http://afp.google.com/article/ALeqM5jGC7KSKjsKYUTGAF1oR04-yOpBgg I expect Iran will be attacked by the spring. Same thing happened in Iraq. The worst part is, attacking Iran will only further devalue the currency. Sometimes I wonder if the ruling elites are intentionally trying to destroy this country.
Besides dollars what are they going to use? Yen? Yuan? Euros? Not forgetting, despite the greenback weakness, it is still the dominant currency in the world.
There isn't an ounce of doubt in my mind that it is intentional. During times of depression there are created more amounts of wealth then during any other time.
The Euro like any other currency is anything but stable. http://finance.yahoo.com/charts#chart2:symbol=usdeur=x;range=5y;charttype=line;crosshair=on;logscale=on;source=undefined
They're trying to profit two ways from the falling dollar, part of the increase in oil has been due to the falling dollar so they profit at higher oil prices at the same time they want to take in a currency that is appreciating in value. I think it's pretty smart since they haven't be able to increase production since the Iran Revolution.
Well, they could increase production if they could develop nuclear for domestic energy needs and export that oil. Iran is dying a slow death under sanctions and economic mismanagement. It makes sense to stop selling in the currency that is sanctioning you.
The dollars principle support is Asian exporters and subprime investment from Asia and Europe. As long as Japan and China keep taking dollars and the subprime market doesn't bust, the dollar will keep some value and business as usual. China and Japan are the deflationary engines that are keeping the US running. Basically employers are paying millions are low end US workers with dollars that have value since the worker can go to walmart and fulfill their dreams. Its really hard to say how long China and Japan can keep it up. China is starting to feel pain with 11% inflation and oil shortages due to yuan price controls. The second factor supporting the dollars is the subprime. The subprime market took in trillions of dollars from European and Asian Banks and Pension funds. The Fed is fighting hard to keep the housing bubble from busting but it has to bust. Overvalued houses and expensive loans to people that can't afford it is not a sound economy.
Based on their growing demand I always believed they need Nuclear power, I also believe they want a nuclear bomb, getting nuclear power isn't going to increase production all its going to do is allow them to sell more barrels of oil on the market, but their production has never reach the level it did pre revolution.
The medicine is worse then the pain. Japan isn't really a factor in supporting the dollar, they have a host of their own problems, but you are correct with China.
The Japanese carry trade, subprime investment, t-bills and the export for dollars are a main support for the dollar. The Yen should be at something like 80 and Yuan at 4:1
Gold is a good hedge. Silver prices are very weird, and there is a lot of playing around with hoarding and dumping in that market. A pretty good currency right now is the Swiss Franc. But if you can find a way, the best thing to do, is to get some Chinese Yuan (Renminbi). When China finally floats it's currency, you are going to make a fortune overnight.
It's very hard to acquire large amounts of Chinese bonds/cash etc. I know Jim Rogers (http://en.wikipedia.org/wiki/Jim_Rogers) has been trying but says it is very difficult. That said, if you are able to find the right advisor/broker, you may be able to get some play in that market. Rogers just put out a book, "A Bull in China". It's supposed to be a primer on the Chinese market/economy. I haven't read it yet, but it's received good reviews. Rogers' commodity fund has gone up 320% since 1998. He used to have his own commodity charts shown on Kudlow & company when he would come on. lol
Chinas inflation is at like 11% right now isn't it? Its a matter of time before all the Chinese goods we consume here jump in price.