Socio-Economics History Blog

Socio-Economics & History Commentary

US Dollar Collapse Imminent !

  • Although, I probably appear as ‘the boy who cried wolf many times’, I am going to sound this alarm again: the USD collapse is imminent. At the end of the story of the boy who cried wolf, the wolf really did come! Frederic Simons gives a simple technical analysis :
     
    We don’t like to make bold predictions. But this time, it is different (famous last words).   …..  Then we came across the following daily chart of the USD. When looking at a chart from a technical analysis viewpoint, you either immediately observe “your trade”, or there is none.
      
    To us, this chart is looking more than spectacular, as it displays a big descending triangle formation, which looks pretty much as if it will be resolved as it should. To the downside.
     
    Now, the height of the pattern is about 11 points. From the breakdown point, which will be reached as prices fall below the two red horizontal lines around 78, the measured move to the downside will equal the height of the pattern.
     
    This amounts to a price target of around 67 in the USD index. And as prices tend to move lower quickly when breaking down, the future chart may look like this in a few weeks time (see above chart).
      
    This is looking nasty, isn’t it ? How to play this ? There are certainly a lot of ways to do it, and everybody has his own preferences. It looks however interesting to buy either some put options on the DX Future, or some EUR/USD call options. The big advantage of options is that you will have big leverage for relatively small change, with a limited risk of loss. In addition, if the USD should actually crash, implied volatilities will explode to the upside, which will add to the value of the options, making profits even bigger. 
     
    As far as the implications of a Dollar crash for precious metals and the bond market are concerned, we can only say: they might be of historic magnitude, and mark important upside breakouts for precious metals, and breaks to the downside for bond prices.  
     
    We think that when the USD crash comes, it will start with a big move, has little retracements, and take no prisoners. 

end

July 25, 2009 - Posted by | Economics | , , , , , , , ,

9 Comments

  1. It will take 5-10 years before the dollar is replaced by a new international currency. Major players will need that time to fully decouple themselves from the dollar and minimize their losses which in China’s case would be in the trillions. The setup in the charts is a short opportunity for traders and hedge funds, but will be bid back up later in the year as the EU and others devalue thier currencies vs the dollar to keep their US bound exports from collapse.

    In the short term, 2-3 years, it does look like we’ll see failed auctions for US treasury bonds. This would be very damaging but the federal and state governments would continue to function albeit in a much more streamlined fashion budget wise. Picture social security and medicare benefits being cut in half, slashed welfare benefits, unemployment benefits etc. Right now, we basically have 20% unemployment (U6.) If we start pushing Great Depression numbers with 25% U6 and failed Treasury sales, the possibility of widespread violence and civil insurrection is alarmingly likely. Keep in mind the offial U6 numbers are fudged and inaccurate. See shadowstats for the real numbers. The Green Shoots are BS and the market at large is heavily manipulated and being propped up. It’s no longer a barometer of the health of the real economy as it is three card monte for insiders. See goldman sach’s frontrunning software story for more on this.

    The final issue is just how much the dollar’s value will fall as it’s phased out for whatever new international currency is introduced. 50% 75% ? Will it take the form of gradual drops over a year or two or happen overnight? How will people and the government react? These are the scary questions. The only way out of this is for the government to invade Iran’s southern oil fields and the Straight of Hormuz and basically hold the world’s oil supply hostage. The US could then dictate terms to China Japan and the EU and work out something better than its currency collapsing. We’ll have to see.

    Comment by erik | July 26, 2009

  2. eric,

    quite interesting…is a collapse on the agenda of Obama Administration along with the “progressive” socialist Democrats, including a few RINO’s? Isn’t that what the so-called “stimulus” bill (pork bill since it had about 8 thousand pork-barreled spending items slipped into it) was all about? Wasn’t it all really about devaluing the dollar so it can collapse and so they can produce their one-world order, socialistic currency?

    777denny

    Comment by Denny | July 26, 2009

  3. [...] also :   US Dollar Collapse Imminent ! Currency Crisis, the Yuan to go Global! Gold will Rise! A New Monetary System to come. Will Gold [...]

    Pingback by Max Keiser: The Collapse of America will be Much Worse Than The Soviet Union! « Socio-Economics History Blog | August 3, 2009

  4. The Dollar has collapsed in USA.
    Some cities like Detroit can not bury the dead.
    That is a severe Horror omen to come in all things
    for America. People living in Tent Cites, some with jobs.
    There is a Hidden Hand of World Power, to make the USA Dollar to collapse in all things, to be worthless.

    Comment by Virginia | October 3, 2009

  5. very good!

    Comment by ccc@aol.col | September 1, 2010

  6. [...] US Dollar Collapse Imminent ! « Socio-Economics History Blog 25 Jul 2009 … also : US Dollar Collapse Imminent ! Currency Crisis, the Yuan to go Global!… Comment by ccc@aol.col | September 1, 2010 | Reply … socioecohistory.wordpress.com/…/us-dollar-collapse-imminent/ [...]

    Pingback by Alert, The Dollar is Collapsing–Are You Prepared | September 18, 2010

  7. [...] US Dollar Collapse Imminent ! « Socio-Economics History Blog 25 Jul 2009 … also : US Dollar Collapse Imminent ! Currency Crisis, the Yuan to go Global!… Comment by ccc@aol.col | September 1, 2010 | Reply … socioecohistory.wordpress.com/…/us-dollar-collapse-imminent/ [...]

    Pingback by Obama and The TEA Party Challenge | September 21, 2010

  8. [...] US Dollar Collapse Imminent ! « Socio-Economics History Blog 25 Jul 2009 … also : US Dollar Collapse Imminent! Currency Crisis, the Yuan to go Global!… Comment by ccc@aol.col | September 1, 2010 | Reply … socioecohistory.wordpress.com/…/us-dollar-collapse-imminent/ [...]

    Pingback by Backlash Against $600 Billion | November 5, 2010

  9. [...] US Dollar Collapse Imminent ! « Socio-Economics History Blog 25 Jul 2009 … also : US Dollar Collapse Imminent! Currency Crisis, the Yuan to go Global!… Comment by ccc@aol.col | September 1, 2010 | Reply … socioecohistory.wordpress.com/…/us-dollar-collapse-imminent/ [...]

    Pingback by Backlash Against $600 Billion Bailout » Stand Up Patriots | November 5, 2010


Sorry, the comment form is closed at this time.

Follow

Get every new post delivered to your Inbox.

Join 838 other followers

%d bloggers like this: