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Will the Dollar fail?

*JSMineSet, by James Sinclair, March 12, 2007

“As I look at today’s gold and dollar market it strikes me that the US dollar, which has had significant opportunity to take the technical advantage and move swiftly and significantly higher, has failed to do so. It has fallen precipitously on news, then after the fall as if the dollar has its own (or perhaps the same) Plunge Protection Team, it steadies at the lower level.

This says to me that as time goes by and the Asian big central banks turn from slowed acquisition of US treasuries to other means of divesture, no matter what they do they will increase the supply of dollars internationally. There is NO harmless way to diversify out of a former reserve currency, even by the purchase of assets as dollars are exchanged into the international pool of that currency, thereby increasing supply. Also where do you get the dollar, Mr. Asia? They are in treasuries now. Do you trade US Treasuries for African copper and nickel, asking the sellers of the raw materials not to sell the US treasuries they receive?

The USD – PPT will be defending the dollar at USDX .8000, .7800, .7600, .7200 and potentially much lower.”

*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

Monex Bullion Investor