Dollar

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The Only U.S. Dollar Move That Matters Now

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

You might think the U.S. dollar is going to crash. That makes sense as the value of paper currencies continues to be destroyed by central banks trying to reduce their debt.

But the dollar's been getting stronger since 2014. And if it moves up through its next resistance level, it would rock financial markets.

Let me show you how to get this right. Because everything depends on what happens to the dollar.

Peter Schiff on U.S. Dollar Crisis: "The Dollar Bubble Is Going to Burst"

By , Associate Editor, Money Morning • @TaraKateClarke -

Stock Market Crash

Peter Schiff, economist, best-selling author, and CEO of Euro Pacific Capital, believes a U.S. dollar crisis is underway.

"The dollar is very overvalued...and the dollar is a bubble," he told Newsmax Prime on Aug. 11. "This dollar bubble is going to burst."

Indeed, two weeks later and Schiff's prediction proved timely. The U.S. dollar index has suffered a fourth-straight loss, and U.S. markets have plummeted in the worst weekly sell-off in four years.

Many blame the surprise yuan devaluation. But Schiff believes investors should be worried about the United States, not China...

Currency Wars: China Now Has Unprecedented Control Over the U.S. Dollar

By , Money Morning -

Currencies

China fired a shot heard 'round the world Aug. 11, stoking fears of what could become the ugliest of all currency wars. In a surprise move, the country massively devalued the yuan 2% - its biggest one-day devaluation in 20 years.

China's yuan devaluation will have more than just that immediate impact - it gives the country unprecedented, long-term control over the U.S. dollar.

Here's how China has managed to place the U.S. dollar on puppet strings...

The End of the Petrodollar Will Slaughter the U.S. Dollar

By , Associate Editor, Money Morning • @AlexMcGuire92 -

end of the petrodollar

For the last 15 years, the U.S. dollar has been heading for total destruction due to the end of the petrodollar.

The petrodollar is a system in which every oil export around the world is priced in dollars.

It worked for 40 years – but now it’s one of five “flashpoints” that will trigger economic collapse…

It worked for 40 years - but now it's one of five "flashpoints" that will trigger economic collapse...

The Money Illusion: What This Picasso Tells Us About the Dollar

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

Stock market today

With the purchase of Picasso's <em>Les Femmes d'Alger dans leur appartement</em> (Version O) for $179 million, the world was served up another piece of evidence that money has lost all value.

Some will argue that such a price is justified for such a one-of-a-kind object, but what is really going on is not that the value of art is increasing but that the value of the paper currencies being used to buy it is being destroyed by central banks who print trillions of dollars of money around the clock.

This phenomenon - which the economist Irving Fisher named "the money illusion" - is causing massive inflation in financial assets around the world - stocks, bonds, real estate and yes, art.

Cash Hoarding Corporations Hurt by Strong Dollar

By , Money Morning -

earnings season

Larry Fink says the strong dollar is bad for the U.S. economy. That's no surprise. But the Blackrock boss didn't mention, in his April 6 interview with the Financial Times, that the skyrocketing dollar could trip up the biggest tech companies - those that thought themselves smart for parking squillions overseas to avoid U.S. taxes.

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China's Yuan Enters the Currency "Big Leagues" to Take on the Dollar

By , Money Morning -

China's yuan

I've been following one of the biggest "stealth" stories of the year: the rise of China's yuan as it gears up to take its place on the world stage.

Towards this very goal, China has taken steady, calculated steps for some time.

It's also no secret that China and Russia have a "special relationship" that will drive this trend.

China is likely to help its neighbor in this time of need, and the longer-term global implications could well be dramatic...

Time for a Post-Petrodollar Profit Play

By , Money Morning -

Beware of unintended consequences.

That's the advice I'd give Western leaders when imposing sanctions on Russia over the Ukraine crisis.

You see, Putin's been racking up his air miles, hastening the pace to replace the petrodollar.

It's a topic I recently discussed here, along with an investment idea for a "counterattack."

At the end of Putin's two-day trip to China last week, the two nations signed a landmark natural gas supply deal, driving another large nail in the dollar's coffin.

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The Golden Yuan Is Coming - Here's How to Play It

By , Money Morning -

The U.S. dollar has been the world's de facto reserve currency for almost 90 years.

