Ranting Andy: The Myth of the Dollar, and Those That Refuse to Acknowledge It

RANTING ANDY – As the bull market in Precious Metals (or rather the bear market in fiat currencies) intensifies, the level of lies and propaganda from Washington, Wall Street, and the puppet media will accelerate exponentially.  I stopped reading the Wall Street Journal in the late 90s when I realized it was nothing more than a cheerleading rag, and in more recent years broke off entirely with ANY AND ALL forms of mainstream communication.  Only the internet will set you free, as one must SEEK THE TRUTH because, if not, the LIES WILL SEEK YOU.

This month’s blatant Cartel attack on the sector reflects a heightened sense of desperation, as epitomized by the five silver margin increases, the likely fake bin Laden news (as if that matters anyway), and the maniacal suppression of large-cap mining stocks with GOVERNMENT COMPUTERS.  We know the cornered rats will fight to the death, and by death I mean the end of the dollar as global reserve currency, the linchpin of power for the evil Wall Street/Washington partnership whose goal is to enrich itself at your expense.  But what we didn’t know was what this fight would look in the late innings, which we are witnessing today.

It’s been nearly three years since the U.S.S. Titanic hit the fatal iceberg.  In the immediate aftermath, the world supported insane U.S. fiscal and monetary policy decisions, with a desperate hope that the five water-filled compartments would magically drain and close.  All that was required was the printing of trillions of dollars (and other currencies), zero interest rates, and faith that the criminals in Washington and New York knew what they were doing.  Never mind that those people have failed in every economic prediction that they’ve ever made, and that their goals, on balance, are actually CONTRARY to YOURS.  But hope springs eternal, which is why, to this day, people still believe these clowns when they tell you the economy is “recovering.”

Unfortunately, as Ray Liotta stated at the end of Goodfellas, “now it’s all over.”  Late 2008 through early 2011 represented the two hours between when the iceberg hit and when the passengers realized the ship was going down.  But those hopeful days are now over, and in the second half of this year it will become impossible for Washington, Wall Street, and the media to convince you that things are improving.  Yes, they will try every trick in the book to fool (and steal from) you, but we have now reached the end game; in other words, the end of the U.S. as a know-it-all dictator of global policy, the dollar as the world’s reserve currency (yielding soaring inflation), and the elevated American standard of living.

As the ship enters the actual sinking stage, you will be bombarded with every manner of propaganda, mistruth, and outright lie.  We know that published economic statistics are bald-faced lies, and many have suspicions that well-timed bin Laden capture stories may be as well.  But what you are likely to hear in the coming months will probably come straight from Goerbells’ playbook, and it is up to YOU to discern what is REAL and what is BULLSH-T!

Think about it, on Friday, April 29th gold and commodities hit new all-time highs while the dollar closed inches from its all-time low.  And when I say all-time low, I mean within one percent of breaking a support level that had been protected by Western Central banks for the past 25 years.  The debt ceiling was about to be breached, the economy was starting to rolling over, and gold and silver were finally starting to get some air time on CNBC, albeit begrudgingly.  Not to mention the COMEX was clearly about to default in the May silver contract, which had thousands of contracts standing for delivery and only tiny amounts of actual silver on hand to pay them off.

So something had to be done to quash “inflation fears” and prevent the inevitable run on the dollar.  And Voila!, a violent coordinated Sunday night attack to get PAPER speculators running.  Of course, the PHYSICAL prices are much higher than the paper prices, and by the way the debt ceiling has now officially been breached and the economic data this week was measurably worse.

 

The last of these three charts represents the U.S. “dollar index”, a trade-weighted index of currencies dominated by the equally sick Euro (63%) and yen (19%) currencies.  In essence, when talking heads discuss “the dollar”, they are referring to this pitifully unrepresentative index, essentially suggesting that the dollar is “strong” any time its exchange rate with the Euro increases, with no regard at all to any other currency in the world.  Or, more importantly, for the dollar’s PURCHASING POWER. 

Despite the fact that nearly all commodities have achieved new all-time highs this year, the American cost of living is skyrocketing, and the suppressed precious metals have been hitting all-time highs, we STILL hear talking heads refer to the dollar in terms of this silly index, which has essentially no relevance to the purchasing power of Americans, and frankly little relevance to MOST people in the world aside from TOURISTS.

