U.S. Dollar

US Dollar Devaluation Prediction for 2015

A debt crisis has taken the western world by storm, but few seem to be sounding the alarm. The U.S dollar, the go-to currency for global economic stability and growth, is imploding at an unprecedented rate.

Profit Confidential editors have been critics of the U.S.’s inability to reign-in government spending. Based on the White House’s own figures, the national debt will reach $20.0 trillion by the end of this decade—about 140% of our current gross domestic product (GDP).

Historically, countries that have incurred considerable debt and consistent national debt-to-GDP multiples of 120% or more have experienced currency devaluation. The U.S. dollar has been in a free-fall against other major world currencies since 2009.

You have to print money to make money. No one knows this better than the Federal Reserve. Since November 2008, the Federal Reserve has initiated three rounds of quantitative easing (QE) in an effort to create more economic activity and increase home prices.

What have three rounds of QE accomplished? It was supposed to increase lending, create more jobs, and lower the unemployment rate. Instead, banks are sitting on a pile of cash and remain tight-fisted, fewer jobs have been created, and the real unemployment rate remains high.

What QE has done is flood the global markets with trillions of U.S dollars. It’s not as if this new-found money is backed by gold. It’s simply created out of thin air.

What’s keeping the U.S. economy afloat? The Federal Reserve has artificially propped up the U.S. economy by buying a majority of the government debt issued by the Treasury department. As a result, the U.S. government has become dependent on borrowing (creating money) to finance itself.

At Profit Confidential, we expect the U.S. dollar to devaluate as the U.S. continues to pile on the debt. You can find regular commentary on the U.S. dollar in Profit Confidential.


USD-CAD Exchange Rate: Canadian Dollar Battering Could Last For Decade

By Friday, August 21, 2015
USD-CAD Exchange RateImage by rick
The Canadian dollar has plunged this year. And this might only be the beginning, according to analysts at Macquarie Capital Markets. In July, the Canadian dollar dipped to its 11-year low against the mighty greenback. Right now, one Canadian dollar would only get you 76 cents in USD. Back in July 2011, a Loonie would get you
.

Economic Collapse: Venezuela’s Currency is So Worthless, People Are Using Money as Napkins

By Friday, August 21, 2015
Economic-CollapseSoaring inflation in Venezuela has left the country’s currency virtually worthless, leaving the troubled nation on the verge of economic collapse. But while economists try to describe the nation’s turmoil with facts and statistics, the story of Venezuela’s struggles was perhaps summed up best in a Reddit forum. On Monday,.

Donald Trump: China Devalued Yuan to “Suck the Blood Out of the U.S.”

By Friday, August 14, 2015
Donald Trump on China DecisionThe Republican frontrunner Donald Trump slammed China over the People’s Bank of China’s decision to devaluate its currency, saying “devalue means suck the blood out of the United States.”   “[China] continuously cuts their currency, they devalue their currency,” Trump addressed China devaluing its currency during.

Peter Schiff: Get Ready for a U.S. Dollar Collapse

By Thursday, August 13, 2015
Peter SchiffWhile investors fret about China’s recent currency devaluation, they should be more concerned about a stock market crash and U.S. dollar collapse in 2015, according to noted investor Peter Schiff. “The dollar is very overvalued, and the dollar is a bubble,” CEO of Euro Pacific Capital Peter Schiff said in an interview with Newsmax.

Peter Schiff: Federal Reserve ‘Going to Do QE4’

By Wednesday, August 12, 2015
U.S. Dollar Collapse In a stunning move, the Chinese central bank devalued its currency to support exports and boost its struggling economy. But according to famed investor Peter Schiff, China is too late. He believes that the U.S. already has an edge when it comes to debasing currency. “America is going to win the currency war,” he said in an interview.
Sep. 2, 2015
Trailing 12-month EPS for Dow Jones companies (Most Recent Quarter) $1014.15
Trailing 12-month Price/earnings multiple (Most Recent Quarter)

17.44

Dow Jones Industrial Average Dividend Yield 2.71%
10-year U.S. Treasury Yield 2.14%

Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.

Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.

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