The US is definitely using this method to devalue its currency.
As a result, the price of gold and silver rockets, but the economy is still not in a good shape.
The job data released on Friday is a great disappointment in many ways.
If US government hopes that manufacturing sector can add more jobs, and bring the economy to full employment, the job data is definitely a disappointment.
Devaluing the currency by printing more money does not work that well.
Is US going to print more money again?
Hopefully not.
While letting the currency appreciates is not a good idea, letting the currency devalue further is an even worse idea.
A weaker dollar means more speculation in precious metals, particularly gold price.
When the people see that the value of their money in the bank devalues, they are more likely to look for opportunities to make more money.
That desire often leads to disastrous ending.
For those who are jobless, a lower currency means imported goods are more expensive. If they have not much savings, paying more for basic necessities is definitely unwelcome.
A mass of unhappy and desperate people can trigger a political crisis. Just as well that US presidential election is near.
President Obama does not seem to have a first clue about managing economy.
Instead of cutting expenses on unnecessary spending, the government cuts job. A loss of 29,000 jobs in public sector is part of the reason for the dismal job data.
The government should add more jobs in public sector, instead of cutting jobs.
If the government stops waging wars overseas, and cuts on business expenses, such as business trips and other expense claims, that will save many jobs.
If President Obama is really committed to reducing debt, he should opt for $1 a year salary. Cutting his salary alone can save a few jobs.
US printing money is not the best method to save the economy.
If US is going to print more money, what can the rest of the world do?
Many investors react by buying gold to hedge against the declining US dollar.
That is a normal and logical reaction.
Having said that, there is a risk of gold bubble bursting in the near future.
Once the US economy shows sign of improvement, and the interest rate increases, the gold bubble may burst.
Let buyer beware. If you want to buy gold and silver to hedge against the declining USD, make sure you can exit before the crash.
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Can you say... INFLATION! <:shudder:>
ReplyDeleteI love the idea of opting for $1 a year from the salary of President O. :D
ReplyDeleteUS is printing money and will print again.
ReplyDeleteMr. Putin claims that also will initiate appointment on new credit rating agencies that will trully reflect the situation of countries and companies in Europe Asia and Russia, as IMF monitored credit rating agencies are serving US speculators. Americans are not smarter than us.
Mr. Putin is absolutelly right - US is trying to trick the entire world, but it should not happen.
Americans should step down from expensive cars, leave the expensive huoses etc ...
and to learn to live with what they really earn and not to trick tthe world in order to continue with luxury life, which they dont deserve.
The wars US committed has ruined a lot of countries - finally the Americans should pay the cost of all the suffering and mysery they caused in order to maintain their luxury life.
You should pay your bill USA.
This is it.