Any time the dollar index blips up, government sympathizers crow how the “dollar is surging”, and thus you need to sell all commodities, particularly “inflation barometers” such as gold and silver (of course, they never say to BUY gold and silver when it blips down, and geez, one of the moron Fed governors went on TV yesterday and said they you should SHORT gold and silver here!). 

The “surge” in the Dollar Index two weeks ago from 72.5 to 75.5 was a perfect example of how irrelevant this measure is, as the event that caused it to rise was when the head of the ECB announced it WOULD NOT raise interest rates, instead choosing to keep them at 1% and continue printing money in the same reckless manner as the U.S..  Wow, is that bullish for the dollar or what!!! 

Quite a coincidence, by the way, that that “gold bearish” news also came out on May 1st, just hours after the SUNDAY NIGHT PAPER SILVER MASSACRE fueled by the fifth silver margin increase, the BS bin Laden news, and the fact that the Chinese market was closed for a holiday.  Followed, of course, by endless commentary about how gold fell due to the “strong dollar”, an argument which shouldn’t even work in a kangaroo court….with REAL KANGAROOS!

Oh, and by the way, below I have constructed a chart of the “dollar index” going back to the early 1970s, essentially from the time the gold standard was abandoned (including an accounting for pre-Euro currencies such as the Mark, Lira, and Franc).  This chart is up to date, including this month’s “surge” from 72.5 to 75.5.  Can anyone spot this “surge” in the long-term chart? 

I, for one, cannot.   LOL.

By the way, does anyone remember that little event in Japan during February, just TWO MONTHS AGO? 

Oh yeah, now I remember, a major earthquake, THE WORST NATURAL DISASTER TO EVER HIT A DENSELY POPULATED REGION IN THE HISTORY OF MANKIND!  I talk about this facetiously, not out of disrespect to the mourning Japanese people, but out of disgust for the pathetic American media and population, which as a group ignore things after a week or two of good headlines, in lieu of going back to their video games, reality shows, and texting.

I’m sorry to disappoint the perma-Pollyanas, but this event likely will be viewed, in historical annals, as THE event that finally brought down the dollar.  Aside from the initial death and destruction of the tsunami, and the unfolding radiation catastrophe, the Japanese economy has completely collapsed, exemplified by the much worse-than-expected -5.2% GDP statistic released yesterday regarding the first quarter. 

Japan is clearly in freefall, and its government is overtly ACCELERATING a 20-year money printing spree that puts the Fed to shame.  But what’s really shocking to me, and as usual ignored by the intelligentsia in Washington, Wall Street, and the media (an oxymoron if I ever saw one), is that the YEN IS RISING AGAINST THE DOLLAR!  And not only that, but it is RISING AGAINST THE DOLLAR despite an EMERGENCY G-7 MEETING LAST MONTH in which the world’s largest Central Banks, led by Helicopter Ben, decided they would print as much yen as necessary to SUPPORT THE DOLLAR and WEAKEN THE YEN!

Think about how convoluted this situation, more ridiculous than the dollar “surging” because the ECB decide to PRINT MORE MONEY.  Japan, the world’s third largest economy and second largest manufacturer, completely implodes, and yet the Yen EXPLODES UPWARD and needs to be WEAKENED by a cabal of money-printing Western bankers.  The reason for this, of course, is that the “yen carry trade”, possibly the largest government-subsidized derivative operation in history, is unraveling, yet another example of just how deep a hole the Western bankers have dug for the rest of us.

I guess my point is that it is MEANINGLESS to point to the “dollar index” as a measure of purchasing power, or frankly the dollar exchange rate against nearly ANY CURRENCY ON EARTH given that they are all fiat-based.  Heck, many currencies, such as the Chinese Yuan, are actually PEGGED to the dollar, meaning that for every dollar printed by Bernanke, the Central Bank of China needs to print one to avoid the Yuan from strengthening.  You really can’t make this stuff up. 

And by the way, the one thing that “economists” have gotten right, for what it’s worth, is the ORDER in which the various countries in the ECB are going belly-up.  The EVIL, IMMORAL, and FRAUDULENT credit default swaps make that analysis easy for them, but either way, Greece in fact went first, followed by Ireland and Portugal.  And as you can see by the daily news, despite all the rhetoric about how bailouts would help, the situation in each of those countries has rapidly deteriorated, to the point that it is now inevitable that these three countries will either abandon the Euro or be kicked out in the near-term (which would trigger explosive inflation in each of those countries, by the way).

