RE: [OpenFX] What About the US Dollar?

Hi Darryl,

I've met Jack as well, am familiar with his work and have spoken with him on the phone. A real pleasant guy in my opinion.

Of course, there will be and are opposing views; however, there are also aligned and supporting views coming from a group of people/groups whose research, ideas and opinions I value and have been following for years. They have been either ahead of the curve, "contrarian" or a combination of both in their thinking since the beginning. And, while that's enough to garner my attention, the fact that they have been correct the majority of the time keeps me reading their work and comparing it to my own research and observations.

A little more on the "contrarian" viewpoint for a minute.

Obviously, this goes against status quo thinking. People like to "fit in" with the majority. It's safe and they don't risk looking foolish; plus, it's conducive to having something to talk about at dinner parties, church and halftime without ruffling anyone's feathers. The point is people tend to "measure" their sanity based on the majority opinion. After all, they reason (mostly subconsciously), if I align myself with the majority, believe what they believe, think what they think, and act like they act, then I must be "sane" and doing things correctly.

And yet, the majority, the "general public", is as I've said before usually late to the party, flat-out wrong or both. Two recent examples: Internet stock and real estate. Let's look at real estate: Did a family of four really need to move from a 2000 square-foot home to a 4000 square-foot one, or by a vacation home, or refinance to get an SUV and plasma TV? In many cases, no. But, because their friends were doing so, that is, taking on debt to fund their liabilities (not "assets"--assets create income), they justified doing the same. The majority of the population was thinking it was okay, so, in the mind of Mr. and Mrs. Average Citizen, "it MUST be okay be (since everyone's doing it) so we'll do it, too." This is called "groupthink" and there are many examples, including the idea of going to college, getting a good job and retiring with a cushy retirement plan.... which is something Michael Dell, Bill Gates and Mark Zuckerberg (of Facebook), just didn't buy into.

JP Getty is quoted as saying one of reasons behind his success was that he watched what everyone else was doing, then "ran like hell in the other direction." Now that's contrarian and it's something I've remembered and taken to heart for nearly two decades.

I appreciate your comment! It certainly gave me a chance to share a little about where I'm coming from and, perhaps, why.

Keep living large!

Clay

-------- Original Message --------
Subject: Re: [OpenFX] What About the US Dollar?
From: Darryl Warren <diamonddbw@yahoo.com>
Date: Wed, March 02, 2011 9:29 pm
To: OpenFX@yahoogroups.com

As long as there is American Idol, Football, & Malls, do you think Joe 6-pack & Suzie Shopper give a rip? (I know this is Sarcasm, but I really would have to agree with you about some people not caring).

I quite often read the daily from Black Swan Trading ( http://www.blackswantrading.com/ ). I had the opportunity to meet the principal, Jack Crooks, in Las Vegas a few years back. He has a moderately opposing view to the one below. I will forward this to him to see what his response might be.

Thank You for forwarding this to us. I'll be looking forward to your new site. Go to survey monkey now.

Darryl

From: "clay@claymarafiote.com" <clay@claymarafiote.com>
To: openfx@yahoogroups.com
Sent: Wed, March 2, 2011 3:57:44 PM
Subject: [OpenFX] What About the US Dollar?

Hi Traders!

The following is excepted from a newsletter I receive, which is written by a former
banker. I'm sharing it here only because this information doesn't get too much coverage
in the mainstream media. Go figure ;-) And, my guess is most people either have no idea
about these things... or, simply don't understand the implications. Regardless, I believe it's
worthy of consideration:

1) A Global Monetary Authority was created at the G-20 meeting in London in
April of 2009. So that step was accomplished two years ago.

2) A few months ago Russia and China signed an agreement whereby they would
conduct a bilateral trade in their own national currencies. While this may
not seem like a very big deal – it is. Up until this time virtually all
international trade was conducted in US dollars. Not only were dollars
mandated for the trading of oil but essentially all other international
trade was conducted in dollars.

3) (Recently) the Managing Director of the International Monetary Fund
Dominique Strauss-Kahn essentially called for the SDR to replace the dollar
as the world reserve currency. SDR stands for Special Drawing Rights and is
fiat currency (means no backing) of the International Monetary Fund.

4) The Bank of India announced last week that it had struck an agreement with
the Bank of China to conduct trade in their own national currencies, shunning the
dollar.

5) This means that the price of goods that are imported from China, from India,
from Europe, from virtually every place we import goods, will rise. Not only will oil
become more expensive (as it is doing), but a falling dollar increases the cost of goods
that we get from around the world – cars from Germany, electronics from Japan,
clothing from China, and agricultural products from South America.

6) We recommend moving some reasonable amount of assets into precious
metals, particularly silver as well as stronger foreign currencies such as
the Chinese Yuan (also called the RMB).

Back to Clay:

Really, this is nothing new. And, for months now, I've been talking about the insidiousness of the
US demanding China strengthen the yuan. While those in DC claim they have a "strong dollar policy",
their actions suggest otherwise. While the above information is classified at "fundamentals", I think
they're worth paying attention to.

So, is the dollar done?

Not yet. But I have to say it's standing on very weak legs. Keep an eye on your charts and your wits
about you. There's always opportunity for those paying attention. That said, as a currency trader, one
simple thing you might consider is opening account with broker that allows you to hold foreign currencies.
What you'd do is fund the account with US dollars, then make a 1 to 1 purchase of a stronger currency. All
it costs is the spread. And, if you time it correctly, you can offset that cost quickly. One US firm that allows
this Interactive Brokers--and my guess is there are others, though I haven't looked for them.

I hope this is useful. Please let me know!

Keep living large!

Clay

P.S. At the "NEW and IMPROVED" site, my goal is to include monthly excerpts from the many "paid for" newsletters
I receive, which are written by people I consider "top-notch". A GOOD idea? Something you'd like to see? Again, let me
know! Oh, and if you haven't taken the survey yet, you still can. Go here to stand-up and be heard:

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