The Dynamics Of A Currency War

Posted: Nov 26 2010     By: Jim Sinclair      Post Edited: November 26, 2010 at 12:54 pm
Filed under: General Editorial

My Dear Friends,
What you are witnessing is adults acting like children.
A currency war solves absolutely nothing whatsoever.
A currency war puts extreme strains on exports.
A currency war never establishes a currency’s value versus its trading partners than can be maintained for any meaningful period of time.
A currency war creates currency levels that have nothing to do with reality economically and are unsustainable.
A currency war is endemic to QE in the entire Western world.
A currency war is destructive to all.
A currency war may cause gold to sell off like today in one currency, but it also causes gold to rise in others.
A currency war in time elects gold as the only viable currency.
A currency war is exactly what will give you levels of the gold price forecasted by Armstrong and Alf that are well above what we have looked at for over 8 years.
A currency war is what Merkel declared in her negative speech a few days ago concerning the euro.
A currency was is what the children running our monetary affairs have entered into.
A currency war is akin to children on the playground playing Keep Away.
A currency war’s game of Keep Away is to keep away prosperity.
1. Shut down your quote machine.
2. Take a brisk walk.
3. Drink some cold water or whatever.
4. Review my illustration below and Monty Guild’s recent comments.
Respectfully yours,
Jim

It is absurd to believe that the U.S. dollar will be a safe haven over the intermediate term
An even more absurd belief is the one that puts U.S. dollar and U.S. debt as a safe haven.  There is not any convincing economic evidence that the U.S. dollar is well managed, and there is no reason to believe that the dollar will rise in value.  In fact, it is the U.S. governments’ intention to devalue the dollar and to print money to avoid a deflation in the U.S.  Why do some global commentators see the dollar as a safe haven?  In our opinion, the only safe haven is precious metals, energy, food and other assets which will hedge against the inevitable inflation that the above policies create.
We wish everyone an enjoyable holiday.
Sincerely,
Guild Investment Management
www.GuildInvestment.com

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