Be very careful: The billionaire currency manipulators like Soros will make billions anyway they can.

There is talk they plan to crash the sterling and the euro which are 69% of the basket the dollar is valued against. This would cause a short term skyrocket to the dollar even if in real terms it was falling and cause a massive short squeeze due to the dollar being the current carry trade currency. That means the people that have been shorting the dollar and buying oil, equities, gold, silver, etc. would have to sell to cover their shorts.

While only a temporary trend, it will wipe out millions of people who aren’t prepared for the selling of everything sold to cover those shorts. I still have gold and silver and a tad of oil and grains but, am ready with stops to get out quickly if this unwinds.

Will it happen? I don’t know but, when you have the major banks, hedge funds and billionaires like Soros that play markets like toys, you better be prepared for anything.

There is word that now that Zimbabwe is adopting the Rand as their interim currency, they will prepare for the new regional currency that is being developed for that part of Africa.

quote
The choice of the currency was determined by economic factors as well as the future intention of the Southern African Development Community (SADC) to adopt a common currency, which inevitably would have to be based on the rand given the dominance of the South African economy in the region, the Herald said.

http://www.namibian.com.na/index.php?id=28&tx_ttnews[tt_news]=53619&tx_ttnews[year]=2009&tx_ttnews[month]=03&cHash=ddc2de0b8c
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So, long term the global move is away from the dollar to regional currencies or non-dollar trade deals as well as support for more use of SDR’s.

But, that is months or a year or so off. Short term you can really get burned so be very cautious in thinking gold or oil or equities are going to just keep going up without some major players, including the major investment banks making a lot of investors very miserable to line their pockets.

AP and I have always had disagreements about the long term but, I don’t ignore his warnings even if I may or may not think they will be as bad as he forecasts. There are no guarantees short term and maybe not long term either. I believe the 2.5 billion people that control 2/3 of the global economy and foreign nations using dollars to buy commodities will determine price and the fate of the dollar but, timing that will be very difficult and before it happens, any major correction in even gold is possible.

Will that happen? Again, I don’t know, but, am prepared that it could happen and will have stops in place when it does that protects my downside. I am also mostly cash right now and will go long more or start shorting when I see more data confirming up or down. We may see this go to December or into the next earning season. If Holiday sales are down, look out.

- JP

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