'Seismic Change' as Dollar Hits 4-Year High

Photo Credit: AlamyThe US dollar has surged to a four-year high against a basket of currencies and has punched through key technical resistance, marking a crucial turning point for the global financial system.

The so-called dollar index, watched closely by traders, has finally broken above its 30-year downtrend line as the US economy powers ahead and the Federal Reserve prepares to tighten monetary policy.

The index – a mix of six major currencies – hit 87.4 on Monday, rising above the key level of 87. This reflects the plunge in the Japanese yen since the Bank of Japan launched a fresh round of quantitative easing last week.

Data from the Chicago Mercantile Exchange show that speculative dollar bets on the derivatives markets have reached a record high, with the biggest positions against sterling, the New Zealand dollar, the Canadian dollar, the yen and the Swiss franc, in that order.

David Bloom, currency chief at HSBC, said a “seismic change” is under way and may lead to a 20pc surge in the dollar over a 12-month span. The mega-rally of 1980 to 1985 as the Volcker Fed tightened the screws saw a 90pc rise before the leading powers intervened at the Plaza Accord to cap the rise.

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How to Survive the Coming Dollar Cyber-Economic Attack

Photo Credit: AP

Photo Credit: AP

The new book Game Plan: How to Protect Yourself from the Coming Cyber-Economic Attack by Kevin Freeman is a stunning collection of factual research which lays out how a systematic international plan to bring down the U.S. dollar as the world’s reserve currency. Freeman warns today’s international effort to “crash the dollar” has reached critical mass: “Stage 3.”

I have been writing about the increasing threat of economic and cyber war in my books and quoting Mr. Freeman for several years now. (For example, in The Inflation Deception p. 28-29) I wrote:

A Financial Pearl Harbor

According to Defense Department consultant Kevin D. Freeman, America in September 2008 suffered a financial “Pearl Harbor,” an internationally-launched coordinated computer raid designed to drain overnight trillions of dollars from our most important financial institutions. The resulting panic gulled Federal lawmakers into approving vast emergency bailout funds for banks, brokers and key corporations.

This remarkably-timed attack and resulting economic confusion persuaded voters to renew the liberal Democratic control of Congress and to elect a fresh and unknown-and-untested anti-capitalist radical community organizer as president.

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Obama’s Pick for Fed Chair Raises Brand-New Fears for U.S. Dollar

Photo Credit: WNDRepublican lawmakers are balking at President Obama’s choice of Federal Reserve chairman, Janet Yellen, worried she will favor enhanced government intervention in the economy, including flooding the market with more dollars.

A review of her previous work finds she divined a theory that was a precursor to the current progressive campaign for the government to ensure “fair” pay to employees.

Yellen’s confirmation in the Democrat-controlled senate is all but a certainty after she was approved by the Senate Banking Committee 11 days ago.

Sen. Marco Rubio, R-Fla., announced he plans to vote against Yellen, citing fears she will enact policies to the detriment of long-term economic growth.

“While Dr. Yellen is an accomplished individual, I will be voting against her nomination to chair the Fed because of her role as a lead architect in authoring monetary policies that threaten the short and long-term prospects of strong economic growth and job creation,” Rubio said in a statement.

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Cramer: Dollar is a Laughing Stock Worldwide (+video)

Photo Credit: APCNBC’s Jim Cramer said the U.S. is “a laughing stock around the world, maybe worse than Italy in some ways when I look at benchmarks. We have obviously lost the faith of a lot of countries.”

“If there was a way to be able to take your money out of this country and put it in Germany … if I were Brazil, if I were Japan I would do it immediately,” he said Thursday on “Squawk Box.”

He went on to say that the slumping dollar index, which measures the greenback’s value against a basket of currencies, reflects the current sentiment of investors around the world. They are saying “lets go into gold, lets get out this dollar … lets not be in bonds in the United States, we’d rather be in any other currency because they basically have lost control,” he said.

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Why the US Dollar is Going Extinct

Is the Dollar Dying? Why US Currency Is in Danger

By Jeff Cox. The US dollar is shrinking as a percentage of the world’s currency supply, raising concerns that the greenback is about to see its long run as the world’s premier denomination come to an end.

When compared to its peers, the dollar has drifted to a 15-year low, according to the International Monetary Fund, indicating that more countries are willing to use other currencies to do business.

