Americans or otherwise, its not a good trade to underestimate the ingenuity of the people - especially Central Bankers.
Dollar will stay, as long as it can stay, the only criteria is - can we stay sane and solvent longer than that!
My 2cs :)
Cheers,
Brijesh
From: Sniper Trader <snipertrader@gmail.com>
To: Technical-Investor@yahoogroups.com
Sent: Wed, December 2, 2009 3:44:52 AM
Subject: Re: [Technical-Investor] A Run on the Dollar... Disturbing
Dollar will stay, as long as it can stay, the only criteria is - can we stay sane and solvent longer than that!
My 2cs :)
Cheers,
Brijesh
From: Sniper Trader <snipertrader@
To: Technical-Investor@
Sent: Wed, December 2, 2009 3:44:52 AM
Subject: Re: [Technical-Investor
We observe two kinds of people in the forums/blogs
* Hopeful optimists (KKP) - "Gosh darn it, we're 'Mericans. We can do it!"
* Realistic observers (Me) - "Human nature always dictates the final debasement."
Now... i am so pleased that...thanks to america.. this keyboard (with the delete button) exists and not to forget... the internet. And all the other wonderful things you mentioned exists due to American Innovation. Thank you America.
Now....even without these.. the world existed.. and as far as i know...was a far better place to live in.
When people are in classic denial mode... they do not see inwards.. they see what others have lacking so that on a relative sense... they more better.
Which brings me to your point of India and 3 Billion people.
I think we have managed just fine till now.. and will manage going forward also.
Not to mention... as long as people like you leave India and goto greener pastures.. we will have that much more resources to utilize
PS: Did you look up the latest patent details.. a majority of it is coming from outside US. Maybe people outside of your small town are not as innovative ? Just a thought.
Can you dig that ?
On Wed, Dec 2, 2009 at 9:11 AM, KKP_Investor <kkpatel1924@ gmail.com> wrote:
Wow Sniper Trader! You have outdone yourself with a pretty narrow minded view.
The computer and internet that you used to connect to the Yahoo Groups and express your view would not even have been a dream for many if it was not for the Low IQ and Creative Out of the Box thinking at the Labs in SanFran,California and Ashburn,VA. Cisco got its nick name that will actually be used to transmit this message to a large group from the beautiful bridge of San Francisco. The first commercial internet packet was transmitted by the company that pays food for my family today. And, believe it or not, the cell phone that you make connections from everyday, also came from a tiny company in the US (in my town also).
These were not former glory days of research and development, since the Robotic Surgery done by Intuitive Surgical which has not seen the face of India or China today, is developed in one of the US labs, that will operate many a patient in poor countries that cannot afford doctors in 2015, 2020 and 2025.
Organ development and Surgical Implants are a huge foray for scientists today, and reconstructive surgery to reappear what someone looked like before a massive accident an area of study that one can get a PhD in today (in my town). This will change to organ development in 2015-2020. All of this happens here due to the open market and creativity.
The IMS platform that programmers will be developing code in 2012 is being developed by my company, and we will need low paid programmers to program it for deployment in the US so that it brings down the cost of doing business.
There is so much more to write, but I think folks are getting the point on what 'creative science' can do......One more> If one wants to go into space, we can get your there as a civilian for a fee (only $1M per person). Are there any rides like this anywhere else in the world?
Each country has created it own massive issues in the last 2000 years, and it is the turn of the US who will lose the SuperPower status by 2020 to 2050 (not sure), but that is a long ways away. By that time India will run out of space to put the 3B people in the country and will have to start exporting them! This last sentence was a big stretch, so please scratch it off - Just pointing out that exaggeration's without merit/sense does not feel good. Thanks.
KKP
Sniper Trader wrote:
If you were examing a foreign country that no longer had any productive basis, yet still possessed a mentality of its former glory days, one that was rapidly expanding social spending while engaged in multiple wars, and was busily replacing the last of its productive class via importation/ subsidization of low-IQ "voters", would you want to hold either its currency and/or sovereign debt?
I wont!. But we all have our blind spots.. don't we ?
On Tue, Dec 1, 2009 at 10:23 PM, BALASUBRAMANIAM SRIRAM <bees2365@yahoo. co.in> wrote:
AP,
This is what every one wants to happen. But where is USD so bullish(3% USD Bulls??!!) and who is the bull? China, Russia, India. Why will they sell USD like that? These are not paper economies. And the psychological warfare to shout down USD is on. I am sure this to will pass.
Sriram
B.Sriram
4B, Skylark Apts,
6,Rutlandgate Fifth St.,
Chennai-600006
Ph:+91 44 28334849(Dir) /28332373( Board)
Mobile:+91 98400 63145
Email:bhsppt@gmail. com
--- On Tue, 1/12/09, Abhijit <ap19632000@yahoo. com> wrote:
From: Abhijit <ap19632000@yahoo. com>
Subject: [Technical-Investor ] A Run on the Dollar... Disturbing
To: Technical-Investor@ yahoogroups. com
Date: Tuesday, 1 December, 2009, 10:12 PM
Something I stumbled upon........ .
A Run on the Dollar Starts Soon
By Porter Stansberry
It's one of those numbers that's so unbelievable you have to actually think about it for a while...
Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.
Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?
How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."
What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.
When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.
The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."
The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.
So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.
The U.S. holds gold, oil, and foreign currency in reserve. It has 8,133.5 metric tonnes of gold (it is the world's largest holder). At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether.. . that's around $500 billion of reserves. Our short-term foreign debts are far bigger.
According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.
Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.
So... where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP.
Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.
So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.
One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None owns even 1% of its total reserves in gold.
All of this is going to lead to a severe devaluation of the U.S. dollar... Which I expect to happen within 18 months. I examined these issues in much greater detail in the most recent issue of my newsletter,Porter Stansberry's Investment Advisory, which was published last week. Coincidentally, America's paper of record – the New York Times – repeated our warnings (nearly word for word) last weekend. Word is getting out.
If you haven't taken steps to protect yourself from the coming devaluation – like owning gold and silver bullion, foreign real estate, and farmland – make sure you do it soon. The dollar rout is coming.
Good investing,
Porter Stansberry
--
Plan Your Work and Work Your Plan to Get Ahead in 2009-2012... ..
KKP Investor
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Bull Markets are Born on Pessimism,
Bull Markets Grow on Skepticism,
They Mature on Optimism, and
Die on Euphoria - Sir John Templeton
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Bear Markets are Born on Recessionism,
Snowball on Momentum & Technical-Breakdown s,
Mature on Eco-Political- Nightmare Talks, and
Die on World-Is-Coming- To-An-End Euphoria - KKP
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>BUFFET: My rule is to be fearful when others are greedy,and be greedy when
others are fearful. All day you wait for the pitch you like, then when
the fielders are asleep, you step up and hit it. Stay dispassionate and
be patient. First the crowd is boozy on optimism and buying every new
issue in sight. The next moment it is boozy on pessimism, buying gold
bars and predicting another Great Depression. Most people get interested
in stocks when everyone else is jumping in. The time to get interested
is when no one else is interested. You can't buy what is popular and
expect to do well.
ABOVE ALL: Whatever God Does, Accept that as Good; Leave Behind ALL Other Judgements/Justific ations.
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Disclaimer> Do you homework for your ownself and then invest. My ideas are not advice.
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