The Downward Spiral – The Millennium Adventure 02-05-03

Salient to Investors:

Jim Rogers Writes:

  • The dollar is in a decline that could lose its status as the world’s reserve currency, which would lead to a huge decline in the standard of US living.
  • A sound currency reflects solid economic fundamentals: little or no debt, a trade surplus, a stable balance of payments, and growing international reserves.
  • US national debt to foreigners is $6.4 trillion, with interest payments last year of $333 billion. US imports greatly exceed exports. Direct foreign investment is declining every year. US reserves of $60 billion would last 3 minutes if creditors began cashing in.
  • Greenspan is the grand maestro of this economic debacle.
  • Imprudent monetary and fiscal behavior has always led to economic disaster. In 1920s Germany, in 1970s England which had to be bailed out by the IMF – in 50 years Britain had lost its status as the richest nation in the world and its Empire.
  • Long the Swiss franc, Japanese yen and Danish krone, despite their governments adopting the US dangerous habit of manipulating their own currencies to compete in the world market.
  • The success or failure of the Euro is one of the most important questions of the twenty-first century. The world needs the Euro, because it needs an alternative to the dollar.The European Union has everything going for it—an enormous population base, a balance of trade surplus, most of its nations are creditors, not debtors.
  • Long the euro despite it being a flawed currency because many member nations don’t run a tight ship. Germany has again started running up huge debts, the Portuguese are running an enormous deficit, the French says they are going to ignore the treaty establishing the euro.
  • The Chinese yuan may eventually have its day in the sun, certainly if the euro fails.

Read the full article at http://www.jimrogers.com/

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