Comments on: Gold Soars to an All-Time High http://dailyreckoning.com/gold-soars-to-an-all-time-high/ Entertaining Ideas on the Economy, Markets, Gold, Oil and Investing Strategies. Sat, 11 Feb 2012 01:59:47 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Enrique http://dailyreckoning.com/gold-soars-to-an-all-time-high/#comment-30394 Enrique Wed, 07 Oct 2009 19:39:25 +0000 http://dailyreckoning.com/?p=18863#comment-30394 > most of these oil-producing countries now > take the dollars they receive for oil and > trade them right away for something else… > So the net affect now on the dollar is zilch. In the early 80's in Mexico's hyperinflation fight what happened was * Country X didn't trade with Mexico (couldn't buy and didn't want to buy anything with pesos) * Country Y traded but turned around the money to banks who entered Mexico to buy companies that subsequently repatriate profits and lowered Gov's & Personal Income perpetuating QE (keep and eye on CFIUS and TIF reports) see BBVA example. Extrapolating the analogy, once that trust or perception of KING DOLLAR as you call it is gone, dollar fate is no different than peso, continental, Zimbabwe dollar, etc. Then the dollars will accumulate within the USA (unless TIF reverses before) and with velocity or not it will create inflation. > most of these oil-producing countries now
> take the dollars they receive for oil and
> trade them right away for something else…
> So the net affect now on the dollar is zilch.

In the early 80′s in Mexico’s hyperinflation fight what happened was

* Country X didn’t trade with Mexico (couldn’t buy and didn’t want to buy anything with pesos)
* Country Y traded but turned around the money to banks who entered Mexico to buy companies that subsequently repatriate profits and lowered Gov’s & Personal Income perpetuating QE (keep and eye on CFIUS and TIF reports) see BBVA example.

Extrapolating the analogy, once that trust or perception of KING DOLLAR as you call it is gone, dollar fate is no different than peso, continental, Zimbabwe dollar, etc.

Then the dollars will accumulate within the USA (unless TIF reverses before) and with velocity or not it will create inflation.

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