Monday Feb 11 2013
From his hospital bed in Cuba, assuming he is still alive, Hugo Chavez ordered an official devaluation of the Bolivar. Officially it went from 4.3 to 6.3 to the dollar. However a zero hedge story reports that on the black market the real rate is more like 17 to the US Dollar. Chavez financed his re election by printing dollars and dispensing favors to everyone. But if you want to make poor people even more so, that is the way to do it, inflate and devalue. The only error in the article I linked is that it suggest this may affect inflation, it will.
Countries the world over have printed money in QE fashion.In Japan the yen has dropped from 128 last October to 108 today, a collapse by any name. Japan has refused to write off bad loans and suffered two lost decades. That is a drop of 15% in a natter if six months. The race to the bottom begins.
Our point is that the world currency collapse has begun.This is the reason for the long term bull market in gold and silver. The only way countries can attempt to re pay their debt is by inflating the currency to pay back with a currency worth less. The same inflation is coming to the US, it is just a matter of when.
Meanwhile gold falls and the miners fall. Richard Russell notes that a bull market always wants to throw the rider off,here is a good example. In a perfect world gold and the miners would be rallying,they are not. This is why most folks do not get rich trading markets, it's a tough job.
Patience.
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