I’ve been pointing out for several months now that the recent rally in the dollar was a mirage, an illusion generated by the yen, euro, pound, and Canadian dollar all dropping into yearly, or intermediate cycle lows together. This selling pressure in the four major currencies that make up the dollar index spawned what looked like a strong dollar.
With Bernanke printing 85 billion of them a month, there is no such thing as a “strong dollar”. I’ve been saying for months that once these four currencies completed their bottoming cluster it would be the dollar’s turn to crash. The recent collapse in the yen was 23%. The Pound 9%. I think the dollar will be somewhere in between with a loss of 9-12% as it drops down into its yearly cycle low.
As this process starts to accelerate over the next couple of months the dollar bulls are going to get a rude awakening, as our currency shows its true colors. The acceleration began today as the dollar has now completed a lower low and a lower high.
Dollar Collapse In Process: Four Big Nations Have Signed A Currency Deal With China IN LESS THEN 2 MONTHS!! Yuan Reaches Record High Against The
The United States might run into trouble accessing debt markets if it defaulted on any of its financial obligations, even if it were able to keep up payments on government bonds, Treasury Secretary Jack Lew told Congress
by Jim Rickards, Gold Silver Worlds:
What will the monetary system look like once a collapse occurs, which Rickards expects in the coming 3 to 5 year time frame. In his view, which he describes in great detail in his book “Currency Wars”, there are four possibilities:
- multiple reserve currencies
- special drawing rights (SDR’s)
A world of multiple reserve currencies (the combined solution): a lot of people think it is possible but I think this is completely unstable. It won’t end the currency wars, it will exacerbate it. Instead of one central bank behaving badly you have five, six or seven….