While the American currency still reigns supreme — it constitutes $3.72 trillion, or 62 percent, of the $6 trillion in allocated foreign exchange holdings by the world’s central banks — the Japanese yen, Swiss franc and what the IMF classifies as “other currencies” such as the Chinese yuan are gaining.

“Generally speaking, it is not believed by the vast majority that the American dollar will be overthrown,” Dick Bove, vice president of equity research at Rafferty Capital Markets, said in a note. “But it will be, and this defrocking may occur in as short a period as five to 10 years.”

Bove uses several metrics to make his point, focusing on the dollar as a percentage of total world money supply.That total has plunged from nearly 90 percent in 1952 to closer to 15 percent now. He also notes that the Chinese yuan, the yen and the euro each have a greater share of that total. Read more from this story HERE.


The Dying Dollar and the Rise of a New Currency Order

By Anthony Migchels. For years now, the collapse of the dollar has been in the cards. Recent developments show mounting pressure on the dollar’s reserve currency status. With a major international deflation going on, the threat of inflation through money printing is unreal. However, should the dollar’s reserve currency status end, the repatriation of trillions of petro- and eurodollars could lead to a strongly inflationary scenario.

The roles of a reserve currency are to finance international trade and to function as a store of value for Governments. Until the second world war it used to be the British pound, but with the demise of the British Empire, the pound lost its international relevance and was overtaken by the dollar. This was formalized in the 1944 Bretton Woods system. All other currencies were fiat currencies, but pegged to the dollar, which in turn was pegged to Gold at 40 dollars an ounce and redeemable for international trading partners.

The Eurodollar
With the dollar as the reserve currency, the US had to export dollars. In the early years after the war especially for Europe, the famous Eurodollars. This sounds great: print money and buy whatever you like. But with the Gold window it was also risky: overprinting could mean excess dollars would be exchanged back to Gold, depleting US Gold reserves.

This was also a weakness that those annoyed with American Hegemony could exploit. In 1967 the leftist press mogul Jean-Jacques Servan-Schreiber penned a famous screed called ‘le défi Américain’ (the American challenge’), arguing Europe was being colonized economically by superior American competition.

France, at the time, was run by de Gaulle, who never was impressed with Anglo-American supremacy. He made a point of exchanging every dollar he could lay his hands on as a means to undermine it. Read more from this story HERE.

The Dollar – and the USA – are Toast

Photo Credit: WNDObama has done it. He has brought America down. It only took him just over four years. The Republicans could have stopped him. They didn’t.

How did the nihilistic left succeed in destroying America? Simple. They learned just a little of the capitalism they hate, and they drove your nation into outright bankruptcy.

And here is what the GOP has to say about it: just about nothing.

The once-mighty United States is now the most indebted nation on Earth. In round numbers, here are just some of the vital statistics as the patient dies:

National debt: $17 trillion, or $50,000 per man, woman and child, or $150,000 per taxpayer. Annual federal deficit: $1 trillion. Medicare/Medicaid/Obama”care”: $1 trillion a year. Social Security: another $1 trillion a year. Defense: two-thirds of a trillion. Unemployment handouts: $2 billion per working day. Debt interest: $1 billion per working day. Federal pensions, ditto.

Now for the big numbers. Your government’s Social Security liability is as big as the national debt: $17 trillion. Its prescription drug liability is $22 trillion. Then there’s the Medicare liability of $86 trillion. Total unfunded liabilities of the U.S. government are $125 trillion.

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China-Australia Pact Could Lead to Dollar's Collapse

Photo Credit: Zero Hedge

[T]he Australian [is] reporting that the land down under is set to say goodbye to the world’s “reserve currency” in its trade dealings with the world’s biggest marginal economic power, China, and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation, in the process “slashing costs for thousands of business” and also confirming speculation that China is fully intent on, little by little, chipping away at the dollar’s reserve currency status until one day it no longer is.

That said, this latest development in global currency relations should come as no surprise to those who have followed our series on China’s slow but certain internationalization of its currency over the past two years…

And while previously the focus was on Chinese currency swap arrangements, the uniqueness of this weekend’s news is that it promotes outright convertibility of the Yuan: something China has long said would happen but many were skeptical it ever would. That is no longer the case, and with Australia setting the precedent, expect many more Asian countries (at first) to follow in Australia’s footsteps, because while the developed world is far more engaged in diluting its currency as a means to spur “growth”, Asian and developing world nations are still engage in real, actual trade, where China is rapidly and aggressively becoming the world’s hub…

Why is this so very critical? For the simple reason that the free lunch the US has enjoyed ever since the advent of the US dollar as world reserve currency, may be coming to an end as other, more aggressive alternatives – both fiat, and hard-asset based – to the USD appear. And since there is no such thing as a free lunch, all the deferred pain the US Treasury Department has been able to offset thanks to its global currency monopoly status will come crashing down the second the world starts getting doubts about the true nature of just who the real reserve currency will be in the future.

