King Dollar and Road Map for Deflationary Depression

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Subject:	Talk of "King Dollar" on CNBC and Road Map for Deflationary Depression
Date:	Wed, 14 Dec 2011 05:25:15 -0800
From:	Jas Jain

Talk of "King Dollar" on CNBC and Road Map for Deflationary Depression

Looks like the dollar bears are quiet of late. It is still early to conclude that the trend reversal in USD has occurred, but once it does take hold we are talking about the Euro going below a buck and Swissie going below 70c over a 4-5 year period, not in a straight line, of course. With the King dollar we would surely have a Slave Indian Rupee. The Indian central bank might be forced to peg INR to the USD after the free fall of rupee above 100. Please note that I have been bullish on gold for 14+ years primarily as the premier currency. The safe haven status of gold would remain but the long-term reversal in the dollar's decline and a prolonged up-trend would be bearish for gold in USD but not in most other currencies. The King Dollar would also lead to deflation and depression in the US.

 

The 30+ year bull market in the long-term US Treasuries is alive and kicking. Why? Because there is no way for the US to avoid the deflationary depression. The bitter medicine of austerity, meaning lower material standard of living, would be administered to Americans by their elected and appointed officials. What has happened to the Irish over the past two years is coming to the UK soon and to the US in couple of years. Fed, or no Fed, you can't live beyond your means forever. And most American can live with lot less! All the Western democracies would have to face the music over the next few years and plunging the global economy into a depression far worse than during the 1930s. The US GDP would contract by at least 20% over the next decade. Guess who would Americans vote for in 2020 Presidential election under those conditions brought about by bankers and financial manipulators?

 

Listening to morons like Marc Faber, Jim Rogers and Peter Schiff, perennial US Treasury and USD bears, could be hazardous to your wealth. The deflationary depression in the US is something that these morons can't imagine, let alone understand. They fantasize about "Printing Money" by Bernanke who has already been rendered impotent in terms of pushing aggregate demand, which is currently being held up artificially with very high deficit spending. Deficit spending of 9-10% of the GDP to get a 2% annual growth is a sure road to ruin.

Jas

• Yesterday the Fed said Inflation has moderated
  Table of Core PCE Inflation

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