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Five Things: The Dollar is Doomed


I know this because I have read it everywhere over the past few weeks.


The Dollar is Doomed... Macro Forecasting Isn't for the Gutless... The Dollar, Technically... How to Handle the Point of Recognition... Twitter Reveals a Longing for Depth by Virtue of its Absence.

The dollar is doomed. I know this because I have read it everywhere over the past few weeks...

UN Wants New Global Currency to Replace Dollar
- Telegraph (UK)

U.N. Panel Calls For Dollar Reserve Role To Be Eliminated
- Wall Street Journal

Dollar Hits Low for Year as Gold Tops $1,000
- Associated Press

Pimco Says Dollar to Weaken as Reserve Status Erodes
- Bloomberg

Wait, that's not true. I haven't read this over the past few weeks; it's been over the past few years. Longer than that, really. But never mind how long it has been coming, what is important is that it is finally here. The question, then, is what comes next:

Here's the most likely scenario. In the next recession, it will appear that deflation and unemployment are threatening the public welfare. Washington will react in panic fashion to attack the problem by cranking up the money and spending machine to "stimulate" the economy - a bit of the "hair of the dog that bit us." These distortions in the economy, and the dollar floods coming from the printing press, will cause Americans to distrust their own paper currency and get rid of it as fast as they can in an orgy of spending...

It's an interesting thesis, to be sure. And it could still play out that way. After all, that passage was written 30 years ago by Howard J. Ruff in his 1979 book, "How to Prosper During the Coming Bad Years."

You might have missed it the first time around if, like me, you were just a little kid, in which case, friend, do I have good news for you, an updated version of Ruff's classic, "How to Prosper During the Coming Bad Years... in the 21st Century," was released just last year.

Reading the headlines over the past few weeks, the timing looks good. And I guess that's really the point: the mere fact that the timing looks good is probably the chief reason that it isn't.

Look, I understand. The macro-economic book publishing business is not for the weak-kneed and gutless. You have to be flexible, adaptive, able to change your position when it is clear you are wrong. Which is the only way you can get a boldly optimistic book like this one, published in 1999...

The Roaring 2000s: Building The Wealth And Lifestyle You Desire In The Greatest Boom In History

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Followed immediately by this one, published by the very same author, in 2009...

The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History

At least he's got all his bases covered.

To be fair, I have my own far-ranging macro-economic thesis, but I also have the good sense not to try and charge anyone for it since, by definition, once you accept money for a point of view you're totally and absolutely committed to selling it... come hell or high water, and no matter whether it's right or wrong.

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No positions in stocks mentioned.

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