Diary

The Dollar is the New Peso

From the CNBC stock blog:

“I don’t know when [the dollar] is going to strengthen,” Peter Schiff, president of Euro Pacific Capital told CNBC. “The dollar isn’t the new yen, it’s unfortunately the new peso.”

The fact that the Federal Reserve is printing dollars to buy U.S. Treasury bills means there can be no other outcome than the collapse of the value of the U.S. dollar.

As CNBC quotes Schiff:

Schiff said the Federal Reserve will soon run into the dilemma of either having to supply the carry traders with an endless amount of cheap dollars or put a halt to the carry trade and aggressively raise interest rates, which will “bring on a much more severe recession than anything we’ve experienced so far.”

Meanwhile, Schiff said he owns the Australian and Canadian dollars as well as the Japanese yen.

“I own a lot of Japanese yen—I think it’s breaking out and the chart looks fantastic,” he said.

“I wouldn’t be looking at any pullbacks from these currencies. There’s a much better chance that the dollar drops through a trap door…I’ve been shorting the dollar for years. I do it because I own foreign currencies, precious metals, and foreign stocks.”

What do you think the dollar’s collapse will do to the Democrats chances in the U.S. House and Senate in 2010, or if the collapse happens prior to the consideration of cap and trade or ObamaCare, what will its collapse do to these bill’s chances?