What is the USD? It is a medium used for the exchange of goods. The car manufacturer sells their car to the salesman who got his money from the ABC widget company. Now that the US gov't has embarked on a USD devaluation program, foreign countries are waking up to the plundering of their resources by the US empire. Trade restrictions and nationalization of resources is happening across the developing world. They do not want a piece of paper with a dead president on it. They have seen the value of different currencies evaporate overnight as the color changes from blue to green. These people want tangible assets-whether it is corn, wheat, copper, gold, gasoline-but it is something that has barter power.
The Euro is no better as it looks like the Club Med economies are grinding to a halt-mainly due to real estate issues (Again). The pressure on the ECB to weaken the Euro will build. Right now the Germans have control of the ECB, but the French take over in 2009 and things ay become a little different. The Armstron cycle model predicts early 2009 as the equity mkt top and then a swoon through to 2011.
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