And this week massive riots broke out in Spain, which is next up on the totem pole, and VASTLY larger than the other three PIGS.  Spanish government bond yields rose sharply late this week before the potentially disastrous elections this weekend, prompting the Euro to have another sharp leg down (a “surging dollar”), and now the news (AFTER THE CLOSE Friday) that Italy, next up on the totem pole from Spain, had its credit rating outlook downgraded to NEGATIVE from STABLE by Standard & Poor’s. 

So if the Euro tanks again on Monday (and the “Dollar Index” surges), do you think that American PURCHASING POWER will improve?  And do you think any Europeans, particularly those in the huge nations of Spain and Italy, whom also could be facing hyperinflation, will be selling any gold?

Don’t make me laugh….or cry.

But the same clowns on Wall Street and in Washington and the media will, as always, tout the “strong dollar” to convince you the U.S. economy is healthy and gold should be sold.  And to tie in last week’s piece, many of the so-called gold allies will start writing articles about how gold cannot rise as a result of the “stronger dollar”, the same people who continue to tell us that SHORT-TERM CHARTS of MANIPULATED MARKETS have value. 

And the same people, by the way, who claimed that gold was getting ready to collapse last week.  Did anyone see what gold did today?  Last I looked, it rose $20 while the Dow tanked and the dollar index soared.  But that’s not supposed to happen, right?

To conclude, I cannot scream the following any louder if I tried: 

NO MATTER WHAT PROPAGANDA, LIES, AND MARKET MANIPULATION THAT WASHINGTON/WALL STREET/LONDON (plus the puppet media) ATTEMPT, THEY WILL NOT BE ABLE TO GENERATE ANOTHER MAJOR DECLINE IN REAL, PHYSICAL GOLD AND SILVER PRICES.

DID YOU HEAR THAT, CARTEL?

YOU CAN NAKED SHORT GLD, SLV, AND THE HUI SHARES ALL YOU WANT (as well as closed end funds like CEF), YOU CAN COLLUDE WITH OTHER CENTRAL BANKS TO CREATE “DOLLAR SURGES” OR MARKET DECLINES and then claim “deflation” is upon us, YOU CAN LIE ABOUT ECONOMIC STATISTICS AND ENDING QUANTITATIVE EASING to try and induce fear, but you will NEVER, EVER AGAIN BE ABLE TO PULL THE BULLS-T YOU ACCOMPLISHED IN 2008-09 in the PHYSICAL gold and silver markets!

NEVER, EVER, EVER!

EVER!

PHYSICAL GOLD AND SILVER PRICES ARE GOING HIGHER, MUCH, MUCH HIGHER, AND LIKELY MOST COMMODITIES WITH THEM AS THE FED, ECB, AND JCB PRINT EXPONENTIALLY HIGHER AMOUNTS OF MONEY TO TRY AND BUY TIME BEFORE THE U.S. TITANIC REACHES DAVY JONES’ LOCKER.  And by the way, for all those supposedly “gold friendly” commentators stating that the U.S. dollar will be gone in five years or the like, you are again doing a disservice to investors, as THE U.S. ITSELF MAY BE GONE IN FIVE YEARS (not completely, but in the current organization structure), let alone the dollar which should be gone in less than two (I won’t even go into the plight of numerous U.S. states, which in many cases, such as California, New York, and Illinois, are in WORSE shape than Spain or Italy!)

PROTECT YOURSELF, and do it NOW, by buying PHYSICAL GOLD, SILVER, and ITEMS OF REAL VALUE such as FOOD and other LIFE NECESSITIES!

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12 Responses to Ranting Andy: The Myth of the Dollar, and Those That Refuse to Acknowledge It

  1. Anonymous says:

    Awesome recap of recent (May 1st, 2011) events! People are awakening – but will they awaken quickly enough, to oust the central bankers? US Notes should be printed through the US Treasury. No need for a return to a ‘gold-standard’. This just allows the ‘elite’ owners of gold to re-gain control over any new (gold-backed) currency…Silver is the soft-spot in the underbelly of the ‘global’ dragon.

