Why The Dollar Bubble Is About To Burst

[Me.]

Why the Dollar Bubble is about to Burst

Steve Masterson | 14.06.2006 17:28 | Analysis | Globalisation | Sheffield
London - 24 May, 2006

“Until recently, the US-dollar has been safe. However, since 1990 western Europe has been busy growing, swallowing up central and eastern Europe. French and German bosses were jealous of the US ability to buy goods and people the world over for nothing. They wanted a slice of the free cake too. Further, they now had the power and established the euro in late 1999 against massive US-inspired opposition across Europe, especially from Britain - paid for in dollars of course. But the euro succeeded.” cont

“Then aeroplanes flew into the twin-towers in September 2001. Was this another Houdini chance to save the US (petro)dollar and the biggest financial/economic crash in history? War preparations began in the US. But first war-fever had to be created -- and truth was the first casualty. Other oil producing countries watched-on. In 2000 Iraq began selling oil in euros. In 2002, Iraq changed all their. A few months later, petro-dollars in their vaults into euros. the US began their invasion of Iraq.

The whole world was watching: very few aware that the US was engaging in the first oil currency, or petrodollar war. After the invasion of Iraq in March 2003, remember, the US secured oil areas first. Their first sales in August were, of course, in dollars, again. The only government building in Baghdad not bombed was the Oil Ministry! It does not matter how many people are murdered -- for the US, the petrodollar must be saved as the only way to buy and sell oil -- otherwise the US economy will crash, and much more besides.” cont…

“And worse for Bush. It makes sense for Europe, China, India and Japan -- as well as all the other countries mentioned above -- to buy and sell oil in Euro's. They will certainly have to stock-up on euros now, and they will sell dollars to do so. The euro is far more stable than the debt-ridden dollar. The IMF has recently highlighted US economic difficulties and the trade deficit strangling the US -- there is no way out.” Cont…

http://www.indymedia.org.uk/en/2006/06/342746.html



For an entertaining view of the history of oil, here is a video for your entertainment. It’s good, very good, but long (45min.)

http://video.google.com/videoplay?docid=-5267640865741878159&q=newman%27s


*shadow government*

[MercutioATC]

1. I bought into this theory years ago.

...and I still believe it.

Roughly 20% of the Dollar's value is due to its status as the international petroleum trading currency. In the last 5 years, the Euro has become a much better choice for countries who need to hold excess petroleum revenues in cash.

I know it sounds apocalyptic, but we MAY be witnessing the fall of an empire...

[Me.]

6. It Does Sound Scary

Heard on CNBC today that housing is falling in Ca and Fla, and some were opining that we are headed for a recession. I think we're heading towards fasten your seat belt time. And then there’s this:

Big Surprises at Bilderberg
James P. Tucker – American Free Press June 19, 2006

“Bilderberg expects interest rates to rise and many Americans to lose their homes in the months ahead. Meanwhile, they hope they can pressure President Bush to refrain from an all-out invasion of Iran while maintaining oil prices at their current record-high levels of about $70 a barrel.

Timothy Geithner, president of the Federal Reserve Bank of New York, predicted rising interest rates and difficulties for families that have obtained adjustable rate mortgages, or “variable” interest rates. Many are likely to lose their homes as rising home mortgage rates add hundreds of dollars to their monthly payments, he said. While most listened solemnly and some expressed concern, one was heard to say, “stupid Americans deserve their fate.” Cont…

“When home construction peaks and prices start downward, many will find they owe more on their home than it is worth in the marketplace. They will also find their mortgage—even “interest-only” payments—are unaffordable. The banks will get the homes back and sell them again.

Again, the term “stupid Americans” was heard among clucks of sympathy or silent indifference. According to one source, no concern was expressed by Allan Hubbard, assistant to President Bush for economic policy.” Cont…

http://www.thetruthseeker.co.uk/article.asp?ID=4682

*shadow government*

[Me.]

