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**globaleconomicollaps** · April 11, 2011, 03:32 AM

Re: 4 cents away from a Water-Fall moment!

I'm not much on reading charts, but doesn't that one tell us that the dollar is about to bounce hard?

see here:
http://www.oftwominds.com/blogmar11/...-take3-11.html
and his post from today.

**Glenn Black** · April 11, 2011, 07:02 AM

The Crash: Sept. 2011 or Sooner?

Good article. I agree that traders and investors are of one mind on the future of the US$. However, where are the minds of John Q. Public? To me, most of them are in a daze, still listening to MSM. Smart money and those in the know are all on the one side, the general public is on the other.

I agree that this is a very dangerous and unstable situation. When the majority of the public wake up and suddenly realize (probably when someone in MSM finally can't stand the cognitive dissonance any more, then they spill the beans through their MSM channel, then all the other MSM channels must follow in unison with declaring the latest panic news flash).

All trades need a counter-party. Look at the volume and open interest. They are making more and more trades, as those "in the know" take advantage of the sheeple.

When the sheeple suddenly wake up, and are no longer sheeple, there will be a dramatic drop in the number of people willing to take the bad side of the DX-US$ trade. Everybody wants to go short US$, and nobody wants to go long. When that happens, over the cliff we go. US$ drops like a stone, all those holding US$ go over Niagara Falls without a life preserver.

What people forget is that while the US still makes many things, food being one of the biggest and most important commodities made, there are critical components that come from overseas. Look at how the car and many other industries have been affected by an earthquake and tsunami in Japan. Everything world-wide, wave after wave, shuts down as critical components can no longer be sourced from their current supplier. At first they will refuse to buy, awaiting for their suppliers to regain their senses and for prices to re-stabilize. But prices and supply won't stabilize, it will just keep getting worse. At first, people could act to resume trade, but will refuse to do so. Later, they will be unable to act due to loss of adequate means to go forward. Only the top 0.1% of the world's population (a mere 7 million people) will have all that is necessary to continue, and they have such a small market share, it will be insignificant. The remaining 6.9 billion are left standing outside in the cold rain.

It will not end well.

The Austrian "Miracle of W�rgl" in 1932 (See http://en.wikipedia.org/wiki/W%C3%B6rgl and http://en.wikipedia.org/wiki/Local_currency) will be repeated by some motivated and aware spots here and there around the globe. For the rest, it will be similar to a sudden stop, bank runs, edicts, frozen assets, confiscations, food deserts, and bank holidays. It will catch the majority unaware and ill prepared.

When the music stops, some may have lots of fiat cash, gold, or silver. Others may have no money, but somehow they will have significant quantities of food.

Who in their right mind will trade a gold coin for the food that they just happen to be holding when the music stops? Will there be some altruistic individuals who share freely? Sure. Will there be others who assume this is a momentary blip, and all will be back to normal soon enough? Yes. But as the clouds get darker and darker, fewer and fewer will follow this path. Hording will soon become the norm.

Suddenly, they will realize there is more food disappearing than what is coming into their region. If you can't grow or harvest your own food, and you can't afford to buy it, or there isn't anything left to buy, and you are unable to travel to a different region where all these limitations are not true, and governments and NGO's are swamped by similar problems everywhere, then you are in a food desert, and you are done for.

It's not going to be pretty.

I expect the US$ or Wall St. crash to start sometime between now and Sept. 2011. Perhaps those in power can extend well past this point. It all depends on when the sheeple wake up. When the sheeple suddenly wake up, there is nothing the government can do to stop this destiny, the Bernacke Put on Wall St. will no longer be worth the effort, nor effective.

Good luck to all. We'll need it.

**chedir007** · April 13, 2011, 09:16 PM

Re: 4 cents away from a Water-Fall moment!

Agreed- from what I'm reading we should have one more scary dollar drop cycle before dollar starts to ramp up again - the usual "disinflation" cycle.

(I gave up on the doom and gloom, MAD MAX end of the world, binary scenario long time ago...that event never arrives!: this descent into hell will be a long and agonizing PROCESS).

Hence, for the silver bugs (i.e. myself), we'll have to monitor carefully for an effective exit.......already exited some positions.

**Adeptus** · April 20, 2011, 02:03 PM

Re: 4 cents away from a Water-Fall moment!

On the front page of the Canadian Financial Post newspaper today...
USD index @ 74.13 right now.

Gold $1500

Silver $45

Still to come:
* US budget deficit ceiling to be raised
* QE3 or alternatives thereof
* Oil to $150 by ?? (insert # of months here)

Change we can believe in?

Hmmm...

**Adeptus** · April 21, 2011, 01:32 AM

Re: 4 cents away from a Water-Fall moment!

And here's a picture of today's waterfall that broke the Oct 2009 low....