But this financial dominance may be nearing its end.

In recent years, China's been floating the idea the yuan should take on the dollar's role as the world's reserve currency.

In fact, the Chinese have already negotiated numerous bilateral trade deals that completely bypass it.

And they've even called for efforts to "de-Americanize" the global economy.

Whatever happens, China's economic rise foreshadows increased influence.

It's a trend that not only has serious implications, but also great profit opportunities, if you know what to expect...

The Best Currencies to Invest in for 2013

By , Contributing Writer, Money Morning -

The best currencies to invest in for 2013 come from Asia, South America, Australia - but not the United States.

The Federal Reserve's misguided insistence on a loose monetary policy, ongoing resistance to government spending cuts, and another increase in the U.S. debt ceiling will all conspire to boost inflationary pressures and restrain the value of the U.S. dollar.

That will, of course, impact domestic market performance and cut into real returns on dollar-denominated investments - but it will also provide major opportunities for U.S. investors who can target issues denominated in the strongest foreign currencies.

Unfortunately, that doesn't include most of the world's other major currencies - including the euro, British pound and Japanese yen - since the economies of the underlying nations are also suffering from sluggish economic recoveries and problems with excess debt.

As such, the strongest currencies in 2013 will likely be found to the north and west of the United States, starting with the neighboring Canadian dollar.

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The Markets or the Mattress: I Know Where My Money is Going

By , Chief Investment Strategist, Money Map Report -

The next 1,000 points on the Dow Jones Industrial Average in either direction are going to be determined by what happens in two cities thousands of miles from our own shores...
Athens and Berlin.

What's more, the risks associated with Europe's redemption, or its failure, are more concentrated now than they were before the crisis began.

There are two reasons: a) Europe won't help itself and b) Wall Street may still have $1 trillion or more in exposure to European problems.

What makes me crazy right now is that European chatter is what's driving the markets.

Every sound bite from Europe is critical these days. Not because there is anything relevant in the political babbling from financial ministers tasked with fixing this mess, but rather that there is a cascade of events that could take us in either direction.

Fix this mess and the markets will take off for a 1,000 point gain that will leave anybody who is on the sidelines hopelessly behind.

Fail and the markets could tank.

It certainly fits the pattern established in recent months. News leaks suggesting solutions have brought on rallies, while negative leaks have caused a ripple effect that has quickly dumped stocks into the hopper.

Yet, it's not really the numbers that matter at the moment - even with the Fed rumored to be considering another $1 trillion stimulus and reports that the European Central Bank (ECB) and International Monetary Fund (IMF) may be seeking as much as $600 billion each.

No. The market swings we are seeing are all about confidence or, more specifically, the near complete lack thereof.

The Mattress vs. The Markets

A recent report from TrimTabs shows that checking and savings accounts attracted eight-times the money that stock, bond and mutual funds did from January to November 2011.

That is a whopping $889 billion that went under "the mattresses" versus only $109 billion that went into the markets.

In fact, CNBC is reporting that the pace of money headed for plain-Jane savings and checking accounts from September to November accelerated to nearly 13-times the average monthly flow rate of the preceding nine months from September to November.

What's significant about this is that the money has headed for the sidelines when the markets have rallied. Usually it's the other way around. Normally money floods into the markets when they move higher.

The other notable thing here is that, generally speaking, up days this year have had thinner volume than down days. This means that most investors just can't handle the swings. In other words, every time the markets dip, they're packing it in.

Pessimism is the Breeding Ground of Opportunity

Bottom line: Investors are making a gigantic mistake - especially those with a longer-term perspective.



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The Dollar Is DONE: Four Ways To Profit As the U.S. Dollar Dies

By , Money Morning -

As a young British banker in the inflation-ridden 1970s, I got used to carrying large amounts of German deutsche marks, Swiss francs and Japanese yen in my wallet - to have some security against the lousy performance of the British pound sterling.

While paying for a pizza in London with this foreign cash was difficult, having those "safe-haven" currencies in hand helped me sleep at night.

We've reached that point again. In light of the debt-ceiling debacle in Washington, the U.S. credit-rating downgrade by Standard & Poor's, and the likelihood that a long stretch of dollar-killing stagflation is headed our way, it's time to take refuge in today's safe-haven currencies.

And I'm going to show you the safest of those safe havens.

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