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DHS Insider Update: It Has Begun

Photo Credit: Canada Free Press

Much like my high-level source within the U.S. Department of Homeland Security outlined in a series of interviews beginning last year, the orchestrated collapse of the U.S. dollar and the entire world’s economic system has begun. The first shots in a global economic take-over were fired in Cyprus as my esteemed colleague and founding editor of Canada Free Press, Judi McLeod laid out in frank detail in her column yesterday and her follow up today.

Please read it and heed her advice, or suffer the consequences of your own normalcy bias that such an event will not happen in the United States, Canada, or from wherever you might be reading this. It will, and the plan appears to be on schedule for a shot across the bow later this spring here in the West, with a more aggressive take-over starting sometime this fall, according to my source.

The Plan
To those needing a quick refresher, the plan is quite simple and can be summarized by the Clinton-era quip attributed to political strategist James Carville, “the economy, stupid” and the June 9, 2010 statement by former Obama czar Van Jones, Socialist extraordinaire, “top down, bottom up, inside out.” It is a plan for a one world Communist economy where the “middle class” will be wiped out through a series of events that will have the same ultimate effect as we are seeing in present day Cyprus.

Based on the events in Cyprus, it should be quite clear to even the most vocal critic of the legitimacy of the information provided to me by my source within the DHS as published on this web site is no longer at issue. The U.S. dollar, the backbone of world currencies and the proverbial firewall preventing the erosion of our national sovereignty, is the ultimate target of a takedown by the global banking interests controlled by a handful of banks and families of the “royal elite.”

Read more from this story HERE.

Dollar Hits 14-Month Low v. Euro

(Reuters) – The euro held near a 14-month peak against the dollar and a 2-1/2 year high versus the yen on Thursday, having risen solidly as investors expect central banks in both the United States and Japan to keep an aggressive easing stance.

The U.S. Federal Reserve underscored that view by leaving in place its monthly $85 billion bond-buying stimulus plan on Wednesday, arguing the support was needed to lower unemployment.

“The bottom line is that there are no signs of a shift away from QE3,” said Vassili Serebriakov, strategist at BNP Paribas referring to the Fed’s bond-buying program.

“Moreover, recent data suggest that the economy remains well short of the substantial and sustained improvement that the Fed is looking for.”

That saw the euro break above key resistance around $1.3500 and move close to $1.3570, a high not seen since November, 2011. As a result, the dollar index .DXY fell to a six-week low around 79.183. It was last at 79.263.

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Dollar Falls As News of Obama’s Win Sinks In

The dollar fell against the yen on speculation Barack Obama’s re-election as president will boost chances the U.S. will maintain monetary stimulus policies that tend to weaken the greenback.

The euro erased gains as European Central Bank President Mario Draghi said the Europe’s crisis is affecting Germany. The U.S. currency was mixed versus its major peers as Obama defeated Republican challenger Mitt Romney, who disagreed with current Federal Reserve policy. Obama now faces the so-called fiscal cliff, $600 billion in tax increases and spending cuts set to be implemented in 2013.

“The size of the victory was perhaps at the upper end of what people were expecting, so that may mean that his negotiations with the Republicans to stop us going over the fiscal cliff might be a bit easier,” said Paul Robson, a senior foreign-exchange strategist at Royal Bank of Scotland Group Plc in London. “The idea of unchanged Fed policy is slightly supportive for equities, slightly weaker dollar, and I think that’s how people are playing it today.”

The U.S. currency depreciated 0.3 percent to 80.08 yen at 7:44 a.m. in New York after declining to 79.81 yen, the weakest level since Nov. 1. The dollar rose 0.4 percent to $1.2764 per euro after falling 0.1 percent yesterday. The euro slipped 0.8 percent to 102.20 yen…

“Monetary policy will remain loose under Obama so the dollar will be sold,” said Michiyoshi Kato, senior vice president of foreign-currency sales at Mizuho Corporate Bank Ltd. in Tokyo. “Dollar selling may not last that long as the U.S. faces the fiscal cliff.”

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