    Peak…silver…by 2020

  2. Anonymous says:

    How about this: We, the (Plebs) of the Planet, enforce a TOTAL REPUDIATION of gold – by NOT BUYING gold – by ONLY BUYING AND/OR BARTERING using SILVER… Eventually, the following would occur: 1) JP Morgue, and affiliated banksters stock would go to ZERO, 2) U.S. Dollar would totally collapse, 3) self-proclaimed ‘elites’ would attempt to buy bread with gold – only to be told ‘we only accept SILVER’…this is totally within the realm of possibility – if, as Max Keiser has stated – we can ‘get this global party started!’ (A total ‘SMACK~DOWN’ of the self-proclaimed ‘elites’ !!!)

  3. Anonymous says:

    What is needed, are U.S. Treasury-issued (ie, Sovereign-issued) Notes, NOT Rothschild-Goldman-Sucks’-‘Fed’-issued Notes. We DO NOT need a return to a ‘gold-standard’ as is often bandied-about. This would simply allow the self-proclaimed ‘elites’, to regain control over the new gold-backed currency, since they already own all the gold… (Thus, the correct answer is: U.S. Treasury-issued Notes. Period.) Until this happens, LOAD UP ON SILVER.
    Reply

  4. Anonymous says:

    It is clear, that silver will outperform gold, long-term. Why? Because, 99.999% of the earth’s population are POOR. They, like investors in India, cannot afford much gold. They can, however, afford silver (currently). Chinese buyers are (currently) favoring gold, although, they are buying both gold and silver – in droves. Eventually, Chinese investors will favor silver, too.

    Still MORE reasons why silver will outperform gold, over the next decade:

    I’m A Crazy Silver-Bug…Why Aren’t You?, by Bix Weir
    (Or, 33 Reasons To Buy SILVER Instead of Gold)
    http://www.roadtoroota.com/public/597.cfm

    The Silver Bullet and the Silver Shield
    http://dont-tread-on.me/the-silver-bullet-and-the-silver-shield/

    Crash JP Morgan – Buy Silver (Episode 96, Keiser Report)

  5. […] Ranting Andy: The Myth of the Dollar, and Those That Refuse to Acknowledge It « BabyBullTwits This entry was posted in World News. Bookmark the permalink. […]

  6. Michael Volz says:

    Thanks Andy for an excellent article clearing the fog which seems to be in endless supply. It is all relatively simple, once one’s eyes are opened but it is nevertheless hard to keep ones eye on the ball with that endless supply of fog being generated.

    Be careful or someone will accuse you of being repetitive
    but I will congratulate you for that, if that is the case (since I have never read you). I hope hope you are being repetitive. When there is a fire in the theater, I glad someone is shouting fire.

    It blows my mind to see how lost in the woods most of the American Sheeple are despite their four year college degrees, big inheritances and big egos!

    Mike

  7. citizen49a says:

    The point about the Dollar Index being increasingly irrelevant is well taken, as is the commentary about the misdirection and misinformation that the media and government engage in by focusing on it.

    China’s economy is now projected to surpass the size of the U.S.’s in 2016, and that’s including the value of all the financial “products” and innovation that has displaced manufacturing as a share of the economy, and all those services provided by the hamburger flippers and the increasing numbers of goverment workers. Call me old fashioned, but I’d rather have a steel plant any day.

    That said, I’m having trouble following some of this.

    Seems like after the earthquake, domestic demand for loans to rebuild Japan increased dramatically. This increase in demand for Yen caused price to increase, and hence the dollar price of Yen increased, i.e. the Yen began to rise against the dollar.

    When people began closing out their Yen positions. wouldn’t that increase the supply of Yen, and wouldn’t this by itself cause the price of Yen in dollars to go down, i.e. to weaken against the dollar.

    So it seems like the unraveling of the carry trade by itself would have driven the Yen DOWN against the Dollar.

    But the Yen carry trade is likely insignificant next to the demand for money, i.e. Yen, to rebuild Japan. These Yen loans would ultimately end up in the foreign exchange as increased dollar demand, but that will happen over time as the Yen created by the government are spent..

