Waxing prophetic, just minutes after I posted the previous blog the Drudge Report profiled two headlines on the historic devaluation of the dollar: "Dollar Falls Sharply In Wake of Fed Move" and "Dollar No Haven After Fed Moves Rate Near Zero."
I mentioned also in the previous posts Schiff and Turk & Rubino (S,T&R) on their predictions about economic crisis. Most deserving of consideration is why Bernanke, Paulson, Dodd, Frank, and company don't seem to have a clue about the effects of their inflationary policies, yet market experts like S,T&R predicted events of late...years ago.
Schiff presciently declared:
"Here are some of the scenarios...The real estate bubble, already losing air, could pop first, sending the economy quickly into recession, which could cause a run on the dollar, force up long-term interest rates, create hyperinflation, and force defaults, refinancing, or other settlements with respect to personal and national debt...Insolvency at Fannie Mae, Freddie Mac, or the Pension Benefit Guaranty Corporation could create an international crisis of confidence in the country's ability to make good on its financial promises." --Schiff in 2006
Turk & Rubino predicted a scenario:
"The dollar is in full retreat on foreign exchange markets, and panic is building on both Wall Street and Main Street. Dollar-denominated bonds plunge in value, which is another way of saying that long-term interest rates soar. Spiking mortgage rates and restrictions on access to new lending burst the housing bubble in overheated markets like California and New York. Home prices drop by 50 percent or more in the space of a few months, and the leaders of the structured finance sector, mortgage giants Fannie Mae and Freddie Mac and derivatives players like JP Morgan Chase, are revealed as the time bombs they are. Their stocks, and most others associated with the U.S. credit bubble, begin to slide. The euro and yen soar against the dollar, while gold blows through $1,000 without a backward glance." --Turk & Rubino in 2004
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