Dollar Damage?

Fed's rate cuts may do long-term dollar damage?  May?  As if it hasn't already?  Dollar is at it's lowest since 1973!  Gold is reaching new highs.  Oil is reaching new highs.  May? 

I love the MSM for reporting the obvious.  We've been saying this since the rate cuts began.  The rate cuts are not going to help those who need it most.  In fact, as inflation is rising and now most bond investors are expecting a better return.  So most of the rates are going up.

More troubling is the fear that whatever success the central bank achieves will have been bought at the expense of future inflation, shattering confidence in the dollar.

Unlike the past, most other central bankers are not cutting as the fed.  In fact, Australia has raised rates. 

Still, there are plenty of investors and economists who are not ready to sound the alarms.

There are always these economists who are not ready to sound alarm until everything has burned down.  Just look at subprime and housing issues.  Most of them told us that in the worse case for housing, there would be no gains. 

We may not be in a dollar crisis as too many economies are dependent on the US.  But as time goes by, more and more are becoming less dependent on the US.  Just check oil prices.  Most economists told you that as US slows down, the prices will go down. 

"Well, you have to put yourself in an oil exporter's shoes," Merrill Lynch's Englander said. "You have all this capital to invest, so why would you invest it in a country where the two-year note is yielding 1.54 percent?"

 

1.54 percent and the currency is falling!  You have to feel sorry for the seniors in this country.  Not only do they have to deal with inflation, but also their savings get no return.  Their real returns on their savings is negative!