Saturday, July 14, 2007

How's that CD looking Now?, you read fuBarrio's chicken little, the sky really is falling proclamation and in fear you noticed that CD's and some treasuries had perked up to 5% returns.

Caution bein the better part of valor and all that, you decided to pack some away for a rainy day....Here's what has happened to the dollar in terms of its ability to buy other well traded currencies so far this year:

As you can see, if the dollar doesn't rebound, you will actually lose purchasing power this year on your CD or fixed income investment. I would go a step further to say that in terms of food and fuel and things you actually need and use, the real inflation in the dollar is bein masked in the USDX chart above by virtue of the fact that it is bein compared to other grossly inflating currencies.

As was discussed here, either the dollar, real estate, or BOTH will fall. I think we know which one of these three has happened by now.

In a bit of potential good news for the dollar, a good friend of mine who doesn't watch this stuff all that closely called me to discuss her concern over the fallin dollar. why is this good news? because either my brain washing is working, or the message that the dollar is a dead duck has filtered down to the masses. about the time these "known knowns" filter down to the masses in a meaningful way is about the time the trade is due for a countertrend rally. in other words maybe us long suffering dollar saving, dollar earning fools will get a short respite in our falling buck.

However, if you do get that respite, enjoy it. It won't last forever....maybe not even long. When I said last year "get your affairs in order" in regards to the dollar I was questioned, "who can predict the future?"

well, c'mon retrospect was it really all that complicated or suprising?

ciao for now,


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