FINAL DEFENSE OF THE USDOLLAR

◄ With little hesitation, a forecast can finally be made that the top in this queer perverse USDollar rally has been established. THE TOP IS IN. The DX index has risen amidst near total destruction of the US financial system and the gradual disintegration of the USEconomy. The top has been seen. A powerful economic recession, eventually taking the form of economic failure and disintegration, will be recognized. Bank failures (an endless skein) and economic failure (worse than recession) will be the keys to the USDollar breakdown. Foreign reserves will be sold in order to pull up their domestic currencies, hurting the US$ clownbuck further. Continued bank failures will do much more damage to the US$ reputation, causing lost faith, and will reveal the need for much more USGovt bailout and rescue. Exploding gargantuan federal deficits will motivate broad US$ selling eventually. The next round of bank losses from commercial mortgages, credit cards, and car loans, combined with a powerful wave of Alt-A and prime mortgage defaults, will lead many to conclude that the US banks cannot recover at all. The USDollar will feel a direct impact. The USGovt bailouts will soon expand even more, as they extend to three key areas: aid to cities and states, aid to major icon corporations like General Motors, and redemption of municipal bonds.

The impact to the USDollar will be devastating. Release of the gold price might be one key to the powerful US$ decline. The climax on the USDollar destruction will possibly be the broad deep and magnificent mortgage reduction program, bound to approach $2 trillion in magnitude in my estimation, with formal plans probably being hatched by mid to late 2009. The impact to the USDollar will be to shovel six feet of soil atop a coffin placed in a hole. The asterisk for lost faith and smeared reputation will be continued corruption in the administration of bailouts. Not much is likely to change, as Paulson (from Goldman Sachs pedigree) is replaced by Geithner (from USFed brethren). The loyalty of both men is clearly to the Ruling Elite, to Wall Street titans, and the aristocracy. They are both knee deep in responsibility for the current meltdown failures. Notice the loud decline this week, as the uptrend has been interrupted. Too many bailouts, too many rescues, too much required stimulus, not any visible sign of anything working. No sign of ANY remedy after 16 months of futility. Economic disintegration ahead!