So Long, Mr. Dollar

I think you meant September 2008; September 2009 hasn't happened yet!

Yes, good catch.  Have updated it.

Ron

 Dr. M,

I know your currently on vacation and not available to offer a rebuttal, but I had to dispute your call for the dollar to drop on 9/19/08.

• On that day, the USD was at 79.014, and then it dropped over the next week to 76.218 (-3.5% over a weeks time).
• But then it proceeded to rally to 88.044 on 11/21/08, less than two months later (a 11.4% gain since your call on 9/19/08).
• It eventually hit a high of 89.292 on March, 09, 2009, almost 6 months after your call for it to go to zero (a 13% gain since your call on 9/19/08).
• Today, more than 9 months after your call, it currently stands at 80.842, which is still higher than the 79.014 it was at the time of your call (2.3% gain over your call on 9/19/08).

You can verify these numbers on this interactive graph. 

Meanwhile gold, the primary hedge against the dollar dropping to zero, had the following performance over the same time periods.

• On that day gold opened at $840/oz, and closed a week later at $900/oz (7.14% gain).
• By 11/21/08, gold had dropped to $776, a loss of 7.6% since your call on 9/19/08, and a 13.7% drop from $900/oz.
• On March 9, 2008, gold was back up to $924/oz, a 10% gain over your call on 9/19/08.
• Today, as I write this gold is at $917/oz, a 9% gain over the 9 months since your call.

So my conclusion is that even though your call on the dollar was ill-advised (at least up to this point) , your recommendation to invest in gold was valid over a longer timeframe, though there would of been a 18.6% drawdown on that trade in late October of 2008.

Looking forward to your input on this when you return from vacation.

Venezuela is one of the few countries whose paper money is endorsed by solid gold, and the fractional reserve of the banks are 22%, much more that us banks 10% or less.

I consider that is possible to be made this business,

1 To borrow in ~100,000 American dollars us$

2 To turn these dollars into currency of Venezuela, bolivars, not using the official rate of 1 dollar = 2,15 bolivars, but the rate of street that this near 1 dollar = 6,3 Bolivars.

3 You can have your position in bolivars or buy gold.

4 If it is required to take gold from Venezuela to the USA If the dollar falls, then the conversion of bolivars to dollars increases giving an important gain.

If happens what all we waited for the dollar, the investment in bolivars is one of but the profitable ones, since Venezuela is an exporting petroleum country with ample petroleum reserves as much as of reserves internments in currencies that not only dollars.

The difference of the rate of change between the official value and the value of street is that there are many Venezuelans buying dollars thinking that the country can be turned communist, where in fact has demonstrated that those that dominate the political scene are totally capitalist.

Greetings from Venezuela.

I accept private messages to me.

 Some ideas to resolve the money issue:  www.thevenusproject.com, www.thezeitgeistmovement.com.