7. And This From The Same Article

“European Bilderbergers said they would have no part in an invasion of Iran, something Bush says is an option on the table.” Although NATO is helping by adding 9,000 troops in Afghanistan, expect no help if Iran is invaded, they said. “We will not help you fight a war for Israel,” one said.” Cont…

“William Luti, special assistant to Bush for defense policy, and Richard Perle, former high Defense Department official and still a close adviser to Bush, responded that the United States is simply trying to stop the spread of nuclear weapons and make the world “safe.” But, said one European: “How ‘safe’ do you think the world will be if you invade Iran and Iran responds by firing missiles on your ally, Israel? Israel will nuke Iran in response and you will have your ‘proliferation.’” Cont…

“You’re wrong,” the European answered. “Iran simply refuses to be bullied by the United States. Save us a lot of trouble and forget about invading Iran.” The Americans remained silent.

Bilderberg’s mood was described as “uneasy” when it came to the issue of oil, a discussion followed closely by such oil-rich participants as banker David Rockefeller, Queen Beatrix of the Netherlands and Franco Bernabe, vice chairman of Rothschild Europe.” Cont…

*shadow government*

[dweller]

10. Bilderbergers expect *moron to 'refrain and maintain' ???

:popcorn:


"stupid Americans deserve their fate"

here's looking at ya, fat pompous rich pigs,
dp

[Warpy]

8. It IS apocalyptic, and the Empire will fall

because what does Empire in is going into deep debt to keep adding to its imperial hegemony through military means.

We already can't afford the Pentagon's appetite for useless and redundant equipment, let alone the cost associated with wars of corporate convenience. The only thing that's left is for the final collapse to occur.

Will we survive as a country? Probably, unless Stupid goes so far out of control that he starts bombing all the countries he doesn't like. Then the world will unite against us to stop us. We will likely not survive intact after such an event. In fact, most of us are not likely to survive, at all.

The only question left is whether we will collapse under the weight of debt and loss of the industries that sustained us, or if the final neocon overreaching is bad enough that the world feels compelled to take us down.

[cliss]

2. Well, guess what Bush.

You waged a war, emptied out the US treasury (actually this is not true because the money spent on this war was borrowed from the future), killed a whole lotta people, turned the world against us,

AND THE EURO WENT UP.

How's that for stupidity? Iran has already been talking about opening up a Euro-based bourse. Russia is planning to get out of the Radioactive Dollar. Hugo Chavez has been grumbling about it. China recently said that the US $dollar was 'junk currency'.

How's that for fixing the Dollar Problem?

[MichiganVote]

3. Amazing what they keep us in the dark about

[Solomon]

4. I tried to tell people years ago that this was the real reason why we

attacked Saddam and why he is such a bad man.

[jazzjunkysue]

9. Yup. War or depression. You pick. That's why the GOP went along with it.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

[kittykitty]

5. So what do we do? Buy Euros? How?

[Art_from_Ark]

14. Yahoo Finance often has ads from Euro sellers

Just be warned, though, that trading currencies is not for people who cannot afford to lose money, or novices with a lot of money to burn. Also be aware that there are "spreads" between what you must pay for a currency, and what you can sell it for (sometimes 4% or more, if you're trading cash)

[Comadreja]

11. Well.......

There is a reason that the US is blustering around acting like a bully...they can threaten anyone if their interests are threatened. I think the dollar is being propped up behind the scenes by pure Mafiosi-style blackmail, whether through NSA spying or less-than-subtle "hand into the shoulder holster" gestures.

[KharmaTrain]

12. Guess That Decission To Buy Into Euros 5 Years Ago Was A Good Idea

The moment the Repugnicans took power, it was clear they were gonna run up big defecits again and treat the US taxpayers and treasury like their own little piggy bank.

I had people say I was "un-American" by investing in foreign currencies...specifically Euros...but then I'd always say "and who do you think is gonna pay to clean up the boooosh messes"?

[jerry611]

13. The Euro is inflated and won't last 20 years

Unless there is political unity in Europe, which there isn't at all, the Euro is doomed to fail.

Yes, I agree totally that the dollar is failing. i am not debating that. But the Euro is only going up in value for that reason alone. Sooner or later the bottom will fall and the Euro will sink. Look what happened after France and the Dutch voted down the EU constitution.

Asia is going to be the chief financial market in about 30 years.

[Art_from_Ark]

15. Talk of the Euro's demise is greatly exaggerated, I think

The Euro's predecessor, the Latin Monetary Union, was among disparate nations (France, Italy, Greece, Belgium, Switzerland, Monaco, Venezuela, etc.), but it lasted for nearly 50 years until it was destroyed by World War I.

