Wednesday, October 6, 2010

Just a question of when...

Predicting that a fiat currency will die is no big prediction, all will eventually.   Gold coins from a government that failed 2,000 years ago are still worth at least $1,340/oz today, but fiat money from a government that failed is worthless.  So the big question is when a particular fiat money will fail.   Is it 100 years from now, this month, or when?

The Dollar Index has dropped about 13% in a few months.  At some point people are going to be unhappy holding dollar bonds that pay 1% per year.  Foreigners will notice exchange rates but even dollar users will notice the price of commodities going up about as fast as the dollar goes down.   With commodities going up double digits in a few months,  bonds look like a poor investment.

Just a few moments ago the Dollar Index was 77.7 and it made me think.  The S&P hit 666, you know, 66.6 would be a fitting time for the dollar to go to hell.   :-)

4 comments:

  1. "Gold coins from a government that failed 2,000 years ago are still worth at least $1,340/oz today, but fiat money from a government that failed is worthless."

    Love that line.


    -bd

    ReplyDelete
  2. Thanks!

    So someone doing technical analysis has come up with a number rather close to my 66.6 as the time things really start to go bad.
    http://www.munknee.com/2010/11/u-s-dollar-collapse-is-fueling-inflation-trade-mania/

    ReplyDelete
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