The dollar and interest rates.

In some ways, the Obama regime is a rerun of Jimmy Carter's presidency, except that the results are worse. The tripod on which the presidency of Jimmy Carter was built was: foreign policy failure in Iran, economic stagnation and inflation.

We see the economic stagnation now, but inflation is slow to show up. Why? Because the 'mark to market' accounting rules cause the destruction of assets, so inflation's symptom (higher prices) are slow to show up. But, inflation is beginning even while we are having the stagnation. You see the inflationary trend in four ways: 1. the rise in oil pieces; 2. the rise in gold prices; 3. the drop in the value of Treasury bonds (they dropped 4 point recently) and the drop in the value of the dollar. You can see the rise in oil prices at the pump and gold is flirting with a heavy resistance price at $980/oz. How about the dollar? I will point out a couple of things about the graphic that shows the value of the dollar. First, note that the dollar had rallied strongly in o8 into 09 until the intentions of the Obama regime became clear. Then it went into a decline. The fact that the 50 day moving average went above the 200 day moving average is NOT a golden cross for the dollar, because the MACD (lower graph) remains negative (the black line remains under the red line). Note that such a trend continues for a couple of months, so the decline of the dollar will continue. Furthermore, the crossing of the averages occurs because of an anomaly in how recent prices affect the averages: the 50 day moving average is topping out, but is still effected by the end of the rise in the dollar, while the 200 day moving average is dropping, because of the recent steep drop. The upper graph shows that the dollar is not oversold (is not under the lower line) so when the dollar does drop below the lower line, it will have a hard time to rally. If we look at the chart of the dollar calculated on a daily basis, we see the opposite of the golden cross, i. e. the 50 day moving average drops below the 200 day moving average.

The dollar will drop much further and will be replaced as a world reserve currency. Then economic stagnation and inflation will accelerate.

What to do in the meantime? Timing is important. Stay in stocks now, but sell all bonds and treasuries. These will lose value. Have a few gold and silver coins, gold-mining stocks.