I've written several posts in the distant past (and I also wrote one last week that somehow didn't find its way onto my blog--Thanks, Blogger!) about the sinking dollar. A year ago I predicted it would decline to $1.30 against the euro, and now it's at $1.34. Why do I remind you of this? Because--your heard it here first--tomorrow, Monday, 11/29/04, is going to be a disaster for the dollar. Due to the feints in favor of the euro by the Chinese and others, individual dollar-holders are going to start dumping, and individual dollar-buyers are going to wait for a sizeable drop in the value before buying. I understand the European banks (maybe other governmental entities) will intervene and start buying dollars at $1.35, but that may be too late. There could well be a panic--really--in which even governmental buying won't ward off the selling frenzy.
Okay, maybe I'm being too dramatic. Maybe tomorrow will bring only a further gradual decline in the dollar's value, but that decline will only be gradual for a little while. The arrogance of America's leadership, led by capitalists who believe they govern the world, has shown no desire to stop the decline of the dollar in the hope that a weak dollar will lead to more sales of their products abroad. But guess what: Maybe they don't rule the world anymore. Maybe the dollar will prove to be like any other commodity, susceptible to evaluation based on its inherent worth. If so, I'd be selling like crazy. Wouldn't you?