Tax & Financial Consulting Services
Our Own Government Is Begging for a Cheaper Buck
(Why Nobody Wants a Strong Dollar…Not Even Uncle Sam)
In case you haven’t heard, we can blame the now freefalling dollar and huge foreign currency rally on major central banks around the world. There is more talk of central banks diversifying their reserves away from the dollar. The gist of the story is central banks added to their currency reserves in the last quarter. They put 63% of that new cash into euros and yen...not the dollar.
For those of you keeping count at home, that's more than $80 billion in one quarter! No wonder the euro and yen took liberties with the dollar in April, May and June.
Of course, these two were also taking liberties with the dollar in July, August and September. But we won't get the currency reserves data for another three months, so there’s no telling if this diversification has continued for sure.
We all know what has happened since March 1st of this year. The dollar has sunk lower and lower, as stocks and foreign currencies rallied. Round and round we go, where we stop nobody knows!
Why Even Uncle Sam Wants a Cheaper Dollar
Guess who’s helping the dollar make this long-sweeping move lower? The U.S. government!
That's right, the U.S. government has shown a willingness to allow the dollar to weaken. Oh, yes, they carry on about a "strong dollar policy" and all that, but they don't back it up one iota.
When it comes right down to it, it looks like the U.S. policymakers touting that “strong dollar policy” see no way out. The only chance they have to pay back debts, is if we have a cheaper dollar. That's it in a nutshell. The government wants, and needs a cheaper dollar.
However, they don't want it overnight! They don't need it overnight! The U.S.’s debts aren't due for a while. That's why you hear them spit out stupid statements about strong dollar policy. The policymakers all know they don’t really want a strong dollar, but they have to keep up appearances anyway. Everyone has to believe they’re willing to defend the dollar.
This is what I’ve been telling you for months now. It's all there in front of you. The deficit spending, the quantitative easing, the bailouts, the stimulus, the zero rate interest policy, the corporate scandals that go unchecked leaving foreign investors weary about their investments. And on and on and on.
Our Politicians Are Begging for a Stronger Yuan
Then there's this little ditty that should give you all the information you need to make the decision to diversify a portion of your investment portfolio out of the dollar. The U.S. wants China to allow their currency to gain against the dollar!
When lawmakers, central bankers, U.S. Treasury Secretaries all go to China year after year, and beg, plead, whine, to the Chinese authorities that the renminbi needs to get stronger vs. the dollar, what are currency investors supposed to think? That's right, that the U.S. wants a weaker dollar, period.
Oh! And one more thing that's really scaring the shigidy out of foreign investors including central banks, is the fact that the U.S. has this enormous national debt, doesn't seem to care.
U.S. lawmakers along with the tax payers are oblivious to the deficit. In fact, the politicians continue to look for new ways to deficit spend! Ugh!
So, what are you waiting on? The Dollar isn’t going to get any better, but surely your portfolio can if you take my advice. Should I say it again...buy more Gold and Silver!
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Until next time...protect your wealth.
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Narmer (Think With A Unified Brain and Mind)
Tax & Financial Consultant, RFC
866-361-3872 toll free fax
"A Prudent man foresees the difficulties ahead and prepares for them; the simpleton goes on blindly and suffers the consequences."
Proverbs 22:3 -- Living Proverbs
LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. G&G Associates gets paid a commission from a membership purchase at www.publicgold.com/gngpreciousmetals.