[ProfessorGAC]

19. And Talk Of The Dollar's Demise, Isn't?

Let's make up your minds, shall we. The euro is not rooted in any better economic soil than is the dollar. While we might have some morons managing our economy right now, they haven't salted the earth. It's correctable and the dollar isn't going to collapse. The two currencies are clearly the two most secure in the world.
The Professor

[Art_from_Ark]

23. "Let's make up our minds"?

Is the Euro really in the same economic soil as the dollar? Sure, they are both fiat currencies, but perception is everything in fiat economics. The Euro supply is relatively transparent, the supply of dollars is now called into question because of the elimination of M3 reporting. The world economy may be tied to the dollar now, but an increasing number of countries-- including America's Number 1 Treasury bond holder, Japan-- are trying to wean themselves from dollar dependency, which will eventually reduce demand for the ever-proliferating dollar.

[KharmaTrain]

16. Diversification Is A Good Thing

Who knows what things will be in 10 or even 5 years...but it was clear in the late 90s the dollar was over-valued and the Euro was finally being accepted as readily, if not more readily, than dollars. Hop on and take the ride. When the Euro over-values (and some think it's close to that point), then its time to move onto other currencies or investments.

So ya think the Yen's gonna make a comeback? LOL. I have a good friend who is a financial trader...he's big on the Wan and the Dong...(insert your joke here).

The ones I feel bad are the suckers who jumped into the markets in the last couple years and now are being all but wiped out.

Peace...

[Art_from_Ark]

17. What would equate as a "comeback" for the yen?

The yen, at 116 per dollar, is almost exactly half-way between its highest point (78/dollar) and lowest point (143/dollar) in the last 12 years. What are your criteria for "making a comeback"?

[KharmaTrain]

18. Close...But Other Factors Apply

Part of that decline is due to the dollar's sink over the past few years...and the Yen surely isn't the force it was before it crashed in the early 90s. I'm very wait and see since the conditions that crashed the Yen still exist in Japan...corporate cronyism...similar to what it is here. To say anyone has the answers is a fool, since so much of finance today is crapshoots and smoke & mirrors...it's just going with your gut and knowing others who think the same way.

[Art_from_Ark]

22. The yen didn't exactly crash in the early '90s

In fact, it reached its strongest point ever (78 to the dollar) in 1994, long after the real estate bubble had burst and corporate cronyism and the banking scandals were coming to the forefront. The gyrations in the yen price in those days had more to do with the easy way that currency traders could manipulate the yen with the tiniest bit of "news", good or bad, perceived or real, about the Japanese economy. You could say that the yen "crashed" in 1998, when it reached 143 per dollar and there was a lot of talk about transparency in the banking system, but the economic conditions then were essentially the same as the economic conditions in 1994.

Come to think of it, though, there was something significantly different between 1994 and 1998-- in 1994, for half the year, Japan had its first socialist prime minister in at least 40 years. But the increasing value of the yen, beyond any reasonable explanation, was putting immense pressure on Japan's exporters, and the socialist prime minister was out of a job by the beginning of 1996.

As for the yen coming down from its lofty high of 78, this was something, as I mentioned earlier, that exporters wanted. Japanese businesspeople I knew who were involved in international services, trading, etc., wanted the yen to be at a level of 110 to 120, so bringing the yen back down to those levels was perceived as "desirable", rather than a "crash".

[Me.]

20. Kick

*shadow government*

[librechik]

21. that theory only works if you accept MIHOP

cuz 9/11 and Saddam were not connected. Therefore, our petrodollar war against Iraq had to come from somewhere. Therefore BushCo sent the bombers and the propogandists.

[PerfectSage]

24. The us$ collapse is a couple years away. imo

For the next few years the Fed can support the dollar by keeping interest rates higher than the rest of the world. I wouldn't be suprised at all to see it rally too for. As the accumulated budget deficits get bigger and bigger the dike will start getting leaky. Then the dumping will begin and the shtf.


For now I'm expect the recent 83.60 low will not be broken.
http://stockcharts.com/gallery/?%24usd

Iran starts selling oil for euros in July.
http://www.middleeastforex.com/index.php?section=215