    So it appears that it is the demand for Yen to rebuild which is making the Yen rise. Unravelling of the Yen carry trade would likely be a fraction of the impact of this, and it would act to WEAKEN the Yen against the Dollar anyway

    Also, the author says many currencies, such as the Chinese Yuan, are PEGGED to the dollar, meaning that for every dollar printed by Bernanke, the Central Bank of China needs to print one to avoid the Yuan from strengthening

    That doesn’t seem accurate, because since Yuan is pegged it doesn’t trade freely in FX markets. If Bernanke prints a dollar it doesn’t have any impact on the exchange rate with Yuan, because that dollar can’t be exchanged for Yuan directly.

    When some Chinese exporter gets it in trade he has to take it to the central bank to get Yuan for it. The central bank doesn’t keep a lot of dollars lying around, they’re invested in commodities or Treasuries, so in order to give the Chinese exporter some Yuan for his dollars the Central Bank has to create them, just like our friendly bankers at the Fed do.

    That increases the Chinese money supply and since there’s no corresponding increase in output for the profit part of the dollars exchanged, this is inflationary unless the Chinese do something to “sterilize” the increase, like sell some bonds. It doesn’t appear they’ve been doing that.

    So the faster Bernanke prints dollars the faster inflation accelerates in China and the rest of the world where those dollars end up. That’s probably happening more through purchases of financial and other assets, because the American consumer is barely getting enough of Bernanke’s dollars to pay his debts.

    As to the rhetoric about how bailouts would help, that was just more banker con games to dig these countries into deeper holes.

    But I don’t think they’ll default in the near term. The dollar is still the only real alternative to the Euro, and the Chinese have already shown a willingness to be the lender of last resort to the banker’s European prey, and I think it’s likely they’ll continue. It’s a good way to get rid of that big pile of Treasuries they’ve got, it buys them influence, and it preserves an alternative to the dollar in an area where they have simultaneously bought political influence.

    In LONG TERM some sort of default inevitable, but that could include money printing and inflating away debts. Before they get to that point the governments will continue to confiscate assets and cut services.

    The observation on the dollar index “surging” and the rhetorical question as to whether the Europeans will sell gold are perhaps the most interesting here.

    Of course they won’t, but what this tells us is that when we see the dollar index “surging”, and the price (Euros) of gold is increasing at the same time, we’re getting a very important signal from the markets.

    What they’re telling us is that Europeans understand that whatever the traders in the FX markets are doing, the dollar is doomed. But their own currency is doomed too, so they’re opting for other ways to preserve wealth – precious metals.

    If gold’s rising with the dollar then the message is even more significant, since gold and the dollar have traditionally traded inversely to each other in the past. People used to buy gold to protect against dollar devaluation, so if the dollar is rising with any conviction that should draw money out of gold.

    It’s not.

    It looks to me like we’re seeing the beginnings of an eventual repudiation of all fiat currencies. That’s the dynamic that leads to hyperinflation – people decide they would rather have anything besides fiat currency and spend it as fast as they get it.

    Maybe those guys who said the world was going to end soon just had the date off by a coup[le of months.

  8. Phil says:

    Silly anti America post.

  9. Sam says:

    Andy,
    You state the following:
    “The last of these three charts represents the U.S. “dollar index”, a trade-weighted index of currencies dominated by the equally sick Euro (63%) and yen (19%) currencies.” Yet at “http://www.babypips.com/school/what-is-the-dollar-index.html”, it states the Euro is 57.60% and the Yen is 13.60%. Would you please clarify the discrepancy?

    Other than that, I enjoyed your commentary. Thank you.

    • Ranting Andy says:

      Sam,

      You are correct, sir! Thought I had the stat correct, but I should’ve double-checked, which I usually do.

      a

  10. Considering the recent large scale buying of physical silver by several large sovereign nations why hasn’t the alledged resulting scarcity of this metal been accompanied by significant price spikes ? Is the cartel actually powerful enough to neutralize the efforts of all the large buyers on the planet and continue to keep the price of silver suppressed ad infinitum ? And is there actually a shortage or is this a myth?
    Would appreciate the input of anyone on this site who would care to offer a clarification. Many Thanks.

    • Ranting Andy says:

      The Cartel can only effect PAPER prices, not PHYSICAL prices.

      Right now, the PHYSICAL price of silver is $42-$43, not $35. Just check apmex.com.

      They also lie, cheat, and steal about stats on the COMEX, and will continue to try doing so until the END GAME.

      OWN PHYSICAL, and do it NOW!

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