOMETHING DRASTIC!
BECAUSE THIS FEELS MORE LIKE THE 70's EVERYDAY NOW