**Kadriana** · April 21, 2011, 06:41 AM

Re: 4 cents away from a Water-Fall moment!

What is the number we should be watching that really concerns you? The Bush lows? I must admit that silver and oil rise is making me a bit nervous these days.

**Adeptus** · April 21, 2011, 07:54 AM

Re: 4 cents away from a Water-Fall moment!

Originally posted by Kadriana View Post

What is the number we should be watching that really concerns you? The Bush lows? I must admit that silver and oil rise is making me a bit nervous these days.

The last known bottom: February,2008 ~70.79 <-- 39+ year low

The difference is that this time, the US Treasuries aren't the safe haven they used to be. Heck even the rating agencies whom are always late to identify any significant high risk recently downgraded US debt (re:S&P US downgrade in news). At some point, confidence in the US dollar is lost on a global scale and a significant descent below that low may occur. My understanding is that the Bernank is buying 70% of all US debt at the moment. As we approach 100%, the waterfall moment that could make official the end of the US reserve currency, increases in probability. How steep will that waterfall drop below the Feb 2008 low be? I have no idea... maybe 20% over a few weeks or maybe more over several months. I honestly haven't a clue on how to even begin guessing there. I do however recall seeing massive (and multiple) 4 cent currency swings in a single day back in the 2008 crisis time. Some will argue inflation (or currency devaluation) is a process. I'd be wondering if such a process doesn't get accelerated and thus turn into a significant event when the confidence straw finally breaks that camel's back.

**GRG55** · April 21, 2011, 08:32 AM

Re: 4 cents away from a Water-Fall moment!

EJ has long written about the potential for a "Dollar crisis", and the difficulty of predicting if or when that might happen, since it's more a politically driven event than economic fundamentals.

But then the more I hear people predicting it is imminent, the less inclined I am to believe it will happen soon...

**WildspitzE** · April 21, 2011, 08:44 AM

Re: 4 cents away from a Water-Fall moment!

Originally posted by GRG55 View Post

But then the more I hear people predicting it is imminent, the less inclined I am to believe it will happen soon...

werd.

**Adeptus** · April 21, 2011, 08:59 AM

Re: 4 cents away from a Water-Fall moment!

Originally posted by GRG55 View Post

EJ has long written about the potential for a "Dollar crisis", and the difficulty of predicting if or when that might happen, since it's more a politically driven event than economic fundamentals.But then the more I hear people predicting it is imminent, the less inclined I am to believe it will happen soon...

Spoken like a true economic contrarian; however, if you believe that economics is not the driving force, but rather political, your own arguement renders your conclusion a moot point. LOL :-D

I for one believe that the accelerated action of the masses toward a single direction (away from US dollar) determines the final consequence (USD crisis). The only way the opposite can occur is if individual contrarian forces overpower the smaller masses (i.e. top X GDP countries continue to trade in USD).

**GRG55** · April 21, 2011, 09:26 AM

Re: 4 cents away from a Water-Fall moment!

Originally posted by Adeptus View Post

Spoken like a true economic contrarian; however, if you believe that economics is not the driving force, but rather political, your own arguement renders your conclusion a moot point. LOL :-D

...

Au contraire. Economic fundamentals change slowly. Sentiment in a political economy goes from "risk off" to "risk on", and back again, in a matter of moments as the reading of the tea leaves is revised dramatically on a single pronouncement. It takes nothing nothing more than a few words from Angela Merkel's lips to move some Europe sovereign interest rates several percentage points in a single trading session.

Statements from pundits that "The Dollar is dying" might be correct. Statements that "The Dollar is dead" seem highly suspect [to me] given how little it would take by the Fed and Treasury [and their friends at Goldman and select other Central Banks] to reverse the trend and trap the shorts. They have done it before and I have every confidence they will do it again. Will it ultimately "save" the Dollar? Maybe not. But it's far more likely to be a long, long ride down to the bottom, not a water slide collapse in the Dollar as many of those schooled in the occult of the charts are suggesting.

**Adeptus** · April 27, 2011, 09:21 PM

Re: 4 cents away from a Water-Fall moment!

Speaking of moving lips sinking ships... Maybe Merkel still has some credibility in the Eurozone, but I think Bernnake's credibility is all but gone....

**GRG55** · April 27, 2011, 09:38 PM

Re: 4 cents away from a Water-Fall moment!

Originally posted by Adeptus View Post

Speaking of moving lips sinking ships... Maybe Merkel still has some credibility in the Eurozone, but I think Bernnake's credibility is all but gone....

"Don't fight the Fed"...

**Kadriana** · April 27, 2011, 10:35 PM

Re: 4 cents away from a Water-Fall moment!

Ok, I'm looking at it below 73? What is the point where people should start to worry? If it goes below the 2008 lows?

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